' C.M.A. No,2028 of 1997 in Suit No,360 of 1997 and C.M.A. No,2076 of 1997 in Suit No,376 of 1997 arise out of similar facts and have, therefore, been heard together and are being disposed of by this common order. Both the plaintiff i,e, M/s. K.G. Traders in Suit No,360 of 1997 and M/s. Moorad Shipping Agency in Suit No,376 of 1997 are Clearing Agents under sections 207 and 208 of the Customs Act, licensed under the Customs Act and Customs House Agent Licensing Rules, 1971 (hereinafter mentioned as Rules) by a circular dated 24-3-1997, issued by the defendant No,1 on behalf of the Licensing Authority, their respective licences were placed under suspension and this Circular has been impugned in the two suits. Through the above application for interim relief, the plaintiffs have prayed for suspension of the aforesaid Circular till the disposal of the respective suits. Even according to the defendants, the allegations against two plaintiffs are identical.
2. The facts giving rise to the controversy are that upon credible information having been received the staff of defendant No,3 i,e, Director of Intelligence and Investigation (Customs and Excise) visited the warehouse owned by Pakistan Tankage Co. (Pvt.) Ltd. And found that large quantity of R.B.D. Palm Oil stored in the aforesaid warehouse had been clandestinely removed without filing of Ex-Bond bills of entries and payment of tax leviable thereof. Apparently, an F.I.R. Was lodged and the Chief Executive of the aforesaid Company (defendant No,4) was arrested. Subsequently a contravention report was prepared on 3-11-1996 by an Officer of the Directorate General of Intelligence and Investigation, copy whereof has been placed on record. Learned counsel for the plaintiffs heavily relied upon certain observations in this report.
' Thereafter on 25-1-1997 a show-cause notice was issued by the Collector of Customs. This notice was addressed apart from the defendant No,4, to all the importers whose goods were said to have been removed as well as Clearing Agents including the plaintiffs. The contents of this notice have been relied upon by both the parties.
3. The plaintiffs submitted their replies to the aforesaid notice, stating inter alia that they were not responsible for the allegations contained therein. However, while the aforesaid matter is still reported to be in adjudication, the impugned Circulars were issued purported to suspend the plaintiffs' licence as Clearing Agents.
4. It has been strenuously contended by M/s. Khawaja Shamsul Islam and Mazher Lari, learned counsel for the plaintiffs in two suits that the impugned action is contrary to the principles of natural justice as well as the mandatory requirements of the Customs Agents Licensing Rules, 1971.
It was contended that under rule 19 of the aforesaid Rules, the Licensing Authority can only suspend or revoke a licence for any of the reasons mentioned therein and only after giving proper opportunity to the licensee of being heard. The plaintiffs submitted that no show-cause notice whatsoever has been served upon them alleging any of the nine grounds stipulated in the aforesaid Rules, which empower the Licensing Authority to suspend or revoke the licence. The position has not been controverted by the defendants.
5. Nevertheless, it appears that the impugned Circular has been issued under the provisions of Rule 21 of the aforesaid Rules, clause (1) whereof reads as under:-- "A Licensing Authority may in cases where lime action is considered necessary against a licensee suspended his licence forthwith pending final action under Rule 90."
6. M/s. Khawaja Shamsul Islam and Mazher Imtiaz Lari, learned counsel for the plaintiffs in the suits, inter alia, raised the following contentions in support of the injunction applications:
(i) That the plaintiffs in Suit No,360 of 1997 was only a Clearing Agent of Certain Banks in whose name the goods in questions had been consigned and had no dealing whatsoever with the owner of the goods with whose connivance clandestine removed from the tanks was alleged to have taken place.
(ii) That there is no prima facie evidence indicating the plaintiffs' involvement in the illegal removal of palm oil from the terminal tanks. The plaintiffs were not named in the F.I.R. And even the contravention report prepared by the defendants themselves purports them to exonerate them.
(iii) That the palm oil in question was stored in bonded warehouse under the joint custody of the keeper of the warehouse and officials of the Customs. The plaintiffs had no concern with such removal and the impugned circular suspending their licences was mala fide and intended to divert the proper course of investigation with the object of shedding Customs Officials.
(iv) That the impugned action against the plaintiff was mala fide and illegal inasmuch as was taken without notice to them and in violation of the requirements of statutory rules and the principles of natural justice.
(v) That in the circumstances of the case there was neither an urgency nor could the action be taken to be urgent or immediate so as to attract the application of Rule 21 of the Customs Agent (Licence Rules). .
