(Per
: HONOURABLE MS.JUSTICE BELA TRIVEDI)
1. The
petitioner has preferred the present petition under Articles 226 and
227 of the Constitution of India challenging the judgments and orders
passed by the Customs, Excise and Gold (Control) Appellate Tribunal,
Mumbai (hereinafter referred to as ' the CEGAT') in Appeal bearing
No. C/195/01-Mum, whereby the CEGAT had dismissed the Appeal of the
petitioner and confirmed the order passed by the Commissioner of
Customs, the respondent no.2 herein, revoking the licence of the
petitioner as the Custom House Agent (CHA).
2. Heard
learned advocate Mr. D.C.Dave for the petitioner and learned
Assistant Solicitor General of India Mr. P.S.Champaneri for the
respondents.
3. The
short facts giving rise to the present petition are that the
petitioner is a company incorporated under the Companies Act, engaged
in the business as CHA since 1949, having its offices at New Delhi,
Calcutta, Paradip and Haldia. As per the case of the petitioner, in
the month of December - 1997 or thereabout, one R.P.Bansal &
Company of Agra (hereinafter referred to as 'the Importer')
approached the petitioner through one Sunil Kothari of M/s. Prabhat
Kiran Mariners, a proprietorship concern, of one Mr. Parag P. Mehta,
and requested the petitioner to act as Custom House Agent for
handling the clearance of one consignment of 105 MT of gypsum
(hereinafter referred to as 'the said goods') at Kandla Port.
Accordingly, the petitioner agreed to act as CHA for the Importer and
precipitated the course of action for filing the requisite bill of
entry on 8th December 1997, bearing the number 10377. It
is further the case of the petitioner that after complying the
necessary formalities for the clearance of the said goods, the
petitioner informed the said M/s. Prabhat Kiran Mariners for taking
requisite steps for taking the delivery of the said goods from the
authorities of Kandla Port, inasmuch as the said M/s. Prabhat Kiran
Mariners were to act as the forwarding and transporting agents for
and on behalf of the Importer. Accordingly, the requisite gate pass
was prepared on 22nd December 1997 for the purpose of
securing removal of the said goods from the North Gate of Kandla Port
by the said forwarding and transporting agent of the Importer. At the
relevant time, the Custom Authorities did not permit the removal of
the said goods from the North Gate and the said Mr. Sunil Kothari was
required to precipitate the course of action for seeking permission
of Custom Authorities for removal of the said goods from the West
Gate in place of the North Gate of Kandla Port. Accordingly, the said
goods were removed from the West Gate of Kandla Port on 23rd
December 1997.
4. It
is further case of the petitioner that thereafter on the basis of the
interim report received by the Custom Authorities suggesting that the
said goods were "gypseous alabaster" in place of
"gypsum", an inquiry was undertaken by the Custom
Authorities at Kandla Port, wherein the statement of the Subhash
Shethi, Executive Director of the petitioner, Mr. Sunil Kothari of
M/s. Prabhat Kiran Mariners, etc. came to be recorded under Section
108 of the Customs Act, 1962 (hereinafter referred to as 'the said
Act'). The premise of the said inquiry was to the effect that
"gypseous alabaster" was prohibited for import and
therefore the said goods had become liable for confiscation. On the
basis of the said inquiry, the respondent no.2 herein passed an order
dated 26th February 1998 under the provisions contained in
Regulation 21(2) of the Customs House Agents Licensing Regulations,
1984 (hereinafter referred to as the 'said Regulations'), suspending
the licence of the petitioner as CHA pending the detailed inquiry in
to the matter. Thereafter, the petitioner made a representation to
the respondent no.2 seeking revocation of the said order of
suspension of the licence, however, the respondent no.2 did not
accept the said representation of the petitioner and continued the
suspension of the licence of the petitioner as CHA. It appears that
thereafter one show-cause notice came to be served upon the
petitioner under Section 124 of the said Act calling upon the
petitioner to show cause as to why the penalty should not be levied
upon the petitioner, however, subsequently the said show cause notice
came to be dropped, on 28.06.1999.
