Gujarat High Court
Diamond vs Union on 19 April, 2011
Author: Harsha Devani
Bench: Harsha Devani
Gujarat High Court Case Information System
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SCA/4571/2011 19/ 19 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No.4571 of 2011
===================================================
DIAMOND
& GEM DEVELOPMENT CORPN. & 1-Petitioner(s)
Versus
UNION
OF INDIA - THROUGH SECRETARY & 4 - Respondent(s)
===================================================
Appearance
:
MR
MIHIR H JOSHI, SENIOR COUNSEL, with MR
ABHISHEK M MEHTA for Petitioner(s) : 1 - 2.
MR PS CHAMPANERI for
Respondent(s) : 1-3,
MR RJ OZA for Respondent(s) : 4,
MR
VIRENDRA M GOHIL for Respondent(s) :
5,
===================================================
CORAM
:
HONOURABLE
MS.JUSTICE HARSHA DEVANI
and
HONOURABLE
MR.JUSTICE R.M.CHHAYA
Date
: 19/04/2011
ORAL
ORDER
(Per : HONOURABLE MS.JUSTICE HARSHA DEVANI) Being aggrieved by the order dated 31st March, 2011 passed the respondent No.2-Development Commissioner reviewing the appointment of the petitioner No.1 company as custodian under section 45 of the Customs Act, 1962 and appointing the respondent No.5-M/s.MMTC Limited, Mumbai as custodian for the Surat Special Economic Zone, the petitioner has filed the present petition.
The petitioner No.1, a company, (hereinafter referred to as the petitioner company) is engaged in the business/activity of development of industrial parks and special economic zones. The petitioner company is also appointed as "Custodian" under the provisions of the Customs Act, amongst others, for Surat Economic Zone situated at Surat.
Assailing the impugned order Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the petitioner submitted that the impugned order dated 31.03.2011 is in colourable exercise of power and authority not vested with the respondent No.2 Development Commissioner and amounts to usurping the authority under section 45 of the Customs Act by appointing a custodian under the guise of reviewing the appointment of the petitioner company made by the Commissioner of Customs, Gujarat vide Notification No.2/95 (CCP) dated 20.10.1995 followed by Customs Notification No.14/1998 dated 18.06.1998. It was submitted that the petitioner was appointed as a custodian in the year 1995/1998 by the aforesaid notifications issued by the Commissioner of Customs in exercise of powers under sub-section (1) of section 45 of the Customs Act and had continued to remain custodian since the last fifteen years. That all of a sudden, the respondent No.2 Development Commissioner has decided to review the appointment of the petitioner company and in its place appoint the respondent No.5 as custodian. Referring to the public notice inviting proposals to work as custodian, it was pointed out that the respondent No.2 has placed reliance on the Circular No.128/95-Customs dated 14.12.1995 issued by the CBEC, for the purpose of reviewing the appointment of the petitioner as custodian. The attention of the court was drawn to the standard set of guidelines for appointment of custodians of EPZs/ICDs/CFSs/ as contained in the said Circular No.128/95-CUS and more particularly to the clause 17 of the Annexure thereto, which says that the duration of the appointment shall initially remain for five years and subject to the satisfaction of the Commissioner of Customs. Commissioner of Customs shall have the right to terminate the appointment at any time after assigning specific reasons and after giving an opportunity to the custodian to explain his case; and that the appointment shall be reviewed every five years thereafter.
