M/S. Universal Imports Agency& ANR
Vs. The Chief Controller of Imports and Exports & Ors [1960] INSC 127 (23
August 1960)
SUBBARAO, K.
SINHA, BHUVNESHWAR P.(CJ) IMAM, SYED JAFFER
SARKAR, A.K.
SHAH, J.C.
CITATION: 1961 AIR 41 1961 SCR (1) 305
CITATOR INFO :
F 1961 SC1752 (8,9,10,12,13,16,18,23,24) RF
1962 SC1621 (20,54) E 1963 SC 734 (4,5,14,15,20,21,24,29,33,39) R 1965 SC 40
(17) R 1967 SC1742 (10) R 1985 SC1729 (16)
ACT:
French Establishments-Agreement to import
goods-De facto transfer of administration to India-Confiscation of goods
imported--Validity--" Things done or omitted to be done", meaning
of-French Establishments' (Application of Laws) Order, 1954, cl. (6)-Sea
Customs Act, 1878 (8 of 1878), s. 167(8).
HEADNOTE:
In pursuance of an agreement dated October
21, 954, entered into between the Government of India and the Government of
France whereby there was a de facto transfer of the administration of
Pondicherry and other French Settlements to the Government of India as and from
November 1, 1954, a notification dated October 30, 1954, was issued by the
Government of India called the French Establishments' (Application of Laws)
Order, 1954, by virtue of which certain enactments specified in column (3) of
the Schedule which included the Sea Customs Act, 306 1878, the Imports &
Exports Trade (Control) Act, 1947, and the Foreign Exchange Regulation Act,
1947, were extended to Pondicherry. Paragraph 6 of the Order provided:
"Unless otherwise specifically provided in the Schedule, all laws in force
in French Establishments immediately before the commencement of the Order,
which correspond to enactments specified in the Schedule, shall cease to have
effect, save as respect things done or omitted to be done before such commencement
Shortly prior to the transfer of the administration of Pondicherry to India,
the petitioners had entered into certain agreements with foreign suppliers for
the import into Pondicherry of diverse goods. Pondicherry was, prior to the
transfer to India, a free port without any restrictions on imports, except on a
few items, and the importers could acquire foreign exchange either at the
official rate in respect of some transactions or at the open market in respect
of others. The petitioners had with the consent of the French authorities
obtained through the banks foreign exchange from the open market to finance
their imports and had, with the foreign exchange so acquired, opened
irrevocable letters of credit in favour of their foreign suppliers on account of
the price of the goods to be supplied. On or about November 1, 1954, the goods
covered by the aforesaid imports were in different stages of shipment and
arrived at the port of Pondicherry in January and February 1955. The Collector
of Customs treated the imports of the goods as unauthorised and confiscated the
same and gave the petitioners an option to pay in lieu of confiscation a
penalty, on the ground that the petitioners had not obtained a licence for
bringing the goods into Pondicherry and that s. 167(8) of the Sea Customs Act,
1878, was contravened. The petitioners claimed, inter alia, that the
transactions entered into by them with the foreign dealers were " things
done " within the meaning of para. 6 of the French Establishments'
(Application of Laws) Order, 1954, and that therefore the imports by the
petitioners were within the saving clause of that paragraph.
Held, (Per Sinha, C. J., Imam and Subba Rao,
JJ. Sarkar and Shah, JJ. dissenting): (1) that on its proper interpretation,
the expression " things done " in para. 6 of the French
Establishments' (Application of Laws) Order, 1954, was comprehensive enough to
take in not only things done but also the effects or the legal consequences
flowing therefrom ;
The Queen v. Justices of the West Riding of
Yoykshire, (1876) 1 Q.B.D. 220 and Heston and Isleworth Urban District Council
v. Gyout, [1897] 2 Ch. 306, relied on.
(2) that the bringing of the goods into India
and the relevant contracts entered into by the petitioners with the foreign
dealers formed parts of a same transaction, and therefore, the: imports were
the effect or the legal consequence of the, " things done ", i.e.,
the contracts entered into by, the petitioner;
307 State of Travancore-Cochin v. The Bombay
Co. Ltd., [1952] S.C.R. 1112 and State of Travancore-Cochin V. Shanmugha Vilas
Cashew Nut Factoyy, [1954] S.C.R. 53, relied on.
(3) that para. 6 of the order saved the
transactions entered into by the petitioners and that, therefore, the Collector
of Customs had no right to confiscate their goods on the ground that they were
imported without a licence.
Per Sarkar, J.-(1) The mere making of the
contracts and the opening of the letters of credit without the bringing of the
goods into Pondicherry would not amount to an " import " and,
therefore, the imports by the petitioners would not be within the saving clause
in para. 6 as things done before the commencement of the Application of Laws
Order. (2) In the absence of the necessary words to extend the application of
French laws to the effect of things done or rights acquired from the doing of
them, the saving clause in para.
6 could not protect the imports made by the
petitioners from the operation of the Indian laws applied to the French
Establishments.
Per Shah, J.-(1) Steps preliminary to import,
even if they are closely integrated therewith, are not included in the concept
of import, in dealing with the provisions of the Sea Customs Act and the
Imports and Exports Trade (Control) Act.
(2) By the use of the expression things done
or omitted to be done before such commencement in cl. 6 of the French
Establishments' (Application of Laws) Order, 1954, French law applies to acts
and omissions before November 1, 1954, and not to legal consequences of those
acts and omissions ensuing after that date, and hence import of goods across
the customs frontier in the Pondicherry Port after November 1, 1954, without a
licence in that behalf is contrary to the provisions of the Sea Customs Act and
the Import and Exports Trade (Control) Act.
ORIGINAL JURISDICTION: Petitions Nos. 123 to
125 of 1957 and 118 of 1959.
Petitions under Article 32 of the
Constitution of India for enforcement of Fundamental Rights.
N. C. Chatterjee and S. C. Mazumdar, for the
petitioners (In Petns. Nos. 123 to 125 of 1957).
A. V. Viswanatha Sastri, R. Ganapathy Iyer
and G. Gopalakrishnan, for the petitioners (In Petn. No. 118 of 1959).
H. J. Umrigar, B. R. L. lyengar and T. M.
Sen, for the Respondents (In all the petitions).
Harnam Singh and Sadhu Singh, for Intervener
No. 1 (B. S. and Co.) 40 308 D. B. Prem and Sadhu Singh, for Intervener No. 2
(French India Importing Corporation).
1960. August 23. The Judgment of B. P. Sinha,
C. J., Imam and Subba Rao, JJ., was delivered by Subba Rao, J. Sarkar, J. and
Shah, J., delivered separate Judgments.
SUBBA RAO J.-These four petitions are filed
under Art. 32 of the Constitution for quashing the orders of the Assistant
Controller of Imports and Exports. the Collector of Customs and Central Excise,
Pondicherry, the Board of Revenue, and the Government of India, and for an
appropriate direction requiring the respondents to refund the amount realised
from the petitioners.
Messrs. Universal Imports Agency and the
proprietor of the agency are the petitioners in the first three petitions and
Messrs. Victory Traders are the petitioners in the last one. The Chief
Controller of Imports and Exports, Pondicherry, the Collector of Customs and
Central Excise, Pondicherry, the Central Board of Revenue and the Government of
India are the respondents in all the petitions.
Messrs. French India Importing Corporation
and Messrs. B. S. & Co. intervened in the Writ Petitions.
Pondicherry was a French Possession in India.
On October 21, 1954, the Government of India and the Government of France
entered into an agreement (hereinafter called the Indo-French Agreement),
whereunder there was a defacto transfer of the administration of the French
Settlements to the Government of India (hereinafter called the merger) as and
from November 1, 1954. The de jure transfer was postponed.
Messrs. Universal Imports Agency are a
proprietary concern registered with the Services Des Contribution, Pondicherry,
having its principal place of business at Pondicherry. Sri Mohanlal B. Gandhi
is the proprietor of the said Agency.
