There is a duty to act fairly by virtue of the application of principles of natural justice be it a quasi judicial or an administrative function. This was reiterated in Suresh Koshy George v. The University of Kerala . Also, in the case of State of Orissa v. Dr. (Miss) Binapani Dei , the Supreme Court had decided that Principles of Natural Justice were applicable not only to judicial and quasi-judicial functions, but also to administrative functions. Article 14 envisages equality before law but in the present matter, having denied a hearing the sex workers can invoke the provisions of the Constitution reading with the principles of natural justice.
Note: Quasi judicial body is a body that makes decisions in the same manner as a court would. Hence, it is judicial in character, but is not a court. Meanwhile, issuing administrative orders is an administrative function.
 1969 AIR 1989
 1967 AIR 1269
 http://www.legalservicesindia.com/article/article/a-k-kraipak-v-union-of-india-1162-1.html last accessed on September 26, 2014
Under the basic principles of Administrative Law it is recognized that an administrative order must adhere to the principles of natural justice. The Courts are duty bound to consider whether the administrative action is fair for which the Court examines the rule governing the administrative functionary. In addition to this, the Courts have recognized that where upon the presence of a legitimate expectation the policy is altered; it would be unfair to deprive someone of that expectation. Where a person enjoys certain benefit under a policy, even with no legal right, the government cannot deprive them of the legitimate expectation by changing the policy without following the principles of fair hearing. 
Accordingly, the Courts have identified that no order involving adverse civil consequences can be passed against any person without giving him an opportunity to be heard. Initially the Court required that the person must prove that the change in administrative policy resulted in some form of harm or injury but the same is not required anymore. As per the Supreme Court if the principles of natural justice are not followed while altering a policy it is sufficient to declare it invalid and no proof of any damage is required. 
With regard to legitimate expectation, the Courts try to exercise restrain as under the concept of separation of power the Court consider that the Executive should have the freedom to decide the policy and modify it as and when required.  Therefore the Courts interfere in such matters only when the legitimate expectation has been denied arbitrarily, unreasonably or against public interest or principle of natural justice. In addition to this, the Court also considers whether the legitimate expectation is legitimate or not. This is a question of fact and is perceived with regard to the public interest involved. The Courts look into the proportionality of change of the policy and determine whether legitimate expectation has been balanced against the need of change.
In the present case, the existing policy of the West Bengal Government had no form of restriction on the setting up of Pandals by Sex workers in West Bengal, which is evident from the Pandal set-up at Sonagachi last year. While this year the Police has restricted the Sex Workers and has imposed additional condition on them to establish a Pandal without any hearing. The Sex Workers had a legitimate expectation that they will be allowed to set-up the Pandal which can deduced from the fact that the same was done in Sonagachi and the Indian Constitution respects the rights of every citizen to practice his/her religion. The Police needs to provide the reason for which the restriction was imposed on the Sex Workers, which is still not public. Upon the disclosure, the Courts need to determine whether the Sex Workers had a legitimate expectation of setting up the Pandal, which was affected by the change in the policy. The Court upon acceptance of this principle can identify that the administrative order should have been preceded by some form of consultation with the Sex Workers.
Moving to the second part, Article 14 of the Indian constitution state that, the state shall not deny to any person equality before law or the equal protection of laws within the territory of India. For the application of this principle there has to be a differentiation, which has to be done with regard to those who are equal and those who are not. This exercise is expressed as reasonable classification.
A legislative classification to be valid must be reasonable. It must always rest upon some real and substantive distinction bearing reasonable and just relation to the needs in respect of which the classification is made. In order to pass the test of permissible classification, two conditions must be fulfilled, namely, 1) the classification must be founded in intelligible/comprehensible differentia which differentiate persons or things which are grouped together from others left out of the group. 2) The differentiate must have rational relation to the object sought to be achieved by the statute in question. Also it is to be noted that the order passed by the executive has to be non-arbitrary. Which in this case it is witnessed that it was arbitrary decision by the police not to allow sex working to make Pandals.
The difference between sex workers and other individuals is not an intelligible differentia as the differentiation is on the basis of the occupation, which has no rational nexus with the object to be achieved by the order. Sex workers not being allowed to establish Pandals has no rational nexus to be object of the said order and therefore, the classification made are totally void. The argument of classification does not even arise as it as basic violates Article 14 as it does not provide equal opportunity to the sex workers to make Pandals just because of their occupation. They should have atleast offered a hearing to the sex worker before passing such an order.
Therefore if the right to set up a Pandal is considered as a legitimate expectation of the sex workers then the Court may hold the order as against the tenants of natural justice by not allowing the Sex Workers their right to hearing. In addition to this, the order is clearly violative of Article 14 as no rational nexus can be deduced from the object of the order which is with regard to regulation of Pandals and maintenance of law and order.
Navjot Corporation Group Housing Society v. Union of India, (1992) 4 SCC 477
SL Kapoor v. Jagmohan, (1980) 4 SCC 379
Union od India v. Hindustan Development Corporation, (1993) 3 SCC 499
PTR Exports v. Union of India, (1996) 5 SCC 268
National Building Construction v. S. Raghunathan, (1998) 7 SCC 66
State of West Bengal v. Anwar Ali Sarkar AIR 1952 SC 75
Natural Resource Allocation, In Re Special Reference No. 1 of 2012; Doctrine of Non Arbitrariness in Executive actions.