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Ram Krishna Kulwant Rai and ors. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKolkata High Court
Decided On
Case NumberCivil Revn. Nos. 710(W), 718(W), 757-58(W), 810(W) of 1966
Judge
Reported inAIR1969Cal18
ActsConstitution of India - Articles 14, 19(1), 77, 226 and 301; ;Imports (Control) Order, 1955; ;Iron & Steel Control Order 1956; ;Essential Commodities Act, 1955 - Section 3
AppellantRam Krishna Kulwant Rai and ors.
RespondentUnion of India (Uoi) and ors.
Appellant AdvocateA.K. Sen, ;S. Roy, ;D. Gupta, ;D. Sen, ;A. Mitra, ;S.C. Bose, ;B.K. Lal and ;G.S. Khetry, Advs.
Respondent AdvocateSubrata Roy Chowdhury and ;P.K. Ghosh, Advs.
DispositionPetition partly allowed
Cases ReferredKalyani Stores v. State of Orissa
Excerpt:
- orderd. basu, j. 1. the petitioners in these five cases have brought petitions under article 226 of the constitution to challenge the validity of a step taken by the respondents to prevent undesirable persons from carrying on dealings with the government of india or its agencies in the sphere of public business or like transactions. 2. though these petitions raise common issues, it would be convenient to take up the facts of c. r. 710(w)/66 in the first instance. c. r. 710 (w)/66 3. the petitioner firm, ram krishan kulwant rai, is a firm carrying on, inter alia, the business of export and import of iron and steel materials and acts as 'handling agents' of the union of india (respondent no. 1) in respect of the imported iron and steel materials. 4. at the material time iron and steel was a.....
Judgment:
ORDER

D. Basu, J.

1. The petitioners in these five cases have brought Petitions under Article 226 of the Constitution to challenge the validity of a step taken by the respondents to prevent undesirable persons from carrying on dealings with the Government of India or its agencies in the sphere of public business or like transactions.

2. Though these petitions raise common issues, it would be convenient to take up the facts of C. R. 710(W)/66 in the first instance.

C. R. 710 (W)/66

3. The petitioner firm, Ram Krishan Kulwant Rai, is a firm carrying on, inter alia, the business of export and import of Iron and Steel materials and acts as 'handling agents' of the Union of India (Respondent No. 1) in respect of the imported Iron and Steel materials.

4. At the material time iron and steel was a controlled commodity under the provisions of the Iron & Steel (Control) Order, 1956, under which no one could purchase or sell iron and steel materials except in pursuance of permits issued by the Iron and Steel Controller (Respondent No. 2, hereinafter referred to as 'the Controller'). In 1960, the Union of India decided to enter into a barter deal in respect of the import and export of steel goods and in pursuance of this policy. Respondent 2 the Iron & Steel Controller (hereinafter referred to as 'the Controller') granted the Import Licences in Annexure A series to the petition (vide also pages 35-36 of the Petition), on the following conditions, inter alia-

(a) The Petitioner was to export a certain quantity of slabs, ingots etc. produced by the Hindusthan Steel Ltd., which were surplus in their hands.

(b) In consideration of the said export the petitioner would be permitted to import steel materials of various descriptions against the total F. O. B. value of the exported goods.

(c) The steel materials so imported by the petitioner would be subject to distribution control by Respondent No. 2 (vide page 35 to the Petition).

5. So far as the import part of the aforesaid barter is concerned, the petitioner has duly imported the materials covered by and in terms of the licences.

6. As to how the petitioner could carry on imports before making any export under the barter deal, it must be pointed out that it has been due to leniency shown by the Respondents themselves at a latter stage of the barter arrangement. On 5-5-60 (Annexure 'E' to the Affidavit-in-op-position) while finalising the terms of the barter deal, the Deputy Controller intimated that though export of the steel materials under the deal should normally precede the corresponding import,

'proposals for pre-import may also be considered if satisfactory irrevocable letters of credit for exports are produced and suitable Bank Guarantees are furnished'.

