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1984 Supreme(SC) 138

SUPREME COURT OF INDIA
O. CHINNAPPA REDDY, A.P. SEN AND E.S. VENKATARAMIAH, JJ.
Liberty Oil Mills and others, petitioners
Versus
Union of India and others Respondents.
Transferred Case. No. 22 of 1984, Civil Appeal No. 274 of 1984 with C. M. P. Nos. 5240-43, 5266, 5268, 5377-78, 5399, 5385, 5410, 7026-27, 7158, 7159, 7451-52 of 1984
Decided on 1-5-1984.

Headnote:

Constitution of India,1950 - Article 14 and 19 (i) (g) - Imports and Exports Control Act - Section 3 (3) - Imports (Control) Order, 1955 - Costoms Act - Sections 128 and 131 – Contracts - Import licences - There were demands that severe action be taken against those responsible - Assurances were given in Parliament. Bureaucracy went into action - It was discovered that though import of beef tallow, like other animal tallow, had been canalised through State Trading Corporation with effect from there had been considerable import of beef tallow outside channel of State Trading Corporation even subsequent on ostensible pretext that licences had been issued and firm contracts had already been entered into before that date - It was also discovered that beef tallow had been allowed to be imported even by non-actual user under letters of authority given by licensees who had obtained import licences against entitlement based on value of their exports - Five circulars, styled abeyance circulars and marked secret were issued by Deputy Chief Controller of Imports and Exports, in respect of as many as concerns – Held, Their cases having been considered by authority separately and individually before circular was issued, Court do not think that it makes any difference on peculiar facts of this case that a single circular was issued covering a large number of concerns - However, Court wish to impress upon authorities that those entrusted by statute with task of taking prejudicial action on basis of their subjective satisfaction should, first bestow careful attention to allegations forming basis of proposed action and probable consequences which may ensue such action and next take trouble of reciting in order issued by them satisfaction forming basis of action and a concise statement of allegations forming basis of satisfaction - Real remedy of party - Court would have first directed authority to communicate, within a specified time to party allegations forming basis of saction - But Court do not consider it necessary to do an as party is now fully apprised of allegations against him - In circumstances, Court think that it would be proper if Court direct authority concerned to consider any representation that may hereinafter be made by party within 10 days from data of its receipt. Subject to this directions, writ petition is dismissed but without any order as to costs - Writ petition

12. We may notice here the argument of Shri V. P. Raman that Clause 11 (4) excludes the application of Clause 8-B to goods by Open General Licence. We find no substance in this submission. Clause 8-B expressely provides that action clause may be taken "notwithstanding anything contained in this order". In view of this non obstante clause, we have no doubt that Clause 8-B applies equally to goods covered by Open General Licence.

13. We may mention at this juncture that Clauses 8-A and 8-B were not to be found in the Imports (Control) Order, 1955 originally but were introduced into it later by way of amendment, to make provision for the making of interim orders pending investigation into allegation under Clause 8. The amendment was in consequence of the lacuna being pointed out by the Bombay High Court in some cases which came before it.

14. To be fair to the learned counsel for the petitioner and the other learned counsel for the interveners, all of them were unanimous about the necessity for a provision like Clause 8-B and none of them argued standing find 8-B the standing view no equally that Clause 8-B would be ultra vires if the principle of natural justice could be read into it. The learned Additional Solicitor General, as mentioned by us earlier, agreed that natural justice should be mad into Clause 8-B so as to provide for a post-decisional hearing at the request of the affected party. Let us examine Clause 8-B in the scheme and setting of the Imports (Control) Order and consider whether natural justice is excluded and, if not, when and what opportunity may be provided to the affected party.

15. Clause 8, we have seen, empowers the Central Government or the Chief Controller of Imports and Exports to debar a person from importing goods or from receiving licences or allotment of imported goods for a specified period if such person is guilty of any of the acts of commission or omission enumerated in the Clause. An order of this immensity cannot obviously be made without due investigation and without giving a reasonable opportunity to the affected party Clauses 8-A and 8-B refer to orders which may be made pending investigation into the allegations under Clause 8 and by necessary implication expose the investigative content of Clause 8. Clause 10 expressly stipulates that action under Clause 8 may not be taken unless a reasonable opportunity is given to the party concerned. Neither Clause 8 not Clause 10 prescribes the procedure to be followed before a final order under clause 8 is made. Has a show cause notice to be issued first, then followed by an investigation and finally concluded by yet another show cause notice ? Or is it enough if a show cause notice is issued after the investigation is concluded and the person concerned is asked to explain the evidence gathered against him ? When may investigation be said to have commenced ? Should investigation be necessarily preceded by a show cause notice? We do not think that the Central Government or the Chief Controller is bound to follow any rigid, hide-bound, predetermined procedure. The procedure may be different in each case and may be determined by the facts, circumstances and exigencies of each case. The authority may design its own procedure to suit the requirements of an individual case. The procedure not be fair and not so designed as to defeat well known principles of justice and thus deny justice. That is all. If the procedure is fair it matters not whether the investigation is preceded, interjected or succeeded by a show cause notice. The word 'Investigation' is not defined but in the context it means no more than the process of collection of evidence or the gathering material. It is not necessary that it should commence with the communication of an accusation to the person whose affairs are to be investigated. That may follow later. When facts come to the notice of the Government or the Chief Controller of Imports which prima facie disclose an act or omission of the














































































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