TMI Blog1959 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... cancellation of the licences. We are therefore of opinion that the opportunity that was given to the petitioners in the present case amounted to a reasonable opportunity of being heard against the action proposed. Appeal dismissed. - 171 of 1958 - - - Dated:- 9-12-1959 - B.P. Sinha, C.J.I., P.B. Gajendragadkar, K. Subba Rao, K.C. Das Gupta and J.C. Shah, JJ. REPRESENTED BY : S/Shri Purshottam Tricumdas, Porus A. Mehta, S.N. Andley, J.B. Dadachanji, Rameshwar Nath and P.L. Vohra, Advocates, for the Petitioner. S/Shri C.K. Daphtary, Solicitor-General of India, N.S. Bindra, R.H. Dhebkar and T.M. Sen, Advocates, for the Respondents. [Judgment per : Das Gupta, J., B.P. Sinha, C.J.I. and P.B. Gajendragadkar and J.C. Shah, JJ. concurring]. The first petitioner is a Company registered under the Indian Companies Act having its registered office in Bombay and is engaged in the business of dyes, chemicals, plastics, and various other goods. The second petitioner is the Chairman and a Director of the first petitioner Company. In this petition for enforcement of fundamental rights under the Constitution they pray for the issue of a writ of certiorari or other appropriate wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Control Order, 1955, proposed to cancel the said licences unless sufficient cause against that was furnished to the Chief Controller of Imports and Exports, New Delhi, within 10 days of the date of the issue of the said notice. On September 26, the petitioner Company s solicitors sent a telegram to the Chief Controller of Imports and Exports, New Delhi, requesting him to give particulars of the alleged fraud and to give them an appointment for inspection of papers and documents relied upon by him. On September 27, the Company wrote a letter to the same officer in which they gave a written explanation pointing out various facts and stating that they were victims of foul play by some person interested in causing damage to them and involving their reputation and in order to bring them in bad books with the authorities. In the concluding portion of this letter the Company stated : We also reserve our right to add to, amend or alter the explanations contained in this letter hereafter and to submit such further explanations as may becomes necessary after taking inspection of all the papers and after getting the particulars of the alleged fraud. We shall thank you to give us also an opp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Controller of Imports and Exports, became competent to make an Order thereunder in consequence of an amendment made in the order, in 1958. As the clause originally stood the relevant words were : The Central Government or any other officer authorised in this behalf may cancel any licence granted under this Order..... . By the amendment made on February 27, 1958, the words or the Chief Controller of Imports and Exports were inserted after the words the Central Government in this clause. The position on the relevant dates in September and October, 1958, therefore was that the Chief Controller of Imports and Exports, New Delhi, had authority to cancel any license granted under the Imports Control Order without being specially authorised in that behalf. It was apparently in view of this position which was pointed out by Mr. Bilgrami in his affidavit in opposition that the learned Counsel for the petitioners did not press this ground at all. Nor did he press the fourth ground, viz., that the petitioners right under Article 14 of the Constitution has been infringed. It is obvious that if the order has been made without the petitioners having been given a reasonable opportunity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners were not genuine. 4. The first contention on behalf of the petitioners is that clause 9(a) of the Imports Control Order is itself invalid as it violates a licensee s rights under Article 19(1)(f) and (g) and Article 31 of the Constitution. Clause 9(a) is in these words :- Cancellation of Licences :- The Central Government or the Chief Controller of Imports and Exports or any other officer authorised in this behalf may can- cel any licence granted under this Order or otherwise render it ineffective :- (a) If the licence has been granted through inadvertence or mistake or has been obtained by fraud or misrepresentation ..........". 5. As in the present case there is no question of the licences having been granted through inadvertence or mistake it is not necessary for us to consider whether the provision for cancellation of licences on the ground that they have been granted through mistake or inadvertence is invalid. The question in the present case is whether the provision for cancellation of licences on the ground that they have been obtained by fraud or misrepresentation is a reasonable restriction in the interests of the general public on the exercise of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... induced by fraud or misrepresentation. Whether the licensee himself or some other party is responsible for the fraud or misrepresentation, the fact remains that in such cases the basis of the grant of licence has disappeared. It will be absolutely unreasonable that such a licence should be allowed to continue. We are therefore of opinion that the provision that licence may be cancelled, if it is found, after giving a reasonable opportunity to the licensee to be heard, to have been obtained by fraud or misrepresentation is a reasonable restriction in the interests of the general public on the exercise of the fundamental right of a citizen guaranteed under Article 19(1)(f) and (g) of the Constitution. The cancellation being under a valid law there can be no question of any right under Article 31 of the Constitution having been infringed. 