Oryx Fisheries Pvt.Ltd vs Union Of India & Ors

2. The appellant, a Private Limited Company engaged in the production, procurement and processing and export of sea-foods, and other related products, agreed to supply MT 1 of pealed and undeveined (PUD) shrimps to one Cascade Marine Foods LLC (hereinafter referred to as, "Cascade"}, a company incorporated under the relevant laws of UAE at Sharjah. The Purchase Contract dated 26.09.2006, was signed by Pristine Food Inc., a local agent of Cascade, and as per the details of the contract, the PUD Shrimps were to be Block frozen-with mandatory labels on both individual block and master carton and the destination was Sharjah, UAE. By a subsequent amendment dated 19.10.2006 to the purchase contract, the PUD quantity was increased to a total of 24 MT without changing other terms of the purchase contract. Prior to the dispatch of the consignment, inspection was carried out by Sakson Fisheries Consultants, local agents of Cascade, on 18.10.2006, whereby it was found that there was no bad odour. Rather there was a 2 fairly fresh smell and the quality of the consignment was found to be satisfactory.

3. On 25.10.2006, the consignment was dispatched from Mumbai, which arrived at Sharjah Port on 02.11.2006 via Delivery Order, dated 06.11.2006. The Director of Customs, Sharjah, was requested to authorize the release of the PUD Shrimps to Cascade. Following this, on 07.11.2006 Sharjah Customs, vide its Customs Declaration Form, stated that the consignment was not to be released before Health Inspection. It appears from the facts that the customs and health authorities of UAE, had inspected the PUD Shrimps' quality and quantity and they were satisfied that it was fit for human consumption. The health authorities resealed the consignment and numbered it as MSLA 18 J 550015, as against the original 3 seal no. YME 166813. It appears from the Store Receipt voucher No. 9232 dated 12.11.2006 of Cascade, the buyer, that they had taken possession of the consignment. After a lapse of more than 10 days, Cascade alleged that the PUD Shrimp was of very poor quality as it transpired from their analysis report dated 21.11.06.

4. As per the minutes of the meeting held on 17.12.2006 in the office of Cascade at Sharjah which was attended by Mr. S.D. Puranik and Mr. P.R. Sakthivel, respectively Managing Director and Director Marketing of the appellant and Mr. Vijay Paranjape, Group QA Manager Al-Kabeer and Ajit Pillai, General Manager, Cascade Marine Foods LLC, the appellant agreed to compensate Cascade to the extent of the value of the defective goods and the 4 minutes of the meeting were signed by all the aforementioned individuals.

6. The appellant called upon Cascade to hand over the consignment to one Freshly Frozen Foods LLC and as a result of that 1081 5 cartons of goods were delivered to the cold store designated by Freshly Frozen Foods on 14.04.2007 vide Cascade Store Issue Voucher 0390. Freshly Frozen Foods could retrieve only 25 kgs from 4 MT of product they had thawed out and they had directed Cascade to take back the material. When the Municipality Audit found out that the validity of PUD shrimp packages had expired they compulsorily destroyed the entire consignment of shrimps and the destruction cost was debited to Cascade. As a result, Cascade by its facsimile transmission dated 13.08.2007 informed the appellant that they rejected the entire consignment and they enclosed a Debit Note No.CMF/DN/108/07 for US$ 86,104.00 which represented the material cost and destruction charges and requested the appellant to settle the same at the earliest.

7. On 3.09.2007 Cascade by its letter addressed to Chairman, Marine Products Export Development Authority (for short, MPEDA), made a quality complaint on the shipment effected by the appellant for a value of US$ 83000 and a claim of total loss arising from intentional cheating by way of delivery of decomposed shrimp, unfit for human consumption.

9. In addition to this, Cascade, through its advocates, served a legal notice on the appellant on 23.09.2007 asking it to pay US$ 83104 plus destruction costs within 7 days of receipt of the notice and on failing to do so, appropriate legal proceedings would be filed in India and UAE to recover the said amount. The appellant, through its Advocate, replied on 17.10.2007 denying that the entire consignment of shrimps exported by the appellant had deteriorated in quality. In furtherance they also denied any liability to compensate Cascade for the value of the goods along with storage charges, distribution costs of USD 83104 plus destruction costs as alleged. 8

10. The third respondent vide its letter dated 25.10.2007, addressed to the appellant, directed it to settle the dispute with Cascade urgently by 10.11.2007, which was duly replied to by the appellant in the negative by its letter dated 11.11.2007. After a series of correspondence between the appellant and the third respondent, finally the third respondent decided on 20.11.2007 to convene a joint meeting on 5.12.2007 between the appellant and Cascade to find out an amicable settlement of the issue in the presence of the officers of MPEDA. The appellant in order to amicably settle the dispute offered Cascade 25% of the value of the goods exported, by way of deferred payment against adjustments, from future supplies, in the presence of officers of MPEDA, Cochin.

12. The appellant replied to the show cause notice vide its letter dated 4.2.2008 seeking to refute the allegations levied upon it and further stated that MPEDA would not be justified in canceling its certificate of registration on the above- mentioned grounds.

15. The second respondent vide its letter dated 20.06.2008 informed the appellant that no more personal hearing was required and directed them to send any further evidence of proof of settlement with Cascade, if any. On 19-08-2008, the second respondent passed an order holding, inter alia, that:

37. The appellant gave a reply to the show cause notice but in the order of the third respondent by which registration certificate of the appellant was cancelled, no reference was made to the reply of the appellant, except saying that it is not satisfactory. The cancellation order is totally a non-speaking one. The relevant 24 portion of the cancellation order is set out:-

16. Being aggrieved, by the order dated 19.03.2008 and 19.08.2008, the appellant preferred a Writ Petition No.2251 of 2008, before the High Court of Bombay. The High Court found no error of law on the face of record, and upheld the findings of the appellate authority and dismissed the writ petition by an order dated 16.10.2008.

Your reply dated 04/02/2008 to the Show Cause Notice is not satisfactory because the quality complaint raised by M/s. Cascade Marine Foods, L.L.C, Sharjah have not been resolved amicably. Therefore, in exercise of the power conferred on me vide Rule 43 of the MPEDA Rules, read with office order Part II No.1840/2005 dated 25/11/2006, I hereby cancel the 25 Registration Certificate No.MAI/ME/119/06 dated 03/03/2006 issued to you. The original Certificate of Registration issued should be returned to this office for cancellation immediately.

In case you are aggrieved by this order of cancellation, you may prefer an appeal to the Chairman within 30 days of the date of receipt of this order vide Rule 44 of the MPEDA Rules.

38. Therefore, the bias of the third respondent which was latent in the show cause notice became patent in the order of cancellation of the registration certificate. The cancellation order quotes the show cause notice and is a non-speaking one and is virtually no order in the eye of law. Since the same order is an appealable one it is incumbent on the third respondent to give adequate reasons.

b. A quasi-judicial authority must record reasons in support of its conclusions. c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

j. Insistence on reason is a requirement for both judicial accountability and transparency.

44. For the reasons aforesaid, this Court quashes the show cause notice as also the order dated 19.03.2008 passed by the third respondent. In view of that, the appellate order has no legs to stand and accordingly is quashed.

45. We are constrained to observe that unfortunately this aspect of the matter was not considered by the High Court. We cannot, therefore, approve the order of the High Court and the same is accordingly quashed. The cancellation of the registration certificate of the appellant 31 is set aside and we declare the registration to be valid if it is not vitiated for any other reason.

47. The appeal is allowed. Parties are left to bear their own costs.