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PETITIONER: PEMA CHIBAR ALIAS PREAMABHAI CHHIBABHAITANGAL

       Vs.

RESPONDENT: UNION OF INDIA AND OTHERS

DATE OF JUDGMENT: 09/08/1965

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. GAJENDRAGADKAR, P.B. (CJ) HIDAYATULLAH, M. SHAH, J.C. SIKRI, S.M.

CITATION:  1966 AIR  442            1966 SCR  (1) 357  CITATOR INFO :  R          1971 SC 846  (7)  R          1975 SC1208  (20)  R          1981 SC1946  (18,26,27,28,30,31,32)

ACT: Goa,  Daman and Diu (Administration) Ordinance (2 of  1961). s.  7(1);  Goa,  Daman and Diu (Administration)  Act  (1  of 1962),  ss.  5  and  9(1) and  Goa,  Daman  and  Diu  (Laws) Regulation  (12 of 1962), s. 4(2)-Scope  of-Import  licences granted before conquest-Right if can be enforced.

HEADNOTE: The  petitioner  a  resident of Daman  a  former  Portuguese territory  in  India,  became  a citizen  of  India  on  the acquisition of that territory by the    Government of  India on the 20th December 1961, by conquest.    He  had  obtained licences between 9th October and 4th December 1961,.for  the import  of various goods.  They were valid for a  period  of 180 days and could be renewed for a further period.  On 30th December,  1961  the  Military  Governor  of  the  conquered territory,   issued   a   Proclamation   with   respect   to arrangements  for trade, recognising only certain  types  of imports.   The imports of the petitioner under his  licences were  not among those recognized, and so he tried to  obtain extension  of  the period covered by the  licences.   Having failed  to  do so he filed a petition under Art. 32  of  the Constitution,  contending  inter alia that : (i)  under  the Goa, Daman and Diu (Administration) Ordinance, 1961  promul- gated  on  5th  March  1962  and  the  Goa,  Daman  and  Diu (Administration)  Act, 1962, which replaced  ,he  Ordinance, the  previous laws in those territories were to continue  as from 5th March 1962 and therefore it amounted to recognition by  the Government of India of all rights flowing  from  the previous  laws  including the petitioner’s right  under  the licences-,  (ii)  s. 4(2) of the Goa, Daman and  Diu  (Laws) Regulation,  1962,  which came into force  on  November  22, 1962,   preserved  any  right,  privilege,   obligation   or liability  acquired, accrued or incurred under the  repealed law, and therefore the petitioners right under the licence,%

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which  were  issued under the former laws as to  export  and import  which were repealed, were preserved; and  (iii)  the petitioner was discriminated against in violation of Art. 14 of the Constitution. HELD  : (i) The petitioner could not rely on the  mere  fact that  the old laws were continued, because, there was  never any  recognition of the right of the petitioner,  under  the licences which he held, by the Government of India which was a new sovereign.  The petitioner was therefore not  entitled to  ask  the Court to compel the respondent  to  honour  the licences. [365 H; 366 A-B] In  cases  of  acquisition of  territory  by  conquest,  the residents  of’  the territory did not carry  with  them  the rights which they possessed as, subject of the ex-sovereign, and that as subjects of the new sovereign  they had    only such  rights  as  are  granted  or  recognised  by  the  new sovereign.     In  the  face  of  the  proclamation  of  the Military Governor it would be impossible  to infer from  the mere fact that the old laws were continued   that there  was recognition  of other liabilities arising therefrom  by  the new sovereign. [360 D; 364 B-C] Besides,  the old laws were not in force from 20th  December 1961  to 5th March 1962.  Section 7(1) of the Ordinance  and s. 8(1) of the, 358 Act,  show  that  as  between  ,he  subjects  and  the   new sovereign,   the   old  laws  did  not  continue   in   that interregnums  and that was why it Was provided  that  things done and action taken by various authorities were validated. Therefore,  the proclamation of 30th December  which  showed what  kind  of import licences would be recognised,  was  in accordance  with  law,  which moans  that  the  petitioner’s imports were not recognised. [364 H; 365 A, B] State  o’  of Rajasthan v. Shyamlal, [1964] 7  S.C.R.,  174, explained. (ii) As  the  petitioner’s  licences were  of  a  date  even anterior  to  the  acquisition  of  the  former   Portuguese territories,  s. 4(2) of the Regulation would not help  him. That section would have helped him if his licences had  been granted  on or after 5th March 1962, because the  Regulation repeals laws which were in force only from that date and the section saves rights acquired under them.[366 B-C] (iii)     The petitioner failed to establish that there  was any discrimination. [366 D]

