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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Article 226
  • Article 14 of the Constitution
  • Article 19(1)(g) of the Constitution
  • Section 5 of the Imports (Control) Act, 1947 read with clause 5 of the Imports (Control) Order, 1948
  • Articles 14 and 19 of the Constitution
  • Section 3 of the Import and Export (Control) Act, 1947
  • Article 32 of the Constitution
  • Section ... of the Import and Export Control Act (year not specified)
  • Section 3(1)(a) of the Imports and Exports Control Act, 1947
  • Article 19 of the Constitution
  • Part III of the Constitution
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Article 226
  • Article 14 of the Constitution
  • Article 19(1)(g) of the Constitution
  • Section 5 of the Imports (Control) Act, 1947 read with clause 5 of the Imports (Control) Order, 1948
  • Articles 14 and 19 of the Constitution
  • Section 3 of the Import and Export (Control) Act, 1947
  • Article 32 of the Constitution
  • Section ... of the Import and Export Control Act (year not specified)
  • Section 3(1)(a) of the Imports and Exports Control Act, 1947
  • Article 19 of the Constitution
  • Part III of the Constitution
Smart Summary

Factual and Procedural Background

The petitioner, a partnership firm engaged in manufacturing automobile parts, wires and cables, applied on four occasions between November 1969 and November 1970 for import licences to procure stainless-steel sheets and electrolytic copper wire bars for the licensing years April 1969–March 1970 and April 1970–March 1971. Complaints of mis-utilisation of previously imported material led the Central Bureau of Investigation to register an FIR on 12 December 1969 under the Imports (Control) Act, 1947.

Because the licensing authority (Respondent 3, Deputy Chief Controller of Imports and Exports, Hyderabad) failed to dispose of the applications within the usual three-week period, the firm filed four writ petitions in the Madras High Court seeking mandamus. The High Court, without a counter-affidavit from the respondents, merely directed them to consider the applications “as expeditiously as possible”. When no decision was forthcoming for about five months, the petitioner initiated contempt proceedings and served a notice on 22 October 1972.

By communication dated 7 November 1972 the applications were rejected on the grounds that: (1) stainless-steel sheets were prohibited for manufacture of automobile parts; and (2) import of electrolytic copper wire bars for such end use was impermissible. The firm then invoked Article 32 of the Constitution before the Supreme Court, seeking (i) a declaration that the rejection orders were void and (ii) a mandamus compelling issuance of the licences.

Legal Issues Presented

  1. Whether a partnership firm can maintain a petition under Article 32 for enforcement of fundamental rights when Article 19(1)(g) protection is available only to citizens.
  2. Whether the petitioner possessed a fundamental or legal right to import licences based on the Import Trade Control Policy (“Red Book”) for 1969-70.
  3. Whether the respondents’ reliance on subsequent administrative “existing instructions” and the delay in disposal violated Articles 14 and 19 of the Constitution.
  4. Whether procedural irregularities in rejecting the applications are justiciable under Article 32 absent infringement of a fundamental right.

Arguments of the Parties

Respondents’ Arguments

  • The petition is not maintainable because Article 19(1)(g) rights belong only to citizens, not to a firm.
  • No fundamental right to the grant of import licences exists; hence Article 32 cannot be invoked for mere procedural errors (Smt. Ujjam Bai cited).
  • Mandamus cannot issue because the petitioner has no specific enforceable legal right, nor a corresponding legal duty on the respondents.
  • Even if otherwise eligible, the 1969-70 licences cannot now be granted due to restrictions imposed by the 1972 Import Control Policy.

Petitioner’s Arguments

  • The respondents failed to follow mandatory procedures in the Import Trade Control Hand Book, amounting to contravention of Articles 14 and 19.
  • The “existing instructions” invoked to reject the applications cannot override the 1969-70 Import Policy and are unconstitutional as unreasonable restrictions on trade.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Smt. Ujjam Bai v. State of U.P., AIR 1962 SC 1621 Classifies situations in which Article 32 may be invoked; emphasises that only violations of fundamental rights are cognisable. The Court applied the categorisation and held that the present case fits none of the categories warranting Article 32 intervention.
Deputy Assistant Iron and Steel Controller v. L. Maneckchand, (1972) 3 SCC 324 Holds that an applicant has no vested right to an import licence in terms of the policy existing when the application was made; mandamus not maintainable where delay is not attributable to the authority. The ratio was applied to conclude that the petitioner had no enforceable right under the 1969-70 policy and that delay, occasioned by criminal investigations, did not justify mandamus.

