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TMI Blog1960 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... R. Ganapathy Iyer and G. Gopalakrishnan, for the petitioner H. J. Umrigar, B. R. L. lyengar and T. M. Sen, Harnam Singh and Sadhu Singh, D. B. Prem and Sadhu Singh, JUDGMENT SUBBA RAO J.- These four petitions are filed under Art. 32 of the Constitution for quashing the orders of the Assistant Controller of Imports and Exports. the Collector of Customs and Central Excise, Pondicherry, the Board of Revenue, and the Government of India, and for an appropriate direction requiring the respondents to refund the amount realised from the petitioners. Messrs. Universal Imports Agency and the proprietor of the agency are the petitioners in the first three petitions and Messrs. Victory Traders are the petitioners in the last one. The Chief Controller of Imports and Exports, Pondicherry, the Collector of Customs and Central Excise, Pondicherry, the Central Board of Revenue and the Government of India are the respondents in all the petitions. Messrs. French India Importing Corporation and Messrs. B. S. Co. intervened in the Writ Petitions Pondicherry was a French Possession in India. On October 21, 1954, the Government of India and the Government of France entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms confiscated all the goods on the ground that they were imported without a licence and gave an option to the petitioners to pay in lieu of confiscation fine amounting to ₹ 30,390/-. The petitioners took up the matter with the Government of India without any success and finally they paid the said penalty under protest and cleared the goods. On or about September 1954 the petitioners placed several indents with their overseas suppliers, Messrs. Shimada Trading Co., Limited, Osaka, Japan, and others and the total C. I. F. value thereof amounted to ₹ 40,470-14-0. They arranged for the full payment of eight cheques to the said suppliers of the value of the goods through the Banque De L' Indo-Chine. Their bankers duly obtained authorization from the Bureau Des Affairs Economique, Pondicherry, for the requisite foreign exchange and sold the same to the petitioners for the amount involved in the cheques, and the said foreign exchange was kept available to the suppliers. On or about November 1, 1954, the goods ordered were in different stages of shipment and in some cases the goods were in the course of shipment and in others awaiting shipment in a matter of a few days. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no import licence was required for goods to enter the territory. Thereafter the petitioners placed orders with foreign dealers. In the middle of August, 1954 and early in September, 1954, they placed a number of indents with their principals in foreign countries for importing fan belts, corn emery, soda water bottles, glass marbles, etc., of value pound 13,870. The orders were backed by full payments in many cases and at least half the payments in others. These payments were made by demand drafts issued by the Banque De L' Indo-Chine. In January and February, 1955 and thereafter the goods arrived at the port of Pondicherry, and they were confiscated by the Collector of Customs who gave the petitioners an option to pay in lieu of confiscation fine aggregating to ₹ 91,100. After filing appeals to the Central Board of Revenue and, thereafter, a revision to the Government of India with no success, the petitioners cleared the goods after paying the penalty under protest. It is clear from the foregoing facts that the petitioners entered into, before the merger, firm contracts of sales by import with foreign sellers, made available foreign exchange either under Letters of Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious orders confiscating the goods and giving the petitioners option to pay penalties in lieu of confiscation., All of them paid the penalties, under protest, and cleared the goods. The appeals filed to the Central Board of Revenue were dismissed and the revisions filed against the orders of the Central Board of Revenue to the Government of India were also dismissed. The petitioners filed the petitions under Art. 32 of the Constitution questioning the validity of the orders of confiscation. The respondents in their counter-affidavits claim that the orders made by them are valid and in accordance with law. Learned counsel for the petitioners raised many contentions in support of their petitions. It is not necessary to enumerate them as the petitions can effectively be disposed of on the basis of one of the contentions. The said contention may briefly be stated thus: The petitioners have the fundamental right to hold and to carry on their import trade and that the Notification No. S. R. O. 3315 dated October 30, 1954, on the basis of which the orders of confiscation were issued has a saving clause which excludes the operation of the said Notification in respect of transactions wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with a licence or a customs clearance permit granted by the Central Government or by any authority specified in Schedule 2 to that order. There are also provisions prescribing the procedure for obtaining licences, the conditions of the licences and for their cancellation or modification. It is, therefore, clear that under the said Act, no goods can be imported into India without a licence obtained in the prescribed manner from the prescribed authorities. The Sea Customs Act provides for the levy of sea customs duty, imposes prohibitions and restrictions on imports and exports in respect of certain goods and imposes punishment for infringement of the provisions of the Act. Under s. 167(8) of the said Act, read with s. 3(2) of the Imports and Exports Trade (Control) Act, 1947, if any goods, the importation or exportation of which is prohibited or restricted, are imported into or exported out of India contrary to such restrictions or prohibitions, the goods concerned are liable to be confiscated and the persons involved are also liable to penalty. The Foreign Exchange Regulation Act, 1947, provides for the regulation of