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IN THE SUPREME COURT OF INDIA
G.S. SINGHVI and ASOK KUMAR GANGULY
ORYX Fisheries Private Limited...Appellant(s)
Versus
Union of India and others...Respondent(s)
CIVIL APPEAL NO. OF 2010
Arising out of Special Leave Petition (C) No.27615/08
Decided on : October 29, 2010
AIR 1958 SC 300; (2001) 1 SCC 182 – Relied upon
(b) Marine Products Export Development Authority Rules, 1972 – Rule 43 – Order of cancellation of appellant’s registration certificate as Merchant Exporter not mentioning his reply to the show cause except that it was not satisfactory – Order totally non-speaking, without giving any reason – Order being appealable, giving reason was obligatory – However appellate order contains reasons – Absence of reasons in original order cannot be compensated by reasons in appellate order – Bias of third respondent, latent in the show cause notice, becoming patent in the order of cancellation of registration certificate – Show cause notice and cancellation of registration certificate not sustainable. (Para 37, 38, 41, 42)
1964 A.C. 40; Kranti Associates Pvt. Ltd. v. Sh. Masood Ahmed Khan; (1986) 4 SCC 537 – Relied upon
Facts of the case:
Appellant is a sea-food exporter. It sent consignment of shrimps to the respondent Cascade Marine Foods LLC in UAE. The consignment was examined by representatives of Cascade before shipment and found fit and there was a fairly fresh smell and the quality of the consignment was found to be satisfactory.
Even on the consignment reaching UAE it was found to be fit for human consumption.
However, Cascade maintained that the consignment was defective and had to destroyed ultimately. They claimed damages.
The MPEDA asked the appellant to settle the matter with Cascade. The appellant’s offer was however not acceptable to Cascade.
The MPEDA cancelled the registration of the appellant. The cancellation was upheld by the Appellate Tribunal and the High Court.
Finding of the Court:
Impugned order cannot be sustained.
Result:
Appeal allowed.
Certainly. Based on the provided legal document, here are the key points:
The authority exercising quasi-judicial powers must adhere to principles of natural justice, including providing a reasonable opportunity for the affected party to make objections or defenses, especially during show cause proceedings (!) (!) .
During the show cause stage, the authority should not confront the accused with definitive conclusions of guilt; instead, it must clearly communicate the charges and allow the party an opportunity to respond (!) (!) .
A show cause notice must be reasonably construed; it should not give an impression that the opportunity to respond is merely a formality, especially when the authority has the power to impose penalties or cancel registration (!) (!) .
The authority must act with an open mind and avoid any appearance of bias or prejudgment, which can be inferred if the notice or proceedings demonstrate a preconceived conclusion about guilt (!) (!) .
The reasons for any adverse order, including cancellation or suspension, must be clearly recorded and communicated. An order that is non-speaking or lacks reasons is not sustainable and undermines transparency and fairness (!) (!) .
The requirement to record reasons supports the principles of justice, accountability, transparency, and judicial review. It ensures that decisions are based on relevant facts and are not arbitrary (!) (!) .
The fairness of a quasi-judicial process is also judged by whether it inspires confidence among those subject to it. Procedural fairness entails that the decision-maker must not only act fairly but also appear to do so (!) (!) .
If the initial proceedings, such as the show cause notice or the order of cancellation, demonstrate a prejudged mindset or bias, the entire process can be invalidated. The authority must keep an impartial and open mind throughout (!) (!) .
In the case at hand, the show cause notice contained language indicating a predetermined conclusion, which compromised the fairness of the proceedings. The subsequent order was non-speaking and did not address the reply of the appellant, further violating principles of natural justice (!) (!) .
The proper course, if procedural flaws are identified, is to set aside the order and allow the authorities to restart the process from the stage of the show cause, ensuring compliance with fair procedures (!) .
Overall, the legal framework emphasizes that decisions affecting rights or interests must be reasoned, fair, and transparent, with the opportunity for the affected party to effectively present their case. Failure to do so renders the proceedings and orders invalid (!) .
Please let me know if you need further elaboration or assistance.
JUDGMENT
GANGULY, J.
1. Leave granted.
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 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 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 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 minutes of the meeting were signed by all the aforementioned individuals.
5. It has been mentioned in the note attached to the letter dated 03.09.2007 sent by Cascade to the Secretary, Ministry of Commerce, Government of India that Cascade was asked by the appellant on 21.12.2006 to issue necessary samples to Mr. Celestine of M/s Starfish Trading FZE and several samples were handed over to him. The fact that the samples were handed over to M/s Starfish Trading FZE has been disputed because the appellant's stand before this Court was that Cascade failed to hand-over the necessary samples to the said M/s Starfish Trading FZE.
6. The appellant called upon Cascade to hand over the consignment to one Freshly Frozen Foods LLC and as a result of that 1081 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
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