It must be said that this softness has been at the root of the loss of foreign exchange which the respondents have to complainof later on. In a battle of wits I may constrained to say, the petitioner has eventually won against the public servants whose duty it was to safeguard the national interests. In this context, it may be noted that though in his letter of 2-2-60 (Annexure 'A' to the counter Affidavit), the Officer on Special Duty recommended to the Controller that

'it should be made clear to the exporter that in case of failure to export, Iron & Steel Controller will have no further dealings with him',

this term was not incorporated in the final embodiment of the terms on 5-5-60 by Annexure 'E' to the counter-affidavit.

7. The dispute between the parties has arisen over the export part of the barter deal, after the petitioner had reaped the full advantage of the other part which was 'normally' to follow the export. The petitioner's case, in short, is that the petitioner placed orders with the Hindusthan Steel Ltd. for the supply of a huge quantity of slabs and ingots for export (Ann. B to the Petition) but that they have failed to supply such materials of an exportable quality as would be acceptable to foreign buyers and that it is on this account that the petitioner has failed to carry out its condition of export. It is stated in the Petition that this dispute between the Petitioner and the Hindusthan Steel Ltd. is the subject-matter of an arbitration proceeding which is pending (para 10 of the Petition).

8. Though Respondents 2 and 3 (Deputy Iron and Steel Controller, hereinafter referred to as the 'Deputy Controller') were kept informed by the Petitioner of the aforesaid failure of the Hindusthan Steel Ltd. to supply exportable materials, the Petitioner received the letter of the Controller dated 21-4-64 which is at p. 102 of the Petition. This letter stated that though the export of iron materials was a condition of the licences to import granted to the Petitioner, by a letter of 5-5-60, the Petitioner had been allowed to make a pre--import of steel materials under its licence, subject to its furnishing a bank guarantee to cover the liability to export, and alleged that the Petitioner had failed to earn the foreign exchange to cover the pre-import already made by it and had failed to carry out the orders of the Controller to earn the requisite amount of foreign exchange, and, accordingly, called upon the petitioner to show cause within 10 days of receipt of this letter 'why suitable action should not be taken against them for failure to comply with the order of the Iron & Steel Controller.'

9. By its letter of 30-4-64 (p. 103 of the Petition), the Petitioner showed cause, stating that its failure to export the Hindusthan Steel Products was due to defaulton the part of the Hindusthan Steel Ltd., in respect of which arbitration proceedings were pending and requested the Controller not to take action until those proceedings were concluded. This explanation, apparently, was not acceptable to the Respondents and on 7-5-66, respondent No. 4, the Deputy Director (Administration) and Vigilance Officer of the Ministry of Iron & Steel, Government of India, issued the impugned letter to the Petitioner, the contents of which are-

'Due to your failure to meet the export commitments under the pre-import licences issued in your favour during 1960-61 resulting in loss of foreign exchange vital for national economy, it has been decided by Government to put you on the banning list for a period of three years from the date of issue of this communication.'

10. The decision mentioned in the aforesaid impugned communication has been challenged as illegal and without [jurisdiction on various grounds, which Will be taken up seriatim. The Petition under Article 226 was filed on 25-5-66. Separate affidavits-in-opposition have been filed on behalf of Respondent No. 1 by the Secretary of the Ministry of Iron & Steel; and by the Deputy Controller on behalf of all the respondents.

11. I. Before entering into the points taken on behalf of the petitioner, it would be useful to examine the effects of the impugned order, which has been referred to at the hearing as 'the banning order'. Though in para 16 of the petition it was alleged that the banning order had 'severely affected' the trade and business of the Petitioner, the details of the injury or the mode in which it had been caused were not elaborated in the Petition; but that has been done by the further Affidavit filed by the petitioner on 8-5-67.

12. In para 19 of the original affidavit-in-opposition of the Deputy Controller, it was stated that the banning order was 'an administrative order of the Government to protect its own interests' and its effect 'was merely that the Government did not desire to enter into any business dealings with him.'

13. There was a hearing on the proceeding averments in the petition and the counter-affidavit on 20-4-67 and it was held that the averments on either side were not clear enough to enable the Court to come to a determination of the question raised by the petitioner that the impugned banning order was nothing but an exercise of the same power as was conferred by Clause 8 of the Import Control Order of 1955, but without going through the statutory procedure to resort to such action, as laid down in Clause 10 of the same order. At that hearing, counsel for the respondents made a statement from the Bar that 'statutory transactions of thepetitioner would not be affected by the impugned order' and that it was only aimed at those businesses

'as regards which the petitioner had not got any 'legal right' to be dealt with by the Government, which has its freedom to select its own contractor or agents In matters not governed by statute.'

