VBC 1 WP6791.11-14.10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE WRIT PETITION NO.6791 OF 2011 M/s.Hamilton Housewares Private Limited. ...Petitioner. Versus Designated Authority, Directorate General of Anti-dumping and Allied Duties & Ors. ...Respondents. ....... Mr.V.Shridharan, Senior Advocate with Mr.Prakash Shah and Mr.Jas Sanghavi i/b. PDS Legal for the Petitioner. Mr.Pradeep S.Jetly with Mr.Jay K.Bhatia for Respondent Nos.1 and 2. Mr.Arshad Hidayatullah, Senior Advocate with Mr.Sujay Kantawala, Mr.Rajesh Sharma, Mr.Ricab Chand and Mr.Brijesh Pathak for Respondent No.3. Mr.R.Ashokan for Respondent No.4. ...... CORAM : DR. D.Y. CHANDRACHUD & A.A. SAYED, JJ. October 14, 2011. ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD, J.) : Rule; with the consent of Counsel for the parties returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal 2. The Petitioner which is a Company engaged in the VBC 2 WP6791.11-14.10 manufacture, import and sale of house ware products, has challenged the preliminary findings issued by the Designated Authority in the Directorate General of Anti-Dumping. The preliminary findings have been issued under the provisions of Rule 12 of the Customs Tariff (Identification, Assessment and Collection of Anti- Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (“the Rules”. 3. On 26 August 2010, the Union Government in the Department of Commerce of the Ministry of Commerce and Industry initiated an investigation into the alleged dumping of Opal Glassware originating in or exported from China and the UAE in exercise of the power conferred by Rule 5 of the Rules. The initial notification of the Designated Authority stated that the investigation was to determine the existence, degree and effect of alleged dumping and to recommend the amount of anti-dumping duty, which if levied would be adequate to remove the injury caused to domestic industry. VBC 3 WP6791.11-14.10 4. Rule 3 of the Rules stipulates that the Central Government may, by notification in the Official Gazette, appoint “a person not below the rank of a Joint Secretary to the Government of India or such other person as that Government may think fit as the Designated Authority for the purposes of these Rules.” 5. On 12 December 2000, a notification was issued by the Union Government in the Ministry of Finance under Rule 3(1) appointing the Additional Secretary to the Government of India in the Department of Commerce of the Ministry of Commerce and Industry as Designated Authority for the purposes of the Rules.1 On 11 February 2011, the Union Government in the Ministry of Finance amended the earlier notification so as to substitute the words “Joint Secretary” for the words “Additional Secretary” in the earlier notification.2 During the operation of the earlier notification Shri P.K. Chaudhery, Additional Secretary was appointed as a Designated Authority. Upon the amendment brought about on 11 February 2011, an order was issued by the Union Ministry of Commerce and 1 Notification No.74/2000-Cus.(N.T.) 2 Notification No.11/2011-Cus.(N.T.) VBC 4 WP6791.11-14.10 Industry on 14 February 2011 by which it was notified that Ms.Vijaylaxmi Joshi, Joint Secretary to the Government of India, in the Ministry of Commerce and Industry, Department of Commerce shall discharge the function of the Designated Authority. The investigation which was initiated by the Designated Authority was accordingly continued with Ms.Vijaylaxmi Joshi as Designated Authority. 6. On 27 May 2011, the Press Information Bureau of the Union Ministry of Personnel, Public Grievances and Pensions notified that the Appointments Committee of the Cabinet had approved the appointment of Ms.Vijaylaxmi Joshi as Additional Secretary in the Department of Commerce with effect from 5 May 2011 by upgrading the post held by the officer to its original level. On 20 July 2011, the Union Ministry of Finance issued a notification in supersession of its earlier notification dated 12 December 2000 “except as respects things done or omitted to be done before such supersession, appointing the person” not below the rank of Joint Secretary to the VBC 5 WP6791.11-14.10 Government of India, Department of Commerce, Ministry of Commerce and Industry as Designated Authority for the purposes of the Rules. On 28 July 2011, the Union Ministry of Commerce and Industry issued an order, notifying that Ms.Vijaylaxmi Joshi consequent upon her appointment as Additional Secretary with effect from 5 May 2011 “continues to discharge the functions of the Designated Authority” inter alia for the purposes of the Rules. 