Skip to content


Vishwakarma Industries Vs. the Union of India (Uoi) and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtPunjab and Haryana High Court
Decided On
Case NumberLetters Patent Appeal No. 350 of 1972 and Civil Misc. No. 4785 of 1973
Judge
Reported inAIR1977P& H76
ActsImports and Emports Control Act, 1947 - Sections 3 and 3(1); Constitution of India - Article 226
AppellantVishwakarma Industries
RespondentThe Union of India (Uoi) and anr.
Appellant Advocate S.P. Goyal, Adv.
Respondent Advocate Kuldip Singh, Adv.
DispositionPetition dismissed
Cases ReferredK. V. Rajalakshmiah Setty v. State of Mysore
Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the.....r.s. narula, c.j.1. the circumstances in which these two connected cases (letters patent appeal 350 of 1972 and civil writ petition 242 of 1972) have been filed may first be surveyed. the annual import trade control policy is announced by the ministry of foreign trade and supply in the government of india for each year for the period april to march. public notice of the annual policy statement is given by publication in the gazette of india. public notice is also issued of any changes made in the policy in any regard from time to time. the period to which the letters patent appeal relates is april, 1966 to march, 1967, on august 4, 1966, the government of india issued public notice relating to 'liberalisation of policy for import of iron and steel and ferro-alloys, by sc-tual users in the.....
Judgment:

R.S. Narula, C.J.

1. The circumstances in which these two connected cases (Letters Patent Appeal 350 of 1972 and Civil Writ Petition 242 of 1972) have been filed may first be surveyed. The Annual Import Trade Control Policy is announced by the Ministry of Foreign Trade and Supply in the Government of India for each year for the period April to March. Public notice of the annual policy statement is given by publication in the Gazette of India. Public notice is also issued of any changes made in the policy in any regard from time to time. The period to which the Letters Patent Appeal relates is April, 1966 to March, 1967, On August 4, 1966, the Government of India issued public notice relating to 'liberalisation of policy for import of Iron and Steel and Ferro-alloys, by sc-tual users in the small-scale sector for the period April 1966 to March 1967' (An-nexure 'A' to the writ petition). Actual users in the small-scale sector to whom import licences for Iron and Steel and Ferro-alloys had been issued or might be issued for April to September, 1964, October 1964 to March, 1965, or for April 1965 to March 1966, were made eligible for the grant of liberal licence under the said public notice. The basis of licensing and the procedure for submission of import applications under the said policy of liberalisation was contained in para. 2 of the said public notice in the following words:--

'(a) BASIS OF LICENSING

(i) The entitlement of the applicant for grant of special licence will be calculated on the basis of the value of Import Licence for Iron and Steel and Ferro-A1-loys issued to him for the period April-September, 1964, and October 1964-March 1965. If any applicant has not obtained an import licence in the said period, the entitlement for the special licence will be calculated on the basis of the value of the licences issued to him during the period April 1965/March 1966. The allotment of Iron and Steel imported through Messrs. Minerals and Metals Trading Corporation of India Ltd., against recommendations of the sponsoring authorities, in lieu of Import licences for part of demands against import applications for those periods will be taken into account for the calculation of the entitlement.

(ii) In the case of an applicant engaged in the priority industries listed in the appendix to this public notice the entitlement for the special licence will be three times the value of the import licence {including allotments if any from Messrs. M. M. T. C.) for Iron and Steel and Ferro Alloys, issued to him for the period April 1964-September 1964 and October 1964-March 1965, or 12 times the value of the import licence (including allotments if any from Messrs. M. M. T. C.) issued to him for the period April 1965-March 1966, as the case may be, without taking into account the enhancement in the value of licence allowed as a result of devaluation of the rupee.

(iii) In the case of an applicant engaged in industries other than those listed in the Appendix to this public notice, the entitlement for the special licence will be twice the value of the import licence (including allotments, if any, from Messrs. M. M. T. C.) for Iron and Steel and Ferro Alloys issued to him for the period April-September 1964 and October 1964-March 1965 or 8 times the value of the import licence (including allotments, if any from Messrs. M. M. T. C.) issued to him for the period April 1965-March 1966, as the case may be, without taking into account the enhancement in the value of licence allowed as a result of devaluation of the rupee.

(iv) If any applicant has obtained advance licence or allotment from Messrs. M.M.T.C. for the period April-September 1966 in terms of I & S. C.'s Public Notice No. 1/1-116/66/A dated 14th April, 1966 and No. 1/1-116/66/B dated 14th April, 1966 for the period April-September, 1966, the value of such licences and allotment will be adjusted against his entitlement for the special licence to be issued under this public notice. The validity of the public notices dated 14th April, 1966, referred to above is extended for the licensing period October 1966-March 1967 so far as it relates to actual users under small-scale industries.'