Inviting attention to the notification appointing the petitioner as a custodian, it was pointed out that the appointment of the petitioner as custodian was not for a limited period. According to the learned counsel, the scheme indicates that the appointment was to continue indefinitely subject to periodic review every five years as laid down in the guidelines. In view of clause 17 of the guidelines the termination could be for valid reasons and after giving opportunity of hearing to the custodian. It was submitted that in the present case no notice as regards review had been issued by the respondent No.2 prior to terminating the custodianship of the petitioner nor was the petitioner called upon to tender any explanation. It was submitted that in fact there was no order of termination, but only an order appointing M/s.MMTC Ltd. as custodian. Moreover, the impugned order does not disclose any reason whatsoever for reviewing the custodianship of the petitioner company nor does it disclose any reasons whatsoever for appointing the respondent No.5 in place of the petitioner company. It was pointed out that over and above appointing M/s. MMTC Ltd. as custodian the respondent No.2 has also proceeded to appoint transporters for transporting the precious goods on behalf of the custodian, who, in terms of the public notice were required to be appointed by the custodian. It was urged that there is no reason or justification for termination, which, even otherwise, is in breach of the principles of natural justice and that there is no statutory basis for bringing an end to the term of the petitioner as custodian. It was contended that the scheme indicates adverse review as a ground for termination; however, no such reason has been stated in the present case.
Inviting attention to the provisions of section 45 of the Customs Act, it was submitted that under the said provision it is the Commissioner of Customs who has been vested with the power to appoint a custodian and that the respondent No.2 does not have the authority or jurisdiction to appoint a custodian. It was submitted the impugned order indicates that the same has been passed in exercise of powers under section 12 of the Special Economic Zones Act, 2005 (hereinafter referred to as "the SEZ Act"). Referring to, sub-section (2) of section 12 of the Act, it was submitted that any power of the Development Commissioner to act under the provisions of section 45 of the Customs Act can be traced to clause
(e) of the said sub-section, which provides for discharge of such other functions as may be assigned to the Development Commissioner by the Central Government under the SEZ Act or any other law for the time being in force. It was submitted that there is nothing in the impugned order to show that the Central Government has in fact assigned to the Development Commissioner the functions under the Customs Act and more particularly under section 45 thereof, hence, the impugned order passed by the Development Commissioner is in excess of the authority vested in him and without any jurisdiction. It was accordingly urged that the petitioner has a strong prima facie case justifying the grant of interim relief. It was further submitted that the petitioner company has been holding the custodianship of the Surat Special Economic Zone since the last fifteen years and has never violated any of the provisions of the notification appointing the petitioner company as custodian and has also followed the guidelines scrupulously and diligently without there being any complaints against the petitioner. It was submitted that the petitioner is also the developer of Surat Special Economic Zone and has the required/requisite infrastructure behind it. The petitioner company has also been handling enormous quantity of cargo running into billions of US dollars and has developed the SEZ by making enormous investments over the years and as such the balance of convenience also leans heavily in favour of the petitioner entitling the petitioner to the grant of interim relief. It was, accordingly, urged that the petition be admitted and the interim relief as prayed for be granted.
The petition is vehemently opposed by Mr.P.S. Champaneri, learned Additional Solicitor General appearing on behalf of respondents No.1, 2 and 3. The learned counsel submitted that by virtue of the provisions of sub-section (1) of section 53(1) of the SEZ Act, a special economic zone, on and from the appointed day, is deemed to be a territory outside the customs territory of India for the purposes of undertaking authorized operations. Sub-section (2) of section 53 of the SEZ Act provides that the Central Government may notify a Special Economic Zone as a deemed port/airport/land station, etc. under section 7 of the Customs Act. It was submitted that these provisions have been made in order to facilitate regular import and export activities from a special economic zone as it is deemed to be a territory outside the customs territory of India. That similar provisions have been made in sub-rule (11) of rule 11 of the Special Economic Zones Rules, 2006 (hereinafter referred to as "the SEZ Rules") which lays down that the Special Economic Zone shall be deemed to be a port, airport, inland container depot, land customs station under section 7 of the Customs Act in accordance with the provisions of section 53, from the date notified in this behalf. It was further submitted by the learned counsel that the SEZ Rules provide that the Specified Officer may designate any area or areas in the Special Economic Zone as an area for loading and unloading of import and export cargo and that as per rule 2(1)(zd) of the SEZ Rules, Specified Officer, in relation to a Special Economic Zone means a Joint or Deputy or Assistant Commissioner, for the time being in force posted in the Special Economic Zone. Thus, it is amply clear that for the purpose of regular customs work in a special economic zone, there is a separate set-up of officers who are posted in the special economic zone on deputation basis and are under the administrative control of the Development Commissioner, in-charge of the Zone by virtue of sections 11 and 12 of the SEZ Act read with rule 20 of the SEZ Rules. According to the learned counsel, in view of the said provisions, the customs authority having jurisdiction over the domestic tariff area (outside the Special Economic Zone) have no administrative control and jurisdiction over the area falling under a special economic zone declared by the Central Government under section 4 of the SEZ Act.
