# DAVA SON OF BHIMJI GOHIL v. JOINT CHIEF CONTROLLER OF IMPORTS & EXPORTS - **Citation:** [1963] 2 S.C.R. 73 - **Court:** Supreme Court of India - **Decided:** 1963 - **Bench:** B .. P. Sinha, K. SuBBA ltAo, N. Rajagopai, A Ayyangar, J. R. MuDHOLKAR, T. L .. Venkatarama Aiyar - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dava-son-of-bhimji-gohil-v-joint-chief-controller-of-imports-exports-2544 - **Pages:** 39 ## Headnote , Export Control-Manganese Ore-Notifications canalising expo-rt and preventing new entrants from exporting-Oonsti~ tutionality of-State Trading Corporation-Monopoly of export creat~d in favour of-!! infringes fundame.ntal right to carry on trade-Notification dated May 26, 1958-Exports Control Order, 1958-lmport~ and Exp6rts (Control) Aot, 194.7 (18 of 1947), s. 3-Constitution of India, Art.s.19 (1) (g) and 19 (6). There was little internal demand for manganese ore and it was extracted mainly for exporting out of India, TJlough previously there was no restriction on the grant of export licen- ' ces from 1956, the Central Government started controlling and restricting the export of manganese ore. On May 26, 1958, the Central Government issued a notification which contained the policy statemen.t for the period July 1958 to June 1959 under which export quotas were to be granted only to established shippers and mineowners who had exported from 1953 onwards and to the State Trading Corporation. Mine (\wner's, like the appellant who did not have an} export performance in the earlier years were excluded from the scheme. They could sell their ore only to the established shippers are to the Corpora· tion which they could do only at. unremunerative prices. By sub~equent policy statements the export was canalised entirely through the Corporation. Section 3 of the Imports and exports (Control) Act, 1947 empowered the Central Government to make orders restricting or controlling the imports and exports of goods. The Central Government made the Exports Control Order, 1958, cl. 6(h) of which empowered the Central Government and the licensing authority to refuse to grant a licence "if the licensing authority decides to canalisc exports through special or specilized agencies or channels". The Noti· fication of May 26, 1950, was issued under cl. 6(h). The appellants contended: (I) that the withholding of the right to engage in the export trade from a class of mineowners consti- ·tuted an unreasonable restriction on their fundamental right guaranteed under Art, 19(1)(g), (II} that cl. 6 (h) ofthe order was ultra virt! the Central Government as s. 3 of the Act - •··• ........ ' -~ - -:"k.. . ~ '' / 74 SUPR~~IE COURT REPORTS [1963] · 196Z . permitted it to pfac~ restrictions only on good:! and not on the D(j,'!Ja ''" oj Bhimji persons who might participate in the export, and (iii) that the '>-- Uohil notification by which canalisation of exports was affected wa.. v. outside the contempiation of". agency and channel under ,. JaitJt Chi~! Con 'roller cl. 6 (h). . · "'- •f Imp•rls .II Exports . .• . • · Held (per Smha, C.J., Ayyangar, Mudholkar and A1yar, · 'JJ.) that the restrictions and control imposed on the export of · manganese ore by the Central Government were legal and did not offend~t._l9(1) (g). The restriction or control in the form of channelling or . ,t canalising the trade was not outside the limitations which "'m:ght be imposed on export trading by s. 3 of the Act and consequently cl. 6 (h) of the Order permitting canalisation of exports was within the rule making pow:~r of the Ce~tral Government. The power to impose restrictions was not confined togoods but extended to persons also. The .canalis· . ing of the exports through the established shippers and mine- . owners was unobjectionable; canalising through the State Trading Corporation and the progressive increase through the corporation was a reasonable restriction in the interests of· · · the general public. The object ·or these restrictions and control was to enable ·a regular supply of uniform quality of the ore to the forei:;n buyers so as to ensure the optimum earning of foreign exchange by the count! y~ and this could best be attained with the Corporation as the main agency engaged in the trade: The State Trading Corporation was a "special" agency or channel as contemplated by d. (h) and the canalising could be done through it. A ~pedal agency is one which is more likely to ach ## Text _Characters 0–39,721 of 76,980. This is a partial read: ask again with offset=39721 for what follows._ ·' 2 S.C.R. SUPREME COURT REPORTS 73 DAVA SON OF BHIMJI GOHIL v. JOINT CHIEF CONTROLLER OF IMPORTS & EXPORTS (B .. P. SINHA, C. J.,. K. SuBBA ltAo, N. RAJAGOPAI,.A AYYANGAR, J. R. MuDHOLKAR and T. L .. VENKATARAMA AIYAR, JJ.) , Export Control-Manganese Ore-Notifications canalising expo-rt and preventing new entrants from exporting-Oonsti~ tutionality of-State