Govindan Nair, C.J.
1. In this appeal by a writ petitioner who unsuccessfully sought to quash the orders passed by the first and second respondents, namely, the Central Board of Excise and Customs and the Collector of Customs, Madras, an interesting and somewhat difficult question of interpretation of the provisions of the Imports (Control) Order, 1955 (here in after called 'the Order') arises. To be more, specific, the question is whether on the facts of the case, it is Clause 3(3) of the Order that would apply or Clause 10-C thereof.
2. The appellant before us is a letter-of-authority holder for a firm to whom licence had been issued, admittedly validly, for the import of photographic films. He opened an irrevocable letter of credit on 11th January, 1974 in favour of the foreign exporter and the goods were despatched on 24th July, 1974 and they arrived at the Port of Madras and a Bill Entry was filed on 18th September, 1974. The description of the goods given in the licence stated:
Photographic Negatives only as per AM. 74 Policy, and 2. Wood Free Glazed Boards excluding Ivory and Fine Boards as per AM. 74 policy.
We are not concerned in this case with item 2. The approximate value of the goods was mentioned in the licence as Rs. 1,50,053. The licence was dated April-March, 1974 and it was valid for 18 months from the date of issue. The only other condition of the licence which came up for comment and construction is what is mentioned under Clause 8(ii)(b), which is as follows:. (b) This licence is issued subject to the condition that all items of goods imported under it shall be used only in the licence-holder's factory at the address shown in the application against which the licence is issued and for the purpose for which the licence is issued or may be processed in the factory of another manufacturing unit, but no portion thereof shall be sold to any other party or utilized or permitted to be used in any other manner. The goods so processed in another factory shall, however, be utilized in the manufacturing processes undertaken by the licensee. The licensee shall maintain a proper account of consumption and utilization of the goods imported against the licence in the prescribed manner and produce such account to the licensing authority, sponsoring authority, or any other authority concerned, within such time as may be specified by such authority
It is also useful to note that Clause 8(i) states specifically that the licence would be subject to the conditions in force relating to the goods covered by the licence, as described in the Import Trade Control Policy Book for the period during which the licence has been issued.
3. The goods in question could be imported only under licence as it fell under Item 303 of Schedule I of the Order. As we indicated earlier, no question of the lack of valid licence arises for consideration in this appeal. Section 3 of the Imports and Exports (Control) Act, 1947, empowers the Central Government by order published in the Official Gazette to make provisions for prohibiting, restricting or otherwise controlling in all cases or in specified classes of cases, and subject to such exceptions if any as may be made by or under the order (a) the import, export, carriage costwise or shipment as ships stores of goods of any specified description; or (b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried. In exercise of the powers conferred by this section, the Order has been issued and Clause 3 thereof is in these terms:
3. Restriction of Import of certain goods.-(1) Save as otherwise provided in this Order, no person shall import any goods_of the description specified in Schedule I, except under, and in accordance, with a licence or a customs clearance permit granted by the Central Government or by any officer specified in Schedule II.
(2) If, in any case, it is found that the goods imported under a licence do not conform to the description given in the licence or were shipped prior to the date of issue of the licence under which they are claimed to have been imported, then, without prejudice to any action that may be taken against the licensee under the Customs Act (LII of 1962), in respect of the said importation, the licence may be treated as having been utilised for importing the said goods.
(3) If, in any case, it is found that the goods imported under a licence do not conform in every respect,-
(i) to the description or value of the goods as contained in the licence; or
(ii) to the other conditions relating to such goods, as contained in, or applicable to, the licence,
the import of such goods shall be deemed to be prohibited.
Clause 10-C of the Order reads as follows:
(1) Where, on the importation of any goods or at any time thereafter, the Chief Controller of Imports and Exports is satisfied, after giving a reasonable opportunity to the licensee of being heard in the matter, that such goods cannot be utilised for the purpose for which they were imported he may by order, direct the licensee or any other person, having possession or control of such goods to sell such goods to such person within such time, at such price and in such manner as may be specified in the direction.
