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PETITIONER: M/s.  UNIVERSAL IMPORTS AGENCYAND ANOTHER

       Vs.

RESPONDENT: THE CHIEF CONTROLLER OF IMPORTSAND EXPORTS AND OTHERS.(AND C

DATE OF JUDGMENT: 23/08/1960

BENCH: SUBBARAO, K. BENCH: 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

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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 rele- vant  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

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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.

JUDGMENT: 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

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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. 57,418- 12-0.   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  Econo- mique, 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

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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,  Pondi- cherry,  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

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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 whereunder 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

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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  provi-

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sions 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 form 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

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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 therefrom.  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  whereunder  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 thereunder.   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 Isleworth 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

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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  post- merger 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

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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 Indo- French  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

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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

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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

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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 therefrom.  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 therefrom.  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 thereunder.   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 therefrom.

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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 thereunder.   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,  con- sidered  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

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preserved  unaffected by the repeal, only things done  under the  repealed enactment and the rights acquired  thereunder. 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  petitio- ners  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

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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, rock- salt  and  certain medicinal preparations,  all  commodities could  be  imported  into the  Pondicherry  Port  without  a licence.  The French Administration exercised control on im- port  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  im- ports 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

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332   An  agreement  for  the  de  facto  transfer  of  the  ad- ministration  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 orders- S.  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

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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

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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  bind- ing 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 fulfil the orders placed outside  the Establishments and finalised through the grant of a  licence by competent authorities.  But the petitioners had  obtained

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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 thereunder 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

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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 supervention 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

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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.                      __________________