The next submission advanced by the learned counsel for the respondent No.2 was that the appointment of a custodian in a special economic zone is purely in relation to handling of the import-export cargo from port/airport to Zone and vice-a-versa, as well as its storage in the designated area (the customs area) as specified by the Specified Officer of the special economic zone. Therefore, all matters pertaining to special economic zone are to be dealt with by the Development Commissioner in-charge of the zone being the administrative head of the Zone. It was submitted that the appointment of the respondent No.5 as custodian by the respondent No.2 Development Commissioner is in accordance with law.
Inviting attention to the changes brought in the Customs Act by introducing the provisions of Chapter-XA in the Customs Act dealing exclusively with the special economic zones to contend that by virtue of the provisions of section 76A thereof, the special economic zone came to be treated as a different territory outside the purview of the Customs Act. Placing emphasis on the provisions of section 76B it was submitted that by virtue of the said provision, the provisions of Chapter XA had an overriding effect over the other provisions of the Customs Act and that in case of any conflict the provisions of Chapter XA would prevail and as such on and from the year 2002 the provisions of Chapter XA prevailed over the provisions of the Customs Act. The learned counsel further submitted that under the provisions of section 76C, the Central Government was empowered to make rules specifying the requirements relating to goods or class of goods admissible to a special economic zone, the nature of operations to which such goods or class of goods may be subjected and the conditions to be fulfilled and the procedure in this regard. It was contended that the expression "admissible" also means custody and that by virtue of the said provision, the provisions of section 45 of the Act were no longer applicable to the special economic zone. The learned counsel next submitted that the provisions of Chapter XA (containing sections 76A to 76N) came to be omitted by Act 22 of 2007 and came to be replaced by the SEZ Act. According to the learned counsel, a special economic zone is a floating sovereign placed under the authority of the Development Commissioner under section 12 of the SEZ Act which was treated as being outside the customs territory of India and as such, the same was not governed by the provisions of the Customs Act. Insofar as the powers of the Development Commissioner to appoint a custodian are concerned, the learned Counsel placed reliance on the provisions of section 12 of the Act to submit that under the said provision, the Development Commissioner was duly empowered to appoint even a custodian as the administrative control and supervision of the officers appointed under sub-section (2) of section 11 (including the officers deputed to such special economic zone) was vested in him.
The next submission advanced by Mr.Champaneri was that rule 2(1)(h) of the Rules defines "custodian" to mean any person referred to in section 45 of the Customs Act and that after the enactment of Special Economic Zone Act, 2005 and the Special Economic Zone Rules, 2006 an instruction No.6/2006 dated 03.08.2006 was issued by the Ministry of Commerce & Industry Department of Commerce, Government of India, to the effect that all the activities relating to Special Economic Zones shall be guided by the provisions contained the Act and the Rules and as such the action of the respondent No.2 Development Commissioner was within the bounds of his authority.