They are established importers and general
merchants dealing in ball bearings, mill stores, porcelain ware, glass marbles,
beltings and various other goods. They commenced their business at Pondicherry
on or about April 14, 1954, under 309 " patente " No. 70 of 1954
issued by the Controller of the Contributions Department of the French
Government at Pondicherry. In the middle of August 1954, they placed 8 indents
with Messrs. Shimada Trading Co., Ltd., Osaka, Japan, for importing porcelain
wares, glass marbles and beltings and the total value thereof amounted to Rs.
57,41812-0. About the end of August 1954, they opened three irrevocable Letters
of Credit with Messrs. Banque De L' Indo-Chine in favour of the said suppliers.
The bankers obtained authorization from the Bureau Des Affaires Economique,
Pondicherry, for the requisite foreign exchange from the open market and sold
the same to the petitioners for the amount involved in the Letters of Credit.
The petitioners made full payment for the said foreign exchange and the said
Bank kept the said foreign exchange and credit irrevocably available with their
Overseas Agent at Japan for the benefit of the suppliers against full set of
shipping documents.
All the said Letters of Credit were valid for
three months and under the agreement the suppliers were to ship the goods
within the said time. On or about November 1, 1954, the said goods were in
different stages of shipment ; in some cases they were in the course of
shipment, and in others awaiting shipment in a matter of a few days and indeed
a large part of the goods had already been placed on board " S. S.
Shillong " and " S. S. Cambodge " and the balance of the goods
were in the course of being loaded in " S. S.
Sunda ". In January and February, 1955
and thereafter the goods arrived at the Port of Pondicherry. The Collector of
Customs confiscated all the goods on the ground that they were imported without
a licence and gave an option to the petitioners to pay in lieu of confiscation
fine amounting to Rs. 30,390/-. The petitioners took up the matter with the
Government of India without any success and finally they paid the said penalty
under protest and cleared the goods.
On or about September 1954 the petitioners
placed several indents with their overseas suppliers, Messrs. Shimada Trading
Co., Limited, Osaka, Japan, and others and the total C. I. F. value thereof
amounted 310 to Rs. 40,470-14-0. They arranged for the full payment of eight
cheques to the said suppliers of the value of the goods through the Banque De
L' Indo-Chine. Their bankers duly obtained authorization from the Bureau Des
Affairs Economique, Pondicherry, for the requisite foreign exchange and sold
the same to the petitioners for the amount involved in the cheques, and the
said foreign exchange was kept available to the suppliers. On or about November
1, 1954, the goods ordered were in different stages of shipment and in some
cases the goods were in the course of shipment and in others awaiting shipment
in a matter of a few days. In January and February, 1955, the goods arrived at
the port of Pondicherry. The Collector of Customs treated the imports of the
goods as unauthorized and confiscated the same and gave the petitioners an
option to pay in lieu of confiscation a penalty amounting to Rs. 20,700/The
petitioners carried the matter to the Government without any success.
Ultimately the petitioners paid the penalty under protest and cleared the
goods.
The petitioners again in the middle of August
1954 placed several indents with their overseas suppliers for importing hair
belting, torches, belt fasteners, electric lighting torch bulbs and primus
stoves, and the total C. I. F. value was Rs. 52,572-12-0. They opened
irrevocable Letters of Credit and issued cheques against full advance
remittance in favour of their suppliers through the said Banque De L'
Indo-Chine. Their bankers arranged through the Bureau Des Affairs Economique,
Pondicherry, for the requisite foreign exchange from the open market and sold
the same to the petitioners for the amount involved in the said Letters of
Credit and cheques. The petitioners made full payment for the said foreign
exchange and the said bank kept the said foreign exchange and the Letters of
Credit irrevocably available with their overseas agents for the benefit of the
suppliers against full set of shipping documents and the cheques issued by the
bank on overseas banks were sent to the suppliers as full advance remittance
against the contracts. In January and February, 1955, the goods arrived at the
311 port of Pondicherry. The Collector of Customs confiscated the goods and
gave the petitioners an option to pay in lieu of confiscation fine amounting to
Rs. 24,210. Though the petitioners took up the matter with the Government of India,
nothing came out of it. They paid the penalty under protest and cleared the
goods.
Messrs. Victory Traders, the petitioners in
Petition No. 118 of 1959, are carrying on business of import and export and
general merchandise in Pondicherry from the year 1949.
The petitioners were importing into
Pondicherry a number of articles from various countries under " patente
" No. 126 of 1954 granted by La Controleur, Pondicherry. On August 20,
1954, they applied to the Chief Bureau Economique, Pondicherry, requesting them
to grant permits to import goods from foreign countries. The said Bureau
replied that no import licence was required for goods to enter the territory.
Thereafter the petitioners placed orders with foreign dealers. In the middle of
August, 1954 and early in September, 1954, they placed a number of indents with
their principals in foreign countries for importing fan belts, corn emery, soda
water bottles, glass marbles, etc., of value pound 13,870. The orders were
backed by full payments in many cases and at least half the payments in others.
These payments were made by demand drafts
issued by the Banque De L' Indo-Chine. In January and February, 1955 and
thereafter the goods arrived at the port of Pondicherry, and they were
confiscated by the Collector of Customs who gave the petitioners an option to
pay in lieu of confiscation fine aggregating to Rs. 91,100. After filing
appeals to the Central Board of Revenue and, thereafter, a revision to the
Government of India with no success, the petitioners cleared the goods after
paying the penalty under protest.
It is clear from the foregoing facts that the
petitioners entered into, before the merger, firm contracts of sales by import
with foreign sellers, made available foreign exchange either under Letters of
Credit or otherwise, and the goods were shipped either before or after the
merger, though they reached their destination 312 after the merger. The said
goods were confiscated by the Collector of Customs under the following
circumstances.
Under the Indo-French Agreement, the entire
administration of the French Settlements was vested with the Government of
India from November 1, 1954, though de jure transfer had been postponed. In
pursuance of the Indo-French Agreement, the Ministry of External Affairs
published a Notification No. S. R. O. 3315 dated October 30, 1954, purporting
to be under s. 4 of the Foreign Jurisdiction Act, 1947, and called the French
Establishments' (Application of Laws) Order, 1954, (hereinafter referred to as
the Order). Under paragraph 3 of the said Order, the Sea Customs Act, 1879, the
Reserve Bank of India Act, 1934, the Imports & Exports Trade (Control) Act,
1947, the Foreign Exchange Regulation Act, 1947 and the Indian Tariff Act,
1934, were extended to Pondicherry. On November 1, 1954, the Government of
India appointed a Controller of Imports & Exports for the French
Establishments, and paragraph 4 of the same notification gave the following
information and guidance to the public :
" As regards orders placed outside the
Establishments and finalised through the grant of licence by the competent
French Authorities in accordance with the Laws and Regulations in force prior
to 1st November, 1954, licence holders are advised to apply to the Controller
of Imports & Exports for validation of licences held by them. No fees will
be charged for these applications. The applications should be accompanied by
the original licence and should give particulars about............
" Licence-holders are advised not to
arrange for shipments of goods until the licences held by them have been
validated by the Controller of Imports and Exports at Pondicherry." The
petitioners by way of abundant caution applied to the Chief Controller of
Imports & Exports for licences for clearance of goods, but they were all
rejected and the petitioners were told that their goods would be treated as
unauthorized imports and they were advised to approach the Collector of Customs
and Central Excise 313 for conditions regarding their release. As stated supra,
after the goods arrived at the port of Pondicherry, the Collector of Customs
and Central Excise made the various orders confiscating the goods and giving
the petitioners option to pay penalties in lieu of confiscation., All of them
paid the penalties, under protest, and cleared the goods. The appeals filed to
the Central Board of Revenue were dismissed and the revisions filed against the
orders of the Central Board of Revenue to the Government of India were also
dismissed. The petitioners filed the petitions under Art. 32 of the
Constitution questioning the validity of the orders of confiscation.