Trading Corporation-Monopoly of export creat~d in favour of-!! infringes fundame.ntal right to carry on trade-Notification dated May 26, 1958-Exports Control Order, 1958-lmport~ and Exp6rts (Control) Aot, 194.7 (18 of 1947), s. 3-Constitution of India, Art.s.19 (1) (g) and 19 (6). There was little internal demand for manganese ore and it was extracted mainly for exporting out of India, TJlough previously there was no restriction on the grant of export licen- ' ces from 1956, the Central Government started controlling and restricting the export of manganese ore. On May 26, 1958, the Central Government issued a notification which contained the policy statemen.t for the period July 1958 to June 1959 under which export quotas were to be granted only to established shippers and mineowners who had exported from 1953 onwards and to the State Trading Corporation. Mine (\wner's, like the appellant who did not have an} export performance in the earlier years were excluded from the scheme. They could sell their ore only to the established shippers are to the Corpora· tion which they could do only at. unremunerative prices. By sub~equent policy statements the export was canalised entirely through the Corporation. Section 3 of the Imports and exports (Control) Act, 1947 empowered the Central Government to make orders restricting or controlling the imports and exports of goods. The Central Government made the Exports Control Order, 1958, cl. 6(h) of which empowered the Central Government and the licensing authority to refuse to grant a licence "if the licensing authority decides to canalisc exports through special or specilized agencies or channels". The Noti· fication of May 26, 1950, was issued under cl. 6(h). The appellants contended: (I) that the withholding of the right to engage in the export trade from a class of mineowners consti- ·tuted an unreasonable restriction on their fundamental right guaranteed under Art, 19(1)(g), (II} that cl. 6 (h) ofthe order was ultra virt! the Central Government as s. 3 of the Act - •··• ........ ' -~ - -:"k.. . ~ '' / 74 SUPR~~IE COURT REPORTS [1963] · 196Z . permitted it to pfac~ restrictions only on good:! and not on the D(j,'!Ja ''" oj Bhimji persons who might participate in the export, and (iii) that the '>-- Uohil notification by which canalisation of exports was affected wa.. v. outside the contempiation of". agency and channel under ,. JaitJt Chi~! Con 'roller cl. 6 (h). . · "'- •f Imp•rls .II Exports . .• . • · Held (per Smha, C.J., Ayyangar, Mudholkar and A1yar, · 'JJ.) that the restrictions and control imposed on the export of · manganese ore by the Central Government were legal and did not offend~t._l9(1) (g). The restriction or control in the form of channelling or . ,t canalising the trade was not outside the limitations which "'m:ght be imposed on export trading by s. 3 of the Act and consequently cl. 6 (h) of the Order permitting canalisation of exports was within the rule making pow:~r of the Ce~tral Government. The power to impose restrictions was not confined togoods but extended to persons also. The .canalis· . ing of the exports through the established shippers and mine- . owners was unobjectionable; canalising through the State Trading Corporation and the progressive increase through the corporation was a reasonable restriction in the interests of· · · the general public. The object ·or these restrictions and control was to enable ·a regular supply of uniform quality of the ore to the forei:;n buyers so as to ensure the optimum earning of foreign exchange by the count! y~ and this could best be attained with the Corporation as the main agency engaged in the trade: The State Trading Corporation was a "special" agency or channel as contemplated by d. (h) and the canalising could be done through it. A ~pedal agency is one which is more likely to achieve ·the object. than other agencies or to achieve it in a larger measure than others. Canalising n~cessarily implied the exciusion of some groups, and if the canalising was valid the appellant could not complain that he had been excluded fro:r;n the export trade. Per Subba Rao, J.-The Notifi~tfons and policy state• ments which destroyed the trade of ·mine owners like the appellant did not impose reasonable restrictions on their . fundamental rights and ·violated .Art. 19 (1) (g) .. The creation of ,a monopoly or near monopoly ~or the export. of man.,.anese ore in . favour of the State Tradmg Corporauon could only be achieved by a law made in conformity with· Art. 19 (6} (ii) and not by administrative action like issuing: --- · . of notifications and policy statement. The power conferred - . on the authorities under d. 6 (h) of the Order to canalise . exports through special or specialised. agencies or channels· . was well within the power conferred on -the Central Govern· ment by s. 3 of the Act. Further, the State Trading Corpo. ··· ration wa!!l a "special" a~rency within the m;nin~r of cl. 6(h). \ 2 S.C.R. ~UPREME COURT REPORTS 7.) But the canalising had to be done in such manner that all 19GB persons engaged in the trade could participate in th~ export DGtJa srm of Bhimjt of the ore and no one was completely excluded. . Gohil CIVIL APPELLATlll JURISDICTION: No. 226 of 1961. Civil Appeal Join! CMefController •f Imports ~ Exports Appeal from the judgment and o~·der dated October 22,. I9.j9, of the Bombay Htgh Court (Nagpur Bench) at Nagpur in Special Civil Application No. 63 of 1959. A. S. Bobde, G. L. Sanghi and Ganpat Rai1 for the appellant. ' G. K.. Daphtary, Bolicitor-Genual of India, Bishan Narain and P. D. Menon, for the respondents. 