Delhi High Court
Sunil Kohli And Ors. vs Union Of India (Uoi) And Anr. on 23 July, 2005
Equivalent citations: 122(2005)DLT594, 2005(83)DRJ637, 2006(195)ELT15(DEL)
Author: Vikramajit Sen
Bench: Vikramajit Sen
JUDGMENT Vikramajit Sen, J.
1. For deciding these Writ Petitions the Custom House Agents license Regulations, 1984 is to be considered and interpreted against the Customs House Agents license Regulations, 2004.
2. The case of the Petitioners is that they have been working with Customs House Agents from 1985 onwards. They are holders of 'G' Cards issued by the Customs Department under the 1984 Regulations. This Card was issued to them because they had held an 'H' Card because they had been working with a permanent licensee. After holding a 'G' Card for a period of three years the Petitioners would become eligible for being considered for the issuance of a temporary license under Regulation 8 of the 1984 Regulation. A prerequisite for the grant of a temporary license under Regulation 8 was that as per Regulation 9(5) the holder of a regular license had to authorise such persons to appear in the Examination. Persons who have been successful in the Examinations must further fulfilll all the conditions laid down in Regulation 10 to become entitled for the issuance of a regular license . It is not without cause that the Petitioners have contended that the present regular licenses have succeeded in keeping others out of their trade.
3. It is relevant to mention that the employers of some of the persons endeavoring to become license holders had unsuccessfully challenged the provisions of the 1984 Regulations before the Hon'ble Supreme Court in Federation of Customs House Agents Association v. Union of India, .
4. The cartel or monopoly of the holders of regular licenses had been perpetuated under the 1984 Regulations, but is additionally sought to be continued by collective action of the holders of regular licenses. This is for obvious reasons. If more persons are granted licenses the vocation would pass into additional hands, a prospect which would obviously not be looked upon with favor by the Federation. The Petitioners had successfully appeared in the Examinations conducted by the Respondents from 1995 to 2003. Although the Regulations mandate that the Respondents should take necessary steps for the issuance of licenses to eligible persons on an annual basis, this has not been done since 1995.
5. After inordinate and unexplained delay, steps were taken in the required direction as late as in June, 2003 in terms of Public Notice No. 25/2003 issued by the Commissioner of Customs (Import and General), New Delhi. This Public Notice invited applications for temporary Customs House Agents license under the 1984 Regulation. The Petitioners applied in consequence of this Public Notice in July, 2003. No action was taken in respect of these applications within that year. The Respondents have reacted as late as in March, 2005, that is, after the filing of these Petitions in July, 2004. The letter dated 3.3.2005 reads as follows:-
Public Notice No. 06/2005Dated:24 February, 2005 Subject: Invitation of applications for grant of temporary custom House Agents under CHA Licensing Regulations, 1984, C/Reg.
Attention of the trade and all public is invited to Public Notice No. 25/2003 dated 20.06.2003, whereunder applications were invited from the eligible candidates for grant of temporary Custom House Agents licenses under the Custom House Agents Licensing Regulation 1984.
Pursuant to the issuance of the above stated Public Notice, 563 applications were received for grant of temporary Custom House Agents Licenses under Regulation 4 of Custom House Agent Licensing Regulations, 1984.
The applications called and received under Public Notice No. 25/2003 were ordered to be kept pending and not to be processed further by an order dt. 8th December, 2003 issued under F. No. 502/9/2002-Cus VI (Pt.II) by the Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, New Delhi. Since the new regulations for the purpose were being formulated by the Ministry Pursuant to the recommendations of the high powered committee on reduction of Transaction Costs of Indian Exports and the recommendations of the Kelker Committee on indirect taxes. As the process of making amendments to the Said CHALR' 1984 have been initiated, the Board has directed that the process of fresh recruitments of Customs House Agents be kept in abeyance till the time new regulations are notified.
Whereas, now the Custom House Agent Licensing regulations' 1984 have been rescinded w.e.f. 23.02.2004 and new Custom House Agent Licensing Regulation 2004 have been promulgated w.e.f. 23.2.2004 vide Notification No. 21/2004-CUS(N.T.) dt. 23.02.2004 issued by the Ministry of Finance, Department of Revenue, New Delhi. As the Custom House Agent Licensing Regulations of 2004 notified by the Ministry vide Notification number mentioned supra does not contain any provision for grant of temporary licenses for appointment of custom house agents, it is not possible to process further with regard to 563 applications received under Public Notice No. 25/2003 dt. 20.06.2003.
All the applications pending with the department received under the Public Notice No. 25/2003 can not be considered for the intended purpose and therefore stand disposed of accordingly. This Custom House shall, however, call for fresh applications for grant of Custom House Agent license as and when may be warranted. The present applicants are free to file their applications at that time and the same shall be considered on merits as per the CHALR 2004.
This public notice is issued without prejudice to the contentions raised by the petitioners in the writ petition No. W.P.(C) No. 2919/2003 in M/s. Transair International v. UOI and Ors. and C.M. No. 7673/2003 under CWP No. 2137/2002 in M/s. Eminent Cargo v. UOI already disposed by the Hon'ble Delhi High Court and writ petition No. 12808-73/2004 in Sunil Kohli and Ors. v. UOI still pending for disposal before the Hon'ble High Court of Delhi.
Sd/-
(SUMAN NAYAR) COMMISSIONER
6. In December, 2003 the Respondents had informed the public that pursuant to the recommendations of the High Powered Committee on Reduction of Transaction Costs of Indian Exports and the recommendations of the Kelkar Committee on Indirect Taxes, the Board has initiated the process of making amendments to the CHALR, 1984. The public was further informed that because of these reasons the Board desired that the process of fresh recruitment of Customs House Agents be kept in abeyance till the time the new regulations are notified. Learned counsel for the Respondent submits that the action articulated in the letter dated 3.3.2005 is a natural sequel to the letter dated 8.12.2003.
