Private Auctioneers Have No Fundamental Right To Be Empanelled For Customs Auctions: Delhi HC Upholds CBIC Circular

The Delhi High Court has held that private auctioneers have no fundamental or vested right to be empanelled for customs auctions; policy choice aimed at transparency and expeditious disposal cannot be interfered with. The bench of Justice C. Hari Shankar and Justice Om Prakash Shukla has upheld the validity of a circular issued by the Central Board of Indirect Taxes and Customs (CBIC) prescribing that auctions of unclaimed and uncleared cargo lying at customs stations must be conducted through e-auction on the portal of MSTC Limited. Accurate Auctioneers, a private auctioneer, assailed the CBIC circular on the ground that it effectively excluded private auctioneers by mandating that auctions be conducted only through MSTC’s e-auction platform. The appellant argued that prior to 2018, custodians of customs stations were free to engage any agency for auction through public auction, e-auction or tender, and that the new regime amounted to an unconstitutional monopoly in favour of MSTC. The appellant contended that the circular violated Articles 14 and 19(1)(g) of the Constitution by restricting the right of private auctioneers to carry on their business. The CBIC lacked authority to interfere with contracts between custodians and auctioneers. The justification offered by the Union of India in court could not supplement the reasons contained in the circular itself. The Union of India defended the circular as a policy measure framed under Sections 143AA and 151A of the Customs Act, empowering CBIC to prescribe procedures to facilitate trade, ensure transparency and expedite clearance of goods. It was pointed out that delays in disposal of unclaimed/uncleared cargo had resulted in congestion, system breakdown and substantial revenue loss. MSTC, a public sector undertaking under the Ministry of Steel, already conducts large-scale e-auctions involving goods worth over ₹1,000 crore annually, with thousands of registered bidders. A centralized e-auction portal ensures wider participation, anonymity of bidders, prevention of cartelization and faster turnover. The court held that no individual or entity has a constitutional or indefeasible right to compel the Government to contract with it. The court observed that Articles 14 and 19 only require the State to adopt a fair and non-arbitrary process when it chooses to enter into contracts, but do not mandate that all willing parties must be empanelled. The canalization of auctions through MSTC was held to be a reasonable restriction in the interest of transparency and administrative efficiency. Upholding the Single Judge’s reasoning, the Division Bench emphasized the settled principle that courts exercise great restraint in matters of economic and administrative policy. The court held that 2018 circular represents a policy choice aimed at streamlining and expediting disposal of unclaimed/uncleared cargo. Courts cannot substitute their own views for that of the executive on the desirability or wisdom of such policy, unless it is shown to be unconstitutional, arbitrary or ultra vires. The appellant’s grievance essentially stemmed from exclusion from a particular business opportunity, which does not translate into a fundamental right. The Bench noted that the circular merely prescribes the mode of auction (e-auction through MSTC) and does not confiscate or prohibit the appellant from carrying on its profession in general. The court held that there is a rational nexus between the objective (transparent, speedy disposal of cargo) and the means adopted (centralized e-auction through MSTC). The restriction, if any, is reasonable and saved by Article 19(6). Policy measures taken in public interest, particularly in economic and fiscal domains, are entitled to a higher degree of judicial deference. The court dismissed the appeal, and upheld the CBIC circular dated 3 December 2018. The court concluded that Accurate Auctioneers could not claim any fundamental or statutory right to be engaged for auctioning unclaimed or uncleared goods at customs stations. Case Details Case Title: Accurate Auctioneers Versus UOI Case No.: LPA 233/2023 Date: 03.02.2026 Counsel For Petitioner: Dr. Shashwat Bajpai Counsel For Respondent: Mukul Singh Click Here To Read Order Read More: Custodial Interrogation Not Necessary: Chhattisgarh HC Grants Anticipatory Bail in Rs. 17.83 Crore In Fake ITC Case

Private Auctioneers Have No Fundamental Right To Be Empanelled For Customs Auctions: Delhi HC Upholds CBIC Circular

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