5. It
further transpires that in the meantime, another show cause notice
dated 11th September, 1998 under the signature of the
Commissioner of Customs, Kandla - respondent no.2 herein, came
to be served on the petitioner under Regulation 23 of the said
Regulations calling upon the petitioner to submit its written
statement of defence to the imputations of the misconduct and
misbehaviour as contained in the Articles of Charges. The petitioner
submitted its reply dated 26th October, 1998 explaining
the reasons and praying for not taking any action on the ground that
the charges were not sustainable. However, the Inquiry Officer,
submitted his report dated 26th June 1999, on the
conclusion of inquiry to the Commissioner of Customs, Kandla for
taking further action. The respondent No.2 - Commissioner of
Customs, Kandla, based upon the said report of Inquiry Officer, held
the charges as proved against the petitioner and ordered for the
revocation of licence of the petitioner as CHA under Regulation 21 of
the said Regulations, vide order dated 9th June, 2000.
Being dissatisfied with the said order, the petitioner preferred an
appeal before the CEGAT, Mumbai for quashing and setting aside the
said order dated 9th June 2000 passed by the Commissioner
of Customs, Kandla. On the preliminary contention that no opportunity
to cross-examine the concerned witnesses was made available to the
petitioner, the CEGAT allowed the said Appeal, however, directed the
Commissioner of Customs to commence the inquiry de novo
against the petitioner on the same charges by following the
provisions contained in the said Regulations stricto senso.
Subsequent to the said order of
CEGAT, a fresh inquiry came to be initiated against the petitioner de
novo by the Commissioner of
Customs by appointing an Inquiry Officer. The said Inquiry Officer,
on the conclusion of the inquiry, submitted his report dated 6th
December 2000, to the Commissioner
of Customs, finding the charges levelled against the petitioner as
duly proved. The petitioner, upon the receipt of the said report,
submitted its reply dated 21st
December, 2000 to the Deputy Commissioner of Customs, Kandla.
However, the respondent no.2 - Commissioner of Customs passed
the order dated 16th
January 2001, accepting the report of Inquiry Officer and ordering
revocation of CHA licence issued to the petitioner company and
further ordering forfeiture of security in view of the provisions
contained in Regulation 21(b)(c) of the said Regulations. Being
aggrieved by the said order passed by the respondent no.2, the
petitioner invoked the appellate jurisdiction of the CEGAT by
preferring the Appeal being No. C/195/01-Mumbai.
6. It
appears that after hearing the petitioner the learned Members of the
CEGAT passed the judgment and order dated 12th June, 2002
recording the findings of facts against the petitioner, however
differed in their final conclusion on the issue of awarding
punishment to the petitioner under Regulation 21 of the said
Regulations, inasmuch as the Member (Technical) held that the period
of suspension of licence undergone by the petitioner was sufficient
punishment, and ordered to restore the licence of the petitioner,
whereas the Member (Judicial), considering the seriousness of the
case confirmed the order of the Commissioner for revocation of
licence of the petitioner. In view of the said difference of opinions
between the two Members, the matter was placed before the third
Member for his opinion as to whether the licence of the petitioner
should be restored or should be permanently revoked. The third Member
being Member (Judicial) vide order dated 12th August 2002
concurred with the order proposed by Member (Judicial). Accordingly,
the final order dated 18th September 2002 came to be
passed by the CEGAT dismissing the appeal of the petitioner. Being
aggrieved by the said judgments and orders passed by the CEGAT, the
petitioner preferred the present petition under Articles 226 and 227
of the Constitution of India.
7. It
was sought to be submitted by learned Advocate Mr. D.C.Dave for the
petitioner that Regulation 13 of the said Regulations prohibited sale
or transfer of the licence and the action of sub-letting the licence
as alleged against the petitioner could not be said to be either sale
or transfer of licence in favour of M/s. Prabhat Kiran Mariners.
According to Mr. Dave, the expression "otherwise transfer"
would attract its interpretation from the word 'sold' or
'transferred' and could not take within its sweep the alleged act of
sub-letting. Mr. Dave also submitted that the statement of the
Executive Director of the petitioner company was recorded under
Section 108 of the said Act in another inquiry and could not be
relied upon in the inquiry initiated against the petitioner for the
alleged breach of the Regulations. Mr. Dave, however, in the
alternative submitted that even if the charges levelled against the
petitioner are held to be proved, the quantum of punishment of
revocation of licence was disproportionate to the alleged mis-conduct
of the petitioner, inasmuch as the extreme and harsh punishment of
revocation of licence should not have been resorted to only on the
sole incident of committing breach of Regulations, and more
particularly, when there was no revenue loss to the department. Mr.