1962. April 16. The Judgment of the Court was delivered by AYYANGAR, J.-Thi~ appeal comes before us by virtue of a certificate of fitness granted by the Nagpur Bench of the High Court of Bombay under Arts. 132(1) and l33(l)(c) of the Constitution. It' arises out of a petition filled by the appellant under Art. 226 of the Constitution bef?re the High Court of Bombay at N 1gpur impugning t.he constiw tutional validity of certain notifications and direct· ion~ issued under tbe I :nports and Ex: ports {Control} Act, 1947, and the Export Control· Ord~-r. 1958, fl'amod thereuuJor and substantially prM·ed tba.t tT1e Joint Chief Controller of Imilorts & Exports, Bombay impleadeu as the first respondent should be directed to con ~ider the application of the app· clln.nt for the grant of a licence to enable him to export certain manganese ore which he had won from his mines, without reference to the impugned notifications. This petition was dismissed by the learned Judges of the High Court who, howevN·, -"( granted the appellar1t is certificate which has enabled him to file this appeal. DoJv, 1rm of Bltimjc Goh.ti v. Joint CAi~,t Crmlroller •! 1~11"' Ex;oru ~~arJ. 76 SUPREME OOURT REPORTS [1963] A few facts ar~ necessary to be stated to "'PPreciate the exact grievance of the petitioner and the grounds upon which the notifications etc. issued h.v government are stated to contravene the Constibtion and in particular to infringe the freedom granted to the appellant under Part III of the Constitution. The appellant is a lessee of certain manganese mines in two aroas of Madhya. Pradesh. The lea,es are stated to have been ~ant€d to him in t.he _years l953 for a period of 20 years each, with an option for renewal if the appellant so desired, under the Mineral ConcoSAion Rules 1949, for a like period. It is an admitted fAct that the in· ternal demand for manganese ore ~ India is very inconsiderable, eo that the ore i~ extracted mostly for the purpose of being ~xported out~ of India. Having regard to the date when thu appellant obtained the mining leases, he couli ,ot have won any appreciable quantity of the metal rluring 1953, nor, of course, could he have exported any quantity of the ore won by him in or prior to the year J 963. It is now n~oes~ary to set out the history of the restrictions on the export of manga"tese ore from 1953 up to tho date relevant to the petition to understand the points sought to be made on behalf of the appellant. Prior to 1953, i. e., at a time before tbt- appellant entered the managanese ore business, export of manganese ore was freely licensed, i. e., tho commodity was subject to no restriction a.s ragards export, nor wa111 any control exercised by government on the allotment of wagons for the movement of mangane:~e ore. As the export of the ore began to expand from that date, the Railways found themselves unable to meet the increased demand for wagons and were foroed to regulate the appellant of euch wagons. The government also took a hand in regulating the I \, '. • - .) t ! S.C.R. SUPREME COURT REPORTS 77 movement of wagons by evolving a. system of regia .. tration of shippers for whom prioritiy in the allotment of wa.O'ons was ensured. It has to be a..Jded that this re 0gula.tion and conbrol over wagon allotment a.nl wagon movement wa.s co-ordinated with and corre]ated to certain changes which were elfeotrd fo~ reg11lating the export of the commodity itself. 'Seotion 3 of the Imports and .Exports (Contl'oll Aot, 1947 (to be referred hereafter as the Aot) enacts : ua. Powers to prohibit or restrict imports and e:x:ports--(1) The c~ntrA.l GnvP-rnment say, by under publisherl in tlH'· Official Gazette, make provisions for nrohi,.,iting-, restricting or otherwise ControlJin.g, in all cases or in specified classeR of cases, and subject to such exceptions if any, as may be · made by or under the order :- . { 1\) the Import, export, carria~e mpered with an export li~nce or has ~· - 2 S.O.R. SUPREME COURT REPORTS 79 exported goods without a licence where it is necessary, or has been a party to any corrupt or fraudulent practice in his commercial deallngs; (e) ifthe applioatictn for an export