Johnson And Johnson Ltd. vs Deputy Chief Controller Of ...
2002 Latest Caselaw 1329 Bom

JUDGMENT

Vijay Daga, J.

1. Heard learned Counsel for the rival parties. This petition is directed against the order dated 11-11-1987 passed by the Deputy Chief Controller of Imports and Exports, New Delhi, in exercise of powers conferred under Clause 8 of the Import (Control) Order, 1955, whereunder; the entitlement of the petitioners i.e. the quota to import raw material for manufacturing Sanitary Napkins was reduced by 20%. In other words, petitioners were permitted to make imports under OGL Licence and receiving import licences and customs clearance permits and allotment of imported material from State Trading Corporation (STC) and Minerals Metals Trading Corporation (MMTC) or any other similar agency for the period from 10th November, 1987 to 31st March, 1990 to the extent of 80% of their entitlement. Thus, the entitlement of the petitioners to import raw material was curtailed by 20% for the period 10-11-1987 to 31-3-1990.

2. The facts brought on record reveal that the show cause notice dated 18-8-1986, which came to be issued under Clause 10 of the Imports (Control) Order, 1955 proposing to take penal action against the petitioner under Clause 8(g) thereof; was based on the premise that the petitioner had illegally imported wood pulp between 1980 and 1985, in violation of paragraph 19(1) of Appendix 10 of the Import Policy 1982-83, and the corresponding provisions of the 1983-84 and 1984-85 policies and thereby committed breach of the Import (Control) Order, 1955.

3. The aforesaid said show cause notice was replied and number of grounds were put forth to show that show cause notice, and the proposed action was unwarranted. The show cause notice was also challenged on the various legal grounds; but, none of the submissions found favour with the respondent No. 1. He was pleased to hold that the petitioners had committed a breach of the relevant Import Control regulations by making imports of wood pulp under OGL licence. He, thus, passed order on 11-11-1987; debarring the petitioner from making imports; the details of which are given in the opening para of this Judgment.

4. Being aggrieved by the above order, petitioners have filed this petition under Article 226 of the Constitution of India. While granting Rule, this Court vide interim order dated 18-12-1987 had stayed the operation of the impugned order with the result impugned order could not operate. In the other words, order could not be implemented. Now, after 15 years this petition has come up for final hearing.

5. The impugned order is being challenged on the various amongst other grounds; including that the action is discriminatory and violative of Article 14 of the Constitution of India, inasmuch as, the person who was not earlier entitled to import wood pulp, prior to the introduction of the system of Open General Licence (OGL) in 1980, was permitted to freely import wood pulp after 1980; subject to his only being an Actual User; but, the persons like petitioners, registered as an Actual Users were barred from importing wood pulp after 1980 due to the purported condition. That once the scheme of OGL was introduced, it equally applied to all Actual Users of the wood pulp so long as they were registered with the sponsoring authority. In this view of the submissions, the contention canvassed and urged is that interpretation adopted by the respondent had the effect of discriminating against the petitioners and treating other similarly placed persons differently, to the detriment of the petitioners, as such the action complained of is in breach of Article 14 of the Constitution of India.

6. The another ground of challenge relates to the breach of principles of natural justice. This ground of challenge, if upheld, can alone decide the fate of this petition, as such, we propose to deal with this challenge first. If necessary, we may consider other grounds of challenge at the later stage of the Judgment.

7. The learned Counsel for the petitioners in order to demonstrate breach of the rules of principles of natural justice, relied upon the averments made in paragraph 1 of the petition; wherein the petitioners have stated that during the course of hearing of the show cause notice, the 1st respondent had expressed himself to be satisfied with the initial submissions made and did not desire to hear the petitioners further. With the result, the 1st respondent did not hear any further arguments on behalf of the petitioners, though the petitioners had number of submissions to make.

8. The above fact is sought to be substantiated on the basis of the letter dated 21st September, 1987 addressed to the then Deputy Chief Controller of Imports and Exports, the respondent No. 1; who had heard the petitioners. This letter is not in dispute. The contents thereof do make a specific reference to this particular fact stated by the petitioners, though the averment made in the petition in this behalf have been denied by the respondents in their counter affidavit.

9. In order to find the strength of this submission, one has to turn to the impugned order, wherein; intrinsic clinching evidence is to be found to support the contention of the petitioners in this behalf. It is mentioned in the impugned order (paragraph 12) that personal hearing was fixed on 12th May, 1987. Accordingly, the matter was heard. Paragraph 13 of the impugned order further makes it clear that the respondent No. 1 vide its D. O. letter dated 12-5-1987, had requested the DGTD to clarify whether registration of the unit of the petitioners with them for availing OGL facility had the effect of superseding the condition; providing for necessity of taking prior permission incorporated m the letter dated 28-6-1980, or that the "sanitary protection products" came to be included in the registration through an oversight. The DGTD vide its letter dated 11/15-9-1987 replied that certificate of registration for availing of OGL facilities did not supersede the condition of Industrial licence/permission, as such the import of raw material under OGL was illegal.

10. The respondent No. 1 relying on the aforesaid clarification-cum-reply furnished by the DGTD passed an impugned order without getting any reaction from the petitioners.

11. The aforesaid adverse material; in the form of clarification from DGTD came on the record of the proceedings subsequent to the date of hearing i.e. after 12th May, 1987. This adverse material was never brought to the notice of the petitioners. As a matter of fact, keeping in view the principles of natural justice, it was obligatory on the part of the respondent No. 1 to draw the attention of the petitioners to this letter and invite their views. The adverse report ought to have been brought to the notice of the petitioner, which was obtained by the 1st respondent behind the back of the petitioners, that too after the hearing was completed. In a quasi judicial proceedings, non supply of the adverse material to the affected person, but supply thereof to the authority taking decision against him on that basis; constitutes violation of rules of natural justice as held by the Apex Court in Union of India and Ors. v. Mohd. Ramzan Khan, .

12. In order to confirm natural justice, the decision maker must not act on the material coming on record subsequent to the stage of hearing or after oral hearing, which the other side has not seen and had no chance to comment on it. It is a elementary rule of principles of natural justice, that party must be given a fair opportunity to collect and controvert any relevant material brought forward to his prejudice. It is needless to mention that the breach of principles of natural justice constitutes breach of Article 14 of the Constitution of India as held by the Apex Court in the case of Union of India and Ors. v. Ex Constable Amrik Singh, . Thus, considering the clear breach of principles of natural justice, the impugned order cannot stand to the scrutiny of law and the same needs to be quashed and set aside on this short count.

Since the impugned order is being set aside on the ground of breach of principles natural, we do not think it, necessary to dwell on other various challenges set up in the petition and canvassed in the oral submissions by the learned Counsel for the petitioners.

13. The learned Counsel for the Revenue suggested for remand with direction to provide fresh opportunity of hearing to the petitioners. We do not think remand would be justified in the facts and circumstances of the present case. Even if, the respondent No. 1, were to hear the petitioners afresh and reach to the same conclusion, even then, no such ban can be allowed to be imposed, considering the present liberal import policy of the country permitting free import. Even otherwise remand would be unnecessary taking into account the peculiar fact that the order has not been acted upon almost for a long period of 15 years. The petitioners were allowed to make import, even in those years when the import restrictions existed, though under the interim relief of this Court. We, thus, do not see any reason to remand the matter back to the respondent No. 1 for fresh enquiry and consent hearing afresh, as suggested by Mr. R. V. Desai, Senior Counsel appearing for the Revenue.

14. In the result, the petition is allowed and the impugned order is quashed and set aside. Rule is made absolute in terms of prayer Clause (a), with no order as to costs.