# U•i11ersal f.t11porls Agem:y v. CAie/ Ctmlroller of 1 pa.1, 6EMporls

- **Citation:** [1961] 1 S.C.R. 305
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Bench:** B. P. Sinha, Jafar Imam, A. K. Sarkar, K. SuBBA RAO, J.C. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/u-i11ersal-f-t11porls-agem-y-v-caie-ctmlroller-of-1-pa-1-6emporls-2166
- **Pages:** 37

## Headnote

French Establishments-Agreement to import goods-De facto
transfer of administration to India-Confiscation of goods imported
-Validity-" Things done or omitted to be done", meaning a/-
French Establishments' (Application of Laws) Order, r954, cl. (6)-
Sea Customs Act, r878 (8 of 1878). s. 167(8).
In pursuance of an agreement dated October 2r, r954, entered into between the Government of India and the Govern-
. ment of France whereby there was a de facto transfer of the
administration of Pondicherry and other French Settlements to
the Government of India as and from November I, r934, a notification dated October 30, 1954, was issued by the Government
of India called the French Establishments' (Application of Laws)
Order, r954, by virtue of wlfich certain enai:tments specified in
column (3) of the Schedule which included the Sea Customs Act,
Kapur ].
August a3.
1960
U•i11ersal
f.t11porls
Agem:y
v.
CAie/ Ctmlroller
of 1 ... pa.1, 6EMporls
306
SUPREME COURT REPORTS
[1961)
1878, the Imports & Expdrts Trade (Control) Act, 1947, and the
Foreign Exchange Regulation Act, 1947, were extended to
Pondicherry.
Paragraph 6 of the Order provided: "Unless
otherwi.e specilically provided in the Schedule, all laws in force
in French Establishments immediately before the commencement of the Order, which correspond to enactments specilied m
the Schedule, shall cease to have effect, save as respect things
done or omitted to be done before such commencement".
Shortly prior to the transfer of the administration of l'o:idicherry to India, the petitioners had entered into certain agreements with foreign suppliers for the import into Pondicherry
of diverse goods.
Pondicherry was, pnor to the transfer to
India, a free port without any restrictions on imports, except on
a few items, and the importers could acquire foreign exchange
either at the official rate in respect of some transactions or at
the open market in respect of others. The petitioners had with
the consent of the French authorities obtained through the banks
foreign exchange from the open market to finance their imports
and had, with the foreign exchange so acquired, opened irrevocable letters of credit in favour of their foreign suppliers un account of the price of the goods to be supplied. On or about
November l, 1954, the goods covered by the aforesaid imports
were in different stages o( shipment and arrived at the port of
Pondicherry in January and February 1955·
The Collectur of
Customs treated the imports of the goods as unaut110rised and
confiscated the same and gav•! the petitioners an option to pay 111
lieu of confiscation a penalty, on the ground that the petitioners
had not obtained a licence for bringing the goods into Pondicherry and that s. 167(8) o( the Sea Customs Act, 1878, was ·
contravened. The petitioners claimed, inter alia, that the transactions entered into by them with the foreign dealers wore
"things done" within the meaning of para. lJ of the l'rench
Establishments' (Application o( Laws) Order, 1954, and that
therefore the imports by the petitioners were within the saving
clause of that paragraph.
Held, (Per Sinha, C.].. Imam and Subba Rao, JJ. Sarkar
and Shah, JJ .. dissenting): (1) that on its proper interpretation,
the express10n " things done " m para. 6 o( the French Establishments' (Application of Laws) Order, 1954· was comprehensive
enough to take in not only things done.but also the effects or the
legal consequences flowing therefrom:
[he Que"n v. justices of the West Riding of Yorkshire, (1876)
l Q.ll.D. 220 and Heston and /slewortil Urbat> District Co1mcil v.
Grout, [1897) 2 Ch. 306, relied on.
(2) that the bringing of the goods into India and the relevant contracts entered into by the petitioners with the foreign
dealers formed parts o( a same transaction, and therefore, the
imports _were the effect or the legal consequence of the " things
done", ·i.e., tho contracts entered into by the petitioner;
..
..
II
'j
1 S.C.R. SUPREME COURT REPORTS
307
State of T

## Text

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l S.C.R. SUPREME COURT REPORTS
305
foreign judgment. (4) Clause 3 of art. 4 is in the nature
r960
of a deeming clause and makes the decree of the Th
A
.
P k.
t (W t p
· b)
d ·
f
f
e
ssocialed
a istan co?r . . es.
U~Ja a
ecre~ o a c_ourt o Hotels of India,
competent iunsdwt1on m East Puniab (India). (5) Ltd. & An~ther
Situs of the decree is not in Pakistan alone but the
v.
legal fiction applies to that also, and (6) the evacuee R. B. Jodha Mal
laws of Pakistan do not affect the effectiveness of the
Kuthalia
decree in India.
I would therefore allow this appeal and set aside
the judgment and order of the High Court. The
appellants will have their costs throughout.
BY COURT: In view of the majority Judgment,
the appeal is dismi8sed with costs.
·
Appeal dismissed.