The respondents in their counter-affidavits
claim that the orders made by them are valid and in accordance with law.
Learned counsel for the petitioners raised
many contentions in support of their petitions. It is not necessary to
enumerate them as the petitions can effectively be disposed of on the basis of
one of the contentions. The said contention may briefly be stated thus: The
petitioners have the fundamental right to hold and to carry on their import
trade and that the Notification No. S. R. O. 3315 dated October 30, 1954, on the
basis of which the orders of confiscation were issued has a saving clause which
excludes the operation of the said Notification in respect of transactions where
under the confiscated goods were purchased and imported. The said saving clause
embodied in paragraph 6 of the Order reads:
" Unless otherwise specifically provided
in the Schedule, all laws in force in the French Establishments immediately
before the commencement of the Order, which correspond to enactments specified
in the Schedule, shall cease to have effect, save as respect things done or
omitted to be done before such commencement ".
Relying on this paragraph, it is contended
that the transactions entered into by the petitioners with the foreign dealers
were " things done " within the meaning of this paragraph and,
therefore, they were saved from the operation of this Order. For the
respondents 314 it is argued that as the confiscated goods were brought into
India after the commencement of the Order, the goods confiscated were outside
the pale of the saving clause. The question raised falls to be decided on a
true interpretation of the terms of paragraph 6 of the said Order.
In order to apply the said paragraph 6 to the
present case, the following facts have to be ascertained : (1) What are the
laws specified in the Schedule ? (2) What were the laws in force in the French
Establishments before the commencement of the Order corresponding to the
enactments so specified ? (3) What were the " things done " or
omitted to be done under the said laws? It is not necessary to enter into any
elaborate survey of the laws specified in the Schedule. Broadly stated, the
Imports & Exports (Trade Control) Act enables the Central Government to
make an order making provisions for prohibiting, restricting or otherwise
controlling the import or export of goods of any specified description. It
makes the infringement of such restrictions an offence and a person
contravening the same is punishable with imprisonment for a term which may
extend to one year or with fine or with both. The Act further says that the
goods imported in violation of the restrictions shall be deemed to be goods the
import of which has been prohibited or restricted under s. 19 of the Sea
Customs Act. In exercise of the powers conferred by s. 3 and s. 4A of the
Imports & Exports (Trade Control) Act, the Central Government made an order
dated December 7, 1955. Under s. 3 of that order, no person shall import any
goods of the description specified in Schedule 1, except and in accordance with
a licence or a customs clearance permit granted by the Central Government or by
any authority specified in Schedule 2 to that order. There are also provisions
prescribing the procedure for obtaining licences, the conditions of the
licences and for their cancellation or modification. It is, therefore, clear
that under the said Act, no goods can be imported into India without a licence
obtained in the prescribed manner from the prescribed 315 authorities. The Sea
Customs Act provides for the levy of sea customs duty, imposes prohibitions and
restrictions on imports and exports in respect of certain goods and imposes
punishment for infringement of the provisions of the Act.
Under s. 167(8) of the said Act, read with s.
3(2) of the Imports and Exports Trade (Control) Act, 1947, if any goods, the
importation or exportation of which is prohibited or restricted, are imported
into or exported out of India contrary to such restrictions or prohibitions,
the goods concerned are liable to be confiscated and the persons involved are
also liable to penalty. The Foreign Exchange Regulation Act, 1947, provides for
the regulation of payments, dealings in foreign exchange and securities, and
the import and export of currency and bullion. It prohibits dealings in foreign
exchange except by persons authorized to deal in the same and it further
provides penalties for contravention of any of the provisions of the Act.
Briefly stated, the Indian law as disclosed by the aforesaid Acts is that
imports into India without a licence are prohibited, the goods so imported in
contravention of the restrictions imposed are liable to be confiscated and that
foreign exchange cannot be obtained otherwise than under the provisions of the
Act. Persons infringing the laws are liable to prosecution in addition to
confiscation of the goods involved.
What was the pre-existing law in Pondicherry
corresponding to the enactments specified in the Schedule? Neither the Acts
governing the imports nor any authoritative text-books disclosing the relevant
law have been placed before us. But from the affidavits filed in the case the
state of law corresponding to the relevant Acts referred to in para. 3 of the
Order can easily be ascertained. Pondicherry had been a free port, there being
no restrictions on imports except on a few items like gold, rock-salt etc. For
effecting payment for the imports, the importers of Pondicherry could acquire
foreign exchange either at the official rate or at the open market rate,
whichever might be conveniently available, both methods being recognised 41 316
by the French Government as valid. In the counter affidavit filed by the State
the manner of acquiring the foreign exchange for imports has been clearly
stated. 'two kinds of permits for obtaining official exchange by importers were
issued by the Chief Commissioner in Pondicherry, which were known as
authorization and attestation respectively. They were signed by the
Governor-General of the French Indian Establishments himself or by his
Secretary-General. The Government of France used to make an overall allotment
of foreign exchange to the French territories. Apart from that allotment, it
made other currency allotments in the light of trade agreements entered into by
France with other countries. Authorizations were issued in respect of goods
imported from countries with which France had entered into trade agreements and
attestations in respect of goods imported from France and other French
colonies. Further, in respect of other transactions exchange was arranged by
importers through banks dealing in foreign exchange. The Department of Affaires
of Economics used to authorize the banks in respect of such transactions.
Shortly stated, Pondicherry was a free port without any restrictions on
imports, except on a few items, and the importers could acquire foreign
exchange either at the official rate in respect of some transactions or at the
open market in respect of others.
What were the " things done " by
the petitioners under the Pondicherry law ? The petitioners in the course of
their import trade, having obtained authorization for the foreign exchange
through their bankers, entered into firm contracts with foreign dealers on C.
I. F. terms. In some cases irrevocable Letters of Credit were opened and in
others bank drafts were sent towards the contracts.' Under the terms of the
contracts the sellers had to ship the goods from various foreign ports and the
buyers were to have physical delivery of the goods after they had crossed the
customs barrier in India. Pursuant to the terms of the contracts, the sellers
placed the goods on board the various ships, some before and others after the
merger, and the goods arrived at Pondicherry port 317 after its merger with
India. The prices for the goods were paid in full to the foreign sellers and
the goods were taken delivery of by the buyers after examining them on arrival.
Before the merger if the Customs Authorities
had imposed any restrictions not authorized by law, the affected parties could
have enforced the free entry of the goods in a court of law. On the said facts
a short question arises whether paragraph 6 of the Order protects the
petitioners. While learned counsel for the petitioners contends that "
things done " take in not only things done but also their legal
consequences, learned counsel for the State contends that, as the goods were
not brought into India before the merger, it was not a thing done before the
merger and, therefore, would be governed by the enactments specified in the
Schedule. It is not necessary to consider in this case whether the concept of
import not only takes in the factual bringing of goods into India, but also the
entire process of import commencing from the date of the application for
permission to import and ending with the crossing of the customs barrier in
India. The words " things done " in paragraph 6 must, be reasonably
interpreted and, if so interpreted, they can mean not only things done but also
the legal consequences flowing there from. If the interpretation suggested by
the learned counsel for the respondents be accepted, the saving clause would
become unnecessary. If what it saves is only the executed contracts, i.e., the
contracts where under the goods have been imported and received by the buyer
before the merger, no further protection is necessary as ordinarily no question
of enforcement of the contracts under the pre-existing law would arise. The
phraseology used is not an innovation but is copied from other statutory
clauses. Section 6 of the General Clauses Act (X of 1897) says that unless a
different intention appears, the repeal of an Act shall not affect anything
duly done or suffered there under. So too, the Public Health Act of 1875 (38
& 39 Vict. c. 55) which repealed the Public Health Act of 1848 contained a
proviso to s. 343 to the effect that the repeal " shall not affect
anything duly done or suffered under the enactment 318 hereby repealed ".
