9911796707
TMI Blog1990 (7) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and directing the respondents to revoke, rescind and cancel the order and/or the Public Notice dated 28th of April, 1989 copy of which is Annexure D to the present writ petition and also the Public Notice No. 122-ITC(PN)/88-91 dated 28th April, 1989 copy of which is Annexure E to the writ petition and restraining them from giving effect to or taking any step in terms thereof or thereunder and to grant consequential reliefs thereof. Annexure D indicates inter alia that in exercise of the powers conferred by Section 3 of the Imports and Exports (Control) Act, 1947 (18 of 1947), the Central Government makes the following amendment in the Open General Licence No. 1/88 dated 30th March, 1988, published under the Notification under the Government of India in the Ministry of Commerce No. 329(E) dated 30th March, 1988 viz: In the said Open General Licence No. 1/88, in condition Number 14, after sub-clause (iii), the following shall be inserted, namely :- (iv) Imports of Woollen rags/synthetic rags/Shoddy Wool will be allowed through two ports only viz. Bombay and Delhi, ICD. Similarly, Annexure E is quoted verbatim as it is :- PUBLIC NOTICE NO. 122-ITC (PN)/88-91 Dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct for importation of such goods has to be registered prior to importation of the said goods with the Textile Commissioner of the Government of India and it is only after the contracts are registered with the said Textile Commissioner and appropriate registration number is granted by the said Authority, one can import the subject consignment accordingly. The allegation of the petitioners is that the petitioner Company acting on the basis of the representation made by the respondents under the Open General Licence Control Order No. 1/88 dated 30th March, 1988 entered into six several contracts during the period January 1989 to April, 1989 with foreign sellers for purchase and importation of consignments of the goods required to be used at its factory as raw materials on the terms and conditions and/or of quantity and specification as contained in the respective indents thereof. In or about May, 1989, the petitioners have, however, come to learn that the Control Order bearing No. 52/88-91 dated 28th of April, 1989 has been issued to the said open General Licence and the same is referred by way of Annexure D to the present writ petition. The petitioners have also found the change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valid basis or justification whatsoever to restrict their importation in the country only through the Ports of Bom bay and Delhi, ICD. Accordingly, the petitioners have made a case that the purported order and/or the purported Public Notice is discriminatory and arbitrary and violative of Article 14 of the Constitution of India and by issuance of the said Order and/or the Public Notice, the respondents are seeking to discriminate between persons similarly situated and the owners of the factories which are situated in the Western and North- Western parts of the country would now be able to import the goods at a much lesser price than owners of factories which are situated inter alia, in the Eastern and North- Eastern part of the country as the additional cost of transportation of goods from Bombay and Delhi to their respective destinations would have to be borne by them for no fault of theirs and the order and the Public Notice are alleged to have been issued in gross abuse of the powers conferred upon the respondents under Section 3 of the said Act and those are discriminatory in nature and the same should be quashed by issuing an appropriate writ of this Court. The petitioners ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods therefrom by Actual Users and/or persons and/or woollen mills. The amendment was made in public interest and the petitioners factory is in Gaziabad near Delhi and the Company s registered office is at No. D/2, Maharani Bag, New Delhi and the present petition is misconceived accordingly. Other allegations of the petitioners have, however, been controverted. 5. The Assistant Collector of Customs has sworn an affidavit, on behalf of the respondent Nos. 4 and 5. He has placed on record the details of the amended order and the Public Notice and to various developments for passing the interim order. It is brought to the notice of the Court that the Customs Authorities at Calcutta received a telex message dated 30-11-1989 issued from the office of the respondent No. 2, Chief Controller of Imports and Exports, Government of India, Ministry of Commerce New Delhi clarify ing that all the conditions applicable for importation of OGL item shall be equally applicable for importation of goods under Additional Licences excepting the Actual User Conditions. For any view of the matter all conditions relating to OGL have also been made applicable to the additional licences excepting the Actu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after their importation, for example by actual user or by manufacturers with concomitant export obligations and accountal thereof by the said manufacturers or users. Hence, the restrictions or conditions or prohibition that would be sought to be imposed in exercise of powers under the said subsection by the Central Government has to be on goods and has to be applicable to the entire country. Such a power cannot be invoked to restrict the importation of the goods through any one or two particular ports of the country. 7. It is further argued that the purported Control Order and/or the purported Public Notice are discriminatory, arbitrary and violative of Article 14 of the Constitution of India. It is highlighted that the owners of factories which are situated in the Western and North-Western parts of the country would now be able to import the said goods at a much lesser price than owners of factories which are situated in, inter alia, the Eastern and North-Eastern parts of the country as the additional cost of transportation of goods from Bombay or Delhi would now have to be borne by them for no fault of theirs, whereas similarly situated, the owners of factories in the Eastern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cence issued under paragraph 215 of the said Import Policy. Clause 2(1) of Paragraph 215 of the Import Policy, according to the petitioners, refers only to the items contained in a Part of the List X of Appendix VI of the said Import Policy. A reference is only to the goods contained in the said list and not to the conditions to which the said goods can be imported under the Open General Licence Scheme which are contained under the head conditions governing imports under Open General Licence . The contracts have to be registered with the Textile Commissioner in terms of Clause 24 of the conditions governing Imports under Open General Licence" as contained in Appendix VI of Import Policy 1988-91. There is no such condition of importation of such woollen/synthetic rags under an additional licence. 