(vi) That the plaintiffs have deprived of their basic right to earn livelihood without following requirement of law.
7. On the other hand Mr. S. Tariq Ali, learned Standing Counsel representing the defendants mainly urged as under:-
(i) The plaintiffs' grievance was redressable through an appeal under Rule 22 of the relevant rules and the suit was not maintainable.
(ii) That in any events this Court had no jurisdiction to entertain the suit or pass orders granting interim relief in view of the specific bar of jurisdiction created by section 217(2) of the Customs Act.
(iii) That the show-cause notice dated 25-1-1997 could be treated as an appropriate notice to the plaintiffs with respect to the allegation against them and they were not justified in complaining that the impugned action has been taken in violation of principles of natural justice.
(iv) That in any case no notice was required before aking action under Rule 21 of the Licensing Rules.
(v) That the plaintiffs are not entitled to interim injunction in terms of section 56(b) of the Specific Relief Act and grant of injunction was contrary to public interest.
8. At the outset it may be pertinent to deal with the question of jurisdiction of this Court raised by the learned Standing Counsel. He strongly relied upon section 217 of the Customs Act. The contents thereof are reproduced as under:-- "217.--(1) No suit, prosecution or other legal proceeding shall lie against the Federal Government or any public servant for anything which is done or intended to be done in good faith in pursuance of this Act or the Rules.
(2) No suit shall be brought in any Civil Court to set aside or modify any order passed, any assessm ent made, any tax levied, any penalty imposed or collection of any tax made under this Act.
9. Syed Tariq Ali argued that while subsection (1) operated as a bar against suit calling in question actions taken in good faith by public servant pursuant to the provision of Customs Act or Rules, the bar contained in subsection (2), which was inserted through an amendment vide Act No,VII of 1992, was absolute and far more comprehensive. According to him after the incorporation of subsection
(2) a suit could not lie even in respect of action of Customs Officials which could not be considered to have been taken in good faith in pursuance of the provisions of the Act or the Rules.
With profound respect I must say that the contention is patently misconceived. It is well- established that provisions barring jurisdiction of Civil Courts in terms similar to the abovequoted provisions of the Customs Act are only attracted when the impugned action is found to be within four corners of the Statute under which it is taken and does not suffer from taint, mala fides or absence of jurisdiction. One may refer to two judgments of the Honourable Supreme Court in the case of Abdul Rauf v. Abdul Hameed Khan PLD 1965 SC 671 and Muhammad Jameel Asghar v.
Lahore Improvement Trust PLD 1965 SC 698.
10. In the first case the respondent had sought a declaration as to his ownership of certain properties and to the effect that the decree of a Deputy Commissioner passed under the Frontier Crimes Regulation was illegal, malicious and ineffective against the plaintiff/respondent. The appellant contended that the suit was barred by law and the jurisdiction of the Civil Court stood ousted in view of the provisions of section 10 and section 60 of Frontier Crimes Regulation, which may be reproduced as follows:-- "Section 10. Restriction on jurisdiction of Civil Court.--No Civil Court shall take cognizance of any claim with respect to which the Deputy Commissioner has proceeded under section 8, subsection (3), clause (a), clause (b) or clause (d).
Section 60. Finality of proceedings under Regulation.--Except as therein otherwise provided no decision, decree, sentence or order given, passed or made, or act done: under Chapter III, Chapter IV, Chapter V or Chapter VI, shall be called in question, or set aside by any Civil or Criminal Court."
' Repelling the objection the Honourable Supreme Court proceeded to hold:-- "If this claim had already been the subject-matter of a reference by the Deputy Commissioner the Civil Court would not on account of section 10 be entitled to go into the merits of the claim.
However, the reference under section 8 should be a valid reference and if it is to be found that the reference itself was without jurisdiction, section 10 will not be attracted. Section 60 prevents the Court from calling in question or from setting aside any order passed or any action taken under Chapters III, IV, V and VI of the Frontier Crimes Regulation. However, as in the case of section 10 section 60 will also apply only where an order is passed with jurisdiction. We are quite familiar with the words 'under the Act' or 'under Chapter... ... ...'. No order is an order passed 'under the Act' if it was not passed in exercise of powers granted by the Act and was, therefore, without jurisdiction."
' Their Lordships further proceeded to hold that:- "A mala fide act is by its very nature an act without jurisdiction. It was explained that a mala fide order means an order which is passed not for the purpose contemplated by enactment granting power to pass such an order but for some other collateral or ulterior purposes."