I therefore, allowed both parties to file supplementary affidavit to make their stands clearer.

14. In the further Affidavit filed by the petitioner on 8-5-67, the petitioner stated that in pursuance of the impugned decision, Government of India has issued a circular on 1-6-66 (Ann. A to the further Affidavit) by 'which-

(i) the Government has suspended business or dealings of the petitioner not only with the Government Departments, but also with other non-Governmental organisations, such as Hindusthan Steel Ltd., the Bokaro Steel Ltd. and Hindusthan Construction Ltd.;

(ii) the suspension, on account of the alleged fault of the petitioner to Associate Firms such as Aminchand PayerelaJ Ltd.;

(iv) By circulating a copy of the said circular to the 'Joint Plant Committee' who is responsible for allocation and distribution of indigenous Iron and Steel materials, the Government has affected the business of the petitioner in indigenous steel materials also, with private parties;

(v) by issuing copies of the circular to the Iron & Steel Controller, the petitioner's statutory rights under the Control Orders have also been affected because the Steel Controller, after receipt of this circular, cannot possibly consider according to law, the applications of the petitioner for licences for the import of steel materials which are governed by the Import Control Order;

(vi) the Steel Controller, on receipt of the circular, is not likely to appoint the petitioner any longer as 'handling agents' of the imported steel materials, which is made by the Controller, by issuing Letter of Authority to a licensee, in his statutory capacity under the Import Control Order.

15. Respondents' rejoinder to the aforesaid Further Affidavit is dated 12-6--67, filed by the Deputy Controller (C. B, Mathur). The contents of this rejoinder may be summarised as follows:

(a) It is denied that any copy of the circular of 1-6-67 was circulated to the 'Joint Plant Committee'. This again is contradicted by the affidavit-in-reply of the Petitioner. The circular of 1-6-67 does not however show ex facie that any copy thereof was forwarded to the Joint Plant Committee.

(b) It is stated that by a letter of 18-7-66, addressed to the Petitioner's Solicitors, the petitioner was informed that the circular of 1-6-66 has been withdrawn.

(c) The Controller or any other statutory authority would exercise his statutory functions under the Control Orders, in issuing the import or export licences and in considering the Petitioner's applications therefor, uninfluenced by the impugned banning order of 7-5-66.

(d) The only effect of the impugned order, according to the Respondents is that only non-statutory 'business dealings between the petitioner and the Government will be suspended for three years. Without being exhaustive, two illustrations of such business dealings have been given in the rejoinder, namely-

'(i) handling agency contracts in respect of Iron and Steel materials imported on Government account by or on behalf of the Government;

(ii) Contracts or orders for supply of goods or materials to Government departments, projects etc. with whom business dealings have been banned.'

16. Let us first see whether the foregoing admitted encroachments upon the petitioner's dealings are unlawful or unconstitutional, as alleged by the petitioner and thereafter we shall take up additional encroachments, if any, as alleged in the Petitioner's Further Affidavit.

17. I. So far as banning of the dealings between the petitioner and the Government Departments in the non-statutory field is concerned, the plea in the respondents' rejoinder of 12-6-67, as quoted above, is in accord with the plea taken in para 29 of the affidavit-in-op-position filed by the respondents on 18-6-66 which was dealt with in my interlocutory judgment dated 11-1-67. The contention of the respondents, in short, is that in the non-statutory sphere, i.e., the sphere of business unaffected by any Control Order, the Government has the freedom, no less than that of a private trader, to choose the parties with whom it would have its transactions and that no individual has any legal or constitutional right to insist that Government must enter into contracts with him, and that Government is free to take an administrative decision in this behalf, independent of the requirements of any statutory provision.

118. The above contention of the Respondents is supported by the observations of the Supreme Court in Achutan v. State of Kerala : AIR1959SC490 which are similar to those of the American Supreme Court in Perkins v. Lukens Steel Co., (1939) 310 US 113. Nor is there any question of application of Article 301 of the Constitution in this sphere inasmuch as there being no control or monopoly in the non-statutory sphere, the exclusion of one particular party cannot amount to an absolute prohibition of trade or business.

