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PETITIONER: RAJ PRAKASH CHEMICALS LTD. & ANR.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT05/03/1986

BENCH: PATHAK, R.S. BENCH: PATHAK, R.S. TULZAPURKAR, V.D. MUKHARJI, SABYASACHI (J)

CITATION:  1986 AIR 1021            1986 SCR  (1) 448  1986 SCC  (2) 297        1986 SCALE  (1)297  CITATOR INFO :  E&R        1987 SC 175  (2,6,7,13,16)  F          1987 SC 179  (1,2)  R          1987 SC1794  (6,7,9,11,12,15,21)  RF         1989 SC 690  (5,6)  RF         1992 SC 696  (8,9,11,12,13)

ACT:      Practice & Procedure      Order of  Court -  Construction of  - To  be consistent with principle  that Court  must be  presumed to  have given effect to the law.

HEADNOTE:      The first  appellant, a public limited company, engaged in  the   manufacture  of   acrylic  ester  monomers  (Butyl Acrylate,  Bthyle  acrylate,  2-Ethyle  Hexyl  Acrylate  and Methyle Acrylate)  under an  industrial licence  granted  in February 1975,  commenced manufacture  in December  1980 and was until  then the  only manufacturer in India. In the year 1981 a  public sector organisation also began to manufacture acrylic ester monomers.      In the  period before 1980 in the absence of lndigenous manufacture of  acrylic ester  monomers, the  Government  of India permitted  the import  of those  items on Op n General Licence. Thereafter,  in the  Import Policy  1981-82, with a view to  protect indigenous industry and to conserve foreign exchange  the  Government  of  India  placed  acrylic  ester monomers in  Appendix 5  (List of  Restricted Items), ant in July, 1981  Ethyl Acrylate  was taken  from  Appendix  5  to Appendix 3  (List of  Banned Items).  A public  notice dated July  7,  1981  announced  that  Export  Houses  which  were eligible to import Ethyl Acrylate would be allowed to import lt only  to the  extent of  irrevocable  Letters  of  Credit opened before the date of the notice.      Under Import  Policy 1982-83,  the nomenclature  of the headings of  the Appendices  was altered,  and  the  heading "List of Banned Items" of Appendix 3 was changed to "List of Limited   Permissible    Items".   Likewise,   the   heading "absolutely Banned  List" of Appendix 4 was altered to "list of Non-permissible 449

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Items (Banned)".  And the heading "List of Restricted Items" of Appendix  5 became  the "List  of  Automatic  Permissible Items". Ethyl  Acrylate remained in Appendix 3 and all other acrylic ester monomers remained in Appendix 5.      Under Import Policy 1983-84, the headings of Appendices 3, 4 and 5 remained as they were, and all four acrylic ester monomers  were   placed  in  Appendix  3  (list  of  Limited Permissible Items).      Under Import  Policy 1984-85  Appendix 2  Part A became the "List  of Banned  Items" and  Appendix 2 Part became the "List of  Restricted Items".  Appendix 3 continued to be the "List of Limited Permissible Items". Appendix 5 was  the  "List of  Canalised Items".  Appendix 6  mentioned the import    of items under Open General Licence.      That nomenclature  ant arrangement  was reflected again under Import  Policy 1985-88,  except that  Appendix  4  was deleted and  the new  Appendix 6 (the "Open General Licence" List) contained  Part II  which listed  items open to import under Export  House Additional  Licence. Under  both  Import Policies,  1984-85   and  1985-88  the  four  acrylic  ester monomers appeared  at item  9 of Appendix 3 (List of Limited Permissible Items).      Changes in  the nomenclature  of the  headings  of  the Appendices in  the Import Policy 1982-83 and thereafter were considered necessary to bridge the gap in India’s balance of payment. The  change in  the nomenclature  tit not alter the principle underlying the grouping of items under the various heads. Each  grouping was  determined in accordance with two major objectives of import policy, the conserving of foreign exchange  and   protecting  the  development  of  indigenous industries  by   limiting  the   import   of   corresponding manufactured products.  The items  in Appendix  3  (List  of Limited Permissible Imports) were those whose import was not permissible  ordinarily   but  could  be  permitted  by  the Government if  their import  was  necessary  and  justified, while the  import of  items absolutely  banned (  and  later simply described as "Banned") was not permissible at all.      The Import  Policy 1978-79  incorporated a scheme under which Registered Exporters were eligible for the grant of 450 Export House  Certificates  on  the  basis  of  the  exports actually made in the three-year base period 1975-76, 1976-77 and 1977-78.  Export Houses  were entitled  to the following facilities:-           (i) Import replenishment licences eligible to them           as registered Exporters,           (ii) Import  replenishment licences transferred to           them by others.           (iii) Import  of  items  placed  on  Open  General           Licence, and           (iv) Additional Licences.      Several diamond  e porters  applied  for  Export  House Certificates and  consequent Additional Licences, which were refused on  the ground  that they  had not diversified their exports. A  number of  writ petitions  were filed  by  these diamond exporters  in the  High Court of Bombay and the High Court of  Delhi. The  High Courts  held that  the ground  on which the  Export House  Certificates had  been refused  was wholly untenable  and directed  the issue  of  Export  House Certificates as  well as the consequent Additional Licences, but while  defining the  right of  the diamond  exporters to import items  under the  Additional Licences  they also took into account  the Import  Policy prevailing  at the  time of import in  regard to  the items which could not be imported. Appeals against  the orders of the High Courts were disposed

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of by  this Court  by its  order dated  April 18,  1985. The authorities were  directed to  issue  the  necessary  Export House Certificates  for the  year 1978-79.  It  was  further directed that  "save and except items which are specifically banned under  the prevalent  i port  policy at  the time  of import, the  diamond e  porters shall  be entitled to import all other items whether canalised or otherwise in accordance with the  relevant rules".  Pursuant to  this order  of  the Court, the diamond exporters were issued Additional Licences which permit them to import acrylic ester monomers.      Feeling aggrieved  by  the  grant  of  such  Additional Licences, the appellants filed a writ petition under Art. 32 co plaining  that the  order dated  April 18,  1985 of  this Court 451 was misinterpreted and, in consequence thereof the import of acrylic ester  monomers was  being allowed.  This  is  Court dismissed the  writ petition  with liberty  to move the High Court of  Bombay. The  appellants then filed a writ petition in the  High Court  of Bombay  which a dismissed by a Single Judge, and  this  order  was  confirmed  in  Appeal  by  the Division Bench on the ground that withdrawal or cancellation of  the   additional  endorsement  made  on  the  Additional Licences would  conflict with  this Court’s  Order and would amount to modifying or nullifying it.      On the  question as  to what  is the  true meaning  and scope of  the order dated April 18, 1985 made by this Court, dismissing the appeal and writ petition, ^      HELD :  1. The  meaning and  scope of this Court’ order dated April  18, 1985  must be  discovered from the terms of the High  Court orders,  because the  language in  which the order of  this Court  is couched bears close comparison with one or other of the High Court orders. [471 F-G]      2. The  Additional Licences  to be  issued  to  diamond exporter entitled then to import items permissible to Export Houses under  such Licence  under the  Import Policy 1978-79 excluding those  items which  fell within Appendices 3 and 4 of the  Import Policy 1978-79 and also excluding items which fell in  Appendix 3  and Appendix  2 Part  A of  the  Import Policy 1984-85. That is the meaning which must also be given to the  ter s  of the  order dated  April 18,  1985 of  this Court. Where the Import Policy prevailing at the time of the import is  the Import Policy 1985-88, the items excluded are those  enumerated   in  the  corresponding  Appendix  3  and Appendix 2  Part A  of that  Import Policy.  That conclusion follows irresistibly on the analysis attempted by this Court and in the context in which the order was made. [473 A-C]      3. When  the word "banned" was used, it was intended to take in  items which  were banned altogether as ell as items which were  banned for import by the holder of an Additional Licence. The Court was concerned with the right to import of the holder  of an  Additional  Licence.  The  holder  of  an Additional Licence as prohibited from i porting items which 452 were banned  altogether and  also items  which  he,  as  the holder of  an Additional  Licence, a  banned from importing. [473 E-F]      4. This  Court would  be enlarging  the scope of relief granted by the High Court if the more liberal interpretation was given  to the  words "specifically  banned" and  such  a construction  is   clearly  impermissible  when  no  diamond exporter had  appealed against that order before this Court. When this  Court made  the orders dated April 18, 1985, when the Import  Policy. 1985-88  was in  force, there ere only t

