Sree Narayan Ghosh vs Collector of Customs

Sinha, J.—The Petitioner Sree Narayan Ghosh has been acting as Custom House agent at Calcutta for a number of years. For that purpose, he had obtained a licence from the Customs Authorities. Sometime in May, 1960, in exercise of the powers conferred by Sub-section (2) of Section 202 of the Sea Customs Act, 1878, the Chief Customs Authority promulgated Rules known as the ''Customs House Agents Licencing Rules, 1960''. The relevant part of Rule 24 thereof is as follows:

Special provision for existing agents. (1) In the case of any clearing agent...who immediately before the date of coming into force of these rules was working as ah agent for the transaction of business in any Custom House, on behalf of clients generally, the Customs Collector may, notwithstanding anything contained in these rules grant a special temporary licence in Form ''F'' (Form 73, Appendix A) to act as a Custom House Agent:

Provided that the Customs Collector is satisfied

(i) that the application of the provisions of these rules relating to the grant of a licence and in particular Rules 9 and 10, will result in undue hardship to any such person; and

(ii) that any such person is otherwise generally suitable to function as a Custom House Agent.

* * * *

(2) The special temporary licence granted under this rule shall be valid for a period of one year but subject to the provisions of Sub-rules (1) and (3), may be renewed from year to year.

(3) No licence shall be granted under this rule after the expiry of five years from the date of coming into force of these rules.

By virtue of this Rule, the Petitioner was granted, a special temporary licence renewable from year to year. On July 14, 1961, the licence which was being held by the Petitioner expired and the Petitioner applied to the Assistant Collector of Customs for Establishment and Administration, for renewal thereof under Rule 24(2) of the said Licencing Rules for a further period of one year. On August 24, 1961 the Assistant Collector served a notice upon the Petitioner to show cause why the renewal of the said licence should not be refused. In fact by an order of the Collector of Customs dated March 24, 1962 the Collector refused to renew his licence. It is against this order that this application is directed.

This application was first made before Banerjee, J. who summarily rejected the application. Against the order of summary rejection, the Petitioner went up on appeal and by an order dated January 24, 1963, the appeal was allowed and it was directed that a Rule should issue and be heard in the usual manner. The Rule was accordingly issued and has now been heard. In order to appreciate the nature of the application it is necessary to state certain facts. As I have stated above, the Petitioner was acting as a Custom House agent and one of his duties was to act as a clearing agent for imports of goods from abroad. In 1959, the Petitioner acted as a clearing agent in respect of two importations. These two importations arrived per ''S.S. Eastern Mail'', Rot. No. 100/59, Line Nos. 20 and 23 respectively. The bill of entry relating to the consignment under Line No. 20 was made out by the Petitioner in the name of Messrs Stifling Traders and Enterprise. The declared goods under the bill of entry were 800 pieces motor car tail lamps weighing 672 lbs. per bill of lading. The first consignment comprised of 8 cases and was taken delivery of on February 2, 1959, in four handcarts. Another bill of entry regarding the second consignment covered by Line No. 23 was submitted by the Petitioner as drawn up in the name of Messrs J.N. Maitra. This consignment covered ten cases consisting of 1,000 pieces motor car tail lamps weighing 3684 lbs. as per bill of lading and imported from the same suppliers. This consignment of 10 cases was taken delivery of in one handcart on March 17, 1959. On or about August 4, 1960, notice was served on the Petitioner, together with Messrs National Trading Agency and several other firms mentioned therein, whereby they were called upon to produce a valid import trade control licence covering all the said goods and to show cause why the importation should not be treated as being in contravention of several provisions of the Imports and Exports Control Act, 1947 and Sea Customs Act. The parties including the Petitioner showed cause and were heard and by orders passed by the appropriate authority on May 6, 1961 arid August 8, 1961 the parties were found guilty and various orders and penalties were passed and so far as the Petitioner is concerned, a penalty was imposed upon him for Rs. 500 u/s 167(39) of the Sea Customs Act. Against the said order, the Petitioner has filed an appeal to the Central Board of Revenue, which is still pending. The case on behalf of the Respondent appears to be as follows: These two consignments were passed through the Customs. Random checking was done and the goods were passed and thereafter removed beyond the Customs barrier. It was thereafter detected that the records showed that a fraud had been perpetrated. The goods came from the same manufacturer and were of the same specification, so that it was extraordinary that in the first consignment 800 pieces of motor car tail lamps in 8 cases weighed 672 lbs. and were carted away in four handcarts whereas in the second consignment 1,000 pieces of motor car tail lamps in 10 cases weighed 3684 lbs. and were carted away only in one handcart. The finding is that the goods were not properly entered into the bills of entry and the same goods were shown twice over to the appraising staff and were cleared illegally. I am not concerned in this case with the validity of the said order, which is the subject-matter of an appeal before the Board of Revenue and I should say nothing on the merits. The show-cause notice, with which we are concerned in this case, is the one issued to the Petitioner on August 24, 1961, by the Assistant Collector of Customs, to show cause why the renewal of his licence should not be refused. The reasons given in the show-cause notice is that he had been adjudged guilty of violation of Section 167(39) of the Sea Customs Act and had been punished by an order directing him to pay a penalty of Rs. 500. It was stated that the Assistant Collector considered the Petitioner as unsuitable to function as a Custom House agent at the Calcutta Custom House under proviso (ii) to Rule 24(1) of the said Licencing Rules, because he had been so adjudged. As I have stated above, the Collector of Customs has passed an order refusing the renewal of his licence. It is against this order of refusal that this application is directed. The provisions as to renewal of licence and particularly of a special temporary licence granted under Rule 24 of the Licencing Rules have been set out above. There can be no doubt that the Collector of Customs has a discretion in the matter and he is not bound to grant a special temporary licence if he considers a person generally unsuitable to function as a Custom House agent. Since the non-issue of such a licence would present the Petitioner from pursuing the profession of his choice, the question comes into existence of a possible violation of his fundamental rights and the question of any possible violation of the rules of natural justice is also involved.

