# fl v. L. MANICKCHAND, PROPRIETOR, KATRELLA CORPN. MADRAS

- **Citation:** [1972] 3 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 1972-01-05
- **Case number:** Civil Appeal No. 1053 Of 1971
- **Bench:** J. M. Shelat, I. D. DuA, H. R. Khanna, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/fl-v-l-manickchand-proprietor-katrella-corpn-madras-5600
- **Pages:** 18

## Headnote

Import Trade Control
PoliGv-Appllcation for import
licence-I/
<hould comidered in term. of the
policy in force at the time of application or at the time of grant of licence.
In December, 1968 the respondent &~plied for an import licence for
importing stainless steel for the licensing period 1968-69. The registra·
lion certificate certified that he was engaged in the manufacture of hospital
and surgical instruments and household utensils of stainless steel. Ac·
cording to the import policy for· 1968-69 no priority was available for
household utensils.
Since the number of applicants for import licences
for stainless steel, which was a sensitive item, was very large instructions
were issued in January 1%9 that the applications should be scrutim.ed
carefully after asking for information from applicants as to details of end
products to be manufactured by an applicant. In May 1969 the respondent stated that the hospital requisttes intended to be manufactured
by him were surgical bowls, spittoons and trays.
The Chief Controller,
Imports and Exports. issued instructions that only 'medical and surgical ,
equipment and appliances' should have priority and not other types of
hospital equipment such as bowls, trays, jugs etc. In April 1970, after
a review of the situation the Chief Controllerlissued instructions to consi ..
der the respondent
9s application in
terms of the
licensing policy for
197t. 71.
The respondent filed an application for the issue of a writ of rnandamru
and the High Court allowed it directing that .the respondent's application
may be dealt with in terms of the 1968-69 import policy.
In appeal, on tho question whether the application should be considered in accordance with the policy in force when the licence was granted
or when the application was made.
HELD: No case had been made out for a mandamus to consider
the respondent's application in terms of 196&-69 policy, since there waa
no undue !aches or delay in dealing with the respondent's application.
and the instructions of the Chief Controller to consider the a~·
cation
in terms df 197~71 policy l\'a& in accordance with para 91 of
, IV
of the Import Trade Control Handbook of Rules and Procedure. {l 168).
[18 ~·
Speedy disposal of applications for import licences is of ~t importance in order that available foreign exchange may be utilized Without
delay; but, it is also to be borne in mind, that in the pment stage of
JI o1lr industrial development. imports requiring foreisn exChange hne , tO
be cootrolled and regulated to prevent abuses of. import quota. Thill. m.
eviblbly f<!!Ulres proper acrutiny of variouc applications for ilDpQrt ~
In. grantipg li<>:nces for ilnports, the authority has to keep in vi• viii.,_..
factors which may have impact on import. of other items of. relati...,.
2
SUPREME COURT REPORTS
[1972] 3 S.C.R.
A\
gre.ater priority in the larger interests of the overall economy of the country
which must be the supreme consideration. Moreover, in view of s. 3(l)(a)
of the Imports and Expdrts Control Act, 1947 and cl. 6(1)(a) of the
Imports (Control) Order, 1955, an applicant has no vested right to an
import licence in terms of the policy in force at the time di his applica.-
tion. f9 B-E; 16 B-E; 17 A-Hl
The respondent's application included household utensils which was
not a priority item and since clarification Was asked for ... the application
B
could not be disposed of during 1968-69. The details of end-products
furnished by him contained items which were non-priority end-products
and hence. the application had to be kept pending until completion of
its examination, and the time taken for such examination was not unreasonable. fl6 Jl..Hl
·
Glass Chaions .Importers and Users Assn. v. Union of India, [1962]
1 S.C.R. 866, referred to.
C

## Text

_Characters 0–38,798 of 45,753. This is a partial read: ask again with offset=38798 for what follows._

A
DEPUTY ASSTr. IRON & STEEL CONTROLLER & ANR.
B
c
D
E
fl
y.
L. MANICKCHAND, PROPRIETOR, KATRELLA
CORPN. MADRAS
January 5, 1972
METAL
(J. M. SHELAT, I. D. DuA, H. R. KHANNA AND G. K. MITTER, 11.J
Import Trade Control
PoliGv-Appllcation for import
licence-I/
<hould comidered in term. of the
policy in force at the time of application or at the time of grant of licence.
In December, 1968 the respondent &~plied for an import licence for
importing stainless steel for the licensing period 1968-69. The registra·
lion certificate certified that he was engaged in the manufacture of hospital
and surgical instruments and household utensils of stainless steel. Ac·
cording to the import policy for· 1968-69 no priority was available for
household utensils.