payments, dealings in foreign exchange and securities, and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in foreign exchange. The Department of Affaires of Economics used to authorize the banks in respect of such transactions. Shortly stated, Pondicherry was a free port without any restrictions on imports, except on a few items, and the importers could acquire foreign exchange either at the official rate in respect of some transactions or at the open market in respect of others. What were the things done by the petitioners under the Pondicherry law ? The petitioners in the course of their import trade, having obtained authorization for the foreign exchange through their bankers, entered into firm contracts with foreign dealers on C. I. F. terms. In some cases irrevocable Letters of Credit were opened and in others bank drafts were sent towards the contracts.' Under the terms of the contracts the sellers had to ship the goods from various foreign ports and the buyers were to have physical delivery of the goods after they had crossed the customs barrier in India. Pursuant to the terms of the contracts, the sellers placed the goods on board the various ships, some before and others after the merger, and the goods arrived at Pondicherry port after its merger with India. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Public Health Act, 1848, and amending Acts. Before the notice had expired these Acts were repealed by the Public Health Act, 1875, which contained a saving of anything duly done under the repealed enactments, and gave power to make a similar rate upon giving a similar notice. The board, in ignorance of the repeal, made a rate purporting to be made under the repealed Acts. It was contended that as the rate was made after the repealing Act, the notice given under the repealed Act was not valid. The learned Judges held that as the notice was given before the Act, the making of the rate was also saved by the words anything duly done under the repealed enactments. This case illustrates the point that it is not necessary that an impugned thing in itself should have been done before the Act was repealed, but it would be enough if it was integrally connected with and was a legal consequence of a thing done before the said repeal. Under similar circumstances Lindley, L. J., in Heston and Isleworth Urban District Council v. Grout (2) confirmed the validity of the rate made pursuant to a notice issued prior to the repeal. Adverting to the saving clause, the learned Judge ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Co Ltd. ([1952] S.C.R. 1112). Patanjali Sastri, C. J., described the nature of export sale thus at p. 1118: Such sales must of necessity be put through by transporting the goods by rail or ship or both out of the territory of India, that is to say, by employing the machinery of export. A sale by export thus involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea. Such a sale cannot be dissociated from the export without which it cannot be effectuated, and the sale and resultant export form parts of a single transaction. The same principle has been restated by the learned Chief Justice in State of Travancore. Cochin v. Shanmugha Vilas Cashew Nut Factory ([1954] S.C.R. 53). The learned Chief Justice stated at p. 63 thus: The phrase integrated activities was used in the previous decision to denote that a sale, that is, a sale which occasions the export, cannot be dissociated from the export without which it cannot be effectuated and the sale and resultant export form parts of a single transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the Order a conscious breach of the terms of the Agreement between the two countries, for even the orders covered by Art. 17 of the Agreement would be excluded from the operation of the saving clause. We would, therefore, hold that paragraph 6 of the Order saves the transactions entered into by the petitioners and that the respondents had no right to confiscate their goods on the ground that they were imported without licence. In this view, no other question arises for consideration. In the result, the orders of the respondents 2, 3 and 4 are quashed and they are directed to refund to the petitioners the amounts illegally collected from them. The petitioners in all the petitions will have their costs. SARKAR J.- I think that these petitions should fail. Sometime in the latter half of 1954, the petitioners had in Pondicherry, then a French establishment in India, entered into certain agreements with foreign suppliers for the import into Pondicherry of diverse goods. It is said that at that time licences were not required for such imports from the French authorities. It appears however that these authorities granted a certain amount of foreign exchange for the import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in force immediately before the commencement of the Act, would be deemed to have been made under the Act There was an order made by the Government of India under r. 84 of the Defence of India Rules by Notification of the Department of Commerce No. 23 I.T.C. 43 dated July 1, 1943, which prohibited the import of the goods which the petitioners had imported. The orders of confiscation would be unexceptionable if the statutes and Order mentioned in the preceding paragraph applied to these imports. That they applied to Pondicherry as from November 1, 1954, would seem to be plain from the Order passed by the Government of India on October 30, 1954, under the Foreign Jurisdiction Act, 1947, to take effect from the date of the transfer of administration, namely, November 1, 1954, called the French Establishments (Application of Laws) Order and being Ministry of External Affairs Notification No. S.R.O. 3315. This Order had been passed in view of the Indo-French agreement and the transfer of administration provided thereby. Its validity is not challenged. Paragraph 3 of the Order provided that the enactments mentioned in the Schedule to it and all Orders made under those enactments and in fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If it were not so, the deeming provision would lose much of its value. That being