Case: Jain Exports (P) Ltd. &amp; Anr Vs. Union Of India &amp; Ors

1. These appeals by certificate are directed against the common judgment of a full Bench of the Delhi High Court dated December 20, 1984, in two writ petitions under Article 226 of the Constitution. The appellants are respectively a Company and its Managing Director. The Company was the holder of Letter of Authority in respect of three licences for import of coconut oil in one case and of two licences in the other and was appointed Letter of Authority Holder in respect of the said licences. It imported two consignments of 5342.369 Mts. and 3002.557 Mts. of refined industrial coconut oil from Sri Lanka and the delivery port was Kandla. The respective ships carrying the aforesaid cargo arrived at the port of destination on 22nd September, 1982, and 10th September, 1982, and appellant No. 1 filed the bills of entry for release of the said cargo in the office of the Assistant Collector of Customs at Kandla. Instead of release of the cargo on the basis of steps taken by appellant No. 1, notices to show cause were received by appellant No. 1 on the allegation that import of industrial coconut oil was not legal as it was canalised item. The appellant No. 1 was called upon to show cause as to why the cargo may not beunder Section 111(d) of the Customs Act as also why the appellants may not be penalised under Section 112 thereof. The appellants showed cause and took the stand that import of industrial coconut oil was not banned under the Import Policy of the Government for the relevant period and the premises upon which the authorities had proceeded to direct issue of show cause was factually untenable. When personal hearing was afforded, on behalf of the appellant No. 1 it was pointed out that the notices No. 3 were the outcome of bias and the said statutory had not applied his own mind to the matter in controversy. It was also pointed out that Mr. Takhat Ram, Joint Chief Controller of Imports and Exports had taken undue interest in the matter to the prejudice of the appellants and had brought to bear upon the statutory authority pressure to act against the interest of the appellants. By the adjudication orders dated 17th December, 1982 and 20th December, 1982, the respondent No. 3 came to the conclusion thatoil, whether edible or not, were canalised items and fell within the ambit of Appendix 9, para 5(1) of the Import Policy of 1980-81. It was not an item under the O.G.L. of 1980-81Respondent No. 3 further held that either of the consignments was covered by the import licences produced by the appellants and was, therefore, liable to be confiscated under Section 11 l(d) of the Act but gave an option to appellant No. 1 to redeem the goods on payment of Rs. 3 crores and Rs. 2 crores respectively as redemption fines. On 27.12.1982 two writ petitions were filed in the High Court of Delhi challenging the action of the Collector. The said writ petitions was finally placed before a Bench of three Judges of the High Court; two of them being Sachar and Khanna, JJ., came to hold that the writ petitions were liable to be dismissed while the other Judge being Wad, J. took the view that the action of the Collector was totallyand that the writ petition should be allowed and the order of the Collector should be set aside. The majority of the learned Judges were of the further view that the quantum of redemption fine should be considered by the Appellate Tribunal. Sachar, J. with whom Khanna J. concurred,would in the circumstances remit the matter to the Appellate Tribunal but only on the question of consideration of the question of quantum of redemption fine. The Appellate Tribunal could hear and dispose of this matter as if it was hearing an appeal filed by the petitioners but, only on the question of quantum of redemption

Court's reasoning:
9. What survives for consideration is the argument relating to the vice of breach of natural justice and the vice of collateral pressure of the Import Authorities in the making of the order. We must frankly state that this aspect of the argument has not at all impressed us. It has not been disputed that show cause notices were issued, cause was shown andby the statutory authorities. It may be that more of opportunities than extended were expected by the appellants in view of the fact that large stakes were in issue. The observance of the Rules of Natural Justice is not referrable to the fatness of the stake but is essentially related to the demands of a given situation. The position here is covered by statutory provisions and it is well settled that Rules of Natural Justice do not supplant but supplement the law.10. We have not been able to find any breach in the compliance of the statutory procedure. We are not inclined to agree that the role played be Mr. Takht Ram vitiated the order of the Collector.