1987 (1) TMI 83 - HC - Customs

Court Invalidates License Suspension Order Under Customs Regulations (2)

The Court invalidated the suspension order of the petitioner's license under Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984, due ... Customs House Agency licence Issues Involved:1. Validity of the suspension order of the petitioner's licence u/s Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984.2. Constitutional vires of Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984.Summary:Issue 1: Validity of the Suspension OrderThe petitioner, M/s. Jeena & Co., challenged the suspension of their licence by the Customs authorities under Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984. The suspension was due to alleged involvement in the attempted export of narcotics concealed in a consignment. The Customs authorities claimed that the petitioner failed to discharge their responsibilities properly and aided the exporter, Mr. J. Sala.The Court examined whether the suspension order was in accordance with Regulation 21(2). It was noted that Regulation 21(2) allows the Collector to suspend a licence in 'appropriate cases' where 'immediate action is necessary,' even if an enquiry is pending or contemplated. The Court emphasized that such discretionary power must be exercised with recorded reasons demonstrating the necessity for immediate action. The impugned order failed to show that the Collector was satisfied that immediate action was necessary, rendering the order arbitrary and not in consonance with Regulation 21(2). Additionally, the order violated the audi alteram partem rule, as no minimal hearing was given to the petitioner despite the grave civil consequences of the suspension.Issue 2: Constitutional Vires of Regulation 21(2)The petitioner argued that Regulation 21(2) was unconstitutional as it conferred unguided, uncontrolled, and uncanalised discretionary power without a time limit for the suspension duration or provision for appeal or review. The Court acknowledged these contentions as weighty and indicative of prima facie unreasonableness, but refrained from declaring the Regulation ultra vires, as the relief could be granted on other grounds.Conclusion:The Court struck down the suspension order dated August 26, 1986, under Regulation 21(2) of the Customs House Agents Licensing Regulations, 1984, for being arbitrary and violative of natural justice principles. The respondents were allowed to proceed against the petitioners in accordance with the law. No order was made for costs, and a verbal prayer for stay of the order was refused.