TMI Blog2016 (10) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... al purposes. The respondent taking into consideration the information received by it, has formed an opinion that licence granted to the petitioner requires to be placed under suspension as an interim measure and the reasons for exercising the power of interim suspension is vivid on a reading of the impugned order. Therefore, the petitioner is not correct in contending that the Licencing Authority has not recorded his opinion, while exercising the power of the interim suspension. In terms of proviso in Rule 42(5), the respondent has granted an opportunity to the petitioner to show cause as to why the Licence should not be cancelled. Therefore, the impugned order cannot be stated to be devoid of reasons nor it can be stated that the competent authority did not form an opinion before passing the order of interim suspension. Lack of jurisdiction - power of authority for interim suspension - the Joint Chief Controller of Explosives, South Circle - Held that: - The learned Additional Solicitor General produced before this Court a chart, attested by the Chief Controller to show the delegation of powers granted by the Chief Controller. By virtue of the said chart, it is seen that the J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afford an opportunity of personal hearing to the petitioner and pass orders on merits and in accordance with law, within a period of 30 days. - W. P. Nos. 20826 & 20827 of 2016 - - - Dated:- 11-8-2016 - T. S. Sivagnanam, J. For the Petitioner : Mr. Vijay Narayan Sr Counsel for Mr.N.Viswanathan For the Respondent : Mr.G.Rajagopalan, Mr.B.Rabu Manohar, SPC ORDER The petitioner is a dealer in Ammonium Nitrate and was granted a licence in Form P-3 to store and trade in Ammonium Nitrate in terms of Ammonium Nitrate Rules, 2015, (Rules), framed under the Explosive Act, 1884, (Act). The petitioner applied for grant of licence in Form P-5 for import licence of Ammonium Nitrate, which was a pre-requisite for import, though the said product was freely importable and not a restricted item. The petitioner's application for import licence, was rejected by order dated 19.08.2015, on the ground that issue of licence in Form P-5, is considered only in favour of Ammonium Nitrate users, in the interest of National Security. This order dated 19.08.2015, is challenged in W.P.No.20826 of 2016. By an earlier order dated 20.05.2016, the licence granted to the petitioner in Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, Chennai, praying for a certification of the correctness of the inventory, which was seized under Mahazar dated 12.11.2015, after taking photographs and drawing of the representative samples by making a visit to the bonded warehouse so as to enable the department to dispose of the seized goods as provided under law. Even prior to the filing of the petition by the Customs Authorities, the first respondent by communication, dated 11.02.2015, informed the Principal Commissioner of Customs, Chennai, that considering the huge quantity of the said Ammonium Nitrate consignment to the tune of 740MT and the impact of its destruction over the environment, it would be appropriate to consider auctioning the consignment to the firm/individual authorised under Ammonium Nitrate Rules, 2012, after observing necessary formalities. This was reiterated by the second respondent by letter dated 23.02.2016. The petitioner submitted a representation dated 29.04.2016 to the Deputy Commissioner of Customs, (SIIB), wherein among other things, they stated that the representation may be considered and it may be ordered either for storage of the goods at the petitioner's licenced premises or in the alte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordering interim suspension and the order is in gross violation of the principles of natural justice, as the petitioner was not afforded an opportunity of hearing as mandated under Rule 42(5)(i) of the Rules. It is further submitted that the proceedings initiated by the Customs Authorities on the advice of the first respondent to sell the goods by auction to other licensees holding licence in Form P-3 in exclusion of the petitioner, is violative of Section 110A read with Section 125 of the Customs Act which provides for the petitioner being entitled to redeem the goods on reasonable conditions and the goods not being prohibited goods, the petitioner has vested right to seek for redemption under Section 125 of the Customs Act. It is further submitted that though the petitioner submitted their explanation to the show cause notice as early as on 01.06.2016, till date no orders have been passed and no notice of personal hearing was issued to the petitioner, though there is a specific request made by the petitioner in that regard in the explanation. 7. The learned Senior counsel, with regard to the challenge to the order dated 19.08.2015, by which the petitioner's application for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 1 and 2, is clearly with an intention to deny the petitioner the right to the imported goods, thereby affecting his right to trade. In support of the contention that the petitioner's right to secure a licence cannot be negatived by any policy decision not stipulated under the Act or the Rules, reliance was placed on the decision of the Hon'ble Supreme Court in the case of Thirumuruga Kirupananda Variyar Thavathiru Sundara Swamigal Medical Educational Charitable Trust vs. State of Tamil Nadu Ors., reported in (1996) 3 SCC 15. 