J.Felix Climant v. The Chairman, Central Board of Excise and Customs, New Delhi.2.The Commissioner

J.Felix Climant.. Petitioner in WP.1784/09C.Mohanarangam.. Petitioner in WP.1785/09T.Raman.. Petitioner in WP.1786/09G.Saravanan.. Petitioner in WP.1787/09C.Sathyanarayanan.. Petitioner in WP.1788/09A.M.Tharun Kumar.. Petitioner in WP.2085/09A.Prabhakaran.. Petitioner in WP.2086/09P.Selvakumar.. Petitioner in WP.2087/09vs.1.The Chairman, Central Board of Excise and Customs, New Delhi.2.The Commissioner of Customs, Custom House, No.60, Rajaji Salai, Chennai – 1.3.The Assistant Commissioner of Customs, Custom House Agent Unit, Custom House, No.60, Rajaji Salai, Chennai – 1... Respondents in W.Ps. 707 to 716 , 336 to 350, 1772 to 1788, 2085 to 2087/09The Commissioner of Customs(Port) Imports, Custom House,No.60, Rajaji Salai, Chennai- 600 001... Respondents in W.Ps. 779, 780, 884/09Writ petitions filed under Article 226 of the Constitution ofIndia, praying for the issue of a Writ of Certiorarified Mandamus,calling for the records of the first and the second respondentsregarding the Public Notification 140/2008 dated 31.12.2008 pursuantto the framing of the Regulations 9(1) of the Customs House AgentLicensing Regulations, 2004, quash the Regulation 9(1) giving riseto the Public Notification No.140/2008 dated 31.12.2008 andconsequently direct the respondents to treat the persons who passedthe qualifying examinations held under Regulation-9 of the CustomsHouse Agent, Licensing Regulation 1984, on par with the persons whohad passed the Qualifying Examination under Rule 8 of the CustomsHouse Licensing Regulation, 2004, in so far as the petitioner isconcerned. (in W.P.Nos. 707 to 716, 336 to 350, 1772 to 1788, 2085to 2087/09To issue a writ of certiorarified mandamus calling for therecords of the Respondent issued from T.No.S.Misc/20/2007-CHA,videPublic Notice No.140/2008 dated 31.12.2008 quash the same andfurther direct the Respondent to accept the candidature/applicationof the petitioner for grant of licence under Regulation 9(1)CHALR,2004, so as to act as Custom House Agent. WPs.779,780 &844/09) https://hcservices.ecourts.gov.in/hcservices/ For Petitioner in all WPs : Mr.R.Yashod Vardhan, learned Senior Counsel and M/s.P.Saravanan, B.Satish Sundar and A.K.Jayaraj.For Customs and CentralExcise Department in all WPs : Mr.K.Ravi Anantha Padmanaban, and Mr.P.Mahevan, Standing Counsel.C O M M ON O R D E RThe petitioners have come up with the present writ petitions,challenging a notification inviting applications for the grant oflicences to act as Customs House Agents, under a new set ofregulations issued in the year 2004.2. I have heard Mr.R.Yashod Vardhan, learned Senior Counsel andM/s.P.Saravanan, B.Satish Sundar and A.K.Jayaraj, learned counselappearing for the petitioners and Mr.P.Mahadevan and Mr.K.RaviAnantha Padmanaban, learned Standing Counsel appearing for theCustoms and Central Excise Department. 3. In exercise of the powers conferred by sub section (2) ofSection 146 of the Customs Act, 1962, the Central Board of Exciseand Customs, issued a set of Regulations called "Customs HouseAgents Licensing Regulations 1984". The scheme of these Regulations,was as follows:-(a) Under Regulation-4, the Commissioner was empowered toinvite applications for the grant of such number of licences, asassessed by him to act as Customs House Agents in the month ofJanuary every year. This invitation should be by means of a noticeaffixed on the Notice Board of each Customs Station as well asthrough publication in at least two newspapers having circulation inthe area of his jurisdiction. The application should be forclearance work within the jurisdiction of the Commissioner.(b) Under Regulation-5, an application for licence should bemade in Form-A and should contain the details prescribed therein.(c) Regulation-6 prescribed the conditions to be fulfilled bythe applicants. As per this Regulation, an applicant should -(i) be a graduate from a recognised University;(ii) be an employee of a licensee;(iii) possess a permanent pass in Form-G prescribed underRegulation-20 (subject to the Commissioner's power to relax thiscondition);(iv) have experience of work relating to clearance of goodsthrough Customs for a period of not less than 3 years in thecapacity of a pass holder; and(v) have financial viability supported by a Certificate from aScheduled Bank or such other acceptable proof evidencing possessionof assets of the value of not less than Rs.1 lakh in respect ofcertain Customs Stations and not less than Rs.50,000/- in respect ofthe other stations. https://hcservices.ecourts.gov.in/hcservices/ (d) Regulation-8 entitled an applicant whose application wasreceived within the time stipulated in the notice under Regulation-4and who satisfied the requirements of Regulations-5 and 6, tooperate as Customs House Agent initially for a period of one yearagainst a temporary licence.(e) Regulation-9(1) stipulated that the holder of a temporarylicence should qualify in an examination conducted by the departmentand that they shall be given only three chances within a period of 2years from the date of issue of temporary licences, to qualify inthe examination. Under Regulation-9(2), the examination was to be awritten and oral examination and was to be conducted twice everyyear. Regulation-9(3) contained a list of about 16 subjects on whichquestions might be asked in the examination. (f) Regulation-10 empowered the Commissioner to grant a regularlicence in Form-D to the holder of a temporary licence who qualifiedin the examination referred to in Regulation-9 and whose performancein relation to (i) the quality/value of cargo cleared and (ii) theabsence of delay either in the clearance of goods or in the paymentof duty, was found to be satisfactory.(g) Regulation-11 dealt with the execution of a bond.(h) Regulation-12 declared that the regular licences grantedunder Regulation-10 would be valid for 5 years and renewable fromtime to time. This Regulation also provided the procedure forrenewal of the regular licence.