JUDGMENT: ORIGINAL JURISDICTION : Writ Petition No. 120 of 1965. Petition under Art. 32 of the Constitution of India for  the enforcement of Fundamental Rights. R.   M.  Seshdari,  Sadhu Singh, B. R. Agarvwala and  H.  K. Puri, for ’he  petitioner. S.   V. Gupte, Solicitor-General, R. H. Dhebar and R. N. Sachthey, for the respondents. The Judgment of the Court was delivered by Wanchoo  J. This writ petition under Art. 32 of the  Consti- tution  is  by  a former Portuguese citizen,  who  became  a citizen  of  India after the acquisition of  the  Portuguese territories in India by the Government of India on  December 20,   1961.   It  may  be  mentioned  that  the   Portuguese territories  were acquired by India after  military  action. The  petitioner  was resident in Daman and had  obtained  23 licences  for import of various goods between October 9  and December  4,  1961.  The goods to be  imported  under  these

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licences were of the value of over one million pounds.   The licences  were valid for a period of 180 days from the  date of  issue  and could be renewed for a further  period.   The case for the petitioner is that he had placed firm orders in respect  of the goods covered by the said licences with  his foreign  suppliers prior to December 20, 1961 for  the  full value  of  the  licences and had made to  the  said  foreign suppliers advance payments either in full or in part of  the price of the goods.  The total amount said to have been paid by the petitioner was over found 3,88,000 and he had to  pay a  further sum of over found 7,62,000 as the  balance.   The goods  covered  by these licences had to be shipped  in  the first  quarter  of 1962.  The petitioner’s case  further  is that  as the goods did not arrive within the period  of  180 days  be had applied on various dates for extension  of  the licences; but the same was 359 refused.  The petitioner then tried to persuade the  foreign suppliers to cancel the orders and remit back the money paid to  them,  but  they refused to  do  so.   Consequently,  he applied  to  the  Government  of  India  that  he  might  be permitted to import the goods against the said licences, but this  was  also  refused.  He therefore  filed  the  present petition  in  May  1963, and contends that  the  refusal  to permit him to import goods on the basis of the said licences violated his fundamental right guaranteed under Art. 19  (1) (f) and (g) of the Constitution.  He also contends that  the Government  of  India  allowed  import  of  goods  by  other merchants  who were similarly situate and this  amounted  to discrimination against him which was violative of Art. 14 of the  Constitution.  He further contends that the  Government of  India  wits bound to allow him to make  the  imports  in question inasmuch as the Government of India had  recognised his right to import under the licences granted to him before December 20, 1961.  In this connection reliance is placed on the  judgment  of  this  Court  in  State  of  Rajasthan  v. Shyamlal.(1) The petition has been opposed on behalf of the Government of India.   It is urged that in view of the emergency, Art.  19 has  been suspended by virtue of the provisions of Art.  358 of the Constitution and therefore the petitioner cannot rely on that Article.  Secondly, it is urged that the  petitioner has  failed by any reliable evidence to make out a  case  of discrimination  against  him  and  that  imports  had   been permitted   to   other  persons  who  were   not   similarly circumstanced  as  the petitioner.  It is  also  urged  that licences  could only be ,ranted by the Governor of Daman  at the  relevant  time and the petitioner has failed  to  prove that  his  licence were in fact issued by  the  Governor  of Daman,  and  therefore the licences are not  valid.   It  is further  urged  that even if the licences were  held  to  be valid,  they were for a period of 180 days.  As the  imports did not take place within that period. the petitioner is not entitled to make any imports after the period was over.  The Government  of India was not bound to extend  the  licences, and   inasmuch  as  the  licences  were  not  extended   the petitioner  has  no right to the issue of any writ  by  this Court  compelling  the  Government of India  to  extend  the licences  and  allow  the  petitioner  to  make  imports  in accordance  with  them.   Lastly,  it  is  urged  that   the Portuguese  territories in India were acquired by  conquest; as  such the new sovereign was not bound as  between  itself and  the  subjects of the former Portuguese  territories  to honour commitments of the former Portuguese Government,  and that  it was open to the new sovereign either  to  recognise