2. The appellant is a partnership concern which manufactures medical and surgical equipments and appliances from imported stainless steel sheets at Hiranagar in the State of Jammu and Kashmir. The above-mentioned industry carried on by the appellant is and was at all relevant times a 'priority industry' within the meaning of that expression used in the public notice dated August 4, 1986. The appellant is registered in the State of Jammu and Kashmir as an 'Actual User Importer' under the small-scale industries registration scheme of the Government of India. The basic year on which the import entitlement of the appellant was to depend for purposes of the public notice being 1964-65, it may be mentioned at this stage that for the first half year of 1964-65, it had been granted import licences of the total value of Rs. 22,000/-, and for the second half of that year it had been issued imported raw material worth Rs. 53,500/- by the Jammu and Kashmir Raw Material Depot instead of being given a direct import licence. On that basis the appellant made an application on September 7, 1966, for an import licence for 1966-67 of the value of Rs, 2,26,500/-, i.e. three times of Rs. 75,500/- which represented the total value of the import licence and of the raw material for Rs. 22,000/- and Rupees 53,500/- respectively issued to the appellant during the basic year. It claimed three times the value of the import licence (including allotments from the R. M. D. Jammu) for the basic period as it, was admittedly included in the priority industry listed in the appendix to the public notice. Some dispute having arisen relating to the entitlement of the appellant and other such importers being worked out on the basis of the allotment of material by the Jammu and Kashmir State Government Raw Material Depot as it was different from the M.M.T.C. and had not been specifically named in the public notice, a representation was made by the Jammu and Kashmir Stainless Steel Manufacturers' Association which was considered by a Special Committee set up by the Government of India. Decision on that representation recorded by the Special Committee in its meeting held on August 17, 1967, was as follows:--

'The Jammu and Kashmir Stainless Steel Manufacturers' Association, Jammu, have represented on behalf of their members namely (i) Ess Tee Industry, (ii) Raj Industries, (iii) Modern Metal Mills against the discrimination against them in the grant of licence for import of stainless steel. Their request was examined in detail and it was decided that in terms of the Import Policy followed by this office for import of raw materials and components, the allotments made through State Government Raw Material Depots during 1964-65 should have been taken into account for determining the firm's entitlement for import of raw materials and components for 1966-67 period. The Committee decided that these cases may also be considered on the same basis and release orders may be issued for 1971-72 period for the value that may become admissible to them and subject to other requirements such as machinery in terms of the current import policy. It was also decided that no additional value should be allowed for back periods.'

3. The special licence that . was issued to the appellant on September 29. 1967, in pursuance of the public notice and in response to its application, dated September 8, 1966, was of the value of Rs. 66,000/- only being three times the value of the import licence that had been issued to it for the first half of 1964-65. No licence was issued to it at that stage on the basis of the value of the allotment of imported stainless steel by the Jammu and Kashmir Government Raw Material Depot. On January 25, 1969, the Government of India communicated to the Iron and Steel Controller, Calcutta, the decision taken by it in the matter of issue of licences to small-scale industries manufacturing hospital appliances and surgical instruments in the States of Punjab, Haryana and Himachal Pradesh (Annexure R-2). In the note attached to the said communication it was noticed that whereas the public notice, dated August 4, 1966, had based the entitlement inter alia on the allotment of iron and steel imported through the M.M.T.C., the said notice was silent regarding the allotment made by the Directors of Industries of the States out of the stocks lying with the autonomous bodies of the States. It was observed therein that if such allotments were to be taken as the basis then more than three times of the allotment given in 1&64-65 against regular applications could now be given against the period 1967-68, but 'the entitlement determined on the above basis should be deemed against the period 1967-68, because as a policy we do not issue licences for more than one back period'. The abovementioned note attached to Annexure R-2 further stated:--

'Since the parties did not receive any import licence for 1966-67 and 1067-68, it (the Committee which assembled in the Joint Secretary's room) decided that we should issue an import licence for one back period only, i.e., 1967-68 for that purpose, the base period to be taken could not be 1966-67 because no licence was issued during 1966-67..... In other words, the base period of 1964-65 or 1965-66 could be taken. Since the physical allocation of material from the stocks of Punjab Small Scale Industries Corporation, Chandigarh, was made either in 1964-65 or 1965-66..... all these allotments should be taken as for the period 1964-65 and the entitlement for 1667-68 should be determined at three times of the value of the allotment made for the period 1964-65.'

4. The version of the appellant was that in pursuance of the policy laid down in Annexure R-2 (which prima facie related to Punjab, Haryana and Himachal Pradesh) an additional licence for the remaining amount (three times Rs. 53,500/-) was ordered to issue to the appellant, but was later cancelled under order of the Central Government, dated April 3, 1969 (Annexure R-3). In that communication sent by the Ministry of Steel and Heavy Engineering to the Assistant Iron and Steel Controller, Faridabad, it was stated that the representation made by the Jammu and Kashmir Stainless Steel Association to the Deputy Minister had been duly considered and a copy of the note indicating the decision taken therein was enclosed. No copy of that note has been produced before us either by the respondents or by the appellant. It is, however, the common case of both sides that the decision taken in R-2 for the actual users of Punjab, Haryana and Himachal Pradesh was made applicable to the manufacturers of the State of Jammu and Kashmir. In paragraph 2 of Annexure R-3 it was directed as below:--

'In view of this decision, the additional licence issued to the party Messrs. Vishwakarma on March 27, 1969, should be called back and cancelled. Where the import licence has already been issued on the basis of three times the value of the import licences received by the party for stainless steel sheets during the base period 1964-65, no further import licences on the basis of three times the value of the allocation of stainless steel sheets from the small-scale industries corporation or from the raw material depot should be issued.'

