`IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No.20038 of 2010 (O&M) Date of decision: 16.12.2010 S.K. Kohli. -----Petitioner. Vs. Union of India and another. -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Jagmohan Bansal, Advocate for the petitioner. Mr. H.P.S. Ghuman, Advocate for the respondents. --- ADARSH KUMAR GOEL, J. 1. This petition seeks quashing of order dated 31.8.2010, Annexure P-2, in terms of Regulation 21 of CHA Licensing Regulation 2004 (for short, “the Regulation”) framed under the provisions of the Customs Act, 1962, prohibiting the petitioner from working under the licence issued to him. The operative part of the said order is as under:- “In view of above, CHA M/s S.K. Kohli (Retd.) 72 FF, Navjivan Vihar, New Delhi holder of CHA License No.16/DEL/CUS/2006 is prohibited from working in the jurisdiction of this Commissionerate with immediate effect in terms of regulation 21 of customs C.W.P. No.20038 of 2010 house agent licensing regulation 2004, until further orders the G card No.12/07 and 11/2008 issued to Sh. J.S. Oberoi s/o late Sh. Inder Singh Oberoi, Suite 1&2, Virat Planet, C-146, Focal Point, Ludhiana and Sh. Jaspinder Singh, H.No.885, Harbanspura, Ludhiana, respectively and all the other G/H cards of M/s Col. S.K. Kohli (retd.) under Customs (Prev.) Commissionerate, Amritsar are suspended with immediate effect further the CHA M/s Col. S.K.Kohli (retd.) 72 FF, Navjivan Vihar, New Delhi, holder of CHA License no.16/DEL/CUS/2006 is directed to surrender G card no.12/07 and 11/2008 and all the G/H cards as mentioned above immediately. This order, is issued without prejudice to any action contemplated against the cha in terms of regulation 20 of customs house agents licensing regulations, 2004, the order to which effect shall be passed after following due procedure prescribed under regulation 22 of the CHALR, 2004 by the parent Commissionerate.” 2. Case set out in the petition is that the petitioner has been granted licence to act as Custom House Agent (CHA) which is valid upto 30.9.2015. He has two employees, J.S. Oberoi and Jaspinder Singh, who had been allotted G-Cards. On 13.8.2008, the petitioner filed Bill of Entry on behalf of M/s Kudu Knitwear Private Limited, Ludhiana. The same was processed by the concerned staff and though found to be in order at one level of process, at subsequent level, it was found that classification of goods was not proper and on proper classification, the duty 2 C.W.P. No.20038 of 2010 attracted was `41 lacs instead ` 4.1 lacs. Accordingly, new Bill of Entry was prepared and the goods were cleared. Though the goods were cleared in August, 2008, in April, 2009, investigation was initiated against the importer, employees of the petitioner as well as the officials of the department, as a result of which, impugned order dated 31.8.2010 has been passed against the petitioner. 3. According to the petitioner, the alleged wrongful action of the employees could not be basis for any action against him. The petitioner was not beneficiary of the wrongful act nor was aware of the same. In any case, there was no loss of duty and in such situation, impugned order could not be passed against the petitioner without giving an opportunity of being heard. Moreover, the alleged wrongful act took place in August, 2008 for which preventive action could not be taken after two years on a stale issue. 4. In the reply filed, stand taken is that in the light of allegations of fraud and evasion of duty, inquiry was initiated by Anti Smuggling Wing of the Customs (Preventive) Commissionerate and it was found that Jaspinder Singh, G-Card holder employee of the petitioner, had manipulated the Bill of Entry. This was also known to another employee of the petitioner namely J.S. Oberoi and in the light of inquiry report dated 16.2.2010, impugned action was taken. The impugned order was only a preventive action to stop further fraud and was passed as a 3 C.W.P. No.20038 of 2010 precautionary measure. There was no requirement of any Show Cause Notice for hearing or passing the impugned order. However, Show Cause Notice dated 13.12.2010 had been issued to the petitioner for revoking the CHA licence. Reference has also been made to the statement of J.S. Oberoi dated 16.4.2009 that Jaspinder Singh another employee of the petitioner had told him about the manipulation of Bill of Entry. The petitioner has admitted the said manipulation in the petition. 