7. The bone of contention in these proceedings under Article 226 of the Constitution, arises from the preliminary findings that were issued by Ms.Vijaylaxmi Joshi as Designated Authority in exercise of powers conferred by Rule 12. On the basis of the preliminary findings, the Union Government on 9 August 2011 imposed a provisional anti- dumping duty.3 The Designated Authority has issued its final findings of the anti-dumping investigation, recommending a definitive anti- dumping duty on 25 August 2011. 8. According to the Petitioner, the preliminary findings that 3 Notification No.72/2011-Cus. VBC 6 WP6791.11-14.10 have been issued by the Designated Authority on 27 June 2011 are liable to be quashed and set aside on several grounds, on the basis of which the Petition under Article 226 of the Constitution was instituted. Since the Designated Authority has in the meantime, issued final findings, Counsel appearing on behalf of the Petitioner has while reserving the right of the Petitioner to question the final findings in appropriate proceedings confined the challenge to the preliminary findings only on the ground that on the date on which the preliminary findings were issued – 27 June 2011 – Ms.Vijaylaxmi Joshi had been promoted to the post of Additional Secretary to the Government of India and was, therefore, bereft of jurisdiction to continue with the enquiry and to issue preliminary findings. 9. The submission before the Court is that by virtue of the notification dated 11 February 2011 issued by the Union Government in the Ministry of Finance under Rule 3(1), the Joint Secretary to the Government of India in the Department of Commerce of the Ministry of Commerce and Industry was alone appointed as Designated VBC 7 WP6791.11-14.10 Authority for the purposes of the Rules. Ms.Vijaylaxmi Joshi was promoted to the post of Additional Secretary on 5 May 2011 and could not have, it is urged, exercised jurisdiction as Designated Authority on and after that date. Hence, when she issued her preliminary findings on 27 June 2011, the jurisdiction of a Designated Authority could not have been exercised by Ms.Joshi, who had ceased to hold the post of Joint Secretary. Though the Union Government by a subsequent notification dated 20 July 2011 stipulated that a person not below the rank of Joint Secretary would be a Designated Authority for the purposes of the Rules, this, it was urged, was to operate with prospective effect since it was not to affect things done or omitted to be done before the notification. Moreover, it was urged that the notification being an administrative act, in pursuance of subordinate legislation, could not have retrospective effect and there would be no occasion to ratify the earlier act done by the Designated Authority on 27 June 2011 of issuing preliminary findings. 10. The Union Government has filed an affidavit in reply in VBC 8 WP6791.11-14.10 these proceedings. Besides explaining the scheme of Section 9A of the Customs Tariff Act, 1975 and the Anti-Dumping Rules, it has been stated that two Ministries dealt with the appointment of Ms.Vijaylaxmi Joshi: (i) The Ministry of Commerce and Industry; and (ii) The Ministry of Finance. While the Ministry of Commerce and Industry dealt with the functions of Ms.Joshi, the notification issued by that Ministry states that as an Additional Secretary, Ms.Joshi continues to discharge the functions of the Designated Authority. Further, it has been stated that Ms.Joshi did not cease to be a Designated Authority within the meaning of the Rules. Reliance has been placed on the Rules in so far as they provide that any officer not below the rank of Joint Secretary shall act as Designated Authority. Consequently, it is urged that Ms.Joshi continued to have jurisdiction to proceed with the matter and to carry out investigation. Reliance, in particular, has been placed on the subsequent order dated 28 July 2011 issued by the Ministry of Commerce and Industry which states that Ms.Joshi continues to be the Designated Authority. VBC 9 WP6791.11-14.10 11. Counsel appearing on behalf of the Third Respondent which is a domestic industry engaged inter alia in the manufacture of Opal Glassware in the country, submitted that (i) The Petitioner has not raised the issue of jurisdiction before the Designated Authority though several letters were addressed by the Petitioner to the authority on 1 July 2011, 14 July 2011 and 26 July 2011; (ii) The Petitioner sought to raise the issue before the Ministry of Finance which accordingly clarified that Ms.Joshi was and continues to be the Designated Authority; and (iii) The power to appoint the Designated Authority is with the Central Government with whom the power to impose a provisional duty also vests. Due process of law has, it is urged, been complied with as Ms.Joshi is the “Designated Authority”. 