Since the number of applicants for import licences
for stainless steel, which was a sensitive item, was very large instructions
were issued in January 1%9 that the applications should be scrutim.ed
carefully after asking for information from applicants as to details of end
products to be manufactured by an applicant. In May 1969 the respondent stated that the hospital requisttes intended to be manufactured
by him were surgical bowls, spittoons and trays.
The Chief Controller,
Imports and Exports. issued instructions that only 'medical and surgical ,
equipment and appliances' should have priority and not other types of
hospital equipment such as bowls, trays, jugs etc. In April 1970, after
a review of the situation the Chief Controllerlissued instructions to consi ..
der the respondent
9s application in
terms of the
licensing policy for
197t. 71.
The respondent filed an application for the issue of a writ of rnandamru
and the High Court allowed it directing that .the respondent's application
may be dealt with in terms of the 1968-69 import policy.
In appeal, on tho question whether the application should be considered in accordance with the policy in force when the licence was granted
or when the application was made.
HELD: No case had been made out for a mandamus to consider
the respondent's application in terms of 196&-69 policy, since there waa
no undue !aches or delay in dealing with the respondent's application.
and the instructions of the Chief Controller to consider the a~·
cation
in terms df 197~71 policy l\'a& in accordance with para 91 of
, IV
of the Import Trade Control Handbook of Rules and Procedure. {l 168).
[18 ~·
Speedy disposal of applications for import licences is of ~t importance in order that available foreign exchange may be utilized Without
delay; but, it is also to be borne in mind, that in the pment stage of
JI o1lr industrial development. imports requiring foreisn exChange hne , tO
be cootrolled and regulated to prevent abuses of. import quota. Thill. m.
eviblbly f<!!Ulres proper acrutiny of variouc applications for ilDpQrt ~
In. grantipg li<>:nces for ilnports, the authority has to keep in vi• viii.,_..
factors which may have impact on import. of other items of. relati...,.
2
SUPREME COURT REPORTS
[1972] 3 S.C.R.
A\
gre.ater priority in the larger interests of the overall economy of the country
which must be the supreme consideration. Moreover, in view of s. 3(l)(a)
of the Imports and Expdrts Control Act, 1947 and cl. 6(1)(a) of the
Imports (Control) Order, 1955, an applicant has no vested right to an
import licence in terms of the policy in force at the time di his applica.-
tion. f9 B-E; 16 B-E; 17 A-Hl
The respondent's application included household utensils which was
not a priority item and since clarification Was asked for ... the application
B
could not be disposed of during 1968-69. The details of end-products
furnished by him contained items which were non-priority end-products
and hence. the application had to be kept pending until completion of
its examination, and the time taken for such examination was not unreasonable. fl6 Jl..Hl
·
Glass Chaions .Importers and Users Assn. v. Union of India, [1962]
1 S.C.R. 866, referred to.
C
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1053 Of
1971.
'•
Appeal by special leave from the judgment and order dated
March 1971 of the Madras High Court in Writ Appeal No. 120
Of 1971.
D
V. S. Desai, M. C. Bhandere and S. P. Nayar, for the appellant.
L. M. Singvi, A. V. Rangam, R. Krishnamoorlhi rund A. Subhashini, for respondent No. 1.
M. V. Goswami, for the intervener.
The Judgment of the Court was delivered by
E
Dllll, J.
This appeal by special leave is directed against the
judgment and order of the Madras High Court dated March 25,
1971 dismissing at the stage of ad!llission an appeal under cl.
(15) of the Letters Patent preferred by the appellant against the
judgment and order of a learned single Judge of that Court dated F
September l, 1970 allowing writ petition no. 933 of 1970' filed
by the respondent praying for a writ of mandamus directing the
Licensing Authority under the Imports & Exports (Control) Act,
194 7 to do his public duty and consider the applications for
import licence made by the respondent.
More than 200 writ
petitions were heard together and disposed of by a common
G
judgment of the learned single Judge, the facts in the respondent's writ petition No. 933 of 1970 being, by common consent,
treated as ilJustrative of all the other cases as well.
·'
On December 7, 1968 Lala Manickchand, proprietor of
Messrs Katrella Metal Corporation, Madras, respondent in this
Court, submitted an application, as a new unit, for the licensing 8
period 1968,69 for the grant of an import liceitce for Rs, 9,9~/-
for importing stainless steel as an actual user for mami~actunng
•
'fRON & STEEL CONTROLLER v. MANICKCHAND (Dua, J.)
3
A hospital requisites.
The registration certificate dated December
31, 1968 issued to the respondent as a small scale industry by the
Additional Assistant Director of Land Commerce, District Madras.