This proviso came under judicial scrutiny in The Queen v. Justices of the West
Riding of Yorkshire(1).
There notice was given by a local board of
health of intention to make a rate under the Public Health Act, 1848, and
amending Acts. Before the notice had expired these Acts were repealed by the
Public Health Act, 1875, which contained a saving of " anything duly done
" under the repealed enactments, and gave power to make a similar rate
upon giving a similar notice. The board, in ignorance of the repeal, made a
rate purporting to be made under the repealed Acts. It was contended that as
the rate was made after the repealing Act, the notice given under the repealed
Act was not valid. The learned Judges held that as the notice was given before
the Act, the making of the rate was also saved by the words " anything
duly done " under the repealed enactments. This case illustrates the point
that it is not necessary that an impugned thing in itself should have been done
before the Act was repealed, but it would be enough if it was integrally
connected with and was a legal consequence of a thing done before the said
repeal. Under similar circumstances Lindley, L. J., in Heston and Isle worth
Urban District Council v. Grout (2) confirmed the validity of the rate made
pursuant to a notice issued prior to the repeal. Adverting to the saving
clause, the learned Judge tersely states the principle thus at p. 313: "
That to my mind preserves that notice and the effect of it ". On that
principle the Court of Appeal held that the rate which was the effect of the
notice was good.
It is suggested that the phraseology of the
saving clause of the English Statutes and of the General Clauses Act of 1897
are of wider import than that of paragraph 6 of the Order and, therefore, the
English decisions are not of any assistance in considering the scope of the
saving clause of the Order. It is further stated that the English decisions
apply only to a saving clause of an Act which repeals another but preserves the
right created by the latter. We do not see any reason why the same construction
cannot be (1) (1876) 1 Q.B.D. 220.
(2) [1897] 2 Ch. 306.
319 placed upon the wording of paragraph 6 of
the Order which is practically similar in terms as those found in the relevant
saving clause of the English Statute and that of the General Clauses Act.
Nor can we find any justification for the
second criticism.
In the instant case the legal position is
exactly the same.
By reason of the Indo-French Agreement the
Government of India made the Order under the Foreign Jurisdiction Act applying
the Indian laws to Pondicherry. The effect of that Order was that the French
laws were repealed by the application of the Indian laws in the same field
occupied by the French laws subject to a saving clause. The position is
analogous to that of a statute repealing another with a saving clause. If the
English decisions apply to the latter situation, we do not see how they do not
apply to the former. In both the cases the pre-existing law continues to govern
the things done before a particular date. We, therefore, hold that the words
" things done " in paragraph 6 of the Order are comprehensive enough
to take in a transaction effected before the merger, though some of its legal
effects and consequences projected into the postmerger period.
Now what was the inter-relation between the
said things done " and the act of import or bringing of the goods into
India ? The effect of the contracts under the pre-existing law was that the
terms thereof could have been implemented without any customs bar placed
against the import. This Court had, in the context of Art. 286(1)(b) of the
Constitution, to consider the connotation of the words " in the course of
export or import " in State of Travancore-Cochin v. The Bombay Co Ltd.
(1). Patanjali Sastri, C. J., described the nature of export sale thus at p.
1118:
"Such sales must of necessity be put
through by transporting the goods by rail or ship or both out of the territory
of India, that is to say, by employing the machinery of export. A sale by
export thus involves a series of integrated activities commencing from the
agreement of sale with a foreign buyer and ending with the delivery of the
goods to a common carrier for (1) [1952] S.C.R. 1112.
320 transport out of the country by land or
sea. Such a sale cannot be dissociated from the export without which it cannot
be effectuated, and the sale and resultant export form parts of a single
transaction." The same principle has been restated by the learned Chief
Justice in State of Travancore. Cochin v. Shanmugha Vilas Cashew Nut Factory
(1). The learned Chief Justice stated at p. 63 thus:
" The phrase " integrated
activities " was used in the previous decision to denote that a sale, that
is, a sale which occasions the export, cannot be dissociated from the export
without which it cannot be effectuated and the sale and resultant export form
parts of a single transaction".
Applying the said principles to an import
sale it may be stated that a purchase by import involves a series of integrated
activities commencing from the contract of purchase with a foreign firm and ending
with the bringing of the goods into the importing country and that the purchase
and resultant import form parts of a same transaction. If so, in the present
case the bringing of the goods into India and the relevant contracts entered
into by the petitioners with the foreign dealers form parts of a same
transaction.
The imports, therefore, were the effect or
the legal consequence of the " things done ", i.e., the contracts
entered into by the petitioners with the foreign dealers.
This conclusion is also reinforced by the
terms of the IndoFrench Agreement. It is common case that the terms of the said
Agreement cannot be enforced in a municipal court in India. We are only
referring to it as the terms thereof throw some light on the proper
understanding of the saving clause. By Art. 17 of the Agreement, in so far as
material for our purpose, all orders placed outside the Establishments and
finalised through the grant of a licence by competent authorities in accordance
with laws and regulations in force prior to the date of the de facto transfer
were to be fulfilled by the Government of India and the necessary foreign
exchange granted if the goods were imported (1) [1954] S.C.R. 53.
321 within the period of validity of the
relevant licences subject to payment of customs duty and other taxes normally
leviable at Indian ports. That is, orders placed outside the Establishments and
finalised through the grant of a licence were to be honoured by the Government
of India. The word " licence " in this Article may be construed
rather widely to take in a permit or an authorization ; otherwise it would lead
to s the anomaly that when a licence, strictly so called, is required for a
transaction and therefore obtained, the transaction is protected by the
Article, whereas the transaction which requires only a permit is excluded
therefrom. It may be recalled that the petitioners obtained authorizations of
the Economics Department in respect of their orders. This Article indicates the
intention of the two Governments that the orders so placed outside the
Establishments should be honoured. If paragraph 6 of the Order is construed in
the manner suggested by the State, we would be imputing to the framers of the
Order a conscious breach of the terms of the Agreement between the two
countries, for even the orders covered by Art. 17 of the Agreement would be
excluded from the operation of the saving clause.
We would, therefore, hold that paragraph 6 of
the Order saves the transactions entered into by the petitioners and that the respondents
had no right to confiscate their goods on the ground that they were imported
without licence. In this view, no other question arises for consideration.
In the result, the orders of the respondents
2, 3 and 4 are quashed and they are directed to refund to the petitioners the
amounts illegally collected from them. The petitioners in all the petitions
will have their costs.
SARKAR J.-I think that these petitions should
fail.
Sometime in the latter half of 1954, the
petitioners had in Pondicherry, then a French establishment in India, entered
into certain agreements with foreign suppliers for the import into Pondicherry
of diverse goods. It is said that at that time licences were not 322 required
for such imports from the French authorities. It appears however that these
authorities granted a certain amount of foreign exchange for the imports. The
importers who failed to secure an allotment of foreign exchange from the French
authorities often obtained it from the open market through banks. The French
authorities however prohibited the banks in Pondicherry with effect from July
1, 1954, from acquiring without their permission, foreign exchange in the open
market for their constituents for financing imports. The petitioners had with
the consent of the French authorities obtained through the banks foreign
exchange from the open market to finance their imports and had with the foreign
exchange so acquired, opened irrevocable letters of credit in favour of their
foreign suppliers on account of the price of the goods to be supplied. They did
this shortly prior to the transfer of administration of Pondicherry and other
French establishments in India on November 1, 1954, to India pursuant to an
agreement made on October 21, 1954, between the Governments of France and
India. The goods covered by the aforesaid imports were shipped and arrived in
Pondicherry port after November 1, 1954, and were confiscated by the Government
of India who had by that time taken over the administration of Pondicherry. The
orders of confiscation gave an option to the petitioners to obtain a release of
the goods by payment of a fine which option was availed of by them.
