Full Judgment Text
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PETITIONER:
M/s. UNIVERSAL IMPORTS AGENCYAND ANOTHER
Vs.
RESPONDENT:
THE CHIEF CONTROLLER OF IMPORTSAND EXPORTS AND OTHERS.(AND C
DATE OF JUDGMENT:
23/08/1960
BENCH:
SUBBARAO, K.
BENCH:
SUBBARAO, K.
SINHA, BHUVNESHWAR P.(CJ)
IMAM, SYED JAFFER
SARKAR, A.K.
SHAH, J.C.
CITATION:
1961 AIR 41 1961 SCR (1) 305
CITATOR INFO :
F 1961 SC1752 (8,9,10,12,13,16,18,23,24)
RF 1962 SC1621 (20,54)
E 1963 SC 734 (4,5,14,15,20,21,24,29,33,39)
R 1965 SC 40 (17)
R 1967 SC1742 (10)
R 1985 SC1729 (16)
ACT:
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 of-French Establishments’ (Application of Laws)
Order, 1954, cl. (6)-Sea Customs Act, 1878 (8 of 1878), s.
167(8).
HEADNOTE:
In pursuance of an agreement dated October 21, 954, entered
into between the Government of India and the Government 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 1, 1954, a
notification dated October 30, 1954, was issued by the
Government of India called the French Establishments’
(Application of Laws) Order, 1954, by virtue of which
certain enactments specified in column (3) of the Schedule
which included the Sea Customs Act,
306
1878, the Imports & Exports Trade (Control) Act, 1947, and
the Foreign Exchange Regulation Act, 1947, were extended to
Pondicherry. Paragraph 6 of the Order provided: "Unless
otherwise specifically provided in the Schedule, all laws in
force in 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
Shortly prior to the transfer of the administration of
Pondicherry to India, the petitioners had entered into
certain agreements with foreign suppliers for the import
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into Pondicherry of diverse goods. Pondicherry was, prior
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 on account of the price of the goods to be
supplied. On or about November 1, 1954, the goods covered
by the aforesaid imports were in different stages of
shipment and arrived at the port of Pondicherry in January
and February 1955. The Collector of Customs treated the
imports of the goods as unauthorised and confiscated the
same and gave the petitioners an option to pay in 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) of the Sea Customs Act, 1878,
was contravened. The petitioners claimed, inter alia, that
the transactions entered into by them with the foreign
dealers were " things done " within the meaning of para. 6
of the French Establishments’ (Application of Laws) Order,
1954, and that therefore the imports by the petitioners were
within the saving clause of that paragraph.
Held, (Per Sinha, C. J., Imam and Subba Rao, JJ. Sarkar and
Shah, JJ. dissenting): (1) that on its proper
interpretation, the expression " things done " in para. 6 of
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 ;
The Queen v. Justices of the West Riding of Yoykshire,
(1876) 1 Q.B.D. 220 and Heston and Isleworth Urban District
Council v. Gyout, [1897] 2 Ch. 306, relied on.
(2) that the bringing of the goods into India and the rele-
vant contracts entered into by the petitioners with the
foreign dealers formed parts of a same transaction, and
therefore, the: imports were the effect or the legal
consequence of the, " things done ", i.e., the contracts
entered into by, the petitioner;
307
State of Travancore-Cochin v. The Bombay Co. Ltd., [1952]
S.C.R. 1112 and State of Travancore-Cochin V. Shanmugha
Vilas Cashew Nut Factoyy, [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 ground that they were imported without a licence.
Per Sarkar, J.-(1) 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. 6 as 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 from 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, even if they
are closely integrated therewith, are not included in the
concept of import, in dealing with the provisions of the Sea
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Customs Act and the Imports and Exports Trade (Control) Act.
(2) By the use of the expression things done or omitted to
be done before such commencement in cl. 6 of the French
Establishments’ (Application of Laws) Order, 1954, French
law applies to acts and omissions before November 1, 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
1, 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.
JUDGMENT:
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. C. Chatterjee and S. C. 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. lyengar and T. M. Sen, for the
Respondents (In all the petitions).
Harnam Singh and Sadhu Singh, for Intervener No. 1 (B. S.
and Co.)
40
308
D. B. Prem and Sadhu Singh, for Intervener No. 2 (French
India Importing Corporation).
1960. August 23. The Judgment of B. P. Sinha, C. J., Imam
and Subba Rao, JJ., was delivered by Subba Rao, J. Sarkar,
J. and Shah, J., delivered separate Judgments.
SUBBA RAO J.-These four petitions are filed under Art. 32 of
the Constitution for quashing the orders of the Assistant
Controller of Imports and Exports. the Collector of Customs
and Central Excise, Pondicherry, the Board of Revenue, and
the Government of India, and for an appropriate direction
requiring the respondents to refund the amount realised from
the petitioners.
Messrs. Universal Imports Agency and the proprietor of the
agency are the petitioners in the first three petitions and
Messrs. Victory Traders are the petitioners in the last
one. The Chief Controller of Imports and Exports,
Pondicherry, the Collector of Customs and Central Excise,
Pondicherry, the Central Board of Revenue and the 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 an agreement (hereinafter called the
Indo-French Agreement), whereunder there was a defacto
transfer of the administration of the French Settlements to
the Government of India (hereinafter called the merger) as
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
Mohanlal B. Gandhi is the proprietor of the said Agency.