M/s. UNIVERSAL IMPORTS AGENCY
AND ANOTHER
v.
THE CHIEF CONTROLLER OF IMPORTS
AND EXPORTS AND OTHERS.
(AND CONNECTED PETITIONS)
(B. P. SINHA, c. J., JAFAR IMAM, A. K. SARKAR,
K. SuBBA RAO and J.C. SHAH, JJ.)
French Establishments-Agreement to import goods-De facto
transfer of administration to India-Confiscation of goods imported
-Validity-" Things done or omitted to be done", meaning a/-
French Establishments' (Application of Laws) Order, r954, cl. (6)-
Sea Customs Act, r878 (8 of 1878). s. 167(8).
In pursuance of an agreement dated October 2r, r954, entered into between the Government of India and the Govern-
. ment of France whereby there was a de facto transfer of the
administration of Pondicherry and other French Settlements to
the Government of India as and from November I, r934, a notification dated October 30, 1954, was issued by the Government
of India called the French Establishments' (Application of Laws)
Order, r954, by virtue of wlfich certain enai:tments specified in
column (3) of the Schedule which included the Sea Customs Act,
Kapur ].
August a3.
1960
U•i11ersal
f.t11porls
Agem:y
v.
CAie/ Ctmlroller
of 1 ... pa.1, 6EMporls
306
SUPREME COURT REPORTS
[1961)
1878, the Imports & Expdrts Trade (Control) Act, 1947, and the
Foreign Exchange Regulation Act, 1947, were extended to
Pondicherry.
Paragraph 6 of the Order provided: "Unless
otherwi.e specilically provided in the Schedule, all laws in force
in French Establishments immediately before the commencement of the Order, which correspond to enactments specilied m
the Schedule, shall cease to have effect, save as respect things
done or omitted to be done before such commencement".
Shortly prior to the transfer of the administration of l'o:idicherry to India, the petitioners had entered into certain agreements with foreign suppliers for the import into Pondicherry
of diverse goods.
Pondicherry was, pnor to the transfer to
India, a free port without any restrictions on imports, except on
a few items, and the importers could acquire foreign exchange
either at the official rate in respect of some transactions or at
the open market in respect of others. The petitioners had with
the consent of the French authorities obtained through the banks
foreign exchange from the open market to finance their imports
and had, with the foreign exchange so acquired, opened irrevocable letters of credit in favour of their foreign suppliers un account of the price of the goods to be supplied. On or about
November l, 1954, the goods covered by the aforesaid imports
were in different stages o( shipment and arrived at the port of
Pondicherry in January and February 1955·
The Collectur of
Customs treated the imports of the goods as unaut110rised and
confiscated the same and gav•! the petitioners an option to pay 111
lieu of confiscation a penalty, on the ground that the petitioners
had not obtained a licence for bringing the goods into Pondicherry and that s. 167(8) o( the Sea Customs Act, 1878, was ·
contravened. The petitioners claimed, inter alia, that the transactions entered into by them with the foreign dealers wore
"things done" within the meaning of para. lJ of the l'rench
Establishments' (Application o( Laws) Order, 1954, and that
therefore the imports by the petitioners were within the saving
clause of that paragraph.
Held, (Per Sinha, C.].. Imam and Subba Rao, JJ. Sarkar
and Shah, JJ .. dissenting): (1) that on its proper interpretation,
the express10n " things done " m para. 6 o( the French Establishments' (Application of Laws) Order, 1954· was comprehensive
enough to take in not only things done.but also the effects or the
legal consequences flowing therefrom:
[he Que"n v. justices of the West Riding of Yorkshire, (1876)
l Q.ll.D. 220 and Heston and /slewortil Urbat> District Co1mcil v.
Grout, [1897) 2 Ch. 306, relied on.
(2) that the bringing of the goods into India and the relevant contracts entered into by the petitioners with the foreign
dealers formed parts o( a same transaction, and therefore, the
imports _were the effect or the legal consequence of the " things
done", ·i.e., tho contracts entered into by the petitioner;
..
..
II
'j
1 S.C.R. SUPREME COURT REPORTS
307
State of Travancore-Cochin v. The Bombay Co. Ltd., [1952]
S.C.R. u12 and State of Travancore-Cochin v. Shanmugha Vilas
Cashew Nut Factory, [1954] S.C.R. 53, relied on.
(3) that para. 6 of the order saved the transactions entered
into by the petitioners and that, therefore, the Collector of Customs had no right to confiscate their goods on the groun<\ that
they were imported without a licence.
Per Sarkar, J.-(r) The mere making of the contracts and
the opening of the letters of credit without the bringing of the
goods into Pondicherry would not amount to an "import" and,
therefore, the imports by the petitioners would.not be within the
saving clause in para. 6as things done before the commencement
of the Application of Laws Order.
(2) In the absence of the
necessary words to extend the application of French laws to the
effect of things done or rights acquired frorri the doing of them,
the saving clause in para. 6 could not protect the imports made
by the petitioners from the operation of the Indian laws applied
to the French Establishments.
Per Shah, J.-(1) Steps preliminary to import, eveu if
they are closely integrated therewith, are not included in the
concept of import, in dealing with the provisions of the Sea
Cnstoms Act and the Imports and Exports Trade (Control) Act.