19. Nor is there any infringement of Article 14, because the ground upon which the petitioner is sought to be excluded, offers a reasonable basis of classification, namely, that the petitioner has defaulted in carrying out the terms of a license issued by the Government. It has not been shown by the petitioner that there are other traders who have committed similar default but have not been visited by similar action. In these circumstances, there cannot be any complaint of violation of Article 14. It is, therefore, needless to enter into the further plea raised on behalf of the respondents that Article 14 has no application where the impugned action has been taken by Government, not as a Sovereign but as a trader.

20. Petitioner cannot, therefore, have any legal complaint if the Government Departments, in pursuance of the impugned order, cease to enter into any contracts with the petitioner relating to any goods in respect of which the petitioner may not have any statutory rights or the respondents any statutory obligations.

21. On behalf of the petitioner, however, a number of objections has been raised to the above principle being applied to this case:

(A) Firstly, it has been urged that it i9 not the Government but a statutory authority, namely, the Controller, who has issued the impugned order of excluding the petitioner.

22. So far as the impugned order at Ann. C to the petition (p. 108) is concerned, it clearly states that 'it has been decided by Government to put you on the Banning List.....,...' and from the letter being issued by the Deputy Director (Administration) in the Ministry of Iron and Steel of the Government of India, it i3 evident that the decision to exclude the petitioner from Government business hag been taken by the Government of India and not by any statutory authority.

23. The situation has, however, been muddled by the Office Memorandum of 1-6-66 issued by the Under-Secretary of the same Ministry of Iron & Steel, which is at Ann. A to the further Affidavit of the petitioner (p. 19), which says-

'The undersigned is directed to say that in pursuance of the decision to suspend business dealings with the firms detailed below and their associates .........the Steel Controller has placed these firms on the Banning list............'

24. It is this communication which has given the petitioner the footing to contend that the decision to ban the petitioner has not been taken by the Government but by the statutory authority, i.e., the Steel Controller. I must say that the Under Secretary did not know what was the implication of what he wrote. I ampained to say that as a Judge I have had other instances of want of comprehension of the legal position by responsible administrative Officers which has brought embarrassment to the Government, leading to a discomfiture resulting from some well-intentioned policy of the Government. The anomaly in the statements made in the instant Memorandum is patent on its face. If the Steel Controller had ordered the banning, there was no reason why the circular should have been issued by the Ministry instead of the Controller who was competent to issue such a Memorandum nor was there any reason why copy of the Memorandum was issued to the Controller himself. Fortunately, for the Respondents, the word 'decision' at the beginning of the Memorandum leaves room for corroborating the statement in the impugned communication of 7-5-66 that the 'decision' had been taken by the Government of India. In fact, the Steel Controller was seeking to implement the decision of the Government referred to in the impugned communication at Ann, C to the Petition (p. 108)) but, owing to the ingenuity of the plan, which it is difficult for the Court to appreciate, the implementation was sought to be made by the roundabout method of issuing a Memorandum by the Ministry and by the Controller circulating a copy of that Memorandum to his subordinates and to the petitioner.

25. At any rate, Ann. A to the Further Affidavit does not by itself displace, the statement made in the impugned communication at Ann. C that the decision to ban the petitioner had been taken by the Government of India. For the same reason, any higher weight cannot be given to the averment in para 22 of the Counter-Affidavit filed by the Deputy Controller dated 20-7-66, which cannot but be characterised as a careless statement of which Respondent No. 1 should take note if India is to maintain her house against heavy winds raging all around.

26. (ii) It was, accordingly, contend-ed on behalf of the petitioner that the impugned communication at Ann. C is not issued in the form required by Article 77 of the Constitution and that the recital therein of a decision having been taken by the Government is not true.