They are established importers and general merchants dealing
in ball bearings, mill stores, porcelain ware, glass
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marbles, beltings and various other goods. They commenced
their business at Pondicherry on or about April 14, 1954,
under
309
" patente " No. 70 of 1954 issued by the Controller of the
Contributions Department of the French Government at
Pondicherry. In the middle of August 1954, they placed 8
indents with Messrs. Shimada Trading Co., Ltd., Osaka,
Japan, for importing porcelain wares, glass marbles and
beltings and the total value thereof amounted to Rs. 57,418-
12-0. About the end of August 1954, they opened three
irrevocable Letters of Credit with Messrs. Banque De L’
Indo-Chine in favour of the said suppliers. The bankers
obtained authorization from the Bureau Des Affaires Econo-
mique, 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. Cambodge " 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
Rs. 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
310
to Rs. 40,470-14-0. They arranged for the full payment of
eight cheques to the said suppliers of the value of the
goods through the Banque De L’ Indo-Chine. Their bankers
duly obtained authorization from the Bureau Des Affairs
Economique, Pondicherry, for the requisite foreign exchange
and sold the same to the petitioners for the amount involved
in the cheques, and the said foreign exchange was kept
available to the suppliers. On or about November 1, 1954,
the goods ordered were in different stages of shipment and
in some cases the goods were in the course of shipment and
in others awaiting shipment in a matter of a few days. In
January and February, 1955, the goods arrived at the port of
Pondicherry. The Collector of Customs treated the imports
of the goods as unauthorized and confiscated the same and
gave the petitioners an option to pay in lieu of
confiscation a penalty amounting to Rs. 20,700/- The
petitioners carried the matter to the Government without any
success. Ultimately the petitioners paid the penalty under
protest and cleared the goods.
The petitioners again in the middle of August 1954 placed
several indents with their overseas suppliers for importing
hair belting, torches, belt fasteners, electric lighting
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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 against full advance remittance in
favour of their suppliers through the said Banque De L’
Indo-Chine. Their bankers arranged through the Bureau Des
Affairs Economique, Pondicherry, for the requisite foreign
exchange from the open market and sold the same to the
petitioners for the amount involved in the said Letters of
Credit and cheques. The petitioners made full payment for
the said foreign exchange and the said bank kept the said
foreign exchange and the Letters of Credit irrevocably
available with their overseas agents for the benefit of the
suppliers against full set of shipping documents and the
cheques issued by the bank on overseas banks were sent to
the suppliers as full advance remittance against the
contracts. In January and February, 1955, the goods arrived
at the
311
port of Pondicherry. The Collector of Customs confiscated
the goods and gave the petitioners an option to pay in lieu
of confiscation fine amounting to Rs. 24,210. 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 No.
118 of 1959, are carrying on business of import and export
and general merchandise in Pondicherry from the year 1949.
The petitioners were importing into Pondicherry a number of
articles from various countries under " patente " No. 126 of
1954 granted by La Controleur, Pondicherry. On August 20,
1954, they applied to the Chief Bureau Economique, Pondi-
cherry, requesting them to grant permits to import goods
from foreign countries. The said Bureau replied that no
import licence was required for goods to enter the
territory. Thereafter the petitioners placed orders with
foreign dealers. In the middle of August, 1954 and early in
September, 1954, they placed a number of indents with their
principals in foreign countries for importing fan belts,
corn emery, soda water bottles, glass marbles, etc., of
value pound 13,870. The orders were backed by full payments
in many cases and at least half the payments in others.
These payments were made by demand drafts issued by the
Banque De L’ Indo-Chine. In January and February, 1955 and
thereafter the goods arrived at the port of Pondicherry, and
they were confiscated by the Collector of Customs who gave
the petitioners an option to pay in lieu of confiscation
fine aggregating to Rs. 91,100. After filing appeals to the
Central Board of Revenue and, thereafter, a revision to the
Government of India with no success, the petitioners cleared
the goods after paying the penalty under protest.
It is clear from the foregoing facts that the petitioners
entered into, before the merger, firm contracts of sales by
import with foreign sellers, made available foreign exchange
either under Letters of Credit or otherwise, and the goods
were shipped either before or after the merger, though they
reached their destination
312
after the merger. The said goods were confiscated by the
Collector of Customs under the following circumstances.
Under the Indo-French Agreement, the entire administration
of the French Settlements was vested with the Government of
India from November 1, 1954, though de jure transfer had
been postponed. In pursuance of the Indo-French Agreement,
the Ministry of External Affairs published a Notification
No. S. R. O. 3315 dated October 30, 1954, purporting to be
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under s. 4 of the Foreign Jurisdiction Act, 1947, and called
the French Establishments’ (Application of Laws) Order,
1954, (hereinafter referred to as the Order). Under
paragraph 3 of the said Order, the Sea Customs Act, 1879,
the Reserve 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
Pondicherry. On November 1, 1954, the Government of India
appointed a Controller of Imports & Exports for the French
Establishments, and paragraph 4 of the same notification
gave the following information and guidance to the public :
" As regards orders placed outside the Establishments and
finalised through the grant of licence by the competent
French Authorities in accordance with the Laws and
Regulations in force prior to 1st November, 1954, licence-
holders are advised to apply to the Controller of Imports &
Exports for validation of licences held by them. No fees
will be charged for these 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 abundant caution applied to the
Chief Controller of Imports & Exports for licences for
clearance of goods, but they were all rejected and the
petitioners were told that their goods would be treated as
unauthorized imports and they were advised to approach the
Collector of Customs and Central Excise
313
for conditions regarding their release. As stated supra,
after the goods arrived at the port of Pondicherry, the
Collector of Customs and Central Excise made the various
orders confiscating the goods and giving the petitioners
option to pay penalties in lieu of confiscation., All of
them paid the penalties, under protest, and cleared the
goods. The appeals filed to the Central Board of Revenue
were dismissed and the 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 made by them are 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. O. 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
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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
314
it is argued that as the confiscated goods were brought into
India after the commencement of the Order, the goods
confiscated were outside the pale of the saving clause. The
question raised falls to be decided on a true interpretation
of the terms of paragraph 6 of the said Order.
In order to apply the said paragraph 6 to the present case,
the following facts have to be ascertained : (1) What are
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 done " 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
Government to make an order making 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 shall be deemed to be goods
the import of which has been prohibited or restricted under
s. 19 of the Sea Customs Act. In exercise of the powers
conferred by s. 3 and s. 4A of the Imports & Exports (Trade
Control) Act, the Central Government made an order dated
December 7, 1955. Under s. 3 of that order, no person shall
import any goods of the description specified in Schedule 1,
except and in accordance with a licence or a customs
clearance permit granted by the Central Government or by any
authority specified in Schedule 2 to that order. There are
also provisions prescribing the procedure for obtaining
licences, the conditions of the licences and for their
cancellation or modification. It is, therefore, clear that
under the said Act, no goods can be imported into India
without a licence obtained in the prescribed manner from the
prescribed
315
authorities. The Sea Customs Act provides for the levy of
sea customs duty, imposes prohibitions and restrictions on
imports and exports in respect of certain goods and imposes
punishment for infringement of the provisions of the Act.