Strong emphasis was laid on the fact that the respondent No.2 had as early as on 6th January, 2011 informed the petitioner that he had decided to review the appointment of the petitioner as custodian and had directed the petitioner to issue a public notice, inviting fresh proposals from interest eligible parties to work as a custodian for Diamonds, Gems, Jewellery, Precious and Semi-precious stones etc. in the Surat, Special Economic Zone, pursuant to which the petitioner had got such public notice published. The petitioner had himself submitted an application pursuant to the said application and as such it had acquiesced with the action of the respondent No.2. It was submitted that the petitioner having taken part in the process of appointment of custodian is now estopped from challenging the same. It was urged that the conduct of the petitioner subsequent to passing of the impugned order also requires to be deprecated inasmuch as despite the fact that the petitioner was directed to make necessary arrangements for handing over the strong room to the respondent No.5 M/s. MMTC Ltd. with effect from 15.04.2011, the petitioner had resisted the same. It was submitted that despite the fact that the petitioner was fully aware that in the eventuality of non handing over the strong room at Surat SEZ, the export-import activities of the precious cargo may get paralyzed resulting in irreparable loss to the industries in the Zone and also to the nation, the petitioner had failed to hand over the same to the respondent No.5. It was submitted that the conduct of the petitioner, therefore, dis-entitles the petitioner from the grant of any of the reliefs prayed for in the petition.
Another submission advanced by Mr.Champaneri was that the respondent No.2 had put the petitioner to notice as early as on 06.01.2011 that its custodianship was being reviewed and that fresh proposals for appointment of custodians were being invited, hence, the petitioner at the relevant point of time could have challenged the same if it so deemed fit. However, the petitioner, instead of challenging the said action at the relevant point of time, has acquiesced with the same by issuing the public notice as directed by the respondent No.2 and also taking part in the process of appointment of custodian. That it was only after the respondent No.5 was appointed as custodian, that the petitioner has approached this Court challenging the impugned order, in the circumstances, the petition is also barred by delay, laches and acquiescence and as such deserves to be dismissed on this ground alone.
On behalf of M/s. MMTC Ltd., Mr.C.Z.Sankhla, learned advocate submitted that pursuant to passing of the impugned order, the respondent No.5 has taken charge as custodian.
In rejoinder, Mr. Joshi, for the petitioner submitted that the interpretation of section 53(1) of the Act, as put forth by the learned counsel for the respondent is not a correct interpretation. Reliance was placed on the decision of a Division Bench of this High Court in the case of Union of India Vs. Oswal Agricomm Private Limited and others, rendered on 06.07.2010 in Letters Patent Appeal No.256 of 2010 and cognate matters, wherein the Court had held thus:
"34. But Section 53 being limited to that extent of 'authorized officer', who was earlier empowered to perform certain jobs under Chapter XA, the power of the Customs authorities under the Customs Act, including the power to confiscate and impose penalty under Sections 111 to 114, as enumerated in Chapter XIV of the Customs Act, is not taken away.
35. Thus, we hold that the competent authorities under the Customs Act are still empowered to confiscate any goods under Sections 111 and 112 and impose penalty under Sections 113 and 114, in appropriate case, even with regard to the units situated within the Special Economic Zone. The competent authorities are also empowered to take penal action under any other Central Act, if such violation is found to have been committed by any or other unit of SEZ including the writ petitioners, with regard to which no notification has been issued either under sub-section (1) or sub-section (2) of Section 21 or sub-section (1) or sub-section (2) of Section 22 of the SEZ Act, 2005."
It was submitted that the said decision squarely covers the issue involved in the present case, viz., the powers of the customs authority under the Customs Act are not taken away even in respect of special economic zones and as such the power of the Commissioner of Customs to appoint a custodian under section 45 of the Act would prevail even after the coming into the force of the SEZ Act. It was further submitted that rule 2(1)(h) of the Rules refers to "custodian" to mean any person referred to in section 45 of the Customs Act, hence, even under the SEZ Act and the SEZ Rules reference to custodian means a custodian who is appointed under section 45 of the Customs Act. In the circumstances, the Development Commissioner has no powers under section 12 of the SEZ Act to appoint a custodian.
Having heard learned Counsel for the respective parties the court is of the opinion that the matter requires consideration. Hence, RULE returnable on 20.06.2011.
In the meanwhile, the parties shall complete all pleadings on or before 15.06.2011.