(i) Regulation-13 declared that the licence was nottransferrable.(j) Regulation-14 listed out the obligations of a Customs HouseAgent. Regulations 15 to 17, dealt with the change in theConstitution of the licensee if the licensee happened to be aCompany, Firm or concern. (k) Regulation-18 enabled a person who qualified in theexamination, to engage himself in the work of clearance of goodsthrough Customs on behalf of a licensee. (l) Regulation-19 imposed an obligation upon the licensee tomaintain accounts and Regulation-20 enabled a licensee to employpersons to assist him.(m) Regulation-21 dealt with suspension or revocation oflicence and Regulation-22 empowered the Commissioner to prohibit anagent from working in one or more sections of the Customs Stations.Regulation-23 provided the procedure for suspending or revoking alicence.(n) Regulations-24 and 25 dealt with accommodation andclearance charges.(o) Regulation-26 repealed the 1965 Regulations, but at thesame time, saved the acts done in pursuance of the 1965 Regulations.4. The petitioners in all these writ petitions are engaged inthe work of clearance of goods through Customs. All the petitionershave also cleared the qualifying examination prescribed underRegulation-9 long ago. But unfortunately, the Commissionerates inTamil Nadu did not invite applications for the grant of licencesunder Regulation-4, nor did they issue temporary licences underRegulation-8, in the past nearly two decades. Therefore, despitegetting qualified several years ago in the examination stipulated in https://hcservices.ecourts.gov.in/hcservices/ Regulation-9, the petitioners have not got either temporary licencesor regular licences.5. Whileso, the Central Board of Excise and Customs, issued anew set of Regulations, in the year 2004, called Customs HouseAgents Licensing Regulations, 2004, in supersession of the 1984Regulations. The broad scheme of these Regulations, is as follows:-(a) Regulation-3 prohibits a person from carrying on businessas a Customs House Agent, unless he holds a licence under theRegulations. (b) Regulations-4 and 5 are the same as Regulations-4 and 5 ofthe 1984 Regulations.(c) Regulation-6 prescribes the following conditions for thegrant of licence viz.,:-(i) that the applicant should have passed the examinationreferred to in Regulation-8.(ii) that the applicant should be a graduate from a recognisedUniversity and possess a professional degree as CA/MBA/LLB/Diplomain Customs Clearance Work with a working knowledge of computers andCustoms procedures or a graduate with 3 years of experience intransacting work as Customs House Agents as a G-Card Holder or aperson who has passed the examination referred to in Regulation-8 ora retired Group-A Officer of the Indian Customs and Central ExciseServices, having a minimum of 10 years experience in Group-A;(iii) that the applicant has financial viability for possessingassets of the value of not less than Rs.2 lakhs and is a citizen ofIndia;(d) Regulation-8 deals with the conduct of examination, bothwritten and oral, for becoming eligible for the grant of licence.(e) Regulation-8(6) lists out about 18 subjects in whichquestions may be asked in the examination.(f) Regulation-9 deals with the grant of licence andRegulation-10 deals with the execution of bond and furnishing ofsecurity.(g) Regulation-11 prescribes the validity period of licence as10 years, renewable thereafter.(h) Regulation-12 makes the licence non-transferrable andRegulation-13 deals with the obligations of the agent.(i) Regulations-14 to 16 deal with the change in theConstitution.(j) Regulation-17 permits a person who has qualified in theexamination to engage himself in the work relating to clearance ofgoods.(k) Regulation-18 deals with maintenance and inspection ofgoods and Regulation-19 deals with employment of persons.(l) Regulation-20 deals with suspension and revocation oflicence and Regulation-21 deals with the power of the Commissionerto prohibit an agent from working in any section.(m) Regulation-22 deals with the procedure for suspending orrevoking the licence.(n) Regulation-23 speaks about accommodation.6. After the issue of the new set of Regulations in 2004,clarifications were sought from the Central Board of Excise andCustoms, by the Commissionerates, regarding various issues. By a https://hcservices.ecourts.gov.in/hcservices/ Circular No.42/2004, dated 10.6.2004, the Central Board issuedclarifications on all the issues, one of which is relevant for ourpresent purpose. It is as follows:-Question:-Can persons who havequalified in the exam underRegulation-9 of CHALR 1984 beexempted from appearing in theexam referred to in Regulation-8of CHALR 2004 and be grantedlicence under Regulation-9(1) ofCHALR 2004 directly?Answer:- No. Those who have notbeen granted licence under CHALR1984 till 23.2.2004 lose theirright. They have to meet thequalifications and pass theexaminations under Regulation-8of CHALR 2004.7. Following the issue of the Regulations of 2004 and the issueof the aforesaid clarifications, the Commissioner of Customs issueda public notice bearing No.140/2008 dated 31.12.2008, which isimpugned in the present batch of writ petitions, invitingapplications for the grant of licences under Regulation-9(1) of the2004 Regulations. It is this public notice that triggered the batchof writ petitions on hand, since the petitioners who had alreadypassed the qualifying examination as per Regulation-9 of the 1984Regulations, suddenly found themselves forced to write thequalifying examination under the new Regulations and compete withnew hands for the grant of licences. 