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the [1964] 7 S. C. R.174. 360 commitments of the former Portuguese Government or not to do so.  In  the present case, the new  sovereign,  namely,  the Government  of -India, refused to recognise  commitments  of the  former Portuguese Government of the nature made by  the issue  of  licences  to the  petitioner  and  therefore  the petitioner is not entitled to any relief from this Court. It  is unnecessary to consider all the arguments except  the one  under Art. 14 raised on behalf of the petitioner as  we have  come  to  the conclusion that the  petitioner  is  not entitled  to any relief in view of the last point  urged  on behalf  of  the Government of India.  We  shall  assume  for purposes  of  the present petition that the  petitioner  did hold valid licences before December 20, 1961 from the former Portuguese  Government  for  import of goods  worth  over  a million  pounds.  The position of law, however, in cases  of acquisition  of territories by conquest, as in  the  present case,  is undisputed.  In such a case the residents  of  the territories  did not carry with them the rights  which  they possessed  as  subjects  of the ex-sovereign,  and  that  as subjects  of the new sovereign they had only such rights  as are  granted or recognised by him, so far as  the  relations between  the subjects and the sovereign are  concerned.   In the present case we are not concerned with relations between subject and subject of the former sovereign and their rights inter  se  when the new sovereign takes over.  We  are  con- cerned  only with relations between subjects of  the  former sovereign and the new sovereign after the new sovereign  has taken  over and what we say herein must be confined to  that position alone. In  M/s Dalmia Dadri Cement Co. Ltd. v. The Commissioner  of Income-tax,  (1)  this undisputed position of law  was  laid down  by this Court.  This position was reiterated  by  this Court  in  State  of  Gujarat  v.  Vora  Fiddali   Badruddin Mithibarwala,(2)  where  it  was held  that  the  rule  that cession  of territory by one State to another is an  act  of State and the subjects of the former State may enforce  only those  rights  which the new sovereign recognises  is  well- settled.  The same position was again affirmed in Shyamlal’s case(1) where it was held that as between the new  sovereign and  the  subjects of the former sovereign, who  become  the subjects  of the new sovereign by acquisition of  territory, the rights of such subjects against the new sovereign depend upon recognition of liability by the new sovereign.  Whether the  new  sovereign  has recognised the rights  of  the  new subjects   as   against  itself  and  has   undertaken   the liabilities arising thereunder is a question of fact (1) [1959] S.C.R. 729  (3) (1964) 7 S.C.R. 174                     (2) [1964] 6 S.C.R.                             361 depending  upon  the  action  of  the  new  sovereign  after acquisition of the territory concerned.  It is on the  basis of  this  well-settled  position  of law  that  we  have  to consider whether the new sovereign, (namely, the  Government of  India)  recognised  these  rights  with  which  we   are concerned  in the present petition after December 20,  1961. when  the  former  Portuguese  territories  in  India   were acquired.  If it did so, the petitioner will be entitled  to relief from this Court; but if it did not, the petition must fail  on the -round that the new sovereign never  recognised the rights arising out of the licences in question. We  therefore  turn  to  the  events  which  happened  after December  20,  1961  to decide  whether  the  new  sovereign

