Natural justice bars pre-investigation restraint on import licences where no proceeding or hearing has been initiated.

Under the Imports (Control) Order, 1955, an interim restraint on an advance licence or suspension of its operation could be imposed only as part of proceedings under Clauses 8 or 9, and the statutory scheme required a reasonable opportunity of hearing before prejudicial action was taken. Because no proceeding had been initiated, no show-cause notice was served, and no lawful source of power or prima facie satisfaction was shown, the telex restraining the petitioner and preventing release of the imported goods was ultra vires and contrary to natural justice.

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Issues: Whether the telex restraining the petitioner from operating the advance licence and the consequential refusal to release the imported goods were authorised under the Imports (Control) Order, 1955 and were valid in the absence of a hearing.

Analysis: The power under Clause 8A and the power to suspend operation under Clause 9(3) are interim measures connected with proceedings under Clause 8 or Clause 9, and the scheme of the Order requires observance of natural justice before such prejudicial action is taken. Clause 10 expressly provides for a reasonable opportunity of being heard before action under Clauses 8, 8A and 9 is taken. On the facts, no proceeding under Clause 8 or Clause 9 had been initiated, no show-cause notice had been served, and the respondents did not demonstrate any prima facie satisfaction or lawful source of power for issuing the telex at a pre-investigation stage. The action therefore could not be sustained as an ancillary power exercised in aid of the Order.

Conclusion: The telex was held to be ultra vires the Imports (Control) Order, 1955 and contrary to the principles of natural justice, and the petitioner succeeded.

Ratio Decidendi: An interim restraint affecting an existing import licence under the Imports (Control) Order, 1955 cannot be imposed before initiation of proceedings and without affording a reasonable opportunity of hearing where the statutory scheme requires natural justice.

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