Court's Reasoning and Analysis

Addressing the maintainability objection, the Court ruled that a “firm” represents its partners collectively; since the partners are citizens, the petition was competent. However, the Court accepted the substantive objections:

  • Article 32 jurisdiction extends only to enforcement of fundamental rights. The impugned action did not violate any such right because neither the Imports & Exports (Control) Act, 1947 nor the relevant Orders were challenged as ultra vires, and the licensing authority possessed jurisdiction.
  • The Import Trade Control Policy (“Red Book”) is an executive policy, not a statutory instrument. It creates no enforceable legal or fundamental right to a licence and may be varied by administrative instructions.
  • The policy itself had been amended by letter dated 29 September 1972 (general notice published 18 August 1973), prohibiting import of the materials for automobile parts. Accordingly, when the authority decided the applications in November 1972, it was bound by the amended policy and could not issue the licences retroactively.
  • The delay in disposal was not motivated by bad faith; it coincided with ongoing CBI investigations and criminal proceedings concerning alleged misuse of earlier imports.
  • Restrictions on importation serve public-interest objectives related to the national economy and are therefore reasonable under Article 19(6). No evidence of hostile discrimination was provided to substantiate an Article 14 claim.

Holding and Implications

Petitions DISMISSED. No order as to costs.

Immediate Effect: The petitioner-firm is denied import licences for stainless-steel sheets and electrolytic copper wire bars for the 1969-70 period.

Broader Implications: The judgment reiterates that import licensing policies confer no vested or fundamental rights and that Article 32 cannot be used to remedy mere procedural irregularities absent a demonstrable violation of fundamental rights. No new legal precedent was established beyond reaffirming existing principles.

    Andhra Industrial Works v. Chief Controller Of Imports And Others

    R.S Sarkaria, J.— In these four writ petitions under Article 32 of the Constitution, the parties and the basic questions for determination are the same. They will therefore be disposed of by a common judgment.

    2. The petitioner-firm is dealing in the manufacture of automobile parts, wires and cables. The petitioner made four applications on November 5, 1969, March 23, 1970, November 5, 1970 and November 6, 1970, for the grant of licences to import stainless steel sheets and electrolytic copper wire bars, for the period April-March 1970 and April-March 1971. At the time of the receipt of the first application dated November 5, 1969, Respondent 3 (Deputy Chief Controller of Imports and Exports, Hyderabad) received some complaints that the petitioner-firm was mis-utilising the imported material. After a preliminary investigation made by the C. B. I., a First Information Report was registered on December 12, 1969 with the police against the petitioner-firm and some others in respect of the commission of offences under Section 5 of the Imports (Control) Act, 1947 read with clause 5 of the Imports (Control) Order, 1948. In the normal course, such applications should have been disposed of within three weeks of the dates on which they were received. Since the respondents did not dispose of the applications, the petitioner-firm filed four writ petitions (Nos. 3526-3529 of 1971) in the High Court of Madras praying for the issue of writ of mandamus directing the respondents to issue the import licences applied for.

    3. Before the High Court, no counter-affidavit was filed by the respondents. The High Court, instead of issuing a writ of mandamus, directed the respondents to consider and dispose of the applications in accordance with law as expeditiously as possible. The applications were however not disposed of for another five months. On September 20, 1970, the petitioner moved the High Court for proceeding against the authorities for contempt of its order. Thereafter on October 22, 1972 the petitioner caused a notice by registered post to be served on the respondents.

    4. Respondent 3 then informed the petitioner-firm by his communication dated November 7, 1972 that its applications had been rejected. The reasons set out in the impugned orders were: (1) Stainless steel sheets are not allowed for the manufacture of the end product of automobile parts as their import has been prohibited in terms of the existing instructions; (2) Since the petitioner-firm was a manufacturer of automobile parts “import of electrolytic coper wire bars for end use of ‘automobile parts’ is not permissible”.