(2) By the use of. the expression "things done or omitted to· be
done befgre such commencement " in cl: 6 of the French Establishments' (Application of Laws) Order, 1954, French law applies
to acts and omissions before November I, 1954• and not to legal
consequences of those acts and omissions ensuing after that date,
and hence import of goods across the customs frontier in the
Pondicherry Port after November I, 1954, without a licence in
that behalf is contrary to the provisions of the Sea Customs Act
and the Import and Exports Trade (Control) Act.
ORIGINAL JURISDICTION:
Petitions Nos. 123 to 125
of 1957 and 118 of 1959.
Petitions under Article 32 of the Constitution of
India for enforcement of Fundamental Rights.
N. 0. Chatterjee and S. 0. Mazumdar, for the petitioners (In Petns. Nos. 123 to 125 of 1957).
A. V. Viswanatha Sastri, R. Ganapathy Iyer and
G. Gopalakrishnan, for the petitioners (In Petn. No. 118
of 1959).
H. J. Umrigar, B. R. L; Iyengar and T. M. Sen, for
the. Respondents (In all the petitions).
Harnam Singh and Sadhu Singh, for Intervener
No; 1 (B. S. 8.nd Co.)
40
r960
Universal
Imports Agency
v.
Chief Controller
of Imports &-
Exports
308
SUPREME COURT REPORT8
[ 1961]
Iy6o
D. R. Prem and Sadhu Singh, for Intervener No. 2
Universal
(French India. Importing Corporation).
Impo,ts Agtncy
1960. August 23. Tho ,Judgment of B. P. 8inha,
v.
C. J., Imam and 8uhba. Rao, JJ., was delivered by
c~~·~m~o;,:;
0
1);' Subba. Rao, J. Sarkar, J. and Shah, J., delivered
Exp0 , 1,
separate Judgments.
SuBBA gAO J.-These four petitions are filed under
Subba /lao ].
f
Art. 32 of the Constitution for quashing the orders o
the Assistant Controller of Imports and Exports. the
Collector of Customs and Central Excise, Pondicherry,
the Board of Revenue, a1~d the Government of India,
and for an appropriate direction requiring the respondents to refund the amount realised from the petitioners.
Messrs. U niversa.l Im ports Agency and the proprietor of the agency are the petitioners in the first
three petitions and Messrs. Victory Traders are the
petitioners in the la.st one. The Chief Controller of
Imports and Exports, Pondicherry, tho Collector of
Customs and Central Excise, Pondicherry, the Central
Board of Revenue and tho Government of India. are
the respondents in all the petitions.
Messrs. French India. Importing Corporation and
Messrs. B. S. & Co. intervened in the Writ Petitions.
Pondicherry was a. French Possession in India..
On
October 21, 1954, the Government of India. and the
Government of France entered into a.n agreement
(hereinafter called the Indo-French Agreement), whereunder there was a. def acto transfer of the administration
of the French Settlements to the Government of India
(hereinaft-0r called the merger) a.s and from November
1, 1954. The de jure transfer was postponed.
Messrs. Universal Imports Agency are a proprietary
concern registered with the Services Des Contribution,
Pondicherry, having its principal place of business at.
Pondicherry. Sri Moha.nla.l B. Gandhi is the proprietor
of the said Agency.
They are established importer~
and genera.I merchants dealing in ball bearings, mill
stores, porcelain ware, glass marbles, beltings and
various other goods.
They commenct-'<l their business
at Pondicherry on or about April 14, 1954, under
1 S.C.R. SUPREME COURT REPORTS
309
"patente" No. 70 of 1954 issued by the Controller of
'960
the Contributions Department of the .French Governu .
1
·
niversa
ment at Pondicherry. In the middle of August 1954, Impo•ts Agency
they placed Sindents with Messrs. Shimada Trading
v.
Co., Ltd., Osaka, Japan, for importing porcelain wares, Chief Cont•oller
glass marbles and beltings and the total value thereof
of Imports &
amounted to Rs. 57,418.12.0. .About the end of
·Exports
August 1954, they opene,d three irrevocable Letters of Subba Rao J.
Credit with Messrs. Banque De L ' lndo-Chine in
favour of the said suppliers. The bankers obtained
authorization from· the Bureau Des Alfa.ires Eoonomique, Pondicherry, for the requisite foreign exchange
from the open market and sold the same to the petitioners for the amount involved in the Letters of
Credit. .The petitioners made full payment for the
said foreign exchange and the said Bank kept the said
foreign exchange and credit irrevocably available with
their Overseas Agent at Japan for the benefit of the
suppliers against full set of shipping documents.
All
the said Letters of Credit were valid for three months
and under the agreement"the suppliers were to ship the
goods within the said time. On or about November
1, 1954, the said goods were in different stages of shipment; in some cases they were in the course of
shipment, and in others awaiting shipment in a matter
of a few days and indeed a large part of the goods had
already been placed on board " S. S. Shillong " and
" S. S. Camliodge " and the balance of the goods were
in the course of being loaded in " S. S. Sunda ". In
January and February, 1955 and thereafter the goods
arrived at the Port of Pondicherry. The Collector of
Customs confiscated all the goods on the ground that
they were imported without a licence and gave an
option to the petitioners to pay in lieu of confiscation
fine amounting to l~s. 30,390/-. The petitioners took
up the matter with the Government of India without
any success and finally they paid the said penalty
under protest and cleared the goods.
