Premature suspension of CHA licence under CHALR was unjustified without completed inquiry or clear attribution of misconduct

Regulation 21(2) of the CHALR, 1984 could not be used to suspend a CHA licence before completion of the preliminary inquiry when responsibility for the alleged export fraud remained unclear. The exceptional suspension power required a completed inquiry under Regulation 21(1) and a proper opportunity of hearing, especially where the record did not establish who was at fault and the stage of wrongdoing was uncertain. On that basis, the suspension order was held unsustainable, though the matter could be reconsidered afresh after inquiry and hearing.

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Issues: Whether the Commissioner was justified in invoking Regulation 21(2) of the CHALR, 1984 to suspend the CHA licence before completion of the preliminary inquiry and without first proceeding under Regulation 21(1).

Analysis: The licence was suspended while the inquiry into the disputed export consignment was still pending and the material on record did not clearly establish who was responsible for the alleged fraud. The order was passed even though the preliminary inquiry had not been completed, no prompt action had been taken against other persons involved, and the true stage at which any wrongdoing occurred remained uncertain. In these circumstances, the exceptional power under Regulation 21(2) could not be used merely on suspicion, and the proper course was to proceed after the preliminary inquiry contemplated under Regulation 21(1) and after hearing the appellant.

Conclusion: The invocation of Regulation 21(2) was not justified and the suspension order could not be sustained. The matter could, however, be reconsidered afresh after completion of inquiry and after granting an opportunity of hearing to the appellant.

Final Conclusion: The appeal succeeded because the impugned suspension was premature and unsupported by a completed inquiry.

Ratio Decidendi: Regulation 21(2) of the CHALR, 1984 cannot be invoked to suspend a CHA licence before completion of the preliminary inquiry when responsibility for the alleged misconduct is not yet clear.

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