Deputy Asstt. Iron & Steel
Controller & ANR Vs. L. Manickchand, Proprietor, Katrella Metalcorpn [1972]
INSC 7 (5 January 1972)
DUA, I.D.
DUA, I.D.
SHELAT, J.M.
KHANNA, HANS RAJ MITTER, G.K.
CITATION: 1972 AIR 935 1972 SCR (3) 1
CITATOR INFO :
R 1974 SC1539 (15,17,18) R 1975 SC1208 (30)
RF 1986 SC1021 (12,24) R 1989 SC2138 (99)
ACT:
Import Trade Control Policy-Application for
import licence If should considered in terms of the policy in force at the time
of application or at the time of grant of licence.
HEADNOTE:
In December, 1968 the respondent applied for
an import licence for importing stainless steel for the licensing period
1968-69. The registration certificate certified that he was engaged in the
manufacture of hospital and surgical instruments and household utensils of
stainless steel. According to the import policy for 1968-69 no priority was
available for household utensils. Since the number of applicants for import
licences for stainless steel, which was a sensitive item, was very large
instructions were issued in January 1969 that the applications should be
scrutinised carefully after asking for information from applicants as to
details of end products to be manufactured by an applicant. In May 1969 the
respondent stated that the hospital requisites intended to be manufactured by
him were surgical bowls, spittoons and trays. The Chief Controller, Imports and
Exports. issued instructions that only 'medical and surgical equipment and
appliances' should have priority and not other types of hospital equipment such
as bowls, trays, jugs etc. In April 1970, after a review of the situation the
Chief Controller issued instructions to consider the respondent's application
in terms of the licensing policy for 1970-71.
The respondent filed an application for the
issue of a writ of mandamus and the High Court allowed it directing that the
respondent's application may be dealt with in terms of the 1968-69 import
policy.
In appeal, on the question whether the
application should be considered in accordance with the policy in force when
the licence was granted or when the application was made.
HELD : No case had been made out for a
mandamus to consider the respondent's application in terms of 1968-69 policy,
since there was no undue leaches or delay in dealing with the respondent's
application. and the instructions of the Chief Controller to consider the
application in terms of 1970-71 policy was in accordance with para 91 of Chap.
IV of the Import Trade Control Handbook of Rules and Procedure (1968).
[18 B-C] Speedy disposal of applications for
import licences is of great importance in order that available foreign exchange
may be, utilized without delay; but, it is also to be borne in mind, that in
the present stage of our industrial development. imports requiring foreign
exchange have to be controlled and regulated to prevent abuses of import quota.
This inevitably requires proper scrutiny of various applications for import
licences. In granting licences for imports, the authority has to keep in view
various factors which may have impact on imports of other items of relatively 2
greater priority in the larger interests of the overall economy of the country
which must be the supreme consideration. Moreover, in view of s. 3 (1) (a) of
the Imports and Exports Control Act, 1947 and cl. 6(1)(a) of the Imports
(Control) Order, 1955, an applicant has no vested right to an import licence in
terms of the policy in force at the time of his application. [9 B-E; 16 B-E; 17
A-H] The respondent's application included household utensils which was not a
priority item and since clarification was asked for the application could not
be disposed of during 1968-69. The details of end-products furnished by him
contained items which were non-priority end-products and hence. the application
had to be kept pending until completion of its examination, and the time taken
for such examination was not unreasonable. [16 E-H] Glass Chatons Importers and
Users Assn. v. Union of India, [1962] 1 S.C.R. 866, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 1053 of 1971.
Appeal by special leave from the judgment and
order dated March 1971 of the Madras High Court in Writ Appeal No. 120 of 1971.
V. S. Desai, M. C. Bhandere and S. P. Nayar,
for the appellant.
L. M. Singvi, A. V. Rangam, R. Krishnamoorthi
and A. Subhashini, for respondent No. 1.
M. V. Goswami, for the intervener.
The Judgment of the Court was delivered by
Dua, J. This appeal by special leave is directed against the judgment and order
of the Madras High Court dated March 25, 1971 dismissing at the stage of
admission an appeal under cl. (15) of the Letters Patent preferred by the
appellant against the judgment and order of a learned single Judge of that
Court dated September 1, 1970 allowing writ petition no. 933 of 1970 filed by
the respondent praying for a writ of mandamus directing the Licensing Authority
under the Imports & Exports (Control) Act, 1947 to do his public duty and
consider the applications for import licence made by the respondent. More than
200 writ petitions were heard together and disposed of by a common judgment of
the learned single Judge, the facts in the respondent's writ petition No. 933
of 1970 being, by common consent, treated as illustrative of all the other
cases as well.
