1984 (5) TMI 236 - SC - Indian Laws

Whether there was any relevant material before the authority competent to take action under clause 8B to reach the satisfaction contemplated by that clause? Held that - We have held that action under Clause 8B is of an interim nature and it may be ex-parte, in which case the affected party may make a suitable representation bringing out all the outweighing circumstances in his favour. That is the real remedy of the party. Courts do not enter the picture at that stage unless the action is mala fide or patently without jurisdiction. We consider that this is not a matter for the court to decide at this stage in a petition under Article 226 of the Constitution or under Article 32 of the Constitution questioning an ad-interim order under Clause 8B. Again we cannot enter into the controversy whether there has been mis utilisation of the imported goods by the petitioners and whether the petitioners can be termed as actual users within the meaning of that expression in the Import Control Order by the mere fact that they subject the beef tallow to air-treatment . All these questions pertain to the merits of the controversy and it is not for us to embark into a discussion into these matters. In the facts and circumstances of this, case, the real remedy of the party, as we conceive it, is to make a representation to the concerned authority setting out his version of the facts and the law and the prejudice to himself and the public interest as a consequence of the action under clause 8B.

Issues Involved:
1. Import of beef tallow and its misuse.
2. Issuance of abeyance circulars.
3. Legal validity of abeyance orders under Clause 8B.
4. Requirement of natural justice and communication of decisions.
5. Public interest and urgency in administrative actions.

Detailed Analysis:

1. Import of Beef Tallow and Its Misuse:
The judgment begins by addressing the public outrage caused by the discovery that beef tallow was being imported and used in the manufacture of vanaspati, which led to severe public agitation and parliamentary questions. It was found that beef tallow import had been canalized through the State Trading Corporation (STC) from June 5, 1981, but significant imports continued outside this channel under pre-existing licenses. The petitioners, Liberty Oil Mills, claimed they had not imported tallow after July 1982 and had used previously imported tallow for soap manufacturing, not for adulterating vanaspati.

2. Issuance of Abeyance Circulars:
In response to the discoveries and public agitation, the government issued a notification banning the import of beef, buffalo, and pig tallow from August 24, 1983. Subsequently, five "abeyance circulars" were issued, directing licensing authorities to keep applications for import licenses and customs clearance permits from 192 concerns in abeyance for six months. These circulars were secretive and instructed authorities to mislead inquiries about the status of applications.

3. Legal Validity of Abeyance Orders Under Clause 8B:
The court examined whether the abeyance orders under Clause 8B of the Import Control Order were valid. It was argued that the orders lacked the requisite satisfaction of the appropriate authority and were based on no material. The court noted that Clause 8B allowed the government to keep applications in abeyance if it was satisfied that issuing licenses or allotments would not be in the public interest. The court held that Clause 8B applied to goods covered by Open General Licenses and that the satisfaction of the authority was subjective but must be based on relevant material.

4. Requirement of Natural Justice and Communication of Decisions:
The court emphasized that natural justice principles should be read into Clause 8B, requiring a post-decisional hearing if requested by the affected party. The court held that the decision to keep applications in abeyance must be communicated to the affected parties, even if reasons for the decision were not provided. The court criticized the secretive nature of the circulars and the instruction to mislead inquiries, stating that such actions were arbitrary and violated Articles 14 and 19(1)(g) of the Constitution.

5. Public Interest and Urgency in Administrative Actions:
The court discussed the role of public interest and urgency in administrative actions under Clause 8B. It noted that strong public sentiment could impart a sense of urgency to a situation, compelling authorities to take swift action. The court held that public interest must outweigh the likely injury to the party affected by the abeyance order. The court also noted that the abeyance orders should not result in significant public injury, such as loss of foreign exchange or unemployment.

Conclusion:
The court dismissed the writ petition but directed the authority to consider any representation made by the affected party within ten days from its receipt. The court emphasized the need for transparency and adherence to natural justice principles in administrative actions affecting business activities. The civil appeal arising from an interlocutory order was disposed of in light of the final decision.

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