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which were  absolutely banned, and the ere animal tallow and rennet. That  was also  substantially the position under the Import Policy 1984-85. [473 G-H; 474 A]      5. The  right of  a diamond  exporter to  an Additional Licence does  not issue  from paragraph  265 of  the  Import Policy 1985-88.  Paragraph 265  enables grant  of Additional Licences  to   other  port  Houses,  and  diamond  exporters entitled to Additional Licence under that Import Policy. The Export House  Certificates granted  to the diamond exporters pursuant to  the orders of the High Courts and of this Court are those envisaged under the Import Policy 1978-79. But for the purpose  of granting  relief in  their favour the Courts took into  account the conditions prevailing at the tit and, therefore, the provision of the Import Policy 1985-88 become relevant. The are relevant for the purpose of construing the terms in  which relief  has been granted by the Courts. They do not constitute the source of those rights. [474 D-F]      6. The  diamond exporters on the construction placed by this Court  on its  order dated  April 18,  1985, cannot  be regarded  as   denying  restitution.   But  the  restitution available to  the has  been reduced by the e press direction of the  Court that  the are  not entitled  to  import  items excluded under  the Import  Policy prevailing at the time of Import in addition to those excluded under the Import Policy 1978-79. [474 H; 475 A]      7. The  construction placed  by this Court on the order dated April  18, 1985  is consistent with the principle that the Court  must be presumed to have given effect to the law. That presumption  can be rebutted only upon evidence showing a clear  intention to  the contrary,  either expressly or by necessary implication.  There is no such evidence before the Court.[475 D-E] 453      8. Those  diamond exporters who were granted Additional Licences under  the Import Policy 1978-79 and had opened and established irrevocable Letters of Credit before October 18, 1985 should  be permitted,  notwithstanding the construction placed on  the order  dated April 18, 1985 of this Court, to clear the  goods  Imported,  or  to  be  imported,  by  them pursuant to such irrevocable Letter of Credit. [477 E-Fl      9. All  imports effected  pursuant of  such Letters  of Credit should  be deemed  to have  been legally and properly made, and  should entail  no adverse consequences whatsoever on the  basis of principles of justice, equity and fair play and by  the need  to avoid  undeserved hardship ignoring the legal technicalities. [477 F-G]      10. The  diamond exporters who pursuant to the issue of Additional Licences  under the  Import Policy  1978-79  have opened and  established irrevocable  Letters of Credit on or after October  18, 1985  will not be entitled to the benefit of this order. [478 B-C]      Deputy Asstt.  Iron   Steel  Controller    Anr.  v.  L. Manickchand,  Proprietor,  Katrella  Mettel  Corpn.  Madras, [1972] 2 S.C.R. 1, relied upon.      Joint Chief  Controller of  Import & Exports, Madras v. M/s Aaichand Mutha etc., [1966] 1 S.C.R. 262, Union of India Ors,. M/s. Indo-Afgan Agencies Ltd., [1968] 2 S.C.R. 366 and Jagannath Aggprwal  v. B.N.  Dutta, (Civil  Appeal No.801 of 1964 decided on January 10, 1967), referred to.

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4978 of 1985.

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    From the  Judgment and  Order dated  16.8.1985  of  the Bombay High Court in Appeal No. 726 of 1985.      V.M. Tarkunde and Rajiv Datta for the Appellants.      B. Datta, Additional Solicitor General, K.K. Venugopal, Ashok H.  Desai, A.K. Ganguli, R.N. Poddar, S. Ganesh, Anand Bhatt, Harish Salve, Raian Karanjawala, Mrs. Manik 454 Karanjawala, G.E.  Vahanvati, B.R.  Agarwala, M.M.  Jayakara and Miss V. Menon for the Respondents.      The Judgment of the Court was delivered by      PATHAK, J. This appeal is directed against the judgment and order  dated August  16, 1985 of a Division Bench of the High Court  of Bombay summarily rejecting an appeal filed by the appellants  against the dismissal of their writ petition by a learned Single Judge of that High Court.      The first  appellant, Raj Parkash Chemicals Limited, is a public  limited company  with  its  registered  office  at Bombay. It  is engaged  in the  manufacture of acrylic ester monomers (Butyl  Acrylate, Ethyl  Acrylate, 2-  Ethyl  Hexyl Acrylate and  Methyl Acrylate)  at its  factory in  Tarapur, Maharashtra. These  items are  used  by  various  industries engaged in  the manufacture of Binders required in textiles, leather paint  and paper Industries. The second appellant is the Managing  Director and  a shareholder  of the  appellant company. In  February 1975,  the appellants  were granted an industrial licence  for manufacturing acrylic ester monomers in a  total quantity of 3,000 tones per annum. The installed capacity of  the factory is, however, 1,000 tones per month. It commenced  manufacture in  December 1980,  and was  until then  the  only  manufacturer  in  India  of  acrylic  ester monomers.  In   the  year  1981  the  Indian  Petrochemicals Corporation Limited,  a  public  sector  organisation,  also entered the  market and  began to  manufacture acrylic ester monomers  at  its  factory  at  Baroda,  which  possesses  a capacity of 10,000 tones per year.      In the  period  before  1980  in  the  absence  of  any indigenous  manufacture   of  acrylic  ester  monomers,  the Government of  India permitted  the import of those items on Open General  Licence. Thereafter in the Import Policy 1981- 82, with  a view  to  protect  indigenous  industry  and  to conserve foreign  exchange the  Government of  India  placed acrylic ester  monomers in  Appendix 5  (List of  Restricted Items), and  in July  1981 Ethyl  Acrylate  was  taken  from Appendix 5  to Appendix  3 (List  of Banned Items). A public notice dated July 7, 1981 announced that Export Houses which were eligible  to import  Ethyl Acrylate would be allowed to import it  only to  the extent  of  irrevocable  Letters  of Credit opened before the date 455 of the notice. Under Import Policy 1982-83, the nomenclature of the  headings of  the Appendices  was  altered,  and  the heading "List  of Banned  Item of  Appendix 3 was changed to "List of Limited Permissible Items". Likewise, the heading " Absolutely Banned  List" of  Appendix 4 was altered to "List of Non-permissible Items (Banned)". And the heading "List of Restricted Items"  of  Appendix  5  became  the  "  List  of Automatic Permissible  Items." Ethyl  Acrylate  remained  in Appendix 3, and all other acrylic ester monomers remained in Appendix 5.  Under Import  Policy 1983-84,  the headings  of Appendices 3,  4 and  5 remained  as they were, and all four acrylic ester  monomers were  placed in  Appendix 3  List of Limited Permissible  Items). Under  Import  Policy  1984-85, there was another change in the nomenclature of the headings of the  Appendices. Appendix  2 Part  A became  the "List of Banned Items"  and Appendix  2  Part  became  the  "List  of