10. Mr.G.Rajagopalan, learned Additional Solicitor General of India, assisted by Mr.B.Rabu Manohar, learned Senior Panel counsel appearing for the respondents at the out set, submitted that the Writ Petition challenging the order of rejection of licence in Form P-5 is an appealable order and without exhausting the appeal remedy, the petitioner is not entitled to approach this Court. With regard to the jurisdiction of the second respondent to suspend the licence, reference was made to Section 17A, which deals with power to delegate and the authority namely, the first respondent is entitled to delegate his powers to the second respondent. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner was issued a licence in Form P-3 to possess for sale of Ammonium Nitrate from a store house exceeding 30MT or in tanks. This licence was issued on 03.12.2014, to remain valid till 31.03.2019. The licenced premises is situated in Aravakurichi Taluk, Karur District. The licence was granted subject to the provisions of the Act and the Ammonium Nitrate Rules 2012. The licence was liable to be suspended or revoked for any violation of provisions of the Act or Rules or the conditions of licence or if it is found that the licenced premises does not conform to the description shown in the plan annexed to the licence. By the impugned order, dated 20.05.2016, this licence in Form P-3 has been suspended. 14. The learned Senior counsel appearing for the petitioner contended that the respondents having invoked power under Section 6E read with Rule 42(5)(i), of the Rules and the same having been done without affording an opportunity to the petitioner is in violation of principles of natural justice. Referring to the proviso under sub-rule (1) of Rule 42, it is submitted that before suspending or cancelling a licence under the said rule, the holder of the licence shall be given an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sub-rule. Sub-section (4) empowers the Licencing Authority to revoke a licence on the application of the licencee. In terms of sub-section (5) while varying the conditions of licence either under sub-section (1) or suspending or revoking the licence under sub-section (3), the Licencing Authority shall record in writing the reasons thereof and furnish to the holder of the licence on demand a brief statement of the same, unless in any case, the Licencing Authority is of the opinion that it will not be in the public interest to furnish such statement. In cases where a Court convicts holder of a licence of an offence under the Act or the Rules, the Licencing Authority may also suspend or revoke a licence. On such conviction being set aside on appeal or revision, the suspension or revocation shall become void; Sub-section (7) gives power to the Appellate Court or to the High Court to exercise the power under sub-section (6), exercising its power of revision. The Central Government may also suspend or revoke the licence or direct the Licencing Authority to do so under sub-section (8). On such suspension or revocation, the licencee shall surrender the licence without delay in terms of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the date specified therein. (3) An order of suspension or revocation of a licence shall be deemed to have been served if sent by post to the address of the licence holder entered in the licence. (4) The suspension of a licence shall not debar the holder of the licence from applying for the renewal. (5).Notwithstanding anything contained in sub-rule (1), an opportunity of being heard may not be given to the holder of the licence before his licence is suspended or cancelled in cases:- (i) where the licence is suspended by a licensing authority as an interim measure for violation of any of the provisions of the Act or these rules or of any conditions contained in such licence and in his opinion such violation is likely to cause imminent danger to the public. Provided that where a licence is so suspended, the licensing authority shall give the holder of the licence an opportunity of being heard before the order of suspension is confirmed; or (ii) where the licence is suspended or cancelled by the Central Government, in the public interest or in the interest of the security of the State, such opportunity should not be given. 19. Thus, as per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the respondent recorded in the impugned order that the petitioner has fabricated the sale document. Further, it is stated that the petitioner has supplied Ammonium Nitrate to the tune of 75kgs to 292000kgs to several quarries which did not possess the licence in Form P-3, and thus the respondent stated that in view of the above stated unauthorised illegal activities, reported by the Customs Authority, the Licence granted to the petitioner is being suspended as an interim measure. 22. On a careful reading of the impugned order, it is evidently clear that the respondent on receipt of the information from the Principal Commissioner of Customs, Chennai, has taken note of the materials placed before it and it appears on further investigation on selected buyers (as stated in the counter affidavit), mentioned that the entire quantity of Ammonium Nitrate was used in Mines and Quarries for blasting operations and not used for agricultural purposes. 