On or about September 1954 the petitioners placed .
several indents with their overseas suppliers, Messrs.'-
Shimada Trading Co., Limited, Osaka., Japan, and __
others and the total C. I. F. value thereof amounted
l/'lit'ersal
lmporls A,:rncy
v.
310
SUPRE:\iE COURT REPORTS
[1961]
to Rs. 40,470-14-0. They a.rra.nged for the full payment of eight cheques to the sa.id suppliers of t.he
value of the goods through the Banque De L' lndo.
Chine. Their bankers. duly obtained a.uthoriza.tion
Ch"/ co,,t•oller from the Burea.11 Des Affairs Economique, Pondio/ 1 .. po.is &
cherry, for the' requisite foreign exchange and sold the
Expo.is
same to.the petitioners for the a.mount involved in the
cheques, a.nd the sa.id foreign exchange was kept available to the suppliers. On or a.bout November 1, 1!)54,
the goods ordered were in different stages of shipment.
and in some cases the goods were in the course of
shipment a.nd in others a.waiting shipment in a matter
of a. few da.ys.
In January a.nd February, 1955, the
goods arrived a.t the port of Pondicherry. The Collector of Customs treated the imports of the goods a.s
unauthorized a.nd confiscated the same and gave the
petitioners an option to pay in lieu of confiscation a
penalty a.mounting to Rs. 20,700/-. The petitioners
carried the matter to the Government without any
success.
Ultimately the petitioners pa.id the penalty
under protest and cleared the goods.
The petitioners a.gain in the middle of August 1954
placed severe.I indents with their oversea.a suppliers
for importing hair belting, torches, belt fasteners,
electric lighting torch bulbs and primus stoves, and
the total C. I. F. value was Rs. 52,572-12-0.
They
opened irrevocable Letters of Credit and issued
cheques age.inst full a.d..-a.nce remittance in favour of
their suppliers through the said Banque De L' Indo.
Chine. Their bankers arranged through the Bureau
Des Affairs Economiquu, Pondicherry, for the requisite
foreign exchange from the open market and sold the
same to the petitioners for the a.mount involved in the
sa.id Letters of Credit and cheques. The petitioners
ma.de full payment for the said foreign exchange and
the said bank kept the said foreign exchange a.nd the
Letters of Credit irrevocably a.vaila.ble with their overseas a.gents for the benefit of the suppliers age.inst full
set of shipping documents and the cheques issued by
the ba.nk on overseas banks were sent to the suppliers
a.s full a.d va.nce remittance a.gs.inst the contra.eta. In
Ja.nua.ry a.nd February, 1955, the goods arrived at the
l S.C.R. SUPREME COURT REPORTS
. 311
port of Pondieherry. The Collector of Customs confis- .
cated the goods and gave the petitioners an option to
Universal
I960
pay in lieu of confiscatii>n fine amounting to Rs. 24,210. Imports Agemy
Though the petitioners took up the matter with the
Government of India, nothing came out of it. They
paid the penalty under protest and cleared the goods.
Messrs. Victory Traders, the petitioners in Petition
v.
Chi~/ Controller
of Imports &
Exports
No. 118 of 1959, are carrying on business of import
Subba Rao J.
and export and general merchandise in Pondicherry
from the year 1949. The petitioners were importing
into Pondicherry a number of a.rticles frpm various
countries under "patente" No. 126 of 1954 gra.nted
by La Controleur, Pondicherry. On August 20, 1954,
they a.pplied to the Chief Bureau Economique, Pondicherry, requesting them to gra.nt pe.rmits to import
goods from foreign countries. The said Burea.u replied that no import licence wa.s required for goods to
enter the territory. Thereafter the petitioners pla.ced
orders with foreign dealers.
In the middle of August,
1954 and early in September, 1954, they placed a.
number of indents with their principa.ls in foreign
countries for importing fan belts, corn emery, ,soda.
wa.ter bottles, gla.ss ma.rbles, etc., of value £ 13,870.
The orders were backed by full pa.yments in many
cases a.nd at lea.st ha.If the pa.yments in others. These
pa.yments were ma.de by demand dra.fts issued by the
Banque De L' ludo-Chine. In Janua.ry a.nd February,
1955 a.nd tharea.fter the goods arrived a.t the port of
Pondicherry, and
they · were confisca.ted by the
Collector of Customs who ga.ve the petitioners a.n
option to pa.y in lieu of oonfisca.tion fine a.ggrega.ting
to Rs. 91,100.
After filing a.ppea.ls to the. Centre.I
Board of Revenue and, thereafter, a. revision to the
Government of India with no success, the petitioners
clea.red the goods a.fter pa.ying the pena.lty under
protest.