North, reads :
"DEPARTMENT OF INDUSTRIES & COMMERCE
B
SMALL SCALE INDUSTRIES DIVISION
S. No. 571
Registration No. MS.N.SSI/506/033
CERTIFICATE
This is to certify that M/s. Katrala Metal CorporaC
tion 54 Sydenbams Road, Madras 7 office at 90 N.S.C.
Bose Road, Madras· 1 is a genuine Small Scale Industry
engaged in the manufacture of Hospital and Surgical
Instruments, Trays,
Mugs,
Basins and
Household
Utensils out of Stainless steel.
D
Sd/ S. Gopalakrisbnan
Addi. Asst!. Director of Land &
Commerce, District Madras North
23-12-68"
According to Import Trade Control Policy (1968-69) lndosE tries engaged in the manufacture of "medical 'and surgical equipment and appliances" were included in the list of priority industries at sl. no. 39 of Appendix I in Section V.
The import policy
is announced and published by the Government of India, Ministry of Commerce, on the eve of each financial year by means or
a Public Notice which is issued in the form of a book called theF
Import Trade Control Policy, commonly known
as the "Red
.,Book". Prior to 1962 the import policy used to be published·
on half-yearly basis.
But with effect from the financial year
1962-63 the Red Book contains the policy for the whole year.
As a supplement to the Red book is the Handbook of Rules and
Procedure on Import Trade Control.
Its provisions are brought
G into force by a Public Notice published in the Gazette of IndiaExtraordinary. tt embodies the procedures, rules and
regula·
tions govermng the submission of applications, grant of licences,
their validity and utilisation and other matters relating to import
trade control.
The instructions contained in this book are applicable subject to future amendments and to the prOvisions of tbe
H
relevant import trade control policy book : vide cl. 6, qiaptet
II of Handbook of Rules and Procedure, 1968. As ls obvious
from the preface of the Red Book for the year 1968-69, in formulating the import policy, account is generaHy taken of all tbe
. SUPREME COURT, REPORTS
"
[1972] 3 s.c.R .
suggestions received from individuals, chambers and associations
A
of trade and industry, Export Promotion Councils, Commodities
Boards, Board of Trade and others:
It appears that according
to this policy import for household utensils was not available as
a priority item and this necessitated further clarification from
the respondent.
In the meantime on January 30, 1969 Licensing Instruction No. 4/69 was issued from the Iro.n and Steel ConB
trol Department (I & E Division). It said :
"IRON & STEEL CONTROL (I & E DIVISION)
Office Note: LICENSING INSTRUCTION No. 4/69
Dated 30-1-1969
1. It has come to the notice of the Iron & Steel Controller that a large number of applications have been
received for import of Stainless Steel Sheet plates and
strips from newcomer units during 1968-69. As a measure· of precaution, the Regional Office and Licensing
section were requested to suspend further issue of
licence vide Iron & Steel Controller's telegram dated
9th January, 1969.
2. The position has been reviewed, in consultation
with the Department of Iron & Steel, and it has been
decided that the applications for Stainless Steel Sheets,
plates and strips received from newcomer units during
1968-69 should be scrutinised by the Directors of
Industries and the Regional Offii:es and Licensing Sections very carefully, before import licences are granted,
with a view to e11suring ·that new units which are not
well-equipped do not get away with import licences of
this sensitive item.
3. For the purpose of scrutinising the applications, ·
it is necessary to call for the following data from the
.applicant :
.( 1) Date of registration of the unit.
(2) Date o~ which power connection was obtained.
( 3) Details of the machinery installed.
(4) Value of the machinery ~ed.
( 5) Whether ihe machinery is imported or · indigenous.
( 6) The address of the firm from whom the machinery was purchased.
(7) Date of )'.>urchase of the machinery, '
c
D
E
F
G
H
A
B
c
D
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F
IRON &.STEEL CONTROLLER v. MANICKCHAND (Dua, I.)
s.
( 8) Date of installation of the machinery.
( 9) Details of the end products to be manufactured.
( 10) Whether the unit is fully equipped to manufacture the items in question.
( 11) Past experience of the firm in manufacturing
line.
( 12) Technicians employed and their technical qualifications.
( 13) Whether any market survey has been conducted
for the disposal of the products to be manufactured. If so, the results thereof.
4. Regional Offices and Licensing Sections are
directed to write to all the new comers, who have sent
their applications for Stainless Steel Sheets plates and
strips to furn~h the above information t.o the respective Directors of Industries <!irect, endorsing a copy to
the Regional Offices
and
the Licensing Sections.