27. It is now established that though an order is not expressed in the name of the President, it is open to the Government to show by independent evidence that the order was in fact made by the Government of India, inasmuch as the provision in Article 77(1) is merely directory,

28. In Chitralekha v. State of Mysore : [1964]6SCR368 it has been held by the Supreme Court that where a letter issued by an Under-Secretary to the Government stated that the Government hadtaken a particular decision, it is open to the Court to hold that there was such a decision, if there is an affidavit filed on behalf of the Government to support that recital. In the instant case, the Secretary of the Ministry of Steel, Mines and Metals has filed a supplementary affidavit on 17-8-67 which shows that the proposal to ban the petitioner and its allied firms was made by the then Secretary and that the proposal was accepted by the Minister-in-charge on 26-4-66, directing the banning for a period of three years. Anything stated in the subsequent Memorandum issued by the Under-Secretary on 1-6-66, cannot belie the notings of the Secretary or the Minister and the affidavit of the Secretary affirming the authenticity of the notings.

29. I do not think that there is any proper reason in this case to hold that the decision to ban the petitioner was not taken by the Government of India, though the implementation of that decision by the Steel Controller had independent implications, which I shall have to consider separately,

30. The next objection of the petitioner to the action of the respondents is, however, justified.

31. Though the impugned communication at Ann. C of the petition does not show to which authorities or persons it was circulated, Ann. A. (P. 19) to the Further Affidavit of the petitioner shows that the Office Memorandum of 1-6-66 was circulated not only to the other Ministries of the Government of India but also to the statutory corporations such as the Hindusthan Steel Ltd., Bokaro Steel Ltd. This was done not with the object of an idle information but with the intention that they also should boycott the petitioner in their dealings as is evident from the Respondents' rejoinder dated 12-6-67 where it is pleaded that the object of the impugned banning order was not only to prevent the Government Departments but also the 'Government projects' from dealing with the petitioner.

32. Here is another confusion in thought which the administrative authorities should get rid of as soon as possible. The statutory corporations are legal entities separate from and independent of the Government and they were set up with the specific object of the Government avoiding the legal and political liabilities for the working of these statutory corporations to their employees and to the world at large. It would be hardly justifiable for Government to avoid that responsibility either morally or legally if the Government officials give it to the world to understand that these corporations are nothing but the limbs of the Government and are managed and administered from the same Secretariat as Government Departments are.

33. Be that as it may, though Government has the right to say that it would not enter into business transactions with a particular person or persons, it has no such right under the common law to induce another legal person that he should not enter into business dealings with a third party. Interference with a subsisting contract between third parties is already an actionable wrong. Whether it constitutes a similar wrong to induce another person not to enter into contractual relations with a third party is still a problem in this developing branch of the law of Torts with which we are not concerned in the instant case but this much ia clear that the Government's common law right not to enter into any business dealings with the Petitioner as enunciated in Achutan's case : AIR1959SC490 will not extend to the Government's issuing an injunction or direction upon independent legal entities. The action of the Government in the instant case, with respect to the Hindusthan Steel Ltd. has been more precarious and illegitimate particularly because of the fact that there is a pending arbitration to which the contractual disputes between the petitioner and the Hindusthan Steel Co. has been referred, and of which the Government is aware.

34. Though it has been averred in the subsequent affidavit of the Respondents that the Memorandum of 1-6-66 has eventually been revoked (as to which I shall advert in another context), it should be the duty of the Court to point out to the respondents that they cannot make such use of the impugned order at Ann. C to the petition as to induce the statutory corporations in which the Government may be financially interested or any other authority outside the Governmental organisation to boycott the petitioner in pursuance of the impugned decision.

35. Let us now take up the complaints of the petitioner regarding the iron and steel business. This topic has to be dealt with under two heads-

(a) The position at the date of the Rulenisi;

(b) The position as altered subsequently by the revocation of the control alleged by the respondents,

(a) At the date of the petition under Article 226 and of the Rule nisi, iron and steel was a controlled commodity. By the Iron and Steel (Control) Order 1956, the acquisition and disposal of all varieties of iron and steel was subject to the control of the Controller, so that none could deal in steel goods without the written order of the Controller, who had also the power to fix the maximum prices of such goods. The import of these goods was also subject to similar control by the Controller under the provisions of the Imports (Control) Order, 1955.

The agreement entered into between the Petitioner and the Controller in respect of the 'barter deal' as to the export of the products of the Hindusthan Steel Co. and the licence in favour of the petitioner for importing a corresponding quantity of steel materials from abroad in lieu of the exported products was issued in pursuance of the provisions of the Imports (Control) Order.