These petitions have been filed under Art. 32
of the Constitution challenging the validity of the confiscation and claiming a
refund of the fine paid on the ground that the confiscation was an illegal
violation of the petitioners' rights under the Constitution to hold property
and to carry on business.
The orders of confiscation had been made
under s. 167(8) of the Sea Customs Act, 1878. That section authorised the
confiscation of goods imported in contravention of orders prohibiting imports
made under s.19 of the same Act.
Section 3 of the Imports and Exports
(Control) Act, 1947, also authorised the Central Government to prohibit by
orders made by it, 323 imports of goods of any specified description and
provided that the goods to which the orders applied would be deemed to be goods
of which the import had been prohibited under s. 19 of the Sea Customs Act and
that the provisions of the latter Act would have effect accordingly. Section 4
of the Imports and Exports (Control) Act provided that all orders made under r.
84 of the Defence of India Rules and in force immediately before the
commencement of the Act, would be deemed to have been made under the Act There
was an order made by the Government of India under r. 84 of the Defence of
India Rules by Notification of the Department of Commerce No. 23 I.T.C. 43
dated July 1, 1943, which prohibited the import of the goods which the
petitioners had imported.
The orders of confiscation would be
unexceptionable if the statutes and Order mentioned in the preceding paragraph
applied to these imports. That they applied to Pondicherry as from November 1,
1954, would seem to be plain from the Order passed by the Government of India
on October 30, 1954, under the Foreign Jurisdiction Act, 1947, to take effect
from the date of the transfer of administration, namely, November 1, 1954,
called the French Establishments (Application of Laws) Order and being Ministry
of External Affairs Notification No. S.R.O. 3315. This Order had been passed in
view of the Indo-French agreement and the transfer of administration provided
thereby. Its validity is not challenged. Paragraph 3 of the Order provided that
the enactments mentioned in the Schedule to it and all Orders made under those
enactments and in force on November 1, 1954, would apply to the French
Establishments subject to the subsequent provisions of the Order. The
enactments mentioned in the Schedule included the Sea Customs Act and the
Imports and Exports (Control) Act. It is not in dispute that the Order under
the Defence of India Rules mentioned earlier was in force on this date.
The Application of Laws Order therefore made
the 42 324 Sea Customs Act, the Imports and Exports (Control) Act and the Order
made under the Defence of India Rules applicable to Pondicherry as from
November 1, 1954. The petitioners have however contended-for reasons which I
will examine presently-that the Order made under the Defence of India Rules had
not been applied to the French Establishments by the Application of Laws Order,
but they have not disputed that the Sea Customs Act and the Imports and Exports
(Control) Act were applied to Pondicherry. The petitioners rested their case
mainly on the saving clause contained in paragraph 6 of the Application of Laws
Order which so far as material, was in these terms:
" All laws in force in the French
Establishments immediately before the commencement of this Order, which
correspond to the enactments in the Schedule, shall cease to have effect save
as respect things done or omitted to be done before such commencement ".
The petitioners have raised three points, two
of which can be disposed of at once. It is said that the Order made under the
Defence of India Rules did not, apply to the French Establishments for only
Orders made under the enactments mentioned in the Schedule were applied to them
by paragraph 3 of the Application of Laws Order, and the Defence of India Act
and Rules were not enactments mentioned in the Schedule. It is true that the
Defence of India Act and Rules are not mentioned in the Schedule. But as
already stated, under s. 4 of the Imports and Exports (Control) Act, Orders
made under r. 84 of the Defence of India Rules are to be deemed to have been
made under that Act. I am unable to accept the contention that an Order which
has to be deemed to be made under the Imports and Exports (Control) Act is not
an Order made under the Act for the purposes of paragraph 3 of the Application
of Laws Order. It seems to me that when an Order is required to be deemed to
have been made under an enactments it is as good as an Order made under the
enactment. If it were not so, the deeming provision would lose much of 325 its
value. That being so, para. 3 would make the Order applicable to Pondicherry.
Then it is said that the imports were made
before the commencement of the Application of Laws Order because the contracts
in respect of them had been concluded and the letters of credit opened before
then though the goods had not been taken across the customs barrier at
Pondicherry by that time. Therefore, it is said, the imports by the petitioners
would be within the saving clause in paragraph 6 as things done before the
commencement of the Application of Laws Order, to which the Sea Customs Act,
the Imports and Exports (Control) Act and the Order made under the Defence of
India Rules would riot apply. This argument also seems to me to be ill-founded.
These Acts and the Order were applied to Pondicherry
as from November 1, 1954. The effect of that was to prohibit imports thereafter
and to render the goods imported in contravention of that prohibition liable to
confiscation.
What is an import-and this is what was
prohibited-has therefore to be decided by reference to these Acts and the
Order. They defined import as bringing goods into India, which in the present
case would include the French Establishments by virtue of paragraph 4 of the
Application of Laws Order. Therefore goods brought across the customs' barrier
into Pondicherry would be goods imported into Pondicherry. To the goods so
brought into Pondicherry after November 1, 1954, the Acts and the Order made
under the Defence of India Rules must apply irrespective of whether the goods
were brought under contracts concluded and letters of credit opened, before
that date. It is not in my view permissible to ascertain the meaning of the
word 'import' for the purpose of this case by reference to other statutes or
notions and to contend that there has been an import by the making of the
contract and the opening of the letter of credit without the bringing of the
goods into Pondicherry as the learned counsel for the petitioners sought to do.
The main argument on behalf of the
petitioners is however, that the words save as respects things done 326 or
omitted to be done' in paragraph 6 of the Application of Laws Order saved not
only the things done prior to the commencement of the Order, that is, the
placing of the indents and the opening of the letters of credit but also the
effect thereof and the rights accrued there from. It is said that the indents
had been legally placed and the letters of credit legally opened with foreign
exchange acquired with the express per. mission of the French Administration
which foreign exchange could not have been acquired without such provision. It
is contended that the saving clause would make the French laws applicable to
the imports which were the effect of these things done before November 1, 1954,
and also protect the rights acquired from the things so done, from the
operation of the Indian laws.
So it is said that the Confiscations Under
the Indian laws were wholly illegal.
Now it has to be noted that the saving clause
does not say that the French laws would apply to the effect of things earlier
done or protect rights accrued there from. I see no warrant in the absence of
the necessary words to extend the application of the French laws to the effect
of things done or rights acquired from the doing of them. It was said that
otherwise the saving clause would be idle. I am unable to agree. If any
question as to anything earlier done arose after the transfer, that question
would under the saving clause have to be decided by the French laws. In the
absence of the saving clause it would have been open to argument what the
effect of the transfer was with regard to things previously done. I may also
point out that S. 6 of the General Clauses Act provides that when one enactment
is repealed by another, then, in the absence of a different intention, the
repeal shall not affect anything duly done or suffered under the repealed
enactment nor any right accrued there under. It strikes me that if the saving
of a thing done under the repealed enactment also necessarily saved what is called
the effect of it or rights acquired from it, it would not have been necessary
to expressly provide also for the saving of the rights acquired under the
repealed enactment.
327 Therefore, it seems to me that the saving
of things done does not automatically save the effect of them or rights
acquired there from.
The argument that the saving clause operated
to protect the imports was based on two English cases, namely, The Queen v.
Justices of the West Riding of Yorkshire (1)
and Heston and Isleworth Urban District Council v. Grout (2). These cases
considered the terms of statutes analogous to s. 6 of our General Clauses Act,
providing that a repeal of one enactment by another shall not affect anything
duly done or suffered under the repealed enactment or any right acquired there
under. These provisions were therefore materially different from the saving
clause now before us, as they expressly saved rights acquired under a repealed
statute.