Copies of these letters may be endorsed to the respective
Directors of Industries, with the request that they should
scrutinise the applications with reference to the date
that may be furnished by the applicants carefully, and
thereafter send their recommendations (revised recommendations as the case may be) to the licensing offices.
5. Regional Office and Licensing Sections are
directed to take immediate action on the lines indicated
above.
Sd/ C. B. Mathur
Officer on Special Duty."
It is quite clear from these instructions that stainless stdct
sheets were considered a sensitive item and that a large number
of newcomers had applied for import of stainless steel sheets,
plates and strips whose applications required close scrutiny. Oa·
G May 2, 1969 the respondent, while giving information about
end-products, stated in a letter that hospital requisites such as
surgical bowls, spittoons and trays were intended to be manufactured by the industry. On May 19, 1969 the Chief Controller
of Imports and Exports, from the Ministry of Foreign Trade and·
Supply issued General Licensing Instruction No. 29/69 on the
subject of import licences to units engaged in the manufacture of
H hospital equipments. These instructions pertained to the import
policy for April 1969-March, 1970, and referred to "medical anct
surgical equipment and appliances" which was the subject matter
6
SUPREME COURT REPORTS
[1972] 3 S.C.R.
of Item. No. 39 in Appendix I of the Red Book for that year. In A
para 2 1t was stated that some Licensing Authorities were treating
the manufacture of "hospital equipment" as priority industry under
the general heading ''medical and surgical equipment and appliances".. It w~ pointed out that all types of hospital equipment and
hospital appliances were not classified as priority industries and it
'."'as added by way of illustration that lotion bowls, kidney trays,
B
1nstt:u.nent trays, wash bowls, meas!Jring jugs, ointment jars and
med1cme cups as end-products were m non-priority category.
The
sponsoring authorities were accordingly directed to ensure that
-0nly those hospital equipment and appliances were to be treated
as priority industries which would appropriately be classified as
·"medical and surgical equipment and appliances".
On May 29,
1969 the Chief Controller of Imports and· Exports issued General
C
Licensing Instruction No. 31 of 1969 on the subject of "grant of
·import licence to units engaged in the manufacture of hospital
equipment''.
After inviting attention to the earlier G.L.I. No.
29/69 dated May 19, 1969 it was stated in this instruction that
after further consideration in consultation with the D.G.T.D. a
list had been prepared in respect of the end-products which alone D
would be treated as priority industries under the general heading
"medical and surgical equipment and appliances." That list was
enclosed for the guidance of the Licensing and Sponsoring authorities and in case of doubt those authorities were directed to refer
the matter to head-quarters Special Licensing Cell.
On October
31, 1969 the Director of Industries, Madras, confirmed the EssenE
tia!ity Certificate already issued to the respondent. It was
observed iu that letter that the firm had "installed machinery and
taken action to obtain power supply etc. Hence the Essentiality
Certificate issued ·to the firm already is confirmed". On Febr:uary
23, 1970 a leiteI' was written by the Dir&etor of Industries and
Commerce, Madras to the Deputy Assistant Iron & Steel Controller, Madras, in which after referring to his earlier letter dated
F
October 31, 1969 and to the respondent's letter dated February
o, 1970, it was stated :
"Jn view of the assurance ~iven by the firm that they
would manufacture only Surgical Equipment like Sterilisers, Operation Tables, Auto-Claves etc,, I recommend
that M/s. Katrella Metal Corporation, 54, Sydanhams
Road, Madras for whom Essentiality Certificate has been
issued for import of stainless steel sheets for the period
April-March, 1969 may please be treated as PRIORITY
INDUSTRY and licence issued to them on this basis."
G
Apparently, the Director of Industries was the sponsoring authoH
rity in this case. It was in .these circumstances that the respondent filed the writ petition in the High Court on March 30, 1970
claiming a writ of mandamus as stated earlier, the sole grievance
IllON & STEEL CONTROLLER v. MAN!CKCHAND (Dua, I.)
7
A
being that the res-l'°ndent's application for import licence had
during all this penod not been .taken up for final disposal.
According to the respondent's case in the High Court, the firm's
factory had been manufacturing various items since 1962 by purchasing raw material from local market with the annual turnover
of about 8 to 10 lacs. With regard to the iespondent's applicaB lion for import licenee for manufacturing hospital and nrgical
equipment it was added that the Director of Industries had,issued
the Essentiality Certificate in April, 1969 and recommended the
respondent for treating it as a priority industry on February 23,
1970. In the counter-affidavit in that Court it was not contested
that the writ petitioner was entitled to have his applications considered. According to para 10 of the counter-affidavit on which
C the learned single Judge of the High Court, disposing of the writ
petition, relied, it was stated inter alia :
D
I
F
"in the case of units engaged in the manufacture of
non-priority end-products, as in the case of the petitioner, the Chief Controller of Imports and Exports had
advised the department to keep the applications pending
until the completion of the examination: The petitioner's application could not therefore be disposed of.