It is from the above-quoted averments in paragraph 2 of Annexure R-3 that the appellant spells out its allegations about an additional licence having actually been issued to it and having subsequently been recalled in accordance with those directions. In reply to the appellant's representation it was informed by the letter of the Deputy Assistant Iron and Steel Controller, dated February 26, 1970 (Annexure 'B'), that since the appellant had already received the import licence for the stainless steel sheets of the value of Rs. 66,000/- for April 1966 to March 1967, under the liberalised scheme on the basis of three times the value of import licence obtained by the appellant during 1964-65, the appellant was not entitled to any further import licence on the basis of three times the value of allotment of stainless steel sheets made through the Raw Material Depot, Jammu.

5. It was in the abovementioned circumstances that a petition was filed by the appellant on March 30, 1971, for the issuance of a writ, order or direction to the respondents (Union of India and the Assistant Iron and Steel Controller, Central Government, Farid&bad;) to quash Annexure 'B', dated February 26, 1970, wherein the additional licence was refused to the appellant, and also the order of respondent No. 1 directing respondent No. 2 to withhold and cancel the additional licence of the appellant (Annexure R-3), and to direct the respondents to restore and release the said additional licence of the value of Rs. 1,60,500/- with fresh validity on account of the balance of the appellant's entitlement for 1966-67. It was further prayed in the petition that if for any reason restoration of the previous import licence may not be possible, a fresh import licence of the value of Rs, 1,60,500/- may be ordered to be issued in favour of the M.M.T.C. with a letter of authority in favour of the appellant to enable it to operate the same.

6. The Deputy Assistant Iron and Steel Controller, Faridabad (respondent No. 2), filed a joint written statement on behalf of himself and the Union of India. The defence taken up by the respondents was that:--

(a) the appellant had no enforceable legal right as the public notice issued by the Government on August 4, 1966, was purely .administrative;

(b) the appellant both on account of policy for the item as also on account of non-indication of allotment in the Director of Industries' recommendation made in the base period was not entitled to any licence on the basis of allotment of steel which was not against the foreign exchange ceiling for the base period;

(c) the hardship suffered by the appellant and other such firms was sought to be alleviated in 1967-68 on ad hoc basis by calculating their value relating to earlier allotments through the State's Small Industries Corporation;

(d) the case of the appellant was clearly distinguishable from the units covered by the decision relating to the grant of special licence of the value of three times the allocation of stainless steel by the State Government;

(e) the distribution of material by the Government Raw Material Depot was not covered by the public notice, dated August 4, 1966, so as to allow any entitlement on the basis thereof 'because the Government Raw Material Depot, Jammu and Kashmir State, had not been equated to the States' Small-Scale Industries Corporation of Punjab, Haryana and Himachal Pradesh;

(f) it was decided that such units may be given import licence who had been allotted stainless steel sheets by the Small-Scale Industries Corporation and by the M.M.T.C. during 1964-65. Respondent No. 2 misinterpreted the said decision of the Ministry of Steel and Heavy Engineering as communicated in their letter, dated January 25, 1969 (Annexure R-2), as the said communication in fact carried the decision only for granting import licence to those units which had not been given any import licence in the base year, but had been given only an allotment from the imports of the State Small-Scale Industries Corporation;

(g) these licences were not given for 1986-67, but for April, 1967 to March, 1968. The said decision having been reiterated to respondent No. 2 in the Government's letter, dated April 3, 1969 (Annexure R-3), the appellant's licence which had been wrongly prepared was cancelled by respondent No. 2;

(h) the appellant could not claim equality with the units of Punjab, Haryana, etc. as those units had not been issued any import licence during 1964-65, and had not been granted any licence during 1966-67, and were, therefore, faced with closure. It was to save them from such a situation that licences were given to them on ad hoc basis in 1967-68, on the basis of the. allocation of stainless steel made to them during the base year; and

(i) the refusal of additional licence to the appellant was in keeping with the public notice, dated August 4, 1966.

7. The writ petition was later emended with the leave of the Court so as to introduce therein paragraphs 17-A and 17-B. It was alleged therein that after the filing of the petition the respondents had sometime in the middle of 1971 referred to the Special Committee to process the representation of the Jammu and Kashmir Stainless Steel Manufacturers' Association to allot appropriate share of their quota to its member units in accordance with the liberalised policy during 1966-67, and that a copy of the summary that was prepared for the consideration of that Committee was being filed as Annexure 'J' to the petition, and the order of the Chief Controller of Imports & Exports, dated August 24, 1971, passed in that connection was Annexure 'K' to the petition. In the summary for the consideration of - the Special Committee (Annexure 'J'), the Jammu and Kashmir Stainless Steel Manufacturers' Association was shown to have represented on behalf of their members (i) Messrs. Ess Tee Industry, (ii) Messrs. Raj Industry and (iii) Messrs. Modern Metal Mills that they had been granted licence for 1966-67 only on the basis of their stainless steel licences for 1964-65, and that for the remaining six months of the base year they were given allocation of steel in view of the licence because the Director of Industries, Kashmir, had himself imported stainless steel which was available for allocation. Annexure 'K' is a copy of the letter of the Chief Controller of Imports, dated August 24, 1971, referring to the representation Annexure 'J', and saying that it had been decided to give the benefit of the allotment of stainless steel made in favour of the above-mentioned three firms during 1964-65 through the State Government Raw Material Depot for the purposes of issue of release orders for 1971-72. While forwarding a copy of the abovementioned decision of the Chief Controller of Imports and Exports to the Iron and Steel Controller, Faridabad (Annexure 'K'), it was mentioned that on the representation of the Jammu and Kashmir Stainless Steel Manufacturers' Association on behalf of their above-named three members it had been decided that in terms of the import policy for import of raw material and components the allotments made through the State Government Depot during 1964-65 should have been taken into account for determining the firm's entitlement for import of raw materials and components for 1966-67 period. The communication further said that the Committee had decided that these cases (all the three named Kashmir manufacturers) may also be considered on the same basis and release orders may be issued admissible to them subject to other requirements such as machinery in terms of the current import policy and that no additional value should be allowed for back periods. In the last paragraph of the endorsement it was stated as below:--