6. This brings us to the main contention pressed on behalf of the petitioners, viz., that the licensee has not been given a reasonable opportunity of being heard before the order of cancellation was made. There can be no doubt that if a reasonable opportunity to be heard as against the proposed order of cancellation has not been given the order wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made, his admissions by conduct or otherwise of some or all the allegations and all other matters which help the mind in coming to a fair conclusion on the question. The action proposed in the present case viz., the cancellation of the five licences was proposed on a tentative conclusion by Mr. Bilgrami on the basis of the material in his possession that the five licences had been obtained fraudulently. The main grounds on which this tentative conclusion appears to have been based were that four applications - three dated June 17 and one dated June 26, 1958, similar in all particulars to the four which are now found in the office of the Joint Controller of Imports and Exports, Bombay, had been actually received but had been rejected and were lying in the Chief Controller s Office; that four similar applications, bearing the same dates and same particulars which were lying in the Bombay Office and also a fifth application dated July 22, were accompanied by five forwarding letters purporting to have been signed by Mr. M.L. Gupta recommending the prayer for licence and containing a statement that the first respondent had authorised such issue of licences on those applications but th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent s statement does not say anything as to how exactly and by whom the fraud was committed but simply added that the first respondent did not say anything beyond the fact that the licences has been obtained by fraud. It is significant that no specific denial was made of Mr. Bilgrami s assertion that to Mr. Rangwala, Mr. Parekh and Mr. Huseini Doctor he had himself stated that the issue of the licences had not been authorised by him as they purported to be . No less important is the fact that Mr. Rangwala does not deny the assertion made by Mr. Bilgrami that he (Mr. Rangwala) in the course of that interview on September 30, suggested that the fraud might have been committed by reason of certain feelings amongst the employees of his firm. It is reasonable therefore to believe that besides stating that the licences had been obtained fraudulently Mr. Bilgrami definitely informed the Company s representatives on September 30, 1958, that though issue of the licences had been purported to be authorised by him - with apparent reference to the forwarding letters recommending the issue of the licences - this had not actually been authorised and further that on receipt of this information t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the Company s representatives appeared to have been more concerned to show that the Company was not a party to the fraud than to show that there was no fraud practised at all, we are of opinion that the omission to give further particulars or inspection of papers did not deprive the petitioners of a fair chance of convincing Mr. Bilgrami that the grounds on which cancellation of the licences was proposed did not exist, or even if they existed, they did not justify cancellation of the licences. We are therefore of opinion that the opportunity that was given to the petitioners in the present case amounted to a reasonable opportunity of being heard against the action proposed. 12. The petitioners are therefore not entitled to any relief. 13. The petition is accordingly dismissed with costs. 14. [Judgment per : Subba Rao, J.]. - I have had the advantage of perusing the judgment of my learned brother, Das Gupta, J. I regret my inability to agree with his conclusion. 15. The facts are fully stated in the judgment of my learned brother and I shall, therefore, briefly restate only the material facts. The first petitioner, M/s. Fedco (Private) Limited (hereinafter call ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id five licences and directing the Collector of Customs, Bombay, to assess the goods of the Company which had been imported into India and allow them to clear the same. 16. Mr. Purshottam Trikamdas, learned Counsel for the petitioners in support of his contentions raised before us two points, viz., (1) Clauses 9 and 10 of the Import Control Order, 1955, (hereinafter called the Order) whereunder the licences were cancelled infringe the fundamental rights of a citizen under Article 19(1)(f) and (g) of the Constitution inasmuch as the said provisions constitute an arbitrary and unreasonable restriction on the said rights; and (2) the Chief Controller has not complied with the provisions of Clause 10 of the Order as he failed to give the Company reasonable opportunity of being heard before the licences granted to them were cancelled and therefore the act of the Chief Controller in cancelling the licences infringes the rights of the Company under Article 19(1)(f) and (g) of the Constitution. 