However, instructions have since been received vlde the
Chief Controller of Imports and Exports, New Delhi
letter dated 8-4-1970, which inter alia provides that
applications received by the sponsoring authorities in
time may be considered irrespective of the date on which
they were forwarded to the licensing authorities and in
terms of the licensing policy for 1970-71."
It was added in this para of the counter-affidavit :
"According to policy for 1970-71,
the material
stainless steel sheets is a canalised item for non-priority
industries and release orders are to be issued on Minerals and Metals Trading Corporation."
In the judgment of the ~
single Judge it wu stated to be
G common ground that the application of the writ petitioners had
to be dealt with in terms of the relevant import policy in force
for the year 1968-69. However, a little lower down in that
judgment, lifter reproducing the relevant portion of paragraph 10
of the counter-affidavit, it was also observed :
H
"Learned counsel for the Central Government urged
that the Licensing Authority whoever it is, is prepared
to consider the apPlications of each of the petitioners
in this ~tCh of wot petitions, but such appraisal of the
applications would be in terms of the licensing policy
8
SUPREME COURT REPORTS
(1972] 3 S.C.R.
for the year ~ 970-71.
Thus in effect, the respondents
A
concede the nght of the petitioners to have their applications considered and disposed of in a manner known
to law, but the only opposition is that such applications
filed and now pending will be considered in the light of
the licensing policy for 1970-7 l."
It was- in this context that the High Court observed that it was
B:
practically conceded that the rule nisi had to be made absolute
and that some more directions were necessary.
Relying on
r. 7(2) in Chapter II of the Handbook of Rules of Procedure,
Import Trade Control for the year 1968, according to which
applications for licences were required to be considered in tenns
)
of the relevant policy in force, the learned single Judge directed : C
"that the Licensing Authority do consider the applications now IJ\lnding before him which are the subject
matter of these writ petitions within six months from this
date bearing in mind the above directions and in particular deal with the said applications,
applying the
import trade control policy prevailing in · 1968-69 or
D
1969-70, as the case may be according to the dates of
application for licence."
On appeal before the division Bench under cl. (15) of the
Letters Patent it was complained by the appellant, the Deputy
Assistant Iron & Steel Controller, that the instructions of the E
learned Judge interfered with the policy introduced in 1970-71
because under the new policy import of stainless steel was canalised through the Minerals and Metals Trading Corporation for
non-priority industries. The division Bench did not consider
this objection to be valid because in its view had the applications
been considered in time and without delay and the import licence
sought granted, these complications would not have intervened.
F
The Dc;partment, according to the High Court, could not take
advantage of the delay in disposing of the applications for licence
made earlier and then take the plea that they should be disposed
of only in accordance with the curfont policy and instructions
given as to canalis11tion.
On this view the appeal was dismissed ·
but time for granting the import licence was extended by a furG
ther period of three months from the date of the order viz. March
25, 1971.
In this Court the question .canvassed at the bar is a. very
narrow one, namely, whether the application for
the
nnpo1t
licence in question should be considered in accordance with
the policy in force when the licence is granted or when the appliH
cation is made.· No point of miila {ides or. arbitrariness was
argued in the High Court and no serious attempt was made on
IRON & STEEL CONTROLLER v. MANICKCHAND (Dua, I.)
9
A
behalf of the respondent to sustain the impugned order of the
High Court on that basis, as indeed, it is not possible for this
Cc,urt to entertain and adjudicate upon such a plea in this appeal
m the absence of a considered opinion of the High Court.
Tue
appellants' learned counsel Shri V. S. Desai at the outset drew
our attention to s. 3 (I) (a) of the Imports & Exports (Control)
B A ct, 18 of 194 7 which empowers the Central Government to prohibit, restrict or otherwise control imports and exports and to
cl. 6(l)(a) of the Imports (Control) Order, 1955 made by the
Central Government in exercise of the powers conferred on it by
ss. 3 and 4 of Act 18 of 1947.
Clause 6(1) of the Order emc
powers the Central Goverrunent or the Chief Controller of Imports
and Exports to refuse to grant a licence or direct any other licensing authority not to grant a licence if no foreign exchange is
available for the purpose or if the grant of a licence to an applicant is prejudicial to the interest of the State or if it has . been
decided to canalise imports and distribution
thereof
through
special or specialised agencies or channels.
