1970 (9) TMI 37 - SC - Customs

Breach of the licence - Held that - The view of the High Court does not seem to be sustainable on the statutory language and on the Import Control Policy of which the respondents were fully aware. Their own application is proof positive of their awareness of the true position and the breach of the conditions of the licence on their part was deliberate. Indeed, as observed earlier, the permission for the import of the second press was apparently sought with the object of its resale. Breach of conditions for import of goods is a serious matter because it prejudicially affects our country s national economy. The import licence for the second press having, in our view, been sought on false representation with the object and purpose of its resale the breach of the licence was, therefore, fully intended and designed. The respondents are guilty of malpractices and of abuse of the import licence with the object of making money. We, however, think that in view of the fact that this litigation has been pending since a long time it would meet the ends of justice if we impose merely fine and do not sentence anyone to imprisonment. The final result is that the order of the High Court is set aside and accused Nos. 1, 2, 3 and 5 are convicted under Section 120-B, I.P.C. and Section 5 of the Imports & Exports Act, 1947 read with Clause 5 of the Import Control Order 1955 and each of the accused Nos. 2, 3 and 5 are sentence to pay a fine of ₹ 2,000/- under each count. Accused No. 1 who is the principal culprit and who was sentenced by the trial court to imprisonment and fine is sentenced to pay a fine of ₹ 5,000/- under each count. In default of payment of fine the defaulting accused persons will undergo rigorous imprisonment for three months. The Company is convicted only under Section 5 of the Imports & Exports Act read with Clause 5 of the Import Control Order and sentenced to pay a fine of ₹ 2,000/-.

Issues Involved:
1. Competency of the appeal by the Deputy Chief Controller of Imports & Exports.
2. Applicability of condition (c) of the import licence to printing presses.
3. Legality of the sale of the imported printing press.
4. Liability of individual accused persons alongside the Company.
5. Conversion of acquittal into conviction under Article 136 of the Constitution.

Detailed Analysis:

1. Competency of the Appeal by the Deputy Chief Controller of Imports & Exports:

The respondents raised a preliminary objection to the competency of the appeal, arguing that the Deputy Chief Controller of Imports & Exports, who filed the special leave petition, was not entitled to do so as the State had conducted the prosecution. The Court rejected this objection, noting that the Deputy Chief Controller was duly authorized to file the complaint and that Article 136 of the Constitution and the Supreme Court Rules empower the Court to grant special leave to the Deputy Chief Controller in such cases.

2. Applicability of Condition (c) of the Import Licence to Printing Presses:

The primary argument from the respondents was that condition (c) of the licence, which restricted the sale of imported goods, did not apply to printing presses as they were neither raw materials nor accessories. The Court rejected this argument, stating that the term "consumption" in condition (c) should be interpreted in the context of the Import Control Order and the Import Trade Control Policy. The Court held that printing presses fall under "printing and lithographic material," and thus, the condition (c) was applicable.

3. Legality of the Sale of the Imported Printing Press:

The Court found that the respondents had violated condition (c) by selling the imported printing press to Dr. Thomas. The respondents had secured the import licence on the representation that the presses were for their own use, but they had negotiated the sale of one of the presses even before its arrival in India. The Court held that the sale was a deliberate breach of the licence conditions, and there was no legal or equitable justification for reselling the printing press.

4. Liability of Individual Accused Persons Alongside the Company:

The Court rejected the argument that only the Company should be held liable, citing the facts and the precedent set in State of West Bengal v. Motilal Kanoria. The Court held that all the respondents, including the individual accused persons, were guilty of the offences under Section 120-B, I.P.C., and Section 5 of the Imports & Exports Act, 1947, read with Clause 5 of the Import Control Order, 1955.

5. Conversion of Acquittal into Conviction under Article 136 of the Constitution:

The Court did not find merit in the argument that the High Court's acquittal should not be overturned under Article 136. The Court held that the High Court's view was not sustainable on statutory grounds and the Import Control Policy. The respondents were aware of the licence conditions and had breached them deliberately. The Court emphasized that such breaches are serious as they affect the national economy.

Final Judgment:

The Supreme Court set aside the High Court's order of acquittal. Accused Nos. 1, 2, 3, and 5 were convicted under Section 120-B, I.P.C., and Section 5 of the Imports & Exports Act, 1947, read with Clause 5 of the Import Control Order, 1955. Each of the accused Nos. 2, 3, and 5 was sentenced to pay a fine of Rs. 2,000/- under each count. Accused No. 1 was sentenced to pay a fine of Rs. 5,000/- under each count. In default of payment of the fine, the defaulting accused persons would undergo rigorous imprisonment for three months. The Company was sentenced to pay a fine of Rs. 2,000/-.

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