Full Judgment Text
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PETITIONER:
STATE OF WEST BENGAL
Vs.
RESPONDENT:
MOTILAL KANORIA
DATE OF JUDGMENT:
15/03/1966
BENCH:
HIDAYATULLAH, M.
BENCH:
HIDAYATULLAH, M.
GAJENDRAGADKAR, P.B. (CJ)
WANCHOO, K.N.
SHAH, J.C.
SIKRI, S.M.
CITATION:
1966 AIR 1586 1966 SCR (3) 933
CITATOR INFO :
R 1971 SC1283 (12)
RF 1973 SC 106 (146)
ACT:
Imports and Exports (Control) Act 18 of 1947, s. 5-Import
(Control) Order No. 17 of 1955, cl. (5)-Goods imported under
licence sold without permission from Controller-Such sale
whether an offence.
Code of Criminal Procedure, 1898, s. 537-Error, commission
of irregularities in complaint-Application of section.
HEADNOTE:
The respondent was the director of a company and also a
partner in the firm managing it. On behalf of the company
he made an application for an import licence under the
Imports and Exports (Control) Act 1947, and in May 1955 the
licence was granted. At that time the grant of licence was
governed by an Order issued in 1948 issued under s. 32 of
the Act, and under that Order the Controller of Imports and
Exports could attach conditions to licences issued by him.
According to the terms of the licence granted to the
aforesaid company the goods imported under-the licence were
to be employed for the company’s own use. In December 1955
the Imports (Control) Order No. 17 of 1955 was passed.
Under cl. 5(3) of the Order certain conditions were deemed
to be part of every licence and under cl. 5(4) every
licencee was enjoined to observe the condition of the
licence. In 1956 the respondent secured a revalidation of
the licence issued to the company. Thereafter when the
goods arrived they were sold by the respondent to another
party. A complaint was filed against the respondent and the
company for an offence under s. 5 of the Imports and Exports
(Control) Act 1947 read with cl. (5) of the Imports
(Control) Order 1955. The respondent faced the trial as an
accused and participated in the proceedings without any
objection. He was convicted by the trial Magistrate but the
High Court acquitted him on the ground that at the time when
the transaction of sale was entered into i.e. in December
1956, breach of a condition of licence did not constitute an
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offence under s. 5 of the Act of 1947. The State appealed
to this Court. The questions that fell for determination
were : (i) whether by disposing of the imported goods
without permission any offence was committed; and (ii) if so
whether the respondent was personally liable.
HELD: (i) Although s. 5 of the Imports and Exports
(Control) Act, 1947 did not, before its amendment in 1960,
specially provide that breach of a condition of licence
would be deemed to be a breach of the Imports (Control)
Order, yet by virtue of cls. 5(3) and (4) read with cl. 12
of the Imports (Control) Order 1955 the transfer of a
licence was a breach of the said order and constituted an
offence. No distinction could validly be made in the
circumstances of this case between transfer of a licence and
transfer of goods imported under it. [945 E-G; 946 B-C]
C.T.S. Pillai v. H. P. Lohia & Anr. A.I.R. 1957 Cal. 83,
referred to.
East India Commercial Co. Ltd. Calcutta v. Collector of
Customs, Calcutta, [1963] 3 S.C.R. 338, distinguished.
934
Stare v. Abdul Aziz [1964] 1 S.C.R. 830, applied.
(ii) The fact that the licence was obtained by ’the
respondent while the 1948 Order was in operation did not
help the respondent as under cl. 12 of the 1955 Order any
licence issued under any of the earlier Orders was deemed to
have been issued under the corresponding provisions of the
1955 Order. The goods under the licence were, moreover,
imported and sold after 1955. The licence itself was
revalidated in 1956 and that could only have been done by
power derived under cl. 7 of the 1955 Order. [945 B, D]
(iii) The respondent was responsible for the issuance of
the licence and for the transfer of the goods imported under
it. He was therefore responsible principally along with the
company. The complaint no doubt was not clear as to whom
was really meant to be prosecuted but it described the
respondent as an accused to which he did not object at his
trial. The error, omission or irregularity, if any, in the
complaint was curable under s. 537 of the Code of Criminal
Procedure and in the present case could not be said to have
led to a failure of justice. [946 E-H]
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 108 of
1964.