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Restricted Items".  Appendix 3  continued to be the "List of Limited Permissible  Items." Appendix  5 was  the  "List  of Canalised Items."  Appendix 6  mentioned the import of items under  Open   General   Licence.   That   nomenclature   and arrangement was reflected again under Import Policy 1985-88, except that  Appendix 4  was deleted  and the new Appendix 6 (the "Open  General Licence"  List) contained  Part  II  now which  listed  items  open  to  import  under  Export  House Additional Licence.  Under both Import Policies, 1984-85 and 1985-88 the  four acrylic  ester monomers appeared at item 9 of Appendix  3 (List  of Limited Permissible Items). Changes in the nomenclature of the headings of the Appendices in the Import  Policy   1982-83  and   thereafter  were  considered necessary in  the context  of loans and financial assistance received from  international agencies  to bridge  the gap in India’s balance of payment, and because the Import Policy of India is considered a vital document by foreign countries in the formulation  of their  fiscal policies. me change in the nomenclature did  not alter  the  principle  underlying  the grouping of items under the various heads. Each grouping was determined and  continued to  be so determined in accordance with two  major objectives  of import policy, the conserving of foreign exchange by limiting the total imports to a level ensuring that payment for them could be met by the available foreign exchange  resources  or  by  maintaining  a  minimum deficit in  the balance  of trade, and the further objective of giving  impetus to,  and protecting,  the development  of indigenous   industries    by   limiting   the   import   of corresponding manufactured products. 456 The  items  in  Appendix  3  (List  of  Limited  Permissible Imports)  were   those  whose  import  was  not  permissible ordinarily but could be permitted by the Government if their import was  necessary and  justified on  the merits  of  the relevant consideration mentioned in the Import Policy, while the import  of items  Absolutely Banned  (and  later  simply described as "Banned") was not permissible at all.      The Import  Policy 1978-79  incorporated a scheme under which Registered  Exporters were registered as Export Houses and  granted   special  facilities   to   strengthen   their negotiating capacity in foreign trade and to build up a more enduring relationship  between  them  and  their  supporting manufacturers. They were  eligible for  the grant  of Export House Certificates on the basis of the exports actually made in the  three year base period 1975-76, 1976-77 and 1977-78. Export Houses were entitled to the following facilities :-           (i) Import replenishment licences eligible to them           as Registered Exporters,           (ii) Import  replenishment licences transferred to           them by others,           (iii) Import  of  items  placed  on  Open  General           Licence. and           (iv) Additional Licences. Replenishment Licences issued in the names of Export Houses, or transferred  to them  by others,  entitled them to import capital goods  placed on  Open General  Licence  subject  to Actual Users  condition, and  raw materials, components, and spares placed  on Open  General  Licence  for  Actual  Users (Industrial). The  Additional Licence  granted  for  1978-79 would be valid for the import of items appearing in Appendix 5 (List  of Restrict  ed Items)  and Appendix  7 (Restricted List -  Iron and  Steel Items) excluding, however, the items appearing in  Appendix 26.  An Additional Licence would also be valid  for import of raw materials, components and spares placed  on   Open   General   Licence   for   Actual   Users

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(Industrial), the  Export House  being obliged to dispose of the items so imported to eligible Actual Users only. 457      Several  diamond   exporters   including   the   fourth respondent, N.  Nayan  Kumar  and  Company,  and  the  fifth respondent, Rajnikant  Brothers, applied  for  Export  House Certificates  and   consequent  Additional  Licences.  Their applications were  refused on  the ground  that they had not diversified their  exports number  of  writ  petitions  were filed in  the High  Court of Bombay and in the High Court of Delhi, and  in each case the High Court held that the ground for rejecting  the application  was invalid and directed the grant of  an Export  House  Certificate  and  an  Additional Licence to the applicant. As those orders became the subject of corresponding appeals by the Union of India in this Court which were  disposed of  by this  Court by  its order  dated April 18,  1985, the construction of which is central to the controversy in this appeal, it would be appropriate to refer to those orders at this point.      Taking the  orders seriatim passed by the High Court of Bombay there  is first  the order dated November 26, 1982 by Pendse, J.  in Writ  Petition No.  1458  of  1979  filed  by Narendra Mafatlal  Mehta, whereby the learned Judge directed the grant of an Export House Certificate under Import Policy 1978-79 to  the petitioner, but while extending the time for making application  for an  Additional Licence  he held  the petitioner entitled  to those  facilities  only  which  were provided by  paragraph 174 of that Import Policy. Thereafter the same  learned Judge  passed an  order dated November 11, 1983  in  Writ  Petition  No.  1293  of  1979  filed  by  D. Navinchandra & Co. in which, while directing the grant of an Export House  Certificate under the Import Policy 1978-79 to the petitioner,  Pendse, J. noted the objection on behalf of the Government  that some of the items which could have been imported under  the Import  Policy 1978-79  could have  been banned under  the Import  Policy 1983-84,  and  the  learned Judge observed  that if any item was banned under the Import Policy 1983-84  the petitioner  would  not  be  entitled  to import that  item even  though it  was not  banned under the Import Policy  1978-79. Another  objection by the Government that the  petitioner should not be permitted to import items which were  canalized items  under the Import Policy 1983-84 was rejected  by Pende,  J., and  he observed that canalised items were not banned items and the petitioner should not be compelled to  approach the  canalising agency for the import of items  which were  not canalised  item under  the  Import Policy 1978-79. He directed that the peti- 458 tioner would  not be  entitled to  import only  those  items which were specifically banned under the Import Policy 1983- 84 prevalent  at the  time of  import. On December 23, 1983, Pendse, J.  passed an order in Writ Petition No. 761 of 1983 filed by Messrs. N. Nayankumar and Company where he directed the issue  of an Export House Certificate to the petitioners under the  Import Policy  1978-79 and  held the  petitioners entitled to an Additional Licence for the import of items in the same  terms as was set forth in the order dated November 11, 1983 in the earlier case. The fourth order in the series was passed  on January  25, 1984  by Bharucha,  J.  in  Writ Petition No.  1048 of 1983 filed by Messrs. Mehta Gems., and that learned  Judge taking note of the orders passed earlier by Pendse,  J. in  similar cases, also directed the issue of an Export  House Certificate  to the  petitioners and  while granting  time   to  the  petitioners  for  applying  or  an Additional Licence he directed:

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         "Save and  except  items  which  are  specifically           banned under  the prevalent  import policy  at the           time of  import, the Petitioners shall be entitled           to import  all other  items whether  canalised  or           otherwise. Then followed  the order  dated January  30, 1985  passed by Sawant, J.  In Notice  of Motion  No. 1194  of 1984  in Writ Petition No. 761 of 1983 filed by N. Nayankumar  Co. and the order directed :-           1.  The  Respondents  should  make  the  following           endorsement on the licence in question :-           "This  licence   is  valid  for  import  of  items           permissible  to  export  houses  under  additional           licence category  as  per  paragraph  176  of  the           Import and  Export Policy  for the  period 1978-79           excluding those  items which  are banned  for  the           period 1978-79  and which  have been banned during           the import  policy for  the  period  1984-85.  The           additional licence  category import  allowed to be           imported subject  to the  provisions of  paragraph           176 of the Import and Export Policy for the Period           1978-79.           2. The  banned items  referred to above mean items           which are "banned" and "absolutely banned". 459           3. The Petitioners will take out a separate Motion           for Import Replenishment (REP) Licence transferred           to them by others, if any.           4. No  other order  on the  present Motion and the           Motion stands  disposed of  as above with no order           as to costs.      Adverting to  the orders  passed by  the High  Court of Delhi in the several Writ Petitions filed before it, we find that the High Court by its order dated July 15, 1980 in Writ Petition No.  250 of 1979 filed by Jayantilal Mangalji Mehta held the  petitioner entitled to an Export House Certificate under the  Import Policy  1978-79,  and  observed  that  the Certificate would  operate with  effect from  the  "original entitlement keeping  in view the date of the application and the year for which ’t was applied". On September 3, 1982 the High Court  directed in  Civil Writ Petition No. 251 of 1979 filed  by   Vijay  Trading  Company  that  an  Export  House Certificate for  the year  1978-79 should  be issued  o  the petitioner  and   declared   him   entitled   to   all   the consequential Replenishment  and  Additional  Licences,  and further directed,  on a  concession made  by the  petitioner that he  would be  satisfied if  he was  permitted to import those items only which were not banned in the year 1 1980-81 (as the  case had originally come up for hearing on July 15, 1980), that  the Replenishment  and Additional  Licences  be issued in those terms. Thereafter, on April 7, 1983 the High Court, while  disposing of  Writ Petition  No. 1501  of 1981 filed by  Rajnikant Brothers,  ordered the  renewal of their Export House  Certificate for  the Year 1978-79 and directed that as  they had  filed the  Writ Petition  on May 11, 1981 they would  be entitled  to the  consequent licences for the import of  those items  only which were open to import under the Import Policy 1981-82. The High Court went on to observe :-           "It may  be that  some of  the items,  which  were           permitted to  be imported  in the year 1981-82 may           now have  been absolutely  banned under the Policy           for the current year, i.e. 1983-84. In such a case           the petitioner,  of course, cannot be permitted to           import those items. If, for example, an item which