It is clea.r from the foregoing facts tha.t the petitioners entered into, before the merger, firm contra.cts of
sales by import with foreign sellers, made a.va.ila.ble
foreign excha.nge either under Letters of Credit or
otherwise, and the goods were shipped either before or
after the merger, though they rea.ched their destina.tion
312
Sl:PRE)IE COURT REPORTS
(1961)
i96o
after the merger. The said goods were confiscated
• .
1
by the Collector of Cudtoms under the following
f; ,ur·er~a
.
d
h
Ld
A
Impo'ts A•rncy circumstances. Un er t e In o.French
greement,
v.
0
tho entire administration of the French Settlements
Chi•/ Co.,i,011" was vestt•d wit.h the Government of India from
of lmpo,ts <SNoYember l, 1954, though dejure transfer had been
Export.•
postponed. In pursua.nce of the Indo-French Agreement, the Ministry of External Affairs 1mblished a.
Subba Rao J. Notification No. S. R. 0. 3315 dated October 30, 1954,
purporting to be under s. 4 of the Foreign Jurisdiction
Act, 1947, and called the French Establishments'
(Application of Laws) Order, 1954, (hereinafter referrnd
to as tho Order).
Under paragraph 3 of the said
Order, the Sea Customs Act, 1879, the Resen·o Bank
of India Act, 1934, the Imports & Exports Trade
(Control) Act, 1947, the Foreign Exchange Regulation
Act, 1947 and the Indian Tariff Act, 1934, were
extended to Pond icherry. On N ovemher l, 1954, the
Government of India. appointer! a Controller of Imports & Exports for the French E;,tahlishments, and
paragraph 4 of the same notification gave the following information and guidance to the public:
"As regards orders placPd outside the Establishments a.nd finalis1,d through tho grant of licence by
the competent French Authorities in accordance with
the Laws and Regulations in force prior to lst
~overnber, 1954, licence-holders a.re advis('d to apply
to the Controller of Irnporlg & ExportR for validation
of licences held hy them.
No foes will be charged for
theso applications. The applications should be accompanied by the original licence and should give particulars about ......... ".
"Licence-holders are advised not to arrange for
shipments of goods until the licences held by them
have been validated by the Controller of Imports and
Exports at Pondicherry."
The petitioners by way of ahund11.nt caution applied
t.o the Chief Controller of Imports & Exports for
licences for clearance of goods, but they we.re all rejected
and the petitioncrH were told that their goods would be
treated as unauthorized imports and they were advised
to approach the Collector of Customs and Central Excise
1 S.C.R. SUPREME COURT REPORTS
313
r960
for conditions ·regarding their release.
As stated
supra, after the goods a_rrived at the port of PondiUniversal
cherry, the Collector of .Customs and Central Excise Impo,i$ Agency
v.
Chief Controller
of Imports &,..
Exports
made the various orders confiscating the goods and
giving the petitioners option to pay penalties in lieu
of confiscation. All of theil'.l paid the penalties, under
protest, and cleared the goods. The appeals filed to ~
the Central Board of Revenue were dismissed and the
Subba Rao ].
revisions filed against the orders of the Central Board
of Revenue to the Government of India were also
dismissed. The petitioners filed· the petitions under
Art. 32 of the Constitution questioning the validity of
the orders of confiscation.
·
The respondents in their counter-affidavits claim
that the orders ma.de by them a.re valid and in accordance with law.
Learned counsel for the petitioners raised many
contentions in support of their petitions. It is not
necessary to enumerate them as the petitions can
effectively be disposed of on the basis of one of the
contentions. The said contention may briefly be.
stated thus: The petitioners have the fundamental
right to hold and to carry on their import trade and
that the Notification No. S. R. 0. 3315 dated October
30, 1954, on the basis of which the orders of confiscation were issued has a saving clause which excludes
the operation of the said Notification in respect of
transactions whereunder the confiscated goods were
purchased and imported. The said saving clause
embodied in paragraph 6 of the Order reads:
"Unless otherwise specifically provided in the
Schedule, all laws in force in the French .Establishments immediately before the commencement of the
Order, which correspond to enactments specified in the
Schedule, shall cease to have effect, save as respect
things done or omitted to be done before such commencement".
Relying on this paragraph, it is contended that the
transactions entered into by the petitioners with the
foreign dealers were "things done " within the meaning of this paragraph and, therefore, they were saved
from the operation of this Order. For the respondents
Universal
Imports Agericy
v.
Chief Controller
of !Pnports 6Exports
314
SCPRE'.llE COURT REPORTS
[1961]
it is e.rgue<l that e.s the confiscated goods were brought
into India. after the commencement of the Order,
the goods confiscated were outside the pa.le of the
saving clause. The question raised fa.118 to be decided
on a true interpretation of the terms of para.graph 6
of the said Order.
In order to apply the said para.graph 6 to the prebent case, the following fact:; he.•~ to be ascertained:
(1) What a.re the laws specified in the Schedule? (2)
What were the laws in force in the French Establishments before the commencement of the Order corresponding to the enactments so specified ? (3) What
were the " things donc " or omitted to be done under
the said laws?