licence is defective and does not conform to the prescribed rules;, t (f) if the applicant commits a breach of the Export Trade Control Regulations; {g) if the appellant is not eligible for a licence in accordance with the Export Trade Control Regulations; (h) if the licensing authority decides to ca.nali~e exports through special or specialized agencies or channels; (i) if the applicant is a partner in a partnership firm, or a director of a private limited co~pany, which is for the time being subject to any action under c1ause 8; - {j) if the applicant is a partnership firm or a private limited company, any partner or director whereof, as the case may be, is for the· time being subject to .any action under clause 8." The first restriction on tht'l export of maligane~e and iron ore was imposed in June, 1956 when the Ministry of Commerce and Industry issued -a public notice on June 26, 1956, settin!.! out their policy as regards export during the half year July to December. 1956.. After reciting that the government were oonv_inoed tha.t the then existing trading mechanism as regard~ the export of ores was inade· quate to code with ·the developments which had t&ken place in tbe purchasing countries, it went on to add that persons who entered into contracts 1962 Da~q son Q/ BJ.imji Gohil .... .1 oint Chi'/ Controiltr oj I m/J01'1S &: Expo' Is ApongarJ. 80 SUPREME OOURT REPORTS £1003) 1961 D;u •on of Bhimji Gohit with foreign buyers bad been unable to fulfil their commit-ments whirh had caused incovenienoo to foreign huyors and so undermined the latter's con· fid(>nce in thf' capscity of this country to m!Lintain an assured lint'~ of supply. In order, thert·fore, to overcome the obstacle in tho wa.:l' of tmg· menting foreign exchange earningi! from the t>xpert of thAse ores, the Government d~!clared that they would help in reorientating t.be trading jn ort's on more rational lines and that fur this purpnse they proposed to ca.nalise the export of ores in a. progr~Psively increasing measure through the State Trading Corpora\ion whil'h would in its turn rely on the minin~ interests in the country and usc the AXisting trade mechanism to the oxtent prnctica.hlP.. For these reasons, thl·y announced that a. ref?ula.tion would take place of 1he t>xpert. of the~ ores d•ning the half yt•ar July· December, 1956 through thre~ classes of ex:por· ters: •• Join I C~itl Cr ntrolltr •f lmporiJ. &: Elfporl, ( 1) Established .shipper.<~ who would be granted .-; r'l:p()rt quotas on the avf'!rage of the quantities exported during tho years 1953,' 1954 and 1955. (2) M·ineowrz.ers ba.sf>d on a annual average of the quantity of ore on which. roya.lt.y was paid during the calender years 1953, 1954 and 1955, and (3) The State Trading Corporation which would be given a. quota on an ad lwc bagis. It iR onl.v necessa.ry to mention that the State Trading Corpo. ration which iR a. Corporation owned and rontrollf'd by the Union Government came i11to existf>nce by. registration under the Indian Companks Act in Ma.v, 1956. Rail transport facilitie~ co.extcnsive with the quota granted. were also a~sutcd for those to whom · quotaB were granted. There were clarifications .and un1mbstantia l varia1 ions of this Press Note to whiJh, however, it iE< not 2 S.C.R. SUPREME COURT REPORTS 81 necessary to refer as they are not material to the points now in controversy. It will be noticed that the control thu1 exercised and the restrictions th.us imposed, mineowners who had not t-ntered the field before 1953 were excluded from the grant of any export ·quota. By a public notice dated September 4, 1956, th~ Ministry of Commerce, however, announced that the case of these "newcomers" was receiving tbeir 1 attention and that an announcement-in that rega.rd would be made in due course. · ' The same policy 'and the same basis of allocation was continued for the next half year Janua.ry to June 1957. For the period July, 1957 to June, 1958, (the government having now started pursuing the policy of announcing their quotas for a year instead of for six months), a Press Note was issued on ·June 1, 1957. by which exporters and . mineowners wer~ allotted a quota equivalent to 60 per cent of their exports made in 1958 or 1956 to be selected by them. The quota thus released was made available for being allotted to the State Trading Corporation on an ad hoc basis and the Press Note added: ''The State Trading Corporation will be allotted. in adequate _quota to enable them to maximise the exports of manganese: ore. The Corporation are being advised to seek_: the co-operation of established trading and mining interest ·to make this effort a success,'. Here again, certain unsubstantial modifications were made by further Press Notes but to these we shall not refer. As regards the next period July 1958 to June 1959, the policy·deoieion of the government was.indica.ted by a Public