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         could be  freely imported under the Policy for the           year 1981-82 is now only canalised, then the 460           petitioner may  still be  entitled to  import that           item because  merely canalising  an item cannot be           regarded as  import of  that item being absolutely           banned.      It has  been mentioned  earlier that the Union of India appealed against  the orders of the High Court of Bombay and the High Court of Delhi, the appeal being Civil Appeal No. 1423 of  1984 (Union  of India  v. Rajnikant  Brothers)  and Civil Appeals  Nos. 3232,3233  and 29020 to 29027 of 1984. A number of  Special Leave Petitions, being S.L.Ps. Nos. 13826 to 13829  of 1983,9161,9174,10868,  952 to 971, 7190,2892 to 2899, 8224 of 1984, 14471 of 1982 and 9338 of 1983 were also disposed of  along with  the appeals.  The order dated April 18, 1985 disposing of those case reads as follows :-           "We have  heard counsel  for the  parties and have           gone through  the judgments  of the High Courts of           Bombay and  Delhi. We  are unable  to find, in the           facts and  circumstances of the case, any require-           ment of  diversification of exports as a condition           for the  grant of Export House Certificates in the           Import Policy for the year 1978-79. While confirm-           ing the  High Court’s  Judgment quashing the order           impugned in  the Writ  Petitions in the High Court           we direct  the appellants  to issue  the necessary           Export House  Certificates for  the year  1978-79.           The Export  House Certificates  shall  be  granted           within 3  months from  this date.  Save and except           items which  are  specifically  banned  under  the           prevalent import policy at the time of import, the           respondents hall  be entitled  to import all other           items whether canalised or otherwise in accordance           with the  relevant rules. The appeals are disposed           of accordingly with no order as to costs."      Pursuant to  the orders  of this  Court and of the High Court of  Bombay and  the High  Court of  Delhi, the diamond exporters have  been issued Additional Licences which permit them to import item such as acrylic ester monomers.      The appellants  are aggrieved  by  the  grant  of  such Additional Licences  and see  in the  import of  items under those 461 Licences  grave   danger  to   their  indigenous   industry. Moreover,  they   say,  valuable   foreign   exchange   will unnecessarily go  out of  the country. In the circumstances, the appellants filed Writ Petition No. 11676 of 1985 in this Court complaining  that the  order dated  April 18,  1985 of this Court was being misinterpreted and, in consequence, the import of  acrylic ester  monomers  was  being  allowed.  On August 1,  1985, this Court dismissed the Writ Petition with liberty to  the appellants to move the High Court of Bombay. me appellants  then filed  Writ Petition No. 1549 of 1985 in the High Court of Bombay, but the writ petition was rejected in limine  by Pendse,  J. On August 12, 1985. An appeal from that order, being Appeal No. 726 of 1985, was dismissed by a Division Bench  on August 16, 1985. The appeal was dismissed on  the   ground,  inter   alia,  that   the  withdrawal  or cancellation of  the  additional  endorsement  made  on  the Additional Licences  would conflict  with the  order of this Court and  would  amount  to  modifying  or  nullifying  it. Thereafter, the  appellant filed a special leave petition in this Court,  and on special leave being granted, this appeal is now before us.

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    It is  admitted between the parties in this appeal that the fundamental  question  for  consideration  is  the  true meaning and  scope of the order dated April 18, 1985 made by this Court.  There is  no dispute that the diamond exporters enjoying the  benefit of the order are entitled to the issue of Export House Certificates under Import Policy 1978-79 and to the facilities flowing from such grant. There can also be no dispute  that the consideration where the items sought to be imported  by such  diamond exporters are canalised cannot act as  an impediment  to the  import directly  by them. The order declares  further that such diamond exporters shall be entitled to  import all  items "save  and except items which are specifically banned under the prevalent import policy at the time  of import."  The controversy  between the  parties centres around  the meaning  of the expression "specifically banned", specially  in the  context of an Additional Licence granted to such diamond exporter.      Shri V.M.  Tarkunde, counsel for the appellant company, contends that under the aforesaid order dated April 18, 1985 Export Houses  holding Additional  Licences  are  prohibited under the  Import Policy  1985-88 from importing items other than 462 those appearing  in Part  II they are taken into account the result would  be the  same. He  points out  that  under  the Import Policy  1978-79 an  Additional Licence  was valid for the import  of raw  materials placed on Open General Licence for Actual  Users (Industrial)  and the  relevant item  1 of Appendix 10 (List of Items on Open General Licence) excluded from import  the items  under Appendix  3 (Banned  List). As acrylic ester  monomers did not appear in that list nor were excluded by  the other  terms of  item 1 of Appendix 10 they could, under  the Import  Policy 1978-79,  be imported under Open General Licence by the holder of an Additional Licence, who was under paragraph 176 of the Import Policy, obliged to dispose them  off to Actual Users (Industrial) only. But now under the  Import Policy  1985-88, prevalent  at the time of import, the  holder of  an Additional  Licence is  no longer entitled to  import acrylic ester monomers because that item is now  insert ed in Appendix 3 Part A, which by a change of nomenclature, is  currently described as the List of Limited Permissible  Items.   Further,  learned   counsel  contends, inasmuch as the purpose of issuing Additional Licences is to satisfy the  needs of  small  scale  manufacturers  who  are unable to  import  directly  the  small  quantities  of  raw materials required  by them, and there fore the holder of an Additional Licence is obliged to supply the imported item to Actual  Users  (Industrial),  regard  must  be  had  to  the circumstances that  under the  Import  Policy  1985-88  even Actual Users  are  debarred  from  importing  acrylic  ester monomers because  this item  has been  placed in  Appendix 3 Part A.  Item 1  of Appendix 6 of the Import Policy 1985-88, which lists  the items  to be  imported under  Open  General Licence, excludes  the items  appearing in Appendix 3 Part A from import  by Actual  Users (Industrial).  Learned counsel urges that  if  Actual  Users  (Industrial)  are  themselves barred from  importing that item the holder of an Additional Licence is  also barred  from doing  so because in the final analysis he  imports only to supply the item to Actual Users (Industrial). The  ban has  been imposed, it is pointed out, as part  of a policy to protect indigenous industry. Learned counsel urges that when the orders of the High Courts and of this Court directed the grant of an Export House Certificate under the Import Policy 1978-79 to diamond exporters for use during the  operation of a subsequent Import Policy, it must