The first mentioned case held that as the two
statutes were substantially for the same purpose, namely, making a rate, the
notice to make a rate tinder the repealed Act should have effect after the
repeal in view of the saving clause as it could have been given under the
repealing Act for the same purpose. It would be difficult to apply the
principle of this case where two statutes have not the same purpose Apart from
the fact that we have here no two statutes, the Indian enactments with which we
are concerned, would seem to have made a complete departure from the position
existing on the same subject during the French Administration. lit the other
case it was held that when a thing duly done tinder a repealed enactment was
saved by a saving clause in the repealing Act, the effect of it was also saved.
But the effect of the thing done would be saved by the express provision
contained in the saving clause, namely, that the repeal shall not affect any
right acquired under the repealed enactment and the judgment in this case was
also based on this express provision to remove any doubts that might arise as
to the other reasoning employed. The thing done in this case was the giving of
a notice by a local authority to certain house owners to sewer and make up a
private street. The effect saved was the recovery by the local authority from
the owners of the expenses of the sewering (1) (1876) 1 Q.B.D. 220.
(2) [1897] 2 Ch. 306.
328 and making of the street which it had to
incur on the owner's failure to carry out the terms of the notice. These things
naturally took time and in the meantime the Act under which the notice was
given had ceased to be applicable. The observation made in this case cannot be
applied to a case like the present.
Then again it seems to me that there is
considerable difference between the terms of the saving clause, considered in
the English cases and the saving clause with which we are concerned. The saving
clause in the English cases as also s. 6 of our General Clauses Act, applies
where a subsequent statute repeals a previous statute passed by the legislature
of the same country. That is not the position here. We have here laws of the
Indian legislature replacing French laws. Indeed it is at least arguable
whether without more, the French laws would have been of force after the
transfer; it would seem that this difficulty was realised and so it was
expressly provided by paragraph 5 of another Order called the French
Establishments (Administration) Order, made by Notification No. 3314 dated
October 30, 1954, issued by the External Affairs Ministry of the Government of
India, that all laws in force in the French Establishments and not repealed by
para. 6 of the Application of Laws Order, would continue to be in force until
repealed.
Further, the saving clauses considered in the
English cases preserved unaffected by the repeal, only things done under the
repealed enactment and the rights acquired there under.
The saving clause that we are considering
saves things done before the commencement of the Application of Laws Order
whether the thing was done under any law or not; it does not purport to
preserve a right acquired under a statute repealed. In Hamilton Gell v. White
(1), it was observed that s. 38 of the English Interpretation Act, 1889, which
corresponds to s. 6 of our General Clauses Act, " was not intended to
preserve the abstract rights conferred by the repealed Act......... It only
applies to specific rights given to an individual upon the happening of one or
other of the events specified in the (1) [1922] 2 K.B. 422. 431.
329 statute." Likewise in Abbott v.
Minister for Lands (1) it was observed about a saving clause which protected
rights accrued under repealed enactments, that, " the more right (assuming
it to be properly so called) existing in the members of the community or any
class of them to take advantage of an enactment, without any act done by an
individual towards availing himself of the right, cannot properly be deemed a
" right accrued " within the meaning of the enactment". The
principle of the English cases on which the petitioners relied would not apply
except to protect rights acquired under repealed statutes. In the cases before
us the petitioners could not say that they had acquired any right tinder any
French law, to import the goods. There was admittedly no law which gave the
petitioners any right to import any goods. The position was only that there was
an absence of laws prohibiting import. That clearly did not give the
petitioners any right and certainly not a right under a statute which was
repealed. All that the French authorities had done was to permit the
petitioners to acquire foreign exchange in the open market for financing their
imports. It would be impossible to say that thereby the petitioners acquired
any right under any French law to import any goods.
Lastly, the principle of the two English
cases applies admittedly only where there is no intention to the contrary.
Now it seems to me that here there is
indication of an intention to the contrary. Clause 17 of tile agreement between
India and France provided that imports finalised through the grant of licence
prior to the transfer would be fulfilled but the goods would be liable to
customs duty normally leviable in Indian ports. Clearly, therefore, it was not
intended that after the transfer, Pondicherry would remain a free port in
respect of imports made even under agreements concluded prior to the transfer
under a licence.
On such imports duty had to be paid after the
transfer. The right to import freely was not therefore intended to be
preserved. If so there could have been no intention, in any event, to protect a
right to import freely (1) [1895] A.C. 425. 431.
330 under an agreement made prior to the
transfer, where there was no licence granted for the import. Admittedly, the
petitioners had not obtained any such licence.
For all these reasons it seems to me that the
English decisions relied on are of no assistance in the present case. I am
unable to read the saving clause in this case as if it is the same as s. 6 of
our General Clauses Act or the corresponding clause in the English
Interpretation Act, 1889, and to obtain guidance from the decisions based on
these statutes. I have therefore come to the conclusion that the saving clause
in paragraph 6 of the Application of Laws Order does not protect the imports made
by the petitioners, from the operation of the Indian laws applied to the French
Establishments.
I would dismiss these petitions.
SHAH J.-Petition No. 123 of 1957: Prior to
November 1, 1954, Pondicherry was one of the French Establishments in India
administered by the Government of France. Under the French administration,
except specified categories like gold, rocksalt and certain medicinal
preparations, all commodities could be imported into the Pondicherry Port
without a licence. The French Administration exercised control on import of
commodities into Pondicherry indirectly by making allotment of the requisite
foreign exchange. The Government of France made an overall allotment of foreign
exchange for the French Establishments in India, and persons desiring to import
goods in Pondicherry and other French Indian settlements were, on applications
addressed to the Chief Commissioner, French Settlements, granted foreign
exchange facility for financing imports, out of that allotment.
Besides the allotment of foreign exchange for
financing imports into the French Establishments in India, certain other
currency allotments were made by the Government of France in the light of Trade
Agreements between the French Government and other countries. The Chief Commissioner
of Pondicherry issued permits for the import of commodities specified in the
Trade 331 Agreements upto the current ceilings fixed in the Agreements. Two
kinds of permits for obtaining official exchange by importers were issued by
the Chief Commissioner which were known as " Authorisation " and
" Attestation ". " Authorisation " was issued for import of
goods from countries with which France had Trade Agreements and "
Attestation " for import of goods from France and from countries with
which the Government of France had not made Trade Agreements. By issuing "
Authorisation " and " Attestation ", the Government undertook to
provide foreign exchange for financing the imports made pursuant thereto.
Since April 1, 1954, the Chief Commissioner
of Pondicherry allowed intending importers to purchase foreign exchange in the
open market for financing imports of merchandise. The Department of Affairs,
Economics, endorsed " authorise " on the application submitted by the
importers' banker in respect of such transactions, but the Government did not
undertake thereby to provide foreign exchange. As official exchange for imports
was freely released, only a few imports were financed before July 1954 with the
aid of exchange purchased in the open market.
Negotiations were proceeding between the
Government of India and the Government of France for transfer of the French
Establishments in India to the Union of India, and when it came to be known
that the transfer was imminent, there was feverish activity to import goods
into the French Settlements with the aid of foreign exchange purchased in the
open market, and in the months of August, September and October orders were
placed by importers with foreign suppliers for purchase of commodities of the
value of Rs.
280 lakhs to be financed by foreign exchange
procured from the open market. Traders who were not normally doing business in
Pondicherry and who had no business interest in French Establishments also
opened offices in Pondicherry and started indenting goods, to be financed with
the aid of foreign exchange in the open market.
43 332 An agreement for the de facto transfer
of the administration of the French Establishments in India was executed
between the Government of India and the Government of France on October 21,
1954. This agreement became effective on November 1, 1954. In exercise of the
powers conferred by s. 4 of the Foreign Jurisdiction Act, 1947, on October 31,
1954, the Government of India issued two ordersS. R. O. 3314, the French
Establishments ( Administration) Order, 1954, and S. R. O. 3315, the French
Establishments (Application of Laws) Order, 1954. By S. R. O. 3315, certain
enactments specified in column (3) of the Schedule which included the Sea
Customs Act, 1878, The Reserve Bank of India Act, 1934, The Imports and Exports
Trade (Control) Act, 1947, The Foreign Exchange Regulation Act, 1947 and The
Indian Tariff Act, 1934, were applied to the French Establishments of
Pondicherry, Karaikal, Mahe and Yanam, with the modification that references in
the enactments, notifications, orders and regulations which were applied to the
French Establishments, to India or to the States were to be construed as
referring to the French Establishments also.