Under s. 167(8) of the said Act, read with s. 3(2) of the
Imports and Exports Trade (Control) Act, 1947, if any goods,
the importation or exportation of which is prohibited or
restricted, are 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 penalty. The Foreign Exchange
Regulation Act, 1947, provides for the regulation of
payments, dealings in foreign exchange and securities, and
the import and export 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 provi-
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sions 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, rock-salt etc. For effecting payment
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
41
316
by the French Government as valid. In the counter affidavit
filed by the State the manner of acquiring the foreign
exchange for imports has been clearly stated. ’two kinds of
permits for obtaining official exchange by importers were
issued by the Chief Commissioner in Pondicherry, which were
known as authorization and attestation respectively. They
were signed by the Governor-General of the French Indian
Establishments himself or by his Secretary-General. The
Government of France used to make an overall allotment of
foreign exchange to the French territories. Apart form that
allotment, it made other currency allotments in the 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 and attestations in respect of goods
imported from France and other French colonies. Further, in
respect of other transactions exchange was arranged by
importers through banks dealing in foreign exchange. The
Department of Affaires of Economics used to authorize the
banks in respect of such transactions. Shortly stated,
Pondicherry was 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.
What were the " things done " by the petitioners under the
Pondicherry law ? The 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 and in others bank
drafts were sent towards the contracts.’ Under the terms of
the contracts the sellers had to ship the goods from various
foreign ports and the buyers were to have physical delivery
of the goods after they had crossed the customs barrier in
India. Pursuant to the terms of the contracts, the sellers
placed the goods on board the various ships, some before and
others after the merger, and the goods arrived at
Pondicherry port
317
after its merger with India. The prices for the goods were
paid in full to the foreign sellers and the goods were taken
delivery of by the buyers after examining them on arrival.
Before the merger if the Customs Authorities had imposed any
restrictions not authorized by law, the affected parties
could have enforced the free entry of the goods in a court
of law. On the said facts a short question arises whether
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paragraph 6 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 case
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 Vict. 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
318
hereby repealed ". This proviso came under judicial scrutiny
in The Queen v. Justices of the West Riding of Yorkshire(1).
There notice was given by a local board of health of
intention to make a rate 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 board, in ignorance of
the repeal, made a rate purporting to be made under the
repealed Acts. It was contended that as the rate was made
after the repealing Act, the notice given 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
Isleworth Urban District Council v. Grout (2) confirmed the
validity of the rate made 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
are of wider import than that of paragraph 6 of the Order
and, therefore, the English decisions are not of any
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assistance in considering the scope of the saving clause of
the Order. It is further stated that the English decisions
apply only to a saving clause of an Act which repeals
another but preserves the right created by the latter. We
do not see any reason why the same construction cannot be
(1) (1876) 1 Q.B.D. 220.
(2) [1897] 2 Ch. 306.
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(1)(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 Ltd. (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. 1112.
320
transport out of the country by land or sea. Such a sale
cannot be dissociated 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 Travancore. Cochin v. Shanmugha Vilas
Cashew Nut Factory (1). 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 the said principles to an import sale it may be
stated that a purchase by import involves a series of
integrated activities commencing from the contract of
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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 bringing of the 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 foreign dealers.
This conclusion is also reinforced by the terms of the Indo-
French Agreement. It is common case that the terms of the
said Agreement cannot be enforced in a municipal court in
India. We are 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 as 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 de facto
transfer were to be fulfilled by the Government of India and
the necessary foreign exchange granted if the goods were
imported
(1) [1954] S.C.R. 53.
321
within the period of validity of the relevant licences
subject to payment of customs duty and other taxes normally
leviable at Indian ports. That is, orders placed outside
the Establishments and finalised through the grant of a
licence were to be honoured by the Government of India. The
word " licence " in this Article may be construed rather
widely to take in a permit or an authorization ; otherwise
it would lead to s the anomaly that when a licence, strictly
so called, is 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.
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 licences were not
322
required for such imports from the French authorities. It
appears however that these authorities granted a certain
amount of foreign exchange for the imports. The importers
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who failed to secure an allotment of foreign exchange from
the French authorities often obtained it from the open
market through banks. The French authorities however
prohibited the banks in Pondicherry with effect from July 1,
1954, from acquiring without their permission, foreign
exchange in the open market for their constituents for
financing imports. 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 on account of the price of the goods to be
supplied. They did this shortly prior to the transfer of
administration of Pondicherry and other French
establishments in India on November 1, 1954, to India
pursuant to an agreement made on October 21, 1954, between
the Governments of France and India. The goods covered by
the aforesaid imports were shipped and arrived in
Pondicherry port after November 1, 1954, and were
confiscated by the Government of India who had by that time
taken over the administration of Pondicherry. The orders of
confiscation gave an option to the petitioners to obtain a
release of the goods by payment of a fine which option was
availed of by them.
These petitions have been filed under Art. 32 of the
Constitution challenging the validity of the confiscation
and claiming a refund of the fine paid on the ground that
the confiscation was an illegal violation of the
petitioners’ rights under the Constitution to hold property
and to carry on business.
The orders of confiscation had been made under s. 167(8) of
the Sea Customs Act, 1878. That section authorised the
confiscation of goods imported in contravention of orders
prohibiting imports made under s.19 of the same Act.
Section 3 of the Imports and Exports (Control) Act, 1947,
also authorised the Central Government to prohibit by orders
made by it,
323
imports of goods of any specified description and provided
that the goods to which the orders applied would be deemed
to be goods of which the import had been prohibited under s.
19 of the Sea Customs Act and that the provisions of the
latter Act would have effect accordingly. Section 4 of the
Imports and Exports (Control) Act provided that all orders
made under r. 84 of the Defence of India Rules and in force
immediately before the commencement of the Act, would be
deemed to have been made under the Act There was an order
made by the Government of India under r. 84 of the Defence
of India Rules by Notification of the Department of Commerce
No. 23 I.T.C. 43 dated July 1, 1943, which prohibited the
import of the goods which the petitioners had imported.