Appeal from the judgment and order dated September 4, 1963
of the Calcutta High Court in Criminal Revision No. 396 of
1962.
Debrata Mookerjee, B. L. Mehta, R. H. Dhebar and B. R. G.
K. Achar, for the appellant.
D. N. Mukherjee, for the respondent.
The Judgment of the Court was delivered by
Hidayatullah, J. This is an appeal by certificate under Art.
134 (1) (c) of the Constitution, against the judgment of the
High Court of Calcutta dated September 4, 1963 by which the
conviction of the respondent Motilal Kanoria under s. 5 of
the Imports and Exports (Control) Act, 1947 and the sentence
of fine of Rs. 200/(in default simple imprisonment for one
month) imposed by the Presidency Magistrate, 6th Court,
Calcutta, were set aside and an acquittal was entered. The
facts of the case are not in controversy and may therefore
be stated briefly. Motilal Kanoria was a director of
Lachminarayan Jute Manufacturing Co. Ltd., Calcutta. The
Company was managed by a firm of the name of Mukhram
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Lachminarayan and Motilal Kanoria was one of the partners of
the firm. The Company and the Managing Agents had a common
address in Calcutta. Motilal Kanoria used to sign on behalf
of the Managing Agents and also generally to deal with the
affairs of the Company. All transactions in this case were
by Motilal Kanoria and he had signed the documents to which
reference will be made presently.
In February 1955 the Government of India approved of the
proposal of the Company to manufacture hackle and combing
pins and sanctioned the import of plant and machinery for
the
93 5
purpose. The Company was permitted to apply to the Chief
Controller of Imports, New Delhi for a licence. The letter
of Government is Ex. 2 dated February 4, 1955. On February
II. 1955 the Company applied to the Chief Controller of
Imports, New Delhi, on the proper application form, for an
import licence. In that application the Company stated that
the machinery was to be installed or used at their Mills at
Konnaggar, Eastern Railway (Ex. 1). On May 26, 1955 a
licence was issued (Ex. 3). The licence read as follows--
"This licence is issued subject to the
conditions to the goods licensed as detailed
in the Policy Book for the current licensing
period and any public notices that may be
issued in this behalf from time to time.
LICENCE NO. 035925
Counterfoil
Not available for foreign exchange unless
authorised by Reserve Bank of India.
IMPORT TRADE CONTROL
(Valid for all India Ports)
(Not transferable except under a letter of
authority from the authority who issued the
licences or from any Import Trade Controller).
Messrs. Shree Luchminarain Jute Manufacturing
Co. Ltd., of 59, Netaji Subhas Road, Calcutta-
1. are hereby authorised to Import the goods
of which particulars are given below:-
1. Country from which consigned: West
Germany.
2. Quantity & Description Machinery as per
of goods: list attached
for the manufacture
of Hackling &
combing pins.
3. Approximate value C.I.F. Rs. 1,88,000/-
(Rupees
One Lakh and Eighty eight thousand only)
4. Period of shipment: Revalidated
upto 31st May 1957.
5. Name & Address of M/s. Schunacher Metal
Manufacturer Shipper or Works
Aktiengesche Suppliers: Ilacheft, Aachen,
Germany.
936
6. Limiting factor for purpose of clearing
through
Customs: Value
7. Name of actual user in
Self
India
This licence is granted under Government of
India, late Commerce Department Notification
No. 23. ITC/43 dated the 1st July 1943 as
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continued in force by the Imports and Exports
(Control) Act 1947 18 of 1947) and subject to
the rules and orders issued thereunder. This
licence is also without prejudice
to the
applications of any other prohibitions or
regulations affecting the importation of the
goods which may be in force at the time of
their arrival.
Sd. Illegible
Section Officer
26-5-55
for Chief Controller of Imports and Exports.
26-5-1955.
Issued from file No. L. IV/49 (11) CG/55.
(Space for Endorsements by Import Trade
Control
Authorities)
This licence is issued with an initial
validity period of one year from the date of
issue. It will be revalidated at or before
the end of the said period of one year, for a
further period of two years, provided
satisfactory evidence is produced that the
order for the goods has been accepted by the
foreign suppliers and a firm contract is made
within the initial period of one year. In no
case, however, will the validity period extend
beyond three years from the date of issue."