These orders came into force on November 1,
1954.
The petitioners who carried on trade in
diverse commodities in Bombay opened a place of business in Pondicherry on
April 14, 1954, and placed eight indents with Messrs. Shimada Trading Co.,
Ltd., Osaka, Japan, for importing porcelain ware, glass marbles and beltings.
On an application submitted by Bankque D. L' Indo-China on behalf of the
petitioners, the Bureau Des Affairs Economique, Pondicherry, endorsed "
authorise " for the requisite foreign exchange purchased in the open market.
This exchange was sold to the petitioners for the amount involved in the
letters of credit. Between August 28, 1954, and August 31, 1954, three
irrevocable letters of credit of the aggregate value of pound 12,850 were
opened by the petitioners and pursuant to these letters, M/s. Shimada Trading
Co., Ltd., shipped goods to Pondicherry. On November 30, 1954, the shipping
documents were received by the petitioners from Messrs.
Shimada Trading Co., Ltd.
333 Admittedly the goods were shipped by the
foreign suppliers after the defacto transfer of Pondicherry. The applications
submitted by the petitioners for the issue of customs permits sanctioning
clearance of the goods were rejected by the Controller of Imports and Exports
at Pondicherry. On January 5, 1955, the Chief Controller of Imports and Exports
issued a public notification that on a consideration of the representations
made by some of the importers asking for permission to import goods for which
necessary foreign exchange had been obtained in the open market through bankers
in Pondicherry and in consultation with the authorities concerned, it was
" clarified for information " that open market transactions of the
nature referred to in the representations were not covered by the Indo-French Agreement,
and that the import of goods against open market transactions after November 1,
1954, must be treated as unauthorised ; but having regard to the hardship
likely to be caused to genuine importers who had placed orders in pursuance of
their normal trading operations, the Collector of Customs, Pondicherry, was
being authorised to accord certain concessions to genuine importers. By one of
such concessions, goods shipped before November 1, 1954, were permitted to be
cleared " without penalty " irrespective of their origin and value,
and consignments fully paid for in foreign currency and shipped after November
1, 1954, and ordered before August 15, 1954, were also permitted to be cleared
it without penalty".
The goods indented by the petitioners were
confiscated by the customs authorities exercising powers under s. 167(8) of the
Sea Customs Act, on the ground that the same had been imported without a valid
licence and in contravention of the Department of Commerce and Industries
Notification No. 43-1 T.C./43 dated July 1, 1943, (as amended) read with sub-s.
2 of s. 3 of the Imports and Exports Trade (Control) Act, 1947. The petitioners
were by orders passed between February 28 and March 4, 1955, given an option to
clear the goods for " home consumption " on payment of customs duty
and fine specified in the order. These 334 orders were confirmed in appeal by
the Board of Revenue and by the Government of India in exercise of revisional
jurisdiction. In the meanwhile the petitioners paid the duty and the fine
imposed by the customs authority and cleared the goods.
The Union Government having rejected the
Revision applications, the petitioners submitted this petition under Art. 32 of
the Constitution for a writ or direction in the nature of certiorari requiring
and commanding the Chief Controller of Imports and Exports, Pondicherry, the
Collector of Customs and Central Excise, Pondicherry, the Central Board of
Revenue and the Union of India and quashing the orders passed by the Customs
authorities and the Union of India and for a mandamus requiring the respondents
to forbear from giving effect to or otherwise acting upon the orders passed by
the Customs authorities and the Union of India, and for a further writ or order
directing the respondents to restore to the petitioners the sum of Rs. 30,890
paid as penalty for releasing the goods.
Undoubtedly, the petitioners had before
November 1, 1954, placed indents for importing goods of diverse descriptions from
foreign suppliers and for that purpose, they had acquired foreign exchange
through their bankers in the open market. The petitioners had also opened
irrevocable letters of credit in favour of the Japanese suppliers. It may be
assumed, even though there is no clear evidence in that behalf, that the
petitioners were after opening irrevocable letters of credit, unable to cancel
the indents. Section 167, cl. (8), of the Sea Customs Act, in so far as it is
material, provides that if any goods, the importation of which is for the time
being prohibited or restricted by or under Chapter IV of the Act, are imported
into India contrary to such prohibition or restriction, such goods shall be liable
to confiscation. By s. 3 of the Imports and Exports Trade (Control) Act, XVIII
of 1947, the Central Government is authorised by order published in the
official Gazette to prohibit, restrict or otherwise control in all cases or in
specified classes of cases, the import, the bringing into any Port or place 335
in India of goods of any specified description. By s. 4 all orders made under
r. 84 of the Defence of India Rules or that rule as continued in force by the
Emergency Provisions (Continuation) Ordinance 1946, and in force immediately
before the commencement of the Act, in so far as they were not inconsistent
with the provisions of that Act, continued to remain in force and were to be
deemed to have been made thereunder. Under the rules framed under the Defence
of India Rules, the import of goods of the description indented by the
petitioners, was, it is not disputed, prohibited, and the rules framed under
the Defence of India Rules continued in force by the operation of s. 4 of the
Imports and Exports Trade (Control) Act, 1947. The rules and orders made under
r. 84 of the Defence of India Rules were on November 1, 1954, operative as if
they were made under the Imports and Exports Trade (Control) Act, 1947, and
when that Act was extended to the French Establishment of Pondicherry, these
rules and orders became also applicable to that area. By s. 19 of the Sea
Customs Act, the Central Government may by notification prohibit or restrict the
bringing by sea, goods of any specified description into India across any
customs frontier as defined by the Central Government. By s. 2(b) of the
Imports and Exports Trade (Control) Act, 1947, import is defined as bringing
into India by sea, land or air.
Import of goods therefore means carrying
goods across the customs frontier declared by the Government of India. There is
no dispute that under s. 19, the Port of Pondicherry was declared a customs
frontier. Admittedly, the goods indented by the petitioners were brought into
India, i.e., imported into India after November 1, 1954. Importation of these
goods without a licence in that behalf being prohibited under a notification
under the Imports and Exports Trade (Control) Act, by bringing the goods into the
Pondicherry Port, prima facie s. 167(8) of the Sea Customs Act was contravened.
But the petitioners contend that in view of
the agreement between the Government of India and the Government of France and
the two orders issued in 336 exercise of the powers conferred by s. 4 of the Foreign
Jurisdiction Act, 1947, the provisions of the Sea Customs Act and the orders
made or deemed to be made under the Imports and Exports Trade (Control) Act,
1947, did not apply to the goods in question. By cl. 3 of the agreement dated
October 21, 1954, the Government of India succeeded to the rights and
obligations resulting from such acts of the French Administration in these Establishments
as were binding on the territory. By para. 5 of Art. 10, acts or deeds
constitutive of rights established prior to the date of the de facto transfer
in conformity with French law retained the value and validity conferred at that
time (by the same law).
By Art. 17, in so far as it is material, all
orders placed outside the establishments and finalised through the grant of a
licence by competent authorities in accordance with the laws and regulations in
force prior to the date of the de facto transfer were to be fulfilled by the
Government of India who were to grant the requisite foreign currency, if the
goods were imported within the period of validity of the relevant licence
subject to payment of customs duty and other taxes normally leviable at Indian
Ports. This agreement is between the Government of India and the Government of
France, and the covenants thereof do not purport to and cannot confer any
rights enforceable at the instance of citizens of Pondicherry or of India. By
s. 3, certain obligations enforceable against the French Administration were
undertaken by the Government of India, but no obligations thereby enforceable
were undertaken by the Indian Government which the petitioners could enforce.