23. Therefore, in my view the respondent taking into consideration the information received by it, has formed an opinion that licence granted to the petitioner requires to be placed under suspension as an interim measure and the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e necessary to go into the aspect as to whether the Joint Chief Controller, who issued the impugned order was a delegate pursuant to the delegation of power being granted under Section 17A, since in terms of Rule 28, read with Schedule I, the Licencing Authority for issuing a licence in Form P-3 is the Chief Controller or Controller authorised by the Chief Controller. 26. The learned Additional Solicitor General produced before this Court a chart, attested by the Chief Controller to show the delegation of powers granted by the Chief Controller. By virtue of the said chart, it is seen that the Joint Chief Controller has been delegated with the power for interim suspension and issuance of the show cause notice. 27. The learned Senior counsel contended that the chart does not have a proper authentication and the same cannot be taken as an order delegating the power to the respondent. I am not inclined to accept the said stand in the light of the fact that the said chart/document has been attested by the Chief Controller. Thus, I am inclined to accept the same as valid proof to show that the Joint Chief Controller of the Explosives, who had passed the order of interim suspension, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) The Ammonium Nitrate shall not be imported into India by sea except through the ports which are duly approved for this purpose by the Ministry of Shipping and Transport, Government of India, in consultation with the Chief Controller and declared as Customs Ports by the Commissioner of Customs; (d) The Ammonium Nitrate imported into India by sea shall not be stored in the port. 32. It is argued that the restrictions on import or export of Ammonium Nitrate, can be only under the circumstances stated in clauses (a) to (d) in sub-rule (4) of Rule 6, and the reason assigned in the impugned order stating that application for licence in Form P-5 will be considered only in favour of Ammonium Nitrate users is not one of the restrictions, as contemplated under the Rules and the reasons stated in the impugned order is extraneous and contrary to the provisions contained in the Ammonium Nitrate Rules and hence, unsustainable. 33. Prior to July 2012, there was no specific Rule to regulate the use of Ammonium Nitrate and after the Rules came into force, Ammonium Nitrate or any combination containing more than 45% of the Ammonium Nitrate by weight including emulsions, suspens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts like fuel, etc., have to be added to make it an explosive. For such explosive mixtures to explode, initiators like detonators are required. Q. Why is it necessary to regulate the use of ammonium nitrate? A. Ammonium Nitrate is a necessary major ingredient for manufacture of explosives and it has been declared as a deemed explosives vide Notification No. G.S.R. S.O. 1678(E) dated 21/07/2011. It has the potential to form an explosive mixture on the addition of ingredients like fuel etc., Hence, it is necessary to regulate the use of Ammonium Nitrate for which the Ammonium Nitrate Rules, 2012 have been framed. Q. Where does AN find its maximum usage? A. Ammonium Nitrate find its maximum usage in Explosives Industry. 36. Thus, the use of Ammonium Nitrate having been regulated, the petitioner cannot, as a matter of right, claim that except for the circumstances set out in Rule 6(4), there can be no restriction on import or export of Ammonium Nitrate, and it cannot be a ground to interfere with the impugned order, as the Rule 6 only postulates general restrictions. Thus, while rejecting the application submitted by the petitioner for grant of licence in F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim measure, though occurred in the said sequential order, it cannot be a reason to infer bias. The authorities exercising power under the provision of the Act and the Ammonium Nitrate Rules are required to take a decision, which will sub-serve National interest and there is no illegality or arbitrariness in the decision making process or in the impugned decision themselves. 40. The decision of the Hon'ble Supreme Court in the case of Thirumuruga Kirupananda Variyar (supra), was a case, where the Hon'ble Supreme Court tested the correctness of the decision of the State Government withholding the issuance of essentiality certificate for starting a medical college on the ground that they have taken a policy decision. Noting that in the matter of establishment of a new medical college rests with the Central Government alone, it was held that the State Government could not refuse essentiality certificate on such policy consideration. In my view the decision is factually distinguishable, as the matters which weighed for consideration in the said case pertain to a establishment of a medical college by a private trust and the findings rendered by the Hon'ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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