Its My Name Pvt. Ltd. v. Directorate General of Foreign Trade

1. This petition has been filed by the petitioner praying for the following relief:-

2. It is the case of the petitioner that the petitioner was never supplied with the copy of the order placing the petitioner company in the Denied Entities List (DEL). The learned counsel for the petitioner further submits that in any case, the said order having been passed without issuing any Show Cause Notice to the petitioner or granting an opportunity of hearing to the petitioner, is in violation of principle of natural justice.

3. As far as the Show Cause Notice dated 27.06.2019 is concerned, it is the case of the petitioner that the same is completely vague and in spite of repeated request of the petitioner to supply the complete documents giving details of the allegations against the petitioner, the same has not been supplied by the respondent. WP (C) 1045/2020 Page 3

4. On the other hand, the learned counsel for the respondent places reliance on Rule 10 of the Foreign Trade (Regulation) Rules, 1993 (hereinafter referred to as the „Rules‟) to submit that the Director General may cancel any license where the licensee has committed a breach of any of the conditions of the license. He submits that in the present case, the proceedings before the respondent have been initiated on a letter received from the Directorate of Revenue Intelligence, which shows the nature of allegations against the petitioner. He further submits that in terms of Rule 9(2) of the Rules, the Director General can suspend the operation of any license where proceedings of cancellation of such license have been initiated under Rule 10.

5. I have considered the submissions made by the learned counsels for the parties. The Show Cause Notice dated 27.06.2019 merely refers to the letter received from the DRI and records as under:-

6. The Show Cause Notice, therefore, merely states that DRI has informed that the petitioner Firm is “suspected to be misusing the Advance Authorisation”. Details of the allegations against the petitioner have not been given in the Show Cause Notice.

7. As far as the order placing the petitioner on DEL is concerned, the same is stated to have been passed on 26.06.2019, that is even WP (C) 1045/2020 Page 4 prior to the issuance of the Show Cause Notice. In terms of Rule 9(2) of the Rules, the same was clearly premature and not permissible as on that date proceedings of cancellation of the license of the petitioner had not been initiated in accordance with Rule 10 of the Rules.

8. The „Guidelines for maintaining the Denied Entities List (DEL)‟ dated December 31, 2003 (hereinafter referred to as the Guidelines) in Clause C mandates compliance with the principle of natural justice even while suspending the license. It reads as under:-

9. Proviso to Section 9(4) of The Foreign Trade (Development and Regulations) Act, 1992 mandates grant of reasonable opportunity to the licensee of being heard before suspending the license.