IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15-04-2009 CORAM: THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN W.P. Nos.707 to 716, 336 to 350, 779, 780, 844, 1772 to 1788 and W.P.Nos.2085 to 2087 of 2009 and M.P.Nos.1,2,3,1,2,3,1,2,3,1,2,3,1,2,3,1,2,3,1,2,3,1,2,3,1,2,3,1,2,3, 1,2,3 etc. batch Isak Ebinesar ..Petitioner in WP 707/2009 S.V.Prabhu ..Petitioner in WP 708/2009 G.Sridhar ..Petitioner in WP 709/2009 A.H.Balachandar ..Petitioner in WP 710/2009 V.Giritharan ..Petitioner in WP 711/2009 J.Ravichandran ..Petitioner in WP 712/2009 M.Ramesh ..Petitioner in WP 713/2009 Mrs.P.Parveen ..Petitioner in WP 714/2009 T.Damodharan ..Petitioner in WP 715/2009 Mrs.N.Amirthavalli ..Petitioner in WP 716/2009 C.V.Karunakaran ..Petitioner in WP 336/2009 R.Subramaniam ..Petitioner in WP 337/2009 C.Lakshmi Narayanan ..Petitioner in WP 338/2009 F.Zubair Ahamed ..Petitioner in WP 339/2009 M.Palaniappan ..Petitioner in WP 340/2009 S.Alaxander ..Petitioner in WP 341/2009 S.Manivannan ..Petitioner in WP 342/2009 C.L.Indu Narayani ..Petitioner in WP 343/2009 A.Srinivasalu ..Petitioner in WP 344/2009 Mr.Valliappa Nagarajan ..Petitioner in WP.345/2009 E.V.Choodamani ..Petitioner in WP.346/2009 P.Srinivasan ..Petitioner in WP.347/2009 B.Sharath Babu ..Petitioner in WP.348/2009 N.Danveer Ahamed ..Petitioner in WP.349/2009 H.Mohan ..Petitioner in WP.350/2009 R.Nedumaran ..Petitioner in WP.779/2009 E.Karunakaran ..Petitioner in WP.780/2009 I.Lakshmanan ..Petitioner in WP.844/2009 J.Subramani ..Petitioner in WP.1772/2009 G.Ganesan ..Petitioner in WP.1773/2009 K.R.Srinivasa Sharma ..Petitioner in WP.1774/2009 P.Rajarajan ..Petitioner in WP.1775/2009 D.Sam David ..Petitioner in WP.1776/2009 T.A.Chidambaram ..Petitioner in WP.1777/2009 S.Pasupathy ..Petitioner in WP.1778/2009 J.Srinivasan ..Petitioner in WP.1779/2009 M.G.Sundaram @ M.G.S.Nair ..Petitioner in WP.1780/2009 S.Ganesan ..Petitioner in WP.1781/2009 M.Saradamuthu .. Petitioner in WP.1782/09 E.Rajendran .. Petitioner in WP.1783/09 https://hcservices.ecourts.gov.in/hcservices/ J.Felix Climant .. Petitioner in WP.1784/09 C.Mohanarangam .. Petitioner in WP.1785/09 T.Raman .. Petitioner in WP.1786/09 G.Saravanan .. Petitioner in WP.1787/09 C.Sathyanarayanan .. Petitioner in WP.1788/09 A.M.Tharun Kumar .. Petitioner in WP.2085/09 A.Prabhakaran .. Petitioner in WP.2086/09 P.Selvakumar .. Petitioner in WP.2087/09 vs. 1.The Chairman, Central Board of Excise and Customs, New Delhi. 2.The Commissioner of Customs, Custom House, No.60, Rajaji Salai, Chennai – 1. 3.The Assistant Commissioner of Customs, Custom House Agent Unit, Custom House, No.60, Rajaji Salai, Chennai – 1. .. Respondents in W.Ps. 707 to 716 , 336 to 350, 1772 to 1788, 2085 to 2087/09 The Commissioner of Customs (Port) Imports, Custom House, No.60, Rajaji Salai, Chennai- 600 001 ... Respondents in W.Ps. 779, 780, 884/09 Writ petitions filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorarified Mandamus, calling for the records of the first and the second respondents regarding the Public Notification 140/2008 dated 31.12.2008 pursuant to the framing of the Regulations 9(1) of the Customs House Agent Licensing Regulations, 2004, quash the Regulation 9(1) giving rise to the Public Notification No.140/2008 dated 31.12.2008 and consequently direct the respondents to treat the persons who passed the qualifying examinations held under Regulation-9 of the Customs House Agent, Licensing Regulation 1984, on par with the persons who had passed the Qualifying Examination under Rule 8 of the Customs House Licensing Regulation, 2004, in so far as the petitioner is concerned. (in W.P.Nos. 707 to 716, 336 to 350, 1772 to 1788, 2085 to 2087/09 To issue a writ of certiorarified mandamus calling for the records of the Respondent issued from T.No.S.Misc/20/2007-CHA,vide Public Notice No.140/2008 dated 31.12.2008 quash the same and further direct the Respondent to accept the candidature/application of the petitioner for grant of licence under Regulation 9(1) CHALR,2004, so as to act as Custom House Agent. WPs.779,780 & 844/09) https://hcservices.ecourts.gov.in/hcservices/ For Petitioner in all WPs : Mr.R.Yashod Vardhan, learned Senior Counsel and M/s.P.Saravanan, B.Satish Sundar and A.K.Jayaraj. For Customs and Central Excise Department in all WPs : Mr.K.Ravi Anantha Padmanaban, and Mr.P.Mahevan, Standing Counsel. C O M M ON O R D E R The petitioners have come up with the present writ petitions, challenging a notification inviting applications for the grant of licences to act as Customs House Agents, under a new set of regulations issued in the year 2004. 