On December 7, 1968 Lala Manickchand,
proprietor of Messrs Katrella Metal Corporation, Madras, respondent in this
Court, submitted an application, as a new unit, for the licensing
period,1968-69 for the grant of an import licence for Rs. 9,900/for importing
stainless steel as an actual user for manufacturing.
3 hospital requisites. The registration
certificate dated December 31, 1968 issued to the respondent as a small scale
industry by the Additional Assistant Director of Land Commerce, District Madras
North, reads :
"DEPARTMENT OF INDUSTRIES & COMMERCE
SMALL SCALE INDUSTRIES DIVISION S. No. 571 Registration No. MS.N.SSI/506/033
CERTIFICATE This is to certify that M/s. Katrala Metal Corporation 54 Sydenhams
Road, Madras 7 office at 90 N.S.C. Bose Road, Madras 1 is a genuine Small Scale
Industry engaged in the manufacture of Hospital and Surgical Instruments,
Trays, Mugs, Basins and Household Utensils out of Stainless steel.
Sd/ S. Gopalakrishnan Addl. Asstt. Director
of Land & Commerce, District Madras North 23-12-68" According to
Import Trade Control Policy (1968-69) industries engaged in the manufacture of
"medical 'and surgical equipment and appliances" were included in the
list of priority industries at sl. no. 39 of Appendix I in Section V. The
import policy is announced and published by the Government of India, Ministry
of Commerce, on the eve of each financial year by means of a Public Notice
which is issued in the form of a book called the Import Trade Control Policy,
commonly known as the "Red Book". Prior to 1962 the import policy
used to be published on half-yearly basis.
But with effect from the financial year
1962-63 the Red Book contains the policy for the whole year. As a supplement to
the Red book is the Handbook of Rules and Procedure on Import Trade Control.
Its provisions are brought into force by a Public Notice published in the
Gazette of India Extraordinary. It embodies the procedures, rules and
regulations governing the submission of applications, grant of licences, their
validity and utilisation and other matters relating to import, trade control.
The instructions contained in this book are applicable subject to future
amendments and to the provisions of the relevant import trade control policy
book : vide cl. 6, Chapter 11 of Handbook of Rules and Procedure, 1968. As is
obvious from the preface of the Red Book for the year 1968-69, in formulating
the import policy, account is generally taken of all the 4 suggestions received
from individuals, chambers and associations of trade and industry, Export
Promotion Councils, Commodities Boards, Board of Trade and others. it appears
that according to this policy import for household utensils was not available
as a priority item and this necessitated further clarification from the
respondent. In the meantime on January 30, 1969 Licensing Instruction No. 4/69
was issued from the Iron and Steel Control Department (I & E Division). It
said:
"IRON & STEEL CONTROL (I & E
DIVISION) Office Note:
LICENSING INSTRUCTION No. 4/69 Dated
30-1-1969
1. It has come to the notice of the Iron
& Steel Controller that a large number of applications have been received
for import of Stainless Steel Sheet plates and strips from newcomer units
during 1968-69. As a measure of precaution, the Regional Office and Licensing
section were requested to suspend further issue of licence vide Iron &
Steel Controller's telegram dated 9th January, 1969.
2. The position has been reviewed, in
consultation with the Department of Iron & Steel, and it has been decided
that the applications for Stainless Steel Sheets, plates and strips received
from newcomer units during 1968-69 should be scrutinised by the Directors of
Industries and the Regional Offices and Licensing Sections very carefully,
before import licences are granted, with a view to ensuring that new units which
are not well-equipped do not get away with import licences of this sensitive
item.
3. For the purpose of scrutinising the
applications, it is necessary to call for the following data from the
.applicant :
(1) Date of registration of the unit.
(2) Date on which power connection was
obtained.
(3) Details of the machinery installed.
(4) Value of the machinery installed.
(5) Whether the machinery is imported or
indigenous.
(6) The address of the firm from whom the
machinery was purchased.
(7) Date of purchase of the machinery.
5 (8) Date of installation of the machinery.
(9) Details of the end products to be
manufactured.
(10) Whether the unit is fully equipped to
manufacture the items in question.
(11) Past experience of the firm in
manufacturing line.
(12) Technicians employed and their technical
qualifications.
(13) Whether any market survey has been
conducted for the disposal of the products to be manufactured. If so, the
results thereof.