In the covering letter, which was sent when
forwarding the licence, the Chief Controller
said inter alia,-
(3). The licence is granted to you subject to
the following conditions:-
(a) In case the project involves any capital
issue and if such capital issue is not
sanctioned the licence is liable to
cancellation.
(b) That if any sanction to the project is
necessary under the laws of the Central,
Provin-
937
cial or a State Government the same should be
obtained and the position reported to this
office by the licensee; in the absence of such
sanction being received the licence is liable
to cancellation.
4. The licence is liable to cancellation if
particulars as to progress of time in
accordance with the detailed instructions
contained in the accompanying slip are not
furnished.
5. The Government do not guarantee for
supply of raw materials required for
manufacture of the goods.
On June 19, 1956 the Company asked for "revalidation" of the
licence and the licence was extended to May 31, 1957. This
extension is mentioned in the licence above reproduced at
No. 4. On December 13, 1956 the Company entered into an
agreement (Ex. 25) with Shalimar Wood Products (P) Ltd. of
Calcutta for the sale of the machinery imported by the
Company. The sale, it is submitted, was at invoice price
and there was no profit. On the arrival of the machinery in
February of the following year the Company authorised
Shalimar Wood Products to receive the shipping documents
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from the Company’s bankers and to clear it from the Docks.
The plant and machinery were then cleared by the Agents of
the Shalimar Wood Products and the latter took them with a
view to installing them in their own factory.
On July 30, 1958 the Company wrote a letter (Ex. 7) to the
Chief Controller of Imports informing him that owing to the
death of their director of Sawal Ram Kanoria who was
interested in the production of the said pins the Company
was compelled to sell the imported plant and machinery to
Shalimar Wood Products. (P) Ltd., Calcutta and asked for the
approval of the transaction. The Chief Controller of
Imports in reply pointed out that permission ought to have
been obtained before the transfer and that the Company had
apparently committed a contravention of the import licence.
A report was made to the police for investigation and later
a complaint under S. 5 of the Import and Exports (Control)
Act, 1947 was filed in the Court of the Chief Presidency
Magistrate, Calcutta, by the Deputy Chief Controller of
Imports and Exports. Lachminarain Jute Manufacturing
Company was named as the accused "represented by Shri
Motilal Kinoria". In paragraph 2 of the complaint the
Company was stated to be the accused but in later paragraphs
of the complaint Motilal Kanoria was named as the accused.
In the prayer it was requested that the court should summon
"accused Motilal Kanoria representing the Company and the
Managing Agents" to answer the charge of a breach of the
pCI/66-14
938
conditions of the licence which constituted an offence under
s. 5 of the Imports and Exports (Control) Act, 1947 read
with clause (5) of the Imports (Control) Order No. 17 of
1955, dated December 17, 1955. Motilal Kanoria appeared at
the trial, was questioned as an accused, pleaded not guilty
and stood the trial. He does not appear to have objected to
being arraigned as an accused person a point he took later
in the High Court and has taken before us. The prosecution
examined a large number of witnesses and filed documents to
prove the above facts none of which is now denied. The
Presidency Magistrate, 6th Court, Calcutta, convicted
Kanoria under s. 5 of the Imports and Exports (Control) Act,
1947 for contravention of clause (5) of the Imports
(Control) Order, 1955 and sentenced him to a fine of Rs.
200/- or simple imprisonment for one month. On revision the
High Court acquitted him but certified the case as fit for
appeal to this Court and the present appeal is the result.
As the prosecution is in respect of an offence under s. 5 of
the Imports and Exports (Control) Act, 1947, we shall begin
by examining what the ingredients of that offence are.
Under the scheme of that Act there is a power to prohibit or
restrict imports and by s. 3 the Central Government is
enabled to make provision, by order published in the
Official Gazette, for prohibiting, restricting or otherwise
controlling them. Section 5 prescribes penalty for
contravention of an order. The section, as amended by Act 4
1960, is set down here
"5. If any person contravenes or attempts to
contravene, or abets a contravention of, any
order made or deemed to have been made under
this Act or any condition of a licence granted
under any such order, he shall, without
prejudice to any confiscation or penalty to
which he may be liable under the provisions of
the Sea Customs Act, 1878, as applied by sub-
section (2) of Section 3, be punishable with
imprisonment for a term which may extend to
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one year, or with fine, or with both".
