WPC(C)No.5794/2008 Page 1 of 62 IN THE HIGH COURT OF DELHI, AT DELHI WP(C)No.5794/2008 Judgment pronounced on 3rd November, 2009. # M/s Dewan Consultants & Pvt. Ltd. ….. Petitioner Through: Mr.Mukul Rohtgi, Sr. Advocate with Ms. Manali Singhal & Mr. Shantosh Sachin, Advs. Versus $ Union of India & Ors. .... Respondents Through: Mr. P.P. Malhotra, ASG with Ms. Monika Garg, Mr. Chetan Choudhary, Mr. Shankar Chhabra and Mr. Gaurav Shankar, Advs. CORAM: HON'BLE MR. JUSTICE G.S.SISTANI 1. Whether reporters of local papers may be allowed to see the Judgment ? 2. To be referred to the Reporter or not? 3. Whether the judgment should be reported in the Digest? G.S.SISTANI, J : 1. Some people travel abroad for a holiday, some out of curiosity, others for the lust and good life and some in search of better job prospects and to improve their standard of living. 120 skilled and unskilled workers, aspiring to earn more for a better living and to improve their standard of life in this country ventured to the United States of America. An article appeared in the Hindustan Times dated 10.03.2008, highlighted the ill-treatment, poor accommodation, WPC(C)No.5794/2008 Page 2 of 62 inhuman treatment and being overcharged, which resulted in a Show Cause Notice to this petitioner and thereafter cancellation of its registration 2. Taking into consideration the out flow of skilled and unskilled workers from India for employment purposes and ill-treatment meted out to some of the workers and further exploitation by recruiting agents, resulted in formation of a Legislation in the year 1983 known as ―The Emigration Act, 1983‖. The aim and object of this Act was to regulate the terms and conditions of overseas employment and to grant protection and safeguards the interest of Indian workers going overseas for employment. Petitioner herein is a recruiting agent. 3. Aggrieved by the action of the respondents by virtue of which the licence of the petitioner was suspended and thereafter cancelled vide order dated 28.07.2008, the present petition has been filed. 4. The petitioner is a private company registered under the Companies Act, 1956, and a registered recruiting agent initially functioning as Indian Overseas Tech Services. The petitioner company was established in the year 1978 and has been functioning as a recruiting agent for the last 30 years. The petitioner is stated to have an excellent WPC(C)No.5794/2008 Page 3 of 62 reputation, goodwill and standing in this field. The registration certificate of the petitioner was suspended vide order dated 12.06.2005 and thereafter its registration was cancelled vide order dated 28.07.2008 by respondent no.2 (Office of the Protector General of Immigrants, through Ministry of Overseas Indian Affairs). It is this order of cancellation, which has been challenged by the petitioner and is a subject matter of the present writ petition. 5. The brief facts of the case as set out in the petition are that the petitioner is a registered recruiting agent. The licence of the petitioner was valid upto 29.10.2014. During the period of its functioning, no complaint was received against the petitioner or its predecessor, the proprietor-ship concern, for the last 30 years. 6. According to the petitioner, during this period the petitioner has assisted in the recruitment of several thousands of workers for various regions. On or about the year 2005, there was a shortage of skilled workers in the Mississippi Region due to the devastation caused by Hurricane Katrina and hence there was an urgent need for recruiting foreign workers. One, Global Resources INC (―Global‖), a company registered in Mississippi was in the business of assisting skilled foreign workers to find employment in the U.S.A. WPC(C)No.5794/2008 Page 4 of 62 under temporary and permanent visa. Global was rendering these services for a fee to be paid by such foreign workers and it undertook as part of such fee to engage an Immigration Attorney to assist in the visa process. 7. Consequently on April 18, 2006, Global and one M/s Signal International (hereinafter referred to as ―Signal‖) a company incorporated under the laws of Mississippi, U.S.A., entered into a Recruitment Agreement (hereinafter referred to as the ―Agreement‖) where under the said Global agreed and undertook to: i. Advertise, pre-test, select and qualify foreign workers suitable for employment by Signal; ii. Provide all immigration documents and an Immigration Attorney free of cost to Signal (but at the cost of the workers) to assist and advise in the visa process for ―H2B‖ temporary visa and/or the ―permanent residence‖ process wherein Signal was liable only for the fees imposed by the US Central or State Governments; iii. be responsible for transporting the foreign workers to the U.S.A. and from the U.S.A. back to their place of origin after expiry of their visas; iv. provide housing, transportation, meals (―Accommodations‖) to the foreign workers upon payment of costs by the said foreign workers. In an amendment to the said Agreement on September 7, 2006, Signal has agreed to pay Global for three WPC(C)No.5794/2008 Page 5 of 62 Meals to be provided by Global to the foreign workers on the terms set out in such amendment. 