TMI Blog2009 (4) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... nan, B. Satish Sundar and A. K. Jayaraj. For Petitioner in all WPs. Mr. K. Ravi Anantha Padmanaban, and Mr. P. Mahevan, Standing Counsel. For Customs and Central Excise Department in all WPs. ORDER The petitioners have come up with the present writ petitions, challenging a notification inviting applications for the grant of licences to act as Customs House Agents, under a new set of regulations issued in the year 2004. 2. I have heard Mr. R. Yashod Vardhan, learned Senior Counsel and M/s. P. Saravanan, B. Satish Sundar and A. K. Jayaraj, learned counsel appearing for the petitioners and Mr. P. Mahadevan and Mr. K. Ravi Anantha Padmanaban, learned Standing Counsel appearing for the Customs and Central Excise Department. 3. In exercise of the powers conferred by sub section (2) of Section 146 of the Customs Act, 1962, the Central Board of Excise and Customs, issued a set of Regulations called "Customs House Agents Licensing Regulations 1984". The scheme of these Regulations, was as follows:- (a) Under Regulation-4, the Commissioner was empowered to invite applications for the grant of such number of licences, as assessed by him to act as Customs House Agents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f duty, was found to be satisfactory. (g) Regulation-11 dealt with the execution of a bond. (h) Regulation-12 declared that the regular licences granted under Regulation-10 would be valid for 5 years and renewable from time to time. This Regulation also provided the procedure for renewal of the regular licence. (i) Regulation-13 declared that the licence was not transferrable. (j) Regulation-14 listed out the obligations of a Customs House Agent. Regulations 15 to 17, dealt with the change in the Constitution of the licensee if the licensee happened to be a Company, Firm or concern. (k) Regulation-18 enabled a person who qualified in the examination, to engage himself in the work of clearance of goods through Customs on behalf of a licensee. (l) Regulation-19 imposed an obligation upon the licensee to maintain accounts and Regulation-20 enabled a licensee to employ persons to assist him. (m) Regulation-21 dealt with suspension or revocation of licence and Regulation-22 empowered the Commissioner to prohibit an agent from working in one or more sections of the Customs Stations. Regulation-23 provided the procedure for suspending or revoking a licence. (n) Regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grant of licence and Regulation-10 deals with the execution of bond and furnishing of security. (g) Regulation-11 prescribes the validity period of licence as 10 years, renewable thereafter. (h) Regulation-12 makes the licence non-transferrable and Regulation-13 deals with the obligations of the agent. (i) Regulations-14 to 16 deal with the change in the Constitution. (j) Regulation-17 permits a person who has qualified in the examination to engage himself in the work relating to clearance of goods. (k) Regulation-18 deals with maintenance and inspection of goods and Regulation-19 deals with employment of persons. (l) Regulation-20 deals with suspension and revocation of licence and Regulation-21 deals with the power of the Commissioner to prohibit an agent from working in any section. (m) Regulation-22 deals with the procedure for suspending or revoking the licence. (n) Regulation-23 speaks about accommodation. 6. After the issue of the new set of Regulations in 2004, clarifications were sought from the Central Board of Excise and Customs, by the Commissionerates, regarding various issues. By a Circular No.42/2004, dated 10.6.2004, the Central Board issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Bench of the Punjab and Haryana High Court, in Madusudan Komra vs. Union of India, where the learned Judges followed the decision of the single Judge of the Delhi High Court. The petitioners point out that even the Andhra Pradesh High Court has issued an interim direction in an identical matter, directing the grant of licences to persons who had passed the qualifying examination under the old Regulations. 10. Mr.R.Yashod Vardhan, learned Senior Counsel submitted that the petitioners had acquired a right, even if inchoate, by virtue of the old Regulations and that therefore the new Regulations cannot take away the same, in view of Section 6 of the General Clauses Act. In support of this contention, the learned Senior Counsel relied upon the decision of the Supreme Court in Glaxo Smith Kline vs. Controller of Patents and Designs {2008 (4) R.A.J. 284}. The learned Senior Counsel also produced the text of the judgment of the Court of Appeal in Chief Adjudication Officer vs. Maguire {1999 (2) All E.R. 859}, which was quoted with approval by the Apex Court in the above decision. 11. Mr.K.Ravi Anantha Padmanaban, learned Standing Counsel for the Department, submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of delay and laches. However I do not wish to non-suit them on this score. 