4. Regional Offices and Licensing Sections
are directed to write to all the new corners, who have sent their applications
for Stainless Steel Sheets plates and strips to furnish the above information
to the respective Directors of Industries direct, endorsing a copy to the
Regional Offices and the Licensing Sections.
Copies of these letters may be endorsed to
the respective Directors of Industries, with the request that they should
scrutinise the applications with reference to the date that may be furnished by
the applicants carefully, and thereafter send their recommendations (revised
recommendations as the case may be) to the licensing offices.
5. Regional Office and Licensing Sections are
directed to take immediate action on the lines indicated above.
Sd/ C. B. Mathur Officer on Special
Duty." It is quite clear from these instructions that stainless steel
sheets were considered a sensitive item and that a large number of newcomers
had applied for import of stainless steel sheets, plates and strips whose
applications required close scrutiny. On May 2, 1969 the respondent, while
giving information about Jr end-products, stated in a letter that hospital
requisites such as surgical bowls, spittoons and trays were intended to be
manufactured by the industry. On May 19, 1969 the Chief Controller of Imports
and Exports, from the Ministry of Foreign Trade and Supply issued General
Licensing Instruction No. 29/69 on the subject of import licences to units
engaged in the manufacture of hospital equipments. These instructions pertained
to the import policy for April 1969-March, 1970, and referred to "medical
and, surgical equipment and appliances" which was the subject matter.
6 of Item No. 39 in Appendix I of the Red
Book for that year.
In para 2 it was stated that some Licensing
Authorities were treating the manufacture of "hospital equipment" as
priority industry under the general heading "medical and surgical
equipment and appliances". It was pointed out that all types of hospital
equipment and hospital appliances were not classified as priority industries
and it was added by way of illustration that lotion bowls, kidney trays,
instrument trays, wash bowls, measuring jugs, ointment jars and medicine cups
as end-products were in non-priority category.
The sponsoring authorities were accordingly
directed to ensure that only those hospital equipment and appliances were to be
treated as priority industries which would appropriately be classified as
" medical and surgical equipment and appliances". On May 29, 1969 the
Chief Controller of Imports and Exports issued General Licensing Instruction
No. 31 of 1969 on the subject of "grant of import licence to units engaged
in the manufacture of hospital equipment". After inviting attention to the
earlier G.L.I. No. 29/69 dated May 19, 1969 it was stated in this instruction
that after further consideration in consultation with the D.G.T.D. a list had
been prepared in respect of the end-products which alone would be treated as
priority industries under the general heading "medical and surgical
equipment and appliances." That list was enclosed for the guidance of the
Licensing and Sponsoring authorities and in case of doubt those authorities
were directed to refer the matter to head-quarters Special Licensing Cell.
On October 31, 1969 the Director of
Industries, Madras, confirmed the Essentiality Certificate already issued to
the respondent. It was observed in that letter that the firm had
"installed machinery and taken action to obtain power supply etc. Hence
the Essentiality Certificate issued to the firm already is confirmed". On
February 23, 1970 a letter was written by the Director of Industries and
Commerce, Madras to the Deputy Assistant Iron & Steel Controller, Madras,
in which after referring to his earlier letter dated October 31, 1969 and to
the respondents letter dated February 6, 1970, it was stated :
"In view of the assurance given by the
firm that they would manufacture only Surgical Equipment like Sterilisers,
Operation Tables, Auto-Claves etc., I recommend that M/s.
Katrella Metal Corporation, 54, Sydanhams
Road, Madras for whom Essentiality Certificate has been issued for import of
stainless steel sheets for the period April-March, 1969 may please be treated
as PRIORITY INDUSTRY and licence issued to them on this basis.