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be regarded  as the  grant of  an exceptional right to them, because in  all the  years after  1978-79 diamond  exporters were not entitled to 463 any Additional  Licence. In  the circumstances,  it is said, when construing  the scope  of those  orders, regard must be had to the observations of this Court in Deputy Asst. Iron & Steel Controller  &  Anr.  v.  L.  Manickchand,  Proprietor, Katrella Metal Corpn. Madras, [1972] 3 S.C.R. 1.      The Union  of India  has made  common  cause  with  the appellant company, and Shri B. Datta, the learned Additional Solicitor General  of India, who appears on its behalf urges that the  Export House  entitlement under  the Import Policy 1978-79 has  to  be  reconciled  with  the  entitlement  and facilities available  under the  Import Policy  1985-88.  He urges that the expression "specifically banned" in the order dated April  18, 1985  of this Court must be given a meaning consistent with  the changed Import Policy now prevailing at the time  of import,  and that  what  is  impermissible  for import against  Additional Licences under the current Import Policy cannot  be allowed  to be  imported now. In the first place learned  counsel points  out that  the High Courts and this Court  have already  permitted  a  departure  from  the current Import  Policy  in  holding  the  diamond  exporters entitled to  Export House  Certificates. Under paragraph 173 of the  Import Policy 1978-79 an Export House Certificate is normally valid  for three  years only. It would no longer be valid  now.  In  the  year  1978-79  due  to  the  need  for protecting export  trade and providing incentives to diamond exporters they became eligible for a total import licence to the extent  of Rs.  108 against an export valued at Rs. 100. The Replenishment  Licence entitled  them to  import  on  an average  of  75%  of  the  F.O.B.  value  of  exports  while Additional Licences  entitled them  to another 33%. With the development of  the national economy and the availability of indigenous products  the policy  was changed  from the  year 1979-80 onwards,  and for  the prupose  of  calculating  the entitlement for  an Additional  Licence the value of exports of select  products carrying an import replenishment rate of more than  50% in  Appendix 17  of the Import Policy 1979-80 was not  to be  taken into  account, and  the value  of such exports was  not to  be included  by an  Export House  while applying for an Additional Licences. In the result, the year 1978-79 was  the only year for which diamond exporters could be granted  Additional Licences.  Learned counsel emphasises the need,  in the  circumstances,  to  ensure  that  further departure from  the current  Import  Policy  should  not  be permitted. He 464 invites our  attention to  paragraph  35(1)  of  the  Import Policy 1985-88  which provides  that Replenishment  Licences and Additional Licences held by Export Houses would cease to be valid  for the  import of  any item which could have been imported under  Open General  Licence during  the  preceding financial year  or earlier  but was  no longer  so under the Import Policy 1985-88.      Shri  K.K.   Venugopal   appearing   for   the   fourth respondent, N.  Nayankumar &  Company, opposes  the confined construction sought to be put by Shri V.M. Tarkunde, learned counsel  for  the  appellant  company  and  Shri  B.  Datta, Additional Solicitor  General of  India on  the order  dated April 18,  1985  of  this  Court,  and  urges  that  diamond exporters, who  were entitled  under the  orders of the High Courts to  the issue  of Exports.  Houses  Certificates  and consequently Additional  Licences were  entitled  under  the

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terms of  those orders  to import  all items  which could be imported under  Open General Licence under the Import Policy 1978-79 as  well as  all items which could be imported under the Import  Policy 1985-88,  including items  in Appendix  3 Part A  (List of  Limited Permissible  Items), but not items absolutely  banned  under  the  Import  Policy  1985-88.  He contends that  the rights  of such diamond exporters must be considered in  the context  of the Import Policy 1978-79 and not of  the Import  Policy  1985-88.  The  applications  for Export House  Certificates were made under the Import Policy 1978-79 and  were denied  by the Chief Controller of Imports on a  wholly untenable ground and consequently the intent of the orders  of  the  Courts  was  to  entitle  such  diamond exporters to restitution. Such restitution could be effected only if  the diamond  exporters could,  notwithstanding  the passage  of   time  occasion  ed  by  the  pendency  of  the proceeding in  Court for  releif against the wrongful order, be placed  back  in  the  position  which  they  would  have occupied had  Export House  Certificates being  granted.  As regards the items which such diamond exporters were entitled to import,  he  has  referred  to  material  on  the  record indicating how  respondent 1 to 3 themselves under stood the orders of  the Court.  Our attention  has  been  invited  to paragraph 5  of the  counter affidavit  of Dr.  R.K. Dhawan, Deputy Chief  Controller of  Imports and  Exports, filed  on behalf of respondents Nos. 1 to 3 which states :-           "5. In terms of the Court order the parties can 465           import all  the  items  which  were  under  O.G.L.           during 1978-79  except animal  tallow  and  animal           rennet which were now banned under Appendix 2-A." In this  connection, reference  may  also  be  made  to  the affidavit of  Kanayalal J. Chellani, Deputy Chief Controller of Imports  and Exports,  filed before  the  High  Court  of Bombay  in   Writ  Petition   No.  1686  of  1985  (Reliance Industries Limited  v. Union  of India), a copy of which has been  included   as  Exhibit  19  to  the  affidavit  of  N. Nayankumar and  Company  in  reply  to  Civil  Miscellaneous Petition 43,000  and 43,001 of 1985 in Civil Appeal No. 3233 of 1985  (Union of  India &  Ors. v.  N. Nayankumar & Ors.). Paragraph 9 states :-           "9. I  say that it is significant to note that the           subject item  has not  been banned  or  restricted           (Appendix 2  of 1985-88  Policy. It  has only been           shifted from  O.G.L.  to  L.P.L.  The  petitioners           after receiving  a licence  for import of the said           item can very well still import the item." Shri Venugopal  has attempted  to demonstrate  that there is need for  importing acrylic  ester monomers and that in fact the   Government    of   India    envisages   such    import notwithstanding that  the item  is no  longer on  the O.G.L. list but  finds place now in Appendix 3 of the Import Policy 1985-88. He  invites our  attention to the counter affidavit of Nikhal  Premchand Shah filed on behalf of N. Nayankumar & Company to  the effect  that because of the inability of the Indian Petrochemicals  Corporation Limited  to run its plant at full  capacity the  commodity which  was  being  sold  to Actual Users at Rs.30 per kilogram was now being sold at Rs. 150 per  kilogram. There  is reference to a news item in the Indian Express  dated April  18, 1985  stating that although the official  price was about Rs. 67 per kilogram, a premium of over  155 per  cent was being charged in the open market, and the  purchaser was  compelled to  pay a total of Rs. 152 per kilogram.  There are  several provisions  of the  Import Policy 1985-88  under which import of acrylic ester monomers

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is permitted.  They can  be  imported  by  Actual  Users  as specified in  paragraphs 82  (1) and  82(3) of  that  Import Policy read with Appendix V-D of the Hand Book of Import and Export procedures  1985-88. A  Registered  Exporter  holding Replenishment Licences  is entitled to import the item under paragraph 466 195(1) of  the Import  Policy  inasmuch  as  Ethyl  Acrylate Monomer and  Butyl Acrylate  Monomer appear  as item B.36 in Appendix 17  of the Import Policy. Under paragraph 204(1) of the Import  Policy, a  special facility  has been given to a manufacturer exporter  holding a valid Replenishment Licence issued in  his  name  against  exports  of  select  products manufactured by him to import the item specified in Appendix 3. It  is contended by Shri Venugopal that the Word "Banned" in the  order dated  April 18,  1985 of this Court should be interpreted  in   a  manner   consistent  with  Joint  Chief Controller of  Imports &  Exports, Madras  v. M/s. Aminchand Mutha etc., [1966] 1 S.C.R. 262 and Union of India & Ors. v. M/s. Indo-Afghan  Agencies Ltd.,  [1968] 2 S.C.R. 366 and it should, therefore,  be construed  as referring to the import of goods  into the  country and  not in  relation to the bar placed on  an individual to import goods which can otherwise be imported  into the  country. Even if the goods covered by the Licences  issued under  the Import  Policy 1978-79  were found to  be canalised  under the Import Policy 1985-88 and, therefore,  excluded   from  import   directly  by   private importers, the  licences would  still operate  in regard  to such  goods.   Learned  counsel  urges  that  the  word  "in accordance with  such rules" in the order of the Court would govern  only  the  manner  and  method  of  import  and  the procedure for  application, the  fees to be paid, the duties to be  paid and  other particulars  and does  not govern the entitlement to import the goods.      Shri S.J.  Sorabjee, appearing  for N.  Nayankumar  and Company, a respondent in Civil Appeal No. 3233 of 1984 filed by the Union of India against the order of the High Court of Bombay,  urges  that  there  is  a  fundamental  qualitative difference  between   the  goods  the  import  of  which  is prohibited and  goods the  import of  which is restricted or controlled. The  goods of  which import is prohibited cannot lawfully cross  the customs frontiers of India and enter the stream of  trade and commerce in the country. The expression "banned goods"  or "banned items", he says, as understood in the  discourse   of  the  import  and  export  trade,  means prohibited  goods.  Restricted  or  controlled  goods  whose import  is   permitted  into  the  country  subject  to  the fulfillment of  certain conditions, learned counsel submits, cannot be  described as  banned goods.  The feature  of non- importability is a characteristic or an attri- 467 bute of  the goods  themselves and  does not depend upon the person who  imports the goods. Our attention is drawn to the distinction  between  the  prohibition  of  prescription  of certain goods,  for example,  narcotics, counterfeit  coins, obscene and  seditious literature  on the one hand and goods the import  of which  is qualified  by the  category of  the person entitled  to import  the goods.  Canalised goods  are goods of  which import  is subject  to restriction,  in that they cannot  be imported  directly by  the private importers and such  goods are  not considered  "banned" goods.  It  is urged that  the import  of goods  can be  validly prohibited only by  an order  under s.3 of the Imports and Exports Act, 1947, and  learned counsel  refers to Aminchand Mutha’s case (supra) and  Jagannath Aggarwal  v. B.N. Dutts (Civil Appeal