8. The primary contention of the petitioners is that afterhaving passed the qualifying examination in terms of Regulation-9 ofthe 1984 Regulations, the petitioners have been waiting for nearlytwo decades to apply for the grant of a licence. TheCommissionerates in Tamil Nadu did not invite applications in termsof Regulation-4 of 1984 Regulations, for more than a decade. All thepetitioners are engaged in the work of clearance of goods throughCustoms for several years in the hope that applications would beinvited one day for the grant of licences to act as Customs HouseAgents. All their hopes were shattered with the issue of newRegulations in 2004 and the public notice issued in 2008, invitingapplications.9. The petitioners rely upon the decision of a learned Judge ofthe Delhi High Court in Sunil Kohli vs. Union of India {2006 (195)ELT 15}, in which the learned Judge held that the new Regulationsdid not negate the actions taken under the previous Regulations andissued directions to the department to grant licences to thosequalified under the old Regulations. The petitioners also rely uponan unreported decision of a Division Bench of the Punjab and HaryanaHigh Court, in Madusudan Komra vs. Union of India, where the learnedJudges followed the decision of the single Judge of the Delhi HighCourt. The petitioners point out that even the Andhra Pradesh HighCourt has issued an interim direction in an identical matter,directing the grant of licences to persons who had passed thequalifying examination under the old Regulations. 10. Mr.R.Yashod Vardhan, learned Senior Counsel submitted thatthe petitioners had acquired a right, even if inchoate, by virtue ofthe old Regulations and that therefore the new Regulations cannot https://hcservices.ecourts.gov.in/hcservices/ take away the same, in view of Section 6 of the General Clauses Act.In support of this contention, the learned Senior Counsel reliedupon the decision of the Supreme Court in Glaxo Smith Kline vs.Controller of Patents and Designs {2008 (4) R.A.J. 284}. The learnedSenior Counsel also produced the text of the judgment of the Courtof Appeal in Chief Adjudication Officer vs. Maguire {1999 (2) AllE.R. 859}, which was quoted with approval by the Apex Court in theabove decision. 11. Mr.K.Ravi Anantha Padmanaban, learned Standing Counsel forthe Department, submitted that the decision of the Delhi High Courtwhich was followed by the High Court of Punjab and Haryana, aroseout of a challenge to the new set of Regulations, by persons whoapplied in response to notices issued under Regulation-4 of the oldRegulations, but on whose applications no decision was taken by therespective Commissionerates. Therefore, the learned Standing Counselsubmitted that the petitioners in the present batch of cases, cannotclaim similar benefits, since the respondents never issued anynotice inviting applications under the old Regulations. Hence noright was created in favour of the petitioners. The learned StandingCounsel relied upon the decision of the Supreme Court in State ofJharkhand vs. Ambay Cements {2004 (178) E.L.T. 55}, for theproposition that the mandatory rules have to be strictly observedand that no exemption can be granted overlooking statutory rules. 12. I have carefully considered the rival submissions.Admittedly, the 1984 Regulations under which the petitioners gotqualified, were issued, by repealing the 1965 Regulations. While the1984 Regulations were holding the field, the Government constituteda High Power Committee on Reduction of Transaction Costs of IndianExports to suggest measures for the reduction of Transaction Costs.It was followed by another Committee known as Kelkar Committee onIndirect Taxes, which suggested measures for simplifying the processand procedures for the grant of Customs House Agents Licences. Inimplementation of the recommendations of these two Committees, theCentral Board of Customs and Excise issued the Regulations of 2004and they came into effect on 23.2.2004. Any misgiving that thepetitioners might have had about the impact of these 2004Regulations, on their prospects of getting a licence on the basis ofthe acquisition of qualifications under the old Regulations, shouldhave got dispelled with the issue of a letter of clarification dated10.6.2004 by the Central Board, under Circular No.42/2004. Thereforethe petitioners should have, in the normal circumstances, soughtredressal immediately after the issue of the clarificatory circulardated 10.6.2004. But unfortunately, the petitioners have waited tillthe issue of a public notice dated 31.12.2008, inviting applicationsfor the grant of licences, to come to Court. Therefore thepetitioners are actually guilty of delay and laches. However I donot wish to non-suit them on this score. 13. As a matter of fact, a person by name G.Saravanan, who hadalso passed the qualifying examination under the old Regulations of1984, challenged the clarificatory Circular No.42/2004, dated10.6.2004, by way of a writ petition in W.P.(MD) No.10388 of 2005before the Madurai Bench of this Court. Justice K.Chandru, dismissed https://hcservices.ecourts.gov.in/hcservices/ the writ petition by an order dated 15.6.2007, upholding theCircular. An appeal was filed against the said order in W.A.(MD)No.442 of 2007. The writ appeal was disposed of by the DivisionBench by an order dated 11.8.2008, merely giving liberty to thepetitioner therein to apply for a licence and directing therespondents to consider the case of the petitioner in accordancewith law. The Division Bench did not say that the application of thepetitioner therein should be considered in accordance with 1984Regulations. 14. The petitioners assail the new 2004 Regulations and thepublic notice dated 31.12.2008, mainly on the ground that by passingthe qualifying examination under the 1984 Regulations and waiting inthe wings for the past more than a decade for the grant of licences,they had acquired a right, which cannot be taken away without dueprocess. The petitioners claim that they had the legitimateexpectation of getting licences and that the same has been belied.Since the syllabus for the examination under both the Regulations isone and the same except an addition of two subjects and also sincethe preamble to the new Regulations, saves even actions omitted tobe taken, the petitioners claim that they are entitled to beconsidered for the grant of licences even under the new Regulationswithout being forced to write the examinations all over again. 