PIONEER TRADERS EASTERN OVERSEAS PONDICHERRY Vs. CHIEF CONTROLLER OF IMPORTS AND EXPORTS PONDICHERRY:CHIEF CONTROLLER OF IMPORTS AND EXPORTS PONDICHERRY

JUDGEMENT

(1.) . - These twenty-nine petitions under Article 32 of the Constitution raise common questions and will be dealt with together. They have been filed by two firms who obtained 'patentes' to carry on business in Pondicherry in September 1954 for the first time. As the facts in all the petitions are similar, we shall only give the facts generally to understand the questions raised before us. The two firms, it may be mentioned, did not carry on any business in Pondicherry before September 1954 when they got a 'patente' each and the proprietor of one of them is a resident of New Delhi while the proprietor of the other is a resident of Bombay.

(2.) The administration of Pondicherry was taken over by the Union of India from November 1, 1954. Before that Pondicherry was under the administration of the Government of France and was a free port. Import into Pondicherry was thus not subject to any restriction, except with regard to certain goods with which we are not concerned in the present petitions. Any merchant desiring to carry on business in the territory of Pondicherry had however to obtain a 'patente' before could do so. These 'patentes' were of five kinds one of which was a 'patente' authorising the trader to carry on the business of import of goods other than those which were under restriction. Though the importers were entitled by virtue of the 'patente' to import goods subject to certain restrictions, this right could only be exercised by securing foreign exchange which was subject to certain limitations and was controlled by the Department of Economic Affairs at Pondicherry. There were two ways in which foreign exchange could be acquired, namely, (i) at the official rate through the Department of Economic Affairs, or (ii) in the open market at such rate as might be available; and both these ways were considered valid before November 1, 1954. Further there used to be authorisations for the purpose of import and the authorisations indicated the limit within which foreign exchange could be acquired either at the official rate or through the open market.

(3.) The petitioners' case is that though the 'patentes' were secured in September 1954, orders for import were placed before August 15, 1954. Thereafter after authorisations had been obtained from the. French authorities, foreign exchange was acquired in the open market for the purpose of financing the import. There were in all twentynine transactions by the two firms, which are the subject-matter of these petitions, and in certain cases advances were paid, the balance being payable by means of bills of exchange drawn on "documents against payment" basis. But though the orders were placed before August 15, 1954 and necessary foreign exchange had also been secured in the open market later, shipments could not be made because of an unexpected dock strike in England and on the Continent and also for want of shipping space, and therefore most of the consignments on the basis of the twenty-nine orders were shipped after November 1, 1954, and only three consignments out of twenty-nine could be shipped in October 1954, that is before the administration of Pondicherry was taken over by the Government of India. The goods in all these cases arrived at Pondicherry after November 1, 1954. In the meantime the administration of Pondicherry was taken over by the Government of India from November 1, 1954 in pursuance of an agreement between the Government of India and the Government of France, and two notifications were issued by the Government of India, namely, S. R. Os. Nos. 3314 and 3315. By S. R. O. 315, which was made under S. 4 of the Foreign Jurisdiction Act, No. XLVII of 1947, the Sea Customs Act, 1878, the Reserve Bank of India Act, 1934, the Imports and Exports (Control) Act, 1947 the Foreign Exchange Regulation Act, 1947 and the Indian Tariff Act, 1934 were extended to Pondicherry. This S. R. O. contained a saving clause which laid down that :-