(2) The price that may be specified under Sub-Clause (1) shall be the aggregate of the landed cost of the goods, clearing and transportation charges and such other incidental charges incurred in relation thereto as are considered reasonable in the circumstances of the case by. the Chief Controller of Imports and Exports.
(2-A) Where goods are imported through the State Trading Corporation of India, the Minerals and Metals Trading Corporation of India or other similar institutions or agencies owned or controlled by the Government or any other recognised agency, and such goods are allotted to any person, an opportunity of being heard in the matter shall be given to such person also.
(3) The licensee or the person to whom any direction has been made under Sub-Clause (1) shall be bound to comply with such direction.
4. The condition in Clause 8(ii)(b), as we have extracted above, had imposed an obligation on the licensee to utilise the goods imported in the factory of the licensee specifically for the manufacturing process carried out by it. The licensee was Messrs. East Coast Sea Foods Corporation. It had refrigeration unit and also a Printing Press. Even before the goods arrived in the Port of Madras, the licensee had sold the freezing plant, and after the arrival of the goods, they had also sold the Printing Press. The Customs authorities got information about these acts of the licensee. Thereupon, they came to the conclusion that the licensee was not in a position to comply with the conditions of the licence and took the view that seclion 111(d) of the Customs Act read with Clause 3(3) of the Order would enable them to confiscate the goods that had been imported by the licensee with the aid of the letter-of-authority holder who had advanced moneys necessary for the import. Section 111(d) of the Customs Act reads thus:
The following goods brought from a place outside India shall be liable to confiscation:. (d) any goods which are imported or attempted to be imported or are brought within the Indian Customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force.
For the 'prohibition' which is a necessary ingredient of the section which we have just now extracted, reliance has been placed on Clause 3(3) of the Order which we have already extracted earlier in this judgment. We may also refer to the definitions of the terms 'import' and 'India' in Section 2(23) and Section 2(27) respectively of the Customs Act, 1962.
(23) 'import', with its grammatical variations and cognate expressions; means bring into India from a place outside India;
(27) 'India' includes the territorial waters of India.
5. A glance at Clauses 3(3) and 10-C of the Order would make it evident that the authority who has to take action under clauses 3(3) and 10-C are different and they would be acting under different provisions contained in different statutes ; and the action under Clause 10-C also, in accordance with the policy laid down by virtue of the conditions of the licence itself, would be a part of the terms on which import has been permitted.
6. On the facts that we have stated above and the statutory provisions which we have adverted to, it was contended on behalf of counsel for the appellant that Clause 3(3) will have no application. He elaborated on it by stating that the condition in so far as it insists that the goods must conform to the description and value as stated in Clause 3(3)(i) gives a key in understanding the more widely worded Clause 3(3)(ii) which speaks of the other conditions relating to such goods as contained in or applicable to the licence. His submission was that this clause would apply only to such conditions in the licence as could be reasonably related to the physical features, the description and the value of the goods. The second submission in regard to the interpretation to be placed on this clause was that the condition in Clause 8(ii)(b) in the licence would be attracted normally only in the case of an act or omission of an importer after the import had been completed. It was submitted that the clause must not be read with reference to the facts of a particular case but must be read according to its tenor, so that its applicability to all types of cases could be defined or laid down. It was so submitted because the licensee had by its act of selling the freezing plant and also the Printing Press later, and in view of its apparently difficult financial condition, known or taken to be incapable of fulfilling the condition in Clause 8(ii)(b) of the licence by the Customs authorities. The argument of counsel was that assuming the inference drawn by the authorities is a correct one, even so the action under Clause 3(3) by the Customs for the confiscation of the goods could not have been resorted to because the clause itself was not applicable for what counsel called, the violation of a 'post-importation condition'.
