Barua & Chowdhuri vs Union of India

Harish Tandon, J.—The order suspending the licence under sub-regulation (1) of Regulation 19 is assailed in this writ petition. Apart from the same the petitioner has also challenged the vires of sub-regulation (2) of Regulation 19 as unconstitutional being opposed to the fundamental principles of natural justice. The order of suspension which runs into several pages reveals that Red Sanders, which is a prohibited goods was attempted to be exported to United Arab Emirates in the guise of High Alumina Refractories Fire Bricks. The said order further contains the violation of various regulations of Customs Brokers Licensing Regulation, 2013 and for such reason the authority arrived at the opinion that the licence of the petitioner should be suspended with immediate effect. Mr. Kishore Dutta, learned senior counsel for the petitioner vehemently submits that sub-regulation (1) of Regulation 19 of the said regulation provides a recording of the reasonable satisfaction where immediate action is necessary and not providing the reason shall entail the order of suspension liable to be quashed and set aside. He further submits that suspension order can only be passed when the enquiry is pending or contemplated and submits that since the enquiry has ended, the order of suspension cannot be continued. In other words what he tried to submit is that the order of suspension cannot continue for indefinite period. He arduously submits that order of suspension passed by the authority with immediate effect without affording an opportunity of hearing is legal, invalid and opposed to the principles of natural justice as held by the Coordinate Bench in case of Hindustan Shipping Agency and Another Vs. Union of India and Another .

By relying upon a judgment rendered in case of M/s. N.C. Singha and Sons and Another Vs. Union of India and Others, . Mr. Dutta submits that in absence of recording the circumstances warranting the suspension with immediate effect, the order of suspension cannot be sustained.

The licence can be suspended under Regulation 19 of the Customs Brokers Licensing Regulations, 2013. Sub-regulation (1) of the said Regulation commence with non obstante clause and empowers the Commissioner of Customs to suspend the objection of Customs Broker where immediate action is necessary provided an enquiry against such agent is pending or contemplated.

Sub-regulation (2) of the said Regulation requires an opportunity of hearing to be given to the Customs Broker when an order of suspension is passed under sub-regulation (1) and thereafter the Commissioner of Customs shall either revoke the suspension or allowed it to continue. The proviso inserted to sub-regulation (2) cast an obligation on the Commissioner of Customs to take recourse to the procedure under Regulation 20, in the event, the order of suspension is allowed to continue. Regulation 20 postulates the procedure for revoking the licence or imposing the penalty whereas the Regulation 18 contains the grounds on which the licence can be revoked or the penalty can be imposed.

The suspension and revocation are different and distinct things. The Commissioner of Customs is empowered to suspend the licence of the Customs Broker where he is of the opinion that an immediate action is necessary and the enquiry is contemplated or pending. The order of suspension impugned in this case contains the violation of the different provisions of regulations and non-fulfilment of the statutory obligations. An enquiry against the exporter and the other related persons for commission of an offence, when a prohibited goods are attempted to be exported clandestinely, stands on a different footing than the violation of the different provisions of the regulations and the obligations attached thereto by the Customs Broker.

The Division Bench in case of N.C. Singha, Sons (supra), did not lay down the proposition that under any circumstances the order of suspension cannot be passed but what has been laid down is that the order of suspension with immediate effect should not be by way of punishment but is necessary to cater the situation warranting immediate action. In the given case in the Division Bench notices that the order lacks the recording of the satisfaction relating to immediate action.

In the present case Paragraph 27 clearly depicts the non-fulfilment of the statutory obligations and contemplation to proceed for an enquiry and to prevent the further misuse of the Customs Broker licence, the situation demands an immediate action. This Court, therefore, does not find that the judgment rendered by the Division Bench could be of any help to the petitioner.

In case of Hindustan Shipping Agency (supra), the Coordinate Bench was considering the matter pertaining to the Customs House Agent Licence Regulations, 2004. Regulation 20 of the said regulations imbibes within itself the incident of suspension and revocation of licence. Regulation 22 provides the procedure to be adopted before the order of suspension could be passed. Sub-regulation (2) of Regulation 20 bestowed power on the Commissioner of Customs to suspend the licence with immediate effect but it was held that since no further procedure is provided the invocation of the power under sub-regulation (2) subject to Regulation 22. The Coordinate Bench notices the broad title of Regulation 20 which deals with the suspension and revocation of licence and held:

"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................"

The present regulation that is Customs Brokers Licensing Regulation, 2013, makes a difference between revocation and suspension as both the eventualities are jotted down in different and separate regulations. Regulation 18 relates to the revocation of licence and procedure has been provided in Regulation 20. Regulation 19 is an independent provision containing the eventuality of suspension of licence and therefore, is not regulated and/or controlled by Regulation 20 thereof. Furthermore, proviso is inserted to sub-regulation (2) of Regulation 19 which was absent in the repealed regulation providing a further action to be taken in the event the Commission of Customs allowed the order of suspension to continue. Therefore, it cannot be said that the order of suspension passed by the Commissioner of Customs is permanent in nature. On the plea that the provision containing the post-decisional hearing is opposed to the principles of natural justice enshrined under the Constitution of India, this Court feels that the matter should be considered after affording an opportunity of filing opposition by the respondents.

Since this Court did not find that prima facie case has been made out for granting an interim order, this Court directs the respondent to file affidavit-in-opposition within four weeks from date, reply, if any, within a week thereafter and the matter shall appear under the heading "For Hearing" after five weeks in the supplementary list.

It is, however, made clear that the findings recording hereinabove is restricted to the interim order sought in the writ petition and is therefore, tentative in nature.

The petitioner is further directed to serve the copy of the writ petition upon the Director General of India by Speed Post immediately so that the time framed for filing the affidavits are adhered to. Pendency of this writ petition shall not prevent the authorities to proceed with the post-decisional hearing and to take a decision thereon and it is expected that the same would be completed within three weeks from the date of the communication of this order.