The scheme of these
D provisions, according to the submission, suggests that the respondent has no absolute right to the grant of a licence merely because
his application has been recommended by the sponsoring authority
and that the licensing authority may decline to grant the licence
on other relevant considerations affecting the larger and more
vital interests of the economy of the State and also other relevanr
factors beyond the control of the State.
In this connection refeE rence was also made to para 91 of Chapter IV of the Import
Trade Control Handbook of Rules and Procedure ( 1968) which
reads :
F
G
H
"Issue of import licences to actual users for back
period 91 (I ) Where an application for import licence
from an actual user is not disposed of during the licensing period concerned on account of any delay or !aches
on the part of the applicant, no li~ce against such
application will be issued after the expiry of the licensing period or after the close of the monetary ceiling.
However, if the delay in the disposal of the application
is on the ·part of the licensing authority or sponsoring
authority or any other Government Department,
the
application will be considered on merits.
(2) While dealing with an import application for a
back period in appeal or otherwise, the authorities concerned will consider such an application having regard
to the general principles laid down, that is, availability
of monetary ceiling, availability of goods applied for
from indigenous sources or other commercial channels,
essentiality of the goods applied for, stocks held by the
2-L864Sup CI/72
10
SUPREME COURT REPORTS
(1972] 3 S.C.R.
applicant and expected arrivals against licences in hana,
past imports and consumption of the item(s) in question
by the applicant, actual production during the preceding
period, estimated production and other factors considered relevant and necessary.
( 3) In case where the applications for licences are
not disposed of during the licensing period concerned
or before the close of the monetary ceiling on account
of delay on the part of the sponsoring authority or the
licensing authority or any other Goverrunent Department the value of the licences iswed in such cases will
be treated as first charge on the monetary ceiling to be
allocated for the next licensing period and the necessary
intimation in this regard will be given to the sponsoring
authority."
A
B
c
According to Shri Desai the entire position of monetary ceiling,
availability of goods applied for from indigenous sources, essentiality of the goods applied for and other relevant factors have to D
be seen for considering the question of issuing import licences to
actual users for back periods.
These considerations. said Shri
Desai, indicate ihat if availability of the goods applied for, from
indigenous sources, improves or the position in regard to foreign
exchange deteriorates or there is a change in the matter of essentiality of the goods applied for, then, .it would be and, indeed, it E
should be open to the licensing authority to come to a fresh decision on the question of issuing the licence uninfluenced by the
consideration that during the previous licensing period, the situation being more easy, the import licence applied for would have
been more readily granted.
The import policy is influenced by
the condition of foreign exchange which depends on various
factors, some of which may even be wholly beyond the control of F
the State and, therefore, \he licensing authority would be entitled
to take ihem into account at the time when ihe licence is actually
issued.
Shri Desai in support of his submission relied on the
following observations from the decision of this Court in Glass
Chatons Importers and Users' Association v. Union of lndia( 1) :
"It is obvious that if a decision has been made that
imports shall be by particular agencies or channels 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
(I) (1%2] J. S.C.R. 862 .al 866.
G
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A
IRON & STEEL CONTROLLER v. MANJCKCHAND (Dua, !.) 11
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.
B
A policy as regards imports forms an integral part
of the general economic policy of a country which is to
have due regard not orily 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 0'1. the political policies of the country
involvin& questions of friendship, neutrality or hostility
with other countries."
c
These observations have also been pressed into service by Shri
Desai in support of his contention that canalising of applications
for the import of stainless steel having been introduced since
April I, 1970 it is not open now to issue the import licence to the
D respondent without the application being canalised according to
the prevailing procedure.
The learned counsel, however, offered, as agreed in the High Court, to consider the respondent's
application according to 1970'.71 policy.
Shri Singhvi on behalf of the respondent controverted
the
I: appellant's argument by strongly relying on
the letter dated
February 23, 1970 from the Director of Industries to the Deputy
Assistant Iron and Steel Controller in which reference was made
to the respondent's assurance
to "manufacture only surgical
equipments like sterlisers, operation tables, autoclaves etc." and
it was recommended that import of stainless steel sheets for the
period 1968-69 be treated as priority industry and licence issued
F to the respondent on this basis. As canalising policy was intro·
duced only on April l, 1970, when the respondent's case, according to Shri Singhvi's argument, had already been completed as a
result of the assurance contained in the letter of February 23,
1970, the respondent's industry was not governed by this policy
and was entitled to get the impor't licence. Shri Singhvi placed
G
strong reliance on r. 7 ( 2) contained in the Import Trade Control
Handbook of Rules and Procedure of 1968 and contended that
the applications for licences must be considered in terms of the
relevant policy in force at the time of making the application.