7. As a result of the discussions at the bar it became evident that it is difficult by interpreting Clause 3(3) alone to come to the conclusion that the clause will attract only such conditions in the licence attributable to the physical features or value of the goods. In fact, counsel himself mentioned that a licence may provide that the import must be from hard currency countries alone. This has no reference directly to the nature or quality of the goods and any violation of that condition would be a violation which would attract Clause 3(3)(i). If the goods were imported from a soft currency area, Clause 3(3) would be attracted and action under that clause would be possible. We shall guard ourselves by stating that we do not wish to express any final opinion in this matter as we think that the correct approach to understand the scope and effect of Clause 3(3) is by reading Clause 3(3) with Clause 10-C and by attempting a harmonious construction of the two clauses so that both the clauses may co-exist and one does not infringe one the other or create conflict in their applications. In this regard, we must also refer to paragraph 94(1) of Chapter IV as well as paragraph 275(2) of Chapter XIII in the Hand-book. Those paragraphs are in these terms:
94. (1) Where, after importing goods against an actual user's licence, the actual user-licensee finds that, for any reasons, he is not in a position to utilise the goods in accordance with the conditions of the licence under which the goods were imported, he should find another actual user and transfer the goods to the latter with the permission of the licensing authority who had issued the licence. The buyer of the goods in such cases should be an actual user requiring the goods in question for use in the industrial unit.
275(2). If for any reason the licensee has not been able to take delivery of the imported goods from the holder of the letter of authority and it is satisfied that the goods, in question, will not serve the purpose for which the import was allowed, it may initiate action in respect of such goods under Clause 10-C of the Imports (Control) Order, 1955, dated 7th December, 1965 as amended.
When we read Clause 10-C along with paragraphs 94(1) and 275(2) of the Hand Book of Import Policy, which are not statutory provisions, but which enunciate the basic policy of the Government under which, and subject to which alone, import in permitted-(We notice that these policies are made conditions of the licence) there can be little doubt that an inability of the licensee to use the imported articles will attract Clause 10-C, and action under that clause cannot result in the confiscation of the goods. On the other hand, the goods can only be directed to be sold at a specified price which should cover the c.i.f. value of the imported goods, customs duty paid, landing and clearing charges paid, transportation charges paid from the customs port to the factory godown of the seller; and other reasonable incidental charges incurred in relation to the imported goods in question. Even in the case of a letter of authority holder, the benefit of proceeding under Clause 10-C of the order is provided by paragraph 275(2) and under Clause 10-C there is a statutory provision that the price that may be specified under Sub-clause (1) shall be the aggregate of the landed cost of the goods, clearing and transportation charges and such other incidental charges incurred in relation thereto as are considered reasonable in the circumstances of the case by the Chief Controller of Imports and Exports. The provision in this regard relating to non-compliance of the conditions that the goods must be used for the purpose for which they were allowed to be imported by either attempting to sell the imported goods, or arising from incapacity under circumstances beyond the control of the licensee to utilise the imported goods for the purpose for which the import licence was granted is visited only with the consequences of goods being taken from the holder of the letter of authority and directed to be sold to a specified individual at a specified price which would guarantee to the licence-holder or the holder of the letter of authority at least the costs that are incurred in importing the goods. This provision is so widely different from the confiscatory provision which is attracted by Clause 3(3) that it is necessary to say clearly under what circumstances the latter would apply and as to when resort can be had to Clause 3(3). It cannot be that one or the other can be applied indiscriminately either according to the whims of the officers concerned or according to the accidental circumstances of early information which the Customs authorities might have had that a licensee was not in a position to use the goods for the purpose for which they had been imported, as in the case before us. We say the 'accidental circumstances' because it is not always that the customs authorities may have knowledge of the conditions or the circumstances of the licensee at the time the goods arrived at the Port, and if the authority acting under Clause 10-C had information that the licensee is incapable or utilising the goods for the purpose for which it is allowed to be imported, even before the goods