On the question of grant of interim relief, a perusal of the provisions of section 45 of the Customs Act, under which the petitioner was appointed as custodian the above referred vide notifications issued in 1995/1998 show that the said provision empowers the Commissioner of Customs to approve of such person in whose custody all imported goods unloaded in a customs area shall remain until they are cleared for home consumption or are warehoused or are transshipped in accordance with provisions of Chapter-VIII of the Act. "Customs area" has been defined under section 2(11) of the Customs Act to mean the area of a customs station and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities. Customs area is defined under section 2(11) of the Customs Act to mean the area of a customs station and includes any area in which imported or export goods are ordinarily kept before clearance by Customs authorities. The proviso to rule 28 of the SEZ Rules speaks of transfer of high value imported goods through the airport to the custodian who shall transfer the same to a designated Customs Area located inside the Processing Area designated by the Specified Officer for further delivery to the unit or developer. Thus, the SEZ Rules also envisage a customs area even within the processing area. On behalf the respondent No.2 it is sought to be canvassed that in view of the provisions of sub-section (1) of section 53 of the SEZ Act, the special economic zone is deemed to be a territory outside the customs territory of India and as such falls outside the jurisdiction of the customs department. However, the said contention fails to take care of what follows thereafter, viz., "for the purposes of undertaking authorised operations". Thus the words outside the customs territory of India cannot be divorced from the words "for the purposes of undertaking authorised operations" and not for all purposes. As to what are the authorized operations is laid down under section 2(c) of the Act to mean operations which may be authorized under sub-section (2) of section 4 and sub-section (9) of section
15. Sub-section (2) of section 4 provides that after the appointed day, the Board may, authorise the Developer to undertake in a special economic zone, such operations which the Central Government may authorize. Thus, sub-section (2) relates to such operations which the Central Government may authorize the developer to undertake in a Special Economic Zone.
Sub-section (9) of section 15 of the Act provides that the Development Commissioner may, after approval of the proposal referred to in sub-section (3), grant a letter of approval to the person concerned to set up a Unit and undertake such operations which the Development Commissioner may authorise and every such operation so authorised shall be mentioned in the letter of approval. Thus, sub-section (9) of section 15 pertains to granting approval for setting up of a unit undertaking such operation as may be authorised by the Development Commissioner. Sub-section (1) of section 53 of the Act is therefore, required to be read in the light of the expression "authorised operations". On a plain reading of section 53(1) of the Act, it appears what is contemplated under the said provision is that the area of a special economic zone is deemed to be a territory outside the customs territory of India for the purposes of undertaking the "authorised operations" as contemplated in section 4(2) and 15(9) of the Act. The said provision however, does not take the special economic zone out of the purview of the provisions of the Customs Act, except in respect of the authorized operations. This position is made clear by the decision of the Division Bench of this Court referred to hereinabove, on which reliance has been placed on behalf of the petitioner, which clearly lays down that Special Economic Zone is deemed to be a territory outside the Customs area only for the purposes of undertaking the authorized operations which means that the Customs Authorities, who were empowered under section 76G (repealed since 11.05.2007), had no power to authorise any developer to undertake any operation in the special economic zone nor had the power to approve any proposal for setting up any unit within the special economic zone. However, section 53 being limited to the extent of "authorized officer", who was earlier empowered to perform certain jobs under Chapter XA and power of the Customs authorities under the Customs Act, including the power to confiscate and impose penalty under Sections 111 to 114, as enumerated in Chapter-XIV of the Customs Act, is not taken away.
In the light of the clear provisions of section 53(1) of the SEZ Act as well as in the light of the ratio laid down in the aforesaid decision, reliance placed upon sub-section (1) of section 53 of the SEZ Act by the respondent No.2 appears to be misplaced as the same does not in any manner curtail the power of the Commissioner of Customs to appoint a custodian under section 45 of the Act in respect of a special economic zone.
A perusal of the provisions of the SEZ Act shows that the same does not contain any express provision for appointment of custodian. The power to appoint a custodian can be traced only to section 45 of the Customs Act, which expressly confers the power of appointment of custodian on the Commissioner of Customs alone. The case of the respondent No.2 Development Commissioner is that he has exercised powers under section 12 of the Act. In this regard it may be necessary to refer to the provisions of section 12 of the Act which read thus:
"12. Functions of Development Commissioner.--(1) Every Development Commissioner shall take all steps in order to discharge his functions under this Act to ensure speedy development of the Special Economic Zone and promotion of exports therefrom.
