1963 (4) TMI 69 - SC - Customs

Constitutional validity of certain notifications and directions issued under the Imports and Exports (Control) Act, 1947, and the Export Control Order, 1958 - whether the restrictions and control for which provision might be made by s. 3 would not include a provision for canalising the trade in any particular commodity? Held that - It would be a matter of policy for the Government to determine, having regard to the nature of the commodity and the circumstances, attending the export trade in it, to lay down the basis for the classification between groups and fix their relative priorities etc. When el. 6(h) permits canalising or the channelling of exports through selected agencies it does not no more than make provision for the classification into groups etc. which but one of the modes which the control under a. 3 of the Act might assume. In the case of a commodity like manganese ore for which there is not much of an internal market the denial of a right to any group or we shall add, to any individual to export would in effect affect him adversely forcing him to sell to others who have been given such a facility. Persons like the app- ellant were being fed on hopes of some relief to them and it was a case not merely of hope deferrer making the heart sick, but of dashed hopes that led the appellant to approach. the Court for relief. Though we consider that the appellant has no legal right to the relief that he sought, his grievance is genuine and it would be for the Government to consider how beat the interest of this class should be protected and it is made worth their while to win the ore so as to expand, foster and augment the export trade in this valuable commodity. Reverting to the legal points raised in the appeal, it appears cleat to us that on the premises (1) that s. 3 of the Import & Export Control Act, 1947 is a valid piece of legislation, (2) that cl. 6 (h) of the Export Control Order is within the rulemaking power of the Central Government and is constitutional, there is no escape from the conclusion that no legally enforceable right of the appellant has been violated for which he could seek redress; under Art. 226 of the Constitution. In this view it is unnecessary to consider whether the appellant having prayed primarily for the issue of a writ of mandamus to direct the licensing authorities to consider his application for an export licence for the half year current at the date of the petition ,without reference to the terms of the impugned notifications and policy statement and that half year having long ago gone by, he could be granted any relief by the High Court on his petition or by this Court on his appeal. It is possible that in such circumstances a person situated like the appellant might be entitled to a declaration as regards the validity of the restrictions imposed which continue to be in force even beyond the half year or year to which the licence relates. It is however unnecessary to pronounce upon this question which does not really arise for consideration in view of the conclusion that we have reached that the restrictions and control to which the trade has been subjected are legal and justified by the Act and the Rules framed there under. The result is that the appeal fails and is dismissed.

Issues Involved:
1. Constitutional validity of notifications and directions issued under the Imports and Exports (Control) Act, 1947, and the Export Control Order, 1958.
2. Whether the refusal to grant an export license to the appellant constituted an unreasonable restriction on the right to carry on business under Article 19(1)(g) of the Constitution.
3. Whether Clause 6(h) of the Export Control Order, 1958, was beyond the rule-making power under Section 3 of the Imports and Exports (Control) Act, 1947.
4. Whether the canalization of export trade through the State Trading Corporation was valid and reasonable.
5. Whether the appellant's petition under Article 226 of the Constitution had become infructuous due to the expiration of the relevant period for which the export license was sought.

Detailed Analysis:

1. Constitutional Validity of Notifications and Directions:
The appellant challenged the constitutional validity of certain notifications and directions issued under the Imports and Exports (Control) Act, 1947, and the Export Control Order, 1958. The appellant argued that these notifications infringed the freedom granted under Part III of the Constitution. The Court noted that the constitutional validity of Section 3 of the Imports & Exports Control Act, 1947, was conceded. The Court held that the impugned notifications and executive actions were valid and within the rule-making power conferred on the Central Government by Section 3 of the Act.

2. Right to Carry on Business Under Article 19(1)(g):
The appellant contended that the refusal to grant an export license constituted an unreasonable restriction on the right to carry on business guaranteed by Article 19(1)(g) of the Constitution. The Court observed that the restriction on the export of manganese ore, including the canalization of exports through the State Trading Corporation, was a reasonable restriction in the interest of the general public. The Court held that the control and restriction imposed by the notifications were justified and did not violate the appellant's fundamental rights.

3. Clause 6(h) of the Export Control Order, 1958:
The appellant argued that Clause 6(h) of the Export Control Order, 1958, was beyond the rule-making power under Section 3 of the Imports and Exports (Control) Act, 1947. The Court held that Section 3 of the Act permitted restrictions or controls on the export trade, including the canalization of trade through selected agencies. The Court found that Clause 6(h) was within the rule-making power conferred on the Central Government by Section 3 of the Act.

4. Canalization of Export Trade Through the State Trading Corporation:
The appellant challenged the canalization of export trade through the State Trading Corporation, arguing that it created a monopoly and was not justified. The Court noted that the State Trading Corporation was preferred as the principal agency for canalizing the export trade in manganese ore to ensure optimum earnings from exports and maintain a regular supply of ore of uniform quality. The Court held that the choice of the State Trading Corporation was justified and that the canalization of exports through the Corporation was a reasonable restriction.

5. Petition Under Article 226 Becoming Infructuous:
The respondents contended that the appellant's petition under Article 226 had become infructuous as the year for which the export license was sought had expired. The Court acknowledged that the primary relief sought by the appellant was for a period that had already passed. However, the Court noted that the appellant might still be entitled to a declaration regarding the validity of the restrictions imposed, which continued to be in force beyond the relevant period. The Court ultimately dismissed the appeal, holding that the restrictions and control imposed were legal and justified by the Act and the Rules framed thereunder.

Conclusion:
The Supreme Court concluded that the restrictions and control imposed on the export of manganese ore, including the canalization of exports through the State Trading Corporation, were valid and reasonable. The Court dismissed the appellant's appeal, holding that no legally enforceable right of the appellant had been violated for which he could seek redress under Article 226 of the Constitution. The appeal was dismissed without costs.

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