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PETITIONER: GLASS CHATONS IMPORTERS & USERS’ ASSOCIATION

       Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT: 10/04/1961

BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS GAJENDRAGADKAR, P.B. SARKAR, A.K. WANCHOO, K.N. AYYANGAR, N. RAJAGOPALA

CITATION:  1961 AIR 1514            1962 SCR  (1) 862  CITATOR INFO :  R          1962 SC 386  (27)  RF         1962 SC1796  (12,13)  R          1963 SC1470  (8)  RF         1972 SC 935  (5)  F          1973 SC2711  (13,14,15,17)  R          1974 SC 366  (96)  RF         1975 SC1564  (28)  R          1979 SC 314  (12)  R          1984 SC1271  (6)

ACT: Import  and  Export--Decision  to  canalise  import  through specialised      channel      or      agency--Constitutional validity--lmport  and  Export Control  Act,  1947--(XVII  of 1947),   s.   3--Imports  (Control)   Order,   1955,   Para. 6(h)--Constitution  of India, Arts, 14, 19(1)(f) &  (g)  and 31.

HEADNOTE: The appellants were importers and users of glass chatons the import  of  which  was prohibited  except  under  a  licence granted  by the licensing authorities under the  Import  and Export  Control Act, 1947, and the Imports (Control)  Order, 1955.   The import was totally prohibited for some time  but afterwards  it  was  permitted under  the  Export  Promotion Scheme and licence was issued in favour of the State Trading Corporation.   The  appellants who made no  application  for licence  contended inter alia that the provisions  of  para. 6(h) of the Imports (Control) Order, 1955, that the  Central Government  or the Chief Controller of Imports  and  Exports may  refuse  to  grant a licence  or  direct  any  licensing authority  not to grant licence if the  licensing  authority decided  to  canalise imports and the  distribution  thereof through  special  or specialised agencies  or  channels  are unreasonable restrictions on the right to carry on trade 863 and  to  acquire property and as such contravene  Arts.  14, 19(1) (f) & (g) and 31 of the Constitution. Held,  that  the  decision  that  import  of  a   particular

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commodity  shall  be  canalised by  a  selected  channel  or through selected agencies is a reasonable restriction in the interest of the general public. The provisions of para. 6(h) of the Imports (Control) Order, 1955 and s. 3 of the Imports and Exports Control Act,  1947, are valid and do not contravene Arts. 14, 19(1)(f) and  (g). Nor  do  they contravene Art. 31 of the Constitution  as  no question  of acquisition of any right arises by the  refusal of a licence.

JUDGMENT: ORIGINAL JURISDICTION: Writ Petition No. 65 of 1959. Petition  under  Art. 32 of the Constitution  of  India  for enforcement of Fundamental Rights. B. D. Sharma, for the petitioners. H. N. Sanyal, Additional Solicitor-General of India, B. Ganapathy Iyer and P. M. Sen, for the respondents. 1961.  April 10.  The Judgment of the Court was delivered by DAS  GUPTA,  J.-This  application  under  Art.  32  of   the Constitution  is  for the protection of  fundamental  rights under  Art.  19(1)(f) and (g), Art. 31 and Art.  14  of  the Constitution.   The  second  and the  third  applicants  are merchants  who  used to import  considerable  quantities  of glass  chatons  upto  1957.   The  first  applicant  is   an Association  of merchants, some of whom were  importers  and some  the  actual users of glass chatons.  Import  of  glass chatons-which  form an important part of the  raw  materials for  the  manufacture  of glass bangles  and  other  similar articles of wear could, be made only on licences granted  by licensing authorities.  Since 1955 the matter has been regu- lated  by  the Imports (Control) Order,  1955.   This  Order which  was  made by the Central Government  in  exercise  of powers  conferred  by sections 3 and 4-A of the  Import  and Export  Control Act, 1947, prohibited the import of a  large number  of goods including inter alia glass chatons,  except under  and,  in  accordance  with  a  licence,  granted   on application by the licensing 864 authorities under the Act.  Policy statements are made  from time  to  time by the Government of  India,  indicating  the policy  for  the issue of Import licences.   The  policy  as regards the import of glass chatons for the period  January, 1957  to  the  end of March, 1958 was that  the  import  was totally  prohibited.’ Since April 1958, the policy  as  laid down  is  that import was permitted only  under  the  Export Promotion  Scheme.  It appears that in’ view of this  policy statement  no application was made at all by the  second  or third applicants or other merchants for the import of  glass chatons, in 1957 or thereafter and no licence was issued  to them.   Licences were however issued in favour of the  State Trading Corporation, for the import of glass chatons of  the value  of  five  lakhs  of Rupees,  for  the  period  April- September, 1958,and again, for the import of these goods  of the  value of Rs. 1,25,000 for the period October,  1958  to March, 1959.  The present application was made on April  27, 1959.   The  prayer is that respondents 1  and  2-i.e.,  the Union of India and the Chief Controller, Imports, should  be directed  (i)  to  "forbear from giving  the  State  Trading Corporation  any  preference over the  petitioners,  in  the grant  of permits", (ii) not to create a monopoly in  favour of the State Trading Corporation, (iii) to cancel the import permits  already granted in favour of respondent No.  3--the State  Trading Corporation and the petitioners  also  prayed

