2014 (12) TMI 357 - HC - Customs

Suspension of CHA license - Regulation 22 of the Customs House Agents Licensing Regulations, 2004 - violating of any of the conditions enshrined under Regulation 13 - disciplinary authority did not agree with the findings of the enquiry officer and proceeded to impose the penalty in the form of revocation of licence - disciplinary authority did not communicate to the petitioner the reasons for disagreement with the enquiry report as such disagreement sees the light of the day in the impugned order - Held that - As the order-in-original impugned in this writ petition have been passed in gross violation of principles of natural justice, it does not get cured by an appellate court by affording of fullest opportunity to the petitioner to canvass all the points which were available to him before the disciplinary authority or is available before the appellate authority. The unfair trial does not get corrected and/or rectified by providing an opportunity of hearing before the appellate authority. Therefore, this Court does not agree with the submission of the department that the writ petition should be thrown on the ground of alternative remedy. Court finds that the order impugned in this writ petition cannot be sustained and is hereby quashed and set aside. - Decided in favour of appellants.

Summary

Issues Involved:
1. Violation of principles of natural justice.
2. Non-adherence to the procedure required by the disciplinary authority while disagreeing with the enquiry report.
3. Justification for entertaining the writ petition despite the existence of an alternative remedy.

Detailed Analysis:

1. Violation of Principles of Natural Justice:
The petitioner challenged the order dated 23rd April 2014, issued by the Commissioner of Customs, on the grounds of violation of principles of natural justice. The petitioner argued that the disciplinary authority did not communicate the reasons for disagreement with the enquiry report, thus failing to provide an opportunity to defend against the points of disagreement. The Court noted that the disciplinary authority must inform the petitioner of the points of disagreement and provide an opportunity to counter them, as established in the case of Punjab National Bank and Others v. Kunj Behari Mishra (1998) 7 SCC 84. This principle was reiterated in Yoginath D. Bagde v. State of Maharashtra and Another (1999) 7 SCC 739, emphasizing that even if the rules are silent, an opportunity of hearing must be given.

2. Non-adherence to the Procedure Required by the Disciplinary Authority:
The Court observed that the disciplinary authority did not follow the procedure required when it proposed to differ from the findings of the enquiry officer. The principles of natural justice necessitate that the disciplinary authority must record its tentative reasons for disagreement and give the delinquent officer an opportunity to represent before finalizing the findings. The Court emphasized that this opportunity is not a mere formality but a substantive right to ensure fairness in the disciplinary proceedings.

3. Justification for Entertaining the Writ Petition Despite the Existence of an Alternative Remedy:
The respondent argued that the writ petition should not be entertained due to the availability of an alternative remedy by way of a statutory appeal. However, the Court referred to the Supreme Court's decision in Institute of Chartered Accountants of India v. L.K. Ratna and Others (1986) 4 SCC 537, which held that a breach of natural justice at the initial stage cannot be cured by an appellate body. The Court emphasized that an unfair trial cannot be rectified by a fair appeal, especially when the initial decision causes immediate and irreparable harm to the petitioner's professional reputation.

Conclusion:
The Court found that the disciplinary authority acted in gross violation of the principles of natural justice by not providing the petitioner with an opportunity to respond to the points of disagreement. Consequently, the impugned order was quashed and set aside. The disciplinary authority was directed to serve a notice on the petitioner indicating the points of difference, allowing the petitioner to submit a representation before proceeding further. The Court clarified that this order should not impact the merits of the disciplinary proceedings, as it solely addressed the procedural violations. The related circular revoking the petitioner's licence was also set aside, as it was dependent on the impugned order. The writ petition was disposed of with no costs, and all parties were directed to act based on the communication made by their respective counsels.