so, para. 3 would make the Order applicable to Pondicherry. Then it is said that the imports were made before the commencement of the Application of Laws Order because the contracts in respect of them had been concluded and the letters of credit opened before then though the goods had not been taken across the customs barrier at Pondicherry by that time. Therefore, it is said, the imports by the petitioners would be within the saving clause in paragraph 6 as things done before the commencement of the Application of Laws Order, to which the Sea Customs Act, the Imports and Exports (Control) Act and the Order made under the Defence of India Rules would riot apply. This argument also seems to me to be ill-founded. These Acts and the Order were applied to Pondicherry as from November 1, 1954. The effect of that was to prohibit imports thereafter and to render the goods imported in contravention of that prohibition liable to confiscation. What is an import-and this is what was prohibited-has therefore to be decided by reference to these Acts and the Order. They defined import as bringing goods into I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng clause have to be decided by the French laws. In the absence of the saving clause it would have been open to argument what the effect of the transfer was with regard to things previously done. I may also point out that S. 6 of the General Clauses Act provides that when one enactment is repealed by another, then, in the absence of a different intention, the repeal shall not affect anything duly done or suffered under the repealed enactment nor any right accrued thereunder. It strikes me that if the saving of a thing done under the repealed enactMent also necessarily saved what is called the effect of it or rights acquired from it, it would not have been necessary to expressly provide also for the saving of the rights acquired under the repealed enactment. Therefore, it seems to me that the saving of things done does not automatically save the effect of them or rights acquired therefrom. The argument that the saving clause operated to protect the imports was based on two English cases, namely, The Queen v. Justices of the West Riding of Yorkshire (1) and Heston and Isleworth Urban District Council v. Grout (2). These cases considered the terms of statutes analogous to s. 6 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the legislature of the same country. That is not the position here. We have here laws of the Indian legislature replacing French laws. Indeed it is at least arguable whether without more, the French laws would have been of force after the transfer; it would seem that this difficulty was realised and so it was expressly provided by paragraph 5 of another Order called the French Establishments (Administration) Order, made by Notification No. 3314 dated October 30, 1954, issued by the External Affairs Ministry of the Government of India, that all laws in force in the French Establishments and not repealed by para. 6 of the Application of Laws Order, would continue to be in force until repealed. Further, the saving clauses considered in the English cases preserved unaffected by the repeal, only things done under the repealed enactment and the rights acquired thereunder. The saving clause that we are considering saves things done before the commencement of the Application of Laws Order whether the thing was done under any law or not; it does not purport to preserve a right acquired under a statute repealed. In Hamilton Gell v. White , it was observed that s. 38 of the English Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otect a right to import freely under an agreement made prior to the transfer, where there was no licence granted for the import. Admittedly, the petitioners had not obtained any such licence. For all these reasons it seems to me that the English decisions relied on are of no assistance in the present case. I am unable to read the saving clause in this case as if it is the same as s. 6 of our General Clauses Act or the corresponding clause in the English Interpretation Act, 1889, and to obtain guidance from the decisions based on these statutes. I have therefore come to the conclusion that the saving clause in paragraph 6 of the Application of Laws Order does not protect the imports made by the petitioners, from the operation of the Indian laws applied to the French Establishments. I would dismiss these petitions. SHAH J.-Petition No. 123 of 1957: Prior to November 1, 1954, Pondicherry was one of the French Establishments in India administered by the Government of France. Under the French administration, except specified categories like gold, rock- salt and certain medicinal preparations, all commodities could be imported into the Pondicherry Port without a licence. The French ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n market, and in the months of August, September and October orders were placed by importers with foreign suppliers for purchase of commodities of the value of ₹ 280 lakhs to be financed by foreign exchange procured from the open market. Traders who were not normally doing business in Pondicherry and who had no business interest in French Establishments also opened offices in Pondicherry and started indenting goods, to be financed with the aid of foreign exchange in the open market. An agreement for the de facto transfer of the ad- ministration of the French Establishments in India was executed between the Government of India and the Government of France on October 21, 1954. This agreement became effective on November 1, 1954. In exercise of the powers conferred by s. 4 of the Foreign Jurisdiction Act, 1947, on October 31, 1954, the Government of India issued two orders- S. R. O. 3314, the French Establishments ( Administration) Order, 1954, and S. R. O. 3315, the French Establishments (Application of Laws) Order, 1954. By S. R. O. 3315, certain enactments specified in column (3) of the Schedule which included the Sea Customs Act, 1878, The Reserve Bank of India Act, 1934, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the hardship likely to be caused to genuine importers