# ' D J. FERNANDES & CO v. THE DEPUTY CHIEF CONTROLLER OF IMPORTS & EXPORTS AND ORS

- **Citation:** [1975] 3 S.C.R. 867
- **Court:** Supreme Court of India
- **Decided:** 1975-03-07
- **Case number:** Writ Petition No. 615 of 1970
- **Bench:** A. N. Ray, K. K. Mathew
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/d-j-fernandes-co-v-the-deputy-chief-controller-of-imports-exports-and-ors-6407
- **Pages:** 11

## Headnote

867
cdnstitution of India, 1950, Articles 73(l)Ca), 239(1), 240
a11d 264(4)-
depen¥ing 011 whether licence was granted before or after liberation of GoaC/assi~cation, if valid.
Co11stitwio11 of India, 1950, A rt. 32-Grant of import licence-Petitioner
no't cha//e11gi11g the validity of the Statute or statutory orders-Wrong application
of law, if ll i·iolation of fundamental. right.
·
Constitution of India, 1950, Ardcles 73(l)(a), 239(1), 240 and 246(4)-
Unfrm Territory, administration of-Union Government, if can issue executive
directions to Administrator.
Goa, Daman and Diu (Administration) Ordinance No. 2 cf 1962, Ss. 3, 4
and 7 and Goa, Daman and Diu (Administration) Act No. 1 of 1962, Ss. 4, 5
and 9-Validarion of all actions taken in good faith and for peace and r:ood
Govemment of Goa, Damon and Diu-Licence granted contrary to prccedure
or by mistake or inadvertence, if could be val(dated.
Co11stitution of India, 1950, Article 19(1) (/)-Rejection of application for
grant of impo/'f /icence-Petitione.r, if can claim fu11damen1a/. right· to the grant
of licence on the basis of a policy statement.
lmcmaticna/ Law-Acquisition of new Territory by Union of lndia-Rir:hts,
if could be founded on pre-liberation law-Central Govemment (new Sovereign),
E
if can alter pre 1existing procedure for issuing impo~t licence.
F
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The petitioners are a partnership firm.
They are successors to J .. Fernandes
& Comriany (Original concern) of which Joshino Fernandes was the sole proprietor. Jn '.he month of October, 1961 the original concern booked orders for
rurchn"~ ·of Surveying & Mathematical Instruments and Surgical & Sdentific
Instruments with a German fir'm.
The orders were accepted by the German firm
on 7th November, 191!1.
On 19/20 December, 1961 Goa was liberated, On
18 Ja.nunry, 1962 the original con,cern applied to the Administrator of Goa for
issuing an import licence for £32,652.10 for Surveying and Mathematical lnstru.
ment< ~nd Surgical and Laboratory Equipments, along with necessary papers of
.firm commitments. The ·original concern obtained a licence on 12 February,
1962. The licence was No. 47. It opened a letter of credit on 21 February,
1962 for 50 per ·cent of the licence. The Central Government on 21 February,
1962 informed the Administrator, Goa, that the Central Government withheld,
actio;i on all pending cases where import had been authorised. Pursuant thereto
the Administrator, Goa issued directions to suspend issue of letter of credit ·and
all cases refoting to firm commitments entered into before 18 December. 1961
which were till then not disposed of, should be frozen.
On April 2, 1962 the
Administrator of Goa issued a Press Note that imports into Goa, Daman and
Diu would be governed by three principles. First import would be allowed in
cases (a) where letters of credits had been opened with the Banco National
Ultra Marines on or before 18 December, 1961; (b) where goods were shipped
on or before 20 December, 1961.
Second, imports of certain specified items
were banned. Third, imports would be allowed of certain goods to the extent
of 50 per cent of imports actually made in the quarter of September, October
and November, 1961.
The petitioner's licence No. 47 was revalidated on 28
May,
1962
for
£ 16,000 for which the peytfoner had not till then opened letter of credit.
868
SUPREME COURT REPORTS
Cl 97 51 3 s.c.It.
27 February, 1962 is the date when the Administrator of Goa suspended issue of
fo:sh letter of credit. In 'the month of July, 1962 the petitioner effected imports
of goods for the full value.
The Imports and Exports Control Act, 1947 was applied to Goa, Daman &
Diu from 1 October, 1963.
In October, 1964 the original concern was taken over by the petitioner.
In 1967 the Hamd Book for the year 1967 declared the period 1 April, 1961
to 31 March, 1966 as the basic period and any one year during the period could
be: sele~ted a5 the basic import by the concerned party who would become the
established importers.
On

## Text

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' D
J. FERNANDES & CO.
v.
THE DEPUTY CHIEF CONTROLLER OF
IMPORTS & EXPORTS AND ORS.
March 7, 1975
[A. N. RAY, C. J. AND K. K. MATHEW, J.]