8. Subsequent to the execution of the above Agreement in 2006, since Global was not a registered agent in India as stipulated under the Act, Global approached the petitioner for recruiting 500 skilled workers – mostly welders and fitters for Signal‘s shipyard in Mississippi and Texas. 9. Signal also issued the Demand Letter and Power of Attorney in favour of the petitioner as required under the Act, which were duly attested by a Notary Public in the U.S.A. 10. In the said documents, it was mentioned that Signal required skilled foreign workers ―on temporary and permanent employment visas‖. Based on the said documents and on the terms and conditions set out in the Agreement wherein it is stated that Signal would be procuring temporary and permanent visas for the foreign workers, the petitioner placed advertisements in leading newspapers for recruitment of skilled workers the jobs available with Signal. 11. The petitioner submits that as per a Government order (D.O. No.Z-11025/9/91 – Emig.) dated 01.08.1991, issued by the Ministry of Labour, Shram Shakti Bhawan, New Delhi, the Emigration Check Requirement Formalities for WPC(C)No.5794/2008 Page 6 of 62 emigrants inter alia to North America has been suspended. Hence on and after 1991, no clearance is required from the office of the Protector of Emigrants for emigration to North America. The petitioner submits that a subsequent notification dated 28.12.2006 has reiterated the above. 12. The mandate given by Global to the petitioner was only to the extent of receiving the applications and documents from candidates and arranging for their interviews and tests to be conducted by both representatives of Global and Signal. 13. Accordingly, the petitioner arranged for interview dates for candidates and representatives from Signal and one Mr.Michael Pol of Global came to India in the month of June/July, 2006, and conducted the interviews and tests at Kerala, Vishakapatnam and Chennai. Signal conducted a written test for the Fitters and practical tests for the Welders. Signal representatives, Mr. Pol of Global and the company representatives present, then explained to the selected candidates (selected subject to results of their medical tests) all the terms and conditions of their employment with Signal. The workers were told at the time of their employment that they would be kept in bunkhouses due to large – scale devastation in the region due to WPC(C)No.5794/2008 Page 7 of 62 Hurricane Katrina. Upon their acceptance of the said terms, the selected candidates also undertook their medical tests at various locations. 14. Signal and Global meanwhile had certain disputes and Signal therefore terminated the Agreement with Global by its letter dated November 29, 2006. Thereafter though the petitioner was initially engaged only by Global for assisting in the process of fixing interviews with workers and medical tests thereafter in India, Signal continued to use the services of the petitioner (only for facilitating the interviews and medical tests as abovementioned candidates). 15. Finally after further follow ups and completion of formalities by the Mr. Malvern Burnett, an Immigration Attorney appointed by Global, the workers left for the U.S.A. in batches from November, 2006, to January, 2007. There were no complaints whatsoever from the workers except in January, 2007, when the petitioner was informed about poor living conditions and poor food quality. 16. It is contended that though the responsibility for providing accommodations was that of Global, and the fact that there was no contractual obligation for the petitioner to provide any facilities or services after completion of the recruitment process, the petitioner‘s Managing Director, Mr. Sachin WPC(C)No.5794/2008 Page 8 of 62 Dewan, personally visited Signal in January, 2007, and checked the food and accommodation provided. When the said Mr. Dewan found that the living conditions were cramped he took immediate action to rectify the same. Mr. Dewan also checked the other facilities, including the food provided and found that substantial and quality food was provided to the workers but that some of the workers were only complaining about their cuisine not being provided for (i.e. South Indian food, etc.). Mr. Dewan took pictures of the said facilities and food provided. 