2. I have heard Mr.R.Yashod Vardhan, learned Senior Counsel and M/s.P.Saravanan, B.Satish Sundar and A.K.Jayaraj, learned counsel appearing for the petitioners and Mr.P.Mahadevan and Mr.K.Ravi Anantha Padmanaban, learned Standing Counsel appearing for the Customs and Central Excise Department. 3. In exercise of the powers conferred by sub section (2) of Section 146 of the Customs Act, 1962, the Central Board of Excise and Customs, issued a set of Regulations called "Customs House Agents Licensing Regulations 1984". The scheme of these Regulations, was as follows:- (a) Under Regulation-4, the Commissioner was empowered to invite applications for the grant of such number of licences, as assessed by him to act as Customs House Agents in the month of January every year. This invitation should be by means of a notice affixed on the Notice Board of each Customs Station as well as through publication in at least two newspapers having circulation in the area of his jurisdiction. The application should be for clearance work within the jurisdiction of the Commissioner. (b) Under Regulation-5, an application for licence should be made in Form-A and should contain the details prescribed therein. (c) Regulation-6 prescribed the conditions to be fulfilled by the applicants. As per this Regulation, an applicant should - (i) be a graduate from a recognised University; (ii) be an employee of a licensee; (iii) possess a permanent pass in Form-G prescribed under Regulation-20 (subject to the Commissioner's power to relax this condition); (iv) have experience of work relating to clearance of goods through Customs for a period of not less than 3 years in the capacity of a pass holder; and (v) have financial viability supported by a Certificate from a Scheduled Bank or such other acceptable proof evidencing possession of assets of the value of not less than Rs.1 lakh in respect of certain Customs Stations and not less than Rs.50,000/- in respect of the other stations. https://hcservices.ecourts.gov.in/hcservices/ (d) Regulation-8 entitled an applicant whose application was received within the time stipulated in the notice under Regulation-4 and who satisfied the requirements of Regulations-5 and 6, to operate as Customs House Agent initially for a period of one year against a temporary licence. (e) Regulation-9(1) stipulated that the holder of a temporary licence should qualify in an examination conducted by the department and that they shall be given only three chances within a period of 2 years from the date of issue of temporary licences, to qualify in the examination. Under Regulation-9(2), the examination was to be a written and oral examination and was to be conducted twice every year. Regulation-9(3) contained a list of about 16 subjects on which questions might be asked in the examination. (f) Regulation-10 empowered the Commissioner to grant a regular licence in Form-D to the holder of a temporary licence who qualified in the examination referred to in Regulation-9 and whose performance in relation to (i) the quality/value of cargo cleared and (ii) the absence of delay either in the clearance of goods or in the payment of duty, was found to be satisfactory. (g) Regulation-11 dealt with the execution of a bond. (h) Regulation-12 declared that the regular licences granted under Regulation-10 would be valid for 5 years and renewable from time to time. This Regulation also provided the procedure for renewal of the regular licence. (i) Regulation-13 declared that the licence was not transferrable. (j) Regulation-14 listed out the obligations of a Customs House Agent. Regulations 15 to 17, dealt with the change in the Constitution of the licensee if the licensee happened to be a Company, Firm or concern. (k) Regulation-18 enabled a person who qualified in the examination, to engage himself in the work of clearance of goods through Customs on behalf of a licensee. (l) Regulation-19 imposed an obligation upon the licensee to maintain accounts and Regulation-20 enabled a licensee to employ persons to assist him. (m) Regulation-21 dealt with suspension or revocation of licence and Regulation-22 empowered the Commissioner to prohibit an agent from working in one or more sections of the Customs Stations. Regulation-23 provided the procedure for suspending or revoking a licence. (n) Regulations-24 and 25 dealt with accommodation and clearance charges. (o) Regulation-26 repealed the 1965 Regulations, but at the same time, saved the acts done in pursuance of the 1965 Regulations. 