Delhi High Court

Quasi-judicial orders lacking cogent reasons and personal hearing violate principles of natural justice and merit remand.

O C Sweaters Llp vs Union Of India & Ors.

Delhi High CourtJUDGMENT: May 08, 20262 MIN READSOURCE JUDGMENT
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The Petitioner, a garment manufacturer, obtained an Advance Authorization (AA) No. 0511005106 on 01.10.2021 to fulfill an urgent export order

Source reference: para. 3

Due to technical glitches on the Respondents' part, the AA data was not transmitted to the Customs/ICEGATE portal, preventing the Petitioner from processing shipments under the AA scheme

Source reference: para. 5

To avoid cancellation of the order, the Petitioner exported the goods under two Shipping Bills (Nos. 6482393 and 6483064) dated 03.12.2021 under the "zero scheme," while noting AA details in the invoices

Source reference: para. 5, 33

The Policy Relaxation Committee (PRC) rejected the Petitioner's requests for relaxation and EODC (Export Obligation Discharge Certificate) through orders dated 03.01.2023, 20.10.2023, and 22.03.2024, citing a lack of "cogent reasons" for hardship and denying requests for a personal hearing

Source reference: para. 7-9
02

Issues

Whether the impugned orders passed by the PRC, rejecting the petitioner’s request for relaxation, violated the principles of natural justice and contravened the Foreign Trade Policy (FTP).

Source reference: para. 25
03

Law Applied

Paragraph 2.59 of the FTP, which vests the DGFT with the power to grant exemptions or relaxation on grounds of genuine hardship or adverse impact on trade

Source reference: para. 26-27

Paragraph 2.60 of the FTP, which mandates that a specific request for a Personal Hearing (PH) should be considered for grievance redressal

Source reference: para. 28-30

Principles from Kranti Associates (P) Ltd. v. Masood Ahmed Khan, which requires quasi-judicial and administrative authorities to record clear, cogent, and succinct reasons for their decisions

Source reference: para. 36-37

Automotive Tyre Manufacturers Association v. Designated Authority, affirming that principles of natural justice must be read into statutory procedures unless expressly excluded

Source reference: para. 39
04

Reasoning

The court found that the Petitioner was prevented from availing the AA scheme benefits solely due to a technical glitch (non-transmission of data to ICEGATE) beyond its control

Source reference: para. 31, 35

The court observed that despite the Petitioner providing evidence—such as AA details mentioned in GST invoices and the urgency of the export deadline—the PRC failed to engage with these facts

Source reference: para. 33-34

The court determined that the PRC’s orders were "mechanical" and amounted to "rubber-stamping" rather than an independent application of mind

Source reference: para. 37

By repeatedly denying the Petitioner’s request for a personal hearing, the Respondents violated the procedural fairness contemplated under Paragraph 2.60 of the FTP and fundamental principles of natural justice

Source reference: para. 32, 41

As the Respondents failed to file a reply, the Petitioner's assertions regarding the technical glitches remained uncontroverted

Source reference: para. 23, 40
05

Holding

The Court answered the issue in the affirmative, holding that the impugned orders were vitiated by non-application of mind and violation of natural justice

The High Court set aside the orders dated 03.01.2023, 20.10.2023, and 22.03.2024. The matter was remanded to the competent authority for de novo consideration, with a specific direction to afford the Petitioner an effective opportunity of personal hearing and pass a fresh reasoned order. The writ petition was disposed of accordingly.

Source reference: para. 42-43, 45
Delhi High Court

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O C Sweaters LlpvsUnion Of India & Ors.

Delhi High Court · May 08, 2026

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