1962 (4) TMI 95 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutional validity of certain notifications and directions under the Imports and Exports (Control) Act, 1947.
2. Whether the restrictions imposed by the government on the export of manganese ore constitute an unreasonable restriction on the appellant's right to carry on business under Article 19(1)(g) of the Constitution.
3. Validity of Clause 6(h) of the Export Control Order, 1958.
4. Whether the canalization of exports through the State Trading Corporation was justified and legal.
5. Whether the appellant's exclusion from export trade was lawful.

Issue-wise Detailed Analysis:

1. Constitutional Validity of Notifications and Directions:
The appellant challenged the constitutional validity of notifications issued under the Imports and Exports (Control) Act, 1947, and the Export Control Order, 1958, which restricted his ability to export manganese ore. The Court examined the historical context and the legal framework governing these notifications. The Court found that the restrictions were imposed to regulate the export of manganese ore, primarily due to the limited internal demand and the need to ensure a steady supply to foreign buyers. The Court upheld the constitutional validity of these notifications, citing the necessity of such controls to manage the export trade effectively.

2. Reasonableness of Restrictions under Article 19(1)(g):
The appellant argued that the restrictions on his right to export manganese ore were unreasonable and violated Article 19(1)(g) of the Constitution. The Court noted that the restrictions were imposed to ensure the optimal utilization of resources and to maintain India's reputation in the international market. The Court held that the restrictions were reasonable and in the interest of the general public, as they aimed to regulate the export trade to maximize foreign exchange earnings and ensure the quality and reliability of exports.

3. Validity of Clause 6(h) of the Export Control Order, 1958:
The appellant contended that Clause 6(h) of the Export Control Order, 1958, which allowed the government to canalize exports through specialized agencies, was beyond the rule-making power under Section 3 of the Imports and Exports (Control) Act, 1947. The Court referred to a previous decision (Glass Chatons Importers and Users Association v. Union of India) and upheld the validity of Clause 6(h). The Court reasoned that the power to control exports includes the authority to regulate the persons engaged in the trade and to channelize the trade through selected agencies.

4. Canalization of Exports through the State Trading Corporation:
The appellant challenged the preferential treatment given to the State Trading Corporation (STC), arguing that it created a monopoly and was not justified. The Court examined the reasons for the government's decision to use the STC as the primary agency for exporting manganese ore. The Court found that the STC was chosen to ensure a regular supply of high-quality ore to foreign buyers and to maximize foreign exchange earnings. The Court held that the inclusion of the STC as a specialized agency for export was justified and within the government's powers under Clause 6(h).

5. Lawfulness of the Appellant's Exclusion from Export Trade:
The appellant argued that his exclusion from the export trade was arbitrary and discriminatory. The Court noted that the government had a rational basis for excluding new-comers who did not have export performance in the specified years. The Court held that the exclusion was a necessary consequence of the canalization policy and was not discriminatory. The Court also acknowledged the appellant's genuine grievance due to the lack of opportunities for new-comers but emphasized that the policy aimed to ensure the stability and reliability of exports.

Conclusion:
The Supreme Court dismissed the appeal, holding that the restrictions and controls imposed by the government on the export of manganese ore were legal, justified, and within the powers conferred by the Imports and Exports (Control) Act, 1947, and the Export Control Order, 1958. The Court emphasized the importance of regulating the export trade to maximize foreign exchange earnings and maintain India's reputation in the international market. The appellant's exclusion from the export trade was found to be a lawful consequence of the government's canalization policy.