Ruma Pal, J. - (1.) The facts of this case are not hi dispute. The facts briefly are as follows: On 14th June 1990 the petitioner applied under the Duty Exemption Scheme for an advance licence for Rs. 6,00,90,6257- for import of 16,750 M/T of Pig iron to office of the Joint Chief Controller of Imports and Exports at Calcutta (hereinafter referred to as the Licensing Authority). An undertaking was given that the petitioner would export 15,227.273 M/T of products of the value of at least the value of Rs. 8,52,72,7287-. On 9th October 1990 the petitioner received an Advance Licence No. P/W73259444/C/XX/18/C/90 dt. 9-10-1990 for Rs. 4,64,48,3% (hereinafter referred to as the said Licence) for import of 12,947.288 Metric Tonnes of pig iron (hereinafter referred to as the said goods). Subsequently on 6-12-1990 the licensing Authority enhanced both the quantity and value of the said licence to 16,750 M/T and Rs. 6,00,90,625/- respectively. In the meanwhile on 11th August 1990 the petitioner company entered into a contract with a foreign concern for importation of 12,750 Metric tonnes of pig iron. The petitioner opened letters of credit in favour of the foreign seller. The said goods were shipped. The petitioner paid Rs. 143.42 lakhs as part payment for the said goods. The petitioner has since paid the entire value of the said goods. On 8th January 1991, the Bills of Entry submitted to Customs were duly processed, scrutinised and passed, by Customs Authorities and the value and quantity of the imported pig iron has been debited by the Customs Authorities upon the said Licence and the Duty Exemption Entitlement Certificate Book. On 19th February 1991 the Customs Authorities issued an order for release of the said goods. On 22nd February 1991 the petitioner Company's office received a telex message from the Joint Chief Controller of Imports & Exports New Delhi (Office of the Chief Controller of Imports & Exports New Delhi) stating "You are not to operate Advance Licence No. P/W/3259444 dt. 9th October 1990 for Rs. 6,00,90,625/- till further advice". On 27th February 1991 the said goods arrived at the Haldia Port. The Customs Authorities refused to release the said goods. In this background this writ application was moved by the petitioners challenging the said telex and the refusal of the Customs Authorities to release the said goods. An interim order was passed by this Court inter alia, directing warehousing of the goods in the petitioner's godown under the lock and key of the Customs Authority. In view of the extreme hardship claimed by the petitioner by a reasoned order dt. 7th March 1991 this Court passed further orders allowing removal of sufficient quantity of the said goods necessary for manufacture of cast iron products in terms of the said licence conditions for 3 weeks upon notice to the Joint Chief Controller of Imports & Exports, Calcutta. This order was subsequently modified and further orders have been passed by this Court directing release of raw materials sufficient for manufacturing for further periods. The only question which is to be resolved in this matter is whether the respondents were justified in issuing the said telex restraining the petitioner company from operating the licence. It is conceded by both parties that the law applicable to this case is the Imports (Control) Order, 1955 (hereinafter referred to as the said order). The licence was issued under the Duty Exemption Scheme contained in Chapter XIX of the Import & Export Policy of April 1990 to March 1993. Under the said Scheme import of goods is allowed duty free subject to an undertaking to Export goods manufactured from such duty free import. As and when the duty free goods are imported endorsements are made on the licence and on the Duty Exemption Entitlement Certificate (DEEC). The said order is in so far as it is relevant provides as follows: "8. Power to debar from importing goods or from receiving licences or allotment of imported goods. - (1) The Central Government or the Chief Controller of Imports & Exports or an authorised officer may debar a licensee or importer or any other person from all or any of the following i.e. importing any goods or receiving licences or allotment of the imported goods through the State Trading Corporation of India, the Minerals and Metals Trading Corporation of India, or any other similar agency and direct, without prejudice to any other action that may be taken against him in this behalf, that no licence or allotment of imported goods shall be granted to him and he shall not be permitted to import any goods for a specified period under this Order :- (a) if his application for licence is at any time found to be not in conformity with any provision of this Order; or (b) if such application is found to contain any false, fraudulent or misleading statement; or (c) if he is found to have used in support of his application any document which is false or fabricated or which has been tampered with; or (d) if he has, on any occasion, tampered with an import licence or has imported goods without a licence or has been a party to any corrupt or fraudulent practice in his commercial dealing or in obtaining a licence, or is found to have solicited any licence by offering an inducement to the holder of the licence or otherwise; or (e) if his agent or employee has been a party to any corrupt or fraudulent practice in obtaining any licence on his behalf; or (f) if he fails to comply with or contravenes or attempts to contravene or abets the contravention of any conditions embodied in, or accompanying a licence or an application for a licence; or (g) if he commits a breach of any law (including any rule, order or regulation) relating to customs or the import and export of goods or foreign exchange; or (h) if he fails to produce any documents or information that is called for by the Chief Controller of Imports and Exports or any other licensing authority; or (i) if he fails to submit production returns regularly to the D.G.T.D. or any other sponsoring authority concerned; or (j) if he fails to comply with the distribution control in respect of imported goods where such control is applicable. 