2005 (7) TMI 110 - HC - Customs

Customs House Agents - Whether the Petitioners had the right to be considered for the issuance of licences under the CHALR 1984 because they had successfully appeared in the Examinations held under these Regulations prior to the coming into effect of CHALR 2004 - Wednesbury reasonableness exists - HELD THAT - The present case is not one where Petitioners have become ineligible for the grant of licences because of changes brought out in the 2004 Regulations. The decision to cancel the invitation for grant of licences by the Public Notice issued in June 2003 is therefore not in consonance with Wednesbury reasonableness. A person appears in an examination on the basis of Regulations then in existence with the legitimate expectation that the prevailing Regulation will continue to apply. Such a person has the legitimate expectation for enjoying the fruits of his success in the Examination which in the present case would have been the issuance of a temporary licence under the 1984 Regulations. Justifiably and reasonably the Preamble of the 2004 Regulations save actions or events which have already taken place. There is therefore no warrant or justification for the cancellation of the process which had already come to its final and ultimate stage. The communication dated 8-12-2003 is also in line with this approach inasmuch as it states that process of fresh recruitment must be kept in abeyance. I am unable to agree with the case of the Respondent that the Petitioners can be treated as falling within fresh recruitment even though they had already been in the present service for almost two decades and have passed in the Examinations conducted by the Respondent themselves. Fresh recruitment must refer to the process of fresh examinations initiated under 2004 Regulations. Since temporary licences as per the 1984 Regulations are no longer in vogue licences would now be granted under the 2004 Regulations. This is one of the important simplifications brought into effect. In the circumstances of the present case therefore the only possibility is for the Respondent to consider the Petitioners as having cleared the Examinations envisaged in the extant Regulation 8 and if the conditions stipulated in Regulations 6 and 9 are met by the Petitioners to grant them the licences envisaged under the present Regulations. This exercise be completed within ninety days from today. Petitions are allowed in the above terms. Parties shall however bear their respective costs.

Issues Involved:
1. Interpretation of Custom House Agents License Regulations, 1984 vs. 2004.
2. Eligibility and rights of petitioners holding 'G' Cards under the 1984 Regulations.
3. Legitimacy of the Respondents' delay in processing applications.
4. Impact of the 2004 Regulations on the petitioners' applications.
5. Application of the principle of Wednesbury reasonableness.
6. Legitimate expectation and the right to issuance of licenses.

Detailed Analysis:

1. Interpretation of Custom House Agents License Regulations, 1984 vs. 2004:
The judgment primarily revolves around the interpretation and application of the Custom House Agents License Regulations, 1984, in contrast to the new 2004 Regulations. The court had to determine whether actions taken under the 1984 Regulations, particularly the issuance of 'G' Cards and subsequent eligibility for licenses, were nullified by the introduction of the 2004 Regulations.

2. Eligibility and Rights of Petitioners Holding 'G' Cards under the 1984 Regulations:
The petitioners, who had been working with Customs House Agents since 1985 and held 'G' Cards, contended that they were eligible for temporary licenses after holding 'G' Cards for three years. The court noted that under the 1984 Regulations, the petitioners had fulfilled all conditions and had successfully appeared in the required examinations, thereby becoming eligible for the issuance of temporary licenses.

3. Legitimacy of the Respondents' Delay in Processing Applications:
The court observed that despite the mandate for annual issuance of licenses, the Respondents had failed to process applications since 1995. Public Notice No. 25/2003 invited applications, but no action was taken until March 2005, after the filing of the petitions. The court found this inordinate and unexplained delay to be a procedural irregularity and a failure to act within a reasonable time frame.

4. Impact of the 2004 Regulations on the Petitioners' Applications:
The court examined whether the petitioners' rights accrued under the 1984 Regulations were affected by the 2004 Regulations. It was argued that the new regulations did not contain provisions for temporary licenses, thus impacting the petitioners' applications submitted under the 1984 Regulations. However, the court emphasized that the prefatory statement of the 2004 Regulations indicated that actions taken under the 1984 Regulations would not be rendered nugatory.

5. Application of the Principle of Wednesbury Reasonableness:
The Respondents argued that their decision to not process the petitioners' applications was reasonable under the Wednesbury principle, which assesses the legality, procedural propriety, and rationality of administrative actions. The court, however, found that the Respondents' actions lacked procedural propriety and rationality, as they had failed to process the applications within a reasonable time and had not conducted necessary inquiries under the 1984 Regulations.

6. Legitimate Expectation and the Right to Issuance of Licenses:
The court held that the petitioners had a legitimate expectation that the regulations in force at the time of their examinations would apply. The court recognized the petitioners' right to be considered for licenses under the 1984 Regulations, as they had fulfilled all requirements and had been in service for almost two decades. The court concluded that the cancellation of the process initiated by Public Notice No. 25/2003 was not justified.

Conclusion:
The court directed that since temporary licenses under the 1984 Regulations were no longer in vogue, the petitioners should be considered for licenses under the 2004 Regulations. The Respondents were ordered to complete this process within ninety days, ensuring that the petitioners' applications were assessed based on the conditions stipulated in the 2004 Regulations. The petitions were allowed, and each party was ordered to bear its own costs.

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