    5. The petitioners challenge the aforesaid orders of November 7, 1972 passed by Respondent 3 on the ground that in view of the Import Policy contained in the Red Book for the relevant period, they were entitled to the grant of these import licences, and that the “existing instructions” on the basis of which their applications were rejected, could not override that Import Policy. In any case, these instructions are unconstitutional; they do not amount to “reasonable restrictions” within the contemplation of Article 19 of the Constitution on the petitioners' right to carry on their trade. The petitioners pray that the impugned orders, dated November 7, 1972, be declared void and a mandamus directing the respondents to issue the licences for the import of the materials in question for the licensing period, April 1969-March 1970, in favour of the petitioners.

    6. At the outset, Mr Prasad, appearing on behalf of the respondents, has raised these objections: (1) Article 19(1)(g) on which the petitioners stake their claim can be availed of only by a citizen of India; the writ petition filed by the firm is therefore not maintainable; (2) Since the petitioners had no fundamental right to the grant of the licences in question and the law in pursuance of which Respondent 3 passed the impugned order, was intra vires, the procedural irregularity or error, if any, committed by the respondent in the exercise of his jurisdiction, not having resulted in violation of or threat to any fundamental right of the petitioners, cannot be impeached by way of a petition under Article 32 of the Constitution. Reference has been made to Smt Ujjam Bai v. State of U.P AIR 1962 SC 1621, (1963) 1 SCR 778: (3) No mandamus or other relief as prayed for by the petitioners, can be granted because the petitioners had no specific legal right to the licences, nor was the respondent under a corresponding legal obligation to grant the same; (4) In any case, no import licences for the year 1969-70 in respect of the materials in question can now be granted because of the restrictions subsequently imposed by Import Control Policy of the year 1972.

    7. In reply Mr Chitale submits that the respondents have not followed the mandatory procedure prescribed in the Import Trade Control Hand Book, contravention of which entitles the petitioners to the issue of a writ of certiorari or any other appropriate order or direction from this Court. This contravention, it is added, has, in effect, violated the fundamental rights of the petitioners under Articles 14 and 19 of the Constitution.

    8. We find no merit in the preliminary objection that the writ petition on behalf of the “firm” is not maintainable. Since “firm” stands for all the partners collectively, the petition is to be deemed to have been filed by all the partners who are citizens of India. We, therefore, negative this objection.

    9. We however, find force in the other contentions canvassed by the learned Counsel for the respondents.

    10. It must be remembered that the jurisdiction of this Court under Article 32 can be invoked only for the enforcement of the fundamental rights guaranteed by the Constitution, and not any other legal right. A petitioner will not be entitled to relief under this Article, unless he establishes that his fundamental right has been violated or imminently threatened. Such violation, actual or potential may arise in a variety of ways, and it is not possible to give their exhaustive classification. But on the analogy of Ujjam Bai case instances, most usual, in relation to laws regulating the citizen's right to carry on trade or business guaranteed by Article 19(1)(g) may be catalogued as under:

    “(a) Where the impugned action is taken under a statute which itself is ultra vires any provision of Part III of the Constitution.
    (b) Where the statute concerned is intra vires but the impugned action is without jurisdiction on account of a basic defect in the constitution of the authority or tribunal or owing to the absence of a preliminary jurisdictional fact, i.e a condition precedent to the exercise of jurisdiction.
    (c) Where the impugned action is based on a misconstruction of the intra vires statute or is so contrary to the established procedure or rules of natural justice that it results in violation of a fundamental right.”
    The instant case is clearly not covered by any of the categories.

    11. Herein, it is not contended that the Import and Export (Control) Act, 1947 or any Order or rule made thereunder is ultra vires. Nor is the validity of the Import Control Policy Statement [for the period April-March, 1969 (sic)] known as Red Book impeached. Indeed, this Policy Statement is the sheet-anchor of the petitioners' claim. Such a Policy Statement, as distinguished from an Import or Export Control Order issued under Section 3 of the said Act, is not a statutory document. No person can merely on the basis of such a Statement claim a right to the grant of an import licence, enforceable at law. Moreover, such a Policy can be changed, rescinded or altered by mere administrative orders or executive instructions issued at any time.

