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HIGH COURT OF DELHI
DateofDecision:11th January,2023
M/S. DISCITE PRIVATE LIMITED ..... Petitioner
Through: Mrs. Anjali Jha Manish with Mr. Priyadarshi Manish & Ms. Divya Rastogi, Advocates.
Through: Mr. Asheesh Jain, CGSC with Mr. Gaurav Kumar &
Mr. Vishal Kumar, Advocates with Mr. Mohit Joshi, Govt. Pleader. for respondent No. 1 & 3.
Mr. Satish Kumar, Sr.
Standing Counsel with Mr. Dhruv, Advocate for R-4.
HON'BLE MR. JUSTICE AMIT MAHAJAN VIBHU BAKHRU, J.
JUDGMENT
1. The petitioner has filed the present petition, inter-alia, impugning an action of the respondents suspending the petitioner’s Importer Exporter Code “bearing No. AAGCD26981”.
2. The petitioner states that its Importer Exporter Code (hereafter ‘IEC’) was suspended in violation of Section 8 of the Foreign Trade (Development & Regulation) Act, 1992 (hereafter “the FTDR Act”).
3. It is the petitioner’s case that Section 8 of the FTDR Act requires the Director General of Foreign Trade (hereafter “DGFT”) or any other officer authorized by him to give a notice in writing, informing the concerned importer/exporter that it intends to suspend or cancel his IEC, and the grounds on which such an action is proposed. The concerned importer/exporter is required to be afforded a reasonable opportunity to make a representation in writing before any such action is taken.
4. The petitioner states that DGFT had not issued any show cause notice as required under Section 8 of the FTDR Act. Further, it had not communicated any grounds for proposing to suspend the petitioner’s IEC. The DGFT has also not passed any speaking order for suspending the IEC.
5. DGFT has filed a counter affidavit countering the aforesaid submissions. According to the DGFT, it has issued a show cause notice dated 11.05.2022 and had also issued a reminder dated 06.06.2022, giving full opportunity to the petitioner to show cause as to why its IEC not be cancelled. The petitioner’s IEC was suspended by an order dated 31.08.2022.
6. Section 8 of the FTDR Act is set out below:
7. A plain reading of Section 8 of the FTDR Act indicates that the DGFT or any officer authorised by him can cancel or suspend of the IEC of any person if any of the circumstances as specified in clauses (a), (b) and (c) of Section 8(1) of the FTDR Act exist or any of the conditions set out therein are satisfied. Section 8(1) of FTDR Act makes it mandatory that a show cause notice stating the grounds on which such an action is proposed be issued to the concerned person and he be afforded a reasonable opportunity to be heard before any adverse action is taken.
8. A plain reading of the notice dated 11.05.2022 indicates that it does not conform to the requirement of Section 8 of the FTDR Act. First of all, the said notice does not set out the grounds on which any action is proposed. Secondly, the only action proposed in the said show cause notice is placing the IEC “under DEL”.
9. The order dated 31.08.2022 is also a non-speaking order. It does not indicate any ground for suspending the petitioner’s IEC; It merely mentions that there is a violation of Section 8 of the FTDR Act.
10. In view of the above, we find merit in the contention that the petitioner’s IEC has been suspended without following the procedure as required under Section 8 of the FTDR Act.
11. Learned counsel for the DGFT states that after the petitioner’s IEC has been suspended, DGFT had issued show cause notice dated 15.11.2022, clearly setting out the grounds on which actions were proposed against the petitioner.
12. A perusal of the said notice indicates that certain grounds for taking action against the petitioner have been set out. In terms of the said show cause notice, the petitioner has been called upon to show cause as to why penal action should not be taken against the petitioner under Section 13 & 14 for violation of Section 8 and 11 of the FTDR Act.
13. Mr Jain, learned counsel for the respondents, states that the said show cause notice may also be considered as a show cause notice under Section 8 of the FTDR Act.
14. In view of the above, this Court considers it apposite to set aside the order dated 31.08.2022 and direct that the petitioner’s IEC be restored forthwith.
15. The petitioner shall treat the show cause notice dated 15.11.2022 as also a show cause notice under Section 8 of the FTDR Act calling upon the petitioner to show cause as to why its IEC may not be suspended or cancelled on the ground as set out in the said show cause notice. This would be in addition to other penal action as proposed in the said notice.
16. The petitioner is at liberty to respond to the said show cause notice within a period of two weeks from today. All rights and contentions of the petitioner in this regard are reserved.
17. The respondents shall consider the petitioner’s response and pass a speaking order within a period of four weeks thereafter.
18. The petition is allowed in the aforesaid terms.
19. All the pending applications stand disposed of.
VIBHU BAKHRU, J AMIT MAHAJAN, J JANUARY 11, 2023 “SK”