5. We have heard learned counsel for the parties. 6. The question for consideration is whether the impugned order, prohibiting the petitioner to continue to work as CHA, was illegal or vitiated by non-compliance of principles of natural justice and calls for interference by this Court. 7. Contention raised on behalf of the petitioner is that the alleged wrongful action being two years old, the petitioner being not aware of the wrongful action of his employees and no opportunity of hearing having been granted, the impugned order was arbitrary and violative of principles of natural justice. 8. On the other hand, learned counsel for the respondents submits that the petitioner has already been issued Show Cause Notice, on which proceedings will be finalised on or before 31.1.2011. The action has been preceded by an inquiry which itself was time consuming and the impugned action was only an interim measure which was not required to be preceded by opportunity of hearing being granted to the petitioner. The 4 C.W.P. No.20038 of 2010 action was bonafide and on account of patent wrongful action having the potential of causing huge evasion of duty. In the facts and circumstances of the case, interference by this Court was not called for. 9. After consideration of rival submissions, we do not find any ground to interfere at this stage. It is patent that there are serious allegations of fraud and manipulation by the employees of the petitioner, for which the petitioner cannot avoid responsibility. Even though the respondents could be expected to act faster and take prompt action, having regard to the nature of allegations, the impugned order cannot be held to be arbitrary. No doubt natural justice is a part of fair procedure and unless expressly or impliedly excluded, any order to the prejudice of a person cannot be passed without giving an opportunity of being heard unless action required is of urgent nature and giving of opportunity may frustrate the interest of justice. Such a situation may exclude the requirement of hearing, pending opportunity of being heard given after such an action. 10. Learned counsel for the petitioner has placed reliance on judgment of this Court in 5.10.2010 in C.W.P. No.16796 of 2010 M/s Saviton Metplast (P) Ltd. v. Union of India & others, holding as under:- “18. Natural justice being part of fair procedure has to be followed unless expressly or impliedly excluded (Maneka Gandhi vs. Union of India), AIR 1978 SC 597, Union of India vs. Tulsiram Patel, 1985(3) 5 C.W.P. No.20038 of 2010 SCC 398, Delhi Transport Corporation v. DTC Mazdoor Congress, AIR 1991 SC 101). It requires: a) hearing by authority taking decision (Gullapalli Bageswara Rao v. A.P.State Road Transport Corpn., AIR 1959 SC 308, Rasid Javed and others v. State of UP and another, (2010) 7 SCC 781); b) opportunity to affected party (Sahara India, supra) and; c) Reasons for the decision (S.N.Mukherjee vs. Union of India, 1990(4) SCC 594).” 11. There is no doubt that where an action adversely affects a citizen, he is entitled to be heard but where emergent action may be a compulsion, requirement of hearing could be held to be excluded. Hearing may be held to be excluded when an interim order is to be passed followed by opportunity of hearing being given. Apart from above judgments, reference may also be made for those settled principles to:- i) Mohinder Singh Gill and another v. The Chief Election Commissioner, New Delhi and others AIR 1978 SC 851; ii) Swadeshi Cotton Mills etc. v. Union of India etc. AIR 1981 SC 818; iii) Liberty Oil Mills and others v. Union of India and others AIR 1984 SC 1271 and 6 C.W.P. No.20038 of 2010 iv) Karnataka Public Service Commission and others v. B. M. Vijaya Shankar and others AIR 1992 SC 952. 12 In the present case, even though it would have been desirable to hear the petitioner when action itself has been taken after two years of the event; the fact remains that employees of the petitioner are alleged to have committed fraud and manipulation and opportunity of hearing is now proposed to be given to the petitioner in a time bound manner, before finalizing the action. Principles of natural justice are not rigid rules and prejudice on account of violation of the rules has to be seen from case to case. Having regard to the facts and circumstances of the case, we do not find any ground to interfere at this stage. 13. The petition is dismissed. (ADARSH KUMAR GOEL) JUDGE December 16, 2010 (AJAY KUMAR MITTAL) ashwani JUDGE 7