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2023 Supreme(Del) 347
IN THE HIGH COURT OF DELHI AT NEW DELHI
YASHWANT VARMA, J.
AL SUDAIS HAJ AND UMRAH SERVICE – Petitioner
Versus
UNION OF INDIA – Respondent
W.P. (C) No. 2588 of 2021, C.M. APPL. No. 7647 of 2021 (Interim Stay)
Decided On : 30-01-2023
Advocate Appeared:
For the Petitioners: Santhosh Krishnan, Deepshikha Sansanwal.
For the Respondents: Vikrant N. Goyal, Tesu Gupta, Ayushi Garg, Bhuvan Mishra, Yash Maheshwari.
Headnote:
Haj Committee Act, 2002 – Income Tax authorities – Allegation of any attempt – Doctrine of Proportionality – Instant writ petition has been preferred seeking petitioner is essentially aggrieved by order first respondent debarring it from applying for being enlisted as a Haj Group Operator forfeiture of security deposit purposes of evaluating challenge which stands raised – Held, Petitioner has already undergone entire period of debarment during pendency of these proceedings before this Court – While it would not be possible for Court to turn clock around it must be held that unsustainable order of blacklisting would not operate so as to render petitioner disqualified in case it was to apply for enlistment as an HGO in future years – For reasons afore noted additional punishment of forfeiture of security deposit also clearly appears to be disproportionate and arbitrary – Writ petition shall stand allowed.
Summary of the Judgment
In this writ petition under Article 226 of the Constitution, the petitioner, Al Sudais Haj and Umrah Service, challenged an order dated 27 January 2021 by the Ministry of Minority Affairs debarring it from applying as a Haj Group Operator (HGO) for five years (Haj 2019-2023) and forfeiting its Rs. 25 lakh security deposit.[11000739030001][11000739030002] (!) The debarment stemmed from allegations of fudging Income Tax Returns (ITRs) submitted with its HGO application under the 2019-2023 HGO Policy, where initial ITRs showed gross receipts from "Haj" operations (despite no prior HGO experience), later clarified as "Umrah" via a revised ITR, leading to discrepancies in narration, address, and acknowledgement numbers verified by the Income Tax Department.[11000739030005][11000739030007][11000739030009][11000739030016] (!) (!) (!) (!) (!)
Key Findings and Grounds for Relief
The Court found misrepresentation in the submitted documents but quashed the order on three main grounds:
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Excess of Jurisdiction by Apex Committee: The petitioner's application was rejected on 20 May 2019 without debarment or forfeiture. The subsequent representation under the grievance redressal mechanism (notification dated 20 May 2019) was considered by the Apex Committee, which improperly recommended additional penalties beyond mere rejection. Such a grievance forum cannot impose or recommend harsher penalties than the original authority, placing the petitioner in a worse position.[11000739030008][11000739030020][11000739030031][11000739030032][11000739030034] (!)
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Prejudged Show Cause Notice: The show cause notice dated 27 February 2020 relied entirely on the Apex Committee's recommendation (already approved by the competent authority), evidencing a closed mind and bias, vitiating natural justice. The notice treated guilt as established rather than seeking a fair response.[11000739030015][11000739030035][11000739030036][11000739030037] (!)
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Doctrine of Proportionality: Even assuming misrepresentation, the maximum penalties (5-year debarment across all related entities and forfeiture) were disproportionate. The petitioner gained no benefit, conceded the error as oversight, obtained ITR rectification (allowed 01 June 2019), and had no prior Haj revenues. Clause 2 of Annexure II (automatic debarment for misrepresentation) is not mechanical; penalties must balance facts, and harsher measures require justification.[11000739030023][11000739030040][11000739030041][11000739030043][11000739030044] (!) (!)
