TMI Blog1961 (3) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... on orders are, therefore, bad and must be quashed. We allow the writ petitions . - - - - - Dated:- 23-3-1961 - B.P. SINHA, S.K. DAS, A.K. SARKAR, N. RAJAGOPALA AYYANGAR AND J.R. MUDHOLKAR, JJ. For the petitioner : Porus A. Mehta, J. B. Gagrat and G. Gopalakrishnan For the respondents : H. J. Umrigar, R. H. Dhebar and T. M, Sen JUDGMENT These are two writ petitions in respect of two orders 'dated August 3, 1960, b which the Joint Chief Controller of Imports, Madras, cancelled two import licences, Nos. A 863296 and 836640 dated January 18, 1960, and February 2, 1960, respectively, granted in favour of the petitioner, Messrs. Sinha Govindji of Bangalore Road, Bellary, for the purpose of importing cellulose nitrate sheets of the value of Rs. 75,000 each for two licensing periods, April/September,'1959, and October/ March, 1960. The complaint of the petitioner firm is that respondents 1 and 2 have cancelled the licences in circumstances which amounted to a denial of its right to be given a reasonable opportunity of being heard, as provided by cl. 10 of the Imports (Control) Order, 1955, before the impugned 'orders were passed and thus arbitrarily and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts, Madras. (Sd.) J. K. Sarkar, Deputy Chief Controller of Imports and Exports. The notices, be it noted, did not state on what grounds falling within cl. 9 of the Imports (Control) Order, 1955, it was proposed to cancel the licences of the petitioner. Clause 9 of the Control Order states four grounds for cancellation of a licence, and we may read the clause here omitting those grounds which are not relevant for our case: 9. Cancellation of Licences: The Central Government or any other officer authorised in this behalf may cancel 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; (b) (c) (d) By a letter dated May 30, 1960, the petitioner referred to the earlier correspondence on the subject and said inter alia: Now clause (9) of the Import Control Order, 1955, under which action is proposed to be taken envisages the cancellation of a licence on various grounds. Your notice does not disclose on which of these grounds the proposed action is sought to be taken. Without knowing on what ground the proposed cancell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to manufacture the relevant articles from the imported raw material. On receipt of this letter a joint investigation was held by the Assistant Director of Industries, Bell,-try, and the Deputy Director, Small, Industries Service Institute, Hubli, and it was found at the time of inspection that the petitioner firm had no machinery and equipment at the premises, nor did they possess any municipal licence or factory licence. On July 2, 1960, the Chief Controller of Imports Exports wrote to the petitioner giving the above information and asking the petitioner to show cause why further issue of licences should not be suspended under cl. 8 of the Imports (Control) Order, 1955. We quote below the relevant extracts from this letter: Gentleman, I write to refer to your letter dated the 21st May, 1960, and 30th May, 1960, on the above subject, and to say that a joint investigation conducted by the Deputy Director, Small Industries Service Institute, Hubli, and Assistant Director of Industries, Government of Mysore, Bellary, revealed that at the time of inspection of your firm by them, no machinery and equipment existed in your premises and that you had no Municipal licences or F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which of the four grounds mentioned therein it was proposed to take action. Naturally, the petitioner stated in its letter dated May 30, 1960, that without knowing on what ground the proposed cancellation was to be made, the petitioner firm was not in a position to show cause. So far there is no dispute between the parties, and it is not seriously urged by the respondents that if the notice stood by itself, it could be held to have given the petitioner a reasonable opportunity of being heard within the meaning of cl. 10. The respondents, however, rely on the letter dated July 2, 1960, in support of their contention that the petitioner has had a reasonable opportunity of showing cause against the cancellation of the two licences. On behalf of the petitioner it has been submitted, not without justification, that the letter dated July 2, 1960, related to a different matter, viz., the suspension of the grant of further licences under cl. 8 for which also a reasonable opportunity to be heard had to be given to the petitioner under cl. 10. In its operative part the letter stated: you are called upon to show cause, within 15 days from the date of this letter, as to why further issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no cause had been shown, when in fact the petitioner had specifically asked for an opportunity to show cause. By their letter dated August 6, 1960, the respondents said that the matter would be considered on receipt of a letter of authority from the solicitor in proper form and on stamped paper, without stating that in the meantime cancellation order, had been made. without waiting for any explanation. on August 10, 1960, the solicitor submitted a written authority, saying that it was unnecessary to (,all for it arid that the two licences had been cancelled arbitrarily and without giving the petitioner an opportunity of being heard. The correspondence, then continued with regard to the proposed action under cl. 8 and the petitioner challenged the correctness of the report of the joint investigation proceeding on many essential particulars including the alleged absence of machinery arid equipment. It, is not necessary to enter into details of that correspondence, because the proposed action under cl. 8 is not the subject-matter of the present proceeding. It is enough to state that from what happened after the receipt of the letter dated July 2, 1960, it is abundantly clear that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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