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2009 DIGILAW 215 (CAL)

Hindustan Shipping Agency v. UNION OF INDIA

2009-03-13

SOUMITRA PAL

body2009
Judgment :- (1) In this writ petition M/s. Hindustan Shipping Agency, the petitioner No.1, an unregistered partnership firm and the petitioner No.2 a partner thereof have challenged the order dated 10th February, 2009 passed by the Commissoner of Customs (Airport and Administration), Kolkata, respondent No.2 suspending the Customs House Agent Licence held by the petitioner No.1 in exercise of the power conferred under Regulation 20(2) of the Customs House Agent Licence Regulations, 2004, (hereinafter referred to as the Regulations) with immediate effect. The matter was moved on 25th February, 2009 when directions were issued for filing of affidavits. Affidavits have since been filed. (2) The principal grievance of the petitioner is that licence has been suspended under Regulation 20(2) without following the procedure for suspension under Regulation 22 of the Regulations which postulates grant of opportunity to the petitioner to submit a written statement and an opportunity of being heard. In this regard reliance was placed on the judgment in W. P. No. 195 of 2008, Mishra and Mishra (Agencies) Enterprises and Anr. v. Union of India and Ors. So far as the point with regard to the maintainability of the writ petition is concerned relying on an unreported judgment by the Division Bench delivered on 19th August, 2008 in M.A.T. No. 593 of 2008 (C.A.N. No. 7062 of 2008), M/s. Ujjal Transport Service v. State of West Bengal and Ors. it was submitted since Court has ample power under Articles 226 and 227 of the Constitution of India to do substantial justice and as there has been infringement of fundamental rights, the petition is maintainable. (3) Opposing the writ petition it was submitted by Mr. Sardar Amjad Ali, learned Senior Advocate that since the petitioner No.1 is an unregistered firm, in view of the provisions contained in Section 69 of the Indian Partnership Act, 1932, the writ petition is not maintainable. In view of the non-obstante clause, Regulation 20(2) is an independent provision giving authority to suspend an agent with immediate effect. Therefore, as it is an independent provision and suspension has been carried out, applicability of Regulation 22 does not arise. As the grounds of suspension have been intimated, the law laid down in Mishra and Mishra (supra) is not applicable. Consequently, the action under challenge is just and proper. Moreover, authority has not taken follow up steps due to the pendency of the writ petition. As the grounds of suspension have been intimated, the law laid down in Mishra and Mishra (supra) is not applicable. Consequently, the action under challenge is just and proper. Moreover, authority has not taken follow up steps due to the pendency of the writ petition. Submission was as under Regulation 22(8) there is a provision for alternative remedy, the writ petition is not maintainable. (4) The issues which calls for consideration are first, since the petitioner is an unregistered firm, in view of Section 69 of the Indian Partnership Act, 1932 whether the writ petition is maintainable and secondly, whether the provisions of Regulation 20(2) conferring power on the authorities for carrying out immediate suspension of licence of an agent is subject to the provisions under Regulation 22. (5) So far as the first issue regarding the maintainability of the writ petition is concerned, in my view, since the Customs Authority had granted licence and had allowed the petitioner No.1, an unregistered firm, to carry out the work of an agent and a partner of the said firm is the petitioner No.2, the respondents cannot be permitted to raise the point of maintainability of the petition. Moreover, the issue is covered by the judgment in M/s. Ujjal Transport Service (supra) wherein it has been held as under:-"This writ petition has been dismissed by the learned trial Court only on the ground that in view of Section 69 of the Indian Partnership Act, 1932 the writ petition would not be maintainable as it has been filed by an unregistered partnership firm. We are of the considered opinion that the aforesaid proposition would not disable the Court to exercise its jurisdiction under Articles 226/227 of the Constitution of India. In this case the trial Court ought to have treated the writ as having been filed in the individual capacity of the Managing Partner, i.e. Debasish Ganguly, who has filed the vakalatnama. This would have served the interest of justice. The Court has ample power under Articles 226/227 of the Constitution to do substantial justice. At this stage the learned Counsel appearing for the appellant has submitted that the appellant would be satisfied in case the writ petition is considered on its merits limited only to the individual members of the unregistered partnership. We find merit in the aforesaid submissions as the firm stands for all the partners collectively. At this stage the learned Counsel appearing for the appellant has submitted that the appellant would be satisfied in case the writ petition is considered on its merits limited only to the individual members of the unregistered partnership. We find merit in the aforesaid submissions as the firm stands for all the partners collectively. In view of the above, the appeal is allowed treating the same as on days list. The order passed by the learned trial Court is set aside. The matter is remanded back to the learned trial Court for deciding the writ petition on merits after treating the same to have been filed by the individual members of the unregistered partnership............" (6) Therefore, in view of the facts noted and the law laid down in M/s. Ujjal Transport Service (supra), the writ petition is maintainable. (7) In order to appreciate the second issue it is necessary to refer to the provisions contained in Regulations 20 and 22 which are as under:-"20. Suspension or revocation of licence :- (1) The Commissioner of Customs may, subject to the provisions of Regulation 22, revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds, namely- (a) failure of the Customs House Agent to comply with any of the conditions of the bond executed by him under Regulation 10. (b) failure of the Customs House Agent to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else; (c) any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or any where