who had placed orders in pursuance of their normal trading operations, the Collector of Customs, Pondicherry, was being authorised to accord certain concessions to genuine importers. By one of such concessions, goods shipped before November 1, 1954, were permitted to be cleared without penalty irrespective of their origin and value, and consignments fully paid for in foreign currency and shipped after November 1, 1954, and ordered before August 15, 1954, were also permitted to be cleared it without penalty . The goods indented by the petitioners were confiscated by the customs authorities exercising powers under s. 167(8) of the Sea Customs Act, on the ground that the same had been imported without a valid licence and in contravention of the Department of Commerce and Industries Notification No. 43-1 T.C./43 dated July 1, 1943, (as amended) read with sub-s. 2 of s. 3 of the Imports and Exports Trade (Control) Act, 1947. The petitioners were by orders passed between February 28 and March 4, 1955, given an option to clear the goods for home consumption on payment of customs duty and fine specified in the order. Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the commencement of the Act, in so far as they were not inconsistent with the provisions of that Act, continued to remain in force and were to be deemed to have been made thereunder. Under the rules framed under the Defence of India Rules, the import of goods of the description indented by the petitioners, was, it is not disputed, prohibited, and the rules framed under the Defence of India Rules continued in force by the operation of s. 4 of the Imports and Exports Trade (Control) Act, 1947. The rules and orders made under r. 84 of the Defence of India Rules were on November 1, 1954, operative as if they were made under the Imports and Exports Trade (Control) Act, 1947, and when that Act was extended to the French Establishment of Pondicherry, these rules and orders became also applicable to that area. By s. 19 of the Sea Customs Act, the Central Government may by notification prohibit or restrict the bringing by sea, goods of any specified description into India across any customs frontier as defined by the Central Government. By s. 2(b) of the Imports and Exports Trade (Control) Act, 1947, import is defined as bringing into India by sea, land or air. Import of goods therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of Art. 10 falls in the chapter headed Judicial Matters and only declares that acts and deeds which constitute rights in conformity with the French Law shall retain the same value after merger with the Union of India and by Art. 17, the obligation is undertaken by the Government of India to fulfil the orders placed outside the Establishments and finalised through the grant of a licence by competent authorities. But the petitioners had obtained no license from any competent authority for importing or even for indenting the goods. It was urged that the orders S. R. O. 3314 and S. R. O. 3315 issued under the Foreign Jurisdiction Act should be construed in the light of the agreement between the Government of India and the Government of France. By S. R. O. 3314, provision is made by the Government of India for the administration of the erstwhile French Establishments. By cl. 5 of that notification, all laws in force in the French Establishments or any part thereof immediately before the commencement of the order and not repealed by cl. 6 of the French Establishments (Application of Laws) Order, 1954, shall continue to remain in force until repealed or amended by a competent au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cl. 6 emphasises that the enactments specified in schedule 3 have no retrospective operation, and as counterpart thereof provides that all transactions which have been concluded before November 1, 1954, will continue to be govered by the French law notwithstanding the enactment of the Acts specified. Since the date of the de facto transfer of the French Establishments to the Indian Union, all imports of goods across the customs frontier at Pondicherry were subject to the provisions of the Sea Customs Act and the Imports and Exports Trade (Control) Act; and goods shipped after November 1, 1954, in pursuance of indents before that date were not expressly saved from the operation of the restrictive provisions of those Acts. On and from November 1, 1954, the law if any relating to the import of goods operative in the French territory was superseded and the goods having been brought into the Pondicherry Port after November 1, 1954, the import was governed by the Sea Customs Act and the Imports and Exports Trade (Control) Act and not by any law of the French territory. The supersession of the French laws by the application of the statutes set out in schedule III was, on November ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression in the course of import of the goods into the territory of India used in Art. 286(1) (b) of the Constitution, a series of integrated activities resulting in the taking of goods across the customs frontier may be involved. But import as defined in the Imports and Exports Trade (Control) Act is bringing a commodity in the territory of India; preliminary steps even if they are closely integrated therewith are not included in that definition. If steps preliminary to import are not included in the concept of import, in dealing with the provisions of the Sea Customs Act and the Imports and Exports Trade (Control) Act, it would be difficult to afford protection of the French laws expressly granted by virtue of cl. 6 of S. R. O. 3315 to such of the preliminary steps as have taken place before the prescribed date, and to create an exemption in favour of imports consequential upon those preliminary steps, which the legislature has declined to do. In my view, therefore, by the use of the expression things done or omitted to be done before such commencement in cl. 6 of S. R. O. 3315 French law applies to acts and omissions before November 1, 1954, and not to legal consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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