11. In the case of Muhammad Jameel Asghar the question of bar of jurisdiction of the Civil Court was raised with reference to similar provisions contained in sections 22 and 25 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, which may be reproduced as under:- "22. Finality of ordeRs,--Save as otherwise expressly provided in this Act, every order made by any officer appointed under this Act, shall be final and shall not be questioned in any Court.
25. Bar of jurisdiction.--Save as otherwise provided in this Act, no Civil Court shall have jurisdiction in respect of any matter which the Central Government or an officer appointed, under this Act is empowered under this Act to determine, and no injunction, process or order shall be granted by any Court or other authority in respect of any action taken or to be taken in exercise of any power conferred by or under this Act."
' Their Lordship proceeded to hold that the action of Settlement Authorities appointed under the Act can always be questioned before Ordinary Civil Courts in case they were found to be without jurisdiction or mala fide. It was observed that "jurisdiction of Civil Court can never be taken away for a mala fide act in its very nature is an illegal and void act and the Civil Court can pronounce an act to be mala fide and therefore void."
12. The above view of the law appears to have been consistently followed by the Courts in several subsequent judgments some of which cited at the Bar by the learned counsel for the plaintiffs, inter alia, Usman Panjwani v. Government of Sindh 1996 CLC 311, Anjuman Taalimul Islam v. Punjab Province PLD 1983 Lahore 294 and. Syed Rounaq Raza v. Province of Sindh 1994 CLC 317.
13. Syed Tariq Ali attempted to argue that while the impugned action might be questionable in the Constitutional jurisdiction of this Court, but could not be assailed in the original civil jurisdiction. This contention, I am afraid is also untenable. It is indeed true that in the original civil jurisdiction the powers exercised by this Court are not wider than those exercised by ordinary Civil Courts under the C.P.C. Nevertheless all the above precedents relate to the jurisdiction of Civil Courts and are founded upon the principle that a Court of general jurisdiction has plenary power to resolve all disputes of a civil nature unless barred by any law and provisions of special law purporting to take away their jurisdiction ought to be strictly construed.
13-A. The distinction sought to be drawn by Mr. S. Tariq Ali between the provisions of subsection (1) and subsection (2) of section 217 of the Customs Act for the purpose of contending that the latter provision was inserted to place an absolute bar on the jurisdiction of a Civil Court is equally unfounded. In my view, the obvious distinction is that while clause (1) purports to confer a personal indemnity to custom officials against being sued for their actions taken in good faith, clause (2) seeks to bar the jurisdiction of Courts to entertain suits questioning orders passed under the Act or the Rules. However, it has been consistently held that a mala fide order or one without jurisdiction is a fraud on the law and can never be assumed to have been passed under a particular statute. C Therefore, a plea as to bar of jurisdiction could only be sustained if it could be shown that the impugned order was passed in the bona fide exercise of powers conferred by the Customs Act or Rules and not otherwise.
14. Coming to the merits of the case I do not think it is necessary for the purpose of the present application to go into the factual controversy, lest it might prejudice the course of adjudication before Customs Authority or final outcome of this suit. This application can in my humble opinion be decided on the short D question whether the impugned action was taken in the exercise of lawful powers and in accordance with the principles of natural justice, which, needless to say, are to be read as part of every statute.
15. Rule 19 of the Customs Agents (Licensing) Rules enables the Licensing Authorities to revoke or suspend the licence of a Clearing Agent upon nine grounds enumerated in different clauses of sub-rule (1). The action being of a punitive nature the licensees are required to be given an opportunity of being heard. Rule 21 under which the impugned action is said to have been taken, however, provides that Licensing Authority may, in cases where immediate action is considered necessary against a licensee, suspend his licence forthwith pending final action under Rule 19. A comparison of the two provisions tends to support Mr. Tariq Ali's contention that a show-cause notice is not a prerequisite for taking action under Rule 21. Indeed there are situations when some immediate remedial action is required to be taken on an emergent basis, and it is therefore, possible in such cases to dispense with the requirement of prior notice as held by the Honourable Supreme Court in the case of Abul A'la Maudoodi v. Government of West Pakistan PLD 1964 SC 673.
16. Nevertheless such actions being of an exceptional nature and involving denial of a most salutary principle of natural justice, a provision enabling such action must be strictly construed.
