In Writ Petition No. 12562 of 2023 -AP HC- Suspension of customs broker license without affording adequate opportunity to the Managing Director of M/s. Richmark Shipping & Logistics Pvt. Ltd., a ‘gross violation of principles of natural justice’: Andhra Pradesh High Court
Justice U. Durga Prasad Rao & Justice Venkata Jyothirmai Pratapa [21-06-2023]

Read Order: M/s. Richmark Shipping & Logistics Pvt. Ltd v. The Commissioner of Customs and Ors

Chahat Varma

New Delhi, July 31, 2023: The Andhra Pradesh High Court has ruled that the suspension of the Customs Broker License of M/s. Richmark Shipping & Logistics Pvt. Ltd. (petitioner company) without giving the Managing Director an adequate opportunity to be heard was a serious violation of principles of natural justice. The court emphasized that the ‘audi alteram partem’ principle, which ensures that parties have a fair chance to present their case, must be adhered to in such cases.

Briefly stated, the petitioner company, a Customs Broker, engaged in import and export activities, had a transaction with Noor Al Shawal General Trading LLC for importing 56,000 Kg of dried dates. However, during Customs examination, it was found that the cargo contained both Areca Nuts and Dried Dates, leading to suspicion of mis-declaration by the petitioner company. Consequently, the Customs Authorities in Visakhapatnam seized the goods and summoned the Managing Director of the petitioner company under Section 104 of the Customs Act, 1962, subsequently arresting and remanding him to judicial custody. The Commissioner of Customs issued a suspension order for the petitioner's Customs Broker License under Regulation 16(1) of the Customs Broker Licensing Regulations, 2018. The petitioner company made representations requesting a postponement of the personal hearing due to the Managing Director's judicial remand and the other Directors and the CEO, not being conversant with the procedure and nature of work. Despite the requests, the Commissioner of Customs issued the impugned order, continuing the suspension of the Customs Broker License until the investigation's conclusion.

The bench comprising of Justice U. Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa noted that the Commissioner of Customs issued the suspension order despite being aware that the Managing Director of the petitioner company was in judicial remand. The petitioner made repeated requests for a postponement of the personal hearing, explaining the Managing Director's situation, but these requests were rejected. As a result, the Managing Director was deprived of any opportunity to submit his explanation to the authorities while he was in judicial custody. The bench stated that this action amounted to a gross violation of the principles of natural justice.

Further, the bench referred to the judgment of M/s Radha Krishan Industries v. State of Himachal Pradesh and others [LQ/SC/2021/2724], to highlight that in situations where there are disputed questions of fact, the High Court may choose to decline jurisdiction in a writ petition. However, if the High Court objectively determines that the nature of the controversy necessitates the exercise of its writ jurisdiction, such a view would not be easily interfered with. In the present case, despite the availability of an alternative remedy, the bench opined that the nature of the controversy warranted the consideration of the writ petition.

Thus, the writ petition was disposed of by the bench. The Managing Director of the petitioner company was allowed to submit their written explanation to the notices issued by the Commissioner of Customs within a period of two weeks. After receiving the explanation, the Commissioner of Customs was directed to pass appropriate orders in accordance with the law.