Limits on CHA licence suspension and arbitration of partner disputes: authority lacked power to make the licence inoperative, but could require arbitration.

The licensing regulations did not confer power to render a CHA licence inoperative merely because partners were disputing among themselves, and no breach of the licensing conditions or the Customs Act was shown; the inoperative direction was therefore set aside. At the same time, where the partnership deed required inter se disputes to be referred to arbitration and the pending requests for change in constitution depended on that dispute being resolved, the authority could direct the parties to pursue arbitration within a fixed time and then act on the pending applications if no settlement emerged. The decision thus distinguishes between the absence of jurisdiction to suspend the licence and the permissible direction to follow the agreed dispute-resolution mechanism.

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Issues: (i) whether the Commissioner had jurisdiction to render the CHA licence inoperative pending resolution of the partners' dispute; and (ii) whether the direction requiring the partners to resolve their dispute by arbitration, with consequential treatment of the pending requests, was sustainable.

Issue (i): whether the Commissioner had jurisdiction to render the CHA licence inoperative pending resolution of the partners' dispute.

Analysis: The licensing regulations did not confer power to make a CHA licence inoperative. No contravention of the licensing conditions or the Customs Act by the partnership concern was shown. The order of inoperation would also prejudice the business of the firm and the livelihood of its employees without any attributable fault.

Conclusion: The direction rendering the CHA licence inoperative was without jurisdiction and was set aside.

Issue (ii): whether the direction requiring the partners to resolve their dispute by arbitration, with consequential treatment of the pending requests, was sustainable.

Analysis: Clause 13 of the partnership deed required disputes between the partners to be referred to arbitration. The requests for change in constitution of the firm and related reliefs depended upon the outcome of that inter se dispute and could not be finally decided until the arbitration process concluded. The Commissioner could require the parties to pursue arbitration within a time frame and, if no settlement emerged, deal with the pending individual applications accordingly.

Conclusion: The arbitration direction was sustained, together with the Commissioner's liberty to act on the pending requests if the dispute was not resolved within the time fixed.

Final Conclusion: The appeal succeeded only to the extent of striking down the order making the CHA licence inoperative, while the direction to have the partnership dispute resolved through arbitration was upheld.

Ratio Decidendi: In the absence of statutory authority, an adjudicating authority cannot render a CHA licence inoperative merely because of a dispute between partners, though it may require the parties to resolve their private dispute through the agreed arbitration mechanism where the pending regulatory requests depend on that resolution.

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