15. At the outset, I am unable to accept the contention thatthe petitioners had acquired either a vested right or even an"inchoate right", as contended by Mr.R.Yashod Vardhan, learnedSenior Counsel. As seen from the scheme of the 1984 Regulations,which I have elicited earlier, the grant of a regular licence,comprised of the following steps:-(i) Invitation by the Commissioner, of applications for thegrant of such number of licences, in the month of January everyyear, under Regulation-4.(ii) Submission of applications in Form-A under Regulation-5.(iii) Scrutiny of applications under Regulation-7 withreference to the qualifications prescribed under Regulation-6.(iv) The grant of temporary licence for one year in Form-B,under Regulation-8(1).(v) Appearing for a written and oral examination underRegulation-9 and getting qualified in the examination and(vi) Submission of an application in Form-C, for the grant ofregular licence in Form-D, under Regulation-10, by the holders oftemporary licences, who qualify in the examination referred to inRegulation-9.16. Thus, the process for the grant of a regular licence underthe 1984 Regulations, was a bit tedious. To get a regular licenceunder Regulation-10 of the old Regulations, a person must be theholder of a temporary licence and must have passed the qualifyingexamination. It is only the holders of temporary licences, who wererequired under Regulation-9(1) of the 1984 Regulations, to qualifyin the examination. 17. Admittedly, the petitioners were never granted temporarylicences. Therefore it is not known as to how they were permitted to https://hcservices.ecourts.gov.in/hcservices/ take the qualifying examination. Perhaps, the petitioners werepermitted to take the qualifying examination on the basis that theywere engaged in the work of clearance of goods through Customs onbehalf of a firm or a Company, holding a temporary licence. Thus,out of the several stages to be crossed under the 1984 Regulationsfor the grant of a regular licence, starting from Regulation-4 uptoRegulation-10, the petitioners had crossed only one stage, namelythat of passing the qualifying examination. They had no occasion tocross the other stages, such as calling for applications(Regulation-4), submission of applications (Regulation-5), scrutinyof applications (Regulation-7) and grant of temporary licence(Regulation-8). Therefore, it is extremely difficult to accept thecontention that the petitioners acquired any right either inchoateor vested. 18. Similarly, it is also pretty difficult to accept the claimthat the petitioners had a legitimate expectation that they would beissued with licences under the old Regulations. Even in a case wherean amendment to the Service Rules was issued, half way through aprocess of selection to the post of Inspectors in the Department ofWeights and Measures in the State of Madhya Pradesh, the SupremeCourt held in State of M.P. vs. Raghuveer Singh Yadav {1994 (6) SCC151} that the legitimate expectation of candidates who had appliedand succeeded in the written examination, was confined only to aconsideration under the unamended Rules and that the Government wasentitled to make final recruitment in accordance with the amendedRules. Similarly, in P.T.R. Exports (Madras) Pvt. Ltd vs. Union ofIndia {1996 (5) SCC 268}, the Apex Court was concerned with theabolition of a particular system of Export Policy known as "Non-quota Exporters Entitlement", and the introduction of the new ExportPolicy on Agreement on Textile and Clothing. The Exporters ofgarments challenged the new policy on the ground that they had madehuge capital investments, on an expectation that they had thebenefit of quota under the Export Policy of the year 1994-1995 andthat such legitimate expectation was blown to pieces. But theSupreme Court rejected the argument on the ground that the doctrineof legitimate expectation had to be angulated on the questionwhether it was revised by a policy in public interest or whether thedecision was based on any abuse of power. 19. Union of India and others vs. International Trading Co.{2003 (5) SCC 437} is also a case where certain permits grantedunder Maritime Laws, for operating deep sea fishing vessels, werenot renewed for several years. The High Court applied the doctrineof legitimate expectation. But the Supreme Court held that thoughrenewal of a permit carries with it, a valuable right, the doctrineof legitimate expectation would have no application when there is achange in policy at the time when the application for renewal istaken up for consideration. It was held therein that a claim basedon mere legitimate expectation, without anything more, cannot ipsofacto give a right and that legitimacy of an expectation can beinferred only if it is founded on the sanction of law. 20. In Bannari Amman Sugars Ltd vs. CTO {2005 (1) SCC 625}, theSupreme Court held that the concept of legitimate expectation is"not the key which unlocks the treasure of natural justice and it https://hcservices.ecourts.gov.in/hcservices/ ought not to unlock the gates which shut the Court out of review onthe merits". Explaining as to how legitimate expectation may arise,the Supreme Court held in the said case that "the expectation mayarise either from a representation or promise made by the authority,including an implied representation or from consistent pastpractice". 