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Application of Clause 6 of the Imports (Control) Order, 1955 - Challenge to debarring order dated 17-2-1985 and debarring circular dated 2-3-1984 - Violation of principles of natural justice. Analysis: The judgment addressed the application of Clause 6 of the Imports (Control) Order, 1955, in response to a challenge against a debarring order dated 17-2-1985 and a debarring circular dated 2-3-1984. The case involved M/s. Jain Shudh Vanaspati Company Limited, which imported Beef Tallow and received a show cause notice on 4-11-1983. The notice directed the company to show cause for breaching the Imports (Control) Order, 1955, and potentially face debarment from importing goods. Subsequently, the Deputy Chief Controller of Imports and Exports debarring M/s. Jain Shudh Vanaspati Company Limited and its directors from importing goods. This order also affected three petitioner companies with common directors, leading to restrictions on import licenses and prejudicing their operations. The crux of the issue revolved around the violation of principles of natural justice. The petitioners argued that they were not provided with any show cause notice or hearing before the application of Clause 6, contrary to the requirement of natural justice. The respondents contended that the statute did not mandate such notice or hearing for actions under Clause 6. However, the judgment emphasized that the absence of explicit provisions for a hearing does not negate the application of natural justice principles, citing precedents like "Swadeshi Cotton Mills v. Union of India" and "Liberty Oil Mills v. Union of India." These cases established the importance of affording a fair hearing, especially when significant civil consequences are involved. Furthermore, the judgment highlighted the Enforcement Guidelines issued by the Government of India, emphasizing the need to assess whether a company substantially benefited from the offense and if a director had a controlling interest. The court noted that these crucial findings could not be made without hearing the affected party. It was underscored that the respondents failed to establish that the petitioner companies benefited from the offense or had a controlling interest. The court rejected the argument that lack of awareness about associated companies justified the absence of detailed orders, emphasizing the necessity of applying established legal principles and guidelines. In conclusion, the court ruled in favor of the petitioners, quashing the debarment order's application of Clause 6 on the petitioner companies. The judgment emphasized the importance of upholding natural justice principles, ensuring fair hearings, and adhering to established legal guidelines.
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