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The Commissioner of Customs (General). Versus Neptune Clearing Agency

2015 (12) TMI 538 - BOMBAY HIGH COURT

Revocation of CHA License - violation of Regulations 12, 18(1) and 13(n) of the Customs House Agents Licensing Regulation,2004 - Held that:- If the respondent agent admits the violation and breach of the regulations based on which the licence is issued, then, being out of business and from 15.10.2009 till date instead of inquiry being held denovo or further from such stage it was held to be vitiated, the permanent revocation can be set aside, but by maintaining the same for specific period or re .....

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ation cannot have any existence in the eyes of law because the inquiry was held in breach of principles of natural justice without any proof of prejudice being caused to the respondent, cannot be sustained. The nonobservance of the principles of natural justice in this case would not mean the whole inquiry is wiped out or the inquiry cannot be held from the stage at which the breach is committed and after rectifying it. That wrong is capable of being remedied. After all the adverse material are .....

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- Dated:- 22-7-2015 - S.C. DHARMADHIKARI & G.S. KULKARNI, JJ. For the Petitioner : Mr. Pradeep S.Jetly For the Respondent : Mr.H.R.Shetty ORDER P.C. : 1. This appeal of the Revenue challenges the order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench dated 7.5.2012 allowing the appeal of the respondent. 2. The respondent is a Customs House Agent and his licence was revoked by the Commissioner of Customs (General) by his orderinoriginal dated 15.10.2009. The .....

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, then, adjourned to 26th /27th March,2008. But the allegation is that no notice of this hearing was given to the agent. Thus, the inquiry concluded in gross violation of principles of natural justice. 3. The Tribunal found that these facts are uncontroverted and from the records it is revealed that on 19.3.2008 there was a hearing held and in the absence of the agent. Statements of some persons were recorded. They were asked to appear again. Further the agent was notified and informed that a pe .....

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stency in the order of the Tribunal. The fundamental error that the Tribunal has committed is that it did not note the difference between the chargesheeted agent being not given an intimation or notice of the adjourned date of hearing and if that is the case, one can understand the conclusion that the inquiry was vitiated and, therefore, the order of revocation of the licence should be set aside. However, it is another thing to conclude that there was a notice of hearing but the agent or its rep .....

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w. In the second eventuality the Law does not permit the inquiry itself to be set at naught and the revocation set aside following which the licence should be restored. In all such matters the breach of principles of natural justice or violation thereof by itself and without anything more, is not fatal. The Law is very clear inasmuch as the Court must conclude as to which principle of natural justice has been violated, whether this principle is so fundamental and basic going to the root of the c .....

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roduce proof and establish prejudice caused to him. If that is proved, then, depending upon other circumstances the inquiry must be allowed to proceed with by correcting and rectifying the breach. The Inquiry can then proceed from the stage at which the breach caused is removed further. 5. If any judgment is required for these principles, we can usefully refer to the Judgment of the Hon'ble Supreme Court in the case of Canara Bank & Ors. Vs. Shri.Debasis Das & Ors., (AIR 2003 SC 2041 .....

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what was observed in B. Karunakara's case (supra) there was no question of violation of principles of natural justice. 13. Natural justice is another name for commonsense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a commonsense liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narr .....

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l justice. Natural justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law. As Lord Buckmaster said, no form or procedure should ever be permitted to exclude the presentation of a litigants' defence. 15. The adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasijudicial body embarks on determining disputes between the parties, or a .....

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a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time. When the historic document was made at Runnymede in 1215, the first statutory recognition of this principle fo .....

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not eat". Since then the principle has been chiselled, honed and refined, enriching its content. Judicial treatment has added light and luminosity to the concept, like polishing of a diamond. 16. Principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasijudicial and administrative authority while making an order affecting those r .....

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t and circumstances of that case, the framework of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. Expression 'civil consequences' encompasses infraction of not merely property or personal rights but of civil liberties, material deprivations, and nonpecuniary damages. In its wide umbrella .....

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man for fairplay and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is 'nemo judex in causa sua' or 'nemo debet esse judex in propria causa sua' as stated in (1605) 12 Co.Rep.114 that is, 'no man shall be a judge in his own cause'. Coke used the form 'aliquis non debet esse judex in propria causa quia non potest esse judex at pars' (Co.Litt. 1418), that is, 'no man ought to be a judge in .....

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les and particularly the audi alteram partem rule, namely 'qui aliquid statuerit parte inaudita alteram actquam licet dixerit, haud acquum facerit' that is, 'he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right' (See Bosewell's case (1605) 6 Co.Rep. 48b, 52a) or in other words, as it is now expressed, 'justice should not only be done but should manifestly be seen to be done'. W .....

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he case at hand the position is different. The position was illuminatingly stated by this Court in Managing Director, ECIL, Hyderabad and Ors. vs. B. Karunakara and Ors. [1993 (4) SCC 727 at para 31] which reads as follows: "Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the Courts and Tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured i .....

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round that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short cuts. Since it is the Courts/Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the Court/Tr .....

