St. Martin Oil Mills v. Deputy Chief Controller of Imports and Exports
1964-09-01
K.K.MATHEW
body1964
DigiLaw.ai
Judgment :- 1. The petitioner in this case is the St. Martin Oil Mills, Thodupuzha. The petitioner is doing business at Thodupuzha and its business consists in crushing copra into coconut oil. The oil cake got in the process is sold by the petitioner at the prevailing market rate. As the required quantity of copra was not available in the local market petitioner was importing copra from Ceylon and other foreign countries since 1955 against licences granted to the petitioner under R.3 of the Imports (Control) Order, 1955, hereinafter called the Order. The Import Control Policy is formulated by the Central Government according to the provisions contained in the Imports and Exports (Control) Act, 1947, hereinafter called the Act, and the provisions contained in the Order, promulgated by the Central Government under S.3 of the Act. The respondent is the licensing authority for Kerala. The respondent has been issuing licences to the petitioner since 1955. The licence was to enure for a period of six months, the first half-year ending on the 30th September and the second ending on the 31st March. The policy to be followed by the respondent in issuing licences is contained in the 'Red Book' published by the Government of India embodying the Import Trade Control Policy for the year 1962 April to 1963 March. It is provided therein that all applicants for import licences should submit their applications on an annual basis to cover their yearly entitlement and that the applications should be made for the total of the half-yearly entitlement of the applicant. The licencees shall be entitled under the licence so issued to order shipment of the goods to the extent of 50% only of the value of the licence during the first half year. The balance of the 50% can be utilised only after the first six months of the validity period of the licence and after endorsement by the licensing authority. By public notice No. 51-I.T.C.C.P. No. 62 issued by the Government of India, Ministry of Commerce and Industry, a change was announced in that policy, in that the applications for licences are to be made on an yearly basis, and that the licences against such applications will be issued in two instalments.
By public notice No. 51-I.T.C.C.P. No. 62 issued by the Government of India, Ministry of Commerce and Industry, a change was announced in that policy, in that the applications for licences are to be made on an yearly basis, and that the licences against such applications will be issued in two instalments. It was also provided that the licences covering the first half yearly entitlement will be issued as first instalment and supplementary licences covering the next half yearly entitlement will be issued subject to such cuts as may be decided upon by the Government in the next half year. Ext. P1 is the copy of the said public notice. The petitioner applied for a licence in respect of the half year ending 30th September, 1962 and the respondent issued licence to the petitioner. The commodity covered by the licence was imported by the petitioner. A further quantity of the value of Rs. 19,850/- for the first half year ending September, 1962, was allotted to the petitioner of which the petitioner was informed by the Copra Producers and Crushers Co-operative Society Ltd., Alleppey, by their letter dated 9-4-1963. The allotment was required to be availed of by the petitioner by entering into an agreement with the Society undertaking among other things the payment of a premium payable by the Society to the State Trading Corporation of India Ltd., New Delhi, at Rs. 290/- per metric ton of copra and also the Society's commission and other incidental charges. The agreement also required the petitioner to deliver to the Society the oil cake obtained by crushing the copra covered by the agreement at Rs. 315/- per metric ton. Ext. P2 is the copy of the form of that agreement. For the second half year ending March, 1963, the petitioner's entitlement was for a licence to import copra of the value of Rs.39,700/-. But no licence was issued to the petitioner, though it applied for the same in the prescribed manner. Ext. P3 is a copy of the communication received by the petitioner from the respondent. In that communication it is stated that the petitioner's entitlement for the second half year would be 3915 tons of the value of Rs. 39,700/- and that the State Trading Corporation of India Ltd., New Delhi, may be approached for the allotment of the said quantity of copra.
In that communication it is stated that the petitioner's entitlement for the second half year would be 3915 tons of the value of Rs. 39,700/- and that the State Trading Corporation of India Ltd., New Delhi, may be approached for the allotment of the said quantity of copra. The petitioner also received a communication from the Society on 14-9-1963 a copy of which is marked Ext. P4, giving intimation that out of the petitioner's entitlement of Rs. 39,700/- for the second half year, 50% thereof has been allotted to the petitioner. It was made clear that this allotment could be got only through the agency of the State Trading Corporation of India Ltd. The petitioner's complaint is that by adopting this device the petitioner is deprived of its fundamental right to carry on the trade. It is averred by the petitioner that by compelling it to take its entitlement from the State Trading Corporation the petitioner would be bound to pay Rs. 290/- per metric ton and also a commission of 1/2% besides the value of the goods to the Society. The petitioner also says that it would be bound to sell the oil cake at a certain rate arbitrarily fixed by the respondent and which is less than the prevailing market price per ton. The petitioner contends that the aforesaid arrangement has no statutory basis and is not warranted by the Act or by the Order. The import policy according to the petitioner, has been formulated in the Red Book and the respondent cannot deviate from the policy laid down in the Red Book on the basis of any direction from the Chief Controller of Imports. The petitioner therefore prays for a writ of mandamus for compelling the respondent to issue a licence for the period to enable it to import the copra from Ceylon. 2.