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that the. respondent No. 3 should be directed not to  import on the basis of import licences already granted. It  has  to  be mentioned at once that the  periods  of  the import  permit  "already  granted" as  referred  to  in  the petition has already expired and consequently, the last  two prayers  mentioned above cannot possibly be granted.   There was  no  application  at all by the  second  and  the  third applicants,   or   any  of  the  merchants  who   form   the association,  the 1st appellant for the issue of any  import licences; there can be no question therefore of  respondents 1  and 2 being given any preference over the petitioners  in the  grant  of permits Nor is there, as far as can  be  made out, any scheme to issue fresh licences in favour of the 865 State  Trading  Corporation  so that  apart  from  what  has already  happened there is no question of any future  action "to  create  a  monopoly  in favour  of  the  State  Trading Corporation".  Therefore the petitioners cannot be given any relief on the present application. Learned Counsel however submitted that so long as Para. 6(h) of  the  Imports (Control) Order, 1955, remains it  will  be useless  for  his  clients  to  make  any  application   for licences.   Para. 6 lays down a number of grounds  on  which the  Central Government or the Chief Controller  of  Imports and  Exports  may refuse to grant a licence  or  direct  any other  licensing  authority  not to grant  a  licence.   The ground  mentioned  in the clause (h) is  "if  the  licensing authority  decide to canalise imports and  the  distribution thereof   through   special  or  specialised   agencies   or channels".   Learned Counsel has argued that this  provision in  clause (h) of Para. 6 is void being in contravention  of Art. 19(1)(f) and (g), and Art. 31 of the Constitution.   He also  urged  that  to the extent s. 3  of  the  Imports  and Exports Control Act, 1947, permits the Central Government to make an order as in Para. 6(h) s. 3 itself is bad.  In  view of  these submissions the learned Counsel was  permitted  to urge  his contentions against the validity of Para. 6(h)  of the  Imports  (Control) Order, 1955, and  also  his  limited attack  against  the  validity of s. 3 of  the  Imports  and Exports Control Act, 1947. The  requirement  as regards any goods that they  cannot  be imported  except  and  in  accordance  with  a  licence   is undoubtedly a restriction on the right to carry on trade  in such  goods  and  also on the  right  to  acquire  property. Learned Counsel does not however contend that by itself this requirement  of s. 3 of the Imports and Exports Control  Act is an unreasonable restriction.  His attack is only  against the further restriction which follows from the provisions in s.  6(h)  of the Order that the Central  Government  or  the Chief Controller of Imports and Exports may refuse to  grant a  licence  or direct any licensing authority not  to  grant licences-"if  the  licensing authority decides  to  canalise imports and the distribution thereof 866 through  special or specialised agencies or channels".   The argument  is-that the further restriction. on the  right  to carry  on  trade  and the right  to  acquire  property  that results from this provision is totally unreasonable. It is obvious that if a decision has been made that  imports shall be by particular agencies or channels the granting  of licence to any applicant outside the agency or channel would frustrate the implementation of that decision.  If therefore a canalization of imports is in the interests of the general public the refusal of imports licences to applicants outside the  agencies or channels decided upon must  necessarily  be