4. The petitioners in all these writ petitions are engaged in the work of clearance of goods through Customs. All the petitioners have also cleared the qualifying examination prescribed under Regulation-9 long ago. But unfortunately, the Commissionerates in Tamil Nadu did not invite applications for the grant of licences under Regulation-4, nor did they issue temporary licences under Regulation-8, in the past nearly two decades. Therefore, despite getting qualified several years ago in the examination stipulated in https://hcservices.ecourts.gov.in/hcservices/ Regulation-9, the petitioners have not got either temporary licences or regular licences. 5. Whileso, the Central Board of Excise and Customs, issued a new set of Regulations, in the year 2004, called Customs House Agents Licensing Regulations, 2004, in supersession of the 1984 Regulations. The broad scheme of these Regulations, is as follows:- (a) Regulation-3 prohibits a person from carrying on business as a Customs House Agent, unless he holds a licence under the Regulations. (b) Regulations-4 and 5 are the same as Regulations-4 and 5 of the 1984 Regulations. (c) Regulation-6 prescribes the following conditions for the grant of licence viz.,:- (i) that the applicant should have passed the examination referred to in Regulation-8. (ii) that the applicant should be a graduate from a recognised University and possess a professional degree as CA/MBA/LLB/Diploma in Customs Clearance Work with a working knowledge of computers and Customs procedures or a graduate with 3 years of experience in transacting work as Customs House Agents as a G-Card Holder or a person who has passed the examination referred to in Regulation-8 or a retired Group-A Officer of the Indian Customs and Central Excise Services, having a minimum of 10 years experience in Group-A; (iii) that the applicant has financial viability for possessing assets of the value of not less than Rs.2 lakhs and is a citizen of India; (d) Regulation-8 deals with the conduct of examination, both written and oral, for becoming eligible for the grant of licence. (e) Regulation-8(6) lists out about 18 subjects in which questions may be asked in the examination. (f) Regulation-9 deals with the grant of licence and Regulation-10 deals with the execution of bond and furnishing of security. (g) Regulation-11 prescribes the validity period of licence as 10 years, renewable thereafter. (h) Regulation-12 makes the licence non-transferrable and Regulation-13 deals with the obligations of the agent. (i) Regulations-14 to 16 deal with the change in the Constitution. (j) Regulation-17 permits a person who has qualified in the examination to engage himself in the work relating to clearance of goods. (k) Regulation-18 deals with maintenance and inspection of goods and Regulation-19 deals with employment of persons. (l) Regulation-20 deals with suspension and revocation of licence and Regulation-21 deals with the power of the Commissioner to prohibit an agent from working in any section. (m) Regulation-22 deals with the procedure for suspending or revoking the licence. (n) Regulation-23 speaks about accommodation. 6. After the issue of the new set of Regulations in 2004, clarifications were sought from the Central Board of Excise and Customs, by the Commissionerates, regarding various issues. By a https://hcservices.ecourts.gov.in/hcservices/ Circular No.42/2004, dated 10.6.2004, the Central Board issued clarifications on all the issues, one of which is relevant for our present purpose. It is as follows:- Question:-Can persons who have qualified in the exam under Regulation-9 of CHALR 1984 be exempted from appearing in the exam referred to in Regulation-8 of CHALR 2004 and be granted licence under Regulation-9(1) of CHALR 2004 directly? Answer:- No. Those who have not been granted licence under CHALR 1984 till 23.2.2004 lose their right. They have to meet the qualifications and pass the examinations under Regulation-8 of CHALR 2004. 