The petitioner therefore prays for a writ of mandamus for compelling the respondent to issue a licence for the period to enable it to import the copra from Ceylon. 2. The petitioner's counsel submits that the attempt of the respondent is to confer a monopoly on the State Trading Corporation and that the distribution of copra through the State Trading Corporation is destructive of the fundamental right of the petitioner to carry on its trade, that the additional pecuniary liability imposed on the petitioner by this arrangement would impose an unreasonable restraint on its liberty to carry on the business, and that the respondent should be directed to issue the licence for importing copra without approaching the State Trading Corporation for its quota of copra. 3. The respondent has filed a counter-affidavit and the main allegations in the counter-affidavit are that the petitioner is not entitled to a writ of mandamus for the issue of a licence as the period for which the licence was to be issued was over, that the import policy of the Government of India has changed and that no licence could be issued in favour of the petitioner for importing copra for the entitlement for the period. It was further alleged that it was decided in the interest of the public to canalise imports through the special agency like the State Trading Corporation, that it was on the basis of that policy decision that the petitioner was directed to take its entitlement for the second half year, namely for the period from October 1962 to 1963 March from the State Trading Corporation, and that the said decision cannot be construed to be a refusal to grant the licence to the petitioner, as the allotment letter, Ext. P3, was actually a permit authorising the petitioner to purchase its entitlement from the State Trading Corporation. It was also alleged in the counter-affidavit that there was no public duty on the part of the respondent to issue a licence as the petitioner has no unconditional right to get a licence as that is dependent upon the policy of the Government of India. Para.6 of the counter-affidavit traces the evolution of the import policy of the Government of India. 4.
Para.6 of the counter-affidavit traces the evolution of the import policy of the Government of India. 4. In exercise of the power conferred under S.3 and 4A of the Import and Export (Control) Act, 1947, the Central Government issued an order known as the Import (Control) 0.1955, dated 7th December, 1955, and Clause.3 of the said Order provides: "(1) Save as otherwise provided in this Order, no person shall import any goods of the description specified in Schedule.1, 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" Schedule I, which is divided into 6 paragraphs, specifies a large number of items of which import is prohibited except under a licence. Clause.6 enumerates the cases in which a licence might be refused by the licensing authority. The import policy for the period 1962-63 was notified by the Government of India and is contained in the book popularly known as the 'Red Book'. This was followed by another Import Trade Control Circular No. 57/62 dated 21-4-1962 incorporating the public notice dated 17-4-1962. Pursuant to the said Import Trade Control Policy and the Import Trade Control Circular a system of annual licensing was introduced. So for as the import policy for the import of copra or coconut kernel as indicated against item No. 38 in Part IV of Section II of the Import Trade Control Policy Book for the licensing period April 1962 to March 1963 is concerned, there was no specific notification. It was only indicated that the item was licensable to actual users. It was announced that all applications for import licences for copra are to be made on an yearly basis, that licences against the applications so made on an yearly basis will be issued in two instalments and that licences covering the first half-yearly entitlements will be issued as first instalment and supplementary licences covering the next half-yearly entitlements will be issued subject to such cuts as may be decided upon by the Government in the next half year.
The policy was changed by the Government of India by a decision taken by the Chief Controller of Imports and Exports by which it was decided to canalise the import through special agency of State Trading Corporation and that decision was taken on account of the exigency of the foreign policy of the Government of India. The respondent contends that by virtue of this change in the policy the petitioner was not entitled to the licence as prayed for by him. Clause.6 (h) of the Order is as follows: "The Central Government or the Chief Controller of Imports and Exports may refuse to grant a licence or direct any other licensing authority not to grant a licence:- (h) if the licensing authority decided to canalize imports and the distribution thereof through special or specialized agencies or channels;..." It was under this clause that the Chief Controller has taken the decision to canalise the import through the special agency of the State Trading Corporation. The petitioner contended that no such decision has been taken and that no record has been produced to show that such a decision has been taken by the Chief Controller of Imports and Exports. I do not think that contention is entitled to succeed as Ext. R8 produced by the respondent would indicate that a decision to canalise the import through the special agency of the State Trading Corporation of India Ltd., was taken by the Chief Controller. Ext. R8 is a communication issued to licensing authorities about the decision taken by the Chief Controller and intimating them to refuse licences for direct import of copra. Ext. R7 lays down the procedure to be followed in this matter. I am satisfied on the perusal of the records that there has been a decision taken by the Chief Controller of Imports that the import of copra should be canalised through the special agency of the State Trading Corporation of India Ltd. 5. It was argued on behalf of the petitioner that under S.3 of the Act, it was incumbent upon the authorities to have notified in the Gazette the change in the policy relating to this matter.