Reference in this connection was also made to r. 81 ( c), according to which the role of the licensing authorities is :
H
"(i) To issue licences on the basis of the recommendations of the sponsoring authorities where such
recommendations are in consonance with. the
policy/procedure in force;
12
SUPREME COURT REPORTS
(1972] 3 S.C.R,
(ii) In the case of rejections, to communicate reasons thereof to the applicants;
(iii) To take penal action against the licencees or
importers for violations of impart and export
control regulations.
-
(iv) To watch the utilisation of ceiling, if any".
It was further contended that the recommendation of the sponsoring authority has to be given due consideration by the licensing authority as provided in r. 80.
The learned counsel submitted that if the import policy prevailing in 1968-69 is not
applied to the respondent, then, the respondent would ouffer in
respect of the applications made for the
years
1969-70
and
1970-71 though this argument was not developed and the counsel was content merely by asserting prejudice to his client. It
may be recalled that- the respondent applied for the licence as a
new unit.
Para 82, sub-para 2 contained in the Handbook of
Rules and. Procedure for 1968 provides :
"82(2) New Units (Priority industries) (a) The
new units, both in the large and the small scale sectors,
should make their first and second import applications
for raw materials and components in a licensing period,
through the sponsoring
authority
concerned,
each
covering their requirements for six months. Subsequent
applications can be made by them on the basis of
actual consumption, in the same manner as has been
laid down for the existing units engaged in the priority
Industries.
(b) In the case of proposed units, the sponsoring
authority will recommend a licence against the second
application only after the unit has gone into production.
( c)
"
Para 53 of the Red Book (1968-69) isin the same terms as
para 82(2)(a).
A
B
c
D
E
F
Prima facie, without the new units actually going into pro-
~uction, no question of recommendation for a licence against the
G
second application could arise.
But the point having not been
fully pursued we express· no opinion on this aspect.
The respondent's learned counsel also submitted that about 163 applications
for import licences had been dealt with by the licensing authority
and the licences granted to the applicants.
Reference in this
•
connection· was made to the affidavit of Lala Manickchand filed
H
in the High Court in support of the writ petition in which it was
asserted that licences had been issued in March, 1969 to 163
.applicants for the value of Rs.
9,900 each.
These licences,
'·
jt:
•
IRON "' STEEL CONTROLLER v. MANICKCHAND (Dua, /.)' 13
A
according to the assertion in this paragraph, had been granted
without any basis, though a little lower down it was added that
those applicants were sunilarly placed as the respondent and,
therefore, the issue of import licence to them showed discriminatory conduct violative of rules of natural justice and equalit)'.
It was also added that according to the
respondent's informaB tion another 321 applicants were going to get licences
withc'>ut
any proper basis or criteria.
The counsel also made a reierence
to that part of the respondent's affidavit in the High Court where
it was stated that if, as the respondent had reliably learnt, the
300 applicants who had asked for import licences were lo be
granted their prayers then the ceiling limit allotted for the year
c
D
E
F
G
H
would be exhausted and the respondent would not get any relief.
It was for this reason that prayer was made in the High Court for
restraining the Joint Chief Controller of Imports and Exports
from issuing any licence to any other person pending disposal of
the respondent's application.
According to
Shri Singhvi
011
April 9, 1970 an undertaking was given by the State in the High
Court that the plea of exhaustion of the quota would not be
taken by it for defeating the respondent's claim.
This submission was apparently made for the purpose of controverting the
contention that the availability of foreign exchange being one of
the vital considerations determining the grant of import licence,
it is the prevailing position of foreign exchange at the time of
granting the licence which has to be seen.
Shri Desai having
denied any such undertaking in the High Court and our attention
having not been drawn to any such undertaking on the record ol
the High Court, we do not consider it proper to take into account
this assertion made on behalf of the respondent.
Shri Singhvi
relied on a decision of the Madras High Court Sha Maggajee
Saremal/ & Bros v. Joint
Chief Controller of Imports and
Exports(') the head-note- of which reads:
"Where a transfer of quota rights is effected as a
result of change in the constitution of. the firm, the new
constituted firm becomes entitled to
the
transferred
quota as from the date on which the reconstitution was
effected and not from the date on which the Chief Controller of Imports purports to accord recognition to such
reconstitution.
The fact that a rule by way of an instruction has
be~n introduced in the Red Bock limiting the consideration of applications only to the immediately prior period
cannot have any value in so far as the ri~hts of parties
come in for examination. The rights of the established
importer to the licence for the back periods cannot be
(I) A.LR. 1966 Mad. 3u9.