'In view of the decision taken by the Committee the entitlement of the three firms pertaining to April 1971-March 1972 may be enhanced by giving them the benefit of the allotment of stainless steel made by the State Government Raw Material Depot during 1964-65.'

8. When the writ petition of the present appellant came up for hearing before a learned Single Judge of this Court (along with two other connected petitions) on February 1, 1972, the counsel for the respondents stated that he had instructions to undertake that the case of the appellant for entitlement to the quota for 1966-67 and subsequent periods would be referred to the Special Committee in terms of Annexure 'J', and that the decision of the Special Committee would be made on or before March 20, 1972. The counsel for the present appellant agreed to that offer and the hearing of his writ petition was adjourned to March 21, 1972, with a direction to the respondents to refer the appellant's case (and the cases of the other writ petitioners which were being heard with that of the appellant) to the Special Committee for consideration in terms of Annexure 'J.' That time was later extended as the Special Committee was not able to meet before March 20, 1972. Ultimately on May 6, 1972, the Special Committee took the following decision in that regard:--

'The substance of the Committee's decision in all these six oases including the three writ petitioners, is that the entitlement of the parties for the period 1966-67, as claimed by them, will be worked out taking into account the allotments made through MMTC or State Government Depots during the period 1964-65 or 1965-66, as the case may be (which were excluded earlier). The additional entitlement of Messrs Nishkam Udyog, Solan, (2) Messrs. Mittal Industries, Solan, and (3) Messrs Vishwakarma Industries, Hiranagar, works out to Rs. 10,980.00, Rs. 10,932.00 and Rupees 1,59,000.00 respectively. The benefit of the additional entitlements will be given effect to from 1971-72 period only by issue of release orders in consonance with the canalisation policy of the Government during the said period. The benefit of the additional entitlements will not accrue to them retrospectively. In other words, the claims of the three writ petitioners for additional entitlements for 1966-67, have been recognised in terms of value, but due to passage of time and having regard to the uniform principles of import licensing followed in similar oases, namely, the availability of foreign exchange, the overall economy of the country, the essentiality for import, the indigenous production, the import policy in force and other relevant factors, it has been decided to give the benefit of the additional entitlement from 1971-72 period and increase the value of the release orders correspondingly for this period. They will not be entitled to the additional quota for the past period including April-March, 1967 period.'

9. The result of the above-quoted decision of the Special Committee was that the right of the appellant to base its future imports on the allocation of stainless steel during the second half of 1964-65 was recognised, and benefit of the same was given to the appellant for the future periods, but the benefit of the additional requirement was not allowed to accrue to the appellant retrospectively that is for the period which had already gone by. Whereas the dispute for the future was settled by the said decision it was clearly held that the appellant would not be entitled to the additional quota for the past period Including 1966-67. The appellant, therefore, pressed its writ petition on merits and the same was contested by the respondents. By this judgment, dated May 26, 1972, Tuli, J. who heard the petition dismissed It on the ground that in view of the observations of their Lordships of the Supreme Court in Ramchand Jagdish Chand v. Union of India, AIR 1063 SC 563, and Probhudas Morarjee Rajkotia v. Union of India, AIR 1966 SC 1044, the appellant had no legal right to obtain an import licence which could ba enforced by this Court. The learned Judge further observed that the reasons stated by the Special Committee could not be said to be extraneous or not relevant, and it could not be argued that the said decision had been taken arbitrarily. The ratio of the judgment of the Supreme Court in the Joint Chief Controller of Imports and Exports, Madras v. Aminchand Mutha, AIR 1966 SC 478, to the effect that administrative instructions do not create any right as such in favour of the person with whom they deal, but are for mere guidance of the authority in the matter of granting quotas, was also followed, and it was held that the appellant could not claim any legal right to receive full entitlement in terms of the public notice, and no writ could, therefore, be issued in its favour. The arguments advanced on behalf of the present appellant before the learned single Judge based on the decision of their Lordships of the Supreme Court in the Union of India v. Anglo Afghan Agencies, AIR 1968 SC 71'8, were repelled by the learned Judge on the ground that the power to direct the concerned authority to make any facility available to a citizen was confined in that case to a situation where the citizen has acted to his prejudice by acting upon the representation made in the policy about a facility to which he was entitled, but which had been denied to him. The learned Judge also laid emphasis on the fact that the appellant had not preferred any appeal against the withholding of the additional licence for which it was now pressing, and that even its earliest representation in that behalf had been filed after the expiry of the statutory period of 30 days provided for filing the appeal against such an order. Nor could the learned single Judge find any equity of the type which led to the grant of a writ petition in the case of Anglo Afghan Agencies (supra) in favour of the appellant. The present appeal has been filed against the order of the learned single Judge dismissing the writ petition. During the pendency of the appeal an application (C. M. 4785 of 1973) was filed by the appellant for permission to place on record an additional affidavit and for leave to summon certain record. In paragraph 3 of its application and of the affidavit it was stated that release order/ import licence had been granted to several industrial concerns for the back period who were similarly situated as the appellant. The names of the two firms who were alleged to be identically situated as the appellant, but who had been granted import licence for the back period, were disclosed as (1) Messrs Seashore Corporation, Madras, and (2) Messrs Paxal Corporation, Post Box No, 6655, 13 Srikrishna Rajendra Road, Fort, Bangalore-2. In paragraph 4 of the application it has, however, been mentioned that the matter relating to the grant of the import licence for back periods to the abovementioned two firms remained under investigation of the Central Bureau of Intelligence for four or five years, and consequently no import licence was issued to the said firms, but that after the clearance by the Intelligence Bureau the case of the said firms was referred to the Special Licensing Committee and Messrs Seashore Corporation was allowed release orders at replenishment export promotion rates on their undertaking that they would export ten per cent of the value of imports and Messrs Paxal Corporation was favoured with an import licence in the name of M. M. T. C. with a letter of authority in their name which meant that they could operate the licence. It was added that the release order in favour of the first firm was issued in March, 1972, and the import licence in favour of the second firm was issued in July, 1972, whereas the decision against the appellant had been taken on May 6, 1972. It was on that basis that discrimination was alleged, and a request to summon the files of the said two firms from the office of the Chief Controller of Imports and Exports was made. The Motion Bench before which the application came up for hearing gave notice of the application to the respondents and order that the same be decided by the Bench hearing the appeal.