21. Therefore, the petitioners herein cannot succeed on theground of legitimate expectation unless they establish that therewas either a representation or promise made by the respondents orthat there was a consistent past practice. In the batch of cases onhand, the petitioners could not even plead that there was either arepresentation or promise made by the respondents at any point oftime. The petitioners could not also establish that there was aconsistent past practice, so as to invoke the doctrine. As a matterof fact, the petitioners have passed the qualifying examinationunder the 1984 Regulations and they have only been waiting for theissue of notifications under Regulation-4, inviting applications forthe grant of licences. Admittedly, the last notification invitingapplications, was issued only in 1998. Regulation-4 of the 1984Regulations requires the Commissioner to issue notificationsinviting applications, in the month of January every year. But theCommissioner did not issue any notification after 1998. Thereforethe only consistent past practice adopted by the respondents, is notto invite applications and not to issue licences. With therespondents, consistently avoiding the issue of licences over thepast more than a decade under the old Regulations, I fail tounderstand how any kind of expectation, much less legitimateexpectation, would have arisen. 22. In Ram Pravesh Singh vs. State of Bihar {2006 (8) SCC 381},the Supreme Court pointed out that "as a ground for relief, theefficacy of the doctrine (of legitimate expectation) is rather weakas its slot is just above fairness in action but far belowpromissory estoppel". It was further held therein as follows:-"Legitimate expectation is not a legalright. It is an expectation of a benefit, reliefor remedy, that may ordinarily flow from apromise or established practice. The term"established practice" refers to a regular,consistent, predictable and certain conduct,process or activity of the decision-makingauthority. The expectation should be legitimate,that is, reasonable, logical and valid. Anyexpectation which is based on sporadic or casualor random acts, or which is unreasonable,illogical or invalid cannot be legitimateexpectation. Not being a right, it is notenforceable as such. It is a concept fashioned bythe Courts for judicial review of administrativeaction. It is procedural in character based onthe requirement of a higher degree of fairness inadministrative action, as a consequence of thepromise made, or practice established. In short,a person can be said to have a "legitimate https://hcservices.ecourts.gov.in/hcservices/ expectation" of a particular treatment, if anyrepresentation or promise is made by anauthority, either expressly or impliedly, or ifthe regular and consistent past practice of theauthority gives room for such expectation in thenormal course."None of the above tests is satisfied in the present batch of cases,so as to apply the doctrine of legitimate expectation. ThoughRegulation-4 of the 1984 Regulations contemplated the issue ofnotifications inviting applications for the grant of licences yearafter year, the respondents had issued such notices onlyoccasionally from 1984 till the issue of new Regulations in 2004.Therefore the conduct of the respondents was not such as to giverise to any expectation, at any point of time from 1984 to 2004. 23. In Ram Pravesh Singh's case, the Supreme Court also pointedout the circumstances sufficient to negate the doctrine. These are(i) public interest, (ii) change in policy, (iii) conduct of theexpectant and (iv) any other valid or bona fide reason given by thedecision maker. In the case on hand, there is a change of policy.This change has been brought forth on the basis of therecommendations of two Committees viz., a High Power Committee onReduction of Transaction Costs of Indian Exports and KelkarCommittee on Indirect Taxes. Therefore there is no scope forinvoking the doctrine to grant any relief to the petitioners.24. In Ashoka Smokeless Coal India (P) Ltd vs. Union of India{2007 (2) SCC 640}, the Supreme Court pointed out that the doctrineof legitimate expectation has been developed in the context of theprinciples of natural justice and that there is a recent trendtowards "doctrine of balancing".25. In Official Liquidator vs. Dayanand {2008 (10) SCC 1}, aThree Member Bench of the Supreme Court pointed out that "at theroot of the principle of legitimate expectation, is theconstitutional principle of rule of law, which requires regularity,predictability and certainty in Government's dealings with thepublic". Applying these yardsticks, it is easy to realise that inthe absence of any notification inviting applications for the grantof licences in the past more than 10 years, the petitioners couldnot have had any expectation, since the issues of regularity,predictability and certainty did not arise at all. 26. In Sunil Kohli vs. Union of India {2006 (195) ELT 15}, thelearned Judge of the Delhi High Court granted relief to personssimilarly situated like the petitioners herein, primarily on thebasis of the doctrine of legitimate expectation. A Division Bench ofthe Punjab and Haryana High Court followed the judgment of the DelhiHigh Court, without going into detail as to how the doctrine wouldapply. Both these High Courts, with great respect to the learnedJudges, have not taken into account the parameters such as (i)promise or representation, either express or implied and/or (ii)consistent past practice, to apply the doctrine. Therefore, I amunable to persuade myself to follow the ratio laid down in theaforesaid cases. https://hcservices.ecourts.gov.in/hcservices/

27. Moreover, in Sunil Kohli's case, a public notice was issuedin June 2003 under the 1984 Regulations, inviting applications forthe grant of licences. The petitioners before the Delhi High Courtapplied for licences in response to that notice. But theapplications were not disposed of for more than 8 months. In themeantime, the new Regulations of the year 2004 came into effect inFebruary 2004 and the Clarificatory Circular was issued in June2004. Therefore the writ petitions were filed in July 2004, afterwhich the Commissioner of Customs issued an order dated 3.3.2005,rejecting the applications for the grant of licences on the groundthat a new set of Regulations had come into force. The learned Judgeof the Delhi High Court took the view that since the petitionersbefore him had cleared all the requirements under the 1984Regulations and also since the respondents failed to take steps toinvite applications for licences on annual basis, the action of therespondents failed to pass the test of reasonableness in terms ofWednesbury principle. 