17. The first point need not be considered as I am clearly of the view that no reasonable opportunity within the meaning of Clause 10 of the Order was given to the petitioners by the Chief Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable , opportunity and of being heard . They imply that when the charge is one of fraud the affected party is entitled to know the particulars of fraud alleged, to inspect the documents on the basis of which fraud is imputed to him and to a personal hearing to explain his case and to absolve himself of the charge made against him. Without these elementary safeguards provided by the authority, the opportunity to be heard given to the licensee becomes an empty formality. With this background I shall scrutinize the relevant facts to ascertain whether any such reasonable opportunity was given to the petitioners in this case. The question falls to be decided only on the affidavits filed by the parties. I shall assume for the purpose of this petition that the affidavit filed by the Chief Controller represents what all had taken place between him and the representatives of the Company. The notice dated September 24, 1958, issued to the petitioners laconically states that the licences granted by the Joint Controller to the Company were fraudulently obtained and therefore it was notified that the Government of India, in exercise of the powers specified in paragraph 9 of the Order propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat they reserved their right to give further explanation. The petitioners were not allowed inspection of the papers. By their letter dated October 3, 1958, the Company recorded what took place at the said interview and sent it to the Chief Controller. The petitioners again wrote another letter to the Chief Controller reminding him that they had not received any particulars of the alleged fraud. This letter was personally handed over to Mr. Sundaram, the Director of Administration in the Office of the Chief Controller on October 14, 1958. At that interview, Mr. Sundaram, told the petitioners that the recommendations against which the disputed licences were granted were not genuine. On October 16, 1958, the Chief Controller cancelled the said five licences issued to the petitioner Company. On the aforesaid facts, which we have assumed for the purpose of this petition, can it be said that the Chief Controller gave the petitioners a reasonable opportunity of being heard to enable them to establish that no fraud had been committed in getting the said licences? 18. The learned Solicitor General, appearing for the respondents, contended that the Company admitted the fraud, that their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not carry the matter any further. The fact, therefore, remains that notwithstanding specific request by the petitioners no particulars were furnished to them, no facilities for inspection of the relevant documents given and no date was fixed for the enquiry in regard to the alleged fraud. 19. The learned Solicitor General asked, what was that that the petitioners could have gained if the particulars were given and if they were allowed to inspect the relevant documents? This is a lopsided way of looking at things. The question should have been, what reasonable opportunity to be heard was given to the petitioners to establish their innocence? That apart, without apportioning any blame either on the petitioners or on the respondents, many possibilities can be visualized, viz., (i) the petitioners were guilty of fraud; they knew that their applications were rejected by the Chief Controller, they got similar applications surreptitiously introduced in the Bombay Office with forged recommendations under the signature of the Deputy Chief Controller, New Delhi, Mr. M.L. Gupta, and obtained the licences by practising fraud on the Joint Chief Controller, Bombay; (ii) a third party, pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments proved that there was no fraud, that there was no order rejecting the applications, that the despatch book showed that the applications were forwarded to the Bombay Office and that the original applications were not in that Office, that the despatch book and the receipt book showed the correspondence that passed between the Chief Controller and the petitioners, and that the signature of Mr. Gupta on the recommendations was genuine. It is not as if the petitioners admitted that they committed the fraud. When they were confronted with the notice, unless the particulars were given to them and the documents shown to them, it was not possible for them to know whether a fraud was committed at all and, if committed, how was it committed. Only for the purpose of explaining that no fraud was committed by them, they asked for the particulars, for inspection of the relevant documents and for a personal hearing : all these were denied to them. In the circumstances, I find it not possible to hold that the petitioners were given reasonable opportunity of being heard within the meaning of Clause 10 of the Order. The stakes are high and the order of cancellation was made arbitrarily and in u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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