Before I proceed further, it is necessary to set out the points taken in this case in support of the Rule. The first point taken is that there has been a violation of the rules of natural justice, inasmuch as the matter was heard by the Assistant Collector of Customs and the order was passed by the Collector of Customs. The second point taken is that the Collector of Customs should, in any event, not have taken any part in the adjudication inasmuch as he had already adjudged the Petitioner guilty and had imposed a personal penalty of Rs. 500 and as such he was actuated by bias against the Petitioner. It is argued that in making the impugned order the Collector relied on his previous decision.

It is significant that the Licencing Rules were not attacked as being violative of the fundamental rights of the Petitioner. In fact, it was not possible for the Petitioner to advance such an argument because he had himself applied for the renewal of his licence under Rule 24 of the Licencing Rules and it was his contention that such renewal should have been granted. In Chandrakant Krishnarao Pradhan and Another Vs. The Collector of Customs, Bombay and Others, , these very Licencing Rules were challenged as unconstitutional and as contravening the provisions of the Sea Customs Act. These contentions were repelled and the Licencing Rules were held to be intra vires excepting Rule 10C of the said Rules which was held to be couched in too wide a form, thus imposing an unreasonable restriction upon Custom House agents to carry on their avocation. However, in this case I am not concerned with any such point. With regard to the first point there appears to be some confusions as to facts. The order imposing a personal penalty on the Petitioner was certainly made by the Collector of Customs. This order dated May 6, 1961, read with corrigendum dated August 8, 1961, is pending in appeal before the Central Board of Revenue. The existing special temporary licence of the Petitioner having expired on July 14, 1961, he made an application to the Assistant Collector of Customs for Establishment and Administration for the renewal thereof. On August 24, 1961, the Assistant Collector of Customs for Establishment and Administration, to whom the application had been made, issued a show-cause notice calling upon the Petitioner to show cause why the renewal of the licence should not be refused. The Petitioner showed cause to the Assistant Collector of Customs. He did not take any point that the Assistant Collector of Customs had no jurisdiction to hear the application which indeed had been made to him by the Petitioner himself. The Petitioner had asked for a hearing and he was granted a personal hearing by the Assistant Collector of Customs. If the matter stood there, the position might have been the subject-matter of an argument, because under the Rules, it is the Collector of Customs who has to be satisfied that a person was unsuitable for functioning as a Custom House agent. That happened however, was that the Collector himself heard the Petitioner on January 15, 1962. The Petitioner fully argued his case before the Collector and all his arguments have been considered in the order of the Collector dated March 24, 1962. After considering all the objections, the Collector held that the Petitioner was not an agent suitable to function as a Custom House agent and therefore, he refused to renew his licence. It was clearly stated in the order that an appeal lay against it to the Chief Customs Authority. No such appeal has been filed. It is, therefore, not correct to say that one man heard the case and another man decided it. In my opinion, the first point taken is of no substance. I now come to the second point, namely, the question of bias. The way that the point of bias is formulated is as follows: It was argued that the Collector of Customs had, in a proceeding mentioned above, already adjudicated the Petitioner as guilty and had imposed a penalty of Rs. 500. In the show-cause notice which was issued by the Assistant Collector of Customs on August 24, 1961, it was stated that inasmuch as that the Petitioner had been adjudged guilty of a violation of Section 167(39) of the Sea Customs Act and had been penalised by an order of the Collector of Customs dated May 6, 1961, read with August 8, 1961, he was considered to be a person unsuitable for functioning as a Custom House agent at the Calcutta Custom House. It is argued that the Collector of Customs having already held that the Petitioner was guilty, was a biased person and therefore, he should not have dealt with the show-cause notice for renewal as justice could not be done by him. Reference was made to the Supreme Court decision in Gullapalli Nageswara Rao and Others Vs. Andhra Pradesh State Road Transport Corporation and Another, . In that case, the rules of natural justice were considered. It was held that the rules of natural justice vary with varying circumstances of statutory bodies and the rules prescribed by the Legislature under which they have to act and the question whether in a particular case they have been contravened must be judged, not by any pre-conceived notion of what they may be, but in the light of the provisions of the relevant Act. See New Prakash Transport Co. Ltd. Vs. New Suwarna Transport Co. Ltd., and Nagendra Nath Bora and Another Vs. The Commissioner of Hills Division and Appeals, Assam and Others, .