28. But with great respect, the Delhi High Court did not takenote of the tests laid down by the Supreme Court for the applicationof either the doctrine of legitimate expectation or the Wednesburyprinciple of reasonableness. In Rameshwar Prasad vs. Union of India{2006 (2) SCC 1}, the Supreme Court cautioned that Wednesburyprinciple is often misunderstood to mean that any administrativedecision regarded by the Court as unreasonable must be struck down.The Court clarified that the correct understanding of the Wednesburyprinciple is that a decision will be said to be unreasonable if (i)it is based on wholly irrelevant material or wholly irrelevantconsideration or (ii) it has ignored a very relevant material whichshould have been taken into consideration or (iii) it is so absurdthat no sensible person could ever have reached such a decision.None of these parameters was found by the Delhi High Court to be inplace in the case before the Court. Therefore I am unable to toe theline of reasoning adopted by the Delhi High Court.29. As a matter of fact, the Supreme Court held in State ofM.P. vs. Hazarilal {2008 (3) SCC 273}, that today the legalparameters of judicial review have undergone a change and that theWednesbury principle of reasonableness has been replaced by thedoctrine of proportionality. 30. Neither the doctrine of proportionality nor even the"strict scrutiny test" to which there is a shift by the EnglishCourts, can be invoked in the present case, to hold that the actionof the respondents is illegal or arbitrary. The 1984 Regulationscontemplated the grant of licences to persons who satisfied theconditions prescribed thereunder, to act as Customs House Agents.Though Regulation-4 required the Commissioner to invite applicationsyear after year in the month of January, an element of discretionwas conferred upon the Commissioner to determine the number oflicences to be issued every year. This is clear from the first partof Regulation-4 which reads as follows:- "The Commissioner may invite applications forthe grant of such number of licences as assessed by https://hcservices.ecourts.gov.in/hcservices/ him ....."The words "may" and "such number of licences" used in Regulation-4steers clear of any doubt that one may entertain about thediscretion conferred upon the Commissioner. If the Commissioner hadnot invited applications after 1998, till the issue of the newRegulations in 2004 and even thereafter till 31.12.2008, it cannotbe categorized as a failure to perform statutory functions. 31. What was cleared by the petitioners is only a qualifyingexamination and not a competitive examination. A pass in aqualifying examination makes a person eligible for consideration. Ifthere is no occasion for such consideration, on account of theinaction on the part of the administrative authorities, it cannotgive rise to a cause of action. 32. Even now, nothing is really lost for the petitioners. Thepass in the qualifying examination that they had taken under the1984 Regulations, has now become useless. But there is no bar forthem under the 2004 Regulations, if they fulfil the conditions underRegulation-6, to appear for the qualifying examination nowprescribed by the present Regulations. As stated in one of theprevious paragraphs, the examination under the 1984 Regulationsincluded questions on 16 subjects. The examination under the 2004Regulations includes questions on 18 subjects. Apart from the 16subjects that formed part of the syllabus under the old Regulations,two new subjects are included in the new Regulations. They are (i)Provisions of the Prevention of Corruption Act and (ii) On-linefiling of Electronic Shipping Bills or Bills of Entry and IndianCustoms and Central Excise Electronic Commerce/Electronic DataInterchange Gateway and Indian Customs Electronic Data InterchangeSystems. Therefore the contention that the pass in the qualifyingexamination under the 1984 Regulations, should be treated asequivalent to a pass in the examination under the new Regulations,cannot be accepted.33. Heavy reliance is placed by the petitioners (and alsoaccepted by the Delhi High Court) on the preamble to the newRegulations, which reads as follows:-"In exercise of the powers conferred by subsection (2) of Section 146 of The Customs Act, 1962(52 of 1962) and in supersession of the CustomsHouse Agents Licensing Regulations, 1984, except asrespect things done or omitted to be done beforesuch supersession, the Central Board of Excise andCustoms hereby makes the following Regulations"According to the petitioners, all actions done or omitted to bedone, under the 1984 Regulations, are saved by the preamble to the2004 Regulations. Since the failure of the Commissioner to inviteapplications for the grant of licences, year after year, under theold Regulation-4, falls under the category of things "omitted to bedone", the petitioners contend that their rights are saved by thepreamble.34. But the above contention of the petitioners cannot becountenanced. The Regulations of the year 1984 contemplated various https://hcservices.ecourts.gov.in/hcservices/ things to be done by the Commissioners, including invitingapplications for the grant of licences, grant of temporary licences,grant of regular licences, conduct of examinations, enforcement ofobligations of the licensees, scrutiny and inspection of accounts ofthe licensees, suspension and revocation of licences and the fixingof clearance charges to which a Customs House Agent may be entitled.If, before the issue of the Regulations of the year 2004, theCommissioner had already issued a licence (under Regulation-10) orrevoked or suspended the licence (under Regulation-21) or fixedclearance charges (under Regulation-25), such acts would fall underthe category of "things done", in terms of the preamble to the 2004Regulations. Similarly, if the Commissioner had issued a noticeunder Regulation-23 (1), proposing to suspend or revoke a licenceunder the 1984 Regulations, but before an order could be passedunder Regulation-23 (7), the new Regulations of 2004 had come intoeffect, the action initiated may be saved in terms of the preamble,so as to enable the Commissioner to complete the process, even afterthe issue of the new Regulations. What was left undone orincomplete, in the procedure prescribed under Regulation-23 of theold Regulations, would fall under the category of "things omitted tobe done". Likewise, if an appeal under Regulation-23 (8) of the 1984Regulations, was pending before the Appellate Tribunal, on the dateof issue of the new Regulations, the continuance of furtherproceedings may be saved by the preamble under the category of"things omitted to be done". 