14
SUPREME COURT REPORTS
(1972] 3 S.C.R.
denied if his application had been kept pending for
A
reasons other than )aches on the part of the applicant.
An application for import licence for
a particular
period must be considered only in the light of the policy
relevant to that period and cannot be refused on the
basis of a later policy which might have changed the
position with regard to the licences for the import of the
Jl.
item applied for.
Decision in W.A. No. 15 of 1960
(Mad.) and in W.P. Nos. 27, 47, 48 of 1961 (Mad.)
followed."
This decision deals with a situation created by the transfer
of quota rights effected as a result of change Jn the constitution
of an existing firm which was an established in1porter and, there· c
fore, cannot lend much assistance irr dealing with the facts before
us.
The unreported decision of this Court in The
Municipal
Corporation for Greater Bombay v. The Advance Builders India
(Pvt.) Ltd.(1), also relied upori by Shri Singhvi merely lays
down th~t "where a statute imposes· a duty the performance or
non-performance of which is not a matter of discretion;
a
D
mandamus may be granted ordering that to be done which the
statute requires to be done (Halsbury's Laws of England, Third
edn. Vol. II, p. 90)". Quite clearly, this decision only reiterate>
the recognised rule in regard to the grant of mandamus and is of
little help to the respondent.
In our view the plea of arbitrariness and ma/a {ides having
£
not been pressed in the High Court it is not possible for this
Court to consider it.
The material on the existing record lo
which our attention was drawn is not enough to make out a
prima facie case of either mala {ides or arbitrariness to justify any
further scrutiny.
Indeed, in the High Court the State had agreed
to consider the respondent's application' and the only controversy
F
th,,ere was as to the year of which the import policy was to govern
the respondent's application. For this purpose,
reliance
was
placed neither on the plea of ma/a {ides nor of arbitrariness with
the result that. we decline to go into these pleas.
There is no doubt that speedy disposal of applicatio11s for
import licences· is of the greatest importance.
Indeed, in lhe
G
Import Trade Control Handbook of Rules and Procedure, 1968
paras 302 to 304 have been exclusively devoted to the subject of
Checks on delays.
They provide;
"302(1) Every effort is made to avoid delays in the
disposal of applications for licences or correspondence.
Reminders in regard to the delayed cases are attended
H
to promptly by the licensing authorities.
(I) C.A. No. !l21 of 1970 decided on 2Sth August, 1971.
"11
A
B
c
D
E
F
G
H
IRON & STEEL CONTROLLER v. MANICKCHAND (Dua, I.)
15
(2) Complaints regarding delay addressed to the
Chief Controller of Imports and Exports, New Delhi,
should be specifically marked "Complaint against delay"
at the top of the communication containing the complaint.
(3) The applicant .should also bring cases of delay
to the personal notice of the Public Relations Officer 111
the Import Trade
Control
office
concerned.
The
Public Relations Officer of the rank of the Deputy
Chief Controller of Imports and Exports has
been
appomted at the headquarters of the office of the Chief
Controller of Imports and.Exports, New Delhi.
In the
regional offices also, Public Relations Officers have been
appointed.
Addressing of communications to import
trade control organisatkms :
303. It is noticed that telegrams and jetters received
tiy the licensing authorities from the trade by way of
reminder do not often contain sufficient
details
to
enable th~ licensing authorities to locate the previous
papers.
With a view to avoid delay in the disposal of
such communications the trade should give brief details
of the reference received by those from the licensing
authority concerned, the particulars of the goods sought
to b~ imported and the I.T.C. classification of such
goods.
The communication should also indicate
its
subject matter, the category of the importer, the type of
the licence to which it pertains, whether it relates to the
grant of the licence or amendment or revalidation thereof or an appeal, and it should also give the number and
date of the relevant original application.
Enquiries regarding the position of applications.
304(a) The
arrangement
under
which
the
importers could enquire the position of the import
application by filling the import enquiry slip has been
discontinued.
(b) The licensing authorities
will
make
every
effort to dispose of the applications as quickly as possible. If an application for an import licence is
not
disposed of within one month from the date of its
receipt in the licensing section the lic~ing authority
will issue an interim reply to the applicant. If an applicant does not receive an interim reply even after this
time limit, he can bring the matter to the notice of the
Public Relations Offieer in the import ~e control
office concerned or book an interview with the officer
•
16
SUPREME COURT REPORTS
[1972] 3 s.c.R.
cohcerned through the Enquiry Officer in order to know
the. reasons for the delay in the disposal of his application.
·
( c) Where a licensing authority calls for
certain
docu!Uen.ts <;>r informa:ion. from the. applicant or any
defic1enc1es m the apphcatton are comm.unicated to the
applicant, and.