2009 (8) TMI 673 - HC - Customs

Suspension of a Custom House Agents Licence - whether an order of suspension of a Custom House Agents Licence can be issued without complying with the procedure for revocation of a licence laid down in Regulation 22 of the Customs House Agents Licensing Regulations, 2004? Held that - There can be no doubt that power under Regulation 20(2) has serious civil consequences for a customs house clearing agent, and the principles of natural justice must be complied with. This writ application may be placed before the Hon ble Chief Justice for assignment to a Division Bench.

Issues Involved:
1. Whether an order of suspension of a Custom House Agents Licence can be issued without complying with the procedure for revocation of a licence laid down in Regulation 22 of the Customs House Agents Licensing Regulations, 2004.

Detailed Analysis:

Issue 1: Compliance with Regulation 22 for Suspension of CHA Licence

Background:
The petitioner, a company incorporated under the Companies Act, 1956, has been operating as a Customs House Agent (CHA) since 1987 and holds a CHA licence valid till 2016. The petitioner's licence was suspended by the Commissioner of Customs (Airport & Administration), Custom House, Kolkata, through Establishment Order No.235/2009 dated August 10, 2009, following the seizure of 6085 Kgs of Red Sanders instead of Hot Dipped Galvanised Tension Bars by the Directorate of Revenue Intelligence (DRI).

Petitioner's Argument:
The petitioner argued that the suspension of the CHA licence could only be exercised upon compliance with the provisions of Regulation 22 for revocation of a licence. The petitioner cited several judgments to support the claim that the procedure under Regulation 22 must be followed even in cases of immediate suspension under Regulation 20(2).

Relevant Regulations:
- Regulation 20: Deals with suspension or revocation of a licence. It includes provisions for immediate suspension where necessary.
- Regulation 21: Allows the Commissioner of Customs to prohibit a CHA from working in specific sections if obligations under Regulation 13 are not fulfilled.
- Regulation 22: Outlines the procedure for suspending or revoking a licence, including issuing a notice, allowing a written statement of defense, and conducting an inquiry.

Court's Analysis:
The court noted that Regulation 20(2) allows for immediate suspension without the need to follow the procedure outlined in Regulation 22. The court referred to the heading of Regulation 20, which includes both suspension and revocation, but emphasized that headings do not control the clear words of a statutory provision. The court cited several Supreme Court judgments to support the interpretation that headings cannot alter the substantive provisions of a regulation.

The court acknowledged that while the power to suspend a CHA licence has serious civil consequences and the principles of natural justice must be observed, in cases requiring immediate suspension, a post-decisional hearing may suffice. The court emphasized that such power should be exercised only in exceptional cases and that investigations should be conducted with utmost expedition to avoid indefinite suspension.

Judicial Precedents:
The court referred to several judgments:
- Mishra & Mishra (Agencies) Enterprises & Anr. vs. Union of India & Ors.
- Indian Mercantile Agency & Ors. vs. Commissioner of Customs (Administration), Kolkata & Ors.
- Goodhope Clearing and Forwarding Pvt. Ltd. vs. Commissioner of Customs (Administration) & others
- M/s. Hindustan Shipping Agency & Anr. vs. Union of India

In these cases, the courts held that the procedure under Regulation 22 must be followed for suspension under Regulation 20(2). However, the present court disagreed with this interpretation, emphasizing that Regulation 20(2) explicitly allows for immediate suspension without following Regulation 22.

Conclusion:
The court found that immediate suspension was warranted in this case due to the serious charges against the petitioner. The court did not grant any interim relief and expressed a prima facie view that the writ application should be dismissed. However, due to differing views from co-ordinate benches, the court recommended that the matter be decided by a Division Bench.

Order:
The writ application was to be placed before the Hon'ble Chief Justice for assignment to a Division Bench. Urgent certified copies of the order were to be provided to the parties upon compliance with requisite formalities.

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