35. But the omission on the part of the Commissioner to inviteapplications for the grant of licences under Regulation-4 of the oldRegulations, will not certainly fall under the category of "thingsomitted to be done", to come within the protective cover of thesaving clause. Therefore the reliance placed upon the preamble tothe 2004 Regulations, is actually misplaced. 36. Lastly, the effect of Section 6 of the General Clauses Act,1897 and the decision cited by Mr.R.Yashod Vardhan, learned SeniorCounsel requires consideration. Section 6 of the General ClausesAct, dealing with repeal, reads as follows:-"6. Effect of repeal: Where this Act, or anyCentral Act or Regulation made after thecommencement of this Act, repeals any enactmenthitherto made or hereafter to be made, then unlessa different intention appears, the repeal shall not-(a) revive anything not in force or existingat the time at which the repeal takes effect; or(b) affect the previous operation of anyenactment so repealed or anything duly done orsuffered thereunder; or(c) affect any right, privilege, obligation orliability acquired, accrued or incurred under anyenactment so repealed; or(d) affect any penalty, forfeiture orpunishment incurred in respect of any offencecommitted against any enactment so repealed; or(e) affect any investigation, legal https://hcservices.ecourts.gov.in/hcservices/ proceedings or remedy in respect of any such right,privilege, obligation, liability, penalty,forfeiture or punishment as aforesaid;and any such investigation, legal proceeding orremedy may be instituted, continued or enforced,and any such penalty, forfeiture or punishment maybe imposed as if the repealing Act of Regulationhad not been passed."37. One need not take recourse to Section 6 of the GeneralClauses Act, for solving the riddle on hand. By an amendmentintroduced under Section 113 of the Finance Act, 2001, Section 159-Awas inserted into the Customs Act, 1962, which reads as follows:-"Section 159-A. Effect of amendments, etc., ofrules, regulations, notifications or orders. -Where any rule, regulation, notification ororder made or issued under this Act or anynotification or order issued under such rule orregulation, is amended, repealed, superseded orrescinded, then, unless a different intentionappears, such amendment, repeal, supersession orrescinding shall not -(a) revive anything not in force or existingat the time at which the amendment, repeal,supersession or rescinding takes effect; or(b) affect the previous operation of any rule,regulation, notification or order so amended,repealed, superseded or rescinded or anything dulydone or suffered thereunder; or(c) affect any right, privilege, obligation orliability acquired, accrued or incurred under anyrule, regulation, notification or order so amended,repealed, superseded or rescinded; or(d) affect any penalty, forfeiture orpunishment incurred in respect of any offencecommitted under or in violation of any rule,regulation, notification or order so amended,repealed, superseded or rescinded; or(e) affect any investigation, legal proceedingor remedy in respect of any such right, privilege,obligation, liability, penalty, forfeiture orpunishment as aforesaid,and any such investigation, legal proceeding orremedy may be instituted, continued or enforced andany such penalty, forfeiture or punishment may beimposed as if the rule, regulation, notification ororder, as the case may be, had not been amended,repealed, superseded or rescinded."Section 159-A of the Customs Act, 1962, is actually in pari materiawith Section 6 of the General Clauses Act. There are only twodifferences between the two provisions viz., (i) while the GeneralClauses Act, speaks only about Act or Regulation, Section 159-A ofthe Customs Act, speaks about Rules, Regulations, Notifications andOrders and (ii) while the General Clauses Act, speaks only aboutrepeal, Section 159-A takes into account any amendment, repeal, https://hcservices.ecourts.gov.in/hcservices/ supersession or rescission of an existing Rule, Regulation,Notification or Order.38. Interestingly, the 1984 Regulations repealed the 1965Regulations. At that time, Section 159-A was not there. Therefore,1984 Regulations contained a provision dealing with repeal andsavings, under Regulation-26. There is no corresponding provisionfor "repeal and savings" under the 2004 Regulations, in view of thefact that Section 159-A takes care of the contingency.39. The principles underlying Section 6 of the General ClausesAct, can be summarised in broad terms, as follows:-(i) It may be invoked either in favour of or against a person. (ii) To be entitled to the benefit of Section 6, a person musthave acquired a right or privilege under the Repealed Act orRegulation. (iii) To apply Section 6 against a person, that person shouldhave either incurred an obligation/liability or been imposed with apenalty or forfeiture for any offence committed under the RepealedAct or Regulation.