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held also in the interests of the general public.  The  real question  therefore is: Is the canalization through  special or specialized agencies or channels in the interests of  the general public. A  policy as regards imports forms an integral part  of  the general  economic policy of a country which is to  have  due regard   not  only  to  its  impact  on  the   internal   or international  trade  of the country but  also  on  monetary policy,  the development of agriculture and  industries  and even  on  the political policies of  the  country  involving questions of friendship, neutrality or hostility with  other countries It may be difficult for any court to have adequate materials to come to a proper decision whether a  particular policy as regards imports is, on a consideration of all  the various  factors involved, in the general interests  of  the public.   Even if the necessary materials were available  it is  possible  that in many cases more than one view  can  be taken whether a particular policy as regards imports-whether one  of heavy customs barrier or of total prohibition or  of entrustment  of imports to selected agencies or  channels-is in  the general interests of the public.  In this  state  of things  the  burden  on  the  person  challenging  that  the government  of the country is not right in its  estimate  of the  effects of a policy as regards imports in  the  general interests  of the public will be very heavy indeed and  when the   Government  decides  in  respect  of  any   particular commodity that its import should be by a selected. 867 channel or through selected agencies the Court would proceed on the assumption that that decision is in the interests  of the  general public unless the contrary. is  clearly  shown. Consequently,  we are unable to accept the argument  that  a decision  that imports shall be canalised, is per se  not  a reasonable  restriction  in  the interests  of  the  general public.   We wish to make it clear that while  the  decision that import of a particular commodity will be canalised  may be  difficult to challenge, the selection of the  particular channel or agency decided upon in implementing the  decision of canalisation may well be Challenged on the ground that it infringes  Art.  14  of  the  Constitution  or  some   other fundamental  rights.   No such question has how.  ever  been raised  in the present case.  The attack on the validity  of Para.  6(h) of the Imports Control Order,  1955,  therefore, fails.  The contention that s. 3 of the Imports and  Exports Control Act, 1947, is bad to the extent that it permits  the government to make an order as in Para. 6(h) of the  Imports Control Order, 1955, consequently also fails. The attack on this provision in Para. 6(h) of the order that it contravenes Art. 31 is not even plausible.  Assuming  for the purpose of this case that the right to carry on trade is itself  property,  it is obvious that there is  no  question here  of the acquisition of that right.  What happens  if  a licence is refused to an applicant under Para. 6(h) is  that the  applicant can no longer carry on trade in these  goods. When licence is granted to the agencies or channels  through which  imports  have  been decided to  be  canalised,  these agencies  or  channels ’can carry on trade but this  is  not because  of an acquisition by these agencies or channels  of the   right  to  carry  on  trade  which  the   unsuccessful applicants for licence had.  Article 31 of the  Constitution has therefore no application. It  was next urged that the grant of licences to  the  third respondent,  the  State Trading Corporation of  India  while none   has  been  granted  to  the  second  and  the   third petitioners has resulted in a denial of equal protection  of

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laws  guaranteed by Art. 14 of the Constitution.   If  these petitioners had applied for licences 868 trader  the  Export  Promotion Scheme and  still  the  State Trading  Corporation  had been preferred it  would   perhaps have  been  necessary  to consider  whether  the  preference accorded  to  the Corporation was based  on  reasonable  and rational  grounds.  It is clear however that though  it  was open  to these petitioners to apply for licences  under  the Export Promotion Scheme they made no application for licence thereunder.   There is to scope therefore for  the  argument that they have en discriminated against. In  the result, we are of opinion that the  petitioners  are not  entitled  Iwo  any relief under Art.  32  of  the  Con. stitution.   The  petition  is  accordingly  dismissed  with costs.                 Petition dismissed.