GLASS CHATONS IMPORTERS & USERS' ASSOCIATION versus UNION OF INDIA

Petition dismissed.

GLASS CHATONS IMPORTERS & USERS' ASSOCIATION

r96r April IO.

UNION OF INDIA

(P. B. GAJENDRAGADKAR, A. IC SARKAR,

K. N. WANCHOO, K. C. DAs GUPTA and N. RAJAGOPALA AYYANGAR, JJ.)

Import and Export-Decision to canalise import through specialised channel or agency-Constitutional validity-Import and Export Control Act, 1947-(XV II of 1947), s. 3 -Imports (Con-trol) Order, 1955, Para. 6(h)-Constitution of India, Arts. 14, r9(1)(j) & (g) and 3r.

The appellants were importers and users of glass chatons the import of which was prohibited except under licence granted by the licensing authorities under the Import and Ex-port Control Act, 1947• and the Imports (Control) Order, 1955· The import was totally prohibited for some time but after-wards it was permitted under the Export Promotion Scheme and licence was issued in favour of the State .Trading Corpora-tion. The.appellants who made no application for licence con-tended inter alia that the provisions of para. 6(h) of the Imports (Control) Order, 1955, that the Central Government or the Chief Controller of Imports and Exports may refuse to grant licence or direct any licensing authority not to grant licence if the licensing authority decided to canalise imports and the distribu-tion thereof through special or specialised agencies or chan-nels are unreasonable restrictions on the right to car1[ry ][on ][trade ]

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and to acquire property and as such contravene Arts. 14, 19(1) (f) & (g) and 31 of the Constitntion.

Held, that the decision that import of particular com-Glass Chatons modity shall be canalised by selected channel or through h~porters .&. selected agencies is reasonable restriction in the interest of the Users Assoctation general public. . v. .

. . The provisions of para. 6(h) of the Imports (Control) Order, Union of India 1955 ands. 3 of the Imports and Exports Control Act, 1947. are valid and do not contravene Arts. 14, 19(1)(f) and (g). Nor do they contravene Art. 31 of the Constitution as no question of acquisition of any right arises by the refusal of licence.

ORIGINAL JURISDICTION: Writ Petition No. 65 of 1959.

Petition under Art. 32 of the Constitution of India for enforcement of Fundamental Rights.

B. D. Sharma, for the petitioners.

H. N. Sanyal, Additional Solicitor-General of India, R. Ganapathy Iyer and T. M. Sen, for the respon-dents .

1961. April 10. The Judgment of the Court was delivered by

DAS GUPTA, J.-This application under Art. 32 of the Constitution is for the protection of fundamental rights under Art. 19(1)(f) and (g), Art. 31 and Art. 14 of the Constitution. The second and the third appli-cants are merchants who used to import considerable quantities of glass chatons upto 1957. The first appli-cant is an Association of merchants, some of whom were importers and some the actual users of glass chatons. Import of glass chatons-which form an important part of the raw materials for the manufac-ture of glass bangles and other similar articles of wear -could, be made only on licences granted by license ing authorities. Since 1955 the matter has been regu-lated by the Imports (Control) Order, 1955. This Order which was made by the Central Government in exer-cise of powers conferred by sections 3 and 4-A of the Import and Export Control Act, 1947, prohibited the import of large number. of goods including inter alia glass cbatons, except under and in accordance with licence, granted on application by the licensing

Das Gupta ].