It is not necessary to enter into any elaborate
survey of the laws specified in the Schedule. Broadly
stated, the Imports & Exports (Trade Control) Act
enables the Central GovtJrnment to make e.n order
ma.king provisions for prohibiting, restricting or otherwise controlling the import or export of goods of any
specified description. It makes the infringement of
such restrictions an offence and a. person contravening
the same is punishable with imprisonment for a. term
which may extend to one year or with fine or with
both. The Act further says that the goods imported in
violation of the restrictions she.II be deemed to be
goods the import of which ha.a been prohibited or
restricted under s. 19 of the See. Customs Act. In
exercise of the powers conferred by s. 3 and s. 4A of
the Imports & Exports (Trade Control) Act, the
Central Government me.de an order dated December 7,
1955. Under s. 3 of that order, no person shall import
any goods of the description specified in Schedule l,
except and in accordance with a. licence or a. customs
clearance permit granted by the Centi-a.I Government
or by any authority specified in Schedule 2 to that
order. There a.re also provisions prescribing the procedure for obtaining licences, the eonditio.is of the
licences a.nd for their ca.ncella.tion or modification. It
is, therefore, clear that under the ea.id Act, no goods
ea.n be imported into India. without a. licence obtained
in the prescribed
manner · from the prescribed
'
•
1· S.C.R. SUPREME COURT REPORTS
315
authorities. The Sea Customs Act provides for the levy
r96o
of sea customs duty, imposes prohibitions and restricu .
1
tions on imports and exports in respect of certain Impo;t•;·~;,.,Y
goods and imposes punishment for infringement of the
v.
provisions of the Act. Under s. 167(8) of the said Act, Chief Controller
read with s. 3(2) of the Imports and Exports Trade
of Imports &
(Control) Act, 1947, if any goods, the importation or
Exports
exportation of which is prohibited or restricted, are
Subba Rao ].
imported into or exported out of India contrary to
such restrictions or prohibitions, the goods concerned
are liable to be confiscated and the persons involved •
are also liable to pen!tlty. The Foreign Exchange
Regulation Act, 1947, ·provides for the regulation of
payments, dealings in foreign exchange and securities,
and the import and e~port of currency and bullion. It
prohibits dealings in foreign exchange except by persons authorized to deal in the same and it further
provides penalties for contravention of any of the
provisions of the Act. Briefly stated, the Indian law
as disclosed by the aforesaid Acts is that imports into
India without a licence are prohibited, the goods so
imported in contravention of the restrictions imposed
are liable to be confiscated and that foreign exchange
cannot be obtained otherwise than under the provisions of the Act. Persons infringing the laws are
liable to prosecution in addition to confiscation of the
goods involved.
.
What was the pre-existing law in Pondicherry corresponding to the enactments specified in the Schedule?
Neither the Acts governing the imports nor any
authoritative text-books disclosing the relevant law
have been placed before us. But from the affidavits
filed in the case the state of law corresponding to the
.relevant Acts referred to in para. 3 of the Order can
easily be ascertained. Pondicherry had been a free
port, there being no restrictions on imports except on
a few items like gold, roc~-salt etc. For effecting pay-·
ment for the imports, the importers of Pondicherry
could . acquire foreign exchange either at the official
rate or at the open market rate, whichever might be
conveniently available, both methods being recognised
ft
316
SC'PREME COURT REPORTS
(1961]
i96o
by the French Government as valid. In the counteru .
1
affidavit filed by the State the manner of acquiring
Impo;;;·,~;""Y the foreign exchango for imports has been clearly
'"
stated. Two kinds of permits for obtaining official
Cf.oef Co•t•oll" exchange by importers were issued by the Chief Como/ Tmpo"s c~ missioner in Pondich,Jrry, which were known as authExp"'''
oriza.tion a.nd attestation respectively. They were
Subba Rao ;. signed by the Governor-Genera.! of the French Indian
Establishments himself or by his Secretary-Genera.!.
Tho Government of France used t-0 make an overall
allotment of foreign exchange t-0 the French territories.
Apa.rt form that allotment, it ma.de other currency
allotments in tho light of trade agreements entered
into by France with other countries.
Authorizations
were issued in respect of goods imported from countries with which France had entered into trade agreements a.nd attestation8 in respect of goods imported
' from France and other French colonies. Further, in
respect of other transactions exchange was arranged by
importers through banks doa.ling in foreign exchange.
The Department of Alfa.ires of Economics used to
authorize the ba.nkH in respect of such transactions.
Shortly stated, Pondicherry wa.s a. free port without
any restrictions on imports, except on a. few items, and
the importers could acquire foreign exchange either at
tho official rate in respect of some transactions or a.t the
open market in respect of others.
What were the "things done" by the petitioners
under the Pondichorry law ? Tho petitioners in
the course of their import trade, having obtained
authorization for the foreign exchange through their
bankers, entered into firm contracts with foreign
dealers on C. I. F. terms. In some cases irrevocable
Letters of Credit were opened a.nd in others bank
drafts were sent towards the contracts. Under the
terms of the contracts the sellers ha.d to ship the goods
from various foreign ports a.nd the buyers were to have
physical deli very of the goods after they ha.d crossed
the customs barrier in India. Pursuant to the terms
of the contracts, the sellers placed the goods on boa.rd
the various ships, some before and others after the
merger, a.nd the goods arrived a.t Pondicherry port
1 S.C.R. SUPREME COURT REPORTS
317
after its merger with India. The prices for the goods
z96o
were paid in full to the foreign sellers and the goods
u .