(The words underlined were introduced in
1960).
The complaint in this case was filed after this amendment.
Different orders at different times were passed by the
Central Government under S. 3 and a word may be said about
the orders of 1943 and 1948, although on the date of the
transfer of machinery (December 13, 1956) only the order of
1955 was in force.
The first order was made under sub-rule (3) of rule 84 of
the Defence of India Rules in force in 1943 (Notification
No. 23 I.T.C./ 43 dated 1st July, 1943). That order was
general and there was no provision authorising the
imposition of conditions in the licence, the breach of which
would be deemed to be a breach of the order.
939
In 1948 another order was issued under s. 3 (Notification
No. 2 I.T.C. dated 6th March, 1948). It provided for
imposition of conditions but the provisions of the order did
not indicate that any particular condition would be deemed
to be included in a licence if not expressly included. The
provisions of that order may be read here:
"In exercise of the powers conferred by sub-
section (1) and sub-section (3) of section 3
of the Imports and Exports (Control) Act, 1947
(18 of 1947), the Central Government is
pleased to make the following order namely:-
(a) Any officer issuing a licence under
clauses (viii)to (xiv) of the notification of
the Government of India in the late Department
of Commerce No. 23 I.T.C./43, dated the 1st
July, 1943, may issue the same subject to one
or more of the conditions below:
(i) that the goods covered by the licence
shall not be disposed of or otherwise dealt
with without the written permission of the
licensing authority or any person duly
authorised by it;
(ii) that the goods covered by the licence on
importation shall not be sold or distributed
at a price more than that which may be
specified in any directions attached to the
licence;
(iii) that the applicant for a licence shall
execute a bond for complying with the terms
subject to which a licence may be granted;
(iv) that the licence shall not be
transferable except in accordance with the
permission of the licensing authority or a
person duly authorised by it;
(v) that such other conditions may be
imposed which the licensing authority
considers to be expedient from the ad-
ministrative point of view and which are not
inconsistent with the provisions of the said
Act.
(b) Where a license is found to have con-
travened the order or the terms and
conditions embodied in or accompanying a
licence, the
940
appropriate licensing authority or the Chief
Controller of Imports may notify him that,
without prejudice to any penalty to which he
may be liable under the Imports and Exports
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(Control) Act, 1947 (18 of 1947), or any other
enactment for the time being in force he shall
either permanently or for a specified period
be refused any further licence for Import of
goods."
By this order the licensing authority was
given the power to include conditions in a
licence.
On December 7, 1955 an order was issued
(Notification No. 17/55 dated December 7,
1955). It consolidated all the rules in one
place and by clause 12 read with Schedule IV
repealed the earlier two orders and some
others but while effecting this repeal it
added a saving clause--
"Provided that anything done or any action
taken, including any appointment made or
licence issued under any of the aforesaid
Orders, shall be deemed to have been done or
taken under the corresponding provision of
this Order. "
The order of 1955 also included several new
provisions regarding conditions which may be
introduced in licences and others which would
be deemed to be so introduced. Conditions
relevant here may be noticed.
"5. Conditions of Licence.
(1) The licensing authority issuing a
licence under this Order may issue the same
subject to one or more of the conditions
stated below:-
(i) that the goods covered by the licence
shall not be disposed of, or otherwise dealt
with, without the written permission of the
licensing authority or any person duly
authorised by it;
(ii) that the goods covered by the licence on
importation shall not be sold or distributed
at a price exceeding that which may be
specified in any directions attached to the
licence;
(iii) that the applicant for a licence shall
execute a bond for complying with the terms
subject to which a licence may be granted.
(2)
941
(3) It shall be deemed to be a condition of
every such licence, that:
(i) no person shall transfer and no person
shall acquire by transfer any licence issued
by the licensing authority except under and in
accordance with the written permission of the
authority which granted the licence or of any
other person empowered in this behalf by such
authority.
