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East West Freight Carriers (P) Ltd. v. Collr. Of Customs, Madras
Factual and Procedural Background
The petitioner challenged the validity and correctness of an order dated 26-9-1994 passed by the respondent under Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984. The petitioner sought quashing of the impugned order which suspended the petitioner’s Customs House Agent licence pending enquiry. The writ petition was taken up for final hearing with consent of the parties.
Legal Issues Presented
- Whether the impugned order suspending the petitioner’s licence under Regulation 21(2) was valid in the absence of an express finding that immediate action was necessary.
- Whether the Collector exercised jurisdiction properly by suspending the licence pending enquiry without explicitly applying mind to the necessity of immediate action.
Arguments of the Parties
Petitioner’s Arguments
- The impugned order is unsustainable as it does not indicate that the Collector formed an opinion that immediate action was necessary to suspend the licence pending enquiry under Regulation 21(2).
- The petitioner challenged the order on grounds related to Regulation 21(1), but the court found it unnecessary to address those since the order relates to Regulation 21(2).
Respondent’s Arguments
- The respondent justified the impugned order by pointing to grave irregularities and contraventions committed by the petitioner as stated in the order.
- The Collector found a prima facie case and considered immediate action necessary to suspend the licence pending enquiry under Regulation 21(2).
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court acknowledged that the Collector has the power under Regulation 21(2) to suspend a Customs House Agent’s licence where immediate action is necessary pending enquiry. However, the court found that the impugned order did not demonstrate that the Collector applied his mind to the necessity of immediate action. The order lacked any statement indicating that the suspension was based on the urgency requirement under Regulation 21(2). The court refrained from expressing an opinion on whether immediate action was factually warranted, noting that this determination lies within the Collector’s discretion. Due to the absence of an explicit finding or application of mind on the necessity of immediate action, the court held that the impugned order could not be sustained.
Holding and Implications
The writ petitions are allowed and the impugned order dated 26-9-1994 is quashed. The respondent is permitted to exercise the power under Regulation 21(2) afresh and pass appropriate orders if so desired. This decision directly affects the parties by invalidating the suspension order but does not establish any new legal precedent.
1. Although W.M.P Nos. 27407/1994 and 26382 of 1994 in W.P No. 17363 of 1994 are posted today, the writ petition itself is taken up for final hearing with the consent of the learned counsel for the parties.
2. Heard the learned counsel for the parties accordingly.
3. The petitioner in this writ petition has questioned the, validity and correctness of the impugned order dated 26-9-1994 passed by the respondent and sought for quashing the same.
4. Shri N.R Chandran, the learned senior counsel for the petitioner contended that the impugned order said to have been passed under Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984, for short the-Regulations', is unsustainable on the face of it.
5. He submitted that under Regulation 21 the Collector may subject to the provisions of Regulation 23 suspend or revoke the licence of a Customs House Agent in so far as the jurisdiction of the Collector is concerned, and also order for forfeiture of security amount on any one of the grounds (a) to (c) mentioned in Regulation 21(1). Under Regulation 21(2) the Collector may in appropriate case where immediate action is necessary suspend the licence pending enquiry.
6. He submitted that the impugned order does not indicate anywhere that the Collector had formed an opinion to state that immediate action was necessary to suspend the licence to the petitioner pending enquiry contemplated for the contraventions. The learned counsel attacked the order of taking action under Regulation 21(1) on few more grounds. In my opinion they are not necessary to be dealt with as in the case on hand the impugned order challenged relates to suspension under Regulation 21(2).
7. Shri C.A Sundaram, Additional Central Government Standing Counsel argued in support and justification of the impugned order. He pointed out that grave irregularities were committed by the petitioner as can be seen from the impugned order itself. The Collector looking into the grave irregularities and contraventions committed by the petitioner and on finding that there was prima facie case against the petitioner has passed the impugned order suspending the licence pending enquiry under Regulation 21(2). He submitted that immediate action was warranted looking to the serious irregularities and contraventions said to have been committed by the petitioner as can be seen from the impugned order.
8. I have considered the submissions made by the learned counsel for the parties. The power of the Collector to take action under Regulation 21(1) is not questioned in the writ petition. It cannot also be disputed that under Regulation 21(2) the Collector has the power to suspend the licence of a Customs House Agent when enquiry against such agent is pending or contemplated where immediate action is necessary.
9. In my opinion the power to suspend the licence is to be exercised where immediate action is necessary. A plain reading of the impugned order does not show that the Collector applied his mind to consider whether immediate action was necessary in the case. The order also does not state that the licence was suspended because immediate action was necessary. I do not express here one way or the other as to whether on the facts of the case immediate action was necessary or was not necessary because it is for the Collector to take decision in that regard.
10. In the absence of any indication that there was application of mind by the Collector on the aspect as to whether immediate action was necessary, in my opinion, the impugned order cannot be sustained. The Collector gets jurisdiction to suspend the licence in cases where immediate action is necessary. In this view I consider it just and appropriate to pass the following order:—
The writ petitions allowed and the impugned order dated 26-9-1994 issued by the respondent is quashed. It is open to the respondent if so desired to exercise the power under Section 21(2) and pass appropriate orders.
11. The learned counsel for the applicant in the contempt application states that the contempt application may be dismissed as not pressed. Accordingly it is dismissed as not pressed.
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