# ASSOCIATION v. UNION OF INDIA

- **Citation:** [1962] 1 S.C.R. 862
- **Court:** Supreme Court of India
- **Decided:** 1959-04-27
- **Case number:** Writ Petition No. 65 of 1959
- **Bench:** P. B. Gajendragadkar, A. Ic Sarkar, K. N. Wanchoo, K. C. DAs GUPTA, N. Rajagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/association-v-union-of-india-2100
- **Pages:** 7

## Headnote

Import and Export-Decision to canalise import through
specialised channel or agency-Constitutional validity-Import and
Export Control Act, 1947-(XV II of 1947), s. 3 -Imports (Control) Order, 1955, Para. 6(h)-Constitution of India, Arts. 14,
r9(1)(j) & (g) and 3r.
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 car
1ry on trade
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I S.C.R. SUPREME COURT REPORTS
863
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•
and to acquire property and as such contravene Arts. 14, 19(1)
r96r
(f) & (g) and 31 of the Constitntion.
Held, that the decision that import of a particular comGlass Chatons
modity shall be canalised by a selected channel or through
h~porters .&.
selected agencies is a reasonable restriction in the interest of the Users Assoctation
general public.
.
v.
.
The provisions of para. 6(h) of the Imports (Control) Order, Union of India
1955 ands. 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.
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,
R. Ganapathy Iyer and T. 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
Das Gupta ].
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 license
ing authorities. Since 1955 the matter has been regulated 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 cbatons, except under and in accordance
with a licence, granted on application by the licensing
864
SUPREME COURT REPORTS
[1962]
x96x
authorities under the Act.
Policy statements are
GI
Ch 1
made from time to time by the Government of India,
1::;0, 1": :s indicating the policy for the issue of Import licences.
users' Association The policy as regards the import of glass chatons for
v.
the period January, 1957 to the end of March, 1958
Union °! India was that the import was totally prohibited .. Since
April 1958, the policy as laid down is that import was
Das Gupta ]. 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 impor