10. On January 18, 1972, the appellant filed Civil Writ Petition 242 of 1972, relating to the licensing period from April 1969 to March 1970. Besides reiterating all the facts that had been set out in the appellant's earlier petition (C, W. P. 916 of 1970) the appellant referred to the Import Trade Control Policy for the year 1969-70 and the public notice, dated March 31, 1969 (the red book) whereby the same was publicised. Reference was made to Clause 27 of the said public notice which provided that the units whioh obtained licences for raw materials/ components against their applications made during April 1968-March 1969 were to make their import applications during April 1969-March 1970, on the basis of actual consumption in continuation of the period of consumption covered by the ap-plications made during 1968-69, at a time taking consumption of not less than three months and not more than six months. Clause 28 of the policy provided that there would be no last date for the submission of applications during the licens-ing period (1969-70) and a unit could apply for licenses at any time it could show consumption of imported raw materials and components as indicated above. The case of the appellant relating to 1969-70 which is not disputed on facts is that it consumed raw materials of the value of Rs. 37,742/- during the period August 15, 1969 to February 14, 1970, and accordingly submitted its application for the import licence of stainless steel sheets of the same value in accordance with the abovementioned import policy. The appellant was, however, granted two import licences, one dated March 22, 1970, for Rs, 22,000/- and the second of the same date for Rs. 11,000/- totalling Rs. 33,000/-. The grievance of the appellant is that it wag illegally denied the licence of the remaining value of Rs. 4,742/- representing the difference between Rs. 37,742/-and Rs. 33,000/-, The second grievance of the appellant in its civil writ petition relating to 1969-1970 relates to the licence in respect of non-priority and products, the policy and procedure for which was to be the same as during the year 1968-69, and consequently the same as during 1967-68, and again the same as in the year 1966-67, so that its entitlement in respect of the second item would depend on the result of its first writ petition which has been dismissed by Tuli, J. and against which the appeal has been heard by us. The prayer in this petition is for quashing the orders of the Government Annexures 'C' and 'D'. Annexure 'C' is the order of the Joint Chief Controller of Imports and Exports, dated November 19, 1970, rejecting the appeal of the appellant and refusing to issue any additional licence for the remaining amount to it. Annexure 'D' is the order of the Chief Controller of Imports and Exports, dated November 1, 1971, refusing to reopen his earlier decision, dated November 10, l'970, as previously stated in his letter, dated March 25, 1971. It has been further prayed in this petition that the respondents may be ordered by the issue of a writ in the nature of mandamus to issue the additional licence, and if it may not be possible to issue an import licence in the name of the appellant the same may be ordered to be issued in favour of the M. M. T. C. with a letter of authority in favour of the appellant enabling it to operate the same itself on payment of commission or charges to the M. M. T. C. as per rules.