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No. 801  of 1964  decided on January 10, 1967). According to the learned  counsel, it  is the  import of  only the  items mentioned in Appendix 2-A of the Import Policy 1985-88 which is covered  by a  notified order  under  the  Act.  No  such notified order  has been  made in  respect of  acrylic ester monomers. Learned  counsel points  out that  the ban  on the import of goods into India is to be found not only under the Imports and Exports Act, but under other enactments, such as the Customs  Act, the  Foreign Exchange  Regulation Act, the Drugs and  Cosmetics Act,  and the Insecticides Act. Learned counsel contends  that the  objective of  the orders  of the High Courts  and of  this Court was to effect restitution to aggrieved diamond exporters, who were victims of an unlawful denial of  their applications for Export House Certificates. It is  urged that  they are  entitled to  full and  complete restitution, and  they have suffered already a diminution of their rights  in the additional fetter imposed by the Courts in excluding  items which  were banned  under the  prevalent Import  Policy   at  the   time  of   import.  There  is  no justification, learned counsel contends, in further reducing the scope  of the restitution to which the diamond exporters were entitled  and  the  orders  of  the  Courts  should  be construed   against   any   further   reduction   of   their entitlement. It  is asserted  that the  entitlement  of  the diamond exporter  flows from  the Import  Policy 1978-79 and not from  the Import Policy 1985-88. There are several items which can  be imported  under the Additional Licences issued under Import  Policy 1985-88 but the import of which was not permissible to  Additional Licences holders under the Import Policy 1978-79  and, it  is said, if the construction sought by the appellant company and the Government of India 468 were accepted  the diamond  exporters would suffer the worst under both  Import Policies  and  even  partial  restitution accorded by  the order  dated April  18, 1985  of this Court would be  nullified. Finally,  learned counsel contends that assuming there  is an  ambiguity in  the  matter  we  should choose such a construction as would not subject the party to pains and  penalties under various statutes besides the loss and hardship  which would  be inevitable. That two views are possible, it  is pointed  out, is evident from the fact that the Import  Control authorities have taken the view that the expression "specifically banned" in the orders of the Courts does not  include items  placed on  the Limited  Permissible List of the Import Policy 1985-88.      Shri Ashok  Desai, appearing  for  Rajnikant  Brothers, Respondent No. 5, relies on considerations somewhat parallel to those  placed before  us by  Shri Sorabjee  and urges  in particular that the right of the importer to an Export House Certificate and  to a  consequential licence  does not alter with variations  affected in  the Import  Policy during  the passing of  time when  litigation was  pending  and  is  not dependent on  the exact  point of time at which the benefits were made available. In construing the order dated April 18, 1985 of  this Court, learned counsel states that the central objective of  effecting restitution  should be borne in mind and that  the  entitlement  to  the  Additional  Licence  is founded in  the Import  Policy 1978-79 and not in the Import Policy 1985-88  and, it is said, paragraph 265 of the Import Policy 1985-88  cannot be  invoked for construing the rights of the  holders of  Additional  Licences  issued  under  the Import Policy  1978-79.  The  successive  screening  of  the rights through the two Import Policies, of 1978-79 and 1985- 88, would  result in a construction so severe as to deny the diamond exporters  any restitution  at all.  Learned counsel

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cites, as  an example of the scope which this Court intended in its  order dated  April 18,  1985, the  direction in that order that the canalisation of items under the Import Policy 1985-88, which  were open  to direct import under the Import Policy 1978-79,  cannot operate as a restriction. It is said that the  ban against  direct import  by  private  importers imposed by  canalisation as  thus removed, and the invention of the  court always  was that  only the items "specifically banned" fell  within the  exception to  the  rights  of  the diamond exporter, "specifically banned" items being those 469 absolutely banned  and appearing  in  Appendix  2-A  of  the Import Policy 1985-88.      Shri  Anil   Dewan,  who  appears  for  Messrs  Hiralal Chaganlal and Shrijee Sales Corporation, Intervenors in this civil appeal,  has also  been heard  by us. He contends that the expressions  used by  the courts in their orders must be understood in  the sense  in which  those  involved  in  the import of  goods and  in import  licensing  understand  such expressions, and  that if  the construction suggested by the appellant Company  and the  Union of  India is  accepted the diamond exporters  would be wholly prohibited from obtaining an Additional  Licence under  the Import Policy 1985-88. The expression "specifically  banned" must, according to learned counsel, refer to items the import of which is banned not by reference to  the person  importing, but  because  they  are prohibited from any import whatsoever. Reference was made to the change  in the  headings of the Appendices in successive Import Policies  and, it is urged, the change of the heading "List of Banned Items" in Appendix 3 to the heading "List of Limited Permissible  Items" must  be given due significance. In other  words, items which were banned are now regarded as open to restricted import. Besides this, learned counsel has adverted to  the particular  facts of  his case, and asserts that while  his case  was not  one of those in appeal before this Court  and therefore  not directly covered by its order dated April  18, 1985,  no appeal  had  been  filed  by  the Government against the grant of licence in the case of these two diamond  exporters, and  that the said diamond exporters had opened  irrevocable Letters  of Credit  before the  writ petition filed  by the  appellant company,  full payment had been made  and foreign  exchange had  left the  country, and shipments had  been effected  in June, 1985, and the Customs authorities had  interpreted the order in their case to mean that the goods imported were not "banned". It is pointed out that only a small quantity of 32 tonnes had been detained at the port,  that the insurance cover of the shipper or seller no  longer  covered  the  goods,  that  the  goods  were  of hazardous nature  and were  lying uninsured,  and he  prayed that the goods should be allowed to be cleared.      We think  it necessary  to keep  in the  forefront  the limits of  the enquiry  before us. We are not concerned with the question of what order should be made on the controversy 470 arising between the parties in the appeals. The Appeals have already been disposed of. They were disposed of by the order dated April  18, 1985. It is not our function to redetermine the issues  arising in  those appeals,  and this  is  not  a rehearing of  those appeals.  We are  charged  with  a  more limited and  pedestrian task. And that is merely to construe the meaning and scope of the order dated April 18, 1985. The submissions of  learned counsel  have  been  thoughtful  and elaborate, and  having regard  to the  range covered by them they would  have done  justice to  a  full  hearing  of  the appeals themselves.  We can  take assistance  from them, but

