ORDER
S.L. Peeran, Member (J)
1. By this appeal the Customs House Agent has challenged the order of suspension of operation of Customs House Agents Licence under the provisions of Regulator 21(2) of Customs House Agents Licensing Regulations, 1984. The ground made out by the appellant is that there was no ground to place the appellant under suspension for taking any immediate action. It is submitted that the offence is in the nature of minor one which does not come within the ambit of Reg. 21(2) of the Customs House Agents Licensing Regulations, 1984. It is submitted that the Reg. 23 lays down the procedure of issue of show cause notice and calling for explanation before proceeding to suspend the Customs House Agent Licence. It is stated that the offence is that the appellant has alleged to being allowed a person by name Naveen who is not their employee to file the documents for clearance purposes, it is stated that the appellant did not indulge in any offence of serious nature or of a grave lapse of diversion or misuse of funds, forgery or any prohibited goods in violation of the procedure calling for a stern action to put the appellant under suspension with immediate effect. It is stated that such an action of placing the appellant under suspension by resorting to Regulation 21(2) has caused serious hardship to the appellant and it is violative of principles of natural justice. It is stated that Regulation 23 ought to have been first resorted to and only in the rarest case 21(2) is required to be invoked, that is, in appropriate cases where immediate action is necessary and where an enquiry on such agent is pending or contemplated. Although the impugned order does narrate the facts and circumstances of one Naveen having been entrusted with papers for the purpose of clearing the goods but that does not call for such a severe action of suspending the licence. Furthermore, the agent has already executed a bank guarantee of Rs. 2 lakhs and has deposited an amount of Rs. 50,000 as security. Therefore, in the light of the Calcutta High Court judgment rendered in the case of N.C. Singha v. UOI and that of Madras High Court rendered in the case of East West Freight Carriers (P) Ltd. v. CC, Chennai which have been followed in the case of Ms. Hexagon Shipping Services v. CC, Chennai by this Bench by Final Order No. 591/2002 dated 21.5.2002, the impugned order is required to be set aside and appeal to be allowed.
2. Ld. SDR reiterated the departmental contention and justified the action taken on the basis of the reasons given by the Commissioner in the impugned Order.
3. We have carefully considered the submissions and have noted the judgments referred to by the Ld. Counsel. The finding recorded by this Bench in the case of M/s. Hexagon Shipping Services v. CC, Chennai in Final Order No. 591/2002 dated 21.5.2002 in para 7 to 9 are reproduced:
7. On a careful consideration of the submissions, we are of the considered opinion that the Commissioner’s power to invoke Regulation 21(2) of CHALR’ 84 on the appellant’s licence cannot be challenged. The said regulation is specific in granting such a power to the Commissioner in appropriate cases to invoke Regulation 21(1) of CHALR’84. However, the reasons and circumstances requiring them for invoking immediate suspension has to be brought out in the order and should be spelt out as to why the Commissioner is invoking Regulation 21(2) and proceeding to suspend CHA licence without issue of SCN and the procedure contemplated under Regulation 23. Unless this is stated and brought out and shown the necessity to invoke Regulation 21(2) and justifiable reasons, the action of suspension cannot be upheld as has been laid down by the Hon’ble Delhi High Court in the case of Rajinder Kumar Goyalv. CC, (supra). The Hon’ble High Court noted that when the suspension order is issued after period of one and half years, such suspension cannot be considered to be falling within the ambit of Regulation 21(2) to be considered as “immediate action”. The Hon’ble Madras High Court in the case of East West Freight Carriers (P) Ltd. v. CC, Madras (supra) in paras 7 to 10 have laid down as follows:
7. I have considered the submissions made by the learned counsel for the parties. The power of the Collector to take action under Regulation 21(1) is not questioned in the writ petition. It cannot also be disputed that under Regulation 21(2) the Collector has the power to suspend the licence of a Customs House Agent when enquiry against such agent is pending or contemplated where immediate action is necessary.
8. In my opinion the power to suspend the licence is to be exercised where immediate action is necessary. A plain reading of the impugned order does not show that the Collector applied his mind to consider whether immediate action was necessary in the case. The order also does not state that the licence was suspended because immediate action was necessary. I do not express here one way or the other as to whether on the facts of the case immediate action was necessary or was not necessary because it is for the Collector to take decision in that regard
9. In the absence of any indication that there was application of mind by the Collector on the aspect as to whether immediate action was necessary. In my opinion, the impugned order cannot be sustained. The Collector gets jurisdiction to suspend the licence in cases where immediate action is necessary. In this view I consider it just and appropriate to pass the following order:
The writ petitions allowed and the impugned order dated 26.9.1994 issued by the respondent quashed. It is open to the respondent if so desired to exercise the power under Section 21(2) and pass appropriate orders.
10. The learned counsel for the applicant in the contempt application states that the contempt application may be dismissed as not pressed. Accordingly it is dismissed as not pressed.
8, On the reading of the above order, it is clear that the power to suspend the licence has to be exercised where immediate action is necessary, As the said reason had not been resorted to, the Hon’ble High Court set aside such an order. We have passed a similar order recently in the case of Sri Sundaraganesh Freights Pvt. Ltd. v. CC, Chennai by Final Order No. 499/2002 dated 24.4.2002. As the Commissioner of Customs had not passed a speaking order in terms of sub-regulation (2) of Regulation 21 of CHALR’84, therefore, the order was set aside giving direction to the Commissioner to reconsider whether the suspension order of licence should continue or not.