Apparently, the Director of Industries was
the sponsoring authority in this case. It was in these circumstances that the
respondent filed the writ petition in the High Court on March 30, 1970 claiming
a writ of mandamus as stated earlier, the sole grievance 7 being that the
respondent's application for import licence had during all this period not been
taken up for final disposal. According to the respondent's case in the High
Court, the firm's factory had-been manufacturing various items since 1962 by
purchasing raw material from local market with the annual turnover of about 8
to 10 lacs. With regard to the respondent's application for import licence for
manufacturing hospital and surgical equipment it was added that the Director of
Industries had issued the Essentiality Certificate in April, 1969 and
recommended the respondent for treating it as a priority industry on February
23, 1970. In the counter-affidavit in that Court it was not contested that the
writ petitioner was entitled to have his applications considered. According to
para 10 of the counter-affidavit on which the learned single Judge of the High
Court, disposing of the writ petition, relied, it was stated inter alia :
.lm15 "in the case of units engaged in
the manufacture of non priority end-products, as in the case of the petitioner,
the Chief Controller of Imports and Exports had advised the department to keep
the applications pending until the completion of the examination. The
petitioner's application could not therefore be disposed of. However,
instructions have since been received vide the Chief Controller of Imports and
Exports, New Delhi letter dated 8-4-1970, which inter alia provides that
applications received by the sponsoring authorities in time may be considered
irrespective of the date on which they were forwarded to the licensing
authorities and in terms of the licensing policy for 1970-71." It was
added in this para of the counter-affidavit "According to policy for
1970-71, the material stainless steel sheets is a canalised item for
non-priority industries and release orders are to be issued on Minerals and
Metals Trading Corporation." In the judgment of the learned single Judge
it was stated to be common ground that the application of the writ petitioners
had to be dealt with in terms of the relevant import policy in force for the
year 1968-69. However, a little lower down in that judgment, after reproducing
the relevant portion of paragraph 10 of the counter-affidavit, it was also
observed :
"Learned counsel for the Central
Government urged that the Licensing Authority whoever it is, is prepared to
consider the applications of each of the petitioners in this batch of writ
petitions, but such appraisal of the applications would be in terms of the
licensing policy 8 for the year 1970-71. Thus in effect, the respondents
concede the right of the petitioners to have their applications considered and
disposed of in a manner known to law, but the only opposition is that such
applications filed and now pending will be considered in the light of the
licensing policy for 1970-71." It was in this context that the High Court
observed that it was practically conceded that the rule nisi had to be made
absolute and that some more directions were necessary.
Relying on r. 7 (2) in Chapter 11 of the
Handbook of Rules of Procedure, Import Trade Control for the year 1968,
according to which applications for licences were required to be considered in
terms of the relevant policy in force, the learned single Judge directed
"that the Licensing Authority do consider the applications now pending
before him which are the subject matter of these writ petitions within six
months from this date bearing in mind the above directions and in particular
deal with the said applications, applying the import trade control policy
prevailing in 1968-69 or 1969-70, as the case may be according to the dates of
application for licence." On appeal before the division Bench under cl.
(15) of the Letters Patent it was complained by the appellant, the Deputy
Assistant Iron & Steel Controller, that the instructions of the learned
Judge interfered with the policy introduced in 1970-71 because under the new
policy import of stainless steel was canalised through the Minerals and Metals
Trading Corporation for non-priority industries.
The division Bench did not consider this
objection to be valid because in its view had the applications been considered
in time and without delay and the import licence sought granted, these
complications would not have intervened. The Department, according to the High
Court, could not take advantage of the delay in disposing of the applications
for licence made earlier and then take the plea that they should be disposed of
only in accordance with the current policy and instructions given as to
canalisation.
On this view the appeal was dismissed but
time for granting the import licence was extended by a further period of three
months from the date of the order viz. March 25, 1971.
In this Court the question canvassed at the
bar is a very narrow one, namely, whether the application for the import
licence in question should be considered in accordance with the policy in force
when the licence is granted or when the application is made. No point of mala
fides or arbitrariness was argued in the High Court and no serious attempt was
made on 9 behalf of the respondent to sustain the impugned order of the High
Court on that basis, as indeed, it is not possible for this Court to entertain
and adjudicate upon such a plea in this appeal in the absence of a considered
opinion of the High Court. The appellants' learned counsel Shri V. S.
Desai at the outset drew our attention to s.
3 (1) (a) of the Imports & Exports (Control) Act, 18 of 1947 which empowers
the Central Government to prohibit, restrict or otherwise control imports and
exports and to cl. 6 ( 1 ) (a) of the Imports (Control) Order, 1 9 5 5 made by
the Central Government in exercise of the powers conferred on it by ss.
