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2009 DIGILAW 939 (CAL)

Jessop and Company Limited Si v. UNION OF INDIA

2009-12-23

KALYAN JYOTI SENGUPTA, L.P.MUKERJI

body2009
Judgment :- (1.) This appeal is arising out of a judgment and order of the learned single Judge of this Court dated 15th, May, 2009 by which the writ petition has been dismissed. (2.) In the writ petition only point involved was that whether the writ petitioner is entitled to get a hearing before any order of suspension is passed under section 11(4) of the Foreign Trade (Development and Regulation) Act, 1992. (3.) The short fact of the case is. that the appellants while carrying on business of import of certain goods enjoy the exemption benefits as. available under the said Act and Rules framed thereunder. It appears that there has been a breach of the terms and conditions of granting such benefits. As such, the penalty proceeding was initiated under the provision of section 14 of the said Act. Admittedly, in the penalty proceeding hearing was given and after hearing a sum of Rs.17,19,404/-was awarded as penalty to be paid by the appellants/petitioners. (4.) The said order imposing penalty was unsuccessfully challenged before the appellate authority. Thus, the said order of imposing penalty at present has become final. (5.) However, it is said that a writ petition has been filed in this Court challenging the entire order. We are not concerned with the same, as the same will take its own legal course. Naturally all points are, to be agitated there where the matter is pending. (6.) Since the amount of penalty was not paid in spite of the said order, the respondents initiated recovery proceeding. While doing so, certificate proceeding has been initiated and the same is pending before the appropriate authority and at the same time order of suspension under section 11(4) of the said Act has been passed and thereby importer-exporter code number has been suspended. Admittedly, this order was passed without giving any hearing. (7.) Therefore, issue before the learned trial, Judge is whether any pre- decisional hearing is required while passing order under section 11(4) or not. We, therefore, set out the said provision in the following manner: "S. 11. Contravention of provisions of this Act, rules, orders and export and import policy. -(1).................. Admittedly, this order was passed without giving any hearing. (7.) Therefore, issue before the learned trial, Judge is whether any pre- decisional hearing is required while passing order under section 11(4) or not. We, therefore, set out the said provision in the following manner: "S. 11. Contravention of provisions of this Act, rules, orders and export and import policy. -(1).................. (4) A penalty imposed under this Act may, if it is not paid, be recovered as an arrear of land revenue and the Importer Exporter Code Number of the person concerned, may, on failure to pay the penalty by him, be suspended by the Adjudicating Authority till the penalty is paid." (8.) The learned trial Judge was of the view that after considering all the judgments of the Supreme Court held that in a case of this nature adherence of principle of natural justice is not required. According to the learned trial Judge, the power is an automatic and is an offshoot of the failure in deposit of the penalty. At the time of the proceeding for imposing penalty hearing was given. So nothing is to be heard is the view of the learned trial Judge, (9.) Mr. Chowdhury, learned counsel appearing for the appellants submits that truly it is a measure of recovery proceeding but the order suspending importer-exporter code number has got the civil and evil consequences by which the benefit enjoyed by his clients in the matter of imposition of penalty will be withdrawn and his clients will suffer serious loss and prejudice. (10.) According to Mr. Bose, learned counsel appearing for the respondents submits that judgment and order of the learned trial Judge is well reasoned and has been rendered upon consideration of all the principles laid down by the Honble Supreme Court and does not call for any interference. (11.) We have gone through the impugned judgment and order of the learned trial Judge. We cannot agree with the learned trial Judge that while passing order of suspension under section 11(4), no hearing is required. No doubt it is a measure and/or method to recover the dues from the defaulter/importer but when a measure of suspension is adopted, certainly it has got the affectation of right and in such situation benefit which has been accrued in favour of the appellant is sought to be withdrawn. No doubt it is a measure and/or method to recover the dues from the defaulter/importer but when a measure of suspension is adopted, certainly it has got the affectation of right and in such situation benefit which has been accrued in favour of the appellant is sought to be withdrawn. The same shall be done upon giving a hearing, namely, before passing suspension order. It may so happen that the party concerned may pay the entire amount or secure or can explain that it is not a case where order of suspension should be passed. While on one hand, the certificate proceeding has been initiated and on the other hand, suspension order has been passed without waiting for the result of certificate proceedings; poses somewhat hardship. (12.) According to us, when the certificate proceeding has been initiated the respondents should wait for the result of the certificate proceeding. According to us both the methods cannot be resorted to together, unless one method is exhausted, another method should not be resorted to. All these aforesaid points could have been agitated had a hearing been given. Although sub-section (4) does not admit of any pre-decisional hearing but one should not loose sight of the provision of section 8 though contained in separate chapter where it has been specifically mentioned that before passing order of suspension cancelling importer-exporter code number, a hearing must be given. When the effect in the order of section 8 is same as in section 11(4), we find no reason why similar opportunity should not be read inherently in the sub-section. In a large number of decisions of Supreme Court and this Court it has been held in a particular provision of law though there does not mention express provision of hearing but compliance of natural justice, namely, opportunity of being heard inheres in the subsection, if effect thereof results in affectation some right. (13.) In this case decision has been taken already without giving any hearing. The amount of penalty still remains unpaid. We, therefore, dispose of this appeal by the following order: In the event appellants deposit, without prejudice, the amount of penalty within a period of one month from the date of receipt of the copy of this order, then order of suspension will stand revoked. The amount of penalty still remains unpaid. We, therefore, dispose of this appeal by the following order: In the event appellants deposit, without prejudice, the amount of penalty within a period of one month from the date of receipt of the copy of this order, then order of suspension will stand revoked. If no such deposit is made, then we keep the order of suspension in abeyance for a period of two months from the date of receipt of the copy of this order and within which a post-decisional hearing should be given to the appellants who will be able to explain everything. However, without relying on our observation made in this judgment the authority concerned shall consider the same and after doing so if the authority concerned feels that order of suspension is required to be revoked, it will be open for him to do so. In the event the representation so to be made or cause to be shown is not accepted by the authority concerned, then reasoned order shall be passed to retain this order of suspension. (14.) The appeal is, thus, disposed of. There will be no order as to costs. Xerox plain copy of the operative portion of this order countersigned by Assistant Registrar (Court) be given to the parties. Appeal disposed of.