The rule indeed itself required that the powers under Rule 21 can only be invoked where immediate action is considered necessary. The word 'necessary' as distinguished from 'expedient', or 'desirable' seems to exclude subjective discretion. Such necessity must be objectively determined. I, therefore, find great substance in the contention of Mr. Mazhar Lan to the effect that Rule 21 could only be invoked if it can objectively shown that there was urgency and it was necessary to take immediate action. It is indeed evident from the record that the F.I.R. Was lodged in October, 1996 and the defendants became aware of the factum of removal of oil about seven months ago. They allowed five months to lapse before issuing impugned Circular. No explanation whatsoever has been furnished to justify such leisurely treatments of the matter. The show-cause notice on which reliance is being placed by Syed Tariq Ali defendants alleging the complicity of the plaintiffs in the illegal removal, was issued on 25-1-1997. Yet for two months no action taken against the plaintiff.
Another way of looking at the matter is that whereas the impugned circular was issued on 24-3- 1997 the plaintiffs complained that they have not yet been given any show-cause notice and this fact has not been denied by the defendants. Obviously when the Rule empowers the Authorities to dispense with the requirement of a notice in case of immediate necessity, it is coupled with a duty to issue such notice as soon as practicable and within a reasonable time. In the above circumstances, I am clearly of the view that prima facie no justification for invoking rule 21 is made out and the plaintiffs were entitled to a show-cause notice before any action cancelling their licences could have been taken.
17. I also find force in the contention that invocation of Rule 21 was mala fide. It was pointed out by Mr. Mazhar Lari that an order passed under Rule 19 is appealable before the Collector of Customs under Rule 22. However, instead of apprising the plaintiffs of the ground upon which their licenses are suspended, examining their defence on merits and enabling them to prefer an appeal against an adverse order in the hierarchy of Custom Authorities the Licensing Authority has chosen to invoke rule 21 without any justification and with the object of depriving the plaintiffs to avail of a mode of redress. I am, therefore, inclined to hold that prima facie no action could be taken under rule 21.
18. I may now deal with Mr. Syed Tariq Ali's contention that the show-cause notice dated 25-1-1997 ought to be treated as a proper notice for the purpose of Rule 19. It was vehemently contended by both the learned counsel for the plaintiffs that the aforesaid notice has nothing to do with cancellation of their licences and does not even contain any specific allegation against them. In this context it may be pertinent to reproduce the operative part of the aforesaid notice:- "It has therefore been alleged that M/s. Pakistan Tankage Co. (Pvt.) Ltd., Karachi have contravened the provisions of section 13 of the Customs Act, 1969. It has also been alleged that M/s. Pakistan Tankage Co. (Pvt.) Ltd., 21-Oil Installation Area, Karachi and the importers mentioned in Column No,1 of the above statement have also contravened the provision of sections 2(s), 3s(i) & (ii), 86, 88, 89, 90, 94, 97, 98, 111, 113, 114, 116, 178, punishable under clauses 8, 14, 55, 57, 58, 59, 61, 62 and 82 of subsection (1) of section 156 of the Customs Act, 1969. The tanks of M/s. Pakistan Tankage Co. (Pvt.)
Ltd., Karachi have also been used for illegal storage and removal of the goods and are liable to confiscation under section 157 of the Customs Act, 1969. M/s. Pakistan Tankage Co. (Pvt.) Ltd., Karachi and the following importers/owners of the goods alongwith M/s. Moorad Shipping Agency, M/s. P.A. Ansari and M/s. K.G. Traders, the Clearing Agents are hereby called upon to show cause as to why action against the aforesaid companies/persons may not be taken under the abovementioned provisions of Customs Act, 1969 and the Sales Tax Act, 1990:--
(i) M/s. West Pakistan Tank Terminal C/o M/s. Pakistan Tankage Company Private Limited 21-Oil Installation Area, Keamari.
(ii) M/s. Pakistan Tankage Company, 21-Oil Installation Area, Keamari, Karachi.
(iii) M/s. Pakistan Liquid Storage, Karachi c/o M/s. Pakistan Tankage Company Private Limited 21-Oil Installation Area Keamari, Karachi.
(iv) M/s. Allied Multiple Industry c/o M/s. Pakistan Tankage Company, 21-Oil Installation Area, Keamari, Karachi.
(v) M/s. Usman Brothers c/o M/s. Pakistan Tankage Company, 21-Oil Installation Area, Keamari, Karachi.
(vi) M/s. International Ghee Industries Ltd., Peshawar c/o M/s. Pakistan Tankage Company, 21-Oil Installation Area, Keamari, Karachi.
