Import-Exporter Code suspension needs hearing, proper statutory authority, and compliance with rehabilitation consent requirements.

Suspension of the Importer-Exporter Code for non-payment of penalty required a pre-decisional hearing because the action affected civil rights and natural justice applied; the suspension was therefore contrary to law. The power under section 11(4) was confined to the very Adjudicating Authority that had imposed the penalty, and an officer other than that authority lacked jurisdiction to suspend the code; the order was illegal. Suspension also could not be made without the Board's consent under the rehabilitation bar, because the code was treated as a business asset and the measure operated like coercive recovery; the order was invalid.

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Issues: (i) whether an opportunity of hearing was required before suspension of the Importer-Exporter Code under section 11(4) of the Foreign Trade (Development and Regulation) Act, 1992 for non-payment of penalty; (ii) whether the officer who passed the impugned suspension order had jurisdiction to do so as the "Adjudicating Authority" under section 11(4); (iii) whether consent of the Board under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 was necessary before suspending the code.

Issue (i): whether an opportunity of hearing was required before suspension of the Importer-Exporter Code under section 11(4) of the Foreign Trade (Development and Regulation) Act, 1992 for non-payment of penalty

Analysis: A prior Division Bench decision had already held that suspension of the code under section 11(4) affects civil rights and that natural justice requires a hearing before such action is taken. The provision, though not expressly providing for a pre-decisional hearing, was read consistently with the effect of the order and the need to afford the affected person an opportunity to explain payment, security, or other grounds against suspension.

Conclusion: A pre-suspension hearing was mandatory, and the impugned order was contrary to that requirement.

Issue (ii): whether the officer who passed the impugned suspension order had jurisdiction to do so as the "Adjudicating Authority" under section 11(4)

Analysis: Section 11(4) authorises suspension by "the Adjudicating Authority", a phrase used with a definite article to denote the very authority that imposed the penalty. The penalty order had been passed by a different officer, and section 13, which concerns powers of officers for adjudication and pecuniary limits, did not confer power to suspend the code for non-payment of penalty. On that construction, the later officer was not the particular adjudicating authority contemplated by the statute.

Conclusion: The suspension order was passed without jurisdiction and was illegal.

Issue (iii): whether consent of the Board under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 was necessary before suspending the code

Analysis: During implementation of a sanctioned rehabilitation scheme, section 22(1) bars proceedings in the nature of execution, distress, or the like against the company's property except with the Board's consent. The code was treated as an asset of the business and a necessary adjunct of trade, and suspension to compel payment of penalty was regarded as akin to coercive recovery proceedings. In that setting, the statutory protection under section 22(1) applied.

Conclusion: The order could not validly be made without the Board's consent.

Final Conclusion: The suspension of the Importer-Exporter Code was set aside because it was ordered without a required hearing, by an lacking the statutory power contemplated by section 11(4), and without the Board's consent under the rehabilitation regime.

Ratio Decidendi: Where a statute authorises suspension of a trading code by "the Adjudicating Authority", the power is confined to the very authority that imposed the penalty, and if the suspension has coercive civil consequences, natural justice and any applicable statutory bar on recovery proceedings must be observed.

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