It. When this petition came up for the first time before the Motion Bench (Harbans Singh, C. J. and R. S. Sar-karia, J. as they then were), it was adjourned to await the decision of the Court in the appellant's earlier petition that is Civil Writ 916 of 1970, which was then on the daily list of a learned Single Judge. After Civil Writ Petition 916 of 1970 had been dismissed, but Letters Patent Appeal 350 of 1972, against the same had been admitted, this petition was again brought up for hearing before the Motion Bench (Harbans Singh, C. J., as he then was, and P. C. Jain, J.) on November 22, 1972, and the petition was admitted but was directed to be heard with the Letters Patent Appeal. That is how both these cases have come up together for hearing before us. In the written statement in reply to the writ petition, the same stand has been taken by the respondents as in the earlier petition. Regarding the new point relating to entitlement to a licence of the value of Rupees 4,742/- It has been averred in paragraph 5 of the written statement of the respondents that since the appellant is a composite unit for both priority and non-priority end products, its entitlement for 1969-70 was required to be refixed on the basis of the value of the licence granted to it for 1964-65, and inasmuch as it had been granted import licence for Rupees 22,000/- during that period and the end products allowed were both priority and non-priority as per classification given in the policy statement for 1969-70, the appellant was entitled only to three times of half the value of 1964-65 imports as per the procedure in force. In short the only additional issue involved in this writ petition is whether the appellant is entitled to the import licence for the whole of the value of actual consumption for the specified period of its choice (as intended for non-priority units only) or is entitled to three times of half the value of the import licence issued in its favour during 1964-65, on account of its being a composite unit for both priority and non-priority end-products as provided in the policy statement. The second part of the case, f. e., even if it has to be half the value of the 1964-65 imports, whether the appellant is or is not entitled to include in such value the stainless steel allotted to it by the Jammu and Kashmir Raw Material Depot is covered by the main point involved in the appellant's earlier petition. On a mere reading of the relevant parts of the notifications issued under the Import Trade Control Policy for 1969-70, it is apparent that in view of the admitted fact that the appellant is a composite unit for both priority and non-priority end products, the basis of calculation of the entitlement of the appellant for 1969-70 is correct as it has to be only three times of half the value of the imports made in 1964-65, and not on the full amount of actual consumption for the prescribed period of its choice during 1969-70, which is not applicable to a composite unit. The appellant has based its claim on the public notice dated August 4, 1966 (Annexure 'A') which has already been referred to in the opening part of this judgment. The manufacturers of hospital equipment and appliances were originally to be treated as priority indus-ties, but such industries were split up into three categories with effect from May 29, 1969, and it was decided that each of such industry would thereafter fall under any-one of the categories mentioned below:--

(i) purely priority;

(ii) mixed (both priority and non-priority); and

(iii) purely non-priority. In the said notice (of which a cycle-styled copy has been produced before us the learned counsel for the respondents) 'purely priority units' were defined as 'the units who make only the priority items' and who were to be granted licences on the basis of consumption certificates keeping the relevant GLIs in view as done in the case of other priority units in the small-scale sector. The appellant would have been entitled to the balance of the value of its actual consumption, i. e., a licence for the additional value of Rs. 4,742/- if it were to fall within the category known as 'purely priority unit'. Relevant part of paragraph 2 of the same order which lays down the manner for determining the entitlement of the second category, i. e. 'mixed' (both priority and non-priority) units who produce both priority and non-priority items (like the appellant) stated as below :--

'(i) The total value of the licences obtained by the firm for manufacture of Hospital Equipment and Appliances In the base periods viz. 1964-65 or 1965-66 may be divided by two.

(ii) The quotient obtained at (i) above multiplied by 2 or 8 as the case may be, will indicate the firm's annual entitlements for non-priority items and this value will continue to be the firm's annual entitlements for non-priority items from 1966-67 to 1969-70.

(iii) The quotient obtained at (i) above multiplied by 3 or 12 will give the firm's annual entitlements for priority end products for 1966-67 and 1967-68. While issuing licences in such cases for the periods 1968-69 and 1969-70 on the basis of consumption certificate the firm's maximum entitlement against each application preferred on 6 months consumption may be fixed at twice the half-yearly entitlement calculated for 1966-67 and 1967-68 in the manner mentioned above and not at twice the value of half-yearly licences obtained by them actually in 1967-68 because such half-yearly licences were not only for priority items but also for non-priority items.'

Sub-paragraph (iv) of paragraph 2 deals with the case of units which came into existence in 1966-67, and is not relevant for our purpose. Paragraph 3 of the said order which deals with purely non-priority units whose entitlement was not to exceed twice the value of the licences obtained by them in 1964-65, etc. is also not relevant for our purposes,

12. The precise policy for determining the entitlement for 1969-70 had to be decided in terms of the public notice referred to above whereby different criteria were laid down for purely priority units, mixed units and purely non-priority units. As the entitlement of the appellant amounting to Rs. 33,000/- has been determined strictly in accordance with the said public notice, and the other basis meant for purely priority units is not applicable to it, we find no force at all in the additional claim made in the writ petition, which must fail subject to the decision on the other point which has to be concluded by the decision in the Letters Patent Appeal.

13. Mr. S. P. Goyal, learned counsel for the appellant, has firstly submitted in the appeal that the appellant came to Court against the withholding of the licence to which it claimed to be entitled and not against the order passed by the Special Committee during the pendency of the writ petition, and, therefore, the so-called valid reasons assigned in the order of the Special Committee cannot be read against it in order to justify the original order which was impugned by the appellant and which did not contain any such reasons. He has secondly submitted that no foreign exchange is now involved in granting the relief claimed by the appellant as no import licences are now issued to the individual units, but the entire stainless steel is imported by the M. M. T. C. which releases the material to different units and if the additional material claimed by the appellant is released to it, the foreign exchange would still not be affected. On the merits of the validity of the impugned order (Annexure 'B' to the first petition) it has been contended by Mr. Goyal that the sole reason given therein about issue of material in place of import licence not being equated to the grant of an import licence is not a valid and good reason in law.