(ii) that the goods for the import of which a
licence is granted shall be the property of
the licensee at the time of import and
thereafter upto the time of clearance through
Customs.
(iii) the goods for the import of which a
licence is granted shall be new
goods unless otherwise stated in the
licence.
(4) The licensee shall comply with all
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conditions imposed or deemed to be imposed
under this clause."
Conditions 5 (1) (i), (ii) and (iii) and 5 (3) (i) are the
same as conditions (a) (i) to (iv) of the 1948 Order but 5
(3) (ii) and (iii) and 5 (4) are new. Conditions 5 (3) (i),
(ii) and (iii) become a part of every licence and further
the licensee has to comply with all the conditions imposed
or deemed to be imposed under clause 5. The effect of these
clauses has to be considered in relation to the licence
granted in this case but in this context the provisions of
clause 7 are also relevant and the clause may be set down
here:
"7. Amendment of Licence.--
The licensing authority may, of its own motion
or on application by the licensee, amend any
licence granted under this Order in such
manner as may be necessary to make such
licence conform to the provision of the Act or
this Order or any other law for the time being
in force or to rectify any errors or omissions
in the licence; Provided that the licensing
authority may, on request by the licensee,
amend the licence in any manner consistent
with the Import Trade Control Regulations."
942
Much of the argument in this case is based on the dates of
these notifications and of the amendment of the section 5 of
the Act, considered in relation to the dates on which the
several facts in this case took place. The Presidency
Magistrate applied the Order of 1955 because the licence was
"revalidated" on June 27, 1956, and according to him, this
was apparently done under powers derived from clause 7 of
that Order. According to the Presidency Magistrate the
Company had imported the plant and machinery for its own use
(vide No. 7 of the licence) and this was an express
condition of the licence. He also pointed out that the
licence was expressly made subject to such restrictions as
might be imposed from time to time and the Order of 1955
imposed conditions which made the transfer of machinery an
offence being a breach of subclause (3) clause (5) of the
1955 Order. The High Court held that s. 5 of the Act as it
stood on December 13, 1956 when the alleged offence was
committed, did not make breach,of a condition of a licence
an offence and, therefore, there was no offence. The
Division Bench relied principally on the observations of Sen
and Mitter JJ. in C. T. S. Pillai v. H. P. Lohia and Anr.(1)
to the following effect :
"It is clear, therefore, that the section
penalises only contravention of any order made
or deemed to have been made under the Act.
But the question is whether contravention of a
condition imposed by a licence issued under
the Act or issued under a statutory order made
under the Act is also an offence under section
5, Imports and Exports (Control) Act, 1947.
Although license is granted under a statutory
order made under the Act and conditions may be
imposed in the license under another statutory
order made under the Act, it is difficult to
hold that the license or the conditions in the
license amount to an order made or deemed to
be made under the Act. Notification No. 23.
I.T.C./43 dated 1-7-1943 merely provides that
no goods shall be imported except goods
covered by special license issued by an
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authorised officer. Notification No. 2-
I.T.C./48 dated 6-3-1948 authorises a
licensing officer to impose one or more
conditions prescribed in that order and a
licensing officer, therefore may impose a
condition in view of the provision of
Notification No. 2-I.T.C./48. But if the
licensee contravenes the condition imposed by
the license it can hardly be said that he has
contravened the order under this Act, that is,
the Notification No. 2-I.T.C./48. The order
No. 2-I.T.C./48 does not directly impose any
duty but it gives power to the licensing
officer to impose certain conditions. But
contravention of condition im-
(1) A. I. R. 1957 Cal. 83.
