9911796707
TMI Blog1986 (2) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The appellants are all small scale Industrialists, who manufacture several utility items using the imported stainless steel allotted to them under the release orders. As in previous years, in the year 1973-74, the year in question, allotment of steel were made to them under the release orders issued by the 2nd respondent on the basis of their consumption in the previous year certified by an auditor. But the 1st respondent, the Minerals and Metal Trading Corporation of India Limited, through which agency the supplies were made, declined to honour the release orders under instructions from the 2nd respondent. These instructions, according to the 2nd respondent were given as he had issued notices to all allottees over the country stating that there was reason to believe that the release orders were obtained by misrepresenting the actual consumption of stainless steel during the relevant period and also by showing inflated consumption. The notices also indicated to show cause why the Controller should not cancel the release orders and called upon them to produce documentary evidence in respect of the actual consumption. It is against the proposed action of cancellation of release or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powering the Central Government to make rules and prescribe the procedure. They form the administrative instructions issued by the Central Government for the year 1973-74. We are now concerned only with these rules and procedure prescribed for the year 1973-74 for allotment of imported steel to the applicants. The import policy of the Central Government is announced on the eve of each financial year by means of a public notice which is issued in the form of a book called Import Trade Policy Book commonly known as Red Book. Any important changes that may become necessary in the mid-term of the financial year are separately notified by means of a public notice. Procedure is prescribed for allotment of imported goods canalised through public sector agencies. Steel, in this case, is canalised through the 1st respondent to the actual users, Para 97, which deals with the procedure of imported goods canalised through public sector agencies reads : 97 (1) In respect of goods the import of which is canalised through a public sector agency for meeting the requirements of actual users, the allotments of imported materials to actual users will be made in the following manner :- (i) by r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority will issue release order in favour of the applicant on the canalising agency concerned in the proforma appearing in Appendix 34. (e) The original release order will be sent to the applicant and a copy thereof will be sent to the licensing authority to the canalising agency. For purposes of verification, the licensing authority will also send confirmatory statements every week to the canalising agencies indicating particulars of the release orders issued during the week. In every case, a copy of the letter with which the release order is sent to the applicant will be forwarded by the licensing authority to the sponsoring authority concerned. (f) The release order will be valid for a specified period during which the allottee will be required to draw supplies from the canalising agency in accordance with the procedure for allotment/distribution prescribed by such agency." 6. What Mr. Chowdary contends is that, when once a release order is issued to an applicant and copy thereof is sent to the canalising agency, it is not open to the 2nd respondent either to cancel the release order or for the 1st respondent to say that he shall not honour the release order because of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained by fraud or misrepresentation. In the counter-affidavit filed on behalf of the respondents, it is stated by the Deputy Chief Controller of Imports and Exports that stainless steel is allowed to actual users only for the manufacture of a few end products. It is banned in any form for industries engaged in the manufacture of utensils, domestic ware, cutlery kitchen ware, table tops, furniture, etc. According to him, it was noticed that, during the period 1 -4-1973 to 31-3-1974, the 1st respondent-Corporation received release orders from small scale units for a value of about Rs. 19 crores as against the release orders for Rs. 7 crores during April 1972 to March, 1973 for stainless steel. The value of about 19 crores was out of all proportion to the genuine needs of the units which obtained the release orders earlier. When this position came to be known it became necessary for the Government to take corrective measures to ensure that the units should not get away with higher value beyond their entitlement assessment and also to ensure that these units do not divert the material unauthorisedly and also manufacture end-products which are banned. The matter was examined at the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f private persons. The learned authors posed three questions, one of them being Has the person in question power to do a certain act at all. The answer given to that is, the power, as has been explained, can be conferred only by law. It is of course, therefore may be either common law or statute, but nothing else. To show that a court is not to be swayed by the policy decision of the Government, the learned counsel next quotes Lord Parker from S.A. de Smith s judicial Review of Administrative Action on Judicial Activism and Judicial Self-Restraint (p. 29): In Modern Britain, where no agreement exists on the ends of Society and the means of achieving those ends, it would be disastrous if courts did not aschew the temptation to pass judgment on an issue of policy." The learned counsel also relied upon Chief Justice Parker s view in Regima v. Governor of Brixton Prison (1) (1969) 2nd Weekly Law Reports, 618, where the learned Chief Justice dealing with the immigration laws, observed : This tea thoroughly unmeritorious application. If ever men should be sent back to the country from which they came, it is these men. But to enable that to be done would, in my judgment, me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code of and his application is dismissed by the Magistrate." 11. That case can be have no bearing, for the Criminal Procedure Code clearly lays down the procedure for search and seizure and when the procedure, as laid down in the Code, had not been followed, the seizure was not one sanctioned by the law in force. 