1
d 1.
f b
h b
f
· ·
niversa
were taken e 1 very o
y t e uyers a ter exammmg Imports Agency
them on arrival. Before the merger if the Customs
v.
Authorities had imposed any restrictions not authChief Controlle1·
orized by law, the affected parties could have enforced
0! Imports &
the free entry of the goods in a court of law. On the
Exports
said facts a short question arises whether paragraph 6
subba Rao J.
of the Order protects the petitioners.
While learned
counsel for the petitioners contends that " things
done " take in not only things done but also their
legal consequences, learned counsel for the State contends that, as the goods were not brought into India
before the merger, it was not a thing done before the
merger and, therefore, would be governed by the enactments specified in the Schedule. It is not necessary
to consider in this casa whether the concept of import
not only takes in the factual bringing of goods into
India, but also the entire process of import commencing from the date of.the application for permission to
import and ending with the crossing of the customs
barrier in India. The words " things done " in paragraph 6 must; be reasonably interpreted and, if so
interpreted, they can mean not only things done but
also the legal consequences flowing therefrom. If the
interpretation suggested by the learned counsel for the
respondents be accepted, the saving clause would become unnecessary. If what it saves is only the executed contracts, i.e., the contracts whereunder the goods
have been imported and received by the buyer before
the merger, no further protection is necessary as ordinarily no question of enforcement of the contracts under
the pre-existing law would arise. The phraseology
used is not an innovation but is copied from other
statutory clauses. Section 6 of the General Clauses
Act (X of 1897) says that unless a different intention
appears, the repeal of an Act shall not affect anything
duly done or suffered thereunder. So too, the Public
Health Act of 1875 (38 & 39 Viet. c. 55) which repealed
the Public Health Act of 1848 contained a proviso to
s. 343 to the effect that the repeal " shall not affect
anything duly done or suffered under the enactment
L'11>vrrsal
Imports .'lgrnry
v.
Chief Co"troller
of J,nports &
Exports
S1tbba Rao _/.
318
SUPRE:\1E COURT REPORTS
[!961]
hereby repealed". This proviso ca.me under judicial
scrutiny in The Queen v. Justices of the West Ridina of
Yorkshire('). There notice was given by a local board
of health of intention to make 11. rnte under the Public
Health Act, 1848, and amending Acts.
Before the
notice had expired these Acts were repealed by the
Public Health Act, 1875, which contained a saving of
"anything duly done" under the repealed enactments,
and gave power to make a similar rate upon giving a.
similar notice. The boa.rd, in ignorance of the repeal,
ma.de a rate purporting to be ma.de under the repenlcd
Acts. It was contended that as the rate was ma.de
after the repealing Act, the notice givPn under the
repealed Act was not valid. The learned Judges held
that as the notice was given before the Act, the making of the rate was also saved by the words "anything
duly done" under the repealed enactments. This case
illustrates the point that it is not necessary that an
impugned thing in itself should have been done before
the Act was repealed, but it would be enough if it was
integrally connected with and was a legal consequence
of a thing done before the said repeal.
Under similar
circumstances Lindley, L. J ., in Heston and I slewortli
Urban District Couw:il v. Grom(') confirmed the validity of the rate ma.de pursuant to a notice issued prior
to the repeal.
Adverting to the saving clause, the
learned Judge tersely states the principle thus at
p. 313: "That to my mind preserves that notice and
the effect of it ". On that principle the Court of Appeal
held that the rate which was the effect of the notice
was good.
It is suggested that the phraseology of the saving
clause of the English Statutes and of the General
Clauses Act of 1897 a.re of wider import than that of
para.graph 6 of tho Order and, therefore, the English
decisions a.re not of any assistance in considering the
scope of the saving clause of the Order. It is further
stated that the English decisions apply only to a
sa. ving clause of an Act which repeals another but
preserves the right created by the latter. We do not
see any reason w by the same construction cannot be
(1) (1876) I Q.B.D. 220.
(2) [1897] 2 Cb. 3o6.
•
1 S.C.R. SUPREME COURT REPORTS
319
placed upon the wording of paragraph 6 of the Order
which is practically similar in terms as those found in
the relevant saving clause of the English Statute and
that of the General Clauses Act.
Nor can we find any justification for the second criticism. In the instant case the legal position is exactly the same. By reason of the Indo-French Agreement the Government· of India made the Order under
the Foreign Jurisdiction Act applying the Indian laws
to Pondicherry. The effect of that Order was that the
French laws were repealed by the application of the
Indian laws in the same field occupied by the French
laws subject to a saving clause. The position is analogous to that of a statute repealing another with a
saving clause. If the English decisions apply to the
latter situation, we do not see how they do not apply
to the former. In both the cases the pre-existing law
continues to govern the things done before a particular date. We, therefore, hold that the words " things
done" in paragraph 6 of the Order are comprehensive
enough to take in a transaction effected before the
merger, though some of its legal effects and consequences projected into the post-merger period.