943
posed by the licensing officer cannot prima
facie be regarded as contravention of the
notified order itself.... When there is a
special license covering certain goods and
there is a condition imposed in the special
license it cannot be said that by breach of
the condition imposed in the special license
it cannot be said that by breach of the
condition there has been any breach of Order
231 I.T.C./43 or of the subsequent
Notification No. 2-I.T.C./ 48. It may
be mentioned that the difficulty apparently
was realised in Pakistan and therefore the
Imports and Exports (Control) Act, 1947, was
first amended by an ordinance and then by the
Imports and Exports (Control) Act, 1950, of
Pakistan. Section 3(2) of that Act provides
that ’no goods of the specified description
shall be imported or exported except in
accordance with the conditions of a license to
be issued by the Chief Controller or any other
Officer authorised in this behalf by the
Central Government. The penal section 5,
refers not only to contravention of an order
or Rule made under the Act but also to the
contravention of any condition imposed by the
License........ It is clear that unless the
penal section itself includes the
contravention of a condition of the license as
an offence, it is not possible to hold that
the licensees by merely committing breach of a
condition imposed by a license has committed
the offence which consists in contravention of
an order made or deemed to be made under this
Act. In this view, therefore, although the
reasons given by the learned Magistrate have
not been considered by us as sound, it is
clear that the prosecution of the opposite
party under s. 5 of Imports and Exports
(Control) Act, 1947, must fail".
These observations were referred to by the
majority decision of this Court in East India
Commercial Co. Ltd., Cakutta v. Collector
of Customs, Cakutta (1) in the following words
:-
before a division Bench of the Calcutta High
Court, consisting of Mitter and Sen. JJ., and
the learned Judges, by their judgment dated
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March,3, 1955 dismissed the revision holding
that there had been no contravention of the
order made or deemed to be made under the Act.
The learned Judges construed s. 5 of the Act
and held that the said section penalised only
a contravention of an order made or deemed to
have been made under the said Act, but did not
penalise
(1) [1963] 3 S.C.R. 338 at 356, 369, 372.
944
the contravention of the conditions of licence
issued under the Act or issued under a
statutory order made under that Act, and
dismissed the revision.
It will be seen from this order that it does
not provide for a condition in the licence
’that subsequent to the import the goods
should not be sold. Condition (v) of cl. (a)
only empowers the licensing authority to
impose a condition from an administrative
point of view. It cannot be suggested that
the condition, with which we are now
concerned, is a condition imposed from an
administrative point of view, but it is a
condition. which affects the rights of
parties.
It follows from the above that the
infringement of a condition in the licence not
to sell the goods imported to third parties is
not an infringement of the
order..................
The Division Bench considered that the earlier Calcutta case
was approved. Following the above observations the learned
Judges applied them to this case. They noted that the
breach of a condition became an offence only after the 17th
of March, 1960 when Act 4 of 1960 was passed and as it could
not be an offence before, even if the Order of 1955 deemed
certain conditions to be a part of the licence, their breach
was not an offence. They- distinguished the decision of the
Bombay High Court ill State v. Abdul Aziz(1) on the ground
that the licence in that case was granted on January 2,
1956, that is to say, after the coming into force of the
Order of 1955. The Division Bench therefore held that no
offence was committed. Adverting also to the fact that
there was confusion as to which of the two-the Company or
Motilal Kanoria-was the accused the learned Judges held that
the Presidency Magistrate was further wrong in convicting
Kanoria although the prosecution was really against the
Company.
The questions that arise in this case are really two and
they are :
(a) whether by disposing of the plant and
machinery without permission an offence was
committed; and
(1) A.L.R. 1962 Bom. 24.
945
(b) if so, by whom ?
In our judgment both these questions must be answered in
favour of the State of West Bengal. It was overlooked in
the High Court that under the proviso to clause 12 of the
Order of 1955 the licence, although granted before that
Order was brought into force, came under its terms. The
words of that proviso refer to a ’licence issued’ under any
of the earlier orders as something done or action taken
under the corresponding provision of the 1955 Order. The
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corresponding conditions were those we have extracted from
the Order of 1955 and set down earlier. By the terms of the
licence (item No. 7) the licensee undertook to use the goods
himself. He further bound himself by "any other
prohibitions or regulations affecting the importation of the
goods which may be in force at the time of their arrival"
and not to transfer the licence "except under a letter of
authority from the authority who issued the licence or from
any Import Trade Controller". The goods arrived long after
the Order of 1955 came into force. By the operation of the
revalidation under clause 7 and the conditions of the
licence, even as they were, the provisions of the Order of
1955 were attracted. As clauses 5(3) and (4) became a part
of the licence, their breach was a breach of the Order and
an offence was, therefore, committed.