12. On behalf of the Respondents a preliminary objection has been raised to the maintainability of the Petition on the ground that final findings have been issued by the Designated Authority and the remedy of the Petitioner would lie in challenging those findings. To meet this objection, Counsel appearing on behalf of the Petitioner VBC 10 WP6791.11-14.10 submits that under Rule 20(2)(a) of the Rules, where a provisional duty has been levied and where the Designated Authority has recorded either a final finding of injury or a final finding of threat of injury coupled with a finding that the effect of dumped imports in the absence of provisional duty would have led to injury, anti dumping duty may be levied from the date of the imposition of provisional duty. Consequently, it was urged on behalf of the Petitioner that the challenge to the preliminary findings would still survive despite the final findings in view of the fact that if the challenge is accepted, the levy of anti-dumping duty would operate with effect from the date of the final notification and would not relate back to the date of the imposition of a provisional duty. Having regard to these provisions of Rule 20(2)(a), we have considered it appropriate to hear the challenge to the preliminary findings. In the event that the Petitioner succeeds in the present proceedings, then it is evident under Rule 20(2)(a) that even if the final findings were to be valid, the anti- dumping duty would take effect not from the date of the imposition of the provisional duty, but from the date of the final notification. We, VBC 11 WP6791.11-14.10 therefore, overrule the preliminary objection. 13. The rival submissions now fall for determination. 14. Rule 3 stipulates that the Central Government may appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as it may think fit to act as Designated Authority for the purposes of the Rules. The reason why the rule making authority has considered it appropriate that an officer of the rank, at least of Joint Secretary, should be appointed as Designated Authority is to ensure that the officer who is to act as Designated Authority must, by the nature of his office, be responsible enough to discharge the functions which are vested in him under the Rules. Rule 4 provides that the duties of the designated authority include (i) investigation of the existence, degree and effect of any alleged dumping in relation to imports of any article; (ii) identification of the article liable for anti-dumping duty; (iii) the submission of findings, provisional or otherwise to Central Government; (iv) determining the VBC 12 WP6791.11-14.10 normal value, export price and the margin of dumping in relation to the article under investigation; and (v) determining the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India consequent upon the import of article from specified countries. The Designated Authority has to make recommendation to the Central Government on the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to domestic industry, and date of commencement of such duty. Similarly, the Designated Authority is vested with the function of reviewing the need for continuance of anti-dumping duty. Consistent with the importance of the enquiry associated with the office of Designated Authority, the rule making authority considered it appropriate that the appointment to the Designated Authority must be of an officer of a rank at least of a Joint Secretary to the Government of India. In the alternate, Rule 3 contemplates that such other person as the Central Government deems fit may be appointed as Designated Authority. VBC 13 WP6791.11-14.10 15. In the present case, the facts on record would indicate that though initially by a notification dated 12 December 2000, the Central Government appointed the Additional Secretary in the Department of Commerce of the Ministry of Commerce and Industry as designated authority, on 11 February 2011, in modification of the earlier notification, it came to be stipulated that a Joint Secretary in that ministry would be appointed as Designated Authority. Ms.Joshi came to be notified as Designated Authority on 14 February 2011 by the Ministry of Commerce and Industry. On that date, as the order notifying her appointment states, she held the rank of Joint Secretary to the Government of India. When Ms.Joshi commenced the investigation, she was, therefore, clearly within the purview of the notification dated 12 December 2000 as amended on 11 February 2011. During the pendency of the investigation, Ms.Joshi came to be promoted as Additional Secretary to the Government of India in the Department of Commerce with effect from 5 May 2011 by upgrading the post which she had held to its original level. On 20 July 2011, the Central Government notified in exercise of the powers conferred by VBC 14 WP6791.11-14.10 Rule 3(1) that a person not below the rank of Joint Secretary to the Government of India would be appointed as Designated Authority. Following this, on 28 July 2011, the Ministry of Commerce and Industry notified by its order that Ms.Joshi, consequent upon her appointment as Additional Secretary with effect from 5 May 2011, continues to discharge the functions of Designated Authority inter alia for the purpose of the Rules. 