Dave, invoking the doctrine of proportionality, relied upon various
judgments of Hon'ble Supreme Court, more particularly, in the case of
Chairman-cum-Managing Director, Coal India Ltd. & Anr. v.
Mukul Kumar Choudhuri & Ors. reported in AIR 2010 Supreme
Court 75, in the case of State of M.P. & Ors. v.
Hazarilal reported in AIR 2008 S.C. 1300 and in the case
of Kailash Nath Gupta v. Enquiry Officer (R.K.Rai), Allahabad Bank
& Ors. reported in AIR 2003 Supreme Court 1377, and
submitted that the punishment of revocation of licence was not only
unduly harsh but grossly irrational and pervese.
8. However,
the learned Assistant Solicitor General of India Mr. P.S.Champaneri,
taking us to the impugned orders passed by the Commissioner of
Customs as well as the CEGAT as also the affidavit-in-reply filed by
the respondents, submitted that there was gross misuse of licence by
the petitioner as CHA which had resulted into violation of the said
Regulations and considering the gravity of the mis-conduct on the
part of the petitioner, the concerned respondents had awarded
appropriate punishment, which does not call for any interference by
this Court. Shri Champaneri, relying upon the judgments of the
Hon'ble Supreme Court in the case of Chairman, All India
Railway Recruitment Board and Anrs. v. K. Shyam Kumar and Ors.
reported in (2010) 6 SCC 614 and
in the case of Union of India & Anr. v. G. Ganayutham reported
in (1997) 7 SCC 463, submitted that the scope of
judicial review is very limited as regards the quantum of punishment
imposed on the delinquent by the appropriate Authorities and there
being no error in appreciating the evidence or in the conclusion
arrived at by the Tribunal, the Court should not interfere with the
said orders which even otherwise are legal and valid.
9. Having
regard to the rival contentions raised by the learned counsels for
the parties and to the orders passed by respondent Authorities, it
clearly transpires that both the Authorities i.e. the Commissioner of
Customs and the CEGAT, after thoroughly discussing the evidence as
regards the charges of mis-conduct levelled against the petitioner,
had come to the conclusion that all the said charges were duly
proved. It is pertinent to note that though the two Members of CEGAT
had differed on the issue of imposition of punishment i.e.
revocation of licence, both had concurred with the findings on the
establishment of charges against the petitioner inter alia
that the petitioner had transferred its licence by sub-letting the
same to M/s. Prabhat Kiran Mariners in violation of Regulation 13 of
the said Regulations and that the petitioner did not maintain the
statutory records and thereby contravened Regulation 19 of the said
Regulations and that the petitioner obtained custom pass for the
persons who were not its employees and permitted the employees of
M/s. Prabhat Kiran Mariners to use the same before the Custom
Authorities for its monitory gain, in violation of Regulation 14 (b)
and 20(6) of the said Regulations. The charges against the petitioner
that the said imported goods of the Importer were removed through the
West Gate instead of North Gate of the Kandla Port in contravention
of Regulation 14(a), without obtaining authorization from the
Importer in respect of the consignment, were also held as proved.
These findings of the respondent Authorities on the charges levelled
against the petitioner, are arrived at by the respondents after
considering all materials on record. The learned Advocate Mr. Dave
for the petitioner has failed to point out any error in the said
findings. Even otherwise, the said findings being findings of facts,
this Court exercising writ jurisdiction is not inclined to
re-evaluate the evidence or sit in appeal over the said findings.
10. So
far as the "Doctrine of Proportionality" as sought to be
canvassed by learned advocate Mr. D.C.Dave for the petitioner is
concerned, it cannot be gainsaid that ordinarily the High Court would
not interfere with the well reasoned order of punishment, on the
ground of sympathy or sentiments. It may be stated that the
principles of judicial review of administrative action and of
proportionality of punishment have been considered by the Hon'ble
Supreme Court in catena of decisions. The Hon'ble Supreme Court, in
the case of Union of India &
Anr. v. G.
Ganayutham, reported in (1997) 7 Supreme Court Cases P.
