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TMI Blog2010 (10) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract, the PUD quantity was increased to a total of 24 MT without changing other terms of the purchase contract. Prior to the dispatch of the consignment, inspection was carried out by Sakson Fisheries Consultants, local agents of Cascade, on 18-10-2006, whereby it was found that there was no bad odour. Rather there was a fairly fresh smell and the quality of the consignment was found to be satisfactory. 3. On 25-10-2006, the consignment was dispatched from Mumbai, which arrived at Sharjah Port on 2-11-2006 via Delivery Order, dated 6-11-2006. The Director of Customs, Sharjah, was requested to authorize the release of the PUD Shrimps to Cascade. Following this, on 7-11-2006 Sharjah Customs, vide its Customs Declaration Form, stated that the consignment was not to be released before Health Inspection. It appears from the facts that the customs and health authorities of UAE, had inspected the PUD Shrimps' quality and quantity and they were satisfied that it was fit for human consumption. The health authorities resealed the consignment and numbered it as MSLA 18 J 550015, as against the original seal No. YME 166813. It appears from the Store Receipt voucher No. 9232 dated 12-11-2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity complaint on the shipment effected by the appellant for a value of US $ 83000 and a claim of total loss arising from intentional cheating by way of delivery of decomposed shrimp, unfit for human consumption. 8. The Deputy Director, MPEDA, the third respondent by its letter dated 12-9-2007 forwarded the quality complaint made by Cascade and sought clarification from the appellant regarding the same. To that the appellant vide its letter dated 18-9-2007 stated that the consignment that they had sent was of standard quality and also pointed out that they were very doubtful whether the sample shown to the appellant's officers during their visit to Cascade's factory and the analysis report dated 21-11-2006 pertained to the consignment sent by them. 9. In addition to this, Cascade, through its advocates, served a legal notice on the appellant on 23-9-2007 asking it to pay US $ 83104 plus destruction costs within 7 days of receipt of the notice and on failing to do so, appropriate legal proceedings would be filed in India and UAE to recover the said amount. The appellant, through its Advocate, replied on 17-10-2007 denying that the entire consignment of shrimps exported by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent vide its letter dated 20-6-2008 informed the appellant that no more personal hearing was required and directed them to send any further evidence of proof of settlement with Cascade, if any. On 19-8-2008, the second respondent passed an order holding, inter alia, that : "..........The appellant in a very unethical way, had reneged on the promises made earlier. It is also clear that the appellant company has made every attempt to disown its responsibility for supplying poor quality seafood to M/s. Cascade Marine Foods LLC, Sharjah. Even during the personal hearing before the undersigned on the 28th April, the appellant was given ample time to settle the matter. Time was also given beyond the deadline fixed. However, the appellant seems to have taken a decision not to settle the complaint. The appellant's contention that they were pressured to sign the documents is quite illogical and unjustifiable because if they had any difference of opinion they could have recorded then and there. Hence there is ample evidence that this is definitely a case of cheating of M/s. Orxy Fisheries by shipping substandard material to M/s. Cascade Marine that brought heavy loss to one of the lead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Part-II No. 184012005 dated 25-11-2005 read with Rule 43 of the MPEDA Rules, I hereby call upon you to show cause why the Certificate of Registration as an Exporter granted to you should not be cancelled for reasons given below: 1. It has been proved beyond doubt that you have sent substandard material to M/s. Cascade Marine Foods, LLC, Sharjah. 2. You have dishonoured your written agreement with M/s. Cascade Marine Foods, LLC, Sharjah to settle the complaint made by the buyer as you had agreed to compensate to the extent of the value of defective cargo sent by you and have now evaded from the responsibility. 3. This irresponsible action have brought irreparable damage to India's trade relation with UAE. Your reply should reach the undersigned within 10 days from the date of receipt of this letter failing which it will be presumed that you have no explanation to offer and we will proceed with action for cancellation of your registration certificate without further notice to you. If ultimately a decision is reached to deregister you under the provisions of the MPEDA Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n confidence and justice is the goal of a quasi-judicial proceeding also. If the functioning of a quasi-judicial authority has to inspire confidence in the minds of those subjected to its jurisdiction, such authority must act with utmost fairness. Its fairness is obviously to be manifested by the language in which charges are couched and conveyed to the person proceeded against. In the instant case from the underlined portion of the show cause notice it is clear that the third respondent has demonstrated a totally close mind at the stage of show cause notice itself Such a close mind is inconsistent with the scheme of Rule 43 which is set out below. The aforesaid rule has been framed in exercise of the power conferred under Section 33 of The Marine Products Export Development Authority Act, 1972 and as such that Rule is statutory in nature. 30. Rule 43 of the MPEDA Rules provides as follows : "43. Cancellation of registration where the Secretary or other officer is satisfied that any person has obtained a certificate of registration by furnishing incorrect information or that he has contravened any of the provisions of this rule or of the conditions mentioned in the certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows : "25. Upon consideration of the language in the show-cause notice-cum-charge-sheet, it has been very strongly contended that it is clear that the Officer concerned has a mindset even at the stage of framing of charges and we also do find some justification in such a submission since the chain is otherwise complete." 35. After paragraph 25, this Court discussed in detail the emerging law of bias in different jurisdictions and ultimately held in paragraph 35 (page 201 of the report), the true test of bias is : "35. The test, therefore, is as to whether a mere apprehension of bias or there being a real danger of bias and it is on this score that the surrounding circumstances must and ought to be collated and necessary conclusion drawn therefrom - in the event however the conclusion is otherwise inescapable that there is existing a real danger of bias, the administrative action cannot be sustained :" 36. Going by the aforesaid test any man of ordinary prudence would come to a conclusion that in the instant case the alleged guilt of the appellant has been prejudged at the stage of show cause notice itself. 37. The appellant gave a reply to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumbent on the third respondent to give adequate reasons. 39. On the question whether the entire proceeding for cancellation of registration initiated by the show cause notice and culminating in the order of cancellation is vitiated by bias we can appropriately refer to the succinct formulation of the principle by Lord Reid in Ridge v. Baldwin and Others (1964 A.C. 40). The Learned Law Lord, while dealing with several concepts, which are not susceptible of exact definition, held that by fair procedure one would mean that what a reasonable man would regard as fair in the particular circumstances (see page 65 of the Report). If we follow the aforesaid test, we are bound to hold that the procedure of cancellation registration in this case was not a fair one. 40. On the requirement of disclosing reasons by a quasi-judicial authority in support of its order, this Court has recently delivered a judgment in the case of Kranti Associates Pvt. Ltd. & Anr. v. Sh. Masood Ahmed Khan & Others on 8th September 2010. 41. In M/s. Kranti Associates (supra), this Court after considering various judgments formulated certain principles in para 51 of the judgment which are set out bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith a valid decision making process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya v. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions". (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process". 42. In the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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