3 and 4 of Act 18 of 1947. Clause 6(1) of the
Order empowers the Central Government or the Chief Controller of Imports and
Exports to refuse to grant a licence or direct any other licensing authority
not to grant a licence if no foreign exchange is available for the purpose or
if the grant of a licence to an applicant is prejudicial to the interest of the
State or if it has been decided to canalise imports and distribution thereof
through special or specialised agencies or channels. The scheme of these
provisions, according to the submission, suggests that the respondent has no
absolute right to the grant of a licence merely because his application has
been recommended by the sponsoring authority and that the licensing authority
may decline to grant the licence on other relevant considerations affecting the
larger and more vital interests of the economy of the State and also other
relevant factors beyond the control of the State. In this connection reference
was also made to para 91. of Chapter IV of the Import Trade Control Handbook of
Rules and Procedure (1968) which reads "Issue of import licences to actual
users for back period 91 (I) Where an application for import licence from an
actual user is not disposed of during the licensing period concerned on account
of any delay or laches on the part of the applicant, no licence against such
application will be issued after the expiry of the licensing period or after the
close of the monetary ceiling. However, if the delay in the disposal of the
application is on the part of the licensing authority or sponsoring authority
or any other Government Department, the application will be considered on
merits.
(2) While dealing with an import application
for a back period in appeal or otherwise, the authorities concerned will
consider such an application having regard to the general principles laid down,
that is, availability of monetary ceiling, availability of goods applied for
from indigenous sources or other commercial channels, essentiality of the goods
applied for, stocks held by the L864Sup CI/72 10 applicant and expected
arrivals against licences in hand, past imports and consumption of the item(s)
in question by the applicant, actual production during the preceding period,
estimated production and other factors considered relevant and necessary.
(3) In case where the applications for
licences are not disposed of during the licensing period concerned or before
the close of the monetary ceiling on account of delay on the part of the
sponsoring authority or the licensing authority or any other Government
Department the value of the licences issued in such cases will be treated as
first charge on the monetary ceiling to be allocated for the next licensing
period and the necessary intimation in this regard will be given to the
sponsoring authority." According to Shri Desai the entire position of
monetary ceiling, availability of good-, applied for from indigenous sources,
essentiality of the goods applied for and other relevant factors have to be
seen for considering the question of issuing import licences to actual users
for back periods. These considerations, said Shri Desai, indicate that if
availability of the goods applied for, from indigenous sources, improves or the
position in regard to foreign exchange deteriorates or there is a chance in the
matter of essentiality of the goods applied for, then, it would be and, indeed,
it should be open to the licensing authority to come to a fresh decision on the
question of issuing the licence 'uninfluenced by the consideration that during
the previous licensing period the situation being more easy, the import licence
applied for would have been more readily granted. The import policy is
influenced by the condition of foreign exchange which depends on various
factors, some of which may even be wholly beyond the control of the State and,
therefore, the licensing authority would be entitled to take them into account
at the time when the licence is actually issued. Shri Desai in support of his
submission relied on the following observations from the decision of this Court
in Glass Chatons Importers and Users' Association v. Union of India(1) "It
is obvious that if a decision has been made that imports shall be by particular
agencies or channels the granting of licence to any applicant outside the
agency or channel would frustrate the implementation of that decision. If
therefore a canalization of imports is in the interests of the general public
the refusal of imports licences to applicants outside the agencies or channels
decided upon must necessarily be held also in the (1) [1962] 1. S.C.R. 862 at
866.
11 interests of the general public. The real
question therefore is: Is the canalization through special or specialized
agencies or channels in the interests of the general public.
A policy as regards imports forms an integral
part of the general economic policy of a country which is to have due regard
not only to its impact on the internal or international trade of the country
but also on monetary policy, the development of agriculture and industries and
even on the political policies of the country involving questions of
friendship, neutrality or hostility with other countries." These observations
have also been pressed into service by Shri Desai in support of his contention
that canalising of applications for the import of stainless steel having been
introduced since April 1, 1970 it is not open now to issue the import licence
to the respondent without the application being canalised according to the
prevailing procedure. The learned counsel, however, offered, as agreed in the
High Court, to consider the respondent's application according to 1970-71
policy.
Shri Singhvi on behalf of the respondent
controverted the appellant's argument by strongly relying on the letter dated
February 23, 1 970 from the Director of Industries to the Deputy Assistant Iron
and Steel Controller in which reference was made to the respondent's assurance
to manufacture only surgical equipments like sterlisers, operation tables,
autoclaves etc." and it was recommended that import of stainless steel
sheets for the period 1968-69 be treated as priority industry and licence
issued to the respondent on this basis. As canalising policy was introduced
only on April 1, 1970, when the respondent's case, according to Shri Singhvi's
argument, had already been completed Is a result of the assurance contained in
the letter of February 23, 1970, the respondent's industry was not governed by
this policy and was entitled to get the import licence. Shri Singhvi placed
strong reliance on r-.
