1990 (7) TMI 250 - HC - Indian Laws

Summary

Issues Involved:
1. Legality and validity of the Public Notice and Import Trade Control Order dated 28th April 1989.
2. Discrimination and arbitrariness of the Public Notice and Import Trade Control Order.
3. Applicability of Section 3 of the Imports and Exports (Control) Act, 1947.
4. Impact of the Public Notice and Import Trade Control Order on the petitioners' business operations.
5. Judicial scrutiny of government policy decisions.
6. Applicability of conditions under Open General Licence (OGL) and Additional Licence.
7. Constitutional validity under Article 14 and Article 19 of the Constitution of India.

Detailed Analysis:

1. Legality and Validity of the Public Notice and Import Trade Control Order:
The petitioners challenged the Public Notice No. 122-ITC(PN)/88-91 and the Import Trade Control Order No. 52/88-91, both dated 28th April 1989, issued by the Ministry of Commerce, Government of India. The petitioners argued that these orders were ultra vires the provisions of the Imports & Exports (Control) Act, 1947, and the Imports (Control) Order, 1955. The respondents justified the orders, stating they were issued to prevent unscrupulous traders from importing serviceable garments under the guise of woollen/synthetic rags, which was detrimental to local manufacturers.

2. Discrimination and Arbitrariness of the Public Notice and Import Trade Control Order:
The petitioners contended that the orders were discriminatory and arbitrary, violating Article 14 of the Constitution of India. They argued that restricting importation to Bombay and Delhi ICD ports placed owners of factories in the Eastern and North-Eastern parts of the country at a disadvantage due to additional transportation costs. The respondents countered that the policy was in public interest to prevent misuse by unscrupulous traders and was not discriminatory.

3. Applicability of Section 3 of the Imports and Exports (Control) Act, 1947:
The petitioners argued that Section 3 of the Act did not empower the Central Government to restrict importation through specific ports. They cited previous judgments to support their claim that restrictions under Section 3 should apply uniformly across the country. The respondents maintained that Section 3 allowed the government to control importation points to prevent abuse and ensure effective regulation.

4. Impact of the Public Notice and Import Trade Control Order on the Petitioners' Business Operations:
The petitioners highlighted the inconvenience and additional costs incurred due to the restriction on importation through Bombay and Delhi ICD ports. They argued that this adversely affected their business operations and competitiveness. The respondents argued that the petitioners' factories were located near Delhi, and thus the impact was minimal.

5. Judicial Scrutiny of Government Policy Decisions:
The petitioners argued that policy decisions could be scrutinized by the courts if they were discriminatory or arbitrary. They cited several Supreme Court judgments to support their claim. The respondents countered that policy decisions, especially those made in public interest, should not be subjected to judicial scrutiny unless there was a clear case of unconstitutionality.

6. Applicability of Conditions under Open General Licence (OGL) and Additional Licence:
The petitioners argued that conditions under the OGL should not automatically apply to Additional Licences unless explicitly stated. They contended that the Import Policy did not provide for such conditions to apply to Additional Licences. The respondents maintained that the conditions were consistent across both types of licences to ensure uniform regulation.

7. Constitutional Validity under Article 14 and Article 19 of the Constitution of India:
The petitioners argued that the restrictions violated their fundamental rights under Article 14 (equality before law) and Article 19 (freedom of trade and commerce) of the Constitution. The respondents contended that the restrictions were reasonable and necessary to prevent misuse and ensure public interest, thus not violating the constitutional provisions.

Conclusion:
The court concluded that the steps taken by the respondents, including the Public Notice and Import Trade Control Order, were not contrary to the provisions of Section 3 of the Imports and Exports (Control) Act, 1947. The court found the restrictions to be reasonable and in public interest, aimed at preventing misuse by unscrupulous traders. The petitioners' claims of discrimination and arbitrariness were not substantiated with sufficient evidence. The writ petition was dismissed, and all interim orders were vacated. The court also noted that the decision applied to other pending writ petitions on similar issues.