crossed the customs barrier, we conceive that he is perfectly entitled to pass an order under Clause 10-C and direct that the goods be sold to a specified person for a specified price. The question that would arise in such circumstances is whether if an order had been passed by the authority entitled to act under Clause 10-C, the Customs authorities could nevertheless, ignoring such an order, confiscate the goods for the violation of the condition for which specific provision is made in Clause 10-C. If the customs can override the order of the authority acting under Clause 10-C, the provision in Clause 10-C will become otiose and will not be applicable. Such inconsistent and inconceivable variations and consequences which result from no fault or omission or act of the licensee cannot be the basis for interpreting the provisions which are patently different one from the other. It is in such circumstances that recourse has to be had to the rule of harmonious construction. We will have to say in what circumstances each Clause would be attracted; one providing for the penal, rather drastic provision of depriving the licensee or the letter of authority-holder of the entire goods and, therefore, putting them to loss in that they will not get even one pie towards its value and the other providing for the more benevolent, and if we may say so, a fair and reasonable method of ensuring that the goods are utilised for the purpose for which they are imported and at the same time also providing that the licensee letter of authority-holder should receive substantially the expenditure incurred in importing. The two cannot be allowed to be applied to the same set of circumstances or facts. In the light of this position, we have to accept the argument of counsel for the appellant that when the violation is of a condition in the licence, which would normally be expected to happen after the import is completed as in the case of failure to utilise the goods for the purpose for which they were allowed to be imported, it is only Clause 10-C that would apply and not Clause 3(3).
8. When a show cause notice was issued quoting Section 111(d) of the Customs Act, 1962 and relying on Clause 3(3) of the Order, objection was taken by the appellant and he invited the attention of the authorities to Clause 10-C and claimed that action should be taken under Clause 10-C and not under Clause 3(3) of the Order. This was overruled by the first respondent and the attempt of the appellant to get the order reversed in appeal before the Central Board of Revenue also failed. We think that the provisions contained in these two clauses of the Order had not been properly understood and they have not been interpreted in the manner in which they should be interpreted. We have, therefore, no doubt that the orders are erroneous in law and they have serious consequences in that the appellant, the holder of the letter of authority who had expended large sums of moneys to the tune of over Rs. 1,60,000 for getting the goods imported to India had suffered by the order that has been passed. We should, therefore, normally set aside these orders.
9. Counsel for the respondents, however, contended that in view of the provision in Section 131 of the Customs Act, 1962, a revision from an order of the appellate authority, namely, the first respondent the Central Board of Excise and Customs under Section 128 of the Act being permitted by law, the appellant has other remedy available to him and by virtue of Article 226(3) read with the provision in Section 58 of the Constitution (Forty-second Amendment) Act, 1976, this Court will have to deny any relief to the appellant, and hold that the writ petition itself has abated. This leads us to consider the provision in Section 58. It is as follows:
58. Special provisions as to pending petitions under Article 226.-(1) Notwithstanding anything contained in the Constitution, every petition made under Article 226 of the Constitution before the appointed day and pending before any High Court immediately before that day such petition being referred to in this Section as a pending petition) and any interim order (whether by way of injunction or stay or in any other manner) made on, or in any proceeding relating to, such petition before that day shall be dealt with in accordance with the provisions of Article 226 as substituted by Section 38.
(2) In particular, and without prejudice to the generality of the provisions of Sub-section (1), every pending petition before a High Court which would not have been admitted by the High Court under the provisions of Article 226 as substituted by Section 38 if such petition had been made after the appointed day, shall abate and any interim order (whether by way of injunction or stay or in any other manner) made on, or in any proceedings relating to, such petition shall stand vacated:
Provided that nothing contained in this Sub-section shall affect the right of the petitioner to seek relief under any other law for the time being in force in respect of the matters to which such petition relates and in computing the period of limitation, if any, for seeking such relief, the period during which the proceedings relating to such petition were pending in the High Court shall be excluded.