867
cdnstitution of India, 1950, Articles 73(l)Ca), 239(1), 240
a11d 264(4)-
depen¥ing 011 whether licence was granted before or after liberation of GoaC/assi~cation, if valid.
Co11stitwio11 of India, 1950, A rt. 32-Grant of import licence-Petitioner
no't cha//e11gi11g the validity of the Statute or statutory orders-Wrong application
of law, if ll i·iolation of fundamental. right.
·
Constitution of India, 1950, Ardcles 73(l)(a), 239(1), 240 and 246(4)-
Unfrm Territory, administration of-Union Government, if can issue executive
directions to Administrator.
Goa, Daman and Diu (Administration) Ordinance No. 2 cf 1962, Ss. 3, 4
and 7 and Goa, Daman and Diu (Administration) Act No. 1 of 1962, Ss. 4, 5
and 9-Validarion of all actions taken in good faith and for peace and r:ood
Govemment of Goa, Damon and Diu-Licence granted contrary to prccedure
or by mistake or inadvertence, if could be val(dated.
Co11stitution of India, 1950, Article 19(1) (/)-Rejection of application for
grant of impo/'f /icence-Petitione.r, if can claim fu11damen1a/. right· to the grant
of licence on the basis of a policy statement.
lmcmaticna/ Law-Acquisition of new Territory by Union of lndia-Rir:hts,
if could be founded on pre-liberation law-Central Govemment (new Sovereign),
E
if can alter pre 1existing procedure for issuing impo~t licence.
F
G
H
The petitioners are a partnership firm.
They are successors to J .. Fernandes
& Comriany (Original concern) of which Joshino Fernandes was the sole proprietor. Jn '.he month of October, 1961 the original concern booked orders for
rurchn"~ ·of Surveying & Mathematical Instruments and Surgical & Sdentific
Instruments with a German fir'm.
The orders were accepted by the German firm
on 7th November, 191!1.
On 19/20 December, 1961 Goa was liberated, On
18 Ja.nunry, 1962 the original con,cern applied to the Administrator of Goa for
issuing an import licence for £32,652.10 for Surveying and Mathematical lnstru.
ment< ~nd Surgical and Laboratory Equipments, along with necessary papers of
.firm commitments. The ·original concern obtained a licence on 12 February,
1962. The licence was No. 47. It opened a letter of credit on 21 February,
1962 for 50 per ·cent of the licence. The Central Government on 21 February,
1962 informed the Administrator, Goa, that the Central Government withheld,
actio;i on all pending cases where import had been authorised. Pursuant thereto
the Administrator, Goa issued directions to suspend issue of letter of credit ·and
all cases refoting to firm commitments entered into before 18 December. 1961
which were till then not disposed of, should be frozen.
On April 2, 1962 the
Administrator of Goa issued a Press Note that imports into Goa, Daman and
Diu would be governed by three principles. First import would be allowed in
cases (a) where letters of credits had been opened with the Banco National
Ultra Marines on or before 18 December, 1961; (b) where goods were shipped
on or before 20 December, 1961.
Second, imports of certain specified items
were banned. Third, imports would be allowed of certain goods to the extent
of 50 per cent of imports actually made in the quarter of September, October
and November, 1961.
The petitioner's licence No. 47 was revalidated on 28
May,
1962
for
£ 16,000 for which the peytfoner had not till then opened letter of credit.
868
SUPREME COURT REPORTS
Cl 97 51 3 s.c.It.
27 February, 1962 is the date when the Administrator of Goa suspended issue of
fo:sh letter of credit. In 'the month of July, 1962 the petitioner effected imports
of goods for the full value.
The Imports and Exports Control Act, 1947 was applied to Goa, Daman &
Diu from 1 October, 1963.
In October, 1964 the original concern was taken over by the petitioner.
In 1967 the Hamd Book for the year 1967 declared the period 1 April, 1961
to 31 March, 1966 as the basic period and any one year during the period could
be: sele~ted a5 the basic import by the concerned party who would become the
established importers.
On 15 May, 1967 the petitioner applied to the licensing
authorities
for
recognising the change in the constitution of the firm and fixation of quota for
whkh they could import the goods. The licensing authorities recognised the
ch~~ge in. the constitution but refused to ~x the qu.ota on the ground that the
Ongmal !tcence. No. 47 grante~ to the original concern on 12 February, 1962
was not 1SSued 111 accordance with the procedure followed for the issue of licence
at. that time. The petitioner filed an appeal against the order. The appeal ':Vas
re1ected.
This writ. pet~tion has been filed by the petitioners praying for a writ of
mandamus directmg the respondents to cancel four orders mentioned in the
petition and to issue quota certificate to the petitioners.
