1993 (9) TMI 126 - HC - Central Excise

Summary

Issues Involved:
1. Whether an oral hearing should be given before deciding an application mentioned in the second proviso to Section 4-M of the Imports and Exports (Control) Act, 1947.
2. Whether the principles of natural justice necessitate an oral hearing in such cases.

Issue-wise Detailed Analysis:

1. Oral Hearing Requirement:
The core issue was whether an oral hearing is mandatory before deciding an application under the second proviso to Section 4-M of the Imports and Exports (Control) Act, 1947. The case was referred to a larger bench due to conflicting decisions by two Division Benches.

One Division Bench (S. Ranganathan and Sunanda Bhandare, JJ.) in C.W. P. 2820/87, held that there was no statutory requirement for an oral hearing before imposing a condition to furnish a bank guarantee. The petitioner's written applications were considered, and thus, there was no failure of natural justice.

Another Division Bench (B.N. Kirpal and C.L. Chaudhary, JJ.) took a different view, emphasizing that an oral hearing should be provided before deciding such applications. They noted that the decision on the application has serious consequences on the final outcome of the main appeal, and principles of natural justice would require an oral hearing.

2. Principles of Natural Justice:
The larger bench delved into the principle of "audi alteram partem" (hear the other side), which is fundamental to natural justice. Various judgments from the Supreme Court and High Courts were cited to support the contention that a reasonable opportunity to present one's case is essential.

Key cases referenced include:
- Shri Mandir Sita Ramji v. Lt. Governor of Delhi and Others: Emphasized the duty to afford an opportunity of being heard before deciding objections.
- S.L. Kapoor v. Jagmohan and Others: Stressed that the absence of an express provision for a hearing does not imply its exclusion.
- Mohinder Singh Gill and Another v. The Chief Election Commissioner, New Delhi and Others: Highlighted the pervasive nature of natural justice in administrative and adjudicative actions.
- Ridge v. Baldwin: Asserted that good administration demands fair play in action.
- Shivraj Fine Art Litho Works v. Assistant Collector, Central Excise: Held that dismissing an application for waiving pre-deposit without a hearing violates natural justice.
- Smart P. Ltd. v. Income-Tax Appellate Tribunal: Affirmed that principles of natural justice apply even where a hearing is not specifically provided.
- Union of India v. Jyoti Prakash Mitter: Indicated that normally, an opportunity for an oral hearing should be given.

Conclusion:
The larger bench concluded that as far as possible, oral hearings must be given to the concerned parties. The decision on the pre-deposit application is crucial as it affects the petitioner's substantive statutory right of appeal. Therefore, the petitioner should be given an oral hearing to demonstrate their prima facie case and financial hardship. The principle of "audi alteram partem" should be given its true meaning, and this principle can be properly implemented if oral hearings in such cases are provided.

Judgment:
The larger bench overruled the decision in Amrutlal Ganpatrai Panchal's case, holding that oral hearings must be given before deciding applications under the second proviso to Section 4-M of the Act. The petitions were allowed, the impugned order was quashed, and the petitioners were directed to appear before the concerned authority for an oral hearing. There was no order as to costs.