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(namely, the Government of India) ever recognised rights  of the  kind  which the petitioner claims on the basis  of  the licence-,   which   he  bad  from  the   former   Portuguese Government.  It appears that after the new territories  were acquired,  their administration was entrusted to a  Military Governor.   On  December  30, 1961,  the  Military  Governor issued a proclamation with respect to arrangements made  for trade in the new territories.  By this proclamation, exports were   allowed  by  sea  on  completion  of  the   necessary formalities   in   accordance  with   law   that   prevailed immediately  before  the entry of Indian  troops  into  Goa. Further  imports  of goods already at sea and in  regard  to which foreign exchange component had already been paid  were allowed  on the same conditions.  This proclamation  of  the Military  Governor clearly shows the extent to which  import of  goods was allowed i.e., where the goods were already  at sea and had been fully paid for.  It is not the petitioner’s case  that  his  licences were covered  by  the  recognition granted to import of goods by this proclamation.  Further it see  s to us clear by implication that every other  kind  of import  except the kind permitted by this  proclamation  was not recognised.  Therefore, as we read this proclamation, it is clear that the new sovereign did not recognise imports on the basis of licences like those granted to the  petitioner, unless  two conditions were fulfilled, namely, (i) that  the goods under the licences were already at sea, and (ii)  that the  foreign exchange had already been paid with respect  to them.  If both these conditions were fulfilled, imports were allowed  but not otherwise.  As, it is not the  petitioner’s case that both these conditions were fulfilled with  respect to these licences, it must be held that the imports which be now  claims to be allowed were not recognised.  Besides  the proclamation  of December 30, 1961, a letter was written  by the Chief Civil Administrator to the President, Goa  Chamber of Commerce in connection with import of goods and the Chief Civil 362 Administrator  had  agreed to consider each  and  individual case on merits and had indicated that applications should be made to him with supporting evidence that a firm  commitment had been entered into before December 18, 1961.  This  again shows  that the new sovereign was not prepared to  recognise all import licences granted but only certain types of  them, and it is not the petitioner’s case that he was even covered under this letter of January 11, 1962.  It may be added that this  letter  is really explanatory of the  proclamation  of December 30, 1961. The  petitioner, however, relies on the Goa, Daman  and  Diu (Administration)  Ordinance  No.  11  of  1961  (hereinafter referred  to as the Ordinance) in support of his  contention that the Government of India had recognised his rights under these  licences.  Under s. 4 of the Ordinance, all  laws  in force before the 20th December 1961 in Goa, Daman and Diu or any  part  thereof were to continue to be in  force  therein until  amended  or repealed by a  competent  Legislature  or other  competent authority.  This Ordinance was  promulgated on  March 5, 1962 and came into force immediately.   It  was replaced by the Goa, Daman and Diu (Administration) Act, No. 1  of 1962 (hereinafter referred to as the Act),  which  was promulgated  on  March 27, 1962 and was to come  into  force from March 5, 1962 i.e., the date of the Ordinance.  By s. 5 of  the Act, all laws in force immediately  before  December 20,  1961, in Goa, Daman and Diu were to continue  in  force therein until amended or repealed by a competent  authority. The contention on behalf of the petitioner is that under the