It was decided in Abdul Aziz v. State of Maharashtra(1) (on
appeal from the case sub. nom. State v. Abdul Aziz of the
Bombay High Court) that if the licence was issued under the
Order of 1955, the provisions of sub-cl. (4) of cl. 5 made
it obligatory upon the licensee to comply with all the
conditions imposed or deemed to be imposed under clause 5
and that the contravention of any condition of a licence
amounted to the contravention of the provision of sub-cl.
(4) of cl. 5 of the Order and consequently to the
contravention of the order made under the Imports and
Exports (Control) Act and therefore the licensee became
liable to the penalty under s. 5 of the Act. The only
distinction between Abdul Aziz’s case and this lies in the
fact that the licence in the former was given after, and in
this case before, the coming into force of Order of 1955.
But this distinction loses significance when the provisions
of clause 12 of the Order of 1955 are read in conjunction
with the licence itself. Between them they bring into
operation clause 5 of the Order of 1955 and the result
reached by this Court in Abdul Aziz’s case obtains here
also. The fact that the licence was revalidated presumably
under clause 7 of the Order of 1955 further fortifies the
above conclusion. The submission of Mr. D. N. Mukherji that
this extension was under the last paragraph of the licence
is not the whole of the matter. A power might have been
reserved by that paragraph but it could only be
(1) [1964] 1 S.C.R. 830.
946
exercised by the licensing authority after December 7, 1955
by virtue of the Order of 1955 because all previous orders
were repealed. There was thus an offence under S. 5 of the
Imports and Exports (Control) Act for the breach of clause 5
of the Order of 1955. Mr. D. N ’ Mukherjee seeks to
distinguish between the transference of the licence and that
of the machinery. This argument is not acceptable to us.
The licence created its own conditions that the goods would
be used by the licensee and the transfer of goods in
circumstances is tantamount to transfer of the licence. It
would be refining matters too finely to distinguish between
the transfer of the licence and the transfer of the goods.
Even if a distinction can be drawn the licence was for the
actual use of the licensee. When the goods were sold
condition No. 7 was broken and so would be a breach of the
1955 Order which had come into force.
The final question is whether Kanoria can be said to have
committed any offence and whether he was prosecuted at all.
The section as amended in 1960 makes the abetment of contra-
vention an offence. If the amendment applied because the
prosecution was after the amendment (a point we need not
decide) Kanoria would be definitely guilty at least of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12
abetment. In our opinion it is not necessary to decide this
point because Kanoria is guilty as a principal offender and
the section as it originally stood, must apply to him. The
section said "if any person contravenes any order made or
deemed to have been made.......... "he shall be punishable
with imprisonment for a term which may extend to one year,
or with fine, or with both." The question is whether Kanoria
was such a person. Kanoria was responsible for the issuance
of the licence and for the transfer of the goods covered by
the licence. He wrote every document connected with these
two matters. He was, therefore, responsible principally
along with the Company. In fact the Company could not have
committed the offence of contravention if Kanoria had not
acted as he did. Abetment, of which the section now speaks,
is an act of a different kind. The act of Kanoria was not
abetting any one else but one which by itself led to the
contravention of the Order of 1955 and he was, therefore,
liable principally. The complaint no doubt was not clear as
to who was really meant to be prosecuted but it described
Kanoria as an accused. Under the Explanation to S. 537 of
the Code of Criminal Procedure no error, commission or
irregularity in the complaint should have led to a reversal
of the finding that Kanoria was guilty unless there was. a
failure of justice. The objection that he was not named. as
an accused throughout the complaint and that he was thus not
an accused could have been raised at the trial but it was
not. On the contrary Kanoria entered a plea of not guilty
on his own behalf and also stood examination as an accused.
It is obvious
94 7
that he was regarded as the accused and he understood his
own position. The objection could not be entertained in
revision in the High Court as it was belated and the defect,
if any, had not occasioned a failure of justice. This
ground also has no force.
For the above reasons we are satisfied that the High Court
erred in interfering with the conviction of the respondent.
We accordingly allow the appeal, set aside the acquittal
ordered by the High Court and restore the conviction under
s. 5 of the Imports and Exports (Control) Act, recorded by
the Presidency Magistrate together with the fine of Rs. 200
or simple imprisonment for one month.
Appeal allowed.
948