else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station. (2) Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated. (Emphasis supplied) Relevant portion of Regulation 22 is extracted hereinbelow:-22. (2) Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated. (Emphasis supplied) Relevant portion of Regulation 22 is extracted hereinbelow:-22. Procedure for suspending or revoking licence under Regulation 20-(1) The Commissioner of Customs shall issue a notice in writing to the Customs House Agent stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit, within such time as may be specified in the notice, not being less than forty-five days, to the Deputy Commissioner of Customs or Assistant Commissioner, of Customs nominated by him, a written statement of defence and also to specify in the said statement whether the Customs House Agent desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs. (2) The Commissioner of Customs may, on receipt of the written statement from the Customs House Agent, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent. (3)......................................................................................... (4).......................................................................................... (5)......................................................................................... (6)......................................................................................... (7) The Commissioner of Customs shall, after considering the report of the inquiry and the representation thereon, if any, made by the Customs House Agent, pass such orders as he deems fit. (8) Any Customs House Agent aggrieved by any decision or order passed under Regulation 20 or sub-regulation (7) of the Regulation 22, may prefer an appeal under Section 129A of the Act to the Customs, Central Excise and Service Tax Appellate Tribunal established under sub-section (1) of Section 129 of the Act. (Emphasis supplied) (8) Regulation 20(1) deals with revocation of licence and sub-regulations (a)(b) and (c) of the Regulations deal with the grounds on which a licence can be revoked. Regulation 20(2) confers power on the Commissioner of Customs to suspend the licence of a Customs House Agent where immediate action is necessary. Interestingly power of suspension of licence "where immediate action is necessary" is under Regulation 20 which, as title indicates, deals with "suspension or revocation of licence". Regulation 20(2) confers power on the Commissioner of Customs to suspend the licence of a Customs House Agent where immediate action is necessary. Interestingly power of suspension of licence "where immediate action is necessary" is under Regulation 20 which, as title indicates, deals with "suspension or revocation of licence". Though it starts with a non-obstante clause and is an independent provision, Regulation 20(2) does not lay down the procedure to be followed by the authority following immediate suspension. Therefore, as no procedure has been enumerated following immediate suspension, answer, if any, has to be found from the Regulations itself. Regulation 22 which deals with the "procedure for suspending or revoking licence under Regulation 20", provides the answer. Regulation 22(1) provides the procedure for suspending the licence of an agent. Hence, as Regulation 20(2) does not lay down the follow up procedure, the procedure under Regulation 22 is to be followed. Regulation 22 postulates "The Commissioner of Customs shall issue a notice in writing to the Customs Agent stating the grounds on which it is proposed to suspend".. "the licence and requiring the said Customs House Agent to submit, within such time as may be specified in the notice, not less than forty five days, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him a written statement of defence and also to specify in the said statement whether the Customs House Agent desires to be heard in person........."Thus, as seen the agent is not only by notice should be informed of the grounds of suspension but at the same time he should be granted opportunity to submit a written statement of defence "within such time as may be specified in the notice." The words "and requiring the said Customs House Agent to submit" "a written statement of defence" is a pointer to that effect. The language of Regulation 22(1), as evident, is plain and unambiguous. The act of immediate suspension of an agent under Regulations 20(2) and the procedure under Regulation 22(1) are inseparable and cannot be read in isolation. Since an action by the authorities under Regulation 20(2) does not provide a remedy, procedure under Regulation 22, as noted, is to be followed. Otherwise it would enable the authority to suspend an agent with immediate effect for an indefinite period thus giving an uncontrolled and unguided power to the State. Since an action by the authorities under Regulation 20(2) does not provide a remedy, procedure under Regulation 22, as noted, is to be followed. Otherwise it would enable the authority to suspend an agent with immediate effect for an indefinite period thus giving an uncontrolled and unguided power to the State. (9) In the instant case by the impugned notice dated 10th February, 2009 the petitioners have been informed of the grounds of suspension. However, as postulated under Regulation 22 it does not specify the time by which the agent is to submit a written statement of defence. It is, thus, in breach of the Regulations wherein the principles of natural justice are ingrained. Since there has been a breach of the principles of natural justice, the petitioners are entitled to take recourse to the remedies provided under Article 226 of the Constitution of India -a remedy which is speedy and efficacious. Hence, in my view, as the Commissioner of Customs (Airport and Administration) Kolkata, respondent No.2 did not adhere to the procedure laid down in Regulation 22(1) while suspending the licence of the petitioner, such action is arbitrary, illegal and violative of Article 19(1)(g) of the Constitution of India and, thus, cannot be sustained. Therefore, the impugned order of suspension is set aside and quashed. The writ petition is allowed. The respondent Nos.1 and 2 are directed to allow the petitioner No.1 to carry on their activities in accordance with the terms of the licence. However, I make it clear that I have dealt with the legal aspect and have not gone into the factual aspects of the matter. (10) No order as to costs.