1993 (7) TMI 96 - HC - Customs

Summary

Issues Involved:
1. Validity of the Customs House Agents Licensing Regulations, 1984.
2. Creation of two categories of agents: permanent and temporary.
3. Publication of the regulation in the Official Gazette.
4. Locus standi of the writ petitioners.
5. Alleged violation of Articles 14 and 19 of the Constitution of India.
6. Alleged colorable exercise of power and fraud in the regulation.
7. Impact on public interest and government revenue.

Issue-wise Detailed Analysis:

1. Validity of the Customs House Agents Licensing Regulations, 1984:
The writ petitioners challenged the validity of the Customs House Agents Licensing Regulations, 1984 on several grounds. They argued that the regulation was ultra vires as it created two categories of agents - permanent and temporary - which was not permissible under Section 146(2)(c). The petitioners contended that the regulation was not published in the Official Gazette and no appointed date was fixed, making the regulation invalid in the eyes of the law. The learned Single Judge dismissed these contentions, holding that the regulation was within the jurisdiction of the authority concerned and did not violate any provisions of Part III of the Constitution of India.

2. Creation of Two Categories of Agents:
The petitioners argued that the regulation created a floodgate for untrained persons to be appointed as agents, leading to complications and treating unequals as equals. The learned Single Judge, however, found that the regulation did not take away or interfere with the existing agents' rights but introduced a scheme for granting temporary licenses to applicants who met the conditions laid down in regulations 5 and 6. The court observed that the petitioners intended to create a monopoly, which was arbitrary and contrary to public policy.

3. Publication of the Regulation in the Official Gazette:
The petitioners contended that the regulation was not published in the Official Gazette, making it invalid. The learned Single Judge held that the provision for publication in the Official Gazette was directory and not mandatory. The court reasoned that since no consequence was provided for non-compliance, the regulation was valid despite non-publication.

4. Locus Standi of the Writ Petitioners:
The respondents argued that the writ petitioners had no locus standi to maintain the writ application, relying on the Supreme Court's decision in J.M. Desai v. Roshan Kumar. The learned Single Judge accepted this contention, stating that the petitioners had to establish that their legal rights were infringed. Since the petitioners' rights were created under the regulation, they had no independent right devoid of the regulation. The court held that the petitioners had no locus standi to challenge the validity of the regulation.

5. Alleged Violation of Articles 14 and 19 of the Constitution of India:
The petitioners argued that the regulation violated Articles 14 and 19 of the Constitution by making unequals equal and creating a monopoly. The court disagreed, stating that the regulation did not infringe on these constitutional provisions. The court noted that the regulation introduced a scheme for granting temporary licenses, which was reasonable and did not create a closed shop in favor of existing agents.

6. Alleged Colorable Exercise of Power and Fraud in the Regulation:
The petitioners claimed that the regulation was a colorable exercise of power and a fraud on the power of making regulations. The court found no merit in this argument, stating that the regulation was within the scope of the rule-making power and did not have any ulterior motives.

7. Impact on Public Interest and Government Revenue:
The court emphasized that the old regulations served a salutary and necessary principle designed to advance public interest by regulating and controlling clearing agents. The court expressed concern that the new regulation, by allowing temporary licenses, would lead to inexperienced and unqualified persons entering the profession, affecting the quality of service and government revenue. The court highlighted the importance of maintaining strict control over clearing agents to prevent smuggling and corruption.

Separate Judgments Delivered:
Both judges concurred in their judgment. Shyamal Kumar Sen, J., delivered the primary judgment, and Ajit Kumar Sengupta, J., agreed with the view, adding that issuing temporary licenses contradicted the purpose of ensuring reliability, financial solvency, and competence in the profession. He emphasized the risks involved in allowing novices to practice as clearing agents and the need for a disciplined and knowledgeable band of agents.

Conclusion:
The appeal was allowed, the order of the learned Single Judge dismissing the writ petition was set aside, and the Customs House Agents Licensing Regulations, 1984, insofar as they allowed temporary licenses, were quashed. The respondents were directed not to act based on the said regulations. There was no order as to costs.