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TMI Blog1991 (12) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... tner of the said firm and Sh. R.S. Bedi, an employee of the Custom House Agent, for their active connivance with M/s. Mitsubishi Heavy Industries Ltd. and M/s. ACKM Pithawala in undervaluation and the fradulent clearance of goods vide Bill of Entry No. 252592 dated 17-9-1990 at the Air Cargo Complex, I.G.I. Airport, New Delhi. And whereas in view of the gravity of the above allegations made against the said CHA firm and its employee, an enquiry under Regulation 21(1) read with Regulation 23 of the Custom House Agents Licensing Regulations, 1984 is contemplated against the said firm and its employee. Now, therefore, I, Mahesh Kumar, Collector of Customs, Delhi in exercise of powers vested in me under Regulation 21(2) of CHALR, 1984 hereby order suspension of CHA licence No. 11/87 of M/s. P.S. Bedi Co. with immediate effect and until further orders. This order is issued without prejudice to any other action being taken or proposed to be taken against the said CHA/or its employees/representatives under the Customs Act, 1962 or any other law for the time being in force. Sd/- (MAHESH KUMAR) COLLECTOR OF CUSTOMS M/s. Bedi Co., E-43/1, Okhla Indl. Area, Phase-11 New ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated 7-5-1991 which has been referred to in the impugned order. 1.3 The allegations made in the show cause notice which are relevant to the present case are :- (1) One Mr. Itagaki, representative of M/s. MHI at New Delhi in his statements dated 25-9-1990 and 20-11-1990, inter alia, stated that after the invoice with the value of J. Yen 11,20,000 was received from Japan, discussions were held in a hotel with M/s. P.S. Bedi Co. and on communication of result of the discussion to Japan, MHI Japan sent the invoices with the lower values of J. Yen 6,00,000 and the same was filed with Bill of Entry No. 252592. [Para 5.8 of the show cause notice] (2) The Bill of Entry No, 252592 dated 17-9-1990 including its annexures such as OGL declaration, declaration under Rule 10 of Customs Valuation Rules, authority letter have been purportedly signed in the name of M/s. NTPC. The Bill of Entry itself has been filed in the name of NTPC and in the invoice the name of the consignee is NTPC. These documents as filed with the Customs give an impression that the goods have been imported by NTPC and are being cleared under their authority. The authorisation letter was in the name of P.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Katyal on behalf of M/s. NTPC as instructed by him at the instance of Mr. S. Kitayama and at the suggestion of R.S. Bedi of the appellant firm. [Para 9. la of the show cause notice] (6) The appellant, who has filed the said bill of entry in the name of NTPC has not been authorised by NTPC or on their behalf. The authorisation letter purported to have been issued in favour of the appellant is also without any authority. The appellant has filed all the papers purported to have been signed by NTPC although he had not received any of the papers from any officer of NTPC or anybody authorised on their behalf. Shri R.S. Bedi, an employee of the appellant firm has further stated that these papers were handed over to him by M/s. ACKM. It has, therefore, been alleged that the appellant firm have filed the papers with the Customs without any authority from NTPC; they had in the past known the procedure for clearance of the consignments proper on behalf of NTPC. Further allegation is that the appellant had been dealing with the officers of ACKM on day-to-day basis and would have in all probability known Mr. K.L. Katyal who had signed illegally these papers. [Para 10.2 of the show cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng power under Regulation 21(2) prior show cause notice or hearing is not necessary for suspension of the licence under the circumstances mentioned therein but the learned Advocate submits that the decision of the Calcutta High Court is not a good law inasmuch as the said judgment has not noticed certain decisions of the Supreme Court or because of subsequent pronouncements of Supreme Court which clearly stipulate that even interim orders are subject to the constraint of a pre-decisional hearing. For this proposition, the learned Advocate relies on Supreme Court s judgment in the case of Liberty Oil Mills Others v. UOI [AIR 1984 SC 1272] - Head Note (C). He has also relied on Supreme Court s judgment in the case of Management of M/s. Nally Bharat Engg. Co. Ltd. v. The State of Bihar and Others reported in Judgments Today [JT 1990 (2) SC 96]. He laid emphasis on the Head Note to the said judgment which reads as follows :- What is thus important in the modern administration is the fairness of procedure with elimination of element of arbitrariness. The State functionaries must act fairly and reasonably. That is, however not the same thing to state that they must act judicially or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular circumstances. [Emphasis supplied by ld. Advocate]. 