The impugned decision at Ann. C to ban the petitioner was prima facie intended as a penalty for the default of the petitioner to comply with the terms of the pre-import licences granted to the petitioner under the said Imports (Control) Order. The petitioner's case in the petition was that the said Control Order contains specific provisions as to what action could be taken and under what procedure, (vide Clauses 8 and 10 of the Order), for the violation of the terms of the licence or of the provisions of the Control Order, and that, accordingly, no action outside the provisions of that Order could be taken except in compliance with the terms of that Order. The contention of the respondents was that the impugned action was an administrative action apart from and in addition to the statutory provisions of the Control Order: Para 10 of the affidavit of Jayanti Sarkar D/- 16-12-66. This question was dealt with by me in an interlocutory judgment when the Respondents, during the pendency of this Rule, made an application for permission of the Court to proceed under the provisions of the Control Order for the cancellation of the petitioner's licence for default in carrying out its requirements.

It is not disputed that apart from import business, the Petitioner also carries on retail business in indigenous steel products (para 6 of the Further Affidavit, dated 8-5-67). At the material time, this business was subiect to control under the Control Order of 1956. The question is whether the Government could exclude the petitioner from this business for the alleged violation of the petitioner to carry out his obligations under the licence issued under the Imports Control Order.

36. The answer is in the negative, for the following reasons:

It is evident that the right to import any goods is an incident of the fundamental right to carry on business which belongs to every citizen under Article 19(1)(g) of the Constitution. This right was subjected to restrictions in the public interest by the Order issued in exercise of powers conferred by the Essential Commodities Act. But for the Control Order, the petitioner would have a right, free of any restrictions, to import steel goods. It is the Control Order which has put this right subject to statutoryrestrictions, created certain offences for violation of the provisions of the Control Order and the licences issued thereunder and also laid down the penalties for the said offences and violation of its statutory requirements. The violation of the terms of the licence was created a statutory offence by the Control Order, if so, the penalty for such offences, namely, the cancellation of the licence, must be held to be the exclusive remedy for the offence and the procedure laid down in the Control Order must also be complied with in order to impose such penalty. This proposition is established by numerous decisions. Cf. Pasmore v. Oswaldtwistle U, D. C. (1898) AC 387 (394) (HL); Brown v. Allweather Co., (1953) 1 All ER 474; R. v. Hall, (1891) 1 Q. B. 747 (770).

37. I have therefore, no hesitation to hold that in the face of the statutory provisions of the Control Order under which admittedly the pre-import licence had been issued, the Respondents cannot take any other measure against the petitioner for violation of the terms of the licence, apart from the provisions of the statute. The implementation of the impugned decision by the Controller by his endorsement of the Office order of 1-6-66 and any action that may be taken by the Controller to deny the petitioner any rights or privileges with respect to the Iron and Steel business must accordingly be held to be ultra vires.

38. II. It has however been contended on behalf of the Respondents in para 7 of the Affidavit-in-Opposition filed on 12-6-67 by Chanda Babu Mathur that by a letter of 18-7-66, addressed to the petitioner's Solicitor the petitioner has been informed that the Office Memorandum of 1-6-66 has been withdrawn. That communication is to be found at Ann. F. (P. 78) of the Further Affidavit of the petitioner, dated 8-5-67 The contents of this letter, however, show that the withdrawal of the Controller's letter of 10-6-66 took place after this Court's interim injunction, issued on 25-5-66 was received by the Respondents. As regards the Memorandum, it is stated that this Court's interim injunction superseded it; that of course, is not the same thing as a withdrawal by the respondents.

39. But the question before me now is not whether the Memorandum of 1-6-66 or the communication thereof by the Controller has subsequently been revoked but what was the scope of the impugned decision at Ann. C. It cannot be overlooked that the impugned communication at Ann. C did not explain what was meant by 'Putting upon the Banning List', which words were as vague as possible. Not being any technical expression, its implications cannot be found out from any other objective material. Its implications or possible use can, therefore, be gathered from the subsequent conduct of the respondents themselves. Hence, even though the Memorandum of 1-6-66 or the circulation thereof by the Controller on 10-6-66 be subsequently withdrawn it is evident that the decision at Ann. C was capable of being circulated to or implemented by statutory authorities so as to cause inroads upon matters governed by statutory provisions. Hence, the declaration just proposed should be made notwithstanding the alleged subsequent withdrawal of the Memorandum of 1-6-66.

