Madras High Court
M/S.Parker Biotech Pvt Ltd vs The General Manager on 10 August, 2022
Author: R.Subramanian
Bench: R.Subramanian
WP.No.24984/2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 10.08.2022
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
WP.No.24984/2016 & WMP.No.21342/2016
M/s.Parker Biotech Pvt Ltd
rep.by its Managing Director
Mr.A.K.Ponnusamy ... Petitioner
Vs
1.The General Manager
Agricultural and Processed Food
Products, Export Development
Authority, 3rd Floor, NCUI Building
3, Siri Institutional Area
August Kranti Marg [Opp.Asiad Village]
New Delhi 110 016.
2.Joint Director General of Foreign Trade
Director General of Foreign Trade
Udyog Bhawan, H-Wing, Gate No.2
Maulana Azad Road, New Delhi 110 011.
3.The Assistant Commissioner of Customs [Exports]
Custom House, No.60, Rajaji Salai
Chennai 600 001. ... Respondents
1/10
https://www.mhc.tn.gov.in/judis
WP.No.24984/2016
Prayer: Writ Petition filed Article 226 of the Constitution of India praying for
issuance of a writ of certiorari calling for the records pertaining to the
impugned order dated 04.07.2016 issued to the 1st respondent in ORG-2015-
16-000101/2067 and quash the same.
For Petitioner : Mr.Hari Radhakrishnan
For Respondents : Mr.V.T.Balaji
Senior Panel Counsel for
Central Government
ORDER
(1) Challenge in this writ petition is to the order of the 1st respondent imposing punishments of cancellation of the Registration-cum- Membership Certificate [RCMC], blacklisting of the petitioner with immediate effect, informing the Director General of Foreign Trade to cancel the Import-Export Code of the petitioner. (2) The petitioner which is a manufacturer of agricultural products, had obtained a Certificate to the effect that certain products manufactured by it, namely, Neem Oil, Neem Cake, Neem Leaf Powder and the Neem EC 300 PPM, 1500 PPM, 3000 PPM and 10,000 PPM, are 2/10 https://www.mhc.tn.gov.in/judis WP.No.24984/2016 organic products. It was found that the petitioner was marketing and exporting its coconut oil claiming that it is an organic product by creating a false certification. This was discovered by the United States Department of Agriculture and as a consequence, the petitioner was blacklisted by the said Authority in the United States. The said action disabled the petitioner from exporting its other products also to the United States. The petitioner wrote to the Department of Agriculture in the United States seeking to remove the blacklisting and permit the petitioner to continue to export claiming that the false certification was created by one Mr.Sakthivel, the Managing Director who has since then resigned. This letter addressed to the United States Department of Agriculture [USDA] by the petitioner was forwarded to the 1st respondent herein for necessary action. (3) Thereupon, the 1st respondent issued a show cause notice as to why action should not be taken against it for enlisting fraudulent certificates in the website of USDA in the year 2012. The petitioner responded stating that such fraudulent certificate was uploaded by the said Sakthivel who happened to be the Managing Director at that 3/10 https://www.mhc.tn.gov.in/judis WP.No.24984/2016 point of time and that the said Sakthivel had also resigned from the post of Managing Director on 30.06.2014. Therefore, the petitioner should be permitted to carry on business by getting their products certified by the appropriate Agency. The 1st respondent, by the order impugned, refused to accept the explanation of the petitioner and imposed the penalties as stated supra.
