Fraud-based licence cancellation upheld where a reasonable hearing was given on the facts and natural justice was satisfied.

A cancellation clause in the Imports Control Order was treated as a valid restriction because it applied only where a licence had been obtained by fraud or misrepresentation, and such a licence could not be protected as a matter of fundamental right. The hearing requirement was assessed on the totality of the facts: notice to show cause was issued, the grounds were stated, and a personal hearing was given, so the majority found compliance with natural justice. The dissent considered fuller particulars and document access necessary for an effective hearing. The article notes that the provision was upheld, while the dissent would have invalidated the cancellation for breach of natural justice.

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Issues: (i) Whether clause 9(a) of the Imports Control Order, 1955, permitting cancellation of a licence obtained by fraud or misrepresentation, was unconstitutional for infringing fundamental rights. (ii) Whether the petitioners were denied a reasonable opportunity of being heard before cancellation of the import licences.

Issue (i): Whether clause 9(a) of the Imports Control Order, 1955, permitting cancellation of a licence obtained by fraud or misrepresentation, was unconstitutional for infringing fundamental rights.

Analysis: The cancellation power was not uncontrolled or arbitrary. It operated only where the licence had been obtained by fraud or misrepresentation, and clause 10 required that no action be taken unless the licensee was given a reasonable opportunity of being heard. A licence procured on a false basis could not be allowed to stand, because the entire regulatory foundation of the import-control scheme disappeared when the grant was induced by fraud or misrepresentation. Such a provision was therefore treated as a reasonable restriction in the interests of the general public.

Conclusion: The provision was held valid and the challenge under the fundamental rights provisions failed.

Issue (ii): Whether the petitioners were denied a reasonable opportunity of being heard before cancellation of the import licences.

Analysis: Notice to show cause was issued, the ground of proposed cancellation was stated, and the petitioners were later given a personal hearing. The majority held that reasonableness had to be judged on the facts of the case, including the surrounding material, the explanations offered, and the interviews with the authorities. On that material, the omission to supply further particulars or permit inspection of papers did not deprive the petitioners of a fair chance to meet the allegation of fraud. The majority therefore found compliance with clause 10 and with the principles of natural justice. The dissenting opinion took the contrary view that particulars of the alleged fraud and access to documents were essential to make the hearing real and effective.

Conclusion: The majority held that a reasonable opportunity was given and the cancellation could not be invalidated on this ground.

Final Conclusion: The import-control cancellation provision was upheld, and the petitioners' challenge to the licence cancellation failed, while the dissent would have quashed the order for breach of natural justice.

Ratio Decidendi: Where a regulatory licence is obtained by fraud or misrepresentation, a cancellation provision coupled with a requirement of reasonable hearing is a valid restriction, and the sufficiency of the hearing must be judged on the totality of the facts to determine whether a fair opportunity to meet the charge was in fact given.

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