notice issued, on May 26, 1958. In the course of this Press--statement the Gov":ernment of India stated that they had been keeping under constant review the working of the 1962 Dorus sort of Bltimji G~llil v. J oi'lt Chief OoJCtrlll~r ofimports &l Ex;011s 1161 Dt1H ••~ of Bhimji Go/Iii v. J(lilo' Chvf Conttolltr tJj lm;tnts &: Exlort; 82 SUPH.EME OOURT REPORTS [1963J policy announced by them under the Preas Notes to which we have already referred, and that they had come to the conclusion that tho long-term interests of Indian Manganese ore would be better served if the export policy wero to discourage fragmentation of quotas and encourage bulk contract-ing, movement, and shipment of ores. A~ the same time, the Governmont expreased their keenness to maintain oontinuity in the export arrangements to the extent practicable. Having regard to these factors, they went on to state: ''Government have decided that for the period July 1958 to Juno 1959, the export of manganese ore will be regulated as follows. (i) The es~a.blished shippers, the mineowner. exporters and the state Trading Corporation will be given &n allotment of quota for a quantity oqual to the quota. for 1957-52. (ii) Firms and parties whose individual allotments are small aro advisod to form Co·operative or limited companios. 11 At the date when the writ petition out of whioh this appeal arises was filed, tho polioy.etatement of May 26, 1958, was in force and it was the validity of the restriction and control exeroised by it that waa challenged as unconstitutional in the petition filed by the appellant. The position at that date may be summarised as follows: (1) From and after July 1956 the export of manganese ore had been controlled or restricted. ''(" (2) The restriction had taken the form of allotment ~f quotas for export granted to: (a) established exporters, i.e., comprising the oategory or these who had exported from 1953 onwardfl, (b) mine-owners who had simiJar1y exported the ,.. 1 A - 2 s.c.:R. SUPREME COURT REPORTS 83 ore won by them with a similar limitation as to the year when they should have exported, and (c) The State Trading Corporation which was _granted an export quota on an ad hoc basis to cover every other quantity which could be exported and for which a foreign market could be found. Traders &nd mine·owners who had not any export performance to their credit in ear1ier years were excluded from the scheme and though the government were repeatedly stating in their public statements that the case of these persons termed "newcomers" would be considered, this had never been done. The appellant fell within the last category and was not eligible to apy export quota and therefore could not export. The result was that the ore won by him had either to be sold (a) in the internal market which, as stated earlier, was a very restricted one, tbis because the steel producing concerns which were the principal or practioalJy the only consumers of the ore in the country had their own mines from which the ore required by them was won~ and (b) in the absence of an internal market the mined ore had to be sold either to established shippers' or to the State Trading Corporation. In regard to established shippers, their quota of export was being progressively reduced, so that their demand for ore.· natura1ly shrank and unremunerative price had therefore to be offered by. the ''newcornersu to induce them to lmy. The only other . possible buyer was the . State Trading Corporation which was being granted quotas on an ad hoc basis sufficient .to enable it to get all the good ore which it might buy for whioh there might be a foreign buyer. In regard to the State Trading Corporation, there was an allegation made by the appellant, by reference to a. circular issued by the Corporation on April 20, 1957, that the terms offered for the purchase of ore were ~ unfair to the sellers because of the excessively large ()OJDmission it demanded. It should; however, be 1962 s1n of Ef.i,, ji G•hll v. J oinl Chief Conlrelkr of Imports d:~Ex;ow 1962 D, v, .- cf Bhimji Gohil v. J oir.t Chl, j Contr Hff of Jm~ts d: 1:.\po•ls 84 SUPRElJE CUORT REPOR'l'S (1963] stated tha.t tho State Trading Corporation was not implca.dc<.l a8 a party in the writ pet.ition in the High Court, nor any reliof sought on the ba.ais of that allegation. Tho circumstance was relied on mel'uly to emphasise the hardship caused to the appellant from the exclusion of those who had no expert performance in the years which were fixed a.a the basic years for the allotment of an export quota to mineownera. The State Trading Corpora· tion being owned and controlled by the Central Government is an agency or instrument of govern· ment for effectuating its commercial policy. If in the pt·rformance of its duties as such publio authority it acts in any improper or unfair manner it would be subject to the control of the Courts