14. All the above-mentioned three grounds urged by Mr. Goyal are based on the assumption that his client has a legal right to the grant of the import licence under the policy statement issued by the Government, and that it can ask this Court to issue in favour of his client a writ in the nature of mandamus directing the respondents to issue the licence in pursuance of a duty which is assumed to be enjoined on them by the said policy statement even though it has been admittedly subsequently decided by the same Government that though the entitlement of the appellant for subsequent periods may be counted on the basis of the allocation of material in addition to the grant of import licence, no licence for the back period would be issued on that basis. Mr. Kuldip Singh has on the other hand laid emphasis on the various judgments of the Supreme Court to which reference has already been made and which have been discussed in detail in the judgment of the learned single Judge. He has in addition referred to a recent judgment of their Lordships in Andhra Industrial Works v. Chief Controller of Imports, Writ Petitions Nos. 122 to 125 of 1973, decided on April 26, 1974, which has been published in 1974 UJ (SC) 361 = (AIR 1974 SC 1539). It was contended before the Supreme Court in that case that the order impugned before their Lordships was liable to be struck down on the ground that in view of the import policy contained in the red book for the relevant period, the writ petitioners were entitled to the grant of the import licence, and that the existing instructions on the basis of which their applications were rejected could not override the import policy. It was also sought to be argued that those existing instructions did not amount to reasonable restrictions within the contemplation of Article 19 o the Constitution. On behalf of the Central Government it was contended, inter alia, before the Supreme Court that no mandamus or other relief as prayed for by the writ petitioners could be granted because they had no specific legal right to the licence nor was the Government under a corresponding legal obligation to grant the same. Their Lordships of the Supreme Court dismissed the writ petitions of the Andhra Industrial Works and after discussing the merits of the case upheld the above quoted contentions of the Central Government in the following words :--

'15. Be that as it may on the basis of an Import Trade Policy an applicant has no absolute right, much less a fundamental right, to the grant of an import licence. The nature of such a claim came up for consideration before this Court in Deputy Assistant Iron and Steel Controller v. L. Manick Chand, Proprietor, Metal Corporation, Madras, (1972) 3 SCR 1 = (AIR 1972 SC 935).

16. That was an appeal by special leave against the judgment of the High Court rendered in exercise of writ jurisdiction under Article 226. The writ petitioner asked for the issue of a Mandamus requiring the authorities to consider his application for licence to import stainless steel in terms of 1968-69 Policy and not in accordance with 1970-71 Policy when the application was made. This Court held that in view of Section 3(1)(a) of the Imports and Exports Control Act, 1947, and Clause 6 (1) (a) of the Imports (Control) Order, 1955, an applicant has no vested right to an import licence in terms of the policy in force at the time of the application. No case for the Mandamus prayed had been made out, particularly when the delay in disposing of the ap-plication for licence was not due to the fault of the Licensing Authority.

17. The ratio of Maneckchand's case (supra), is applicable with greater force to the present petitions which have been made under Article 32 of the Constitution. The instant case is no doubt one of delay on the part of the authority, but this 'delay' could not be said to be 'undue' or motivated by bad faith. In view of the supervening criminal proceedings against the petitioners, the respondent might have thought that it was better for him to defer decision on the applications till the termination of the criminal pro-ceedings.

18. Nor do we find any substance in the contention that the 'existing instructions' or the orders made in pursuance of the Import & Export Control Act place 'unreasonable restrictions' on the petitioners' right to carry on trade or business. These restrictions obviously have been imposed in the interests of the general public and national economy. Again, in this connection the observations made by this Court in Maneckchand's case (supra) are relevant and may be extracted;

'..... it has to be borne in mind that in the present stage of our industrial development imports requiring foreign exchange have necessarily to be appropriately controlled and regulated, Possible abuses of import quota have also to be effectively checked and this inevitably requires proper scrutiny of the various applications for import licence. In granting licences for imports, the authority concerned has to keep in view various factors which may have impact on imports of other items of relatively greater priority in the larger interest of the overall economy of the country which has to be the supreme consideration.' '