9. We have noticed that this bench in the case of KPS & Co. v. CC, Madras noted that order suspending the CHA licence under Regulation 21(2) of CHALR’84 did not bring out as to what acts the clerk of the previous CHA performed which show that the appellant CHA was negligent in performing his duties nor the need for immediate action by way of suspension of licence. In the present case, very forcible arguments were advanced by Ld. Counsel and Consultant that the cause of action took place as far
back as on 31.7.2002 when the bill of entry was filed for clearances. Appellants had filed modified bill of entry which was done vide bill of entry No. 22484 dated 31.7.2002. The suspension order has been passed on 30.3.2002. The offence had been committed much earlier and the suspension order has not been issued immediately bringing out the reasons as to why immediate action of suspension is required to be done. By resorting to Regulation 21(2) CHALR’84 and not proceeding to call for issue of SCN, the Commissioner has only brought out the facts in the impugned order but has not given the reasons as to why he is putting the appellant under suspension with immediate effect. Without resorting to Regulation 23, the order in the light of all the judgments cited cannot be applied and requires to be set aside which we order accordingly. However, the Commissioner is at liberty to proceed afresh in the matter by following the principles of natural justice and procedure laid down under CHALR’ 1984, Appeal is allowed on the above terms.
4. We notice that the Regulation 21(2) empowers the Commissioner in any appropriate case where immediate action is necessary as to suspend the licence of CHA where an enquiry on such agents is pending or contemplated. In the case of N.C. Singha & Sons (supra), the Hon’ble Calcutta High Court noted that:
A perusal of the order dated 9th June, 1998 passed by the respondents No. 2 clearly suggests that the power under Regulation 21(2) was resorted to apparently without spelling out in the impugned order as to whether any immediate action was necessary so as to suspend the licence of the appellants with immediate effect. Undoubtedly a plan reading of the Regulation 21(2) clearly stipulates that the requirement to take immediate action is a sine qua non to the suspension of a licence under Regulation 21(2) because such suspension is not by way of any punishment, as is contemplated by Regulation 21(2), but is required to cater to a situation warranting immediate action. The purpose of resorting to immediate suspension of a licence because of some immediate action is to immediately stop the activities of the clearing agent so as to disable him from taking any further action in the matter since, under a particular situation and under some given set of circumstances, the requirement of immediate action may demand that the clearing agent may be immediately required to be prevented from working any further, The minimum that is required by the Commissioner to enable him to exercise such power is the spelling out of the circumstances in the order warranting the need to take such immediate action and to actually say that immediate action is indeed required in the matter. What we see from the impugned order dated 9th June 1998 is that the expression “immediate action” itself is missing. That apart, what we find from the preamble, recitals and facts stated in the order is that the circumstances did not warrant the taking of immediate action in terms of Regulation 21(2) of the 1984 Regulation.
5. As can be seen from the above judgment, the High Court has noticed that there was no reasons spelt out by the Commissioner while suspending the CHA licence and hence on that ground alone the order was set aside. Likewise, the Madras High Court in the case of East West Freight Carriers (supra) noticed that there was no reasons were given and also in the absence of such a mention as to why an immediate action is taken. The order of suspension without issue of show cause notice is not sustainable. Like the Delhi High Court in the case of Rajinder Kumar Goyal v. CC set aside the order of suspension as the said order was passed after a period of one-and-half years of the alleged illegality and the same cannot be considered as falling within the terms of “immediate action for suspension of licence” in terms of Regulation 21(2) of Customs House Agents Licensing Regulations, 1984 on the basis of this reasoning similar orders have been passed wherein the Commissioner had not spelt out any reasons for putting the CHA agent for suspension were immediate action was necessary against the agent. In the present case, in the impugned order in para 2 to 5 the Commissioner has delineated the entire facts of the case and has explained as to why the agent is required to be put in suspension and also has satisfied himself about the instance of prima facie case warranting immediate stern action under the provisions of Customs House Agents Licensing Regulations, 1984.
6. In the light of the ratio of the judgments cited above we are required to see as to whether the Commissioner was justified and had reasons to put the appellant under suspension in terms of provisions of the Regulation 21(2). In all the judgments the only ground for setting aside the order was that the suspension order did not spell out the facts to take immediate action of suspension of the licence were an enquiry against such agent is pending or contemplated. In the present case, we are not faced with a question as to whether the action of suspension is justified or not in the terms of the facts. Counsel conceded that there was a violation but was trying to say that the offence is not a serious one calling for Regulation 21(2). The Rule 21(2) does not contemplate situation of serious offence or minor one but it empowers the Commissioner in appropriate cases where immediate action is necessary to suspend the licence where an enquiry against such agent is pending or contemplated. In the present case action has been taken immediately and the counsel conceded the point that there was no justification in the issue of order and also without detail reasons said out. The counsel’s only argument that the terms of appropriate cases refer to serious offence and not in minor cases where there is only violation of Rule inasmuch as the appellant had entrusted the papers to a person that he is not their employee. On a careful consideration, we notice that Regulation 21(2) does not lay down or specify the type of offence which requires suspension. This discretion of the Commissioner but in appropriate cases can come to a conclusion about immediate action of suspension of the licence of CHA to be resorted to where an enquiry on such agent is pending or contemplated. The Commissioner from the extracted portion of the order spelt all the facts and has also noted that there is prima facie case warranting immediate stern action pending investigation and finalisation in the matter. Therefore, the ratio laid down is justified in the present case and we are required to uphold the order. However, as the appellant are put to inconvenience by suspending the licence the Tribunal can only give direction to the Commissioner to expedite the enquiry and finalise the proceedings as expeditiously as possible as any delay in the proceedings may cause under hardship if appellant is found to be innocent or minor penalty is required to be inflicted. In the interest of justice, therefore, while up holding the order of suspension, however, in the interest of justice, we give direction to expedite the investigation and complete the proceedings within a period of 3 months from the date of receipt of this order and grant post-suspension hearing in terms of ratio of Larger Bench of Tribunal. Ordered accordingly.