Case Note & Summary
The dispute arose from an application for an import licence for stainless steel submitted by L. Manickchand, proprietor of Katrella Metal Corporation, Madras, under the import policy for 1968-69. The respondent, a small-scale industry unit, sought to import stainless steel as an actual user for manufacturing hospital requisites. His registration certificate indicated manufacture of hospital and surgical instruments, trays, mugs, basins, and household utensils. Under the 1968-69 Import Trade Control Policy, 'medical and surgical equipment and appliances' were listed as a priority industry, but household utensils were not. The application was made on December 7, 1968. Due to the sensitive nature of stainless steel and a large number of newcomer applications, Licensing Instruction No. 4/69 dated January 30, 1969 required detailed scrutiny of such applications. The respondent, in May 1969, clarified that his end-products would include surgical bowls, spittoons, and trays. The Chief Controller of Imports and Exports issued General Licensing Instructions clarifying that only items classifiable as 'medical and surgical equipment and appliances' would be treated as priority, and illustrating that lotion bowls, kidney trays, instrument trays, wash bowls, measuring jugs, ointment jars, and medicine cups were non-priority. On October 31, 1969, the Director of Industries confirmed the Essentiality Certificate. In April 1970, after review, the Chief Controller instructed that the respondent's application be considered under the 1970-71 import policy. The respondent then filed a writ petition in the Madras High Court seeking a mandamus to direct the licensing authority to consider his application under the 1968-69 policy. A single judge allowed the writ petition, and a Division Bench dismissed the appeal at admission stage. The Supreme Court heard the matter by special leave. The core legal issue was whether the import licence application should be governed by the policy in force at the time of application or at the time of grant. The appellants contended that the respondent had no vested right and that the instructions to apply the later policy were valid under para 91 of the Import Trade Control Handbook of Rules and Procedure, 1968. The respondent argued that the application should be considered under the 1968-69 policy. The Supreme Court held that an applicant has no vested right to an import licence under the policy in force at the time of application, relying on Section 3(1)(a) of the Imports and Exports Control Act, 1947 and Clause 6(1)(a) of the Imports (Control) Order, 1955. The Court observed that speedy disposal of applications is important, but proper scrutiny is necessary to prevent abuse of import quotas and to prioritise foreign exchange. The Court found no undue delay or laches in dealing with the application, and the Chief Controller's instruction to apply the 1970-71 policy was in accordance with para 91 of the Handbook. Consequently, the Supreme Court allowed the appeal, set aside the High Court's order, and held that no mandamus could be issued to consider the application under the 1968-69 policy; the application was to be considered under the 1970-71 policy.
Headnote
A) Import Trade Control - Import Licence Policy - No Vested Right - Imports and Exports Control Act, 1947, Section 3(1)(a); Imports (Control) Order, 1955, Clause 6(1)(a) - An applicant had no vested right to an import licence under the policy in force at the time of his application; the licensing authority could consider the application under the policy prevailing at the time of grant, as the statutory framework did not confer such a right. Held that the respondent could not insist on the 1968-69 policy for his application (Paras 9, 16-17). B) Import Trade Control - Change of Policy During Pendency - Application of Later Policy - Import Trade Control Handbook of Rules and Procedure, 1968, Para 91, Chapter IV - The Chief Controller's instruction to consider the respondent's application under the 1970-71 policy was in accordance with para 91 of the Handbook, as the application had not been disposed of during 1968-69 due to need for clarifications and scrutiny; there was no undue delay or laches. Held that no mandamus could be issued to consider the application under the earlier policy (Paras 16-18). C) Import Trade Control - Sensitive Items and Priorities - Stainless Steel as Sensitive Item - Imports and Exports Control Act, 1947 - Government Policy - Licensing Instruction No. 4/69 required careful scrutiny of newcomer applications for stainless steel; the respondent's stated end-products included non-priority items like surgical bowls and trays, which were not within the priority category of "medical and surgical equipment and appliances"; the time taken for examination was not unreasonable. Held that the scrutiny was justified to prevent abuse of import quotas and to allocate foreign exchange according to priority (Paras 4-16).
Issue of Consideration
Whether an application for import licence should be considered in accordance with the import policy in force at the time of application or at the time of grant of licence.
Final Decision
Appeal allowed; High Court judgment set aside; writ petition dismissed; no mandamus for 1968-69 policy; application to be considered under 1970-71 policy as per Chief Controller's instructions.
Law Points
- Applicant has no vested right to import licence under policy in force at time of application
- import licence policy at time of grant governs
- para 91 of Import Trade Control Handbook of Rules and Procedure 1968 permits consideration of application under later policy if no undue delay
- foreign exchange regulation and priority considerations justify scrutiny