463 considering the position of proportionality in administrative
law in England and India, observed thus:
"31. The current
position of proportionality in administrative law in England and
India can be summarised as follows;-
(1) To judge the
validity of any administrative order or statutory discretion,
normally the Wednesbury test is to be applied to find out if the
decision was illegal or suffered from procedural improprieties or
was one which no sensible decision-maker could, on the material
before him and within the framework of the law, have arrived at. The
Court would consider whether relevant matters had not been taken into
account or whether irrelevant matters had been taken into account or
whether the action was not bonafide. The Court would also consider
whether the decision was absurd or perverse. The Court would not
however go in to the correctness of the choice made by the
administrator amongst the various alternatives open to him. Nor
could the Court substitute its decision to that of the
administrator. This is the Wednesbury test.
(2) The Court would not
interfere with the administrator's decision unless it was illegal or
suffered from procedural impropriety or was irrational in the sense
that it was in outrageous defiance of logic or moral standards.
The possibility of other tests, including proportionality being
brought into English Administrative Law in future is not
ruled out. These are
the CCSU principles.
(3)(a)As per Bugdaycay,
Brind and Smith, as long as the Convention is not incorporated into
English Law, the English Courts merely exercise a secondary
judgment to find out if the decision maker could have, on the
material before him, arrived at the primary judgment in the manner he
had done.
(3)(b)If the
Convention is incorporated in England making available the
principle of proportionality, then the English Courts will render
primary judgment on the validity of the administrative action and
find out if the restriction is disproportionate or excessive or is
not based upon a fair balancing of the fundamental freedom and the
need for the restriction thereupon.
(4)(a)The position in
our country, in administrative law, where no fundamental
freedoms as aforesaid are involved, is that the Courts/Tribunals
will only play a secondary role while the primary judgment as to
reasonableness will remain with the executive or
administrative
authority. The secondary judgment of the Court is to be based on
Wednesbury and CCSU principles as stated by Lord Greene and Lord
Diplock respectively to find if the executive or administrative
authority has reasonably arrived at his decision as the primary
authority.
(4)(b)Whether in the
case of administrative or executive action affecting fundamental
freedoms, the Courts in our country will apply the principle of
'proportionality' and assume a primary role, is left open, to be
decided in an appropriate case where such action is alleged to
offend fundamental freedoms. It will be then necessary to decide
whether the Courts will have a primary role only if the
freedoms under Article
19, 21 etc. are involve and not for Article 14.
Punishment in
disciplinary matters: Wednesbury & CCSU tests:
32. Finally, we come to
the present case. It is not contended before us that any
fundamental freedom is affected. We need not therefore go into the
question of 'proportionality'.There is no contention that the
punishment imposed is illegal or vitiated by procedural
impropriety. As to 'irrationality', there is no finding by the
Tribunal that the decision is one which no sensible person who
weighed the pros and cons could have arrived at nor is there a
finding, based on material, that the punishment is in
'outrageous' defiance of logic. Neither Wednesbury nor CCSU tests
are satisfied. We have still to explain 'Ranjit Thakur'.
33. In Ranjit Thakur,
this Court interfered with the punishment only after coming to the
conclusion that the punishment was in outrageous defiance of logic
and was shocking. It was also described as perverse and irrational.
In other words, this Court felt that, on facts, Wednesbury and CCSU
tests were satisfied. In another case, in B.C. Chaturvedi vs. Union
of India [1995 (6) SCC 749], a three Judge Bench said the same
thing as follows (SCC P.762 para 18)
The High
Court/Tribunal, while exercising the power of judicial review,
cannot normally substitute its own conclusions on penalty and
impose some other penalty. If the punishment imposed by the
disciplinary authority or the appellate authority shocks the
conscience of the High Court/Tribunal it would appropriately would
the relief, either by directing the disciplinary
authority/appellate authority to reconsider the penalty imposed, or
to shorten the litigation, it may itself, in exceptional and
rare case, impose appropriate punishment with cogent reasons in
support thereof
Similar view was taken
in Indian Oil Corporation vs. Ashok Kumar Arora [1997 (3) SCC 72],
that the Court will not intervene unless the punishment is wholly
disproportionate."