(3) Every interim order (whether by way of injunction or stay or in any other manner) which was made before the appointed day, on, or in any proceedings relating to, a pending petition not being a pending petition which has abated under Sub-section (2) and which is in force on that day, shall, unless before the appointed day copies of such pending petition and of documents in support of the plea for such interim order had been furnished to the party against whom such interim order was made and an opportunity had been given to such party to be heard in the matter, cease to have effect (if not vacated earlier),-
(a) on the expiry of a period of one month from the appointed day, if the copies of such pending petition and the documents in support of the plea for the interim order are not furnished to such party before the expiry of the said period of one month; or
(b) on the expiry of a period of four months from the appointed day, if the copies referred to in Clause (a) have been furnished to such party within the period of one month referred to in that clause but such party has not been given an opportunity to be heard in the matter before the expiry of the said period of four months.
(4) Notwithstanding anything contained in Sub-section (3), every interim order (whether by way of injunction or stay or in any other manner) which was made before the appointed day on or in any proceedings relating to a pending petition not being a pending petition which has abated under Sub-section (2), and which is in force on that day, shall, if such order has the effect of delaying any inquiry into a matter of public importance or any investigation or inquiry into an offence punishable with imprisonment or any action for the execution of any work or project of public utility, or the acquisition of any property for such execution, by the Government, or any corporation owned or controlled by the Government, stand vacated. Explanation.- In this section, 'appointed day' means the date on which Section 38 comes into force.
There are two Sub-sections in Section 58 and the first Sub-section clearly states what is meant by a pending writ petition. The writ petition must be pending on the appointed day i.e., 1st February, 1977. Both the Sub-sections refer only to writ petitions and not to writ appeals. The question is whether a writ petition that had been disposed of before 1st February, 1977 could be stated to be pending on the appointed day. We have no hesitation in saying that it is impossible to say that the writ petition was pending on the appointed day. The statute had not imported any legal fiction by which it had provided that notwithstanding the dismissal of the writ petition, by virtue of the fact that an appeal had been taken by the writ petitioner, the 'writ petition must be deemed to have been pending on the appointed day. A plain reading, of the sections therefore, obliges us to say that the writ petition under appeal before us was not pending on 1st February, 1977, the appointed day to which reference is made under Section 58(1).
10. Then the question is whether in view of the apparently wider language of Section 58(2), counsel for the respondents could contend that the principle of Article 226(3) must be applied even in regard to this appeal. Section 58(1) itself states what is meant by a pending petition. It has been described in detail as 'every petition made under Article 226 of the Constitution before the appointed day and pending before any High Court immediately before that day' and after these words occur the words 'such petition', being referred to in this section as a pending petition. Therefore, when Sub-section (2) of Section 58 speaks of every pending petition, we can think of only a petition under Article 226 of the Constitution before the appointed day which was pending before the High Court immediately before that date. As we said, W.P. No. 6225 of 1975, by the judgment under appeal was dismissed on 22nd September, 1976. The writ petition, therefore, was not pending on the appointed day and neither Sub-section (1) nor Sub-section (2) of Section 58, therefore, would be attracted and naturally, Article 226(3) of the Constitution will also have no application. We are not, therefore able to dispose of the appeal on the preliminary objection, which normally we should have dealt with earlier by stating that the appeal had abated. The view that we have taken in supported by the conclusion reached by a Full Bench decision of the Andhra Pradesh High Court in Government of India v. National Tobacco Company : AIR1977AP250 , where there is an elaborate discussion of various other matters and that Court also came to the conclusion that in regard to a petition that had been dismissed before the appointed day and against the judgment dismissing the petition there was an appeal pending, Section 58 will have no application. We prefer to rest our decision exclusively on the interpretation that we place on the wording of the section by giving those words their natural and ordinary meaning