Mr. Goyal has sought to distinguish this case from the one in hand on the ground that the decision of their Lordships was confined to the right of the petitioners before them under Article 32 of the Constitution, and that inasmuch as no fundamental right of Messrs Andhra Industrial Works was found to have been violated, their Lordships declined to grant them any relief, but that consideration is not relevant in proceedings under Article 226 of the Constitution where a writ can be issued even if no infringement or violation of any fundamental right is alleged or proved. A reading of the judgment of the Supreme Court shows that contention No. 2 advanced by the Government was that since the petitioners had no fundamental right to the grant of the licence in question, they were not entitled to any relief, but contention No. 3 was independent of the other two contentions and that related to the plea that a citizen had no specific legal right to a licence nor the respondents were under a corresponding legal obligation to grant the same. The law laid down by their Lordships of the Supreme Court in the Joint Chief Controller of Imports and Exports, Madras v. Aminchand Mutha, AIR 1966 SC 478, Probhudas Morarjee, Rajkotia v. Union of India, AIR 1966 SC 1044, the Deputy Assistant Iron and Steel Controller, Madras v. L. Manickchand Proprietor, Katralla Metal Corporation, Madras, AIR 1972 SC 935, and in Exen Industries v. The Chief Controller of Imports and Exports, (1972) 3 SCC 176 = (AIR 1971 SC 1025), has been further affirmed and clarified in the latest judgment of their Lordships in the case of Andhra Industrial Works (supra), It has also been held by their Lordships that the appropriate authorities can take into consideration the factors relevant at the time of disposing of the application for a licence. The instructions and public policy issued by the Central Government from time to time under the Joint Trade Policy Statement issued yearly or half-yearly are binding on the Government and no one has a right to claim exemption from being bound by those instructions. In L. Manickchend's case (supra) their Lordships made it clear that an ap-plicant has no absolute vested right to an import licence in terms of the policy in force at the tune of his application because from the very nature of things at the time of granting the licence the authority concerned may often be in a better position to have a clearer overall picture of the various factors having an important impact on the final decision on the allotment of import quota to the various applicants. Mr. Kuldip Singh also brought to our notice the form in which relief was granted by a Division Bench of the Delhi High Court on November 16, 1971, in Civil Writ 25-D of 1'966, Exen Industries v. The Chief Controller of Imports & Exports. After coming to a finding that the applications of Messrs Exen Industries for import of raw materials for the previous period were entitled to be considered from 1964 onwards, the learned Judges stated in the penultimate sentence of their judgment that 'if this is not possible due to passage of time, the respondents must do so at any rate from now onwards,' We agree with Mr. Kuldip Singh that the consideration which impelled the Division Bench of the Delhi High Court to place the above quoted rider on the earlier part of their judgment would be equally good and relevant for the Government in devising and revising its import policy and its policy for the issue of import licences from time to tune. I am unable to find anything abhorring or inequitable in the decision of the Government about recognising the right of the appellant for the future based on the allocation of steel by the Raw Material Depot during the later half of 1964-65, subject to relief in that regard not being granted for the back periods. When it is undoubtedly open to the Government to change the very basis of grant of import licence for the future, there is no reason why the Government is not entitled to hedge in the entitlement of a citizen to import certain goods in' future to a cer-tain extent, but to provide for the benefit of that decision not being given for the past period. It may not be fair to give effect to an entitlement for a past period due to change of circumstances brought about by the passage of time. In the nature of things it is impossible to devise and follow uniform principles for import licences. The ultimate consideration is of the overall economy of the country of which the Government is normally the best judge, unless it is found that in arriving at a decision in a particular case its decision has been actuated by official or personal malice or based on irrelevant or extraneous considerations. The facts of this case do not fall within any such exception. We have, therefore, no hesitation in upholding the decision of the learned single Judge to the effect that the appellant does not have any legal right to compel the respondents to issue any import licence to it for the back periods contrary to the impugned decision of the Government (Annexure R-3),

15. Nor are we able to find any force in the contention of Mr. Goyal about no foreign exchange being involved in the changed circumstances. Whether the stainless steel is imported by the M. M. T. C. for the whole of the country or part of the country and distributed to users, or whether it is allowed to be imported by the actual users directly makes no difference so far as the total amount of foreign exchange is involved. If im-port licences were to be given on the basis of a policy which has been changed and lesser quantity of stainless steel is to be given under the changed policy, the grant of greater quantity is bound to reflect on the existing stocks of the M. M. T. C. which have to be replenished and larger amount of foreign exchange is necessarily to be involved in adopting such a course. In any event that question does not really arise in view of our decision on the first point.

16. The facts of the case of Anglo Afghan Agencies (AIR 1968 SC 718) (supra) were entirely different and have no bearing at all on the point involved in the present proceedings. I happen to be the author of the judgment of the Division Bench of this Court in that case which was ultimately upheld by the Supreme Court The basis of that judgment wag that if the Central Government makes a person to act in a particular manner on the basis of an express representation made in that behalf, it is not open to it to deny the benefit which the person concerned had actually earned by acting in that particular manner on the basis of the particular representation after he had so acted, so as to deprive him of the benefits of the declared policy of the Government which made him to so act. No such consideration is involved in the instant case.

17. Mr. Kuldip Singh took one day's time from us to ascertain from the Central Government as to why and how the appellant had been discriminated against in the matter of the grant of licence for 1966-67 on the basis of the allocation of steel made to it by the Jammu and Kashmir Raw Material Depot during 'the second half of 1964-65. After making those enquiries Mr. Kuldip Singh told us that it was correct that the additional licence for the back period had been refused to all the units similarly situated as the appellant, but that subsequently M/s. Seashore Corporation, Madras, and Messrs Paxal Corporation, Bangalore, somehow illegally managed to procure the licences for the back period about which counsel was not in a position to get any definite affidavit filed at this stage as the grant of the licences to those two parties has already rocked the Parliament for more than one Session, and all those files have been seized and sealed, and are under enquiry by the Central Bureau of Investigation in connection with which Tul Mohan Ram M. P. and others are being prosecuted. This shows that the grant of licences to those two firms was not regular and in normal course, and has been due to some possible underhand dealings, and the appellant cannot claim equality in the matter of obtaining licence along with such other firms. At the best a concession was made in their favour whether legal or illegal, and a concession cannot according to the authoritative pronouncement of their Lordships of the Supreme Court in K. V. Rajalakshmiah Setty v. State of Mysore, AIR 1967 SC 993. be claimed as a matter of right end a writ of mandamus cannot he issued commanding the Government to show some indulgence to the appellant. C. M. 4785 of 1973 is therefore dismissed.

18. No other point having been argued in this appeal or in the writ petition, both these must fail. For the foregoing reasons the Letters Patent Appeal as well as the writ petition are dismissed though without any order as to costs.

Muni Lal Verma, J.

I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //