Mrs. Sampoorani Ammal vs The Joint Chief Controller of Imports and Exports and Another

K. Veeraswami, C. J.

One Rathinam Traders was granted a licence by the Ministry of Foreign Trade and Supply through the Joint Chief Controller of Imports and

Exports for import of art silk yarn. The licence was subject to the condition that the goods imported should either be utilised by the importer or

sold to other manufacturers of products covered by the Exports Promotion Scheme for Art Silk Fabrics who directly export their products or who

sell a part of their products for export. A show cause notice, dated 20th May, 1969 under clause 10 of the Imports (Control) Order, 1955, as

amended, for taking action under Clause 8 of the Order, was issued to the firm, stating that there was reason to believe that the goods imported

against the licence had not been properly utilised or deposed of by them in terms of the conditions imposed on and applicable to the licencee. The

firm furnished a reply through one of the partners. The firm had two partners one of them being the appellant, and two other persons, minors,

admitted to the benefits of the partnership. After carefully considering the whole matter and the reply, the Deputy Chief Controller of Imports and

Exports, acting for the Joint Chief Controller of Imports and Exports made the order, dated 18th August, 1969, by which he debarred the firm

under clause 8 (f) and (g) of the Imports (Control) Order from receiving import licences, customs clearance permits and allotments of imported

goods through STC/MMTC or any similar agencies for licensing periods, viz. April-March, 1968 and April-March, 1969. The order wound up by

stating:

This decision shall also apply to the branches and partners of the firm as mentioned below.

One of the partners mentioned is the appellant. The propriety of the extension of the debarment to the appellant without any notice to her under

the law was questioned but unsuccessfully before Ismail, J.

Taking the frame of clause 8 and also reading it along with clause 6, we think that though in answer to a notice to the firm for action to be taken

under clause 8 one of the partners can act for it and reply to the show cause notice, as the matter would be relating to the firm''s business activity,

when debarment was proposed against one of the partners, we do not think that the other partners had a right to represent the partner against

whom debarment was proposed. That would be a personal thing to the partner and not relating to the firm''s business. Representation would be

allowed only when it related to the business of the firm and not to the individual partner. We are of the view, therefore, that before passing the

impugned order debarring the appellant, she would be entitled to notice to show cause against the action proposed under it. A notice to the firm

will not be sufficient notice to the partner in respect of the action to be taken personally against the appellant. This is so not only for the reason we

mentioned, namely, that the proposal of debarment against the individual partner does not relate to the business of the firm, but also because the

individual partners may have defences peculiar to her or him, namely, that she or he is a minor, or that she or he was innocent and never knew

anything of the irregularity complained of, or that she or he was only a sleeping partner not knowing anything of what the other partner was doing.

Thus, there may be grounds which may be convincing for not imposing the i punishment of debarment against the individual partner.

On that view, the appeal is allowed the effect of which is that the extension of the debarment to the appellant is quashed. No costs.