It was contended for the petitioners : (i) The petitioners' fundamental right
under Art. 14 is violated because the re!pondents discriminated aga'inst the i1etitioners. The respondents granted licences to six parties. There is no di~inction
b<itween the cases of the petitioners and the ca~~ of the six traders.
(ii) Tbe
licence No. 47 dated 12 February, 1962 was a licence issued in accordance ,,1ith
the procedure· followed for the issue of licence at that time. The directions of
the Central Government were illegal. The Central Government was not com·
pctent to issue directions to the Administrator of Goa except through
the
President in view of Arts. 239 and 240 ot the Constitution. (iii) The provisions
of the Goa, Daman and Diu (Administration) Ordinance No. 2 of 1962, :and
Goa, Daman and Diu. Administration Act 1 ot 1962 cured all irregularities of
the State, if any, for the grant of Hcence. And (iv), the refusal to consider
the application affects the fundamental right of the petitioner to carry on trade
and business.
,
Rejecting the contentions and dismissing the writ petitions,
HELD: (i) T)l(: classificatio'! of persons with reference ~o the. grant of import
licence depending on whe!her it ~as .granted befor~ the. l~berat~on or .after !he
liberation of Goa is a vahd class1ficat1011 based on mtelhgible differenha having
a rational nexus with the object of import' licence policy. There is no violation
of Art 14. The petitioner stands on a different footing and does not belong
to the· class of persons who were given import licences durini: the Portuguese
Rule before liberation of Goa. [872 G-H]
(ii) The petitioner does not challenge the validity of paragraph 33(n) of the
Hand Book of Rules of Procedure. There is no challenge to the authority of
the Deputy Chief . Controller of Imports and Exports to pass an order in the
light of paragraph 33(n) of the Hand Book. [873 C]
Really the petitioner's contention is that the licensing authorities misapplied
or wrongly applied tiJe Imports and Exports Control, Act. A p~tition under
Art. 32 will not be competent to challenge any erroneous decision
of an
authority. [873 DJ
Gulabdas & Co. v. Assistant Collector of Customs, A.I.R. 1957 S.C. '/33,
Sta:e of Jammu & Kashmir v. Mir Gulam Rasul, [1961] 3 S.C.R. 969, Smt. Ujfam
Bai v Stale of U J°., [1963] I S.C.R. 778 and Bhatnagars & Co. Ltd. v. Union
ol India, [1957] S.C.R. 701 at 712, relied on.
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J. FERNANDES & CO. V. DY. CHIEF CONTROLLER (Ray, C.J.)
86 9
Parliament has'power under Art. 246( 4) to make laws with respect to any
Union Territory. The executive power of the Union under Art. 73 (1)(a) shall
extend to the matters with respect to which Parliament has power to make laws.
The Union Government has. therefore, power to issue executive directions to the
Administrator of a Union Territory. So long as there is no conflict between a
direction issued by the Central Governmeut and a Presidential Regulation made
under Art. 240, the Administrator of a Union Territory is bound to carry out
the orders and directions given by the Central Government. [875 G-H]
Shamsher Singh v. Stale of Punjab & Anr., A.LR. 1974 S.C. 2192, referred
to.
There is no particular statute or Portuguese law which confers any right on
the petitioner to get an import Hcence in the circumstances in which it was issued
to him. Even if pre-liberation laws continued to be in force with effect from 5
March, 1962 that would not take away power of the Central Government to
modify or alter the pre-existing procedure for issuing import licences, after
liberation, ·in exercise of its executive .l)Owers
under
Art.
73(1)
of
the
Constitution. [876 DJ
(iii) Section 3 and 4 of the Goa, Daman and Diu (Administration) Ordinance
No. 2 of 1961 and Section 4 an!f 5 of the Goa, Daman and Diu (Administration)
Act No. 1 of 1962 do not support the case of the petitioner. These provisions
io the Ordinance and the Act came into force on 5 March. 1962. The import
licence was issued on 12 February, 1962 which is prior to the coming into force
of the provisions of the Ordinance and the Act. After the liberation· of Goa the
Portuguese laws were not in force and, therefore, the petitioner cannot take
recourse to the Portuguese laws for the validity of the licence which was issued
on 12 Februar.v. 1962. The Chief Civil Administrator was subordinate authority
to the Government of India and was bound to obey the directions of the Central
Government. The Chief Civil Administrator had no authority to issue a licence
m disregard of the directions of the Central Government. Such a licence would
not confer· any right on the petitioner. [874 C-E]
State of Punjab v. Jagdip Singh, [1964] 4 S.C.R. 964, referred to.
The petitioner cannot draw any sustenance either from section 7 of the
Ordinance or section 9 of the Act for three reasons.