11. Again,
while considering the "Doctrine of Proportionality", the
Hon'ble Supreme Court, in the case of Coimbatore
District Central Cooperative Bank v. Coimbatore District Central
Cooperative Bank Employees Association & Anr.
reported in (2007) 4
Supreme Court Cases 669, has
held as under:
"18. 'Proportionality'
is a principle where the Court is concerned with the process, method
or manner in which the decision-maker has ordered his priorities,
reached a conclusion or arrived at a decision. The very essence of
decision-making consists in the attribution of relative importance to
the factors and considerations in the case. The doctrine of
proportionality thus steps in focus true nature of exercise the
elaboration of a rule of permissible priorities.
19. de
Smith states that 'proportionality' involves 'balancing test' and
'necessity test'. Whereas the former ('balancing test') permits
scrutiny of excessive onerous penalties or infringement of rights or
interests and a manifest imbalance of relevant considerations, the
latter ('necessity test') requires infringement of human rights to
the least restrictive alternative. ['Judicial Review of
Administrative Action'; (1995); pp. 601-605; para 13.085; see also
Wade & Forsyth; 'Administrative Law'; (2005); p.366]."
12. In
the case of Chairman & M.D. V.S.P. & Ors. v. Goparaju Sri
Prabhakara Hari Babu, 2008 (2) G.L.H. 146, the Hon'ble Supreme
Court observed thus:-
"17. Once it is
found that all the procedural requirements have been complied with,
the Court would not ordinarily interfere with the quantum of
punishment imposed upon a delinquent employee. The Superior Courts
only in some cases may invoke the doctrine of proportionality. If the
decision of an employer is found to be within the legal parameters,
the jurisdiction would ordinarily not be invoked when the misconduct
stands proved. {See Sangeroid Remedies Ltd. v. Union of India &
Ors. [1999 (1) SCC 259]}.
17.1.The High Court in
exercise of its jurisdiction under Article 226 of the Constitution of
India also cannot, on the basis of sympathy or sentiment, overturn a
legal order."
13. The
Hon'ble Supreme Court, in the recent case of Chairman-cum-Managing
Director, Coal India Ltd. & Anr. v. Mukul Kumar Choudhuri &
Ors. reported in AIR 2010 Supreme Court 75, has
held thus:
"26.
The doctrine of proportionality is, thus, well recognized concept of
judicial review in our jurisprudence. What is otherwise within the
discretionary domain and sole power of the decision maker to quantify
punishment once the charge of misconduct stands proved, such
discretionary power is exposed to judicial intervention if exercised
in a manner which is out of proportion to the fault"
14. In
view of the above principles laid down by the Hon'ble Supreme Court
in various judgments it clearly transpires that the judicial review
of administrative action or of proportionality of punishment is
permissible only if the decision of the decision maker is found to be
illegal, unreasonable, irrational or suffering from any procedural
impropriety, and that the High Court in exercise of jurisdiction
under Article 226 or 227 should not interfere with the legal orders
of Administrative Authorities. So far as the facts of the present
case are concerned, as stated hereinabove, respondent no.3 -
the CEGAT has upheld the order of respondent no.2, revoking the
licence of the petitioner as CHA on the ground of petitioner having
committed breach of statutory regulations and the misconduct by
misusing its licence. In the opinion of this Court, once the decision
of the respondent Authorities that the petitioner
committed violation of statutory regulations and the misconduct is
found to be within the legal parameters, all the legal consequences
as a result of such violation and the breach have to follow. The case
of the petitioner being the case of contravention of said regulations
and misuse of licence as CHA, the respondent Authorities have rightly
revoked the licence of the petitioner. The said decision having been
arrived at by the respondents, after taking into consideration all
relevant material and the said Regulations, and after following the
due process of law, it could not be said that the said decision was
illegal, unreasonable, perverse or irrational. Under the
circumstances, it could also be not said that the punishment of
revocation of licence was a harsh punishment or the punishment dehors
the
doctrine of proportionality. The petitioner having failed to point
out any perversity or unreasonableness on the part of respondent
Authorities warranting judicial intervention, this Court does not
find any merits in the present petition.
15. In
that view of the matter, the petition deserves to be dismissed and
accordingly is dismissed. Rule stands discharged. No order as to
costs.
(HARSHA
DEVANI, J.)
(BELA
TRIVEDI, J.)
jani
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