The orders of confiscation would be unexceptionable if the
statutes and Order mentioned in the preceding paragraph
applied to these imports. That they applied to Pondicherry
as from November 1, 1954, would seem to be plain from the
Order passed by the Government of India on October 30, 1954,
under the Foreign Jurisdiction Act, 1947, to take effect
from the date of the transfer of administration, namely,
November 1, 1954, called the French Establishments
(Application of Laws) Order and being Ministry of External
Affairs Notification No. S.R.O. 3315. This Order had been
passed in view of the Indo-French agreement and the transfer
of administration provided thereby. Its validity is not
challenged. Paragraph 3 of the Order provided that the
enactments mentioned in the Schedule to it and all Orders
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made under those enactments and in force on November 1,
1954, would apply to the French Establishments subject to
the subsequent provisions of the Order. The enactments
mentioned in the Schedule included the Sea Customs Act and
the Imports and Exports (Control) Act. It is not in dispute
that the Order under the Defence of India Rules mentioned
earlier was in force on this date.
The Application of Laws Order therefore made the
42
324
Sea Customs Act, the Imports and Exports (Control) Act and
the Order made under the Defence of India Rules applicable
to Pondicherry as from November 1, 1954. The petitioners
have however contended-for reasons which I will examine
presently-that the Order made under the Defence of India
Rules had not been applied to the French Establishments by
the Application of Laws Order, but they have not disputed
that the Sea Customs Act and the Imports and Exports
(Control) Act were applied to Pondicherry. The petitioners
rested their case mainly on the saving clause contained in
paragraph 6 of the Application of Laws Order which so far as
material, was in these terms:
" All laws in force in the French Establishments
immediately before the commencement of this Order, which
correspond to the enactments in the Schedule, shall cease to
have effect save as respect things done or omitted to be
done before such commencement ".
The petitioners have raised three points, two of which can
be disposed of at once. It is said that the Order made
under the Defence of India Rules did not, apply to the
French Establishments for only Orders made under the
enactments mentioned in the Schedule were applied to them by
paragraph 3 of the Application of Laws Order, and the
Defence of India Act and Rules were not enactments mentioned
in the Schedule. It is true that the Defence of India Act
and Rules are not mentioned in the Schedule. But as already
stated, under s. 4 of the Imports and Exports (Control) Act,
Orders made under r. 84 of the Defence of India Rules are to
be deemed to have been made under that Act. I am unable to
accept the contention that an Order which has to be deemed
to be made under the Imports and Exports (Control) Act is
not an Order made under the Act for the purposes of
paragraph 3 of the Application of Laws Order. It seems to
me that when an Order is required to be deemed to have been
made under an enactments it is as good as an Order made
under the enactment. If it were not so, the deeming
provision would lose much of
325
its value. That being so, para. 3 would make the Order
applicable to Pondicherry.
Then it is said that the imports were made before the
commencement of the Application of Laws Order because the
contracts in respect of them had been concluded and the
letters of credit opened before then though the goods had
not been taken across the customs barrier at Pondicherry by
that time. Therefore, it is said, the imports by the
petitioners would be within the saving clause in paragraph 6
as things done before the commencement of the Application of
Laws Order, to which the Sea Customs Act, the Imports and
Exports (Control) Act and the Order made under the Defence
of India Rules would riot apply. This argument also seems
to me to be ill-founded.
These Acts and the Order were applied to Pondicherry as from
November 1, 1954. The effect of that was to prohibit
imports thereafter and to render the goods imported in
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contravention of that prohibition liable to confiscation.
What is an import-and this is what was prohibited-has
therefore to be decided by reference to these Acts and the
Order. They defined import as bringing goods into India,
which in the present case would include the French
Establishments by virtue of paragraph 4 of the Application
of Laws Order. Therefore goods brought across the customs’
barrier into Pondicherry would be goods imported into
Pondicherry. To the goods so brought into Pondicherry after
November 1, 1954, the Acts and the Order made under the
Defence of India Rules must apply irrespective of whether
the goods were brought under contracts concluded and letters
of credit opened, before that date. It is not in my view
permissible to ascertain the meaning of the word ’import’
for the purpose of this case by reference to other statutes
or notions and to contend that there has been an import by
the making of the contract and the opening of the letter of
credit without the bringing of the goods into Pondicherry as
the learned counsel for the petitioners sought to do.
The main argument on behalf of the petitioners is however,
that the words save as respects things done
326
or omitted to be done’ in paragraph 6 of the Application of
Laws Order saved not only the things done prior to the
commencement of the Order, that is, the placing of the
indents and the opening of the letters of credit but also
the effect thereof and the rights accrued therefrom. It is
said that the indents had been legally placed and the
letters of credit legally opened with foreign exchange
acquired with the express per. mission of the French
Administration which foreign exchange could not have been
acquired without such provision. It is contended that the
saving clause would make the French laws applicable to the
imports which were the effect of these things done before
November 1, 1954, and also protect the rights acquired from
the things so done, from the operation of the Indian laws.
So it is said that the Confiscations Under the Indian laws
were wholly illegal.
Now it has to be noted that the saving clause does not say
that the French laws would apply to the effect of things
earlier done or protect rights accrued therefrom. I see no
warrant in the absence of the necessary words to extend the
application of the French laws to the effect of things done
or rights acquired from the doing of them. It was said that
otherwise the saving clause would be idle. I am unable to
agree. If any question as to anything earlier done arose
after the transfer, that question would under the saving
clause have to be decided by the French laws. In the
absence of the saving clause it would have been open to
argument what the effect of the transfer was with regard to
things previously done. I may also point out that S. 6 of
the General Clauses Act provides that when one enactment is
repealed by another, then, in the absence of a different
intention, the repeal shall not affect anything duly done or
suffered under the repealed enactment nor any right accrued
thereunder. It strikes me that if the saving of a thing
done under the repealed enactMent also necessarily saved
what is called the effect of it or rights acquired from it,
it would not have been necessary to expressly provide also
for the saving of the rights acquired under the repealed
enactment.