10. The contention of the petitioner is also that upon perusal of the Import Policy 1988-91 it would be evident that there are specific and separate provisions for grant of each additional licence and the conditions which have to be satisfied for a particular class or category of persons to be entitled to receive any of the said licences, whereas the Open General Licence being genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n taken to prevent the same in the manner as provided under the law. They have strongly submitted that the policy decision of the Government in permitting the importers to import into India through specific points of entry is for public benefit and this type of policy cannot be subjected to judicial scrutiny as discussed in the case reported in A.I.R. 1984 S.C. Page 1543. The Hon ble Supreme Court has also found in A.I.R. 1980 S.C. Page 1449 that the Court cannot be called upon to decide as to whether this type of policy is right or wrong. There is also reference in support of the case of the respondents to the case reported in A.I.R. 1964 S.C. Page 370 that the classification underlying the alleged policy had to have a reasonable nexus with the object sought to be achieved. In geographical classification also, there is a reasonable relation to the object sought to be achieved and regard being had to the materials on record, it can be appreciated by this Court that the policy in question is neither unreasonable nor unfair. The respondents have strongly challenged urging inter alia that the writ petition is thoroughly misconceived and the petitioners having all the factories in nort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor Imports (Control) Order (1955) as published in Gazette of India, Extra on 7-12-1956 and Exports (Control) Order, 1958 published in Gazette of India, Extra on 1-5-1958 are beyond legislative competence of Central Legislature. Reference may be made to the decision reported in A.I.R. 3969 Bombay, p. 224 (Ganpat Bapurao Bibekat v. Rameshwar Shalligram Pitambarwale and Anr.). The powers conferred under Section 3(1) of the aforesaid Act are not restricted merely to prohibiting or restricting imports at the point of entry of goods into the territory of India but extends also to controlling the subsequent use of the goods imported. The policy intends to conserve essential supplies for civilian consumption in this country. Provision is made for regulation by permits. An appeal is provided for grants and against refusal of permits. It has to be considered whether the restrictions imposed are reasonable within the meaning of Article 19(6) of the Constitution and the machinery provided for implementation of the policy is satisfactory or not. This aspect of the matter has been considered in the case reported in A.I.R. 1952 Madras, Page 840 (S.P. Shaik Abdul Khader Co. v. A.R. Subramani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975 Cal. P. 440 (Supra). The scope of Section 3(1) of Imports Exports (Control) Act, of 1947 has been considered. It was found that the expression all cases in Section 3(1) has to be read in conjunction with specified classes of cases. The expression all cases cannot be so construed as to mean the goods of specified description and to mean goods identified by destination of the goods. Description is here an adverb relating to the goods, that is to say, to the qualities of the goods and not to the identification of the goods. When by provision, authority is given to impose restriction on the trade that provision must accordingly be construed strictly. Thus, an order under S. 3(1) prohibiting export of all goods to a country is beyond the authority given by S. 3 because there is no specification of the goods intended to be prohibited. The facts of the case tend to show that the contracts in respect of the subject goods have been entered into between Messrs. Union Agencies (Distributors) Pvt. Ltd., Rhodesia and the exporters. The name of their Zambia Associates Messrs. Factors Zambia Ltd. had been utilised as a cover and Messrs J.N. Baruett Co., Beirs and their Agents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ints of entry. There is no question of applicability of the restriction to any prohibited land. It is for the purpose of administrative feasibility for effective machination, for effective control and in order to plug loopholes perpetrated by unscrupulous traders to bring into the territory of the country various prohibited goods, the Government imposes restriction with the particular type of goods can be brought as per the Open General Licence and/or Additional Licence through one or two or three particular points of entry to the country. It cannot be branded as an unreasonable restriction. The principle as laid down in the aforesaid decision does not have any impact upon the facts of the present case as discussed above. 15. By looking at the decision reported in A.I.R. 1963 S.C. Page 1470 (Abdul Aziz v. State of Maharashtra) it has been found that the power conferred under Section 3(1) of the Imports Exports (Control) Act, is not restricted merely to prohibiting or restricting imports at the point of entry of goods into the territory of India but extends also to controlling the subsequent disposal of the goods imported. It is for the appropriate authority and not for the Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall comply with all conditions imposed or deemed to be imposed under the clause. The contravention of any condition of a licence thus amounts to the contravention of the provision of sub-clause (4) of Clause 5 of the Order and consequently to the contravention of the order made under the Act. If the licencee does not comply with the conditions of the licence about the use of the goods to be imported he contravenes the order made under the Act and makes him liable to punishment. 