7(2) contained in the Import Trade Control
Handbook of Rules and Procedure of 1968 and contended that the applications for
licences must be considered in tern-is of the relevant policy in force at the
time of making the application.
Reference in this connection was also made to
r. 81 (c), according to which the role of the licensing authorities is :
"(i) To issue licences on the basis of
the recommendations of the sponsoring authorities where such recommendations
are in consonance with the policy/procedure in force;
12 (ii) In the case of rejections, to
communicate reasons thereof to the applicants;
(iii) To take penal action against the
licencees or importers for violations of import and export control regulations.
(iv) To watch the utilisation of ceiling, if
any".
It was further contended that the
recommendation of the sponsoring authority has to be given due consideration by
the licensing authority as provided in r. 80. The learned counsel submitted
that if the import policy prevailing in 1968-69 is not applied to the
respondent, then, the respondent would suffer in respect of the applications
made for the years 1969-70 and 1970-71 though this argument was not developed
and the counsel was content merely by asserting prejudice to his client. It may
be recalled that the respondent applied for the licence ,I,% a new unit.
Para 82, sub-para 2 contained in the Handbook
of Rules and Procedure for 1968 provides :
"82(2) New Units (Priority industries)
(a) The new units, both in the large and the small scale sectors, should make
their first and second import applications for raw materials and components in
a licensing period, through the sponsoring authority concerned, each covering
their requirements for six months.
Subsequent applications can be made by them
on the basis of actual consumption, in the same manner as has been laid down
for the existing units engaged in the priority Industries.
(b) In the case of proposed units, the
sponsoring authority will recommend a licence against the second application
only after the unit has gone into production.
(c) Para 53 of the Red Book (1968-69) is in
the same terms as para 82 (2) (a).
Prima facie, without the new units actually
going into production, no question of recommendation for a licence against the
second application could arise. But the point having not been fully pursued we
express no opinion on this aspect.
The respondent's learned counsel also
submitted that about 163 applications for import licence,, had been dealt with
by the licensing authority and the licences granted to the applicants.
Reference in this connection was made to the affidavit of Lala Manickchand
filed in the High Court in support of the writ petition in which it was
asserted that licences had been issued in March, 1969 to 163 applicants for the
value of Rs. 9,900 each. These licences, 13 according to the assertion in this
paragraph, had been granted without any basis, though a little lower down it
was added that those applicants were similarly placed as the respondent and,
therefore, the issue of import licence to them showed discriminatory conduct
violative of rules of natural justice and equality. It was also added that
according to the respondent's information another 321 applicants were going to
get licences without any proper basis or criteria. The council also made a
reference to that part of the respondent's affidavit in the High Court where it
was stated that if, as the respondent had reliably learnt, the 300 applicants
who had asked for import licences were to be granted their prayers then the
ceiling limit allotted for the year would be exhausted and the respondent would
not get any relief. It was for this reason that prayer was made in the High
Court for restraining the Joint Chief Controller of Imports and Exports from
issuing any licence to any other person pending disposal of the respondent's
application. According to Shri Singhvi on April 9, 1970 an undertaking was
given by the State in the High Court that the plea of exhaustion of the quota
would not be taken by it for defeating the respondent's claim.
This submission was apparently made for the
purpose of controverting the contention that the availability of foreign
exchange being one of the vital considerations determining the grant of import
licence, it is the prevailing position of foreign exchange at the time of ,ranting
the licence which has to be seen. Shri Desai having denied any such undertaking
in the High Court and our attention having not been drawn to any such
undertaking on the record of the High Court, we do not consider it proper to
take into account this assertion made on behalf of the respondent. Shri Singhvi
relied on a decision of the Madras High Court Sha Maggajee Saremall & Bros
v. Joint Chief Controller of Imports and Exports(1) the head-note of which
reads :
"Where a transfer of quota rights is
effected as a result of change in the constitution of the firm, the new
constituted firm becomes entitled to the transferred quota as from the date on
which the reconstitution was effected and not from the date on which the Chief
Controller of Imports purports to accord recognition to such reconstitution.
The fact that a rule by, way of an
instruction has been introduced in the Red Book limiting the consideration of
applications only to the immediately prior period cannot have any value in so
far as the rights of parties come in for examination. The rights of the
established importer to the licence for the back periods cannot be (1) A.I.R.