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Ordinance  and the Act, the previous laws were  to  continue and therefore this amounted to recognition by the Government of India of all rights flowing from the previous laws and in this connection reliance has been placed on the decision  of this Court in Shyamlal’s case(1).  Further reliance has been placed on the Goa, Daman and Diu (Laws) Regulation (No.  XII of  1962), which came into force on November 22,  1962.   By this  Regulation, certain Indian laws were enforced  in  the new territories, including the Imports and Exports (Control) Act,  No. 18 of 1947; and any law in force corresponding  to the  new law enforced by this Regulation was  repealed.   So the former laws as to export and import which were continued by  the  Ordinance  and  the  Act  were  repealed  by   this Regulation,  which  brought the Indian Imports  and  Exports (Control)   Act  into  force  into  the   new   territories. Particular reliance is placed on s. 4(2) of the  Regulation, which lays down that nothing in sub-s. (1), which (1)  [1964] 7 S.C.R. 174.                             363 provides for repeal, shall affect the previous operation  of any  law  so  repealed or anything  duly  done  or  suffered thereunder, or any right, privilege, obligation or liability acquired,  accrued  or incurred under any law  so  repealed. The  argument is that sub-s. (2) of s. 4 of  the  Regulation preserved  any  right, privilege,  obligation  or  liability acquired,  accrued  or incurred under the repealed  law  and therefore  the  right under the licences in  favour  of  the petitioner  which  were issued under the repealed  law  were preserved;   and  this  amounted  to  recognition   of   the petitioner’s right under the said licences and therefore the Government of India having recognised the right was bound to honour it. We are of opinion that there is no force in this contention. The  main argument on behalf of the petitioner is  based  on the  decision of this Court in Shyamlal’s case. (1) In  that case it was observed that "by continuing the old laws,  till they  are  repealed, altered or modified, the new  State  in effect undertook the liability which might arise against  it by  virtue  of  the  continuance  of  the  old  laws."  That observation was immediately followed by another  observation to  the effect that even if there was some doubt  about  the new  State undertaking the liabilities of the old  State  in view of the continuance of the old laws, the Court could  in accordance  with the decision in Dalmia Dadri  Cement  Co.’s case  ( 2 ) look to Art.  VI of the Covenant to come to  the conclusion that on continuing the old laws, until they  were altered,  repealed  or modified, the new State  intended  to affirm the rights of the subjects which they had against the merging  State  and to assume itself the  liability  if  any arising  against the merging State.  The decision  therefore in  that  case  that  the  new  State  had  recognised   the liabilities of the old State was not based only on the  fact that  the old laws were continued; it was fortified  by  the further  observation that Art.  VI of the Covenant could  be looked  into  to see what the new State intended,  and  that Article provided that the liabilities of the old State would be assumed by the new State.  There is no doubt that if that Article  had  not  been there in the Covenant  and  if,  for example, the Covenant provided that the new State would  not assume the liabilities of the old State, the Court would not have  come to the conclusion that there was  recognition  of the liabilities against the old State by the new State.   In the  present  case  we have nothing like  Art.   VI  of  the Covenant  to  lead  us  to the  conclusion  that  there  was recognition  of the liabilities of the old State by the  new

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State.   In the absence of such a provision it would not  in our opinion be right to say that merely because the old laws were  continued there was recognition of the liabilities  of the old (1) [1964] 7 S.C.R. 174.                    (2) [1959] S.C.R.. 729 364 State  by  the  new State.  We have therefore  come  to  the conclusion that merely because the old laws were  continued, it  cannot  necessarily  be  inferred  that  the  new  State recognised and assumed all liabilities of the former  State. On  the  other hand if we refer to the proclamation  of  the Military  Governor of December 30, 1961, we immediately  see that only certain types of imports to which we have  already referred  were recognised by the new State and  not  others. In  the face of that proclamation of December 30,  1961,  it would  in our opinion be impossible to infer from  the  mere fact  that  the  old  laws were  continued  that  there  was recognition  of  liabilities arising therefrom  by  the  new sovereign.   That is one aspect of the matter which  in  our opinion  conclusively shows that the new sovereign  did  not recognise the rights arising from licences of the kind  with which we are dealing in the present petition, and  therefore the petitioner would have no right under these licences  for they  were never recognised by the new sovereign.  -In  this view of the matter, the petition must fail. But  this is not all.  The Ordinance and the Act of 1962  on which  the petitioner relies came into force from  March  5, 1962.  It is true that they provided for the continuance  of old  laws  but that could only be from the date  from  which they came into force i.e., from March 5, 1962.  There was  a period  between December 20, 1961 and March 5,  1962  during which  it  cannot  be said that  the  old  laws  necessarily continued so far as the rights, and liabilities between  the next subjects and the new sovereign were concerned.  So  far as  such  rights  and liabilities  are  concerned,  (we  say nothing  here  as  to the  rights  and  liabilities  between subjects and subjects under the old laws), the old laws were apparently  not in force during this interregnums.  That  is why we find in s. 7(1) of the Ordinance, a provision to  the effect that all things done and all action taken  (including any  acts of executive authority, proceedings,  decrees  and sentences)  in or with respect to Goa, Daman and Diu  on  or after the appointed day and before the commencement of  this Ordinance,  by  the Administrator or any  other  officer  of Government, whether civil or military or by any other person acting  under  the  orders  of  the  Administrator  or  such officer, which have been done or taken in good faith and  in a  reasonable belief that they were necessary for the  peace and good Government of Goa, Daman and Diu, shall be as valid and  operative  as  if  they  had  been  done  or  taken  in accordance  with law.  Similarly we have a provision  in  s. 9(1) of the Act, which is in exactly the same terms.   These provisions in our opinion show that as between the  subjects and the new sovereign, the old laws did not continue  during this interregnums and that is why things done and 3 65 action taken by various authorities during this period  were validated  as if they had been done or taken  in  accordance with  law.   A  doubt  was raised as to  the  power  of  the Military  Governor to issue a proclamation like the  one  he did on December 30, 1961, to which we have already referred. That  doubt  in our opinion is cleared by  these  provisions which  make  all  such orders as if they had  been  made  in accordance with law.  The proclamation of December 30,  1961