7. Following the issue of the Regulations of 2004 and the issue of the aforesaid clarifications, the Commissioner of Customs issued a public notice bearing No.140/2008 dated 31.12.2008, which is impugned in the present batch of writ petitions, inviting applications for the grant of licences under Regulation-9(1) of the 2004 Regulations. It is this public notice that triggered the batch of writ petitions on hand, since the petitioners who had already passed the qualifying examination as per Regulation-9 of the 1984 Regulations, suddenly found themselves forced to write the qualifying examination under the new Regulations and compete with new hands for the grant of licences. 8. The primary contention of the petitioners is that after having passed the qualifying examination in terms of Regulation-9 of the 1984 Regulations, the petitioners have been waiting for nearly two decades to apply for the grant of a licence. The Commissionerates in Tamil Nadu did not invite applications in terms of Regulation-4 of 1984 Regulations, for more than a decade. All the petitioners are engaged in the work of clearance of goods through Customs for several years in the hope that applications would be invited one day for the grant of licences to act as Customs House Agents. All their hopes were shattered with the issue of new Regulations in 2004 and the public notice issued in 2008, inviting applications. 9. The petitioners rely upon the decision of a learned Judge of the Delhi High Court in Sunil Kohli vs. Union of India {2006 (195) ELT 15}, in which the learned Judge held that the new Regulations did not negate the actions taken under the previous Regulations and issued directions to the department to grant licences to those qualified under the old Regulations. The petitioners also rely upon an unreported decision of a Division Bench of the Punjab and Haryana High Court, in Madusudan Komra vs. Union of India, where the learned Judges followed the decision of the single Judge of the Delhi High Court. The petitioners point out that even the Andhra Pradesh High Court has issued an interim direction in an identical matter, directing the grant of licences to persons who had passed the qualifying examination under the old Regulations. 10. Mr.R.Yashod Vardhan, learned Senior Counsel submitted that the petitioners had acquired a right, even if inchoate, by virtue of the old Regulations and that therefore the new Regulations cannot https://hcservices.ecourts.gov.in/hcservices/ take away the same, in view of Section 6 of the General Clauses Act. In support of this contention, the learned Senior Counsel relied upon the decision of the Supreme Court in Glaxo Smith Kline vs. Controller of Patents and Designs {2008 (4) R.A.J. 284}. The learned Senior Counsel also produced the text of the judgment of the Court of Appeal in Chief Adjudication Officer vs. Maguire {1999 (2) All E.R. 859}, which was quoted with approval by the Apex Court in the above decision. 11. Mr.K.Ravi Anantha Padmanaban, learned Standing Counsel for the Department, submitted that the decision of the Delhi High Court which was followed by the High Court of Punjab and Haryana, arose out of a challenge to the new set of Regulations, by persons who applied in response to notices issued under Regulation-4 of the old Regulations, but on whose applications no decision was taken by the respective Commissionerates. Therefore, the learned Standing Counsel submitted that the petitioners in the present batch of cases, cannot claim similar benefits, since the respondents never issued any notice inviting applications under the old Regulations. Hence no right was created in favour of the petitioners. The learned Standing Counsel relied upon the decision of the Supreme Court in State of Jharkhand vs. Ambay Cements {2004 (178) E.L.T. 55}, for the proposition that the mandatory rules have to be strictly observed and that no exemption can be granted overlooking statutory rules. 