1966 Mad. 309.
14 denied if his application had been kept
pending for reasons other than laches on the part of the applicant. An
application for import licence for a particular period must be considered only
in the light of the policy relevant to that period and cannot be refused on the
basis of a later policy which might have changed the position with regard to
the licences for the import of the item applied for. Decision in W.A. No. 15 of
1960 (Mad.) and in W.P. Nos. 27, 47, 48 of 1961 (Mad.) followed." This
decision deals with a situation created by the transfer of quota rights
effected as a result of change in the constitution of an existing firm which
was an established importer and, therefore, cannot lend much assistance in dealing
with the facts before us. The unreported decision of this Court in The
Municipal Corporation for Greater Bombay v. The Advance Builders India (Pvt.)
Ltd.(1), also relied upon by Shri Singhvi merely lays down that "where a
statute imposes a duty the performance or non-performance of which is not a
matter of discretion, a mandamus may be granted ordering that to be done which
the statute requires to be done (Halsbury's Laws of England, Third edn. Vol.
II, p.
90) ". Quite clearly, this decision only
reiterates the recognised rule in regard to the grant of mandamus and is of
little help to the respondent.
In our view the plea of arbitrariness and
mala fides having not been pressed in the High Court it is not possible for
this Court to consider it. The material on the existing record to which our
attention was drawn is not enough to make out a prima facie case of either mala
fides or arbitrariness to justify any further scrutiny. Indeed, in the High
Court the State had agreed to consider the respondent's application and the
only controversy there was as to the year of which the import policy was to
govern the respondent's application. For this purpose, reliance was placed
neither on the plea of mala fides nor of arbitrariness with the result that we
decline to go into these pleas.
There is no doubt that speedy disposal of
applications for import licences is of the greatest importance. Indeed, in the
Import Trade Control Handbook of Rules and Procedure, 1968 paras 302 to 304
have been exclusively devoted to the subject of Checks on delays. They provide;
"302 (1) Every effort is made to avoid
delays in the disposal of applications for licences or correspondence.
Reminders in regard to the delayed cases are attended to promptly by the
licensing authorities.
(1) C.A. No. 1121 of 1970 decided on 25th
August, 1971.
15 .lm15 (2) Complaints regarding delay
addressed to the Chief Controller of Imports and Exports, New Delhi, should be
specifically marked "Complaint against delay" at the top of the
communication containing the complaint.
(3) The applicant should also bring cases of
delay to the personal notice of the Public Relations Officer in the Import
Trade Control office concerned. The Public Relations Officer of the rank of the
Deputy Chief Controller of Imports and Exports has been appointed at the
headquarters of the office of the Chief Controller of Imports and Exports, New
Delhi. In the regional offices also, Public Relations Officers have been
appointed. Addressing of communications to import trade control organisations :
303. It is noticed that telegrams and letters
received by the licensing authorities from the trade by way of reminder do not
often contain sufficient details to enable the licensing authorities to locate
the previous papers.
With a view to avoid delay in the disposal of
such communications the trade should give brief details of the reference
received by those from the licensing authority concerned, the particulars of
the goods sought to be imported and the I.T.C. classification of such goods. The
communication should also indicate its subject matter, the category of the
importer, the type of the licence to which it pertains, whether it relates to
the grant of the licence or amendment Or revalidation thereof or an appeal, and
it should also give the number and date of the relevant original application.
Enquiries regarding the position of
applications.
304(a) The arrangement under which the
importers could enquire the position of the import application by filling the
import enquiry slip has been discontinued.
(b) The licensing authorities will make every
effort to dispose of the applications as quickly as possible. If an application
for an import licence is not disposed of within one month from the date of its
receipt in the licensing section the licensing authority will issue an interim
reply to the applicant. If an applicant does not receive an interim reply even
after this time limit, he can bring the matter to the notice of the Public
Relations Officer in the import trade control office concerned or book an
interview with the officer 16 concerned through the Enquiry Officer in order to
know the reasons for the delay in the disposal of his application.
(c) Where a licensing authority calls for
certain documents or information from the applicant or any deficiencies in the
application are communicated to the applicant, and the applicant has furnished
the required documents or information or made good the deficiencies but does
not receive any further communication from the licensing authority within 15 days
thereafter, he can bring the matter to the notice of the Public Relations
Officer or book an interview with the Officer concerned to know the reasons for
the delay in the disposal of the application.