Relief Granted
- Impugned order quashed.[11000739030045]
- Security deposit refunded.[11000739030046][11000739030045]
- Debarment held unsustainable; does not disqualify future HGO applications post-2023, as the full period elapsed during pendency.[11000739030044][11000739030045]
- Petition allowed, emphasizing procedural fairness and proportionality in blacklisting. (!) [judgement_act_referred]
This ruling underscores that administrative penalties like debarment must follow natural justice, stay within jurisdictional limits, and be proportionate, even under policy clauses using "automatic" language.[11000739030042]
JUDGMENT :
YASHWANT VARMA, J.
1. The instant writ petition has been preferred seeking the following reliefs:
“(A) Issue a writ of certiorari and call for the records leading up to the Impugned Order dated 27.01.2021, declare such order as illegal and set it aside.
(B) Issue a writ of mandamus or direction to Respondents to refund the Petitioner’s security deposit of Rs. 25,00,000/- forfeited by the Impugned Order,
(C) Issue a writ of mandamus or direction permitting Petitioner to apply for and seek Haj quota for Haj 2021 and thereafter, without reference to Impugned Order dated 27.01.2021.”
2. The petitioner is essentially aggrieved by the order of 27 January 2021 passed by the first respondent debarring it from applying for being enlisted as a Haj Group Operator [HGO] for a period of five years together with the forfeiture of the security deposit of Rs. 25 lakhs. For the purposes of evaluating the challenge which stands raised, the following salient facts would merit notice.
3. The Kingdom of Saudi Arabia regulates the annual inflow of pilgrims to Mecca based on a country-wise quota which is announced periodically. The quota fixed for the nation is envisaged to be distributed through the Haj Committee set up under the Haj Committee Act, 2002 [2002 Act]. Out of the quota so prescribed and fixed for the country, a smaller percentage is earmarked to be distributed amongst Private Tour Operators who are also called Haj Group Operators [hereinafter and for the sake of brevity to be called “HGOs”]. The policy for registration and allocation of the Haj quota amongst HGOs’ stands encompassed in the order of 20 December 2018 issued by the Ministry of Minority Affairs (Haj Division) [Ministry] under the Union Government. The aforesaid policy governs the selection of HGOs during the period 2019-2023.
4. Being desirous of being selected as an HGO, the petitioner submitted an online application on 20 January 2019. As would be evident from a reading of the relevant parts of the policy, the following broad categories were formulated:
“The new Policy for 2019-2023 created three categories:
(A) Category I - HGOs having experience of 12 years or more in Haj operations with annual turnover of Rs. 5 Crores or more from Haj and/or Umrah operations in any of the preceding two years (30% quota).
(B) Category I - HGOs having experience of minimum 6 years in Haj with annual turnover of Rs. 3 Crore or more from Haj and/or Umrah operations in any of the preceding two years (40% quota).
(C) Category II - HGOs having annual turnover of Rs. 1 Crore or more from Haj and/or Umrah operations in any of the preceding two years (30% quota).”
5. In terms of the eligibility conditions prescribed in the policy document, an HGO was required to have a minimum annual turnover of Rs. 1/3/5 crores or more as may be applicable from Haj “and/or” Umrah operations in any of the two financial years preceding the empanelment year. The petitioner, who had not prior to the making of the aforesaid application been enlisted or selected as an HGO, had applied under Category II.
6. Upon the submission of the aforesaid application and on due scrutiny thereof, the respondents No. 1 issued a communication on 03 April 2019 pointing out various defects which had been noticed in the application submitted by the petitioner. It becomes pertinent to note that the respondents found upon examination of the document which had been submitted by the petitioner that although it had set out receipts reflected in its audited Profit and Loss Account for Financial Year 2017-18 as being from Haj operations, since the petitioner had never been selected as an HGO earlier, the declarations made in that respect were doubted. The respondents further noted that the extracts of the Income Tax Return [ITR] and the Tax Audit Report had not been downloaded from the official portal of the Income Tax Department and thus could not be validated.
7. While responding to the aforesaid deficiency letter, the petitioner by its commun