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him with the report. The question whether the employee would be entitled to the backwages and other benefits from the date of his dismissal to the date of his reinstatement if ultimately ordered, should invariably be left to be decided by the authority concerned according to law, after the culmination of the proceedings and depending on the final outcome. If the employee succeeds in the fresh inquiry and is directed to be reinstated, the authority should be at liberty to decide according to law .....

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Bench of this Court in the case of Patel Engineering Ltd. Vs. Union of India, (2014(307) E.L.T. 862 (Bom.)) followed the above principles and held as under: 15 In these circumstances, we are unable to accept the argument of Mr. Kantawala that any prejudice has been caused to the assessee by not permitting the panel members to be cross examined. The Tribunal did not commit any error in holding that right to defend the proceedings which are inherent in such adjudication are in no way prejudiced, .....

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some of the panel members was justified. 16. We do not see any violation of the principles of natural justice. We do not see that the assessee was prejudiced by refusal of the authorities to permit cross examination of other panel members. In the light of the admitted factual position and finding that imported cranes were not within the permissible time limit but were more than 10 years old that the benefit of the license and of the notification was rightly denied. 17. We have not been addresse .....

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passed in violation of natural justice need not be set aside under Article 226 of the Constitution of India. For example where no prejudice is caused to the person concerned, interference under Article 226 is not necessary. Similarly, if the quashing of the order which is in breach of natural justice is likely to result in revival of another order which is in itself illegal as in Gadde Venkateswara Raov. Govt. of A.P. [AIR 1966 SC 828 : (1966) 2 SCR 172] it is not necessary to quash the order me .....

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ddy, J. followed Ridge v. Baldwin [1964 AC 40 : (1963) 2 All ER 66 (HL)] and set aside the order of supersession of the New Delhi Metropolitan Committee rejecting the argument that there was no prejudice though notice was not given. The proceedings were quashed on the ground of violation of principles of natural justice. But even in that case certain exceptions were laid down to which we shall presently refer. 23. Chinnappa Reddy, J. in S.L. Kapoor case [(1980) 4 SCC 379] laid down two exception .....

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ition to breach of natural justice, prejudice must also be proved has been developed in several cases. In K.L. Tripathi v. State Bank of India [(1984) 1 SCC 43 : 1984 SCC (L&S) 62] Sabyasachi Mukharji, J. (as he then was) also laid down the principle that not mere violation of natural justice but de facto prejudice (other than nonissue of notice) had to be proved. It was observed, quoting Wade's Administrative Law (5th Edn., pp. 47275), as follows: (SCC p. 58, para 31) [I]t is not possib .....

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this Court has consistently applied the principle of prejudice in several cases. The above ruling and various other rulings taking the same view have been exhaustively referred to in State Bank of Patialav. S.K. Sharma [(1996) 3 SCC 364 : 1996 SCC (L&S) 717] . In that case, the principle of prejudice has been further elaborated. The same principle has been reiterated again in Rajendra Singh v. State of M.P.[(1996) 5 SCC 460] 21. Thus, the consistent view is that may be and only in case of w .....

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e nature of the lis, the statute under which an adjudication is undertaken and several other factors. This has been now firmly established in the decision of Bar Council of India v/s High Court of Kerala reported in (2004) 6 SCC 311: AIR 2004 SC.2227. In that case, in the SCC report, this is what is held: 49. In N.K. Prasada v. Govt. of India [(2004) 6 SCC 299] this Court observed: (SCC p. 308, paras 2425) 24. The principles of natural justice, it is well settled, cannot be put into a straitjack .....

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ecisions it was held: (SCC p. 506, para 29) 29. The principles of natural justice, it is trite, cannot be put in a straitjacket formula. In a given case the party should not only be required to show that he did not have a proper notice resulting in violation of principles of natural justice but also to show that he was seriously prejudiced thereby. 25. The principles of natural justice, it is well settled, must not be stretched too far. (See also Mardia Chemicals Ltd. v. Union of India [(2004) 4 .....

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ablished, they are nonetheless not statutory rules. Each of these rules yields to and changes with the exigencies of different situations. They do not apply in the same manner to situations which are not alike. These rules are not cast in a rigid mould nor can they be put in a legal straitjacket. They are not immutable but flexible. These rules can be adapted and modified by statutes and statutory rules and also by the constitution of the Tribunal which has to decide a particular matter and the .....

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nciple of natural justice must be applied and followed depends upon several factors and as enumerated above. Even if there is denial of the request to cross examine the witnesses in a inquiry, without anything more, by such denial alone, it will not be enough to conclude that principles of natural justice have been violated. Therefore, the judgments relied upon by Shri Kantawala must be seen in the factual backdrop and peculiar circumstances of the assessee's case before this Court." 6. .....

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to the period already undergone namely from 15.10.2009 till today. Mr.Shetty has no clear instructions in that regard. Hence, we do not adopt this course, else the Court would be accused of extending misplaced sympathy and which is likely to be misused in future cases by others. 7. In these circumstances the Tribunal was justified in finding fault with the inquiry but it could not have allowed the appeal of the original appellant in its entirety. The Tribunal's conclusion that the final ord .....

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