17. Counsel for the petitioner submits that due to the efforts of Mr. Dewan, Signal, promised to improve the living conditions, which Signal claimed were below par due to the after effect of Hurricane Katrina. Thereafter the petitioner received information from the workers that Signal had improved the working conditions around the month of May, 2007, and that the workers therefore had no further complaint about the same. 18. Further some of the workers recruited through the petitioner had also come to India on a vacation after May, 2007. During their trip some of the recruits contacted the petitioner but did not make any complaints whatsoever about living and food conditions at Signal. To the WPC(C)No.5794/2008 Page 9 of 62 knowledge of the petitioner all the workers have been receiving their remuneration as agreed upon and all of them have made substantial amounts of money (nearly USD 75,000 – about Rs.30,00,000/-) from their employment with Signal. To the knowledge of the petitioner all those persons who had visited India for a vacation had returned to the U.S.A. 19. The petitioner further received information sometimes in February/March, 2007, that several of the workers recruited by the petitioner and stationed in Mississippi had absconded i.e. had left the Signal shipyard and had taken up work with other organizations where they could get more money than paid by Signal though they had arrived in the U.S.A. through visas sponsored by Signal, which amounts to a contravention of the conditions of the visas. 20. The petitioner further got information that Signal had filed for extension of visas as the workers had left India with H – 2B work visas, which were valid for a period of 10 months but that as of February – March, 2008, such extension of visas had not yet been received by Signal. 21. On March 10, 2008, the Hindustan Times, carried an article that about 100 workers who are working in Signal, recruited from India, had complained about the living conditions at WPC(C)No.5794/2008 Page 10 of 62 Signal and had filed class action suit in the U.S.A. alleging human trafficking. It was also mentioned in the newspaper that several allegations were made against the petitioner including about the excess payments having been made to the tune of 8 to 10 lakhs on the promise of obtaining permanent visas for the workers but only temporary visas were given to the workers. 22. On the date, the Article appeared in the newspaper, respondent no.2 issued the first suspension order, suspending the certificate of registration of the petitioner, for a period of thirty days. Simultaneously, respondent no.3 also issued a show cause notice directing petitioner to file its reply on the suspension order issued by respondent no.2 within a period of fifteen days. According to the petitioner, no reasons were set out for issuance of the said first suspension order dated 10.03.2008 except that the Hindustan Times dated 10.03.2008 had carried an article. On account of the suspension notice, the business of the petitioner came to a standstill. Reply to the notice was sent on 17.03.2008. On 03.04.2008, respondent no.3 called upon the petitioner to submit originals of certain documents which were supplied by the petitioner. On 07.04.2008, the petitioner again received a letter from respondent no.3 WPC(C)No.5794/2008 Page 11 of 62 asking for certain documents, the reply of which was sent by the petitioner on 09.04.2008. 23. According to the petitioner, he has submitted all the documents pertaining to the recruitment of the workers of the Signal. On 07.04.2008, the petitioner received the second suspension order dated 03.04.2008 from the office of respondent no.2 extending the operation of suspension order dated 10.03.2008 till determination of question as to whether the registration of the petitioner should be cancelled and directed the petitioner to show cause within fifteen days of the receipt of the said second impugned suspension order. 24. As per the petitioner, apart from repeating the allegations verbatim from the first suspension order dated 10.03.2008 the only reason mentioned by respondent no.2 was that preliminary reports from CGI, Houston, had been received and according to which the workers were sent on Guest Workers Visa, which amounted to cheating of innocent immigrants and further the petitioner had not explained the question of payment of huge amounts made by the workers. 25. According to the petitioner, the second show cause notice was also untenable and amounted to holding the petitioner guilty based only on the allegations in a newspaper article WPC(C)No.5794/2008 Page 12 of 62 and without any trial. The petitioner is stated to have sent a detailed reply dated 17.04.2008. On 08.04.2008, petitioner filed a reply against the suspension order no.1 dated 10.03.2008 as well as the second suspension order no.1 dated 03.04.2008. 26. On 21.04.2008, the petitioner received yet another show cause notice from respondent no.2 dated 15.04.2008, which according to the petitioner, had raised false, baseless and unsubstantiated allegations. Reply to this was sent on 24.06.2008. The petitioner was constraint to file a writ petition before this Court against issuance of multiple show cause notices. The High Court vide order dated 06.05.2008 directed the respondent to complete the enquiry within a period of one month from the date of its order. The appeal of the petitioner was heard on 06.06.2008 and finally rejected vide order dated 12.06.2008. 