327
Therefore, it seems to me that the saving of things done
does not automatically save the effect of them or rights
acquired therefrom.
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The argument that the saving clause operated to protect the
imports was based on two English cases, namely, The Queen v.
Justices of the West Riding of Yorkshire (1) and Heston and
Isleworth Urban District Council v. Grout (2). These cases
considered the terms of statutes analogous to s. 6 of our
General Clauses Act, providing that a repeal of one
enactment by another shall not affect anything duly done or
suffered under the repealed enactment or any right acquired
thereunder. These provisions were therefore materially
different from the saving clause now before us, as they
expressly saved rights acquired under a repealed statute.
The first mentioned case held that as the two statutes were
substantially for the same purpose, namely, making a rate,
the notice to make a rate tinder the repealed Act should
have effect after the repeal in view of the saving clause as
it could have been given under the repealing Act for the
same purpose. It would be difficult to apply the principle
of this case where two statutes have not the same purpose
Apart from the fact that we have here no two statutes, the
Indian enactments with which we are concerned, would seem to
have made a complete departure from the position existing on
the same subject during the French Administration. lit the
other case it was held that when a thing duly done tinder a
repealed enactment was saved by a saving clause in the
repealing Act, the effect of it was also saved. But the
effect of the thing done would be saved by the express
provision contained in the saving clause, namely, that the
repeal shall not affect any right acquired under the
repealed enactment and the judgment in this case was also
based on this express provision to remove any doubts that
might arise as to the other reasoning employed. The thing
done in this case was the giving of a notice by a local
authority to certain house owners to sewer and make up a
private street. The effect saved was the recovery by the
local authority from the owners of the expenses of the
sewering
(1) (1876) 1 Q.B.D. 220.
(2) [1897] 2 Ch. 306.
328
and making of the street which it had to incur on the
owner’s failure to carry out the terms of the notice. These
things naturally took time and in the meantime the Act under
which the notice was given had ceased to be applicable. The
observation made in this case cannot be applied to a case
like the present.
Then again it seems to me that there is considerable
difference between the terms of the saving clause, con-
sidered in the English cases and the saving clause with
which we are concerned. The saving clause in the English
cases as also s. 6 of our General Clauses Act, applies where
a subsequent statute repeals a previous statute passed by
the legislature of the same country. That is not the
position here. We have here laws of the Indian legislature
replacing French laws. Indeed it is at least arguable
whether without more, the French laws would have been of
force after the transfer; it would seem that this difficulty
was realised and so it was expressly provided by paragraph 5
of another Order called the French Establishments
(Administration) Order, made by Notification No. 3314 dated
October 30, 1954, issued by the External Affairs Ministry of
the Government of India, that all laws in force in the
French Establishments and not repealed by para. 6 of the
Application of Laws Order, would continue to be in force
until repealed.
Further, the saving clauses considered in the English cases
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preserved unaffected by the repeal, only things done under
the repealed enactment and the rights acquired thereunder.
The saving clause that we are considering saves things done
before the commencement of the Application of Laws Order
whether the thing was done under any law or not; it does not
purport to preserve a right acquired under a statute
repealed. In Hamilton Gell v. White (1), it was observed
that s. 38 of the English Interpretation Act, 1889, which
corresponds to s. 6 of our General Clauses Act, " was not
intended to preserve the abstract rights conferred by the
repealed Act......... It only applies to specific rights
given to an individual upon the happening of one or other of
the events specified in the
(1) [1922] 2 K.B. 422. 431.
329
statute." Likewise in Abbott v. Minister for Lands (1) it
was observed about a saving clause which protected rights
accrued under repealed enactments, that, " the more right
(assuming it to be properly so called) existing in the
members of the community or any class of them to take
advantage of an enactment, without any act done by an
individual towards availing himself of the right, cannot
properly be deemed a " right accrued " within the meaning of
the enactment". The principle of the English cases on which
the petitioners relied would not apply except to protect
rights acquired under repealed statutes. In the cases
before us the petitioners could not say that they had
acquired any right tinder any French law, to import the
goods. There was admittedly no law which gave the petitio-
ners any right to import any goods. The position was only
that there was an absence of laws prohibiting import. That
clearly did not give the petitioners any right and certainly
not a right under a statute which was repealed. All that
the French authorities had done was to permit the
petitioners to acquire foreign exchange in the open market
for financing their imports. It would be impossible to say
that thereby the petitioners acquired any right under any
French law to import any goods.
Lastly, the principle of the two English cases applies
admittedly only where there is no intention to the contrary.
Now it seems to me that here there is indication of an
intention to the contrary. Clause 17 of tile agreement
between India and France provided that imports finalised
through the grant of licence prior to the transfer would be
fulfilled but the goods would be liable to customs duty
normally leviable in Indian ports. Clearly, therefore, it
was not intended that after the transfer, Pondicherry would
remain a free port in respect of imports made even under
agreements concluded prior to the transfer under a licence.
On such imports duty had to be paid after the transfer. The
right to import freely was not therefore intended to be
preserved. If so there could have been no intention, in any
event, to protect a right to import freely
(1) [1895] A.C. 425. 431.
330
under an agreement made prior to the transfer, where there
was no licence granted for the import. Admittedly, the
petitioners had not obtained any such licence.
For all these reasons it seems to me that the English
decisions relied on are of no assistance in the present
case. I am unable to read the saving clause in this case as
if it is the same as s. 6 of our General Clauses Act or the
corresponding clause in the English Interpretation Act,
1889, and to obtain guidance from the decisions based on
these statutes. I have therefore come to the conclusion
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that the saving clause in paragraph 6 of the Application of
Laws Order does not protect the imports made by the
petitioners, from the operation of the Indian laws applied
to the French Establishments.
I would dismiss these petitions.
SHAH J.-Petition No. 123 of 1957: Prior to November 1, 1954,
Pondicherry was one of the French Establishments in India
administered by the Government of France. Under the French
administration, except specified categories like gold, rock-
salt and certain medicinal preparations, all commodities
could be imported into the Pondicherry Port without a
licence. The French Administration exercised control on im-
port of commodities into Pondicherry indirectly by making
allotment of the requisite foreign exchange. The Government
of France made an overall allotment of foreign exchange for
the French Establishments in India, and persons desiring to
import goods in Pondicherry and other French Indian
settlements were, on applications addressed to the Chief
Commissioner, French Settlements, granted foreign exchange
facility for financing imports, out of that allotment.
