1998 (6) TMI 91 - HC - Customs

Licence suspension u/reg 21(2) invalid without recorded urgency and reasons; Custom House Agent's suspension quashed

HC held that suspension of a Custom House Agent's licence under Regulation 21(2) of the 1984 Regulations is permissible only when 'immediate action' is ... Custom House Agent - legality and validity of the suspension order in purported exercise of the power under Regulation 21(2) - HELD THAT:- Undoubtedly a plain reading of the Regulation 21(2) clearly stipulates that the requirement to take immediate action is a sini qua non to the suspension of a licence under Regulation 21(2) because such suspension is not by way of any punishment, as is contemplated by Regulation 21(2), but is required to cater to a situation warranting immediate action. The purpose of resorting to immediate suspension of a licence because of some immediate action is to immediately stop the activities of the clearing agent so as to disable him from taking any further action in the matter since, under a particular situation and under some given set of circumstances, the requirement of immediate action may demand that the clearing agent may be immediately required to be prevented from working any further. The minimum that is required by the Commissioner to enable him to exercise such power is the spelling out of the circumstances in the order warranting the need to take such immediate action and to actually say that immediate action is indeed required in the matter. What we see from the impugned order dated 9th June, 1998 is that the expression 'immediate action' itself is missing. That apart, what we find from the preamble, recitals and facts stated in the order is that the circumstances did not warrant the taking of immediate action in terms of Regulation 21(2) of the 1984 Regulation. Our only concern, rather sole concern in this appeal is about the legality and validity of the suspension order in purported exercise of the power under Regulation 21(2). That order, in our opinion, is not sustainable because it does not spell out that any immediate action is required to be taken in the matter nor does the order on its face indicate that such action was indeed warranted. Appeal accordingly is allowed. - impugned suspension order dated 9th June, 1998 is quashed and set aside. Issues involved: Suspension of Custom House Agent license u/r 21(2) of Custom House Agents Licensing Regulations, 1984 without immediate action justification.Summary:The judgment by the High Court of Judicature at Calcutta pertains to the suspension of a Custom House Agent's license under sub-rule (2) of Rule 21 of the Custom House Agents Licensing Regulations, 1984. The Commissioner of Customs, Calcutta suspended the license of the petitioner without clearly stating the necessity for immediate action as required by Regulation 21(2). The appellants challenged this order through a writ application under Article 226 of the Constitution of India. The Single Judge did not grant interim relief but provided directions for future orders. The appeal was made against the Single Judge's judgment.Upon hearing arguments from both sides, the Court examined Regulation 21(2) which allows suspension of a license in cases where immediate action is necessary. The Court found that the suspension order lacked justification for immediate action and did not meet the criteria set by the Regulation. The purpose of immediate suspension is to halt the agent's activities promptly under urgent circumstances, which was not evident in this case.The Court emphasized that the legality and validity of the suspension order were the main concerns. It concluded that the order was unsustainable as it failed to demonstrate the necessity for immediate action as required by the Regulation. Therefore, the appeal was allowed, the Single Judge's judgment was set aside, and the suspension order dated 9th June, 1998 was quashed.The Court clarified that its decision was limited to the validity of the order under Regulation 21(2) and did not express any opinion on other regulations or the merits of the case. The judgment did not prevent further actions by the respondents if deemed necessary. The application was disposed of, and no costs were awarded to any party. All parties were instructed to act upon a signed copy of the order.