## Text

Ramdhandas
v.,
State of Punjab
Ayyangar J.
862
SUPREME COURT REPORTS
[1962]
be reasonable, if the same were necessary to secure
the efficient enforcement of valid provisions. The
inclusion of a reasonable margin to ensure effective
enforcement will not stamp a law otherwise valid
as within legislative competence with the character
of unconstitutionality as being unreasonable."
These observations, in our opinion, clearly apply and
suffice to support the validity of the related provisions here impugned.
The petition fails and is dismissed with costs.
Petition dismissed.
r96r
GLASS CHATONS IMPORTERS & USERS'
April IO.
ASSOCIATION
v.
UNION OF INDIA
(P. B. GAJENDRAGADKAR, A. IC SARKAR,
K. N. WANCHOO, K. C. DAs GUPTA and
N. RAJAGOPALA AYYANGAR, JJ.)
Import and Export-Decision to canalise import through
specialised channel or agency-Constitutional validity-Import and
Export Control Act, 1947-(XV II of 1947), s. 3 -Imports (Control) Order, 1955, Para. 6(h)-Constitution of India, Arts. 14,
r9(1)(j) & (g) and 3r.
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 car
1ry on trade
•
. , ,
I S.C.R. SUPREME COURT REPORTS
863
-
•
and to acquire property and as such contravene Arts. 14, 19(1)
r96r
(f) & (g) and 31 of the Constitntion.
Held, that the decision that import of a particular comGlass Chatons
modity shall be canalised by a selected channel or through
h~porters .&.
selected agencies is a reasonable restriction in the interest of the Users Assoctation
general public.
.
v.
.
The provisions of para. 6(h) of the Imports (Control) Order, Union of India
1955 ands. 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.
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,
R. Ganapathy Iyer and T. 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
Das Gupta ].
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 license
ing authorities. Since 1955 the matter has been regulated 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 cbatons, except under and in accordance
with a licence, granted on application by the licensing
864
SUPREME COURT REPORTS
[1962]
x96x
authorities under the Act.
Policy statements are
GI
Ch 1
made from time to time by the Government of India,
1::;0, 1": :s indicating the policy for the issue of Import licences.
users' Association The policy as regards the import of glass chatons for
v.
the period January, 1957 to the end of March, 1958
Union °! India was that the import was totally prohibited .. Since
April 1958, the policy as laid down is that import was
Das Gupta ]. 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 cha tons 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 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
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1 S.C.R. SUPREME COURT REPORTS
865
State Trading Corporation so that apart from what
I96,
hfas already happened there is _no
1
quefstion offanhy
Glass Chatons
uture act10n "to crea~e ~,monopo y m avou:? t e
Impo,ters c;.
State Tradmg Corporat10n . Therefore the pet1t10ners usm' Association
cannot be given any relief on the present application.
v.
Learned Counsel however submitted that so long as Union of India
Para. 6(h) of the Imports (Control) Order, 1955, remains
it will be useless for his clients to make any application Das Gupta J ·
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{l)(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 fo 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
109
866
SUPREME COURT REPORTS
[1962]
z96x
through special or specialised agencies or channels".
Gl
Ch
The argument is that the further restriction on the
ass
atons
. ht
·d
d h
. h
.
Importers &
rig
to carry on tra e an t e rig t to acquire proUsers' Association perty that results from this provision is totally unreav.
sonable.
Union of Tndia
It is obvious that if a decision has been made that
imports shall be by particular agencies or channels
Das Gupta ]. 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 ·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
I
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I S.C.R. SUPREME COURT REPORTS
867
channel or through selected agencies the Court would
i961
proceed on the assumption that that decision is in the
interests of the general public unless the contrary is
Glass Chatons
1
h
C
1
bl t
Importm &
clear y s own.
onsequen.t .Y, we are _una e o accept users' Association
the argument that a de01s10n that imports shall be
v.
canalised, is per se not a reasonable restriction in the Union of India
interests of the general public. We wish to. make it
clear that while the decision that import of a partiDas Gupta J.
cular 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. Noisuch question has however 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 laws guaranteed by Art. 14 of the Constitution. If these petitioners had applied for licences
•
868
SUPREME COURT REPORTS
[1962)
r96r
under the Export Promotion Scheme and still the
Gia" Chatons State Trading Corporation had been :preferred it would
Importm &
perhaps have been necessary to consH,ler whether the
Usm' A"ociation preference accorded to the Corporation was based on
v.
reasonable and rational grounds. It is clear however
Union of India that though it was open to these petitioners to apply
for licenqes uuder the Export Promotion Scheme they
Das Gupta J. made no application for licence thereunder. There is
no scope therefore for the argument that they have
been discriminated against.
April II·
In the result, we are of opinion that the petitioners
are not entitled to any relief under Art. 32 of the Constitution. The petition is accordingly dismissed with
costs.
Petition dismissed.
HIRALAL PATNI
v.
LOONKARAM SETHIYA & OTHERS
(K. SUBBA RAO, RAGHUBAR DAYAL and
J. R. MUDHOLKAR, JJ.)
Civil Procedure-Receiver, continued by preliminary decree
till discharged-Final decree silent-Whether receiver automatically
discharged-Lease by reuiver to party-Term of leas. expiringDispossession o/ lessee by receiver-,Summary procedure or civil
suit-Code of Civil Procedure, I9D8 (V of 1908), 0. 40.
The John Mills comprising of three textile mills and one
flour mill were jointly owned by several persons. The financier
of the Mills filed a snit for recovery of the amount due to him.
During the pendency of the suit a receiver was appointed to
take possession of the flour mills but he was not empowered to
run the mi!ls directly without further directions of the court.
A preliminary decree was passed in the suit directing among
other things that the receiver was to continue until discharged.
Thereafter, an arrangement was made for running the mills and
the court directed that the appellant, who was one of the coowners of the mills, he given a lease of the flour mill for three
years by the receiver. In the lease deed the appellant undertook to deliver back possession to the receiver upon the expiry
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