First, the scope of validation is limited to such acts which were done in good faith and with the reasonable
belief that they were necessary for peace and good Government. The licence
was issued in contravention of lawful dLrections given by the Government of
India. The licence was not issued in good faith or in a reasonable belief that
they were necessary for the peace and good Government of Goa, Daman and
Diu. Second, the validation was not intended to protect breaches of directions
:ssued by the new sovereign. [874 E-G]
Pam~ Chi bar v. Union of India, (1966] 1 S.C.R. 357, referred to.
Third, in the year 1967 the Government of India laid down the conditions
that imports m'ade under licences issued through inadvertence or mistake in the
past would not be considered for issuing the import quota certificate. This is
a matter of polky. The policy decision is also not challenged by the petitioner.
If the policy is followed and in a given case a licence was issued contrary to
the procedure or by mistake or inadvertence the decision in the year 1968 in
the light of the. policy enunciated in 1967 cannot be regarded. erroneous simply
on the ground that the original licence erroneously issued in 1962 might be
validated under s. 7 of the Ordinance. [874 H-875 BJ
Revalidation was in violation of the terms and conditions set out by the
Chief Civil Administrator in his Press Note dated 2 April. 1962. It is not
correct to say that the Chief Civil Administrator revalidated the licence dated
12 February 1962 on 28 May, 1962. The Chief Civil Administrator merely
extended. the validity of the licence for a further period of 90 days. It is not a
case of revalidation of a defective licence but a case of extension of the duration
of the licence. [875 C-D]
870
SUPREME COURT REPORTS
(19751 3 s.c.R.
(iv) No mat1:rials were shown to establish that the original concern was I.\
A
regular registered importer, That apart, no person can on the basis of a policr
stakment claim a right to the grant of an import licence.
This Court has
held that there is no absolute right much less a fwidamental right, to the grant
of an import licence. In the present case, there is no misconstruction of any
i,tatulory provbion. It cannot be said that there is no authority of law to reject
an application for import licence. [876 E-E; 877 C-E]
Smt. Ujjam Bai v. Sta~e of U.P., [1963] J SCR 778, M js. A11dhra Industrial
B
Works v. C/1ief Controller of Imports and Others, AIR 1974, SC 1539, and
Deputy Asofawnt Iron and Stee! Cont.roller
v.
L. Manickchand, Proprietor,
Kuoclla Met<!l Corporation, Madras, [1972] 3 SCR I, relied on.
Tata Iron and Steel Co. Ltd. v. S. R. Sarkar, [1961] 1 SCR 379, K. T. Moopil
Nair v. The Stare of Kera/a,
[1961] 3 SCR 77, Shri Madan/al Arora v.
1 he Excise and Taxation, Officer, [1962] 1 SCR 823, referred to.
ORIGINAL JURISDICTION : Writ Petition No. 615 of 1970.
c
Petition under Art. 32 of the Constitution of India.
Y. S. Chitale, H. N. Ramachandra and B. R. Aganwria,
petitioners.
P. f .. Rao and S. P. Nayar, for the respondents.
The Ju:igment of the Court was delivered by
for the
RA[Y., C. J.--This writ petition is for a mandamus directing the
r:~spondents to cancel for orders mentioned in the petition and to
issue quota certificate to the petitioners in
respect of their
past
irniports.
D
The petitioners are a partnership
firm.
The petitioners
are
E
successors to J. Fernandes & Compa•11y of, which Joshino Fernandes
was the sole proprietor, hereinafter referred to as the original concern.
In the month of October, 1961 the original
concern booked
orJcrs for purchase of Surveyi1,1g & Mathematical Instrume11ts
and
Surgical & Scientific Instruments with a German firm.
The orders
were accepted by the German firm, as will appear from the letter
F
dated 7 November, 1961.
On 19/20 December, 1961
Go>a was liberated.
Prior to the
liberation of Goa import licences were granted to the citizens
of
Goa by a
Government Department known as "Junta do Comercio
Externo" which means the Board of External Trade.
The original
concern is alleged to be an importer registered with the Junta priior
G
to the month of December, 1961.
After the liberation of Goa the
representatives of Goa Chamber of Commerce and Industry saw the
Administrator of Goa wiith regard to applications for import.
On
18 January, 1962 the original concern applied to the Administrator
of Goa for issuing an import licence for £ 32,652.10 for Surveying
anJ Mathematical Instruments and Surgical and Laboratory Equipments, along with necessary papers for firm commitments.
H
The original concern obtained a licence on 12 February, 1962.
Thi~ licence was No. 47. The original concern was allowed to import
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J, EERNANDES & CO. V. DY. CHIEF CONTROLLER (Ray, C.J.)
871
instruments, microscopes, laboratory apparatus and utensils all worth
£32,652-10-0. The original concern opened a letter of credit on 21
February, 1962 for 50 per cent of the licence.
