Case Note & Summary
The dispute arose from the Export Promotion Scheme introduced by the Government of India under the Import Trade Control Policy for the licensing period October 1958 to March 1959. The petitioner, a firm of exporters and importers, exported artsilk goods to Singapore and claimed entitlement to import licences for artsilk yarn equal to 100% of the foreign exchange earned. The Government, having learned of malpractices, suspended the scheme and appointed a committee to scrutinise pending applications. The committee accepted the value of some exported goods but reduced the value of Bush Shirt Cloth, leading to a licence for Rs 3,19,354/- instead of the claimed Rs 7,07,709.55. The petitioner filed a writ petition under Article 32 of the Constitution seeking mandamus to grant a licence for the full value or certiorari to quash the reduced licence, alleging arbitrary reduction and discrimination. The Supreme Court held that the fundamental right to carry on trade under Article 19(1)(g) is subject to reasonable restrictions in public interest, and import controls are constitutionally valid. The licensing authority's power under Clause 3 of the Imports (Control) Order, 1955 and Clause 2 of Appendix 42 was discretionary, not mandatory, and did not oblige the Controller to issue a licence for the full export value. The Court further held that no evidence of discrimination under Article 14 was established, as the petitioner failed to prove that similarly situated persons were treated differently. The petition was dismissed, affirming the reduced licence.
Headnote
A) Constitutional Law - Fundamental Rights - Freedom of Trade and Commerce - Article 19(1)(g), Constitution of India - State's power to impose reasonable restrictions on imports in interest of general public upheld; import licensing scheme not unreasonable restriction. Held that fundamental right under Art 19(1)(g) is not absolute and import controls are valid.
B) Administrative Law - Licensing Authority's Discretion - Import Control - Clause 2 of Appendix 42, Imports (Control) Order, 1955 read with Section 3, Imports and Exports (Control) Act, 1947 - Clause invests Controller with authority, not obligation; power discretionary. Held that Controller not bound to grant licence for full export value; granting 45% did not infringe Art 19(1)(g).
C) Constitutional Law - Equality before Law - Article 14, Constitution of India - Absence of evidence of discriminatory treatment between petitioner and similarly situated persons; no violation. Held that alleged discrimination not proved.
D) Constitutional Law - Writ Jurisdiction - Article 32 and Article 226 - Where High Court dismisses writ under Art 226, remedy is appeal, not to be heard as intervener in Supreme Court. Held that no right of intervention.
Issue of Consideration
Whether the Controller of Imports was bound to grant import licence for full export value under Export Promotion Scheme; whether reduction to 45% violated fundamental rights under Articles 19(1)(g) and 14; whether licensing power was arbitrary.
Final Decision
The Supreme Court dismissed the writ petition. The Court held that the Controller's grant of licence for Rs 3,19,354/- (approximately 45% of export value) was lawful and did not violate Articles 14 or 19(1)(g). The licensing authority's discretion was upheld.
Law Points
- Right to trade under Article 19(1)(g) is subject to reasonable restrictions in public interest
- State's power to control imports is valid
- Import licensing authority's power under Imports (Control) Order 1955 is not arbitrary
- Clause 2 of Appendix 42 confers discretion not obligation
- No violation of Article 14 without evidence of discrimination
- Where writ under Article 226 dismissed
- remedy is appeal not intervention.
Case Details
1961 LawText (SC) (08) 14
Writ Petition No. 1 of 1960
J.C. Shah, P.B. Gajendragadkar, K. Subba Rao, M. Hidayatullah, Raghubar Dayal
AIR 1963 SC 563, 1962 SCR (3) 72
A. V. Viswanatha Sastri, K.K. Jain, Ganpat Raj for the petitioners; C. K. Daphtary, Solicitor-General of India, V.A. Saiyed Mohamad, T. M. Sen for the respondents
M/s. Ramchand Jagadish Chand
Union of India and Others
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Nature of Litigation
Writ petition under Article 32 of the Constitution seeking mandamus/certiorari against reduced import licence under Export Promotion Scheme.
Remedy Sought
Petitioner sought mandamus directing the Chief Controller of Imports and Exports to grant import licence for 100% of export value or certiorari quashing the reduced licence.
Filing Reason
Controller granted licence for Rs 3,19,354/- instead of claimed Rs 7,07,709.55, allegedly arbitrary reduction and discrimination.
Issues
Whether the Controller of Imports was legally obligated to grant an import licence for the full export value under Clause 2 of Appendix 42 of the Import Trade Control Policy.
Whether the reduction of the licence to Rs 3,19,354/- constituted an unreasonable restriction on the petitioner's right to trade under Article 19(1)(g).
Whether the licensing authority's discretionary power under Clause 3 of the Imports (Control) Order, 1955 was uncanalised or arbitrary.
Whether the petitioner established discrimination under Article 14 by showing other exporters received higher percentages.
Whether a person whose writ petition under Article 226 was dismissed by High Court could be heard as intervener in Supreme Court.
Submissions/Arguments
Petitioner contended that the Controller was bound to grant a licence for the full value of exports under the Export Promotion Scheme and that the reduction to 45% arbitrarily infringed their fundamental right under Article 19(1)(g).
Petitioner alleged discrimination under Article 14, claiming that eight other exporters during the identical period received licences ranging between 85 and 100 per cent of their exports.
Union of India submitted that import control is a reasonable restriction in public interest; the licensing authority's power is discretionary, not mandatory; and the committee scrutiny was justified due to malpractices.
Ratio Decidendi
A citizen's right to carry on trade under Article 19(1)(g) is subject to reasonable restrictions imposed in public interest; import control and licensing schemes are valid. The licensing authority's power under Clause 3 of the Imports (Control) Order, 1955 and Clause 2 of Appendix 42 is discretionary, not mandatory, and grant of a reduced licence does not infringe fundamental rights absent proof of discrimination.
Judgment Excerpts
The fundamental right of a citizen to carry on any occupation, trade or business under Art. 19 (1)(g) of the Constitution is not absolute : it is subject to reasonable restrictions which may be imposed by the state in the interests of the general public.
The clause invests the Controller with authority, it does not impose an obligation upon him enforceable at the instance of the exporter, to issue a licence for the amount (subject to the maximum prescribed) claimed by the exporter. The power is plainly discretionary.
In the absence of evidence to show that discriminatory treatment was made between the aggrieved person and to persons similarly circumstanced, there can be no violation of Art. 14.
Procedural History
The petitioner after making an infructuous demand for a licence for the value of the goods exported filed a writ petition under Article 32 of the Constitution directly before the Supreme Court, seeking mandamus or certiorari against the reduced licence.
Acts & Sections
- Constitution of India: Articles 14, 19(1)(g), 32, 226
- Imports and Exports (Control) Act, 1947 (18 of 1947): Section 3
- Imports (Control) Order, 1955: Clause 3, Appendix 42 Clause 2