(2) Without prejudice to the generality of the foregoing provisions, the Development Commissioner shall--
(a) guide the entrepreneurs for setting up of Units in the Special Economic Zone;
(b) ensure and take suitable steps for effective promotion of exports from the Special Economic Zone;
(c) ensure proper co-ordination with the Central Government or State Government Departments concerned or agencies with respect to, or for the purposes, of clauses (a) and (b);
(d) monitor the performance of the Developer and the Units in a Special Economic Zone;
(e) discharge such other functions as may be assigned to him by the Central Government under this Act or any other law for the time being in force; and
(f) discharge such other functions as may be delegated to him by the Board.
(3) Every Development Commissioner shall be overall in charge of the Special Economic Zone and shall exercise administrative control and supervision over the officers and employees appointed under sub-section (2) of Section 11 (including the officials deputed to such Special Economic Zone) to discharge any of the functions under this Act.
(4) Without prejudice to the provisions of sub-sections (1) to (3), every Development Commissioner shall discharge such functions and exercise such powers as may be delegated to him by a general or special order by the Central Government or the State Government concerned, as the case may be.
(5) Every Development Commissioner may call for such information from a Developer or Unit from time to time as may be necessary to monitor the performance of the Developer or the Unit, as the case may be.
(6) The Development Commissioner may delegate any or all of his powers or functions to any of the officers employed under him."
On a plain reading of sub-section (1) of section 12 of the Act, it appears that the Development Commissioner is required to generally discharge functions for ensuring speedy development of the Special Economic Zone and promotion of exports therefrom and in particular the functions enumerated in section 12(2) of the Act. Clause (e) of sub-section (2), which is relevant for the present purpose, empowers the Development Commissioner to discharge such other functions as may be assigned to him by the Central Government under the Act or any other law for the time being in force. Thus, the Development Commissioner may exercise powers under section 45 of the Act if such functions have been specifically assigned to him by the Central Government as contemplated under clause (e) of sub-section (2) of section 12 of the SEZ Act. However, in the present case, that is not the position, inasmuch as no such assignment of powers has been pointed out on behalf of the respondent No.2 nor it is the case of the respondent No.2 that he has exercised such powers. As regards Instruction No.6 dated 3rd August, 2006 of the Government of India, Ministry of Commerce and Industries, Department of Commerce which finds reference in the affidavit-in-reply filed on behalf of the respondent No.2, a perusal of a copy thereof (which has been placed on record by the learned advocate for the petitioner) shows that the same has no relevance to the facts of the present case. The main plank of the submissions advanced by the learned Counsel for the respondent No.2-Development Commissioner is that the Development Commissioner is vested with all administrative powers in respect of the special economic zone and as such under the provisions of section 12 of the Act he is duly empowered to appoint a custodian.
Another significant aspect of the matter is that rule 2(1)(h) of the SEZ Rules defines "custodian" to be a custodian referred to in section 45 of the Customs Act, 1962. Hence, any reference to custodian under the Rules would mean a custodian referred to in section 45 of the Customs Act. It has been argued on behalf of the respondent No.2 that the words used in the said rule are "person referred to in section 45 of the Customs Act", which is not same as the person appointed under the Customs Act. The said contention is fallacious inasmuch as even if one goes by the express language of rule 2(1)(h) of the SEZ Rules, which speaks of the custodian as being the person referred to in section 45 of the Customs Act, the custodian would be the person referred to in section 45 of the Customs Act, meaning thereby the person approved by the Commissioner of Customs. Thus, for all intents and purposes a custodian under the provisions of the SEZ Act and the SEZ Rules is a custodian as envisaged under section 45 of the Customs Act. Once that is the position, any person appointed as a custodian otherwise than under the provisions of section 45 of the Customs Act would not be a custodian within the meaning of rule 2 (1)(h) of the Rules so as to be competent to discharge the duties of a custodian in the special economic zone.