The Central Government on 21 February, 1962 informed
the
Administrator, Goa, that the Central
Govem.ment withheld action
on all pending cases where import had been authorised. The Central
Government gave two reasons.
First, the Government were of the
view that any relaxation o~ import would result in serious drain on
foreign exchange, and second that it was difficult for any :;.uthority to be
satisfied about the firm commitments and some abuse was possible.
Pursuant thereto. the Administrator, Goa issued direcfrons to suspend issue of letter of credit and all cases relating to firm commitments entered into before 18 December, 1961 which were till then,
not disposed of, should be frozen.
On 2 April, 1962 the Administrator of Goa issued a Press Note
that imports into Goa, Daman and Diu would be governeJ by three
principles. First, import would be allowed in cases (a) where letters of
credits had been opened with the· Banco National Ultra Marines 01,1
or before 18 December, 1961; (b) where go'Ods were shipped on or
before 20 December, 1961. ·
Second, imports of certain specified
items were banned.
Third, imports would be allowed of certain
goods to the extent of 50 per cent of imports actually made in the
quarter of September, Octuber and November, .1961.
The petitioner's licence No. 47 was revalidated on 28 May, 1962
for £ 16,000 for which the petitioner had not till then opened letter
of credit.
27 February, 1962 is the date when the Administrator
of Goa had suspended to issue fresh letter of credit.
In the month
of July, 1962 the petitioner effected imports of goods for the full
value.
The Imports and Exports Control Act, 1947 was applied to Goa,
Daman & Diu from 1 Oct~ber, 1963.
F
In October, 1964 the original concern was mken over by the
G
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petitioner.
In 1967 the Hand Book for the year 1967 declared the peri'od 1
April, 1961 to 31 March, 1966 as the bask period and any one year
during the period could be selected as the basic import by the concerned party who would become the established importers.
On 15 May, 1967 the petitioner applied to the licensing authorities for recognising the change in the
constitution of the firm and
fixation of quota for which they could import the goods. The Iicens-.
ing authorities recognised the change in the constitution but refused
to fix the quota on the ground that the original licence No. 47 granted to the original concern on 12 February, 1962 was not issued
h1
accordance with the procedure followed for the issue of licence at
that time.
The petitioner filed an appeal against the order.
The
appeal was rejected.
The petitioner filed a review application which
was rejected.
872
SUPREME COURT REPORTS
[19751 3 s.c.R.
The petitioner's grievances are these: First, licence No. 47 d'ated
12 February, 1962 was a licence issued in accordance with the proc;edure followed for the issue of licence at that time.
The directions
of the Central Government were illegal.
The Central Government
was not competent to issue directions to the Administrator of Goa
except through the President in view of Articles 239 and 240 of the
Constitution.
Second, the provisions of the
Goa,
Daman,
Diu
Administration Ordinance No. 2 of 1961, hereinafter referred to as
lthe Ordinance and Goa, Daman, Diu Administration Act 1 0£ 1962
hereinafter referred to as the Act cured all irregularities of the State,
li! any, for the grant of licence. Third, refusal to consider the applicat10n affects the fundamental right of the petitioner to carry ota trade
and. bu~iness. Fourth, the petitioner's fundamental right under Article
1_4 1s v1~lated because the responde_nts discriminated against the petitroner.
fhe respondents granted hcences to six parties. It is said
that the conditions, namely, shipping . before 20 December 1961 and
opening of letters of credit before 18 December 1961 'could only
operate in respect of licences issued by the Portu'guese Government.
When by reason of policy, ~hese were the conditions
applied, the
same sh·ould have been applied even to those who were given licences
under the old laws by the Portuguese Government or those who were
given licences by the AJministrator of Go:1 under the operation of the
old laws.
There is no distinction between the cases of the petitioner
and the case of six traders mentioned in Annexure R-4 at page 169.
The contention of the petitioner tlrnt six traders have been granted
licences whereas the petitioner was not, and, there was violation under
Article 14 is unacceptable.
These six licences were issued· before
liberatio!l between the period 12 February, 1961 and 4 December,
1961.
TI1c six licences were issued prior to the liberation of Goa.
The liberation 'Of Goa was on 19 December, 1961.
On 20 December,
1961 Goa became a Union Territory.
The licence on which the petitioner bases the claim was dated 12 February, 1962.
The petitioner
was not admittedly issued any licence before the liberation of Goa.
Between the liberation of Goa and the application of the petitioner for
licence, the Government of India issued on 3 January, 1962 to the
Chief Civil Administrator, Goa certain directions regarding the issue
of import licence.
The original concern had not opened letter
of
credit before 18 December, 1961 and the goods in question were not
shipped prior to 20 December, 1961.