16. The submission which has been urged on behalf of the Petitioner is that with effect from 5 May 2011, when Ms.Joshi was promoted as Additional Secretary, the substantive rank which was to attach to her position as an officer of the Government did not fulfill the requirement of the notification dated 11 February 2011 under which a Joint Secretary in the Union Government was to be appointed as Designated Authority. Stretched to its logical conclusion, the submission which has been urged on behalf of the Petitioner would mean that between 5 May 2011 and 20 July 2011, Ms.Joshi was not vested with the jurisdiction to act as Designated VBC 15 WP6791.11-14.10 Authority. For, even assuming the line of enquiry of the Petitioner, it is evident that on 20 July 2011, a fresh notification was issued by Union Government under Rule 3(1) stipulating the appointment of a person not below the rank of Joint Secretary to the Government of India as Designated Authority. Even according to the Petitioner, with effect from 20 July 2011, Ms.Joshi would fit that description since the rank of Additional Secretary is above that of Joint Secretary. But, according to the Petitioner, the notification dated 20 July 2011 would not have the effect of saving the preliminary findings that were rendered by Ms.Joshi on 27 June 2011 because the notification, both in its tenor and as a matter of first principle must only have prospective effect. Similarly, it is urged that the order of the Union Ministry of Commerce and Industry dated 28 July 2011 which refers to Ms.Joshi continuing to discharge the functions of the Designated Authority cannot rectify the absence of jurisdiction between the date on which the officer was promoted as Additional Secretary and the date of the notification subsequently issued on 20 July 2011 allowing the appointment of an officer not below the rank of Joint Secretary. VBC 16 WP6791.11-14.10 17 In our view, the submission which has been urged on behalf of the Petitioner would have to be considered from the perspective of the de facto doctrine. Whether the de facto doctrine can be applied in a situation such as the present, is an issue which we have to decide. The de facto doctrine is postulated on the principle that the act of an officer holding a public office or of the holder of a judicial office would be regarded as being valid in law in certain circumstances even though his own appointment is invalid and the officer or Judge concerned has in a strict legal sense no power. The de facto doctrine was evolved in order to balance the absence of power on the one hand with the consequence emanating from an annulment of the act or the decision of the officer consequent upon a finding of an invalidity in his appointment. Holding that the consequence of an invalid appointment would result in a nullification of his official acts would lead to serious public consequences and in many cases a result which would not coalesce with the public interest in ensuring repose in official acts and decisions. In India, the de facto doctrine was the subject matter of judicial decisions since the early years of the VBC 17 WP6791.11-14.10 Twentieth century. The doctrine was recognized in a decision of Sir Asutosh Mookerjee, J. in Pulin Behari vs. King Emperor.4 The decisions on the subject were adverted to in the leading judgment of the Supreme Court in Gokaraju Rangaraju vs. State of Andhra Pradesh.5 The judgment of the Supreme Court dealt with the effect of a declaration by the Supreme Court that the appointment of an Additional Sessions Judge was invalid, on judgments pronounced by the Judge prior to the declaration. In that case, while Criminal Revisions and Appeals were pending before the High Court, the Supreme Court quashed the appointments of several Sessions Judges who had heard those cases on the ground that their appointments were in violation of Article 233 of the Constitution. Thereupon, it was urged that the judgments rendered by those Judges were void and would have to be set aside. Repelling the submission, the Supreme Court explained the genesis of the doctrine in the following observations : “The doctrine is now well established that “the acts of the officers de facto performed by them within the scope of their assumed official authority, in the interest of the public 4 (1912) 15 Cal LJ 574 5 (1981) 3 SCC 132 VBC 18 WP6791.11-14.10 or third persons and not for their own benefit, are generally