It was argued on behalf of the petitioner that under S.3 of the Act, it was incumbent upon the authorities to have notified in the Gazette the change in the policy relating to this matter. The argument was that the import policy for the whole year 1962-63 has been laid down in the Red Book and if a different policy decision was taken by the Government of India or by any other authority it must have been notified to the public in the Gazette under S.3 of the Act. S.3 of the Act is as follows: "Powers to prohibit or restrict imports and exports:- (1) The Central Government may, by order published in the Official Gazette, 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: It appears to me that the decision to canalise the import was taken under Clause.6 (h) of the Order passed under S.3 of the Act. The reasonable construction of Clause.6 appears to me to be that the Government or the Chief Controller may direct any other licensing authority to refuse licence if the Government or the Chief Controller decide to canalise the import through a special agency. The Government and the Chief Controller of Imports and Exports are licensing authorities and if they decided to canalise the import through special agency they can direct the other licensing authorities to refuse to grant licences. Here, the Chief Controller has decided to canalise the import through the special agency of State Trading Corporation and therefore the licensing authority was bound to refuse the licence to the petitioner for the second half year of 1962-1963. 6. Mr. Suryanarayana Iyer, appearing for the petitioner submitted that the Government having laid down their import policy for 1962-63 in the Red Book it was not open to them or any other authority to have changed that policy without publishing the same in the Government Gazette under S.3 of the Act. I am not satisfied that this is the correct approach to the question. S.3 speaks of the Government passing an Order like the Imports (Control) Order, 1955. The decision to canalise can be made either by the Government or by the Chief Controller and that decision, it does not appear, should be published in the Government Gazette.
I am not satisfied that this is the correct approach to the question. S.3 speaks of the Government passing an Order like the Imports (Control) Order, 1955. The decision to canalise can be made either by the Government or by the Chief Controller and that decision, it does not appear, should be published in the Government Gazette. Mr. Suryanarayana Iyer submitted that no decision has been taken by the Chief Controller of Imports and Exports to canalise the import under Clause.6(h) and that Ext. R8 was only an interdepartmental communication and that it would not evidence the existence of a decision under sub-clause (h) of Clause.6. But I am satisfied from a perusal of the records that a decision has been taken by the Chief Controller to canalise the imports, and Ext. R8 was a communication of that decision for the information of the licensing authorities. Reliance was placed on Daya v. J.C.C. of Imports and Exports (A.I.R.1962 S.C.1796) for the proposition that a change in the import policy must be announced by public notice before the licensing authority can refuse a licence on that basis. Counsel relied upon the observations in Para.5 of that ruling. That ruling, in my opinion, does not decide the question whether a decision to canalise under Clause.6(h) should be published in the Gazette. No doubt, the ruling proceeded on the basis that the policy decision must have been made before the commencement of the year. The decision is only an authority for the proposition that Clause.6(h) is valid. Therefore that ruling is of no assistance to the petitioner. The other ruling which was relied upon is Glass C.I. & U. Association v. Union of India (A.I.R.1961 S.C.1514). That also would go to show that the refusal of a licence on the basis of a decision to canalise the import through a special agency is not open to attack on the ground that it is violative of the fundamental right of a citizen applying for the licence.
That also would go to show that the refusal of a licence on the basis of a decision to canalise the import through a special agency is not open to attack on the ground that it is violative of the fundamental right of a citizen applying for the licence. In these circumstances, I do not think that the petitioner is entitled to succeed on the ground that the decision to canalise the import of copra through the special agency of the State Trading Corporation ought to have been published in the Government Gazette or that public notice should have been given of the same, and that in the absence of the publication the decision to canalise was invalid. 7. The next point for consideration is that even assuming that the petitioner was entitled to a licence for importing copra for the half year in question whether a writ can be issued to compel the respondent to issue the licence long after the period in question. It is admitted that the import policy of the Government of India has changed and that the result of the issue of a writ of mandamus would be to direct the Government to deviate from that policy. In E. W. Co. v. Joint Chief Controller, I. & E. (A.I.R.1960 Calcutta 561) it was observed: "The import trade control policy is always changing. It depends on a variety of factors, including world-trade conditions, availability of foreign exchange, the prevailing political atmosphere and so on. Unstable as these factors are it is obvious that the policy undergoes, and must undergo, changes from time to time." In the case referred to above a licensing authority refused to issue a licence and the petitioner before the High Court prayed for a writ of mandamus to compel the authority to issue a licence for the expired period. It was held that a direction cannot be issued for compelling the authority to issue a licence for the expired period. 8. In these circumstances, I come to the conclusion that there was a decision to canalise the import taken under Clause.6(h) of the Order and that even though it was not notified in the Gazette or otherwise published, it is valid.
8. In these circumstances, I come to the conclusion that there was a decision to canalise the import taken under Clause.6(h) of the Order and that even though it was not notified in the Gazette or otherwise published, it is valid. However desirable it might be that such a decision should be published for the information of the public, I cannot find any basis for the contention that it was obligatory that it should have been published in the Gazette or made known to the public by some other means, and that in the absence of the publication I should ignore the decision to canalise the import. 9. I dismiss the writ petition but in the circumstances, make no order as to costs. Dismissed.