40. It has also been urged that since the period of the existing licences in favour of the petitioner has already expired, he cannot have any grievance. This also does not solve the problem, because so long as the Imports Control Order remains, the petitioner, if he wants to carry on the business of Import shall have to obtain fresh licences or renewal thereof and the respondents shall be obliged to act in accordance with the provisions of that Order and not outside them.

41. The petitioner has also expressed his apprehensions that his applications for renewal or the like will not be duly considered in view of the Bombay Order having been circulated to different Departments of the Government, which must include the Import Controller. Of course, in this sphere, the Controller will have to act in accordance with statutory provisions but there is no knowing how far the Controller will be influenced by the Banning Order, in so far as his function is discretionary,

42. Since the relief proposed by me will be declaratory in nature, the question of locus standi falls into the background because it has been established that in order to maintain an application under Article 226, it is not necessary for the petitioner to show that he has already suffered an actual injury; apprehension of injury or threat of injury is enough: Bengal Immunity Co. v. State of Bihar : [1955]2SCR603 ; Kochunni v. State of Madras : AIR1959SC725 .

43. It is next contended on behalf of the respondents that with effect from 29-4-67, the control over iron and steel materials has itself been withdrawn by the Government bv notification No. S/ESS. COMM/Iron & Steel-2A/29-4-67, which has been produced before me.

44. By this notification, all varieties of iron and steel have been exempted from the provisions of Clauses 4, 5, 15, 18, 20 and 27 of the Iron & Steel (Control) Order, 1956. The result of this is that the acquisition, disposal or dealing in these materials are now free from any control by the Controller, so that any action on the part of the Iron Controller to ban the petitioner would not affect the right of the petitioner to deal in these goods inthe free market, in any manner. But this has taken place during the pendency of the Rule and, as experience goes, essential goods like iron, cement or the like, are subjected to control and decontrol from time to time, according to the exigencies of the economic and financial situation for the time being. Hence, there is no assurance that control under the Order of 1956 shall not be re-imposed again at any future time.

45. It has also been rightly pointed out by Mr. Sen on behalf of the petitioner that the Notification just referred to has not repealed or abrogated the Control Order of 1956 altogether and that the Controller is still capable of doing something to the prejudice of the petitioner in exercise of his remaining powers under this Order. My attention has, for instance, been drawn to Clause 10 of this Order which the Controller retains, that is, the power to make an order directing the petitioner

'to release by way of loan or sell the whole or part of any iron and steel in the possession of such party (i.e., including indigenous materials) to such person or class of persons on such terms and conditions as may be specified in the Order'.

Petitioner is, accordingly, entitled to have a declaration that the impugned decision at Ann. C to the petition cannot be applied to the acquisition, supply or distribution of any goods which is subject to statutory control for the time being, because if the Government excludes the petitioner from such business, it would amount to an absolute deprivation of the fundamental right of the petitioner to carry on business in such goods as well as upon the freedom of movement of such goods guaranteed by Article 301, which can be imposed only by law and not administrative action.

46. Further, the exemption of iron and steel from the operation of the Iron & Steel Control Order, 1956, does not put an end to the Imports Control Order which prescribes statutory remedies for the violation of the terms of the licences granted thereunder. Hence, the petitioner is also entitled to a declaration that the impugned decision at Ann. C cannot be applied to exclude the petitioner from the business of Import of Iron and Steel goods the import of which is subject to the Imports Control Order, 1955. The granting of licences and the remedies for violation of the terms of such licences are governed by the provisions of that Order and they cannot be substituted by any non-statutory action by the Government.

47. It was contended in some of the counter-affidavits that the petitioner was not entitled to any relief in this behalf! inasmuch as the Controller of Imports was not impleaded. The question beforethe Court, however, is the legality of the impugned decision of the Government of India and the circulation thereof to all the Departments of the Government of which the Imports Controller is obviously a part. In the present context, the Court has to point out what uses of the impugned decision cannot be lawfully made. The answer of the Court on the Instant point is that the impugned decision cannot be used in any manner so as to affect the petitioner in respect of its business of importing iron and steel goods which is governed by the Imports Control Order, 1955.