8A. Power to suspend importation of goods of grant of licences or allotments of imported goods. - The Central Government or the Chief Controller of Imports & Exports or an authorised officer may suspend the importation of goods by any person or grant of licences or allotment of imported goods through the State Trading Corporation of India, the Minerals and Metals Trading Corporation of India, or any other similar agency, to a licensee or importer or any other person pending investigation into one or more of the allegations mentioned in Clause 8 without prejudice to any other action that may be taken against him in this behalf: Provided that grant of a licence or allotment of imported goods, shall not ordinarily be suspended under the clause for a period exceeding twelve months: Provided further that on the withdrawal of such suspension, a licence or allotment of imported goods may be granted to him for a period of suspension, subject to such conditions, restrictions or limitations as may be decided by the authority aforesaid, keeping in view the foreign exchange position, indigenous production and other relevant factors. 8B Power to keep in abeyance applications for licences or allotments of imported goods. - Where any investigation into any of the allegations mentioned in Clause 8 is pending against licensee or importer or any other person, and the Central Government or the Chief Controller of Imports and Exports or an authorised officer is satisfied that without ascertaining further details in regard to such allegation, the grant of licence or allotment of imported goods will not be in the public interest, then notwithstanding anything contained in this Order, the Central Government or the Chief Controller of Imports and Exports or an authorised officer may keep in abeyance any application for grant of licence from such person, or direct the State Trading Corporation of India, the Minerals and Metals Trading Corporation of India, or any other similar agency to keep in abeyance allotment of imported goods to such person, without assigning any reason and without prejudice to any other action that may be taken in this behalf: Provided that the period for which the grant of such licence or allotment is kept in abeyance under this clause shall not ordinarily exceed six months. 9. Cancellation of licences. - (1) The Central Government or the Chief Controller of Imports and Exports or any other officer authorised in this behalf may cancel any licence granted under this Order or otherwise render it ineffective : (a) if the licence has been granted through inadvertence or mistake or has been obtained by fraud or mis-representation; (b) if the licence has been granted contrary to rules or the provisions of this Order; (c) if the licensee has committed a breach of any of the conditions of a licence; (d) if the Central Government or such officer is satisfied that the licence will not serve the purpose for which it has been granted; (e) If the licensee has committed a breach of any law relating to customs or the rules and regulations relating to the imports or exports of goods or of any law relating to the regulations of foreign exchange. 9(3). The Central Government or the Chief Controller of Imports & Exports or any other officer authorised in this behalf may, by special order in writing render ineffective or suspend the operation of any licence granted under this Order, where proceedings of cancellation of such licence have been initiated under sub-clause (1) so however, every such special order, shall be revoked where a decision is taken to cancel the licence after the completion of such proceedings. 10. Opportunity of being heard to be given. - (1) No action shall be taken under Clause 7 or sub-clause (1) or sub-clause (3) of Clause 8 or Clause 8A or Clause (1) or Clause 9 against a licence or an importer or any other person unless he has been given a reasonable opportunity of being heard." The respondent's. Counsel has contended that specific charges had been made in the affidavit of the respondents 4 to 6 and the petitioner had not chosen to answer the charges in its affidavit in reply. It is further contended that the telex was issued at a pre-investigation stage in exercise of a power ancillary to the powers of suspension/abeyance/cancellation under Clause 8 & 9 of the said order. The respondents have placed reliance on the decision of the Supreme Court in the following cases : (i) Income Tax Officer, Cannanore v. Mohammed Kunhi reported in AIR 1969 SC 430. (ii) Liberty Oil Mills and Ors. v. Union of India.
(2.) In Income Tax Officer, Cannanore v. Mohammed Kunhi reported in AIR 1969 SC 430, the Supreme Court was dealing with the question whether the appellate authority under the Income Tax Act, 1961 had the power to stay recovery proceedings pending the Appeal although there was no such power expressly granted by the statute. The Supreme Court held that there was such power. It is to be noted however that the Supreme Court was considering the exercise of power pending an appeal. The court was not called upon to consider whether the appellate authority had the ancillary powers to issue an order for stay even though there was no 'lis' pending before it.
(3.) The following sentence in the Liberty Oil Mills case has also been relied on by the respondents. "Ordinarily in the absence of anything more, it should not be necessary to give an opportunity to the person concerned before proceeding to take action under Clause 8A or Clause 8B". This sentence has been read out of context. The full passage which has been quoted below would show that the reasoning in Liberty Oil Mills runs counter to the submission of the respondents.;