(vii) M/s. United International Peshawar c/o M/s. Pakistan Tankage Company, 21-Oil Installation Area, Keamari, Karachi. and why the Customs Duty, Surcharge, Penal Surcharge Withholding Taxes should not be recovered from them under section 32(2) of the Custom Act, 1969."
19. Though it has been alleged in the narration of facts that defendant No,4 admitted fraudulent removal of oil in connivance with certain persons including the defendants the operative part only speaks of offences alleged to have been committed, by Pakistan Tankage Company (Pvt.) Ltd., of whom the defendant No,4 is a Chief Executive. It was contended by the learned counsel for the plaintiff that the notice seems to require the plaintiffs to show cause as to why action should not be taken against them for violation of law committed by Pakistan Tankage Co. (Pvt.) Ltd., and why Customs duty, sales tax and other taxes should not be recovered against seven importers mentioned in the notice. In other words Peter is called upon to explain the misdeed of Paul. I regret to say that from tenor of notice the contention does not appear to be entirely ill-founded.
20. In any event even if it be assumed that the notice dated 25-1-1997 was validly issued to the plaintiffs and they were liable to be proceeded against in terms thereof, suspension of their licences could not be effected under the rules. Proceedings against a person for evasion of duty of penal action under the provisions of the Customs Act are all together different from proceedings for suspension or revocation of Clearing Agents licences. The Licensing Rules provide a complete mechanism for suspension or revocation of such licences. Rule 19(1) enumerates 9 specific reasons for which the licence of Clearing Agents can be suspended or revoked and they appear to be exhaustive. One such ground stated in clause (v) reads "punishment of the licensee under the Act", it would therefore, follow that prima facie the plaintiffs' licence could be suspended only after they were punished on finding of guilt for violation of the provision of the Customs Act and not upon the mere allegation to that effect. It is also interesting to note that the notice dated 25-1-1997 does not mention a single ground upon which action against the Clearing Agents could be taken under rule
19. I regret to say that the relevant Officers have not bothered to apply their mind to the requirement of the rules and the law and have acted in an extremely casual and arbitrary manner.
I am therefore satisfied that the plaintiffs have made out a strong prima facie case in their favour.
21. With respect of the question of balance of convenience and irreparable injury, it has been emphatically contended that the plaintiffs are being deprived of their very right to livelihood and it is impossible to quantify their loss in monitary terms. In this context I am tempted to quote from a judgment of the Honourable Supreme Court in the case of East End Exports, Karachi v. Chief Controller of Imports and Exports PLD 1965 SC 605 at page 613 to the following fact:-- "Suspension may be a punitive suspension or one in aid of an enquiry. An order in the nature of punishment is always required to be proceeded by a properly constituted enquiry. The other kind of suspension is designed to facilitate the due prosecution of the enquiry'. Such a temporary suspension is deemed to be an implied term in every contract of service. Section 16 of the General Clauses Act also lays down that an authority who has got power to appoint has also the power to suspend. It has therefore been held that if an authority when holding an enquiry, is satisfied that the charge against the public servant is connected with his position as a Government servant or is likely to embarrass him in the discharge of his duties or involves moral turpitude, he can suspend him pending the enquiry. On this principle it may be said that the Chief Controller can also exercise this power summarily pending an enquiry. It must however, be remembered that the Government servant, by reason of his suspension, does not lose his office or suffer degradation. His rank remains the same. He merely ceases to discharge the duties of his office during pendency of the departmental enquiry against him. He also draws a subsistence allowance during A the period of suspension. In the event of his honourable acquittal he is allowed to draw full salary for the period of suspension. On the other hand, if an Export or Import Registration Certificate is temporarily suspended, it may cause incalculable harm to the importer or exporter for which he cannot get any redress even if later the order of suspension is withdrawn. If suspension continues longer it may even totally destroy his trade. It is therefore, desirable that this summary power should be exercised very sparingly, and that too only when the urgency of the situation demands it. Even then the authority concerned should, without the least possible delay inform the person concerned of the charges against him."
22. With respect of Mr. Tariq Ali's contention based on section 56(d) of the Specific Relief Act it may be sufficient to state that public officials are required to perform their duties strictly in accordance with law and when they proceed to violate the law then actions cannot be treated as performance of public duties.
23. In view of the above I am of the opinion that the plaintiffs are entitled to an interim injunction. I would, therefore, grant the same to the effect that the operation of the impugned order would remain suspended till the disposal of this suit. This however, will not preclude the Customs Authorities to carry on such investigation and to take such action as may be considered appropriate strictly in accordance with the law. Needless to say that the above observations are only tentative and shall not prejudice the final determination of the dispute.