as valid and binding, as if they were the acts of officers de jure” (Pulin Behari v. King-Emperor, (1912) 15 Cal LJ 574. As one of us had occasion to point out earlier “the doctrine is founded on good sense, sound policy and practical experience. It is aimed at the prevention of public and private mischief and the protection of public and private interest. It avoids endless confusion and needless chaos. An illegal appointment may be set aside and a proper appointment may be made, but the acts of those who hold office de facto are not so easily undone and may have lasting repercussions and confusing sequels if attempted to be undone.” The Supreme Court held that a Judge de facto is one who is not a mere intruder or usurper, but a person who holds the office under colour of lawful authority though his appointment is defective and may later be found to be defective. The underlying principle, according to the judgment of the Supreme Court, is that the defect of his title to the office would not render the judgments pronounced a nullity when the acts were done by him when he was clothed with the powers and functions of the office. Such acts and decisions had the same efficacy as judgments pronounced and acts done by a Judge de jure. In other words, as explained by the Supreme Court, the genesis of the de facto doctrine is the public policy to prevent needless VBC 19 WP6791.11-14.10 confusion and endless mischief. The de facto doctrine is doctrine born out of necessity. 18. Apart from this principle, there is a second principle which underlies the de facto doctrine. The second principle is that a defective appointment of a de facto Judge may be questioned directly in a proceeding to which the Judge is a party, but cannot be permitted to be questioned in a litigation between two private litigants which has no consequence to the Judge except his position as a Judge. The Supreme Court has, in this context, observed as follows: “A judge, de facto, therefore, is one who is not a mere intruder or usurper but one who holds office, under colour of lawful authority, though his appointment is defective and may later be found to be defective. Whatever be the defect of his title to the office, judgments pronounced by him and acts done by him when he was clothed with the powers and functions of the office, albeit unlawfully, have the same efficacy as judgments pronounced and acts done by a judge de jure. Such is the de facto doctrine, born of necessity and public policy to prevent needless confusion and endless mischief. There is yet another rule also based on public policy. The defective appointment of a de facto judge may be questioned directly in a proceeding to which he be a party but it cannot be permitted to be questioned in a litigation between two private litigants, a litigation which is of no concern or consequence to the judge except as a VBC 20 WP6791.11-14.10 judge. Two litigants litigating their private titles cannot be permitted to bring in issue and litigate upon the title of a judge to his office. Otherwise so soon as a judge pronounces a judgment a litigation may be commenced for a declaration that the judgment is void because the judge is no judge. A judge’s title to his office cannot be brought into jeopardy in that fashion. Hence the rule against collateral attack on validity of judicial appointments. To question a Judge’s appointment in an appeal against his judgment is, of course, such a collateral attack.” 19. The conclusion which the Supreme Court drew was that Judges in that case who rejected the appeal in one case and convicted the accused in the other case were not mere intruders and usurpers but had discharged the functions and duties of Judges under colour of lawful authority. The Court was concerned with the office that the Judges purported to hold and not with the particular incumbents of the office. 20. The principle enunciated in Gokaraju Rangaraju’s case was followed by the Supreme Court in a subsequent decision in Pushpadevi M.Jatia vs. M.L.Wadhawan, Additional Secretary.6 In 6 (1987) 3 SCC 367 VBC 21 WP6791.11-14.10 that decision, the Supreme Court observed as follows : “Where an office exists under the law, it matters not how the appointment of the incumbent is made, so far as validity of his acts are concerned. It is enough that he is clothed with the insignia of the office, and exercises its powers and functions. The official acts of such persons are recognised as valid under the de facto doctrine, born of necessity and public policy to prevent needless confusion and endless mischief.” 21. In Central Bank of India vs. C.Bernard,7 a Bi-partite Settlement between the management and the workmen stipulated that the Chief Executive Officer was entitled to decide which officer would be empowered to hold an