x96x authorities under the Act. Policy statements are GI Ch 1 made from time to time by the Government of India, 1::;0, 1": :s indicating the policy for the issue of Import licences. users' Association The policy as regards the import of glass chatons for v. the period January, 1957 to the end of March, 1958 Union °! India was that the import was totally prohibited .. Since Das Gupta ]. April 1958, the policy as laid down is that import was permitted only under the Export Promotion Scheme. It appears that in view of this policy statement no application was made at all by the second or third applicants or other merchants for the import of glass chatons, in 1957 or thereafter and no licence was issu-ed to them. Licences were however issued in favour of the State Trading Corporation, for the import of glass cha tons of the value of five lakhs of Rupees, for the period April-September, 1958, and again, for the import of these goods of the value of Rs. 1,25,000 for the period October, 1958 to March, 1959. The present application was made on April 27, 1959. The prayer is that respondents 1 and 2-i.e., the Union of India and the Chief Controller, Imports, should be directed (i) to "forbear from giving the State Trading Corpora-tion any preference over the petitioners, in the grant of permits", (ii) not to create monopoly in favour of the State Trading Corporation, (iii) to cancel the import permits already granted in favour of respon-dent No. 3-the State Trading Corporation and the petitioners also prayed that the respondent No. 3 should be directed not to import on the basis of im-port licences already granted.

It has to be mentioned at once that the periods of the import permit "already granted" as referred to in the petition has already expired and consequently, the last two prayers mentioned above cannot possibly be granted. There was no application at all by the second and the third applicants, or any of the mer-chants who form the association, the 1st appellant for the issue of any import licences; there can be no question therefore of respondents 1 and 2 being given any preference over the petitioners in the grant of permits. Nor is there, as far as can be made out, any scheme to issue fresh licences in favour of the

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State Trading Corporation so that apart from what I96, hfas already happened there is _noquefstion offanhy Glass Chatons uture act10n "to crea~e ~,monopo 1 y m avou:? t Impo,ters c;. State Tradmg Corporat10n . Therefore the pet1t10ners usm' Association cannot be given any relief on the present application. v. Learned Counsel however submitted that so long as Union of India Para. 6(h) of the Imports (Control) Order, 1955, remains it will be useless for his clients to make any application Das Gupta J · for licences. Para. 6 lays down number of grounds on which the Central Government or the Chief Con-troller of Imports and Exports may refuse to grant licence or direct any other licensing authority not to grant licence. The ground mentioned in the clause (h) is "if the licensing authority decide to canalise imports and the distribution thereof through special or specia-lised agencies or channels". Learned Counsel has argu-ed that this provision in clause (h) of Para. 6 is void being in contravention of Art. 19{l)(f) and (g), and Art. 31 of the Constitution. He also urged that to the extent s. 3 of the Imports and Exports Control Act, 1947, permits the Central Government to make an order as fo Para. 6(h) s. 3 itself is ·bad. In view of these submissions the learned Counsel was permitted to urge his contentions against the validity of Para. 6{h) of the Imports (Control) Order, 1955, and also his limited attack against the validity of s. 3 of the Im-ports and Exports Control Act, 1947.The requirement as regards any goods that they cannot be imported except and in accordance with licence is undoubtedly restriction on the right to carry on trade in such goods and also on the right to acquire property. Learned Counsel does not however contend that by itself this requirement of s. 3 of the Imports and Exports Control Act is an unreasonable restriction. His attack is only against the further restriction which follows from the provisions in s. 6{h) of the Order that the Central Government or the Chief Controller of Imports and Exports may refuse to grant licence or direct any licensing authority not to grant licences-"if the licensing authority decides to canalise imports and the distribution thereof

Union of Tndia It is obvious that if that if if decision has been made that that Das Gupta ]. imports shall be by particular agencies or channels the granting of licence to any applicant outside the agency or channel would frustrate the implementa-tion of that decision. If therefore canalization of imports is in the interests of the general public the refusal of imports licences to applicants outside the agencies or channels decided upon must necessarily be ·held also in the interests of the general public. The real question therefore is: Is the canalization through special or specialized agencies or channels in the inte-rests of the general public. ,

policy as regards imports forms an integral part of the general economic policy of country which is to have due regard not only to its impact on the internal or international trade of the country but also on monetary policy, the development of agriculture and industries and even on the political policies of the country involving questions of friendship, neutrality or hostility with other countries. It may be difficult for any court to have adequate materials to come to proper decision whether particular policy as regards imports is, on consideration of all the various fac-tors involved, in the general interests of the public. Even if the necessary materials were available it is possible that in many cases more than one view can be taken whether particular policy as regards im-ports-whether one of heavy customs barrier or of total prohibition or of entrustment of imports to select-ed agencies or channels-is in the general interests of the public. In this state of things the burden on the person challenging that the government of the country is not right in its estimate of the effects of policy as regards imports in the general interests of the public will be very heavy indeed and when the Government decides in respect of any particular commodity that its import should be by selected