Besides the allotment of foreign exchange for financing im-
ports into the French Establishments in India, certain other
currency allotments were made by the Government of France in
the light of Trade Agreements between the French Government
and other countries. The Chief Commissioner of Pondicherry
issued permits for the import of commodities specified in
the Trade
331
Agreements upto the current ceilings fixed in the
Agreements. Two kinds of permits for obtaining official
exchange by importers were issued by the Chief Commissioner
which were known as " Authorisation " and " Attestation ". "
Authorisation " was issued for import of goods from
countries with which France had Trade Agreements and "
Attestation " for import of goods from France and from
countries with which the Government of France had not made
Trade Agreements. By issuing " Authorisation " and "
Attestation ", the Government undertook to provide foreign
exchange for financing the imports made pursuant thereto.
Since April 1, 1954, the Chief Commissioner of Pondicherry
allowed intending importers to purchase foreign exchange in
the open market for financing imports of merchandise. The
Department of Affairs, Economics, endorsed " authorise " on
the application submitted by the importers’ banker in
respect of such transactions, but the Government did not
undertake thereby to provide foreign exchange. As official
exchange for imports was freely released, only a few imports
were financed before July 1954 with the aid of exchange
purchased in the open market.
Negotiations were proceeding between the Government of India
and the Government of France for transfer of the French
Establishments in India to the Union of India, and when it
came to be known that the transfer was imminent, there was
feverish activity to import goods into the French
Settlements with the aid of foreign exchange purchased in
the open market, and in the months of August, September and
October orders were placed by importers with foreign
suppliers for purchase of commodities of the value of Rs.
280 lakhs to be financed by foreign exchange procured from
the open market. Traders who were not normally doing
business in Pondicherry and who had no business interest in
French Establishments also opened offices in Pondicherry and
started indenting goods, to be financed with the aid of
foreign exchange in the open market.
43
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332
An agreement for the de facto transfer of the ad-
ministration of the French Establishments in India was
executed between the Government of India and the Government
of France on October 21, 1954. This agreement became
effective on November 1, 1954. In exercise of the powers
conferred by s. 4 of the Foreign Jurisdiction Act, 1947, on
October 31, 1954, the Government of India issued two orders-
S. R. O. 3314, the French Establishments ( Administration)
Order, 1954, and S. R. O. 3315, the French Establishments
(Application of Laws) Order, 1954. By S. R. O. 3315,
certain enactments specified in column (3) of the Schedule
which included the Sea Customs Act, 1878, The Reserve Bank
of India Act, 1934, The Imports and Exports Trade (Control)
Act, 1947, The Foreign Exchange Regulation Act, 1947 and The
Indian Tariff Act, 1934, were applied to the French
Establishments of Pondicherry, Karaikal, Mahe and Yanam,
with the modification that references in the enactments,
notifications, orders and regulations which were applied to
the French Establishments, to India or to the States were to
be construed as referring to the French Establishments also.
These orders came into force on November 1, 1954.
The petitioners who carried on trade in diverse commodities
in Bombay opened a place of business in Pondicherry on April
14, 1954, and placed eight indents with Messrs. Shimada
Trading Co., Ltd., Osaka, Japan, for importing porcelain
ware, glass marbles and beltings. On an application
submitted by Bankque D. L’ Indo-China on behalf of the
petitioners, the Bureau Des Affairs Economique, Pondicherry,
endorsed " authorise " for the requisite foreign exchange
purchased in the open market. This exchange was sold to the
petitioners for the amount involved in the letters of
credit. Between August 28, 1954, and August 31, 1954, three
irrevocable letters of credit of the aggregate value of
pound 12,850 were opened by the petitioners and pursuant to
these letters, M/s. Shimada Trading Co., Ltd., shipped
goods to Pondicherry. On November 30, 1954, the shipping
documents were received by the petitioners from Messrs.
Shimada Trading Co., Ltd.
333
Admittedly the goods were shipped by the foreign suppliers
after the defacto transfer of Pondicherry. The applications
submitted by the petitioners for the issue of customs
permits sanctioning clearance of the goods were rejected by
the Controller of Imports and Exports at Pondicherry. On
January 5, 1955, the Chief Controller of Imports and Exports
issued a public notification that on a consideration of the
representations made by some of the importers asking for
permission to import goods for which necessary foreign
exchange had been obtained in the open market through
bankers in Pondicherry and in consultation with the
authorities concerned, it was " clarified for information "
that open market transactions of the nature referred to in
the representations were not covered by the Indo-French
Agreement, and that the import of goods against open market
transactions after November 1, 1954, must be treated as
unauthorised ; but having regard to the hardship likely to
be caused to genuine importers who had placed orders in
pursuance of their normal trading operations, the Collector
of Customs, Pondicherry, was being authorised to accord
certain concessions to genuine importers. By one of such
concessions, goods shipped before November 1, 1954, were
permitted to be cleared " without penalty " irrespective of
their origin and value, and consignments fully paid for in
foreign currency and shipped after November 1, 1954, and
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ordered before August 15, 1954, were also permitted to be
cleared it without penalty".
The goods indented by the petitioners were confiscated by
the customs authorities exercising powers under s. 167(8) of
the Sea Customs Act, on the ground that the same had been
imported without a valid licence and in contravention of the
Department of Commerce and Industries Notification No. 43-1
T.C./43 dated July 1, 1943, (as amended) read with sub-s. 2
of s. 3 of the Imports and Exports Trade (Control) Act,
1947. The petitioners were by orders passed between
February 28 and March 4, 1955, given an option to clear the
goods for " home consumption " on payment of customs duty
and fine specified in the order. These
334
orders were confirmed in appeal by the Board of Revenue and
by the Government of India in exercise of revisional
jurisdiction. In the meanwhile the petitioners paid the
duty and the fine imposed by the customs authority and
cleared the goods.