12. I have carefully considered the rival submissions. Admittedly, the 1984 Regulations under which the petitioners got qualified, were issued, by repealing the 1965 Regulations. While the 1984 Regulations were holding the field, the Government constituted a High Power Committee on Reduction of Transaction Costs of Indian Exports to suggest measures for the reduction of Transaction Costs. It was followed by another Committee known as Kelkar Committee on Indirect Taxes, which suggested measures for simplifying the process and procedures for the grant of Customs House Agents Licences. In implementation of the recommendations of these two Committees, the Central Board of Customs and Excise issued the Regulations of 2004 and they came into effect on 23.2.2004. Any misgiving that the petitioners might have had about the impact of these 2004 Regulations, on their prospects of getting a licence on the basis of the acquisition of qualifications under the old Regulations, should have got dispelled with the issue of a letter of clarification dated 10.6.2004 by the Central Board, under Circular No.42/2004. Therefore the petitioners should have, in the normal circumstances, sought redressal immediately after the issue of the clarificatory circular dated 10.6.2004. But unfortunately, the petitioners have waited till the issue of a public notice dated 31.12.2008, inviting applications for the grant of licences, to come to Court. Therefore the petitioners are actually guilty of delay and laches. However I do not wish to non-suit them on this score. 13. As a matter of fact, a person by name G.Saravanan, who had also passed the qualifying examination under the old Regulations of 1984, challenged the clarificatory Circular No.42/2004, dated 10.6.2004, by way of a writ petition in W.P.(MD) No.10388 of 2005 before the Madurai Bench of this Court. Justice K.Chandru, dismissed https://hcservices.ecourts.gov.in/hcservices/ the writ petition by an order dated 15.6.2007, upholding the Circular. An appeal was filed against the said order in W.A.(MD) No.442 of 2007. The writ appeal was disposed of by the Division Bench by an order dated 11.8.2008, merely giving liberty to the petitioner therein to apply for a licence and directing the respondents to consider the case of the petitioner in accordance with law. The Division Bench did not say that the application of the petitioner therein should be considered in accordance with 1984 Regulations. 14. The petitioners assail the new 2004 Regulations and the public notice dated 31.12.2008, mainly on the ground that by passing the qualifying examination under the 1984 Regulations and waiting in the wings for the past more than a decade for the grant of licences, they had acquired a right, which cannot be taken away without due process. The petitioners claim that they had the legitimate expectation of getting licences and that the same has been belied. Since the syllabus for the examination under both the Regulations is one and the same except an addition of two subjects and also since the preamble to the new Regulations, saves even actions omitted to be taken, the petitioners claim that they are entitled to be considered for the grant of licences even under the new Regulations without being forced to write the examinations all over again. 15. At the outset, I am unable to accept the contention that the petitioners had acquired either a vested right or even an "inchoate right", as contended by Mr.R.Yashod Vardhan, learned Senior Counsel. As seen from the scheme of the 1984 Regulations, which I have elicited earlier, the grant of a regular licence, comprised of the following steps:- (i) Invitation by the Commissioner, of applications for the grant of such number of licences, in the month of January every year, under Regulation-4. (ii) Submission of applications in Form-A under Regulation-5. (iii) Scrutiny of applications under Regulation-7 with reference to the qualifications prescribed under Regulation-6. (iv) The grant of temporary licence for one year in Form-B, under Regulation-8(1). (v) Appearing for a written and oral examination under Regulation-9 and getting qualified in the examination and (vi) Submission of an application in Form-C, for the grant of regular licence in Form-D, under Regulation-10, by the holders of temporary licences, who qualify in the examination referred to in Regulation-9. 