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which  clearly showed what kind of import licences would  be recognised  must  be held to be in accordance with  law  and that  means  that no imports were  recognised  except  those covered by the proclamation. Our  attention is also drawn to certain other orders  passed after  March 5, 1962 in connection with imports.   One  such order was passed on April 2, 1962 which stated that  imports into Goa, Daman and Diu from abroad will be governed by  the following principles : -               (1)   in  cases where letters of  credit  were               opened with the Banco National Ultramarino  on               or  before 18th December, 1961, or goods  were               shipped prior to 20th December, 1961,  imports               will  be  allowed and  the  necessary  foreign               exchange provided.               (2)               (3)               (4) It is however admitted on behalf of the petitioner that  his case is not covered by even this order of April 2, 1962  and he  cannot therefore use it as recognition of his  right  to import under these licences. Then  on  April 11, 1962, another order was  issued  in  the following terms :-               "Notwithstanding  anything  contained  in  any               decree, notification, rule etc., it is  hereby               directed  that  all goods imported  into  Goa,               Daman  and Diu from abroad by freight or  post               shall require a valid import licence." These orders therefore after March 5, 1962 also clearly show that  there was no recognition at any stage of the  kind  of licences   which  the  petitioner  held  from   the   former Portuguese Government.  The petitioner therefore in view  of all  these facts and circumstances cannot rely on  the  fact that old laws were continued as from March 5, 1962; nor  can he rely on the orders of April 2 and 11, 1962, for his  case is not covered by them, even though these orders SUP.CI/65-9 366 show  some relaxation of the conditions as compared  to  the proclamation of December 30, 1961.  Thus there was never any recognition  of  the  right  of  the  petitioner  under  the licences,  which  he  held, by the  new  sovereign.   He  is therefore  not  entitled  to ask this Court  to  compel  the Government of India to honour the licences in dispute in the present petition. As  for Regulation No. XII of 1962, that is also of no  help to  the petitioner.  The laws repealed thereby  (as  between the  sovereign  and the subjects) were in  force  only  from March  5,  1962.  Section 4(2) on which reliance  is  placed would  have helped the petitioner if his licences  had  been granted on March 5, 1962 or thereafter.  But as his licences are  of  a  date even anterior to  the  acquisition  of  the Portuguese  territories,  s. 4(2) of the  Regulation  cannot help  him.   The  contention under this head  must  also  be rejected. As  to  Art.  14, it is enough to say that it  was  for  the petitioner to establish that there was discrimination in his case.   He  has  completely failed to  do  so,  for  besides certain -vague assertions in the petition, there is  nothing to  prove  that other licences were  recognised  in  similar circumstances.  The contention under Art. 14 must fail. The  petition therefore fails and is hereby  dismissed  with costs.                     Petition dismissed.

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