which those words convey. It is also significant to note that the section speaks of petitions pending before any 'High Court'. We can conceive of a petition instituted before the appointed day and disposed of by the High Court pending before the Supreme Court by the time Section 58 came into operation. If we apply the theory recommended by counsel on behalf of the respondents that the appeal is a continuation of the writ petition, we suppose, it must extend also the appeals pending before the Supreme Court. But the section certainly will not apply to appeals pending in the Supreme Court because in so many words it states that the petition must be pending in the High Court. This position under the section gives us another clue that the section is not intended to affect appeals taken from the decision in writ petitions disposed of before the appointed day. We, therefore, negative the preliminary objection that by virtue of Article 226(3), we should decline the exercise of jurisdiction under that Article. There is yet another reason for the conclusion. A point was taken in the counter-affidavit filed before the learned Judge that the remedy under Section 131 of the Customs Act was available and this Court should not exercise jurisdiction under Article 226. This objection was taken with reference to the Article as it stood before the amendment was effected by the Forty-second Amendment to the Constitution. Ordinarily, the High Courts would decline to exercise jurisdiction when there is an effective alternate remedy. The objection was, therefore, not with out substance, but it was apparently not pressed before the learned Judge. It was not considered in the judgment and the matter was dealt with on the merits and an elaborate judgment was rendered negativing the relief. For this reason also we think that we should not stultify the appellant by declining jurisdiction under Article 226 of the Constitution at this stage.
11. In the light of the above, with great respect to the learned Judge, we have to set aside the judgment under appeal and hold that Clause 3(3) of the Order is not applicable to the facts of this case and that the order of confiscation passed by the second respondent and the order in appeal confirming that order are unsustainable. Accordingly, we set aside the judgment and set aside the orders passed by the first and respondents and set at naught the confiscation.
12. The only remaining question is what should happen to the money that had been held by the first and second respondents on the sale of the goods to the fourth respondent on 4th October, 1973. There was an order in W.M.P. No. 10136 of 1975 that the amount, namely, Rs. 2,60,721 will be held by the first and second respondents to be disbursed in accordance with the directions of this Court. In this connection, we have to refer to the fact that on the 30th of September, 1975, the appellant before us sent a letter by registered post acknowledgment due to the second respondent telling him that the orders of the first and second respondents are being challenged before the High Court in proceedings under Article 226 and requesting the second respondent not to sell the valuable goods that had been imported. This letter was received by the second respondent on 3rd October, 1975. Ignoring this request completely, he sold the goods on the 4th October and the order passed by this Court on 7th October, 1975 in W.M.P. No. 8905 of 1975 not to sell the goods became a futile order. That is why it was stated in the order in W.M.P. No. 10136 of 1975 that the amount will be held for disbursement in accordance with the directions of this Court.
13. The sum fetched by sale to the fourth respondent as we said is Rs. 2,60,721. The c.i.f. value that is mentioned before us is over Rs. 1,60,000. Counsel for respondents states that the customs duty payable is 120 per cent on that value. If the customs duty is taken from Rs. 2,60,721, the appellant, the letter-of-authority holder who made the money available for import, will certainly not get the c.i.f. value of the goods. This petition had resulted by the hasty action taken under Clause 3(3) of the Order, and therefore, if any one should suffer, it must be the respondents. We, therefore, direct that out of the sum of Rs. 2,60,721 held by the first and second respondents in accordance with the order passed by this Court in W. M.P. No. 10136 of 1975, the c.i.f. value of the goods and any other expenses which could fall under paragraph 94 of the policy and Clause 10-C(2) of the Order will be paid by the first and second respondents to the appellant. The balance amount may be taken by the Customs authorities towards the customs duty payable on the import.
14. We dispose of the appeal on the above terms. We direct the parties to bear their own costs throughout in these proceedings because as we prefaced the judgment, the question arising for decision was somewhat a difficult one and it was not contended that there was any mala fide action or even any action without any bona fides.