We have, therefore, to look at the particular statute concerned in this case and the nature of the Rules and the background in which it has to be administered. Custom House agents are allowed to act as clearing agents within the Custom House area at Calcutta. They discharge an important function. Unless the persons chosen to discharge these duties are persons of responsibility and absolute integrity of character, it is not possible to administer the Customs regulations with success. A discretion has been given to the Collector of Customs to consider as to who was a suitable persons to discharge such duties. The Rules have not been challenged as ultra vires before me. It is admitted that there were proceedings against the Petitioner in respect of charges which were quite serious and which ended in the conviction of the Petitioner of contravention of Section 167(39) of the Sea Customs Act and a penalty was imposed. That decision is subject to appeal before the Central Board of Revenue. But an appeal by itself does not do away with the original order. The Central Board of Revenue has not suspended the order made by the Collector of Customs. Therefore, the problem facing the Collector was as to whether notwithstanding the conviction of the Petitioner he could be still considered as suitable person to carry on his duties as a clearing agent and whether his licence should be renewed for that purpose. On the face of it, it would be a very unsatisfactory state of affairs to allow a person convicted of an offence under the Sea Customs Act to act as a responsible clearing agent, who is expected to assist the authorities in the day-to-day administration of that important statutory provision. The revenue of the State would be in peril. In my opinion, the argument put forward cannot be accepted. It is not that a biased person is adjudicating on the very points of law or fact which he has already decided. The exact point which arose for determination before the Collector of Customs is as to whether a person who had been convicted of an offence under the Sea Customs Act should be granted a licence to carry on his duties under the Licencing Rules, as if nothing had happened. The two things are entirely distinct. So far as the adjudication of the offence is concerned, it had been completed and the matter was pending in appeal. In the proceeding before the Collector of Customs, in respect of the renewal, this issue as to whether the adjudication had been properly done, could not fee raised. If this issue could have been raised and if it was still open to the Collector of Customs to consider whether the Petitioner had been rightly convicted, then I can understand fact the question of has comes into the picture. A person who had already decided that the Petitioner was guilty, could not be expected to do justice on such an issue. But as I have mentioned above, this issue was not before the Collector of Customs at all the point was as to whether, regard being had to the conviction, the Petitioner should be allowed to continue functioning as a Custom House agent under the Licencing Rules. In fact, the only thing that the Collector of Customs was called upon to consider was as to whether, the nature of the offence of which the Petitioner was convicted, was of such a nature that it could be considered as trifling, so that the Petitioner could be allowed to continue to act as a Custom House agent, without any hesitation. In my opinion, the answer can only be one. The original charge against the Petitioner was a serious one and he has been convicted. As long as that conviction stands, it is impossible to expect the Customs Authorities to consider the Petitioner as a person fit to act as a Custom House agent. In deciding this point, the question of bios does not enter into the picture. After the order of conviction is upset by the Central Board of Revenue and if the Collector still refuses to reconsider his order, then it would be said that there arises a question of bias. In my opinion, the second point also fails.

Lastly, I would like to refer to the Supreme Court decision in Veerappa Pillai Vs. Raman and Raman Ltd. and Others, . The case was under the Motor Vehicles Act and the rules framed thereunder and one of the points involved was the right to the issue of a permit under the Motor Vehicles Act and the relevant rules thereunder. Aiyar, J. said as follows:

The Motor Vehicles Act is a statute which creates new rights and liabilities and prescribes an elaborate procedure for their regulation. No one is entitled to a permit as of right even if he satisfies all the prescribed conditions. The grant of a permit is entirely within the discretion of the transport authorities and naturally depends on several circumstances which have to be taken into account. The Regional Transport Authority and the Provincial Transport Authority are entrusted u/s 42 with this power. They may be described as administrative bodies exercising quasi-judicial functions in the matter of the grant of permits.

The learned Judge held that the Motor Vehicles Act and the rules provided a complete scheme for regulating issue of permit and they prescribed appeals and revisions for the redress of grievances and for correction of errors. The Supreme Court refused to interfere. The principle applies to the issue of a licence. Therefore, the only question to be considered is as to whether the Collector of Customs heard the Petitioner and whether the Petitioner had ample opportunity of putting forward all his arguments. A glance at the order of the Collector of Customs will show that the Petitioner had a full hearing and all his arguments have been considered.

In the premises, this application fails and should be dismissed. The Rule is discharged. Interim orders, if any, are vacated. There will be no order as to costs.