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only for  the purpose  of discovering  what has been said by the Court  in its  order of April 18, 1985. That defines the scope of the present proceeding.      The terms  in which  the order  has  been  made  appear simple on the surface, and yet as the range and depth of the contentions at  the Bar  have demonstrated,  they  embody  a certain complexity.  At  the  outset,  it  is  necessary  to examine the  context in  which the  order was  made. Diamond exporters, who  had been  denied  Export  House  Certificate under the Import Policy 1978-79, filed writ petitions in the High Court  of Bombay  and the High Court of Delhi. The High Courts ruled  that the  ground on  which  the  Export  House Certificates had  been refused  was wholly  untenable.  They directed the  issue of  such Certificates  as  well  as  the consequent Additional Licences, but while defining the right of  the   diamond  exporters   to  import  items  under  the Additional Licences  they also  took into account the Import Policy prevailing  at the  time of  import in  regard to the items which  could not  be imported.  The  pendency  of  the litigation  had  inevitably  occupied  time,  and  meanwhile events had not remained stationary. The contextual framework determining the import structure had altered. Considerations pertaining to  current economic  and fiscal needs had led to the periodic  reorientation of  the country’s Import Policy. Indigenous industry  had put  in appearance  over the years, and it was necessary to protect its growth and encourage its development. Many  items which  could formerly  be  imported with comparative  freedom under Open General Licence were no longer so permissible. And, therefore, items were moved from one List  to another. There was a change in the nomenclature of the  Headings of  different Lists,  but that  change  was effected merely  by way of clarification in order to promote a clearer  comprehension among  foreign countries of India’s import 471 policy. it was a change essentially in nomenclature, and for the most  part effected no alteration in the basis governing the classification  reflected in the Lists. The basis of the classification  was   supplied  by   the   principle   which determined the  constitution of  each group.  That principle bound the  group together.  It was  a principal  which along with others  formed the  network of  principles constituting the current  Import Policy. It is in this light that we must understand the  order dated  April 18, 1985. The Courts were confronted with  the problem  that items  which were open to import under Open General Licence to an Export House holding an Additional  Licence were  no longer included in that List and had  meanwhile been transferred to a List not accessible to the  holders  of  Additional  Licences.  me  dictates  of reality rendered  it necessary  for the  Courts to take into account the altered situation, and this they attempted to do by framing  their respective  orders in  appropriate  terms. They took  into account  not only  the rights of the diamond exporters under  the Import  Policy  1978-79  but  also  the effect and  impact on  those rights  of  the  Import  Policy operating at the time of the import.      It is  desirable at this point to keep in mind that the appeals filed  in this  Court against the orders of the High Courts were  appeals filed by the Union of India. There were no appeals  by the  diamond exporters.  The complaint by the Union of  India before  this Court  was that the High Courts had granted  too much  to the diamond exporters or even that no grant  was called  for at  all. There was no complaint by the diamond  exporters before  the Court  that the grant was insufficient and  that more  should have  been granted. This

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Court was  required to  consider  only  whether  the  relief granted by  the High Courts should have been granted at all, not whether it should be enhanced. In other words, the terms of the  High Court  orders determined the outer limit of the rights of the diamond exporters. As this Court dismissed the appeals and  affirmed those orders, the meaning and scope of this Court’s  order dated  April 18, 1985 must be discovered from the  terms of  the High  Court orders.  And that  would plainly be  so because  the language  in which  the order of this Court  is couched  bears close  comparison with  one or other of the High Court orders.      In construing  the order  dated April  18, 1985 of this Court, it is necessary to note that the real controversy 472 between the  parties centres  on the  meaning of  the  words "specifically banned".  They are  the key  words, and indeed the principal  submissions made  by  the  array  of  learned counsel before  us have  been devoted  to  ascertaining  the significance of  those words. They are words which were used by Pendse,  J. and  Bharucha, J. in the orders made by them, and our task is to find out what they were intended to mean. Now, all  the appeals  before this Court were disposed of by the order  dated April  18, 1985.  It was  a single order in respect of  the different  appeals, and  what lt intended to say in  one appeal it did in another. The Court proceeded on the assumption  that the  Judges of the High Court of Bombay should be  considered to  have spoken  with  one  voice  and meaning although in different language. And that Pendse, J., Bharucha, J.  and Sawant, J. were all in agreement as to the extent of  relief to be granted to the diamond exporters. To appreciate then  what is intended by the words "specifically banned" it  is necessary  to have recourse also to the order made by  Sawant. J. He directed that the Additional Licences were valid  for the  import of  items permissible  to Export Houses under  such Licence according to paragraph 176 of the Import Policy  1978-79  "excluding  those  items  which  are banned for  the period  1978-79 and  which have  been banned during the  Import Policy  for the period 1984-85," and then explained that  "banned items  referred to  above mean items which  are   ’banned’  and  ’absolutely  banned’.  The  word "banned" in  that order has been used for the period 1978-79 , and  it has also been used in relation to the period 1984- 85. It  is obvious  that in  the light  of  the  explanation appended by  the learned  Judge when he spoke of items which were banned  for the  period 1978-79,  he had  in mind items which  were   "banned"  and  items  which  were  "absolutely banned", and he was clearly referring to Appendix 3 (List of Banned Items)  and Appendix  4 (List  of  Absolutely  Banned Items). Appendix  3, it  will be  recalled, 5;  the list  of items which  could not  be imported by an Export House on an Additional Licence.  It was  a ban  with  reference  to  the category of  importer. Appendix 4 is the list of items which could not  be imported  by anyone  whosoever. When regard is had to the Import Policy 1984-85, reference must necessarily be made  to the corresponding Appendix 3, formerly described as the  List of  Banned Items, and now described as the List of Limited Permissible Items, and Appendix 2 Part A which is now the  List of  Banned Items replacing Appendix 4 (List of Absolutely Banned Items). In 473 other words, the Additional Licences to be issued to diamond exporters entitled  them  to  import  items  permissible  to Export Houses  under such  Licence under  the Import  Policy 1978-79 excluding those items which fell within Appendices 3 and 4  of the Import Policy 1978-79 and also excluding items

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which fell in Appendix 3 and Appendix 2 Part A of the Import Policy 1984-85.  Upon what we have said earlier, that is the meaning which  we think  must also  be given to the terms of the order  dated April  18, 1985  of this  Court. Where  the Import Policy prevailing at the time of import is the Import Policy 1985-88,  the items  excluded are those enumerated in the corresponding  Appendix 3  and Appendix 2 Part A of that Import Policy.  That conclusion  follows irresistibly on the analysis attempted  by us  and in  the context  in which the order was made.      We are  mindful of  the submissions  made before  us by learned counsel for the different diamond exporters that the word "banned" in the import trade should mean item which are absolutely  banned   and  cannot   be  imported   under  any circumstance whatever,  and that  an import of items subject to restrictions  respecting the  category of importer should not fall  within the  expression "banned". Reliance has been placed on  Awinchund Mutha’s  case (supra)  as well as Indo- Afghan Agencies  Ltd.’s case (supra). Goods can be banned it is urged,  only by  an order  under s.  3 of the Imports and Exports Act, 1947, and we are referred to Jagannath Aggarwal v. B.N.  Dutta (supra) (Civil Appeal No. 801 of 1964 decided on January  10, 1967).  It seems  to us  that when  the word "banned" was  used, it  was intended  to take in items which were banned  altogether as  well as  items which were banned for import by the holder of an Additional Licence. The Court was concerned  with the  right to import of the holder of an Additional Licence.  The holder of an Additional Licence was prohibited from importing items which were banned altogether and also  items which  he, as  the holder  of an  Additional Licence, was  banned from  importing. If  the  more  liberal interpretation suggested  by learned counsel for the diamond exporters was  given to  the words  "specifically banned" we would be  enlarging the  scope of relief granted by Sawant 7 J., and such a construction is clearly impermissible when no diamond exporter had appealed against that order before this Court. It  may be  of some  relevance to note that when this Court made  the order  dated April  18, 1985 when the Import Policy 1985-88 was in force, there were only two items 474 which were  absolutely banned,  and they  were animal tallow and animal  rennet. That was also substantially the position under the Import Policy 1984-85.      It has  been urged  on behalf of the respondent diamond exporters  that  if  the  order  dated  April  18,  1985  is constured in  the manner suggested by the appellants it will result in  nullifying the  relief envisaged  by the Court in making the  order. We  are unable to subscribe to that view. In the Import Policies of 1984-85 and 1985-88 the items open to import  under Open  General Licence  are now set forth in Appendix 6.  A perusal  of Part  II of  List 8 in Appendix 6 shows that  it enumerates  in fairly  long detail  the items allowed to  be imported  by Export Houses holding Additional Licences for  the sale  of those  items to  eligible  Actual Users (Industrial) subject to Actual User Condition. That is the entitlement of the holder of an Additional Licence under paragraph 265(4) of the Import Policy 1985-88.      We are  conscious that  the right of a diamond exporter to an  Additional Licence  does not issue from paragraph 265 of the  Import Policy  1985-88. Paragraph  265  enables  the grant of  Additional Licences  to other  Export Houses,  and diamond exporters  are not  entitled to  Additional Licences under that  Import Policy.  There can be no dispute that the Export House  Certificates granted  to the diamond exporters pursuant to  the orders of the High Courts and of this Court