16. Thus, the process for the grant of a regular licence under the 1984 Regulations, was a bit tedious. To get a regular licence under Regulation-10 of the old Regulations, a person must be the holder of a temporary licence and must have passed the qualifying examination. It is only the holders of temporary licences, who were required under Regulation-9(1) of the 1984 Regulations, to qualify in the examination. 17. Admittedly, the petitioners were never granted temporary licences. Therefore it is not known as to how they were permitted to https://hcservices.ecourts.gov.in/hcservices/ take the qualifying examination. Perhaps, the petitioners were permitted to take the qualifying examination on the basis that they were engaged in the work of clearance of goods through Customs on behalf of a firm or a Company, holding a temporary licence. Thus, out of the several stages to be crossed under the 1984 Regulations for the grant of a regular licence, starting from Regulation-4 upto Regulation-10, the petitioners had crossed only one stage, namely that of passing the qualifying examination. They had no occasion to cross the other stages, such as calling for applications (Regulation-4), submission of applications (Regulation-5), scrutiny of applications (Regulation-7) and grant of temporary licence (Regulation-8). Therefore, it is extremely difficult to accept the contention that the petitioners acquired any right either inchoate or vested. 18. Similarly, it is also pretty difficult to accept the claim that the petitioners had a legitimate expectation that they would be issued with licences under the old Regulations. Even in a case where an amendment to the Service Rules was issued, half way through a process of selection to the post of Inspectors in the Department of Weights and Measures in the State of Madhya Pradesh, the Supreme Court held in State of M.P. vs. Raghuveer Singh Yadav {1994 (6) SCC 151} that the legitimate expectation of candidates who had applied and succeeded in the written examination, was confined only to a consideration under the unamended Rules and that the Government was entitled to make final recruitment in accordance with the amended Rules. Similarly, in P.T.R. Exports (Madras) Pvt. Ltd vs. Union of India {1996 (5) SCC 268}, the Apex Court was concerned with the abolition of a particular system of Export Policy known as "Non- quota Exporters Entitlement", and the introduction of the new Export Policy on Agreement on Textile and Clothing. The Exporters of garments challenged the new policy on the ground that they had made huge capital investments, on an expectation that they had the benefit of quota under the Export Policy of the year 1994-1995 and that such legitimate expectation was blown to pieces. But the Supreme Court rejected the argument on the ground that the doctrine of legitimate expectation had to be angulated on the question whether it was revised by a policy in public interest or whether the decision was based on any abuse of power. 19. Union of India and others vs. International Trading Co. {2003 (5) SCC 437} is also a case where certain permits granted under Maritime Laws, for operating deep sea fishing vessels, were not renewed for several years. The High Court applied the doctrine of legitimate expectation. But the Supreme Court held that though renewal of a permit carries with it, a valuable right, the doctrine of legitimate expectation would have no application when there is a change in policy at the time when the application for renewal is taken up for consideration. It was held therein that a claim based on mere legitimate expectation, without anything more, cannot ipso facto give a right and that legitimacy of an expectation can be inferred only if it is founded on the sanction of law. 20. In Bannari Amman Sugars Ltd vs. CTO {2005 (1) SCC 625}, the Supreme Court held that the concept of legitimate expectation is "not the key which unlocks the treasure of natural justice and it https://hcservices.ecourts.gov.in/hcservices/ ought not to unlock the gates which shut the Court out of review on the merits". Explaining as to how legitimate expectation may arise, the Supreme Court held in the said case that "the expectation may arise either from a representation or promise made by the authority, including an implied representation or from consistent past practice". 21. Therefore, the petitioners herein cannot succeed on the ground of legitimate expectation unless they establish