(4) Mr.Hari Radhakrishnan, learned counsel for the petitioner would submit that the procedure adopted by the 1st respondent itself is flawed. According to the learned counsel, the show cause notice was issued by the General Manager and the personal hearing was done by the Chairman of the 1st respondent/Department. However, the General Manager passed the impugned order imposing the penalties. This according to him is unknown to law. He would also contend that the reason assigned in the impugned order is that because an employee of the Company who was shown as the contact person in the website remains to be employed by the Company even after the incident, the claim of the Company that the Managing Director had created the fraudulent certificate, has quit the Company, cannot be a 4/10 https://www.mhc.tn.gov.in/judis WP.No.24984/2016 reason for allowing the Company to continue its operations and export products which are not duly certified as organic. (5) Mr.V.T.Balaji, learned Senior Panel Counsel for the Central Government would submit that the consequences of such fraudulent representation are very serious inasmuch as the image of the entire country is lowered in the eyes of others Nations in which such fraudulent practice is discovered. He would also submit that the very fact that the Director who has engaged in such fraud, resigned or ceased to be a Director of the Company, would not by itself purify the Company from its past misdeeds and hence, the order impugned is perfectly in order. He would also pointed out that in the counter affidavit filed by the Assistant General Manager, APEDA, it is stated that the petitioner has not taken any efforts to have the products re- certified. It is also claimed that the petitioner has not been certified presently by any Certification Body under the National Programme for Organic Production. It is also stated that since USDA had blacklisted the petitioner in July 2012, the petitioner cannot get it's products certified for another five years. That five years period is 5/10 https://www.mhc.tn.gov.in/judis WP.No.24984/2016 also over as of today.
(6) Though the petitioner was able to obtain a Certificate from another Organization called ''INDOCERT'', the said certificate was also withdrawn on a representation by APEDA. No doubt, the learned counsel for the petitioner argued that the personal hearing was by the Chairman and the orders have been passed by the General Manger. The said action has been explained in the counter affidavit stating that the order has been issued with the approval of the Chairman who is the competent authority.
(7) Be that as it may, now the petitioner would contend that the person who created the fraudulent certificate is no longer engaged with the petitioner. The impugned order is based on the fact that APEDA has not been informed of the resignation of the Director who had created the fraudulent certificate and that the name of one Ms.Bharathi, figures as the contact person in the website and she still continues to be employed by the petitioner. The second reason, in my opinion, should not be sustainable. Merely because an employee who is shown as the contact person in the website which contained the 6/10 https://www.mhc.tn.gov.in/judis WP.No.24984/2016 fraudulent representation is retained, by itself cannot be a reason to reject the claim of the petitioner that the person who was responsible for the misrepresentation has ceased to have any link with the Company. The fact that Mr.Sakthivel who was the Managing Director and who had created the fraudulent certificate, has resigned, can be demonstrated by the petitioner by producing the relevant proof from the Registrar of Companies, which is also available at pages No.68 and 69 of the typed set of papers.
(8) Therefore, while sustaining the order impugned, it is made clear that it will be open to the petitioner to apply again to the respondents with appropriate certificate issued by the competent authority for registration and for removal of the blacklisting. It will not be out of place to point out at this juncture that the penalty of blacklisting cannot be for an indefinite period. It has to be for a specific period. No period has been mentioned in the order impugned. In case the petitioner applies to the respondents with appropriate certificates, satisfying the requirements of the Regulations relating to production and sale of organic products, the respondents will reconsider the 7/10 https://www.mhc.tn.gov.in/judis WP.No.24984/2016 cancellation of RCMC and blacklisting.
(9) At this juncture, the learned Senior Panel Counsel for the Central Government would state that such reconsideration will be only on merits. Any authority is expected to reconsider only on merits and not otherwise. Of course, it is common knowledge that many of the authorities do such reconsideration for other considerations than on merits.
(10) Depending on the orders passed by the respondents on the request of the petitioner for reconsideration, the DGFT will take consequential action with reference to the petitioner's Import-Export Code. (11) The writ petition stands disposed of with the above observations.
No costs. Consequently, connected miscellaneous petition is closed.
10.08.2022 AP Internet : Yes 8/10 https://www.mhc.tn.gov.in/judis WP.No.24984/2016 To
1.The General Manager Agricultural and Processed Food Products, Export Development Authority, 3rd Floor, NCUI Building 3, Siri Institutional Area August Kranti Marg [Opp.Asiad Village] New Delhi 110 016.
2.Joint Director General of Foreign Trade Director General of Foreign Trade Udyog Bhawan, H-Wing, Gate No.2 Maulana Azad Road, New Delhi 110 011.
3.The Assistant Commissioner of Customs [Exports] Custom House, No.60, Rajaji Salai Chennai 600 001.
9/10 https://www.mhc.tn.gov.in/judis WP.No.24984/2016 R.SUBRAMANIAN, J.
AP WP.No.24984/2016 10.08.2022 10/10 https://www.mhc.tn.gov.in/judis