The Union Government having rejected the Revision
applications, the petitioners submitted this petition under
Art. 32 of the Constitution for a writ or direction in the
nature of certiorari requiring and commanding the Chief
Controller of Imports and Exports, Pondicherry, the
Collector of Customs and Central Excise, Pondicherry, the
Central Board of Revenue and the Union of India and quashing
the orders passed by the Customs authorities and the Union
of India and for a mandamus requiring the respondents to
forbear from giving effect to or otherwise acting upon the
orders passed by the Customs authorities and the Union of
India, and for a further writ or order directing the
respondents to restore to the petitioners the sum of Rs.
30,890 paid as penalty for releasing the goods.
Undoubtedly, the petitioners had before November 1, 1954,
placed indents for importing goods of diverse descriptions
from foreign suppliers and for that purpose, they had
acquired foreign exchange through their bankers in the open
market. The petitioners had also opened irrevocable letters
of credit in favour of the Japanese suppliers. It may be
assumed, even though there is no clear evidence in that
behalf, that the petitioners were after opening irrevocable
letters of credit, unable to cancel the indents. Section
167, cl. (8), of the Sea Customs Act, in so far as it is
material, provides that if any goods, the importation of
which is for the time being prohibited or restricted by or
under Chapter IV of the Act, are imported into India
contrary to such prohibition or restriction, such goods
shall be liable to confiscation. By s. 3 of the Imports and
Exports Trade (Control) Act, XVIII of 1947, the Central
Government is authorised by order published in the official
Gazette to prohibit, restrict or otherwise control in all
cases or in specified classes of cases, the import, the
bringing into any Port or place
335
in India of goods of any specified description. By s. 4 all
orders made under r. 84 of the Defence of India Rules or
that rule as continued in force by the Emergency Provisions
(Continuation) Ordinance 1946, and in force immediately
before the commencement of the Act, in so far as they were
not inconsistent with the provisions of that Act, continued
to remain in force and were to be deemed to have been made
thereunder. Under the rules framed under the Defence of
India Rules, the import of goods of the description indented
by the petitioners, was, it is not disputed, prohibited, and
the rules framed under the Defence of India Rules continued
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in force by the operation of s. 4 of the Imports and Exports
Trade (Control) Act, 1947. The rules and orders made under
r. 84 of the Defence of India Rules were on November 1,
1954, operative as if they were made under the Imports and
Exports Trade (Control) Act, 1947, and when that Act was
extended to the French Establishment of Pondicherry, these
rules and orders became also applicable to that area. By s.
19 of the Sea Customs Act, the Central Government may by
notification prohibit or restrict the bringing by sea, goods
of any specified description into India across any customs
frontier as defined by the Central Government. By s. 2(b)
of the Imports and Exports Trade (Control) Act, 1947, import
is defined as bringing into India by sea, land or air.
Import of goods therefore means carrying goods across the
customs frontier declared by the Government of India. There
is no dispute that under s. 19, the Port of Pondicherry was
declared a customs frontier. Admittedly, the goods indented
by the petitioners were brought into India, i.e., imported
into India after November 1, 1954. Importation of these
goods without a licence in that behalf being prohibited
under a notification under the Imports and Exports Trade
(Control) Act, by bringing the goods into the Pondicherry
Port, prima facie s. 167(8) of the Sea Customs Act was
contravened.
But the petitioners contend that in view of the agreement
between the Government of India and the Government of France
and the two orders issued in
336
exercise of the powers conferred by s. 4 of the Foreign
Jurisdiction Act, 1947, the provisions of the Sea Customs
Act and the orders made or deemed to be made under the
Imports and Exports Trade (Control) Act, 1947, did not apply
to the goods in question. By cl. 3 of the agreement dated
October 21, 1954, the Government of India succeeded to the
rights and obligations resulting from such acts of the
French Administration in these Establishments as were bind-
ing on the territory. By para. 5 of Art. 10, acts or deeds
constitutive of rights established prior to the date of the
de facto transfer in conformity with French law retained the
value and validity conferred at that time (by the same law).
By Art. 17, in so far as it is material, all orders placed
outside the establishments and finalised through the grant
of a licence by competent authorities in accordance with the
laws and regulations in force prior to the date of the de
facto transfer were to be fulfilled by the Government of
India who were to grant the requisite foreign currency, if
the goods were imported within the period of validity of the
relevant licence subject to payment of customs duty and
other taxes normally leviable at Indian Ports. This
agreement is between the Government of India and the
Government of France, and the covenants thereof do not
purport to and cannot confer any rights enforceable at the
instance of citizens of Pondicherry or of India. By s. 3,
certain obligations enforceable against the French
Administration were undertaken by the Government of India,
but no obligations thereby enforceable were undertaken by
the Indian Government which the petitioners could enforce.
Para. 5 of Art. 10 falls in the chapter headed " Judicial
Matters " and only declares that acts and deeds which
constitute rights in conformity with the French Law shall
retain the same value after merger with the Union of India
and by Art. 17, the obligation is undertaken by the
Government of India to fulfil the orders placed outside the
Establishments and finalised through the grant of a licence
by competent authorities. But the petitioners had obtained
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no license from any competent authority for importing or
even for indenting the goods.
337
It was urged that the orders S. R. O. 3314 and S. R. O. 3315
issued under the Foreign Jurisdiction Act should be
construed in the light of the agreement between the
Government of India and the Government of France. By S. R.
O. 3314, provision is made by the Government of India for
the administration of the erstwhile French Establishments.
