2015 (6) TMI 257 - HC - Indian Laws

Authority to withhold grant of inspection certificates - Alleged violation on the part of the petitioner in respect of past export consignments - Held that - In the present case it is apparent that the action of respondent Nos. 1 & 2 in withholding the certificates is patently without authority of law and thus warrants interference under Article 226 of the Constitution of India. The Supreme Court in Rajasthan State Industrial Development and Investment Corporation 2013 (2) TMI 673 - SUPREME COURT had inter alia held that writ discretion must be exercised by the court on grounds of public policy public interest and public good. The writ is equitable in nature and thus its issuance is governed by equitable principles. Refusal of relief must be for reasons which would lead to injustice. Applying the aforesaid principles in the given facts and circumstances it is apposite that this Court exercise its jurisdiction to enforce the respondents to perform their duty. In my view it is not necessary for this Court to refrain from exercising its jurisdiction under Article 226 of the Constitution of India on account of existence of an alternate remedy. - Decided in favour of appellant.

Summary

Issues:
1. Authority to withhold inspection certificates for alleged past violations.
2. Legality of imposing penalty for past violations.
3. Duty of Export Inspection Agency to issue certificates promptly.

Issue 1: Authority to withhold inspection certificates for alleged past violations:
The petitioner, engaged in honey export, faced withholding of inspection certificates by respondent Nos. 1 & 2 due to alleged past violations of Export of Honey Rules, 2002. The primary question was whether the respondents had the legal authority to withhold certificates based on past violations. The petitioner argued that withholding current certificates for past violations was unjustified, as the EIA had already issued a show cause notice for the alleged violations, and any punitive action should be taken in accordance with the law. The court noted that there was no provision allowing the withholding of certificates as a punitive measure for past violations. It emphasized that the EIA must function within the confines of the law and cannot act arbitrarily or whimsically. The court directed the respondents to issue the pending inspection certificates within two weeks, highlighting that the EIA's duty is to inspect and issue certificates promptly.

Issue 2: Legality of imposing penalty for past violations:
The EIA sought a penalty of Rs. 19,79,981 for alleged past violations of exporting honey without necessary certificates. The court questioned the basis for imposing such a penalty, noting that the term "penalty" seemed erroneous, and it might actually pertain to recovering inspection fees for the past uninspected consignments. The court expressed doubt on the EIA's ability to recover fees for uninspected consignments and emphasized that any fee recovery must be done in accordance with the law, affording the petitioner an opportunity to respond. The court highlighted that the EIA's actions must align with statutory duties and cannot be arbitrary or contrary to legal provisions.

Issue 3: Duty of Export Inspection Agency to issue certificates promptly:
The court underscored the EIA's duty to promptly inspect and issue certificates, especially when consignments were pending clearance for months. The petitioner had repeatedly requested certificates to facilitate export, warning that delays could lead to order cancellations. The court criticized the withholding of certificates as irresponsible and a dereliction of duty by the EIA. It stressed that the EIA must act in accordance with the law and fulfill its obligations without undue delay. The court invoked equitable principles and the need to enforce existing legal rights, directing the EIA to issue the pending inspection certificates promptly. The judgment clarified that it did not preclude the respondents from taking action against the petitioner for alleged past violations in accordance with the law.

This detailed analysis of the judgment in the Delhi High Court case delves into the issues of authority to withhold inspection certificates, legality of imposing penalties for past violations, and the duty of the Export Inspection Agency to issue certificates promptly, providing a comprehensive understanding of the court's decision and reasoning.