D. K. Clearing And Shipping Agency PVT. LTD. vs. Union Of INDIA (Through The Secretary) Ministry Of Law And Justice And Ors.

Held

The Court held that the inordinate delay on the part of the respondents in conducting the regular inquiry, which commenced in 2009 and had seen hardly any steps taken by the respondents to proceed with it, was a significant factor. The Court noted that the petitioner had repeatedly requested documents, which were not produced until July 1, 2021, and no regular dates of hearing were conveyed except once. The Court found that the petitioner was not expected to preserve evidence/record intact for over 11 years due to this inaction. Applying the principles laid down in the case of Bombay Dyeing and Manufacturing Company Limited, the Court held that the inaction of the respondents in not adjudicating the matter for such a long period would cause serious prejudice to the petitioner. The Court rejected the respondents' submission that no prejudice would be caused, stating that allowing the inquiry to proceed at this stage would result in gross injustice. Therefore, the Court quashed the inquiry proceedings. Prayer clauses (a) and (b) of the writ petition were made absolute.

Facts

The petitioner, D. K. Clearing and Shipping Agency Pvt. Ltd., held a Custom House Agent (CHA) License. The respondents alleged illegal sub-letting of this license. Consequently, on May 11, 2009, the operation of the petitioner's license was suspended. On July 2, 2009, the suspension was revoked, but a regular inquiry was ordered under Regulation 22 of the CHALR, 2004. The petitioner was served with a notice to submit a written statement on August 12, 2009. The petitioner repeatedly requested documents from the Inquiry Officer to prepare a reply, but these were not provided. The initial Inquiry Officer was replaced due to administrative reasons. The new Inquiry Officer also failed to provide documents or proceed with the inquiry for several years. The petitioner filed the present writ petition on March 19, 2021, seeking to quash the inquiry proceedings due to inordinate delay.

Key Issues

1. Whether the inordinate delay on the part of the respondents in conducting the regular inquiry, commencing from July 2, 2009, vitiates the proceedings and warrants their quashing, considering the principles of natural justice and the potential prejudice to the petitioner? (Relates to principles of natural justice and procedural fairness). Petitioner's arguments: The petitioner argued that the respondents are solely responsible for the significant delay in conducting the inquiry, which has now spanned over 11 years. They contended that the respondents failed to provide necessary documents despite repeated requests, hindering the petitioner's ability to participate effectively. The petitioner relied on the judgment in Bombay Dyeing and Manufacturing Company Limited v/s. Deputy Commissioner of CGST & CX, Div-IX, Mumbai Central GST Commissioner, where similar prolonged delays led to the quashing of inquiry proceedings. They argued that no purpose would be served by continuing the inquiry after such a long period. Respondents' arguments: The respondents argued that the suspension order was revoked, and the petitioner was not alleging any violation of the principles of natural justice. They claimed that the current Inquiry Officer had granted opportunities and supplied all requisitioned documents. They asserted that no prejudice would be caused to the petitioner if the inquiry were allowed to proceed and that the Inquiry Officer was willing to complete it expeditiously. They also stated there were no allegations of malafides against the Inquiry Officer for the delay.