13. As a matter of fact, a person by name G.Saravanan, who had also passed the qualifying examination under the old Regulations of 1984, challenged the clarificatory Circular No.42/2004, dated 10.6.2004, by way of a writ petition in W.P.(MD) No.10388 of 2005 before the Madurai Bench of this Court. Justice K.Chandru, dismissed the writ petition by an order dated 15.6.2007, upholding the Circular. An appeal was filed against the said order in W.A.(MD) No.442 of 2007. The writ appeal was disposed of by the Division Bench by an order dated 11.8.2008, merely giving liberty to the petitioner therein to apply for a licence and directing the respondents to consider the case of the petitioner in accordance with law. The Division Bench did not say that the application of the petitioner therein should be considered in accordance with 1984 Regulations. 14. The petitioners assail the new 2004 Regulations and the public notice dated 31.12.2008, mainly on the ground that by passing the qualifying examination under the 1984 Regulations and waiting in the wings for the past more than a decade for the grant of lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work of clearance of goods through Customs on behalf of a firm or a Company, holding a temporary licence. Thus, out of the several stages to be crossed under the 1984 Regulations for the grant of a regular licence, starting from Regulation-4 upto Regulation-10, the petitioners had crossed only one stage, namely that of passing the qualifying examination. They had no occasion to cross the other stages, such as calling for applications (Regulation-4), submission of applications (Regulation-5), scrutiny of applications (Regulation-7) and grant of temporary licence (Regulation-8). Therefore, it is extremely difficult to accept the contention that the petitioners acquired any right either inchoate or vested. 18. Similarly, it is also pretty difficult to accept the claim that the petitioners had a legitimate expectation that they would be issued with licences under the old Regulations. Even in a case where an amendment to the Service Rules was issued, half way through a process of selection to the post of Inspectors in the Department of Weights and Measures in the State of Madhya Pradesh, the Supreme Court held in State of M.P. vs. Raghuveer Singh Yadav {1994 (6) SCC 151} that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... past practice". 21. Therefore, the petitioners herein cannot succeed on the ground of legitimate expectation unless they establish that there was either a representation or promise made by the respondents or that there was a consistent past practice. In the batch of cases on hand, the petitioners could not even plead that there was either a representation or promise made by the respondents at any point of time. The petitioners could not also establish that there was a consistent past practice, so as to invoke the doctrine. As a matter of fact, the petitioners have passed the qualifying examination under the 1984 Regulations and they have only been waiting for the issue of notifications under Regulation-4, inviting applications for the grant of licences. Admittedly, the last notification inviting applications, was issued only in 1998. Regulation-4 of the 1984 Regulations requires the Commissioner to issue notifications inviting applications, in the month of January every year. But the Commissioner did not issue any notification after 1998. Therefore the only consistent past practice adopted by the respondents, is not to invite applications and not to issue licences. With the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) conduct of the expectant and (iv) any other valid or bona fide reason given by the decision maker. In the case on hand, there is a change of policy. This change has been brought forth on the basis of the recommendations of two Committees viz., a High Power Committee on Reduction of Transaction Costs of Indian Exports and Kelkar Committee on Indirect Taxes. Therefore there is no scope for invoking the doctrine to grant any relief to the petitioners. 24. In Ashoka Smokeless Coal India (P) Ltd vs. Union of India {2007 (2) SCC 640}, the Supreme Court pointed out that the doctrine of legitimate expectation has been developed in the context of the principles of natural justice and that there is a recent trend towards "doctrine of balancing". 25. In Official Liquidator vs. Dayanand {2008 (10) SCC 1}, a Three Member Bench of the Supreme Court pointed out that "at the root of the principle of legitimate expectation, is the constitutional principle of rule of law, which requires regularity, predictability and certainty in Government's dealings with the public". Applying these yardsticks, it is easy to realise that in the absence of any notification inviting applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ministrative decision regarded by the Court as unreasonable must be struck down. The Court clarified that the correct understanding of the Wednesbury principle is that a decision will be said to be unreasonable if (i) it is based on wholly irrelevant material or wholly irrelevant consideration or (ii) it has ignored a very relevant material which should have been taken into consideration or (iii) it is so absurd that no sensible person could ever have reached such a decision. None of these parameters was found by the Delhi High Court to be in place in the case before the Court. Therefore I am unable to toe the line of reasoning adopted by the Delhi High Court. 