(d) Applications for import of capital goods
and heavy electrical plant will take somewhat longer time. But in such cases
also, if the applicant finds that there has been a delay in the disposal of his
application, he can bring the matter to the notice of Public Relations Officer
or book an interview with the concerned officer to know the reasons for
delay." This importance is justified because it is necessary for our
country to utilise without undue delay the available foreign exchange, the
supplies of which are limited, lest due to unforeseen circumstances beyond the
control of the State the position in this regard E deteriorates. Para 91 of
this Handbook, which has already been reproduced, while properly safeguarding
the right of the applicants for import licence also points out the consequences
of delay and laches on their part. In the present case, as is clear from the
respondent's counter-affidavit and from what has already been stated earlier,
in the advance copy of the respondent's application, no particular end-use of
the stainless steel sheets required was specified and the respondent was asked
to furnish particulars of the end-use and other required information in April,
1969. The S.S.I. Registration Certificate was for the end-products
"hospital and surgical instruments and household utensils". As per
policy, there was a ban on issue of licences for stainless steel sheets for
manufacture of household utensils. It was in May. 1969 after the expiry of the
period 1968-69 that the respondent firm stated that they were going to
manufacture hospital requisites such as surgical bowls, spittoons and trays. In
the meantime. as is clear, there being a large number of new units who had
applied for import licences, in April, 1969 the Department considered it
desirable to have a further scrutiny and fresh instructions came into force
with effect from April 16, 1969 (GLI No. 23/69). It is for these reasons, which
cannot be considered to be irrelevant, that the application could not be
disposed of during 17 1968-69 period. We are ignoring the fact that according
to the counter-affidavit the respondent's application, along with the
essentiality certificate, was received in the office of the Deputy Assistant
Iron and Steel Controller on April 23, 1969 which was after the expiry of the
1968-69 period, and' we are assuming without holding, that the respondent's
application had reached the appropriate authority during ;the 1968-69 period.
It is not possible for us, on the material on the record and on the arguments
advanced at the bar, to hold that there was any undue delay, laches or
dilatoriness on the part of the Department in disposing of the respondent's
application during 1968-69.
The history of the correspondence between the
respondent and the Department, as already noticed, clearly shows that the
respondent's application included items of manufacture which were not covered
by the priority list and as a result of a large number of new applicants for
the sensitive item of stainless steel, the Department was compelled to hold a
proper scrutiny in the larger interests both of the healthy growth of industry
and of the balanced economy of the country. Fresh instructions for this purpose
issued on June 4, 1969 became operative and the respondent was naturally
required to comply with these instructions. Since the respondent's application
contained items which were non priority end-products this application was kept
pending until the completion of its examination, and in our opinion this was
not unreasonable. It was on April 8, 1970 that the Chief Controller of Imports
and Exports, apparently after proper review of the situation, issued
instructions providing for the consideration of applications like those of the
respondent, irrespective of the date on which they were forwarded to the
Department, in terms of the licensing policy for 1970-71. Though that period
has expired, Shri Desai has fairly offered on behalf of his clients even now to
consider the respondent's application in terms of the policy for that year.
Now, it has to be borne in mind that in the
present stage of our industrial development imports requiring foreign
exchanging have necessarily to be appropriately controlled and regulated.
Possible abuses of import quota have also to be effectively checked and this
inevitably requires proper scrutiny of the various applications for import
licence. In granting licences for imports, the authority concerned has to keep
in view various factors which may have impact on imports of other items of
relatively greater priority in the larger interest of the over-all economy of
the country which has to be the supreme consideration; and an applicant has no
absolute vested right to an import licence in terms of the policy in force at
the time of his application because from the very nature of things at the time
of granting the licence the authority concerned may often be in a better
position to have a 18 clearer over-all picture of the various factors having an
important impact on the final decision on the allotment of import quota to the
various applicants. Shri Singhvi's suggestion that the respondent's concern may
have to close down if the import licence is not granted according to 196869
policy is difficult to accept in view of the assertion in the writ petition
claiming turnover of 8 to 10 lacs by purchasing raw material from local markets.
In our opinion, no case has been made out on
the Present record for a mandamus to the Department to consider the respondent's
application for import licence in terms of 1968-69 policy. It is not possible
on the existing material to conclude that the Department is guilty of any undue
laches or delay in dealing with the respondent's application which would
justify the Court in granting the mandamus prayed for.
The High Court was thus not right in making
the impugned order. As Shri Desai has given an undertaking that the
respondent's application would be considered in the light of the import policy
for 1970-71 even though that period expired long ago, we need say nothing more
on this aspect.
We would accordingly allow the appeal with
the observation that the respondent's application be considered in accordance
with the import policy for the year 1970-71 without avoidable delay. In the
circumstances of the case there would be no order as to costs.
V.P.S. Appeal allowed.
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