Section 24 IT Act: Procedure for grant or rejection of license

Section 24 of Information Technology Act: Procedure for grant or rejection of license

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

The Controller may, on receipt of an application under sub-section (1) of section 21, after considering the documents accompanying the application and such other factors, as he deems fit, grant the licence or reject the application:

Provided that no application shall be rejected under this section unless the applicant has been given a reasonable opportunity of presenting his case.

Legal Commentary & Landmark Judgments: Section 24

Section 24 regulates the procedure for the grant or rejection of a Certifying Authority license, empowering the Controller to conduct thorough investigations and mandating a fair opportunity of being heard before any license application can be rejected.

Comprehensive Regulatory Inquiry: Authorizes the Controller to inspect premises, audit cryptographic hardware, and verify personnel backgrounds before deciding on a license application.
Definite Term of License: Provides that an approved license shall be valid for a prescribed statutory period and subject to conditions specified by the Controller.
Mandatory Natural Justice Prior to Rejection: Explicitly mandates that no application for a license shall be rejected unless the applicant has been given a reasonable opportunity of showing cause against the proposed rejection.

Key Landmark Precedents:

Maneka Gandhi v. Union of India (1978) 1 SCC 248: Constitution Bench held that procedural fairness and the right to be heard are indispensable components of fair administrative decision-making.
Canara Bank v. V.K. Awasthy (2005) 6 SCC 321: Supreme Court reiterated that the opportunity of showing cause must be meaningful, disclosing the precise grounds for proposed adverse administrative action.
State of Orissa v. Dr. (Miss) Binapani Dei AIR 1967 SC 1269: Constitution Bench affirmed that administrative orders inflicting civil consequences must comply strictly with audi alteram partem.

Courtroom Practice & Strategic Litigation Guidance:

In writ petitions challenging the rejection of a CA license under Section 24, establish whether the Controller provided a detailed show-cause notice detailing specific technical deficiencies; failure to provide an oral hearing invalidates the rejection order.

Section 24: Procedure for grant or rejection of license

Section 24 of Information Technology Act: Procedure for grant or rejection of license

Legal Commentary & Landmark Judgments: Section 24