In light of the aforesaid discussion, the court is of the prima facie view that section 12 of the SEZ Act does not empower the Development Commissioner to appoint a custodian under section 45 of the Customs Act, inasmuch as the powers under the Customs Act are required to be expressly assigned to the Development Commissioner under clause
(e) of sub-section (2) of section 12 of the Act. The power under section 45 of the Customs Act is specifically conferred on the Commissioner of Customs, who is the only authority in whom the power of appointing a custodian under sub-section (1) thereof is vested. Thus, the action of the respondent No.2 in appointing the respondent No.5 M/s MMTC Ltd. as custodian in place of the petitioner prima facie appears to be without jurisdiction and authority of law. The appointment of custodian by the respondent No.2 having been made under section 12 of the SEZ Act, the person so appointed would not be a custodian as contemplated under rule 2(1)(h) of the SEZ Rules so as to be competent to discharge functions of a custodian under the said Rules. From the facts as appearing from the record, the petitioner is the developer of the special economic zone and has also established necessary infrastructure for discharging the functions of the custodian. The petitioner has been acting as a custodian with effect from the time of its appointment vide notifications issued in 1995/1998 till 15.04.2011 and nothing has been brought on record by the respondents to indicate any breach of the provisions of its appointment or that any complaint of whatsoever nature has been made against the petitioner. The petitioner has been appointed as custodian by the Commissioner of Customs in exercise of powers under section 45(1) of the Customs Act, which are duly vested in him. Whereas the impugned order has been passed by the respondent No.2 in exercise of powers under section 12 of the SEZ Act, which prima facie does not confer any such power on the Development Commissioner. Moreover, the petitioner company's custodianship has been terminated without assigning any reasons whatsoever, without issuing any notice for review, without calling for an explanation from the petitioner, and without affording any opportunity of hearing to the petitioner in complete violation of the principles of natural justice. In the circumstances, the balance of convenience weighs heavily in favour of the petitioner company. Moreover, non-grant of interim relief would cause irreparable injury to the petitioner. On behalf of the respondent No.2 it has been contended that the petition is barred by delay, laches and acquiescence. Insofar as delay and laches are concerned, it is true that the petitioner did not file the petition at the earliest point of time when it was asked to issue public notice. However, the facts on record indicate that the petitioner was duly pursuing the matter with the respondent No.2 and even after the impugned order was passed the petitioner had made a representation to the respondent No.2 to reconsider his decision. The petitioner company has, thereafter, before the date on which the impugned order was to take effect, approached this Court by way of the present petition. Hence the contention that the petition is barred by delay and laches is prima facie not substantiated. Insofar as the question of acquiescence on the part of the petitioner company is concerned, the petitioner company has emphatically denied the said contention. Moreover, it is a well-settled position of law that acquiescence or waiver would not vest in an authority a power which is otherwise not vested in it. In the circumstances, in view of the findings recorded hereinabove, the said contention also does not merit acceptance.
In the light of the aforesaid discussion, the petitioner has made out a strong prima facie case, the balance of convenience also leans heavily in favour of the petitioner and non grant of interim relief as prayed for would cause irreparable injury to the petitioner. Moreover, the Court has also prima facie found the appointment of the respondent No.5 M/s MMTC Ltd to be without any authority and jurisdiction. The Court is accordingly of the view that the petitioner is entitled to interim relief prayed for in the petition.
Hence, by way of interim relief, the execution, operation and implementation of impugned order dated 31.03.2011 (at Annexure-A) is hereby stayed till the final disposal of the present petition.
At this stage Mr. P.S. Champaneri, learned Assistant Solicitor General has requested that this order be stayed for a period of three weeks from today so as to enable the respondents to avail of remedy before the higher forum. In the facts and circumstances of the case, the request is turned down. Direct service is permitted.
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[H.N.
DEVANI, J] [R.M. CHHAYA, J]
Bhavesh*
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