The application of the petitioner was subsequent to the issue of directions dated 3 January, 1962 by
the G.:ivernment of India that imports would be allowed if letter of
credit had been opened before 18 December, 1961 or shipment had
taken place before 20 December, 1961.
The classification of per:;ons
with reference to the grant of import licence depending on whether
it was granted before the liberation or after the liberation of Goa is a
valid classification based on intelligible differentia having a rational
nexus with the object of import licence policy.
There is no violation
of' Article 14.
'The petitioner stands on a different footing and docs
not belong to the class of pers:ons who were given import lic:ences
during the Portuguese Rule before the liberation of Goa.
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J. FERNANDES & CO. V. DY. CHIEF CONTROLLER (Ray, C.J.) 873
The petitioner challenges the orders doate~ 28 September, 196~
rejecting the petitioner's applicati?n for the issue of ~ quota certificate.
The Government rejected rt on the ground that hcence No. 4 7
dated 12 February, 1962 was not issued in acc?rdance with the procedure prescribed for issue of licences, at that time. The Government
relied on paragraph 33 (n ) of the Hand Book ?f Rules, 1968. In shor.t,
that paragraph is that licence would be given only for the ?as1c
period between 1 April 1961 and 31 March, 1966 to establlshe<l
importers. The Governrhent took. th~ stand t~at the ~titioner is not
eligible because there was ,no valid hcence.
fhe petitioner does not
challenge the validity of any provision of the Imports and B~ports
(Control) Act, 194 7, oc any provision of any statutory. orders issued
thereunder.
The petitioner does not challenge the vahd1ty of para·
graph 33 (n) of the Hand Book of Rules of Procedure. There is no
challenge to the authority of the Deputy Chief Controller of Imports
and Exports to pass an .order in the light of paragraph 33(n) of the
Hand Book.
Reoally, the petitioner's contention is that the licensing authorities
misapplied or wrongly applied the Imports and Exports Ce1,1trol Act.
A petition under Article 32 will not be competent to challenge any
erroneous decision of an authority.
(See Gulabdas & Co. v. Assistant Collector of Customs(!) and State of Jammu & Kashmir v. Mh·
Gulam Rasul). (2)
A wrong application of Jaw would not amount
to a violation of fundame\1tal right.
Das, C.J. said in the case of
Gulabdas & Co. (supm) that ;f the provisions of Jaw are good and the
orders passed are within the jurisdiction of the authorities there is
no infraction of fundamental right if the authorities are right or wrong
on facts.
In the case of Gulabdas & Co. (supra)
the petitioners
challenged the order of the Assistant Collector of Customs.
The·
Customs authorities assessed duty under Item 45 ( 4) of the Indiaf,1
Customs Tariff.
The petitioners in that case contended that the duty
should have been assessed under Item 45 (a). This Court held that
there was neither any violation of fundamental right under Article 19
or any unequal treatment and the petition was not maintainable. This
Comt in the case of Smt. Ujjam Bai v. State of U.P.( 3) as also in the
case of Bhatnagars & Co. Ltd. v. Union of India,(4 ) held the same
view that any erroneous decision would not be a violation of fundamental rights ..
The petitioner relied 01,1 sections 3, 4 and 7 of the Goa, Daman &
Diu (Administration) Ordinance 1962. Section 3 of the Ordinance
G
in short stated that authorities who immediately before the commencement of this Ordin•ance were exercising lawful fu
1.1ctions in connection
with the Administratio11 of Goa, Daman and Diu or any part thcreofl
shall, unless otherwise directed continue to exercise in connection
with such administration thei't' respective functions. Section 4 or the
Ordinance speaks of continuance of existi'ng laws and their adaptation
l
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until amended or repealed by a competent legislature. Section 7 says
-ihat all things done and all actions taken on or 11.fter the appointed day
(I) A.l.R. 1957 S.C. 733.
(2) [1961] 3 S.C.R. 969.
(3) [1963] l S.C.R. 778.
(4) [1957] S.C.R. 701 at 712.
8 74
SUPREME COURT REPORTS
[19751 3 s.c.R.
which was 20 December, 1961 and before the commencement of the
on: nance, viz., 5 March, 1962 by the Administrator. or any other
offkcr 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 Jaw.
The petitio~1er also relied on sections 4, 5 and 9 of the Act. Section
4 speaks of officers who before the commencement of the Act were
exercising lawful functions would continue to exercise their rnspective
functions.
Section 5 of the Act speaks of continuance of existing.
laws and their adaptation until a.mended or altered by the competent
Legislature.
Sectioi.1 9 of the Act speak~ of validation of ce:rtam action and indemnity of officers for certain acts similar to section 7 of.
the Ordina.nce ..