Now what was the inter-relation between the said
" things done " and the act of import or bringing of
the goods into India ? The· effect of the contracts
under the pre-existing law was that the terms thereof
could have been implemented without any customs
bar placed against the import. This Court had, in
the context of Art. 286(l)(b) of the Constitution, to
consider the connotation of the words " in the course
of export or import " in State of Travancore-Cochin v.
The Bombay Co. Lfd. (1).
Patanjali Sastri, C. J., described the nature of export sale thus at p. 1118:
" Such sales must of necessity be put through by
transporting the goods by rail or ship or both out of
the territory of India, that is to say, by employing the
machinery of export. A sale by export thus involves
a series of integrated activities commencing from the
agreement of sale with a foreign buyer and ending
with the delivery of the goods to a common carrier for
(1) [1952] S.C.R. III2.
Universal
Imports Agency
v.
Chief Controller
of I1nports &
Exports
Subba Rao ].
19fio
(:' uivrrsal
Imports A.1;nuy
v.
Chief C1J10frol!er
of lt11port~ &
E:rp:Jrts
320
SUPRE;\IE COURT REPORTS
[ 1961]
transport out of the country by land or sea. Such
a salo cannot be diBsociated from the export without
which it cannot be effectuated, and the sale and resultant export form parts of a single transaction."
The same principle has been restated by the learned
Chief Justice in State of Tramncore-Cochin v. Shanmugha Vilas Cashew Nut Factory (' ).
The learned Chief
.Justice stated at p. 63 thus:
"The phrase" integrated activities" was used in
the previous decision to denote that a sale, that is, a
sale which occasions the export, cannot be dissociated
from the export without which it cannot be effectuated and the sale and resultant export form parts of a
single transaction".
Applying tho said principles to an import sale it
may be stated that a purchase by import involves a
series of integrated activities commencing from the
contra.ct of purchase with a foreign firm and ending
with the bringing of the goods into the importing
country and that the purchase and resultant import
form parts of a same transaction. If so, in the present case the bringi11g of tho goods into India and the
relevant contracts entered into by the petitioners with
the foreign dealers form parts of a same transaction.
The imports, therefore, were the effect or the legal
consequence of the "things done", i.e., the contracts
entered into by the petitioners with the foriegn dealers.
This conclusion is e.lso min forced by the terms of
the Indo-F'rench Agreement. It is common case that
the terms of the said Agreement cannot be enforced in
a municipal court in India.
We aro only referring to
it as the terms thereof throw some light on the proper
understanding of the saving clause.
By Art. 17 of the
Agreement, in so far aH material for our purpose, all
orders placed outside the Establishments and finalised
through the grant of a. licence by competent authorities in accordance with laws and regulations in force
prior to the date of the def acto transfer were to be fulfilled by the Government of India and the necessary
foreign exchange granted if the goodH were imported
(1) [1954] S.C.R. 53·
·-
1 S.C.R. SUPREME COURT REPORTS
321
within the period of validity of the relevant licences
z960
subject to payment of customs duty and other taxes
.
normally leviable at Indian ports. That is, orders 1 Puntive~al
placed outside the Establishments and finalised through m or 'v. $•ncy
the grant of a licence were to be honoured by the Chief Controller
Government of India. The word "licence " in this
of Impor/s &
Article may be construed rather widely to take in a
Exports
permit or an authorization ; otherwise it would lead to
the anomaly that when a licence, strictly so called, is
Subba Rao f.
required for a transaction and therefore obtained, the
transaction is protected by the Article, whereas the
transaction which requires only a permit is excluded
therefrom. It may be recalled that the petitioners
obtained authorizations of the Economics Department
in respect of their orders. This Article indicates the
intention of the two Governments that the orders so
placed outside the Establishments should be honoured.
If paragraph 6 of the Order is construed in the manner suggested by the State, we would be imputing to
the framers of the Order a conscious breach of the terms
of the Agreement between the two countries, for
even the;orders covered by Art. 17 of the Agreement
would be excluded from the operation of the saving
clause.
·
We would, therefore, hold that paragraph 6 of the
Order saves the transactions entered into by the petitioners and that the respondents _had no right to confiscate their goods on the ground that they were
imported without licence. In this view, no other question arises for consideration.
In the result, the orders of the respondents 2, 3 and
4 are quashed and they are directed to refund to the
petitioners the amounts illegally collected from them.
The petitioners in all the petitions will have their
costs.
SARKAR J.-I think that these petitions should fail.
S•rka• J.
Sometime in the latter half of 1954, the petitioners
had in Pondicherry, then a French establishment in
India, entered into certain agreements with foreign
suppliers for the import into Pondicherry of diverse.·
goods. It is said that at that time lioenoes were not
Universal
Imports Agency
v.
Clrief Controller
of Imports &
E:¥potls
Sarkat j.
322
SUPREME COURT REPORTS
(1961]
required for such imports from the French authorities. It appears however that these authorities granted a certain a.mount of foreign exchange for the
imports.