    12. From the counter-affidavit filed on behalf of the Respondents, it is clear that the Import Trade Control Policy (Red Book-Vol. I) had been amended and the import of the materials in question for utilization in the end products of most “automobile parts” was prohibited as per instructions conveyed by Chief Controller of Imports and Exports in his letter No. IPC (Gen. 33)/73/72/3499, dated September 29, 1972, although general notice of this amendment was published later on August 18, 1973 (Vide Annexure R-5). The result was that in accordance with the amended Import Trade Control Policy, the respondent could not, in November 1972, grant the licences applied for to the petitioners in respect of the past period, April 1969-March 1970.

    13. It is nobody's case that Respondent 3 lacked inherent jurisdiction to deal with and decline the application for the grant of the licences. Serious complaints of the commission of criminal offences arising out of the misutilization of materials previously imported under import licences, were pending investigation by the CBI against the petitioners. Subsequently, a criminal complaint has also been made in court for trial of the petitioners and others for those offences. In these circumstances, it could not be said that the disposal of the applications, was delayed by Respondent 3 due to ulterior motives, or that the refusal to grant the licences was violative of the rules of natural justice.

    14. Be that as it may, on the basis of an Import Trade Policy an applicant has no absolute right, much less a fundamental right, to the grant of an import licence. The nature of such a claim came up for consideration before this Court in Deputy Assistant Iron and Steel Controller v. L. Maneckchand, Proprietor, Katrella Metal Corpn., Madras (1972) 3 SCC 324, (1972) 3 SCR 1.

    15. That was an appeal by special leave against the judgment of the High Court rendered in exercise of writ jurisdiction under Article 226. The writ-petitioner asked for the issue of a mandamus requiring the authorities to consider his application for license to import stainless steel in terms of 1968-69 Policy and not in accordance with 1970-71 Policy when the application was made. This Court held that in view of Section 3(1)(a) of the Imports and Exports Control Act, 1947 and clause 6(1)(a) of the Imports (Control) Order, 1955, an applicant has no vested right to an import license in terms of the policy in force at the time of the application. No case for the mandamus prayed had been made out, particularly when the delay in disposing of the application for licence was not due to the fault of the Licensing Authority.

    16. The ratio of Manekchand's case (supra), is applicable with greater force to the present petitions which have been made under Article 32 of the Constitution. The instant case is no doubt one of delay on the part of the authority, but this “delay” could not be said to be “undue” or motivated by bad faith. In view of the supervening criminal proceedings against the petitioners, the respondent might have thought that it was better for him to defer decision on the applications till the termination of the criminal proceedings.

    17. Nor do we find any substance in the contention that the “existing instructions” or the orders made in pursuance of the Import and Export Control Act place “unreasonable restrictions” on the petitioners' right to carry on trade or business. These restrictions obviously have been imposed in the interests of the general public and national economy. Again, in this connection the observations made by this Court in Maneckchand case are relevant and may be extracted:

    “... it has to be borne in mind that in the present stage of our industrial development imports requiring foreign exchange have necessarily to be appropriately controlled and regulated. Possible abuses of import quota have also to be effectively checked and this inevitably requires proper scrutiny of the various applications for import licence. In granting licences for imports, the authority concerned has to keep in view various factors which may have impact on imports of other items of relatively greater priority in the larger interest of the over-all economy of the country which has to be the supreme consideration.”

    18. Lastly, there is no question of the violation of Article 14 of the Constitution. Excepting a nebulous allegation in the rejoinder, the petitioners have not set up any plea of hostile discrimination. They have not given any particulars whatever, of any other applicant, similarly situated, who might have been granted such an import licence in like circumstances.

    19. For all the reasons aforesaid, the petitions fail and are dismissed, but, in the circumstances of the case, without any order as to costs.

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    Andhra Industrial Works v. Chief Controller Of Imports And Others
    (Apr 26, 1974)