27. After passing of the order dated 06.05.2008 by the Delhi High Court, the petitioner issued a letter to respondent no.2 on 13.05.2008 requesting for prior intimation of the date of enquiry. The date for enquiry was fixed as 29.05.2008. Since the petitioner‘s Managing Director and his counsel were travelling, an adjournment was sought to 06.06.2008, which was granted. The petitioner vide letter dated WPC(C)No.5794/2008 Page 13 of 62 01.06.2008 requested respondent no.2 to furnish copies of documents and statements being relied upon by them in the enquiry. Such documents were only furnished to the petitioner on 06.06.2008. Meanwhile the appeal filed by the petitioner herein was rejected on 12.06.2008. Subsequent to the passing of the order in the appeal, respondent no.2 sent a letter dated 17.06.2008 to the petitioner directing the petitioner to produce the documents on 27.06.2008. Meanwhile the petitioner again requested respondent no.2 to furnish copies of documents and statements, if any, which the second respondent would be relying upon against the petitioner in the enquiry. The petitioner is stated to have produced all the documents on 27.06.2008, pertaining to Signal in its possession as requested by the second respondent during the hearing on 06.06.2008. Dissatisfied by the documents supplied, by an order dated 28.07.2008 respondent no.2 cancelled the registration certificate of the petitioner. The petitioner was served with a copy of the order dated 28.07.2008 on 31.07.2008. 28. Learned counsel submits that the petitioner was shocked to receive the order dated 28.07.2008 as he had repeatedly requested respondent no.2 to furnish all documents and WPC(C)No.5794/2008 Page 14 of 62 statements which the second respondent wished to rely upon to ensure an effective hearing for the petitioner. 29. Learned counsel submits that the orders of suspension and cancellation order are arbitrary, contrary to the law and without following the principles of natural justice. By passing of the aforesaid orders, the respondents have deprived the petitioner of its right to conduct business and earn its livelihood. 30. Learned counsel contends that the respondents have relied on the material, statements and baseless allegations in cancelling the registration certificate of the petitioner. The petitioner has been deprived of its right to respond to the allegations contained in the cancellation order as the documents relied upon by respondent no.2 in the impugned cancellation order have not been furnished to the petitioner. It is also submitted that the second respondent has failed to furnish copies of the documents and statements relied upon by them and, thus, the petitioner has been deprived of an effective hearing. It has been strongly urged before this Court that the suspension orders and the show cause notices issued by respondent no.2 are based on newspaper reports according to which the petitioner has misled the WPC(C)No.5794/2008 Page 15 of 62 workers by promising permanent visas and has charged them exorbitant amounts based on the said promise. 31. It is contended that the sole basis of the said accusations against the petitioner, as set out in the suspension orders and various show cause notices issued by respondent no.2 were the unsubstantiated allegations in the newspaper reports and a report from the Consulate General of India. Any orders passed on the sole basis of newspaper reports are contrary to the established principles of law. 32. Learned counsel has also submitted that while the petitioner produced all documents in its custody before respondent no.2, despite repeated requests, respondent no.2 failed to furnish copies of the documents and statements relied upon by them in deciding the matter against the petitioner. 33. Learned counsel submits that apart from the undated letter from Signal along with annexures which do not set out the basis for allegations, respondent no.2 did not furnish any other document or statement implicating the petitioner, at any point of time. Counsel further submits that the business and livelihood of all its employees have come to an abrupt standstill due to the illegal and arbitrary actions of the respondent. WPC(C)No.5794/2008 Page 16 of 62 34. It is submitted that the cancellation of the registration certificate of the petitioner for purported non-maintenance of certain records despite emigration to North America being exempted from the provisions of the Emigration Act, vitiates the impugned cancellation order. While the cancellation order has been passed for purported non- maintenance of records, however, no such show cause notice was issued on this ground. Further the action taken is arbitrary and excessive for non-maintenance of records particularly when emigration to North America is exempted from the provisions of the Emigration Act. 35. It is contended that the cancellation order is vague and baseless, as the respondents have failed to consider that the petitioner only acted as a facilitator for Signal to recruit the workers and had issued the advertisement as per the Demand Letter and Power of Attorney issued by the Signal. Thereafter Signal had arranged for an Immigration Attorney and the said attorney had also arranged for visas and all other formalities were carried out by the Attorney and Global. Based on the recruitment, the workers were provided gainful employment at Signal‘s shipyards. The workers have made substantial amounts of money, since their emigration to the USA, and the workers continued to WPC(C)No.5794/2008 Page 17 of 62 work with Signal as they have got extension visas and the process for their permanent visas has also been commenced. Thus, none of the workers were either misled or cheated and that only some of the workers have raised false complaints for mala fide reasons. 