1988 (10) TMI 285 - HC - Companies Law

Issues Involved:
1. Issuance of 'No Objection Certificate' (NOC) for import of re-rollable scrap.
2. Availability of re-rollable scrap from indigenous sources.
3. Impact of administrative guidelines issued at the end of the financial year.
4. Retrospective application of administrative orders or circulars.
5. Fundamental rights under Article 19(1)(g) of the Constitution of India.

Issue-wise Detailed Analysis:

1. Issuance of 'No Objection Certificate' (NOC) for import of re-rollable scrap:
The petitioners sought a writ of mandamus commanding the respondent No. 2 to issue an NOC for the import of 10,000 metric tonnes of re-rollable scrap. The court noted that the petitioners' application was not registered, and no demand for earnest money was made, which was a prerequisite for issuing an NOC as per para 223 of the Import and Export Procedure. However, the court held that the failure to register the application and demand earnest money did not disentitle the petitioners from claiming the NOC. The court emphasized that the respondents' arbitrary and unreasonable actions could not deny the petitioners' statutory rights.

2. Availability of re-rollable scrap from indigenous sources:
The court found that the respondents failed to meet the petitioners' requirements from indigenous sources. Despite the respondents' claim that the materials were available indigenously, there was no evidence or attempt made to supply the materials from such sources. The court held that the respondents' inaction and arbitrary behavior constituted a failure to discharge their statutory duty, thereby entitling the petitioners to the NOC for direct import.

3. Impact of administrative guidelines issued at the end of the financial year:
The court examined the guidelines issued on 6th February 1988, which limited the import quantity to 10% of the licensed capacity or 1500 tonnes, whichever was less. The court held that these guidelines, issued at the fag-end of the financial year, could not nullify the rights accrued to the petitioners based on the law existing when the application was filed on 30th June 1987. The court cited the Supreme Court's decision in East India Commercial Company Limited v. Collector of Customs, Calcutta, emphasizing that administrative orders issued at the end of the year could not retrospectively affect the petitioners' rights.

4. Retrospective application of administrative orders or circulars:
The court reiterated that administrative orders or circulars could not have retrospective effect unless expressly provided by the legislature. The court referred to the Supreme Court's decision in Oswal Woollen Mills Ltd. v. Union of India, which held that administrative orders could not amend or modify existing policies retrospectively. The court concluded that the guidelines issued in February 1988 could not interfere with the petitioners' rights accrued from their application filed in June 1987.

5. Fundamental rights under Article 19(1)(g) of the Constitution of India:
The court emphasized that every citizen has the right to carry on trade or business, as guaranteed under Article 19(1)(g) of the Constitution of India. The court held that the respondents' arbitrary and unreasonable actions violated the petitioners' fundamental rights. The court noted that public authorities must act reasonably and cannot exercise unfettered discretion like private individuals.

Conclusion:
The court issued a writ of mandamus commanding respondent No. 2 to issue the 'No Objection Certificate' within 10 days, enabling the petitioners to obtain an import license for 10,000 metric tonnes of re-rollable scrap. The respondent No. 4 was directed to issue the import license within 15 days of receiving the NOC. The writ petition succeeded, and no order as to costs was made.

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