29. As a matter of fact, the Supreme Court held in State of M.P. vs. Hazarilal {2008 (3) SCC 273}, that today the legal parameters of judicial review have undergone a change and that the Wednesbury principle of reasonableness has been replaced by the doctrine of proportionality. 30. Neither the doctrine of proportionality nor even the "strict scrutiny test" to which there is a shift by the English Courts, can be invoked in the present case, to hold that the action of the respondents is illegal or arbitrary. The 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as equivalent to a pass in the examination under the new Regulations, cannot be accepted. 33. Heavy reliance is placed by the petitioners (and also accepted by the Delhi High Court) on the preamble to the new Regulations, which reads as follows:- "In exercise of the powers conferred by sub section (2) of Section 146 of The Customs Act, 1962 (52 of 1962) and in supersession of the Customs House Agents Licensing Regulations, 1984, except as respect things done or omitted to be done before such supersession, the Central Board of Excise and Customs hereby makes the following Regulations" According to the petitioners, all actions done or omitted to be done, under the 1984 Regulations, are saved by the preamble to the 2004 Regulations. Since the failure of the Commissioner to invite applications for the grant of licences, year after year, under the old Regulation-4, falls under the category of things "omitted to be done", the petitioners contend that their rights are saved by the preamble. 34. But the above contention of the petitioners cannot be countenanced. The Regulations of the year 1984 contemplated various things to be done by the Commissioners, including invi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the repeal shall not - (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceedings or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act of Regulation had not been passed." 37. One need not take recourse to Section 6 of the General Clauses Act, for solving the riddle on hand. By an amendment introduced under Section 113 of the Finance Act, 2001, Section 159-A was inserted into the Customs Act, 1962, which reads as follows:- "Section 159-A. Effect of amendments, etc., of rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Section 159-A takes care of the contingency. 39. The principles underlying Section 6 of the General Clauses Act, can be summarised in broad terms, as follows:- (i) It may be invoked either in favour of or against a person. (ii) To be entitled to the benefit of Section 6, a person must have acquired a right or privilege under the Repealed Act or Regulation. (iii) To apply Section 6 against a person, that person should have either incurred an obligation/liability or been imposed with a penalty or forfeiture for any offence committed under the Repealed Act or Regulation. (iv) The Repeal would neither revive anything that is dead and gone nor affect any investigation, proceedings or remedy in respect of any right, privilege, obligation, liability, penalty or forfeiture. 40. Applying the above principles to the cases on hand, it can be seen without any semblance of a doubt that the petitioners did not acquire any right or privilege under the Repealed Regulations of 1984. Therefore, there is no scope for invoking Section 6 of the General Clauses Act. In Glaxo Smith Kline case, relied upon by Mr.R.Yashod Vardhan, learned Senior Counsel, an application for the grant o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court was rendered 4 years ago. The petitioners before the Delhi and Punjab High Courts are now in enjoyment of a licence, though subject to the outcome of the appeals. 43. The respondents seek to distinguish the petitioners before the Delhi High Court from the petitioners herein, on the sole ground that before the issue of 2004 Regulations, the Commissioner at Delhi had issued a notice inviting applications, in June 2003 and the applications of the petitioners before the Delhi High Court, were kept pending for a long time till the new Regulations were issued in 2004. But this, in my considered view, is no distinction at all. It is well settled that a person who applies for the grant of a licence or permit or even for employment, acquires no vested right or privilege. As a matter of fact, a person who is even selected for appointment, acquires no such right except to the limited extent of being considered before his juniors or persons of lower rank are considered. Therefore, the petitioners before the Delhi High Court and the Punjab High Court, stood on no better footing than the petitioners herein. But they have now derived a benefit, (even if temporarily) solely on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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