2013 (9) TMI 783 - HC - Customs

Prohibition to Transact Business in case of CHA - Surrender Of Original Licence - Petitioner had been prohibited from transacting business under Regulation 9(2) of the Customs House Agents Licensing Regulations, 2004 within the jurisdiction of Delhi Commissionerate with immediate effect and to surrender his original licence and cards issued to them - Petitioner contended that no hearing or show cause notice was granted/issued to the petitioner and there had been violation of principles of natural justice submitted that order of prohibition under Regulation 21 can be only in respect of one or more sections of the Customs House and not the entire Commissionerate - Held that - The respondents themselves have issued Circular No. 9/2010-Customs dated 8th April, 2010 stating that where immediate suspension action is required under Regulation 20(2), there is no need to follow the procedure prescribed in Regulation 22, but it has been decided by the Board that post-decisional hearing should be given in all such cases so that errors apparent, if any, can be corrected and an opportunity of hearing is given to the aggrieved party - The aforesaid provision will be equally applicable to emergent and immediate action, which are taken under Regulation 21 - In these circumstances, we are leaving the second contention open as the petitioner can raise the said objection before the authorities concerned in the post-decisional hearing Relying upon INTERNATIONAL CARGO SERVICES Versus UNION OF INDIA 2005 (5) TMI 81 - HIGH COURT OF DELHI - The petitioner was entitled to post-decisional hearing also and then the respondents should pass a speaking order. Mohinder Singh Gill v. The Chief Election Commissioner, New Delhi 1977 (12) TMI 138 - SUPREME COURT - wherever the Parliament had intended a hearing it had said so in the Act and the rules and inferentially where it had not specified it was otiose - There was no such sequitur - The silence of a stature had no exclusionary effect except where it flows from necessary implication. Plain reading of the regulation 20 (2) would show that it was an emergent provision and its very purpose may be frustrated if the hearing was to be granted without exception and irrespective of the compelling facts and circumstances of the case, justifying passing of such an order - In the present case, no circumstances existed which would suggest invoking of this emergency provisions without taking recourse to the principle of natural justice - Furthermore, the order does not state, much less specifically give reasons which show proper application of mind by the concerned authorities for arriving at such a conclusion. Even administrative orders should be supported by proper reasons and application of mind - on both these accounts, the petitioner was entitled to succeed.

Summary

Issues Involved:
1. Violation of principles of natural justice.
2. Scope and applicability of Regulation 21 of the Customs House Agents Licensing Regulations, 2004.
3. Requirement of post-decisional hearing.
4. Issuance and service of show cause notice for revocation of licence.

Detailed Analysis:

1. Violation of Principles of Natural Justice:
The petitioner argued that the impugned order dated 24th January 2013, prohibiting them from transacting business under Regulation 9(2) of the Customs House Agents Licensing Regulations, 2004, was issued without a hearing or show cause notice, thereby violating the principles of natural justice. The court acknowledged that the principles of natural justice require that the person likely to be adversely affected by an action should be given notice and a reasonable opportunity to be heard. The court referred to the judgment in International Cargo Services versus Union of India, which emphasized the necessity of pre-decisional hearing unless emergent action is required.

2. Scope and Applicability of Regulation 21:
The petitioner contended that the prohibition under Regulation 21 should only apply to one or more sections of the Customs House and not the entire Commissionerate. The respondents, however, argued that Regulation 21 is independent and does not require the procedure prescribed in Regulation 22. The court examined Regulations 20, 21, and 22, noting that Regulation 21 allows the Commissioner of Customs to prohibit any Customs House Agent from working in one or more sections of the Customs Station if obligations under Regulation 13 are not fulfilled. The court highlighted that Regulation 21 does not explicitly require the procedure of Regulation 22 to be followed.

3. Requirement of Post-Decisional Hearing:
The court emphasized the need for post-decisional hearing in cases of emergent action under Regulation 21, drawing parallels with Regulation 20(2), which allows immediate suspension of a licence pending enquiry. The court cited the judgment in International Cargo Services, which held that post-decisional hearing is necessary to ensure compliance with the principles of natural justice. The court also referred to Circular No. 9/2010-Customs, which mandates post-decisional hearing in cases of immediate suspension under Regulation 20(2).

4. Issuance and Service of Show Cause Notice for Revocation of Licence:
During the hearing, it was noted that a show cause notice for revocation of the petitioner's licence had been issued by the Commissionerate at Pune. The petitioner's counsel stated that they had not received the notice. The court facilitated the service of the show cause notice in the court and directed the petitioner to file a reply within thirty days. The court further directed the competent authority at Pune to dispose of the show cause notice within thirty days of receiving the reply. If the authority failed to do so, the prohibition order would be deemed suspended/revoked.

Conclusion:
The court concluded that the petitioner is entitled to a post-decisional hearing and directed the respondents to pass a speaking order after such a hearing. The court also facilitated the service of the show cause notice for revocation and set a timeline for its disposal. The writ petition was disposed of with these directions, ensuring adherence to the principles of natural justice and procedural fairness.