Sections 3 and 4 of the Goa, Daman and Diu (Administration)
Ordianance No. 2 of 1961 and Sections 4 and 5 of the Goa, Dama1,1
and Diu (Administration) Act No.1 of 1962 do not support the case
of the petitioner. These provisions in the Ordinance and the Act
came into force on 5 March, 1962. The import licence was i1:sued on
12 Febmary, 1962 which is prior to the comi'ng into force of the provisions of the Ordinance and the Act. After the liberation of Goa the
Portuguese laws were not in force and, therefore, the petitioner cannot
take recourse to the Portuguese laws for the validity of the licence
which was issued en 12 February, 1962. The Chief Civil Administrator was su·bordinate authority to the Government of India a.nd was
boirad to obey the directions of the Central Government. The Chief
Civil Administrator had no authority to issue a licence in disregard
of the directions of the Central Government.
Such a Iicenct~ would
not confer any right on the petitioner (See State of Punjab v. Jagdip
Sm&h) ((I).
The petitioner cannot draw a'ay sustenance either from section 7
of th·~ Ordinance or section 9 of the Act for three reasons. First,
the scope of validation is limited to such acts which were done in· good
faith and with the reasonable belief that they were necessary for peace
and good Government. The licence was issued in cO'ntravention of
lawful directions given by the Government. of India.
The licence
was not issued in good faith or in a reasonable belief that the:y were
necessary for the peace and good Government of Goa, Dama~1 and Diu.
Second, the validation was not intended to protect breaches of directions issued by the new sove~eign.
(See Pama Chibar v. Union of
India) (2).
If the licence dated 12 February, 1962 was validated by section 7
of the Ordinance that validatida would be an answer to any move on
the part of the responde11ts to cancel that particular licence.
What
was deemed to be valid by legal fiction for a certain purpose, notwithstanding the infirmity in granting it, cannot confer any right ml the
petitioner to claim in future as a matter of right, any import quota.
(I) [1964] 4 S.C.R.. 964.
(2Hl966] 1 S.C.R. 357.
B
c
D
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G
H
A
B
c
D
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F
G
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J. FERNANDES & CO. V. DY. CHIEF CONTROLLER (Ray, C.J.)
8 75,
The validation would be only in respect of past transactions.
Third,
in the year 1967 the Govemment of India laid down the conditions
that imports made under licences issued through inadvertence or mistake in the past would not be considered for issuing the import quota
l.!ertificate.
This is a matter of policy.
Normally, courts do not go
into such policy decision.
The policy decision is also not challenged
by the petitioner.
If the policy is followed and in a given case a liceace was issued contrary to the procedure or by mistake or inadvertence,
the decision in the year 1968 in the light of the policy enunciated in
1967 cannot be regarded erroneous simply on the ground that the
original licence erroneously issued in 1962 might be validated under
section 7 of the Ordinance.
A1,1y revalidation of the licence on 28 May, 1962 by the Administra·
tor would not assist the petitioner in regard to obtait1ing CjUOla dghto;.
On 12 April, 1962 the Administrator himself issued a Press
Note
specifying the conditions subject to which imports would be allowed.
• Revalidation was in violation of the terms and conditions set out by
the Chief Civil Administrator in his Press Note dated 2 April, 1962.
It is not correct to say that the Chief Civil Administrator revalidated
the licence dated 12 February, 1962 on 28. May, 1962. The Chief
Civil Admi~1istrator merely extended the validity of the licence for a
further period of 90 days.
It is not a case of revalidation of a d~fec
tive licence but a case of extension of the duration of the licence. If
the original licence was defective mere extension of the duratio1a of
the licence could not cure the defect.
In any event, the protection,
if any, of the validating section in the Ordinance would not extend
beyond 4 March, 1962 because the acts validated u'nder section 7 of
the Ordinance must have been done between 20 December, 1961 and
4 March, 1962.
The directions issued by the Central Government 'are impeached
by the petitioner to be in violation of Articles 239 and 240 of the
Constitution.
Under Article 1 (3) (c) of the
Constitution,
Goa,
Daman and Diu became part of the territory of India by acquisition.
Goa, Daman and Diu became a Union Territory on and from the date
of their acquisition by the Government of India.
Under Article 239 ( 1)
a Union Territory shall be administered by the President acting through
an Administrator.
Article 240 empowers the President to make regulations for the peace, progress and good Government of the l~
1nion
Territory. In the present case no Presidential Regulation was relied
on by either side.
Parliament has power under Article 246 ( 4) to make laws with
respect to any Union Territory. The executive power of the Union
under Article 73 (1) (a) shall extend to the matters with respect to
which Parliame'nt has power to make laws.
The Union Government
has, therefore, power to issue executive directions to the Administrator
of a Union Territory.
So long as there is no conflict between a direction issued by the Central Government and a Presidential Regulation
made under Article 240, the Administrator of a Union Territory is
boul1d to carry out the orders and directions given by the Central
Government.