16. In the instant case, the problem arises as to the legality and validity of the restrictions as imposed by the impugned Imports Trade (Control) Order and the Public Notice. It has strongly been argued that by the purported Public Notice and/or the purported order, the owners of the factories which are situated in the western and northwestern parts of the country will now be able to purchase goods at a much lesser price than owners of factories which are situated in, inter alia, the Eastern and North Eastern parts of the country as the additional cost of transportation of goods from Bombay or Delhi would now have to be borne by them for no fault of theirs. A case of violation of Article 14 of the Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y giving sufficient data and materials that apart from dry principle of law, there is actually any sufferings of the petitioners or that the petitioners suffer from the restrictions so challenged. Besides, this Court has also considered the scope of the Policy and the Import Order vis-a-vis the Public Notice whether they are discriminatory in nature in making out a case of unreasonable classification. 17. True it is that a provision would have to pass the test of reasonableness under Clause (5) and first part of Clause (6) of Article 19 of the Constitution of India. That would also be the position in respect of Article 304(b). But since the requirement of these provisions is the same as the yardstick of reasonableness would be common to all the cases. It is well recognised that when an enactment is found to infringe any of the fundamental rights guaranteed under Article 19(1), it must be held to be invalid unless who support it can bring it under the protective provision of Clause 5 or Clause 6 of that Article. To do so the burden is on those who seek the protection and not on the citizen to show that the restrictive enactment is invalid as observed by the Hon ble Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty contract against the exporting policy in view of the equitable considerations. It was made clear that the constitutional questions should be considered by Court only when it is absolutely necessary and not otherwise. Prima facie. National Export Policy should .not be interfered with by Courts unless compelled by glaring unconstitutionality. In order to appreciate the scope of the policy the Hon ble Supreme Court has given a proper guideline in the case of Gopal Narain v. State of Uttar Pradesh reported in A.I.R. 1964 S.C. P. 370. Subba Rao J. (As His Lordship then was) delivering the judgment has observed that because of a legislature s reluctance or inadvertence to express itself clearly of its policy, a heavy and difficult burden is often placed on Courts to discover it, if possible, on a fair reading of the provisions of the Act. Some Acts expressly lay down the Policy to guide the exercise of discretion of an authority on whom a power to classify is conferred. Some Acts though they do not expressly say so, through their provisions may enact clearly, by necessary implication, their policy affording a real guidance for the exercise of discretion conferred on an authority there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al import licence would govern importation of the goods to be imported under an additional licence. Upon perusal of paragraph 215 of the Import Policy and looking to the conditions as laid down in the Open General Licence as well as additional licence, it appears that what can be imported under an additional licence are items covered under Part-I of List 8 of Appendix 6 of the Import Policy. The conditions are almost same and similar. If there is any change of the condition of any clause it will have impact both upon the Open General Licence as well as upon the additional licence. The policy is always deemed to be consistent. All the relevant statute and the steps taken thereunder have got to be reconciled and upon properly construing the relevant provisions, it does not appear that in the facts of the present case, the persons holding additional licence have a larger freedom to import the goods in question through the ports other than Bombay and Delhi ICD. 19. The attention of this Court has been drawn to the decision of the Full Bench of the Delhi High Court reported in 1987 (29) E.L.T. Page 753 (Jam Exports Private Limited, New Delhi Anr. v. Union of India Ors.) which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shipment of goods should have been received by 31-3-1982 or 30-6-1982 and irrevocable letter of credit opened by 28-2-1982. Since the goods arrived in September, 1982, even in terms of the said conditions, the goods could not have been imported validly. It is clearly held that any argument which assumes a certain vested right to import certain items and denies power to the Union of India to change that policy subsequently must be repelled. Therefore, the submissions that there was a vested right in the petitioners to import the items which were in OGL under 1980-81 Policy, even though they maybe canalised in subsequent years, that the licence issued in 1980-81 must continue to govern the requirements of import, that the purpose of revalidation is only to extend the period of validity for the shipment and that the arrival date could have no relevance to the items which could be imported are misconceived. It is not for the court to examine merits and demerits of a Policy laid down by regulation making body. It has been found by the Hon ble Supreme Court in its decision reported in A.I.R. 1984 S.C. P.1543 (Maharashtra State Board Secondary and Higher Secondary Education v. Paritosh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pari materia of the Act of 1947, a distinction has been made between goods of specified description and all goods. Section 3 of the Act of 1947 itself empowers the Authorities to impose restriction on trade and therefore, should be construed with some strictness. This Court observes, that with great respect to the learned Single Judge at Madras while an unreported Judgment dated 25-4-1990 in the matter of B.L. Tandon v. Union of India Ors. being writ petition No. 2167 of 1990 in the High Court of Judicature at Madras has been placed on record, that there was perhaps no assistance to the Hon ble Judge by referring all the facts of the case and the relevant provisions of law to decide the case comprehensively and to examine the extent of the power of the Central Government to formulate a Policy pursuant to relevant provisions of law as prevailing to issue the impugned notification. The issuance of any writ in the said Judgment without considering all the relevant facts and laws cannot have any impact upon the decision of the present case. Thus having discussed all the facts and laws as connected therein this Court respectfully differs with the conclusion reached by the Hon ble Sing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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