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are those envisaged under the Import Policy 1978-79. But for the purpose  of granting  relief in  their favour the Courts took into  account the  conditions prevailing at the time of import, and  therefore the  provisions of  the Import Policy 1985-88 become  relevant. They  are relevant for the purpose of construing  the terms in which relief has been granted by the Courts.  They do  not constitute  the  source  of  those rights.      Great emphasis  has been laid by learned counsel on the overriding consideration  that the intent of the High Courts and of  this Court  was to effect restitution to the diamond exporters, who  had been denied Export House Certificates to which  they   were  clearly   entitled,  and   there  is  no justification, it is said, for so construing the order dated April  18,  1985  that  the  extent  of  restitution  stands attenuated. We  think it  necessary to  point out  that  the diamond exporters  cannot,  upon  our  construction  of  the order, 475 be regarded  as  denied  restitution.  But  the  restitution available to  them has been reduced by the express direction of the  Court that  they are  not entitled  to import  items excluded under  the Import  Policy prevailing at the time of import in addition to those excluded under the Import Policy 1978-79.  We   may,  in   this  connection,   refer  to  the observations of  this Court  in Manickchand’s  case  (supra) where it was pointed out:           "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.      It seems  to us  that the  construction placed By us on order dated  April 18, 1985 is consistent with the principle that the  Court must be presumed to have given effect to the law. That  presumption can  be rebutted  only upon  evidence showing a  clear intention to the contrary, either expressly or by  necessary implication. We see no such evidence before us. En  passant, we  may refer  to paragraph  35(1)  of  the Import Policy 1985-88, which declares :           "35.(1). REP licences and Additional licences held           by Export  Houses/Trading Houses  will cease to be           valid for  import  of  any  item  which  could  be           imported under  Open General  Licence  during  the           preceding licencing  year or  earlier  but  is  no           longer so in this Import-Export Policy."      But while  the construction  suggested by the appellant company and  the Union of India of the order dated April 18, 1985 of  this Court  has found  favour with us, the scope of the relief  to be  granted remains  to  be  considered.  The interim orders  passed by the Court in this appeal were made on the  basis that  they operate  in respect  of all diamond exporters seeking  to import acrylic ester monomers pursuant to the  Additional Licences issued to them and this case has been heard  on the  assumption that  the orders  made on the appeal 476 will govern  all such diamond exporters. In drawing up those orders, a  few facts  need to  be carefully  considered.  As mentioned earlier,  consequent upon  the rejection  of their applications for  Export House Certificates under the Import

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Policy 1978-79  a number of diamond exporters approached the High Court  of Bombay  and the  High Court of Delhi and were granted relief.  The directions  made  by  the  High  Courts issued in  a steady and continuous stream from the year 1980 onwards, and the High Court of Bombay in particular detailed the facilities  to which  the  petitioner  diamond  exporter would  be   entitled  on   the  issue  of  an  Export  House Certificate. me  orders continued  all the way upto January, 1985. Appeals  filed by the Union of India in the High Court of Bombay  against the  orders  of  the  respective  learned Single Judges were dismissed by a Division Bench of the High Court and  those orders  were affirmed. In the writ petition filed by  Messrs. Vijay Trading Company in the High Court of Delhi,  the  High  Court  had  directed  that  although  the petitioner was  entitled to  an Export House Certificate for the year  1978-79 it would be entitled to import those items only which  were not  banned in  the year  1980-81, the writ petition having  been taken up for hearing during that year. A Special  Leave Petition by the union of India against that order was  dismissed by  this Court  on April  18, 1983.  An application by  the Union  of India for review of that order was dismissed  by this  Court on May 4, 1984. Meanwhile, the Union of  India appealed to this Court against the orders of the High Court of Bombay and of the High Court of Delhi made in favour  of the  diamond exporters  in the  writ petitions filed by  them and it has not been shown that any stay order was granted by this Court in those appeals. The appeals were heard along  with several  special leave  petitions by  this Court, and  were dismissed by the order dated April 18, 1985 in terms  which, as has been mentioned earlier, affirmed the High Court  orders. The appellant company in this case filed a writ  petition in  the High  Court of Bombay and that writ petition  was  dismissed  on  August  12,  1985.  Meanwhile, Additional Licences  had been  issued to some of the diamond exporters by  the Import Control Authorities, and it appears clearly from  the affidavit of Dr. R.K. Dhawan, Deputy Chief Controller of  Imports and Exports and the affidavit of Shri Kanayalal J.  Chellani, Deputy  Chief Controller  of Imports and Exports  that the  Import Control Authorities themselves considered that  the diamond  exporters  holding  Additional Licences were entitled to import all the 477 items accessible  to them  under Open  General Licence under the Import  Policy 1978-79 except those placed in Appendix 2 Part A  of the  Banned List under the Import Policy 1985-88. It also appears that some of those diamond exporters who had been granted  Additional Licences  pursuant to the orders of the High  Courts have  already fully utilised those Licences and in some cases have partly utilised them. Throughout this period any  diamond exporter  granted an  Additional Licence under the  Import Policy  1978-79 could  bona  fide  believe having regard  to the  ccnsistent orders  made by the Courts and the  equally  consistent  manner  in  which  the  Import Control Authorities  had construed those orders, that he was entitled to  effect imports accordingly. Many of them opened irrevocable Letter  of Credit  on orders placed with foreign suppliers convinced  that they were fully entitled to import the items ordered by them. This popular impression continued unabted until  October 18,  1985, when  for the  first  time since lt  all began this Court made an order, on the Special Leave Petition  giving rise  to the  present appeal (Special Leave was granted on November 5, 1985), imposing a restraint on the  clearing of  acrylic ester  monomers by  the customs authorities. The date, October 18, 1985, is a critical date, because for  the first time diamond exporters can be said to

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have been  warned that  the  Court  could  possibly  take  a different view  from that prevailing hitherto. Meanwhile, as we have  said, some  of the  diamond exporters  had  already irretrievably   committed    themselves   by   opening   and establishing irrevocable  Letters of  Credit.  We  think  it appropriate that  those diamond  exporters who  were granted Additional Licences  under the Import Policy 1978-79 and had opened and  established irrevocable Letters of Credit before October 18,  1985 should  be permitted,  notwithstanding the construction we  have placed  on the  order dated  April 18, 1985 of  this Court,  to clear  the goods imported, or to be imported, by  them pursuant  to such  irrevocable Letters of Credit. In  other words,  all imports  effected pursuant  to such Letters of Credit should be deemed to have been legally and properly made, ant should entail no adverse consequences whatsoever, In  taking this  view we  are impressed  by  the broad principles of justice, equity and fair play and by the need to  avoid undeserved hardship, and we are not persuaded to the  contrary by  legal technicalities.  We may point out that the  validity of  this principle has been recognised in paragraph 35(3)  of the  Import Policy 1985-88 itself, where while declaring  that Additional  Licences issued  to Export Houses in the Preceding licencing 478 year or  earlier shall  cease to  be valid for the import of items of  spares appearing  in certain Appendices, including Appendix 3,  of the  Import Policy for the licencing year an exception  has   been  carved   out  insofar   that   "these restrictions will  not  apply  to  the  extent  the  licence holders have made firm commitments by irrevocable Letters of Credit opened  and established..........  before  1st  April 1985", the  date when  the Import  Policy 1985-88  came into force.      At  the  same  time  we  make  lt  clear  that  diamond exporters who  pursuant to  the issue of Additional Licences under the  Import Policy 1978-79 have opened and established irrevocable Letters  of Credit  on or after October 18, 1985 will not be entitled to the benefit of this order.      The appeal,  and therefore  the writ  petition filed by the appellants,  are disposed  of accordingly.  There is  no order as to costs. A.P.J 479