but as no relief basod on such a complaint was olaimed by the appeJlant, it is not necessary to pursue the point or examine its merits. The case of the appellant has to be judged on the basis of two admitted features resulting from the policy statements of Government we h~ve set out earlier : (1) That mineowuers who were "newcomers", i. e., not having export performance in certain basic years, were excluded from direct participation in the export trade, but these pe-rsons had, in view of the practical absence of an internal market for manganese ore to sell their gooda to others who had been granted facility for export. (2) That the eat<>gory of persons to whom they could sell their ore were two (a) Established shippers, and (b) The State Trading Corporation, and with the nature of this market as already described. The question raised for consi(;lera.tion by the appeal is whether the withholding of the right to engage in export trade from this clasa of mineown· ers constitutes an unreasonable restriction on their right to carry on buBinoss guaranteed by Art. 19 (I) ,. {g) of the Constitution. • 2 s.c.R.. SUPREME COURT REPORTS 85 Pausing here we might put aside one matter which is beyond the pale of cont.roversy, and that is that the constitutional validity of A. 3 of the Imports .& Exports Control Act, 194,7, wl1ich forms as it were the ultimate root from whir.h tlw impugned notifications and executive actions spring is conceded. The points urged by learned. Counsel for the appellant were two : (1) Clause 6 (h) of Exports Control Order 1958, was beyond the rulemaking power under s. 3 of the Imports & Kx:port ) Control Act, 1947, (2) Even if cJ. 6 (h) and the ''canalising" of exports through "special" or "specialised" ageneies or channels be valid, the notifications by which the canaJisation was effected are ~mtside the contemplation of the 'agency or channel' under cl. 6 (b). Before proceeding further it is necessary to mention that. the constitutional validity of cl. 6 (h) of the Export Control Order 1953 was not disputed before us, the controversy in relation to it having ·~ been conolnd~d by the decision by this Court i~ Glass Chaton.s Importers and Use1·8 A.ssom'ation v. Union of India (1). The argument in support of the contention that. cJ. 6 (h) was beyond the terms of s. 3 of the Act was briefly this : Section 3 of the .Act by its language, its setting and context permits restrictions or controls only in rrgard to goods which are the subject-matter of export and does not permit restrictions being imposed on per· • sons engaged in the export trade. In other words, > the Central Government is enabled by a notified order under s. 3 of the Act (a) to specify the goods in respect of which the control or restriction is to be exercised, along with (b) a matter which this necessarily involves, viz., the quantjties that may '- \ be exported, ( c} the quality of the goods that might -- pass out of the country and (d) as regards the. destination to which they might be exported. But ·~ the restrictions could not extend any further. An (1) A•l•R· 1961 S.C. 1Sl4, 1962 D.JV4 ,·on Dj Bhimji Oohil v. Joint Chi1j Con troller of Tmj1orls & E;rpt.rP A_1yangt1rJ. 19G2 f>11112 s.TI •f Bflimji c;.,.,z v. J ,;"t Cili1/ c.,.trQI/tr •f 1m~• I,.{: .f)(~rl< -- .. 86 SUPREME OOURT REPORTS [19631 order under s. 3 cannot make provisions restricting the persons who might pa.rticip~te in export trade, restrict either their number or impose qualifications which they must satisfy before being permitted to export. Be1ides, even if a notified order might validly prescribe the persons who might participate in tho export trade, still it did not authorise an order which would so canalise or channol the per· sons who might engage in tho export trade aq practicaJly to create a monopoly in favour of any ,/ particular person or group which is \vhat r. o (h) 'v has effected. The argument was put in a. slightly different fGrm by reference to the provisions of Art. 19 (6). Article 19 (I) (g), after guaranteeing to all citizen8 the right to carry on any occupation, trade or business, had gone on to provide in cl. (6) tho rest:ictions which may constitutionaJly be imposed on the right thus guaranteed, and tho clause as it now stands after the first Amendment of the Constitution reads, to quote the material words : "Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposea, or prevent the State from making any law imposing, in the interests of the ~E>neral public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, nothing in the said sub-clause shall affect the operation of a.ny existing law in so far as it relates to, or prevent the State from making any law relating to,- (i} ---· ---- (ii) the carrying on by the State, or by corporation owued or controlled by tho StatR., of any trade, bu.sinese, industry or service, whether to the exclusion, complete