36. Learned Additional Solicitor General appearing on behalf of the respondents submits that the present petition would not be maintainable in view of the fact that an appeal is provided under Section 23 of the Emigration Act, 1983, against an order of cancellation. It is contended that the impugned order has been passed after following the due procedure and complying with the principles of natural justice and statutory provisions. Thus, the order of cancellation is not open to judicial review. 37. Learned Additional Solicitor General further submits that the petitioner has been given a show cause notice and a full- fledged enquiry was held after giving an opportunity of hearing in compliance with the principles of natural justice as well as the Emigration Act and Rules. It is submitted that there is adequate evidence on record to establish that the petitioner in complete violation of the Emigration Act, 1983, has cheated and misled the poor prospective emigrant workers in collusion with Michael L. Pol of Global Resources. WPC(C)No.5794/2008 Page 18 of 62 38. It is contended that the petitioner/recruiting agency lacks the basic integrity and sensitivity that is required in recruiting agent‘s business dealings with prospective Indian emigrants as some of them may be only semi-literate or illiterate. It is further contended that despite several opportunities during the enquiry, the petitioner has failed to produce the evidence and complete record of recruitment and amounts charged in respect of the alleged misconduct. 39. Learned Additional Solicitor General submits that the petitioner has misrepresented that there are no complaints against him and petitioner has a clean record. In fact a complaint was received against the petitioner in the year 1997. It is disputed that the action has been taken against the petitioner only on the basis of some newspaper report. Since the petitioner did not comply with the various provision of the Emigration Act, 1983 and also did not behave responsibly and conscientiously in dealing with the poor emigrant workers who had placed their trust in him or their future prospects in foreign lands, the respondents were well within their rights to cancel the registration certificate. 40. It is contended that the petitioner acted irresponsibly and showed scant regard to the welfare of the emigrant WPC(C)No.5794/2008 Page 19 of 62 workers, luring them into his net with false promises of a Green Card/permanent residency which only the US Government can decide upon. In these circumstances, order of cancellation of registration certificate is fair and just. 41. It is further contended that a report was published in the Hindustan Times dated 10th March, 2008, that the petitioner/recruiting agency had recruited 120 Indian workers to work with M/s Signal International Company, Mississippi, USA, in two shipyards. It was further reported that the workers have paid huge amounts of money to the recruiting agency for their jobs in the company. The workers were promised good wages, decent accommodation, etc., however, they began facing a lot of problems upon their arrival. The workers were made to live in inhuman conditions without proper food and proper accommodation. The workers alleged, as reported, that the agents had also threatened to burn their passports. 42. Learned Additional Solicitor General submits that the matter was considered and upon enquiry it revealed that the recruiting agent, by way of charging huge amounts of money from the workers, which is more than the prescribed amount in the Emigration Rules, had sent the workers to a WPC(C)No.5794/2008 Page 20 of 62 company where they were not provided with proper accommodation and food, and had cheated the innocent emigrants and also violated the terms and conditions of the registration certificate. Therefore, the recruiting agent (petitioner herein) is not fit to continue to hold the certificate and, thus, while suspending the certificate, vide order dated 10.03.2008, petitioner was asked to show cause within fifteen days of the receipt of the order as to why their registration certificate should not be suspended indefinitely/cancelled. 43. Learned Additional Solicitor General contends that no doubt the process of investigation was triggered off