48. Let us now take up the petitioner's business of acting as 'handling agents' to the Government.

The nature of that business will be appreciated from a specimen contract, dated 12-10-65 which has been placed before me. Under such contract, the goods which are imported by the Government under a licence issued in favour of the Controller, will be taken delivery of by the petitioner as agent of the Government and then delivered to the respective consignees. It is clear that this contract is not governed by any statutory provision (vide para 29 of Further Affidavit of Chanda Babu Mathur) and, therefore, Government is free to engage any person as its agent for this business, for which the petitioner cannot have any grievance. Even if such action infringes any of the rights of the petitioner under any existing contract, the petitioner may have his remedy under the law of contract, but not under Article 226 of the Constitution.

49. The question of form of relief remains. It has been laid down by the Supreme Court in Basappa v. Nagappa : [1955]1SCR250 , Dwarkanath v. I. T. Officer, : [1965]57ITR349(SC) that the jurisdiction under Article 226 is not confined to the issue of the English 'prerogative writs' nor do the technicalities of those writs fetter the plenary jurisdiction of the High Court under Article 226 to grant appropriate writs or order in the facts of a case before it. The Court has, indeed, approved of the grant-Ing of declaratory relief in various cases e.g., Abdulkadir v. State of Kerala : AIR1962SC922 ; B.B.L. & T. Merchants' Association v. State of Bombay : (1961)IILLJ663SC ; Mathra Parshad & Sons v. State of Punjab, : AIR1962SC745 ; State of M.P. v. Bhailal Bhai, : [1964]6SCR261 ; Tewari v. District Board : (1964)ILLJ1SC ; Bullion & Grain Exchange Ltd. v. State of Punjab : [1961]1SCR668 ; Kalyani Stores v. State of Orissa, : [1966]1SCR865 .

50. In the instant case, it is indeed the interpretation and applicability ofthe impugned decision at Ann. C to the Petition which is the subject matter of controversy between the parties. A declaration as to the legality or illegality of the possible uses of this decision is therefore the proper mode of resolving that controversy. A declaration is all the more necessary because of the fact that the respondents' own explanation of the object of the impugned decision, as given In para 19 of the Counter-Affidavit of 20-7-66 is very wide, namely, that 'the Government did not desire to enter into any business dealings with him', and of the fact that at the hearing counsel for the respondents stated that the respondents were not prepared to give an undertaking to the effect that the banning decision would not affect the statutory rights, if any, of the petitioner relating to iron and steel materials, in so far as any part ol that business is controlled or governed by statutory provisions.

51. In the result, this petition will succeed in part and the Rule shall be made absolute, without any order as to costs, with the declaration that the respondents cannot so use or apply the impugned decision at Ann. C to the petition-

(a) as to induce any statutory corporation or other authority outside the Governmental organisation to boycott the petitioner in their dealings with the petitioner;

(b) as to enable any statutory authority, including the Iron and Steel Controller, or the chief controller of imports to take any action in respect of the Iron and Steel business, outside or contrary to the statutory provisions by which the powers and obligations of such statutory authority may, for the time being, be governed.

(c) as to affect the acquisition, import, supply or distribution of any goods which is or in so far as it is subject to statutory control for the time being.

52. Petitioner shall be at liberty to come to Court again if the respondents do apply the impugned decision to any use which is negatived by the declarations made herein.

53. In view of the declarations made above, no separate orders are necessary on the application made by the Chief Controller of Exports and Imports because the declarations made herein do not prevent him from taking any steps in accordance with the provisions of the statutory order, Nor will the Government be prevented from taking any action in any sphere not affected by the declarations made herein.

C. R. 718 (W), 757-58 (W), 810 (W) of 1966

54. After hearing the learned Counsel, on either side, it appears that though there may be minor differences in facts In the other cases, the point involved, isthe same, and therefore, those Rules,namely, C. R. 713(W) of 1966, C. R. 757-58(W) of 1966 and C. R. 810(W) of 1966 willbe governed by the judgment passed inC. R. 710(W) of 1966 and similar orderswill be passed therein.


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