7. The question that arises is whether the Petitioners had the right to be considered for the issuance of licenses under the CHALR, 1984 because they had successfully appeared in the Examinations held under these Regulations prior to the coming into effect of CHALR, 2004. It is contended by learned counsel for the Petitioners that enforceable rights had accrued in their favor which could not be taken away by the coming into effect of the subsequent Regulations. It has further been contended that the Respondents were obligated to take necessary steps every year and in these circumstances since the Respondents had been in startling default from 1995, already for over seven years, the Petitioners' applications should have been processed expeditiously. Estoppel has been pleaded in favor of the Petitioners.
8. Mr. Nag, learned counsel appearing on behalf of the Respondent, submits that no rights have accrued merely because the Petitioners have passed the Examination under the old Regulations. The new Regulations have made the syllabus or subject matter of the Examinations much more stringent. However, it is not in contention that the only fresh inclusion is Regulation 8 (6) (q) which deals with -'on-line filing of electronic shipping bills or bills of entry and Indian Customs and Central Excise Electronic commerce/Electronic Data interchange Gateway (ICEGATE) and Indian Customs electronic Data Interchange systems (ICES)'. Mr. Nag has also drawn attention to the fact that Regulation 6 has undergone a change in that, apart from graduates other persons holding professional degrees, Group A officers of the Indian Customs and Central Excise Services have also been made eligible. The Petitioners are not contesting the widening of the net. The fact remains that under Regulation 6 the Petitioners remained fully eligible for consideration. Mr. Nag contends that in assessing the legality of the administrative action of not considering the applications of the Petitioners Wednesbury reasonableness has to be taken into consideration. It is his submission that there is no procedural irregularity, no illegality and also no irrationality in the impugned action. This submission is difficult to accept. This principle has been explained in Tata Cellular versus Union of India, (1994) 6 SCC 651 as is evident from the following extract:
"The duty of the court is to confine itself to the question of legality. Its concern should be:
1. Whether a decision/making authority exceeded its powers?
2. Committed an error of law.
3. committed a breach of the rules of natural justice,
4. reached a decision which no reasonable tribunal would have reached or,
5. abused its powers.
Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilllment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:
(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must given effect to it.
(ii) Irrationality, namely, Wednesbury unreasonableness.
(iii) Procedural impropriety.
The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, 'consider whether something has gone wrong of a nature and degree which requires its intervention".
9. The opening paragraph of the 2004 Regulations 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, namely:-
10. A reading of this prefatory statement to Regulation 2004 leaves no manner of doubt that any action which had been taken prior thereto would not be rendered nugatory. So far as the Petitioners are concerned they had taken all the steps and cleared all requirements expected of them under the 1984 Regulations. Not only had the Respondent defaulted in taking requisite steps for consideration of fresh applicants for licenses on an annual basis, they have manifested a procedural irregularity in not processing the Petitioners' applications within reasonable time, which on any consideration, ought not to have exceeded ninety days. It is also significant that the Respondent should have carried out an enquiry further, that is, under Regulations 6 and 8 of the old Regulations in order to determine whether successful candidates fulfillled all the concomitants for the grant of licenses under the Regulations. This action has not been taken till date and the only possible and reasonable assumption must be that the Petitioners fulfilll all the requirements stipulated in the 1984 Regulations. Furthermore, in considering whether Wednesbury reasonableness exists, one must also investigate the purpose behind the change in Regulations. The effort was to simplify the grant of licenses as per the Kelkar Committee. In actual effect, it has been seen that only clause (q) of Regulation 8(6) is a fresh inclusion. The present case is not one where Petitioners have become ineligible for the grant of licenses because of changes brought out in the 2004 Regulations. The decision to cancel the invitation for grant of licenses by the Public Notice issued in June, 2003, is therefore, not in consonance with Wednesbury reasonableness.
11. A person appears in an examination on the basis of Regulations then in existence with the legitimate expectation that the prevailing Regulation will continue to apply. Such a person has the legitimate expectation for enjoying the fruits of his success in the Examination, which in the present case, would have been the issuance of a temporary license under the 1984 Regulations. Justifiably and reasonably, the Preamble of the 2004 Regulations save actions or events which have already taken place. There is, therefore, no warrant or justification for the cancellation of the process which had already come to its final and ultimate stage. The communication dated 8.12.2003 is also in line with this approach inasmuch as it states that process of fresh recruitment must be kept in abeyance. I am unable to agree with the case of the Respondent that the Petitioners can be treated as falling within fresh recruitment even though they had already been in the present service for almost two decades and have passed in the Examinations conducted by the Respondent themselves. 'Fresh recruitment' must refer to the process of fresh examinations initiated under 2004 Regulations.
12. The interesting question which remains is which license should be granted to the Petitioners. Since temporary licenses as per the 1984 Regulations are no longer in vogue licenses would now be granted under the 2004 Regulations. This is one of the important simplifications brought into effect. In the circumstances of the present case, therefore, the only possibility is for the Respondent to consider the Petitioners as having cleared the Examinations envisaged in the extant Regulation 8 and if the conditions stipulated in Regulations 6 and 9 are met by the Petitioners, to grant them the licenses envisaged under the present Regulations. This exercise be completed within ninety days from today.
13. Petitions are allowed in the above terms.
14. Parties shall, however, bear their respective costs.