or partial, ~ of citizens or otherwise" • - : .. ' 2 S.C.R. SUPREME COURT REPORTS 87 The effect of the policy statements and directions to the licensing authorities issued by virtue of the powers conferred by cl. 6 (h) of the Export Control Order, 1958 had resulted in the creation of a monopoly or a near monopoly in favour of the State Trading Corporation. It was urged that the creation of such a monopoly could: on the language of Art. 19 (6) (ii) be effected only by the ~tate making a law in relation J to the matters there set out. Neither the Export & , --J Import Control Act, 194 7 nor even the notified order made there under-The Export Control Order, 1958 could be said to be "a law relating to the carrying on by the :::lta.te of any trade, business, industry .or service,, and therefore the validity of the preferen. tial treatment granted to the Htate Trading Corporation could not be justified or upheld by reference to t}le amendment effected to cl. ( 16) by the Constitution (First Amendment) Act, 1961. So much could be accepted. But this, however, leaves for consideration the question whether the provision now impugned could not be sustained as "a reasona. ble restriction" on. the exercise of the rights conferr. ed by sub-cl. (g) of Art. 19 (l) in the interest of the general public i. ·a., on the opening words of para 1 of cl. (6). But as pointed out already~ the constitutional validity of cl. 6 (h) in so far as it permits the canalising or channelling of the export trade is no longer res integra. this having been upheld in the Glass.Ohatons case C). In the circumstances, the very narrow question for consideration is whether the restrictions and con~rol for which provision might be made by a. 3 would not include a provision for canalishig the trade in any particular commodity. We are clearly of the opinion th~tt the restriction or control in 'the form of channelling or Canal ising the trade is ~ not outside the limitations wbic~ might be imposed OJl ~ ~) ",qt. t$61 s.c. 1514. 1962 D'vo Dgage ·in the export trade has only to be st?-ted. If the quant~m of the . export in a comrood1ty could be restncted, the control that would effectuate this must necessarily extend to the persons engage<;! in or . desirous of eno-agin(J' in the export of that commodtty and this wo"'uld a 0fortiori be so, if the restriction ta.kes the form of a prohibition of exports in a commodity altogether. If thert'>fore the control or restriction could legally extend to the persons who are engaged in the trade; it would appear to follow as a. logical step that the restriction might take the form of classifying tho persons who might particip· ate in the trade- and the conditions aubjoct to which any particular class might be permitted to do so. It would be a. matter o( policy for the Government to determine, having regard to the nature of.the commodity and tho ciroumsta.uces attendinl7 the export trade in it, to lay down the basis -fo~ the clasaification botweocn groups and fix: their relative priorities eto. When cl. 6(h) permits "ca.na.lisinl7" or th~ ··~hannelling" of exports through se leot~d agencies 1t d_oos ~ot ~o more than make provision for the clastHficatwn mto groups eto. which but one of the ~odes which the ''control" under s. 3 of the Act mtght assume. ' . _ Th.e nex.t point to bo considered is whether the . ~ohficatwns li!IIUocl. by which ( 1) tho export trading m maugn.neso oro l!i confined to three o-roups of !1e;sons ungagt:d irt tho trade, viz., (a) e~tablished ~ppers, _(b) mme-owners, and (o) the ~tate Trading rr>rat.iou, tho two former being allotted 'ro~ .; t . ~. 2 S.C.R. SUPREME COURT REPORTS 89 based upon the export effected by them during certain basic years, (2) th-:; progressive reduction in the quota of groups (a) & (b) with a view to enable tha available export business to be handled by the State Trading Corporation, and (3) as a necessary result of the above t·he elimination frcm the export trade of the class k1iown in t.he trade as unewcomets" was permitted under cl. 6(h) of the export Control ·Order, 1958. It would be seen from the above that there are two grievances of the appellant which are inter-related: (1) The first consists in the complaint regarding the quota allowed to the established shippers and mineowners who had an export performance during a basic year. J..Rarned Counsel however, did not put this forward as any serious grievance because persons falling within those already in the trade and the appellant who wants to come into the export trade could not legitimately ·object to those already in it being allowed facilities 0r licences for effecting exports. In his petition before the High Court the appellant rajsed a complaint that the basic years fixed in the policy-statement were arbitrary but the fixation of any year must be so, and if the Government fixed as a basic year, a period three years before