(iv) The Repeal would neither revive anything that is dead andgone nor affect any investigation, proceedings or remedy in respectof any right, privilege, obligation, liability, penalty orforfeiture.40. Applying the above principles to the cases on hand, it canbe seen without any semblance of a doubt that the petitioners didnot acquire any right or privilege under the Repealed Regulations of1984. Therefore, there is no scope for invoking Section 6 of theGeneral Clauses Act. In Glaxo Smith Kline case, relied upon byMr.R.Yashod Vardhan, learned Senior Counsel, an application for thegrant of Patent and an application for the grant of "ExclusiveMarketing Right" were filed under the Patents Act, 1970. Theapplications were rejected by the Controller of Patents on28.12.2004 and the Amendment Act, 2005, came into operation on1.1.2005. When the rejection of the application by the Controllerwas challenged, a question of maintainability was raised on thebasis of the Amendment Act, 2005. The objection was upheld by theHigh Court. It is in such circumstances that the Supreme Courtapplied the principles underlying Section 6 of the General ClausesAct. In other words, a series of actions had been taken under theRepealed Act and the question before the Court was about the fate ofsuch actions, in the light of the Repealing Act. 41. But in the present case, no action was taken by therespondents under the 1984 Regulations, either to inviteapplications under Regulation-4 or to issue temporary licences tothe petitioners under Regulation-8 or to process applications forgrant of regular licences under Regulation-10. It is only theactions done or omitted to be done that are normally saved.Inactions are never saved. Therefore, the contention on the basis ofSection 6 of the General Clauses Act, is nothing but a last straw onthe Camel's back. https://hcservices.ecourts.gov.in/hcservices/

42. Despite all the above legal issues, which stare against thepetitioners, there is one aspect, which cannot be lost sight of. Itappears that pursuant to the judgment of the Delhi High Court,persons similarly placed like the petitioners herein, have beengranted licences to act as Customs House Agents by theCommissionerate of Delhi. Similarly, persons from Punjab andHaryana, who are also similarly placed like the petitioners, havebeen granted licences in pursuance of the judgment of the High Courtof Punjab and Haryana, which followed the judgment of the Delhi HighCourt. The learned Standing Counsel for the Department submittedthat the Department had gone on appeal against the judgment of theDelhi High Court and that of the Punjab and Haryana High Court.However, it is admitted that licences have been granted to personsin Delhi and Punjab in pursuance of the aforesaid decisions. Butthese licences also contain a rubber stamp/seal affixed by thedepartment to the effect that they are subject to the ultimateoutcome of the cases. In any case, the decision of the Single Judgeof the Delhi High Court was rendered 4 years ago. The petitionersbefore the Delhi and Punjab High Courts are now in enjoyment of alicence, though subject to the outcome of the appeals.43. The respondents seek to distinguish the petitioners beforethe Delhi High Court from the petitioners herein, on the sole groundthat before the issue of 2004 Regulations, the Commissioner at Delhihad issued a notice inviting applications, in June 2003 and theapplications of the petitioners before the Delhi High Court, werekept pending for a long time till the new Regulations were issued in2004. But this, in my considered view, is no distinction at all. Itis well settled that a person who applies for the grant of a licenceor permit or even for employment, acquires no vested right orprivilege. As a matter of fact, a person who is even selected forappointment, acquires no such right except to the limited extent ofbeing considered before his juniors or persons of lower rank areconsidered. Therefore, the petitioners before the Delhi High Courtand the Punjab High Court, stood on no better footing than thepetitioners herein. But they have now derived a benefit, (even iftemporarily) solely on the basis of passing the qualifyingexamination under the old Regulations. If ultimately those personssucceed even in the appeal, the benefit now conferred on them maybecome permanent. Therefore, to deprive the petitioners herein of asimilar benefit, when the petitioners are also placed on the samepedestal, would violate Article 14. If such a contingency arises,the respondents are obliged to remedy the situation for thepetitioners. 44. In the light of what is stated above, the challenge to theimpugned Regulations of the year 2004 as well as to the notificationinviting applications, is rejected. However, the Central Board ofExcise and Customs, who is the first respondent in these writpetitions, is directed to examine the matter and come up with ascheme for extending to the petitioners herein, the same benefits asconferred upon similarly placed persons in Delhi and Punjab andHaryana. In case, the Central Board of Excise and Customs is not ina position to do anything, the Central Government may take https://hcservices.ecourts.gov.in/hcservices/ appropriate steps, by invoking the power under Section 161 of theCustoms Act, 1962, by which they are empowered to do anything toremove the difficulties arising out of the implementation of the2004 Regulations, in one area, while not implementing the same inother areas (Delhi and Punjab).45. All the writ petitions are disposed of on the above terms.No costs. Consequently connected miscellaneous petitions are closed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.SvnTo1.The Chairman, Central Board of Excise and Customs, New Delhi.2.The Commissioner of Customs, Custom House, No.60, Rajaji Salai, Chennai – 1.3.The Assistant Commissioner of Customs, Custom House Agent Unit, Custom House, No.60, Rajaji Salai, Chennai – 1.4. The Commissioner of Customs(Port) Imports, Custom House,No.60, Rajaji Salai, Chennai- 600 0015 ccs to M/s. B. Satish Sundar, Advocate, SR. 140171 cc to Mr.K. Ravi Anantha Padmanabhan, Advocate, Sr. 140361 cc to Mr.P. Saravanan, Advocate, Sr. 14376 W.P. 707 to 716, 336 to 350, 779, 780, 844, 1772 to 1788 and W.P.Nos.2085 to 2087 of 2009SGL, LA (CO)kk,km, rvl, em 18/4