The decision of this Court in Shamsher Singh v. State
876
SUPREME COURT REPORTS
U 97 51 3 s.c.R.
of Punjab & Anr.(I) is that the powers conferred on the Pr~sident by
Article 239 are to be exercised by him on the aid and advice of the
Cabinet. Therefore, the directions issued by the Central Government
are valid because of the combined effect of Article 73 and Atricle 246
which CO'a.fers power on the Union executive to exercise powers in
respect of matters with respect to which Parliament has competence to
make laws.
ln the present case, ihe Chief Civil Administrator himself declared
in a Press Note dated 2 April, 1962 the terms and conditions subject
to which import licence would be grante.d .. The alleged revalidation of
licence No. 47 in the month of May, 1962 took place subsequent to
tl~e Press Note a.nd contrary to the terms a·nd conditions. It was really
not a revalidation of the licence but an extension of the period, If
the licence itself was defective, there could not be any validation of the
licence as was c:ontended for by the petitioner.
There is no par1:icular statute or Portuguese law which confers
a!ay right on the petitioner to get an import licence in the circumstani~es .
in which it was issued to him. Even if pre-liberation laws continued
A
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to be in force with effect from 5 March, 1962 that would not take
D
away power of the Central Government to modify or alter the preexisting procedure for issuing import licences, after liberation, in exercise of its exei::utive powers under Article 73 (1) of the Constituti<Jl11.
The: petitioner contended that the original concerh was an importer
registered with t:he Ju1ata prior to December, 1961. The respondents
denied th•at allegation. The petitioner in the rejoinder alleged that it is
J<:
to be presumed that the original importer must have been registered
wiith the Ju'nta, prior to the liberation. No materials were shown to
establish that thi~ original concern was a regular registered importer.
The contu1tion on behalf of the respondents that tbe licence was issued
without following the regular procedure and by inadvertence or misrake
is borne by the facts and circumstances of the case particularly because
the Chief Civil Administrator had no authority to issue a11y import
F
licences in contravention of the directions of the Central Government
issued on 3 January, 1962.
The petitioner relied on the decision of this Court in M/s. Andhra
Industrial Works v. Chief Controller of Imports and others(2)
in
support of t_he proposition appearing at page 1542 of the Report. The
proposition stated there in that one of the instances in relation to laws
G
regulating the citizen's right to carry on trade or business guarantef:d
by Article l 9(1) (g) may be catalogued as where the impugned acticin.
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 resul:ts
in violation of •,1 fundamental right.
In the case of M /s. A ndhra
Industrial Works (supra) the proposition which was extracted from
Ujjmnhai's case (supra) is that an order of assessment made by an .
authority under a taxing statute which is intra vires, cMnot be challengH
ed under Article 32 as repugnant to Article 19(1) (g) on the
sol~
(l) A.LR.1974 S.C. 2192.
(2)A.I.R. 1974 S.C. 1539,
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J. FERNANDES & CO. V. DY. CHIEF CONTROLLER (Ray, C.J.) 877
ground that it is based on a misconstruction of a provision of the Act
or of a notification issued thereunder.
fa Ujjambai's case (supra)
it was said that when assessment proceedings are repugnant to rules
of natural justice there is an infringement of the right guaranteed under
Article 19 (1 )(f) and 19 (1 )(g). In support of that proposition reference
was .made to Tata lrO,n and Steel Co. Ltd. v. S. R. Sarkar('), K. T. Moopil Nair v. The State of Kerala( 2 ) and Shn Madan. ·
lal Arora v. The Excise and Taxation Officer(8 ).
In the case of Andhra Industrial Works (supra) an objectfon was
raised on behalf of the res~ondents that the petition was not compe·
tent because there was no violation of fundame111tal rights. This Court
upheld that objection and said that neither the Imports and Exports
(Control) Act nor any order thereunder was alleged to be ultra vires
nor was the Import Control Policy impeached. A policy statement
was held to be not a statutory document. No person can dn. the basis
of a policy statement claim a right to the grant of an import licence.
This Court. also held that there is no absolute right much less a fundamental right, to the grant of an import licence.
This Court in Deputy Assistant Iron and Steel Controller v. L
Manickchand, Proprietor, Katrella Metal Corporation, Madras(') held
that no one has any vested right to an import licence in terms of the
policy in force at the time of his application. There is no misconstrue·
tion of any statutory provision in the present case. In the present
case, it cannot be said that there is no authority of law to reject ·an
application for import licence.
For these reasons, the petition fails and is dismissed. Parties will
pay and bear their own costs.
V.M.K.
(1) [1961] 1 S.C.R. 379.
(3) [196211 S.C.R. 823.
Petition dismissed.
(2) [1961] 3 S.C.R. 77.
(4) [197l] 3 S.C.R. 1.