the announcement of the policy, i.e., took into account performance within a period of three years before that date, we do not see · any uureasonableness or arbitrariness about it. (2) It waR in regard to the inclusion of the State Trading Corporation among those entitled to export and tho increasing quota given to it on an ad hoc basis without reference to any antecedent performance that the main attack wa.s directed and it was this that learned Counsel stated alllounted to a monopoly which was not countenanced hy the law. It will therefore be sufficient for us to confine attention to the grounds upon which the successive notifications which afforded ~ increasing facilities to the StatP. Trading Corpora... tion for export were challenged. J96Z -- DiJDtl son of B~Jim Gohil v. Joint Chi,f ConU'olln 4 Imports rh &fmts dyy1111gar J. 1962 D•4 son ,f Bhimji Gohil Y. Joi"t Clti the crit~rio. laid down would be dcniod the right to participate in that trade; and this would t bo a fortiori so if tho restriction takeR thf\ form of & 2 S.C.R. SUPREME OOURT REPORTS 91 cana.li!!Jing of the trade in a commodity, for canalis· ing necessarily implies the exclusion of some groups. If therefore s. 3 of the Act permits a rule to be made for oanalising export · trade' in a commodity and such canalising is not unconstitutional, it would necessarily follow that a person cannot have a. legally sustainable complaint that he is eliminated from among the groups entitled to participate in the trade. The question whether the canalising has beeuproper1y done in the sense that the groups selected are no better than the groups eliminated ·poses a very different problem, and if that were made out a question of discrimination might conoeiv· ably arise. We should, however, hasten to point "out that it is not the case of the appellant that the established shippers and the mineowners to whom quotas have been allotted in addition to the State Trading Corporation have been improperly included in the group of persons entitled to participate in the .export trade, and that apart, there is a rational and very proper classification between those who have experience in the trade and the newcomers who do not possess these experience. In other commodities concerned in export or import, newcomers i.e.~ those with no previous experience in the export line but who have experience in other branches of the trade, have been allotted quotas, though this should depend upon the circumstances of each trade. It has not been suggested that previous experience in the export trade would not be a valuable qualification for the grant to a person or .~group of a quotaJ and even a preferential quota in the export trade in the commodity with which we are now concerned. It would thus appear that if the notifications had confined the entire export trade to those with previous experienc~, no legal objection could have been taken .to the notifications on 'the arguments addressed to us by learned --\ Counsel for the appellant. In such a state of circumstances the appellant would ha.ve been exoluded but ll~l D1JtJt1 son of Bhimji Goliil V, I Joi11l CM4 Ctndrolltr oflmpr~tls ~ Exporll A»•nc~~rJ. 1962 DavD sr.rt ~! Bhimji Gohil v. .I oi..t CA;.J Contr~/n of lmpnls tf: EJ:potts 92 SUPREME OOURT REPORTS [1963] he could not still oompl"in that he w"s illegally eliminated because this exclusion was necessary consequence of channelling or canalising of the exports through persoru~ with previous experience in the fielrl. The real grievance of the appellant was that in preference to him and those liko him, who win the ore to be exported, the State Trading Corporation which bad 110 previous experience of the export trade should have been sc]ccted as the agency for canalising exports. There is no doubt that if the only teat of differentiation was previous experience, the preference of the State Trading Corporation to the appellant and the othors of the class to which he bJlong:!, might not b(\ justified, but that is not ' the Hole test by which the matter has to be judged. We have set out earlier the grounds upon which choice of the State Trading Corporation as the agency for effecting tho export trade was determined by the government and we consider that for those reasont> there was nothing improper in the choice, but that .on the ot.her baud the object of the. export trade, viz., the earning of foreign ~change to the maximum with benefit of a long range charact-er for exports from this country could be expected to be attained with the ~tate Trading Corporation as the main agency engaged in the trade. We do not therefore consider that there is any substance in the argument of the learofld Counsel for the appellant that the choice of the State Trading Corporation and tho granting to it if quotas on an ad hoc basis was either beyond the powers conferred upon tho li<'ensing authorities under cl.