Para. 5 of Art. 10 falls in the chapter
headed " Judicial Matters " and only declares that acts and deeds
which constitute rights in conformity with the French Law shall retain the same
value after merger with the Union of India and by Art. 17, the obligation is
undertaken by the Government of India to fulfill the orders placed outside the
Establishments and finalised through the grant of a licence by competent
authorities. But the petitioners had obtained no license from any competent
authority for importing or even for indenting the goods.
337 It was urged that the orders S. R. O.
3314 and S. R. O. 3315 issued under the Foreign Jurisdiction Act should be
construed in the light of the agreement between the Government of India and the
Government of France. By S. R. O. 3314, provision is made by the Government of
India for the administration of the erstwhile French Establishments.
By cl. 5 of that notification, all laws in
force in the French Establishments or any part thereof immediately before the
commencement of the order and not repealed by cl. 6 of the French
Establishments (Application of Laws) Order, 1954, shall continue to remain in
force until repealed or amended by a competent authority. The law, if any,
relating to the import of goods into India applicable in the French
Establishments prior to November 1, 1954, stood expressly repealed by cl. 3 of
S. R. O. 3315 which provided that the enactments specified in column 3 of the
Schedule as in force before the commencement of this order shall be applied to
and shall be in force in the French Establishments subject to (a) any
amendments to which the enactments are for the time being generally subject in
the territories to which they extend ; (b) the modifications, if any, specified
in column 4 of the schedule; and (c) the subsequent provisions of the order. By
column 3 of the schedule to this order, the Sea Customs Act, the Reserve Bank
of India Act and the Imports and Exports Trade (Control) Act were expressly
applied to the French Establishments, and under the provisions of these Acts
and notifications issued there under as from November 1, 1954, no person could
without a license in that behalf import goods of the nature indented by the
petitioners. By cl. 6, it was enacted that " unless otherwise specifically
provided in the schedule, all laws in force in the French Establishments immediately
before the commencement of this order, which correspond to the enactments
specified in the schedule, shall cease to have effect, save as respects things
done or omitted to be done before such commencement ". The Sea Customs Act
and the Imports and Exports Trade (Control) Act were expressly made applicable
to the French Establishment of 338 Pondicherry and all corresponding law in
that territory ceased to have effect save as respects things done or omitted to
be done before such commencement. Clause 6 does not authorise the doing of
things expressly forbidden by the provisions of the Acts made applicable by
schedule 3 in the Pondicherry Establishment, and by the use of the expression,
" things done or omitted to be done " in the clause, to the rights or
legal consequences which may but for the application of the enactments
specified in schedule 3 have flown from the acts done or omitted to be done the
French law does not continue to apply. The clause undoubtedly protects French
laws which correspond to the enactments specified in schedule 3 in so far as
they concern things done or omitted to be done before the commencement of S, R.
O. 3315. In superseding the French law in force on the prescribed date, the cl.
6 emphasises that the enactments specified in schedule 3 have no retrospective
operation, and as counterpart thereof provides that all transactions which have
been concluded before November 1, 1954, will continue to be govered by the
French law notwithstanding the enactment of the Acts specified.
Since the date of the de facto transfer of
the French Establishments to the Indian Union, all imports of goods across the
customs frontier at Pondicherry were subject to the provisions of the Sea
Customs Act and the Imports and Exports Trade (Control) Act; and goods shipped
after November 1, 1954, in pursuance of indents before that date were not
expressly saved from the operation of the restrictive provisions of those Acts.
On and from November 1, 1954, the law if any relating to the import of goods
operative in the French territory was superseded and the goods having been
brought into the Pondicherry Port after November 1, 1954, the import was
governed by the Sea Customs Act and the Imports and Exports Trade (Control) Act
and not by any law of the French territory. The supersession of the French laws
by the application of the statutes set out in schedule III was, on November 1,
1954, complete, " save as respects things done or omitted to be done
". Does the expression " things done " include consequences
which may 339 have ensued in future but for the supervening of the merger
agreement ? Ex facie, by cl. 6, the French law is kept alive in respect of
" things done or omitted to be done " i.e., things done or omitted to
be done in the past; it has not the effect of keeping alive that law in respect
of things to be done or omitted to be done in future. All transactions
completed after November 1, 1954, will, on the plain words of cl. 6, be
governed by the statutes made applicable by virtue of cl. 3 of S. R. O. 3315.
Section 6 of the General Clauses Act, 1897,
has in terms no application when the court is called upon to ascertain the
effect of supersession of French law by the application of the specified
statutes by cl. 6 of S. R. O. 3315. In terms s. 6 of the General Clauses Act
applies to the effect of repeal of enactments of the Indian legislature, and
there is nothing in S. R. O. 3315 which supports the plea that the section
applies as if the French law in operation before merger of the French
Establishments is to be regarded as a statute enacted by the Indian
legislature. In that premise, it is difficult to appreciate how the principle
of cases decided by the courts in England on the words of s. 38 of the
Interpretation Act, 1889 (52 and 53 Viet. ch. 63) which are substantially the
same as those used in s. 6 of the General Clauses Act, 1897, can lend any
assistance in interpreting the meaning of the expression " things done or
omitted to be done " in cl. 6 of S. R. O. 3315. By enacting S. R. O. 3315,
the French law after its supersession has not been expressly kept alive in
respect of any right or privilege acquired or accrued under the things done
under that law; and it would be an unwarranted incursion into the field of
legislation to attempt to extend the protection of that law to transactions
which have taken place after the prescribed date relying upon the General
Clauses Act.
Nor is the interrelation between the
agreement of purchase with a foreign seller, and the various processes leading
to the delivery of goods to a common carrier and the ultimate import of goods
sufficient to include within the expression " things done " used in
44 340 cl. 6 of S. R. O. 3315 consequences of the things done which may ensue
in future. Within the expression " in the course of import of the goods
into the territory of India " used in Art. 286(1) (b) of the Constitution,
a series of integrated activities resulting in the taking of goods across the
customs frontier may be involved. But import as defined in the Imports and
Exports Trade (Control) Act is bringing a commodity in the territory of India;
preliminary steps even if they are closely integrated therewith are not
included in that definition. If steps preliminary to import are not included in
the concept of import, in dealing with the provisions of the Sea Customs Act
and the Imports and Exports Trade (Control) Act, it would be difficult to
afford protection of the French laws expressly granted by virtue of cl. 6 of S.
R. O. 3315 to such of the preliminary steps as have taken place before the
prescribed date, and to create an exemption in favour of imports consequential
upon those preliminary steps, which the legislature has declined to do.
In my view, therefore, by the use of the
expression things done or omitted to be done before such commencement " in
cl. 6 of S. R. O. 3315 French law applies to acts and omissions before November
1, 1954, and not to legal consequences of those acts and omissions ensuing
after that date, and hence import of goods across the customs frontier in the
Pondicherry Port after November 1, 1954, without a licence in that behalf is
contrary to the provisions of the Sea Customs Act and the Imports and Exports
Trade (Control) Act.
The provisions of the Sea Customs Act and the
Imports and Exports Trade (Control) Act whereby restrictions are imposed upon
the import and export of goods are not by themselves unreasonable. If the
petitioners are not entitled to the benefit of cl. 6 of the Indo-French
Agreement, there is no other ground on which they can successfully impugn the
validity of the orders imposing duty and penalty.
I am therefore of the view that this petition
should be dismissed with costs.
341 For reasons set out in the principal
petition, petitions Nos. 124 and 125 of 1957 and 118 of 1959 should also be
dismissed with costs.
BY COURT: In view of the majority Judgment,
the petitions are allowed. The petitioners in all the petitions will have their
costs.
Petitions allowed.
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