3-3. Opposing the contention of the learned Advocate Smt. Vijay Zutshi, learned CDR pointed out that principles of natural justice have to be applied having regard to the peculiar Scheme of the Act or the provisions of law and not only the peculiar facts and circumstances of the case. There is no hard and fast rule that in every situation there must be a show cause notice and there must be prior hearing to the affected person. There are no embedded principles in any rigid set of the rules by the name of principles of natural justice. She points out that so far as particular provision, namely Regulation 21(2) is concerned there is a direct authority of Calcutta High Court and there is no other contrary decision of any other High Court which holds that prior notice or hearing is required to be given by the Collector while he exercises his power under the said Regulation 21(2). She has, therefore,-submitted that no illegality has been committed by the Collector. She relies for her proposition on (i) AIR 1970 SC 150 [A.K. Kraipak Others] and (ii) AIR SC 896 [Daud Ahmed v. District Magistrate, Allahabad]. 3.3A We have care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Jeena Co. and having regard to the peculiar Scheme of Regulation 21 read with Regulation 23, we are of the view that an order passed by the Collector of Customs in exercise of his power under Regulation 21(2) need not precede by a show cause notice or any hearing to the CHA concerned. Accordingly, we do not find any substance in this proposition of the learned Advocate. 3.4 Next proposition of the learned Advocate is that the impugned order does not give any reasons and is, therefore, a nullity. He relies for this proposition on (i) 1976 SC 1785 Para 6 [Siemens Engg. Mfg. Co. v. UOI]. 3.5 Opposing the submission, the learned CDR has submitted that the reasons are stated in para 2 of the impugned order (which has already been set out above). According to her, the reason given is that there are grave allegations against the appellant firm in the show cause notice dated 7-5-1991 and an enquiry is contemplated against the said firm under Regulation 21(1) read with Regulation 23 of the CHALR, 1984. She has, therefore, urged that no illegality in the order can be found on this ground. 3.6 We have considered the submissions of both the sides on this issue whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, mentioned supra. In para 5 of the said Report that Court has observed as follows :- To our mind, such power under sub-regulation (2) of Regulation 21 has given the Collector a very wide discretionary power to suspend the licence of a Custom House Agent. While taking such action the Collector of Customs is not confined to the grounds as specified in sub-regulation (1) but in order to take such action the Collector must be fully satisfied the immediate action is necessary. Although such satisfaction should not be merely on subjective satisfaction of the Collector but the reasons for being so satisfied should be specifically recorded in the order itself. As indicated earlier, the said order was not on merely subjective satisfaction of the Collector but ample reasons had been given in the order itself indicating that he had bona fide exercised his power as provided under sub-regulation (2) of Regulation 21. He has submitted that the Jeena s case was one of export of narcotics and the evidence on record and the reasons given in the impugned order itself shows that an immediate action was necessary against the CHA. No such immediacy emerges out of the reasons, namely, gravity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be taken either instantly or without any considerable loss of time. A reasonable time in view of particular facts and circumstances of case under consideration. The word immediate in the American Legal Dictionary Words and Phrases - Legally Defined states that there appears to be no material difference between the terms immediately and forthwith . A provision to the effect that a thing must be done forthwith or immediately means that it must be done as soon as possible in the circumstances, the nature of the act to be done being taken into account. The Law Lexicon by Justice T.P. Mukherjee quotes - Bladwin s Century Edition Bouvier s Law Dictionary 1928 Edition at page 519 explaining the meaning of the word immediately as follows :- The words forthwith and immediately have the same meaning. They are stronger than the expression within a reasonable time , and imply prompt, vigorous action without any delay, and whether there has been any such action is a question of fact having regard to the circumstances of the particular case. A similar meaning has been given in Wharton s Law Lexicon . For the aforesaid reasons, the learned Advocate has submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Public Orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. The learned Advocate has, therefore, submitted that the respondent cannot be allowed to plead about a letter dated 27-8-1991 not mentioned in the impugned order itself. He further submits that this letter in any case is just an inference of M/s. NTPC in respect of a matter which is still under adjudication with the Additional Collector of Customs and how far that inference of M/s. NTPC is valid and can be used against the appellant is a matter of conjecture and surmises at this stage and cannot form the basis for action under RG 21(2) of CHALR, 1984. 