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channel or through selected agencies the Court would i961 proceed on the assumption that that decision is in the interests of the general public unless the contrary is Glass Chatons Importm & clear y s own. 1 onsequen.t 1 .Y, we are _una bl o accept t users' Association the argument that de01s10n that imports shall be v. canalised, is per se not reasonable restriction in the Union of India interests of the general public. We wish to. make it clear that while the decision that import of parti-Das Gupta J. cular commodity will be canalised may be difficult to challenge, the selection of the particular channel or agency decided upon in implementing the decision of canalisation may well be challenged on the ground that it infringes Art. 14 of the Constitution or some other fundamental rights. Noisuch question has how-ever been raised in the present case. The attack on the validity of Para. 6(h) of the Imports Control Order, 1955, therefore, fails. The contention that s. 3 of the Imports and Exports Control Act, 1947, is bad to the extent that it permits the government to make an order as in Para. 6(h) of the Imports Control Order, 1955, consequently also fails.

The attack on this provision in Para. 6(h) of the order that it contravenes Art. 31 is not even plausible. Assuming for the purpose of this case that the right to carry on trade is itself property, it is obvious that there is no question here of the acquisition of that right. What happens if licence is refused to an applicant under Para. 6(h) is that the applicant can no longer carry on trade in these goods. When licence is granted to the agencies or channels through which imports have been decided to be canalised, these agencies or channels can carry on trade but this is not because of an acquisition by these agencies or channels of the right to carry on trade which the un-successful applicants for licence had. Article 31 of the Constitution has therefore no application.

It was next urged that the grant of licences to the third respondent, the State Trading Corporation of India while none has been granted to the second and the third petitioners has resulted in denial of equal protection of laws guaranteed by Art. 14 of the Con-stitution. If these petitioners had applied for licences

r9[6]r under the Export Promotion Scheme and still the Gia" Chatons State Trading Corporation had been :preferred it would Importm & perhaps have been necessary to consH,ler whether the Usm' A"ociation preference accorded to the Corporation was based on v. reasonable and rational grounds. It is clear however Union of India that though it was open to these petitioners to apply for licenqes uuder the Export Promotion Scheme they Das Gupta J. made no application for licence thereunder. There is no scope therefore for the argument that they have been discriminated against.

In the result, we are of opinion that the petitioners are not entitled to any relief under Art. 32 of the Con-stitution. The petition is accordingly dismissed with costs.

Petition dismissed.

HIRALAL PATNI v. April II· LOONKARAM SETHIYA & OTHERS (K. SUBBA RAO, RAGHUBAR DAYAL and J. R. MUDHOLKAR, JJ.)

Civil Procedure-Receiver, continued by preliminary decree till discharged-Final decree silent-Whether receiver automatically discharged-Lease by reuiver to party-Term of leas. expiring-Dispossession o/ lessee by receiver-,Summary procedure or civil suit-Code of Civil Procedure, I9D8 (V of 1908), 0. 40.

The John Mills comprising of three textile mills and one flour mill were jointly owned by several persons. The financier of the Mills filed snit for recovery of the amount due to him. During the pendency of the suit receiver was appointed to take possession of the flour mills but he was not empowered to run the mi!ls directly without further directions of the court. preliminary decree was passed in the suit directing among other things that the receiver was to continue until discharged. Thereafter, an arrangement was made for running the mills and the court directed that the appellant, who was one of the co-owners of the mills, he given lease of the flour mill for three years by the receiver. In the lease deed the appellant under-took to deliver back possession to the receiver upon the expiry