2015 (12) TMI 538 - HC - Customs

Revocation of CHA License - violation of Regulations 12, 18(1) and 13(n) of the Customs House Agents Licensing Regulation,2004 - Held that - If the respondent agent admits the violation and breach of the regulations based on which the licence is issued, then, being out of business and from 15.10.2009 till date instead of inquiry being held denovo or further from such stage it was held to be vitiated, the permanent revocation can be set aside, but by maintaining the same for specific period or restricting it to the period already undergone namely from 15.10.2009 till today. Mr.Shetty has no clear instructions in that regard. Hence, we do not adopt this course, else the Court would be accused of extending misplaced sympathy and which is likely to be misused in future cases by others. Tribunal was justified in finding fault with the inquiry but it could not have allowed the appeal of the original appellant in its entirety. The Tribunal s conclusion that the final order of revocation cannot have any existence in the eyes of law because the inquiry was held in breach of principles of natural justice without any proof of prejudice being caused to the respondent, cannot be sustained. The nonobservance of the principles of natural justice in this case would not mean the whole inquiry is wiped out or the inquiry cannot be held from the stage at which the breach is committed and after rectifying it. That wrong is capable of being remedied. After all the adverse material are disclosed to the Agent and the persons whose version is proposed to be relied upon are made available for questioning by the Appellant, the inquiry can proceed and be concluded. That would be a fair course to adopt so as to protect both sides. - till the Inquiry is concluded and which must be concluded within the time stipulated above, the order of suspension of licence stands, but without prejudice to the rights and contentions of both sides - Petition disposed of.

Issues Involved:
1. Revocation of Customs House Agent's license.
2. Violation of principles of natural justice.
3. Tribunal's conclusion on the inquiry process.
4. Prejudice caused by the breach of natural justice.
5. Procedural fairness in the inquiry.

Issue-wise Detailed Analysis:

1. Revocation of Customs House Agent's license:
The respondent, a Customs House Agent, had his license revoked by the Commissioner of Customs (General) on 15.10.2009 due to alleged violations of Regulations 12, 18(1), and 13(n) of the Customs House Agents Licensing Regulation, 2004. The revocation followed an inquiry where the respondent was charged and subsequently failed to attend a scheduled hearing, leading to the inquiry concluding in his absence.

2. Violation of principles of natural justice:
The Tribunal found that the inquiry was conducted in gross violation of principles of natural justice. Specifically, the respondent was not given notice of the adjourned hearing date, which led to the inquiry proceeding and concluding without his presence. This was deemed a fundamental error by the Tribunal, as the absence of notice to the chargesheeted agent vitiated the inquiry process.

3. Tribunal's conclusion on the inquiry process:
The Tribunal concluded that the inquiry was flawed due to the lack of notice to the respondent about the adjourned hearing date. However, the High Court found inconsistency in the Tribunal's order. The High Court differentiated between a situation where an agent is not given notice of a hearing and a situation where the agent is notified but unable to attend. The latter does not necessarily vitiate the inquiry if the agent is given an opportunity to cross-examine witnesses and review statements at a later stage.

4. Prejudice caused by the breach of natural justice:
The High Court emphasized that a breach of natural justice does not automatically nullify the entire inquiry. It must be established that the breach caused actual prejudice to the respondent. The Court referred to the Supreme Court's judgment in "Canara Bank & Ors. Vs. Shri. Debasis Das & Ors." which stated that the breach of natural justice must be so fundamental that it goes to the root of the case. If prejudice is proven, the inquiry should proceed from the stage where the breach occurred, after rectifying it.

5. Procedural fairness in the inquiry:
The High Court directed that the inquiry should be resumed from the point where the breach occurred. The Inquiry Officer was instructed to provide the respondent with copies of the statements recorded on 19.3.2008 and make the witnesses available for cross-examination. This approach ensures procedural fairness and allows the respondent to defend himself adequately. The Court clarified that the suspension of the license would continue until the inquiry is concluded, but without prejudice to the rights and contentions of both parties.

Conclusion:
The High Court partially disagreed with the Tribunal's decision to completely set aside the revocation of the license. It held that the inquiry could be rectified and resumed from the stage where the breach of natural justice occurred. The Court's approach ensures that the principles of natural justice are upheld while allowing the inquiry to proceed fairly.

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