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TMI Blog2015 (1) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... gao International Economic Development Corporation Ltd., (a foreign supplier) for one tone, out of which, a consignment of 600 kgs was duly cleared by the Customs authorities and the Drug Authorities and only the consignment of 400 kgs of progesterone, manufactured by Zhejiang, was held up. The relevant documents were sent by the foreign supplier to the petitioners bank and the goods shipped by the foreign supplier were reached the Port of Chennai, whereupon the petitioner filed a bill of entry for clearance of the same. However, it appears that the said Zhejiang lodged a complaint dated 2.4.2009 before the Drugs Controller General of India and hence, the certificates referred to by the petitioner were sent to Zhejiang to verify the authenticity of the same. 4. While so, during the course of examination, the Assistant Drugs Controller, vide opinion dated 26.5.2009 stated that 'Zhejiang' is claimed as the manufacturer of the consignment as per the documents submitted by the petitioner while filing the Bill of Entry, however, the said Zhejiang has clarified to the respondents that the goods of the bill were neither produced nor supplied by them to the said foreign supplier a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-standard drugs declared by Director of Testing Laboratory only and not for spurious drugs and thereby, re-export cannot be made since the material is the evidence as part of the prosecution to be launched. It is stated that on 16.8.2012, prosecution proceedings have been launched against the petitioner for import of spurious drugs from unregistered sources before the XV Metropolitan Magistrate, George Town, Chennai. With these averments, the respondents sought for dismissal of the writ petition. 6. Heard the learned senior counsel appearing for the petitioner and the learned counsel appearing for the respondents and perused the entire record. 7. Assailing the impugned proceedings, Mr. Arvind P.Datar, learned senior counsel would foremost contend that the impugned decision of the second respondent in rejecting the claim of the petitioner for re-export the consignment in two lines without giving sufficient reasons for such rejection, is arbitrary and such a non-speaking decision cannot stand and is liable to be set aside. He also contended that the before taking such decision in refusing the permission to re-export the consignment, no opportunity was afforded to the petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave rejected the plea of the petitioner for re-exporting the spurious drugs and intimated the same by impugned communication, which cannot be interfered. He also pointed out that Rule 41(1) of the Act applies only for re-export of substandard drugs declared by the Director of testing lab only and not for spurious drugs and it is required for the purpose of marking it as material object during the trial of the prosecution. Hence, he sought for dismissal of the writ petition. 9. Heard the learned senior counsel for the petitioner and the learned senior Central Government standing counsel for the respondents and perused the entire records. 10. It is not in dispute that the petitioner has filed a Bill of Entry No.220583 dated 21.5.2009 for the clearance of 400 kgs of Progesterone Micro, which according to the petitioner, manufactured by M/s.Zhejiang, which is a registered company having valid certificate issued under Rule 27-A of the Act. On verification, according to the respondents, it was found that the said consignment purported to be imported from an unregistered source and hence, the same was termed as 'spurious' under Section 9-B(e) of the Act and it was detained. It is also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; With reference to the above, it is informed that the importer M/s.J.B.Khokhani & Co., Mumbai, has submitted in their letter dated 19.6.2009 that the Hongkong trader M/s.Hongkong Tiagao International Economic Development Corporation Ltd., Hongkong, who had supplied the subject noted consignment has agreed to accept the same if re-exported. A mail dt.19.6.2009 to this effect from M/s.Hongkong Tiangao International Economic Development Corporation Ltd., Hongkong submitted by M/s.J.B.Khokhani & Co., Mumbai is enclosed for your reference. This may be accepted and in compliance with Rule 41(1) Drugs & Cosmetics rules, the importer M/s.J.B.Khokhani & Co., Mumbai Envee Druges Pvt.Ltd., may be permitted to re-export the Progesterone imported under B/E No.220583, dated 21.5.2009 to M/s.Hongkong Tiangao International Economic Development Corporation Ltd., Hongkong. 14. A perusal of the above, it is clear that the Asst.Drugs Controller has given nod for re-export of the consignment. However, in the meanwhile, criminal proceedings have been initiated against the petitioner since the imported goods were deemed as spurious. On 16.2.2012, the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Drugs Controller, Chennai, stating that since there is no reply from it in spite of repeated reminders, the Department is of the opinion that re-export permission be granted in the instant case. It is also requested by the second respondent to deputy a representative from Drug Controller Authority on 24.7.2012 so that sample may be drawn in presence of both the importer and the Drug Controller, if no representative is present on 24.7.2012, then sample will be drawn by the Customs Authorities and forwarded the same to the Deputy Drugs Controller for necessary action. 17. While the matters stood thus, the second respondent, by letter dated 24.7.2012 impugned in this writ petition, communicated the following to the petitioner. With reference to the above subject, it is informed that the re-export permission sought vide your letter dated 15.02.2012 is denied. 18. A perusal of the above communication, it is not known on what grounds, the second respondent has taken the decision to deny the permission sought for by the petitioner for re-exporting the consignment. No reasons have been assigned in the impugned communica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) SCC 716), it is stated: (SCR p. 140) We are clear that public orders, publicly made in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. 26. Yet again in Mohinder Singh Gill (199 (4) SCC 214), this Court observed: (SCC p. 417, para 8) 8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust not only be done it must also appear to be done as well. (d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. (e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations. (f) Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. (g) Reasons facilitate the process of judicial review by superior courts. (h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice. (i) Judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reason given by the Deputy Drugs Controller in the proceedings, dated 23.7.2012 is that Rule 41(1) of the Act applies for re-export of substandard drugs declared by Director of testing lab only and not for spurious drugs and since the material is the evidence as part of the prosecution, re-export of the same should not be allowed. 23. It is relevant to extract Rule 41(1) of the Act, which reads as under: 41.1. If the Director of the laboratory appointed for the purpose by the Central Government or any other officer empowered by him on this behalf subject to the approval of the Central Government reports to the Customs Collector that the samples of any drug in a consignment are not of standard quality, or that the drug contravenes in any other respect the provisions of Chapter III of the Act or the rules thereunder and that the contravention is such that it cannot be remedied by the importer, the Customs Collector shall communicate the report forthwith to the importer who shall, within two months of his receiving the communication either export all the drugs of that description in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een blocked under the letter of credit. I find considerable force in the contention of the learned senior counsel. However, this Court is of the view that while permitting the claim of the petitioner for re-exporting the material, appropriate conditions shall be imposed for compliance by the petitioner. 25. In the light of the above discussion, the Writ Petition is allowed and the impugned proceedings, dated 24.7.2012 of the second respondent, are hereby set aside. The respondents are directed to permit the petitioner to re-export the material covered by the Bill of Entry No.220583, dated 21.05.2009, subject to the following conditions, viz., i) The respondents shall depute a representative from the Drug Controller Authority and draw the requisite samples in the presence of both the importer and the Drug Controller, that may be required for the purpose of sending it to the Director of Testing Lab and preserve some samples for marking it as material object during the trial of the prosecution pending against the petitioner before the XV Metropolitan Magistrate Court, George Town, Chennai; &n ..... 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