3.10 We have carefully considered the pleas advanced on both sides. We are in agreement with the learned Advocate about the requirements that an order passed under Regulation 21(2) must fulfil before it can be held to be tenable. One of the requirements as rightly pointed out by the learned Advocate on the authority of Calcutta High Court s judgment in the case of Jeena Co., mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court rendered in the case of M/s. Jeena Co., supra, holding that prior hearing is not necessary before suspending the licence under sub-regulation (2) of Regulation 21, the Apex Court had an occasion to consider the scope and extent of the principle of audi alteram partem in the case of Union of India v. Tulsiram Patel, 1985 SC 1416 and observed in paragraph 101 as follows : 101. Not only, therefore, can the principles of natural justice be modified but in exceptional cases they can even be excluded. There are well defined exceptions to the memo judex in causa sua rule as also to the audi alteram partem rule. The memo judex in causa sua rule is subject to the doctrine of necessity and yields to it as pointed out by this Court in J. Mohapatra Co. v. State of Orissa, (1985) 1 SCR 322,334-5 : (AIR 1984 SC 1572,1576-7). So far as the audi alteram partem rule is concerned, both in England and in India it is well established that where a right to a prior notice and an opportunity to be heard before an order is passed would obstruct the taking of prompt action, such a right can be excluded. This right can also be excluded where the nature of the action to be taken, its object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... templated, he is not wholly without any opportunity. For, in such a case, a Show Cause Notice has to be given to such Agent and he would have full opportunity to contest the same by producing any evidence or cross-examining any person under Regulation 23. Besides he will also have an opportunity to make representation before the Collector, if enquiry report prepared by the Assistant Collector of Customs goes against him. Even if the Order of the Collector goes against him, such Agent has the remedy of appeal. This in my considered opinion would be a sufficient compliance with the requirement of natural justice. Thus, I agreeing with my learned brother also overrule the contention that prior hearing was necessary before passing the impugned Order of suspension under sub-regulation (2) of Regulation 21. As regards the contention that the impugned Order is not in consonance with sub-regulation (2) of Regulation 21. 7. It was the contention of the learned Counsel for the appellants that under sub-regulation (2) of Regulation 21 the Collector has a discretion to suspend the licence of an Agent only in appropriate cases where immediate action is necessary and where an enquiry against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proposed action and the probable consequences which may ensue such action and, next, take the trouble of reciting in the Order issued by them the satisfaction forming the basis of the action and a concise statement of the allegations forming the basis of the satisfaction. If the necessary recitals are not found, there may be serious sequels. In cases involving Civil Liberties, the Order will necessarily have to be quashed. In other cases also, it is possible to envisage similar results depending on the rights involved the object of the Statute and other facts and circumstances. From a reading of the impugned Order of suspension it is clear that the respondent had not taken trouble of reciting in the Order about his satisfaction forming the basis of the action. Nowhere he has said in the impugned Order that the present case is an appropriate case where immediate action is necessary. What he has said in the impugned order is only that a Show Cause Notice dated 7-5-1991 was issued to the appellants for their active connivance with M/s. Mitsubishi Heavy Industries Ltd. and M/s. ACKM Pithawala in under-valuation and fraudulent clearance of goods vide Bill of Entry No. 252592 dated 17- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dated 7-5-1991 that the appellants under their direction have fraudulently signed the Bill of Entry and filed it in the name of NTPC though they were never authorised to do so by the NTPC or nobody on their behalf may be the fresh reason for passing the impugned Order. This contention is to be rejected only for mention. For, this alleged fraudulent act of the appellants was the very basis of the Show Cause Notice itself and this is amply clear from the opening paragraph of the impugned Order of suspension wherein the respondent has stated that Show Cause Notice dated 7-5-1991 was issued to the appellants for their connivance with M/s. MHI and M/s. ACKM and Pithawala in under-valuation and fraudulent clearance of goods vide Bill of Entry No. 252592 dated 7-9-1990. Thus the receipt of the said letter dated 27-8-1991 is of no consequence. 8. Before I part it may also be stated that for the reasons mentioned by my learned brother and by me as aforesaid, this unexplained inordinate delay in passing the order of suspension vitiates the impugned Order as it has become tainted with colourable exercise of power. See : Radheysham v. State of Haryana - AIR 1982 Punjab Haryana 519 (FB) a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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