By cl. 5 of that notification, all laws in force in the
French Establishments or any part thereof immediately before
the commencement of the order and not repealed by cl. 6 of
the French Establishments (Application of Laws) Order, 1954,
shall continue to remain in force until repealed or amended
by a competent authority. The law, if any, relating to the
import of goods into India applicable in the French
Establishments prior to November 1, 1954, stood expressly
repealed by cl. 3 of S. R. O. 3315 which provided that the
enactments specified in column 3 of the Schedule as in force
before the commencement of this order shall be applied to
and shall be in force in the French Establishments subject
to (a) any amendments to which the enactments are for the
time being generally subject in the territories to which
they extend ; (b) the modifications, if any, specified in
column 4 of the schedule; and (c) the subsequent provisions
of the order. By column 3 of the schedule to this order,
the Sea Customs Act, the Reserve Bank of India Act and the
Imports and Exports Trade (Control) Act were expressly
applied to the French Establishments, and under the
provisions of these Acts and notifications issued thereunder
as from November 1, 1954, no person could without a license
in that behalf import goods of the nature indented by the
petitioners. By cl. 6, it was enacted that " unless
otherwise specifically provided in the schedule, all laws in
force in the French Establishments immediately before the
commencement of this order, which correspond to the
enactments specified in the schedule, shall cease to have
effect, save as respects things done or omitted to be done
before such commencement ". The Sea Customs Act and the
Imports and Exports Trade (Control) Act were expressly made
applicable to the French Establishment of
338
Pondicherry and all corresponding law in that territory
ceased to have effect save as respects things done or
omitted to be done before such commencement. Clause 6 does
not authorise the doing of things expressly forbidden by the
provisions of the Acts made applicable by schedule 3 in the
Pondicherry Establishment, and by the use of the expression,
" things done or omitted to be done " in the clause, to the
rights or legal consequences which may but for the
application of the enactments specified in schedule 3 have
flown from the acts done or omitted to be done the French
law does not continue to apply. The clause undoubtedly
protects French laws which correspond to the enactments
specified in schedule 3 in so far as they concern things
done or omitted to be done before the commencement of S, R.
O. 3315. In superseding the French law in force on the
prescribed date, the cl. 6 emphasises that the enactments
specified in schedule 3 have no retrospective operation, and
as counterpart thereof provides that all transactions which
have been concluded before November 1, 1954, will continue
to be govered by the French law notwithstanding the
enactment of the Acts specified.
Since the date of the de facto transfer of the French
Establishments to the Indian Union, all imports of goods
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across the customs frontier at Pondicherry were subject to
the provisions of the Sea Customs Act and the Imports and
Exports Trade (Control) Act; and goods shipped after
November 1, 1954, in pursuance of indents before that date
were not expressly saved from the operation of the
restrictive provisions of those Acts. On and from November
1, 1954, the law if any relating to the import of goods
operative in the French territory was superseded and the
goods having been brought into the Pondicherry Port after
November 1, 1954, the import was governed by the Sea Customs
Act and the Imports and Exports Trade (Control) Act and not
by any law of the French territory. The supersession of the
French laws by the application of the statutes set out in
schedule III was, on November 1, 1954, complete, " save as
respects things done or omitted to be done ". Does the
expression " things done " include consequences which may
339
have ensued in future but for the supervention of the merger
agreement ? Ex facie, by cl. 6, the French law is kept alive
in respect of " things done or omitted to be done " i.e.,
things done or omitted to be done in the past; it has not
the effect of keeping alive that law in respect of things to
be done or omitted to be done in future. All transactions
completed after November 1, 1954, will, on the plain words
of cl. 6, be governed by the statutes made applicable by
virtue of cl. 3 of S. R. O. 3315.
Section 6 of the General Clauses Act, 1897, has in terms no
application when the court is called upon to ascertain the
effect of supersession of French law by the application of
the specified statutes by cl. 6 of S. R. O. 3315. In terms
s. 6 of the General Clauses Act applies to the effect of
repeal of enactments of the Indian legislature, and there is
nothing in S. R. O. 3315 which supports the plea that the
section applies as if the French law in operation before
merger of the French Establishments is to be regarded as a
statute enacted by the Indian legislature. In that premise,
it is difficult to appreciate how the principle of cases
decided by the courts in England on the words of s. 38 of
the Interpretation Act, 1889 (52 and 53 Viet. ch. 63) which
are substantially the same as those used in s. 6 of the
General Clauses Act, 1897, can lend any assistance in
interpreting the meaning of the expression " things done or
omitted to be done " in cl. 6 of S. R. O. 3315. By enacting
S. R. O. 3315, the French law after its supersession has not
been expressly kept alive in respect of any right or
privilege acquired or accrued under the things done under
that law; and it would be an unwarranted incursion into the
field of legislation to attempt to extend the protection of
that law to transactions which have taken place after the
prescribed date relying upon the General Clauses Act.
Nor is the interrelation between the agreement of purchase
with a foreign seller, and the various processes leading to
the delivery of goods to a common carrier and the ultimate
import of goods sufficient to include within the expression
" things done " used in
44
340
cl. 6 of S. R. O. 3315 consequences of the things done which
may ensue in future. Within the expression " in the
course of import of the goods into the territory of India "
used in Art. 286(1) (b) of the Constitution, a series of
integrated activities resulting in the taking of goods
across the customs frontier may be involved. But import as
defined in the Imports and Exports Trade (Control) Act is
bringing a commodity in the territory of India; preliminary
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steps even if they are closely integrated therewith are not
included in that definition. If steps preliminary to import
are not included in the concept of import, in dealing with
the provisions of the Sea Customs Act and the Imports and
Exports Trade (Control) Act, it would be difficult to afford
protection of the French laws expressly granted by virtue of
cl. 6 of S. R. O. 3315 to such of the preliminary steps as
have taken place before the prescribed date, and to create
an exemption in favour of imports consequential upon those
preliminary steps, which the legislature has declined to do.
In my view, therefore, by the use of the expression things
done or omitted to be done before such commencement " in cl.
6 of S. R. O. 3315 French law applies to acts and omissions
before November 1, 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 1, 1954, without a licence
in that behalf is contrary to the provisions of the Sea
Customs Act and the Imports and Exports Trade (Control) Act.
The provisions of the Sea Customs Act and the Imports and
Exports Trade (Control) Act whereby restrictions are imposed
upon the import and export of goods are not by themselves
unreasonable. If the petitioners are not entitled to the
benefit of cl. 6 of the Indo-French Agreement, there is no
other ground on which they can successfully impugn the
validity of the orders imposing duty and penalty.
I am therefore of the view that this petition should be
dismissed with costs.
341
For reasons set out in the principal petition, petitions
Nos. 124 and 125 of 1957 and 118 of 1959 should also be
dismissed with costs.
BY COURT: In view of the majority Judgment, the petitions
are allowed. The petitioners in all the petitions will have
their costs.
Petitions allowed.
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