12. The case of Amar Singh v. Custodian Evacuee Property (4) (AIR 1957 SC 599), far from supporting the contention of the learned counsel for the appellants, supports the action of the respondents. That was a case where allotment of grant of the respondents was made to the refugees on a quasi-permanent basis. The Custodian of Evacuee Property cancelled the allotment and, therefore the allottees contended that there was violation of their fundamental rights to property under Art. 19(1) (f), 31(1) and (2) of the Constitution. The Supreme Court, negativing the contention observed :- Having given our best consideration, we are unable to hold that the interest of a quasi-permanent allottees is property within the concept of that word so as to attract the protection of fundamental rights. Property, to fall within the scope of Art. 19(1) (f) must be capable of being the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw and he cannot be removed by an executive fiat and pointed out that Sec. 92 C.P.C. provided for a suit being filed against person in possession of the trust property and that the State or its executive officers cannot interfere with the rights of others unless they can point to some specific rule of law which authorises their facts. It is on those facts that it was held that the executive action taken by the State or its officers was destructive of the basis principle of the rule of law. 15. The Supreme Court in G.J. Fernandez v. State of Mysore (6) (A.I.R. 1967 S.C. 1753), held that the Mysore Public Works Department Code only consisted of mere administrative instructions and are not statutory rules and, therefore, no writ lay for disobediance of the rules at the instance of a member of the public. The learned Judges said that in order that such executive instructions have for force of statutory rules it must be shown that they have been issued either under the authority conferred on the State Government by some statute or under some provision of the Constitution providing therefor. It was therefore held that even if there has been any breach of such executive Instructions tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Judges of the Supreme Court said that every act done by the Government or by its officer must, if it is to operate to the prejudice of any person, be supported by some legislative authority. They held that the newsprint policy of the Government violates Articles 19(1) (a) and 14 of the Constitution. In so holding they said that the effect and consequence of the impugned policy the newspapers is directly controlling the growth and circulation of newspapers. The direct effect is the restriction upon circulation of newspapers upon growth of newspapers through pages; newspapers are deprived of their area of advertisement and are exposed to financial loss and the freedom of speech and expression is infringed. That case also has no relevance to the present case. Here we are dealing with executive rules under which the users of stainless steel get allotment of steel quotas on the basis of their previous years consumption. The same executive rules provide for cancellation, if the users are guilty of misrepresentation or misuse. 19. The rules and procedure form a complete code in respect of allotment of the imported steel and withdrawal or cancellation of the release or allotment orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercised which appear to part take at the same moment of legislative, executive and judicial characteristics. In view of the complexity of modern government and the congestion of parliamentary business, it is probably necessary that the executive should exercise powers of subordinate legislation. Whether it should exercise purely judicial powers is more open to question." In Jayantilal Amratilal v. F.N. Rana (10) (A.I.R. 1964 S.C. 648), the question relating to executive power was considered by the Supreme Court. For majority, the Supreme Court held that the notification issued by the President entrusting the consent of the State Government of Bombay, to the Commissioners of Divisions in the State of Bombay the functions of the Central Government under the Land Acquisition Act, 1894 is relation to the acquisition of land for the purposes of the Union within the limits of the territorial jurisdiction of the State Commissioners, subject to the said control by the Government of Bombay as it exercised in relation to the acquisition of land for the purposes of the State, was valid. The real question in that case was whether the President s notification had the force of law. The cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slation and make decisions affecting the personal and proprietary rights of individuals which are quasi-judicial in character. In addition to these quasi-judicial and quasi-legislative functions, the executive has also been empowered by statute to exercise functions which are legislative and judicial in character and in certain instances, powers are exercised which appear to partake at the same moment of legislative, executive and judicial characteristics. In the complexity of problems which modern Government have to face and the same moment of legislative, executive and judicial characteristics. In the complexity of problems which modern Government have to face and the plethora of parliamentary business to which it inevitably leads, it becomes necessary that the executive should often exercise powers of subordinate legislation. It is indeed possible to characterise with precision that an agency of the State is executive, legislative or judicial, but it cannot be predicted that a particular function exercised by any individual agency is necessarily of the character which the agency bears. 22. Justice Shah in State of Madhya Pradesh v. Bharat Singh (7) (A.I.R. 1967 S.C. 1170), ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislature making provision in each case for the executive machinery to carry out the powers and duties imposed instead of using the existing Provincial machinery. * * * * Their Lordships construe sub-section (2) of S.49 as providing an extensible limit and not a maximum limit, and the provision of sub-section (2) of S.124/C (corresponding to Article 258(2) of the Constitution) as affording a means of such extension." In Bonanza Creek Gold Mining Co. Ltd. v Rex (13) (A.I.R. l9l6 P.C.193),the extent of the executive power under the Constitution of Canada came up for consideration and Viscount Haldene opined:- Executive power is in many situations which arise under the statutory constitution of Canada conferred by implication in the grant of Legislative power so that where such situations arise the two kinds of authoritiry are corrective. The expression executive power is not defined in the Constitution. Article 73 and the corresponding Article 162 lay down the extent of the executive power. The executive power is not confined or limited to the execution or carrying out of the laws passed by the Legislature. It extends to matters with respect to which Parliament has com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o them, the legislature alone is competent to take away that right though they had acquired that right under Para 97 of the very rules. The Import Trade Control Rules and Procedure provide a package deal both for obtaining the allotment of imported steel and also for cancellation of the release or allotment orders, if such allotment or release orders are obtained on misrepresentation or misutilisation of the quotas allotted. It is for that reason that the Central Government changed its policy. The previous policy was to make allotment on the basis of the consumption in the preceding year or years certified by a Chartered Accountant. On account of the fact that there is a change of policy, the allotment of steel quota was to be made on the basis of the value of the machinery and its capacity to manufacture the permissible end-products. It is perfectly open to the Central Government to reduce the quota having regard to Foreign Exchange restrictions or due to the change of import policy or because of the discovery of malpractices committed by the users of the material. 27. In J. Fernandes Co. v. The Deputy Chief Controller of Imports and Exports (18) (A.I.R. 1975 S.C.1208) Chief J ..... X X X X Extracts X X X X X X X X Extracts X X X X
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