S P VERMA Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner in the year 1962 obtained actual users licence for import of certain components for manufacture of clocks and time-pieces. The petitioner had entered into a collaboration agreement with M/s. Favre-Leuba & Co. Ltd., Bombay for obtaining financial and technical assistance for the manufacture of these clocks and time-pieces. On the arrival of the goods at Bombay on 13th Nov., 1962 the petitioner for some reason could not get the goods released. The petitioner wrote to the Directorate of Industries, Himachal Pradesh for permission to process the raw material and parts for manufacture of clocks and time-pieces outside the factory premises and also for exemption of demurrage charges. In view of the collaboration agreement of the petitioner with M/s. Favre-Leuba & Co. Ltd. the petitioner wanted that the goods be released in Bombay to M/s. Favre-Leuba & Co. Ltd., Bombay after which the actual manufacture of clocks and time-pieces could be done at Mandi, Himachal Pradesh. Since the clearance was refused by the Directorate of Industries, Himachal Pradesh the petitioner again wrote to the Joint Chief Controller of Imports & Exports that permission to process the goods outside the factory premises be granted. In the meanwhile the goods were cleared from Customs by M/s. Favre-Leuba & Co. Ltd., Bombay. Since the petitioner had obtained actual users licence for manufactureof clocks and time-pieces at Mandi, Himachal Pradesh he had to utilise the goods in his own factory. The Joint Chief Controller of Imports & Exports on inquiries being made by the Directorate of Industries found that the petitioner not having installed any machinery in his factory was not in a position to start production within feasible period of time and thus issued a show cause notice to the petitioner on 24th June, 1968 under Cl. 10-C of the Imports (Control) Order 1955. A similar show cause notice was sent by the Deputy Chief Controller of Imports & Exports to M/s. Favre-Leuba & Co. Ltd., Bombay because these imported goods were lying with M/s. Favre-Leuba & Co. Ltd., at Bombay. M/s. Favre-Leuba & Co. Ltd., Bombay vide their letter dt. 19th July, 1968 replied to the said show cause notice and stated that the goods imported by the petitioner were lying in the custody of Mr. Favre under instructions from the Superintendent of Police, C.B.I. It was further stated in this letter that a sum of Rs. 85,000/-was advanced by M/s. Favre- Leuba & Co. Ltd., Bombay to the petitioner in pursuance of their agreement with M/s. Tarna Watch Co. It was further suggested by them that M/s. Favre-Leuba & Co. Ltd., Bombay were 'Sole Selling Agents' for M/s. Sifco Limited, Hyderabad and they could request M/s. Sifco Limited, Hyderabad to take delivery of these goods against payment for manufacture of alarms. As regards the petitioner, the notice issued to him was received back undelivered with the postal remark 'no such person in the beat'. On 10th Dec., 1968 an order was passed by the Deputy Chief Controller of Imports & Exports directing M/s. Favre-Leuba & Co. Ltd., Bombay having possession and control of the said goods to sell the same to M/s. Sifco Limited, Hyderabad within a period of one month at a price of Rs. 83,036.89. On 25th Sept., 1969 another notice was issued by the Deputy Chief Controller of Imports & Exports to the petitioner under Cl. 10 of the Imports (Control) Order, 1955 stating therein that the petitioner had obtained the licence by misrepresentation and thus the provisions of Cl. 8 of the Imports (Control) Order, 1955 were attracted and the petitioner was asked to show cause within 15 days as to why action be not taken under Cl. 8 of the said Order to debar the petitioner from receiving import licences, CCPs and/allotment of imported goods through STC/MMTC or any other similar agencies. The petitioner sent a reply to this notice. However, the Deputy Chief Controller of Imports & Exports not being satisfied by the reply passed an order on 27th/30th Jan., 1970 debarring the petitioner from receiving import licence etc. for two years.

(2.) The petitioner in the present writ petition has challenged this order dt. 27th/30th Jan., 1970 debarring the petitioner from obtaining any import licence etc. for two years and also for restoring the goods imported by him under import licence or in the alternative pay to the petitioner the sale proceeds calculated in the terms of Clause 10-C of the Imports (Control) Order, 1955.

(3.) Since by the time the writ petition came up for hearing two years period during which the bar was to operate had expired, the only point urged by the learned counsel for the petitioner was regarding the requirement of notice to the petitioner before passing an order under Cl. 10-C of the Imports (Control) Order, 1955. Learned counsel contended that the petitioner was not given any notice under Clause 10-C of the Imports (Control) Order, 1955 and the petitioner learnt about the order dated 10th Dec., 1968 passed by the respondent only when the respondent filed the counter-affidavit to the petition. It was submitted that under Cl. 10 of the Imports (Control) Order, 1955 whenever the Chief Controller of Imports & Exports decides to sell the goods to any other person he has first to be satisfied after giving a reasonable opportunity to the licencee of being heard in the matter that the goods cannot be utilised for the purpose for which they were imported. It was submitted that if the petitioner had been given the opportunity of hearing he would have satisfied the Chief Controller of Imports & Exports that the petitioner was in a position to utilise the goods in his own factory. It was further contended that an order passed under Cl. 10 of the Imports (Control) Order, 1955 is a quasi-judicial order and principles of natural justice required that the petitioner should have been given an opportunity to explain before such order was passed. It was further submitted that if an opportunity had been given to the petitioner even if the petitioner had not been able to show that he was in a position to utilise the goods in his own factory he would have been able to indicate the price at which the goods ought to have been sold or the person to whom the goods could be sold under the circumstances. Learned counsel referred to certain questions asked in Parliament and the replies given by the Minister thereto in order to show that all throughout the respondents knew that the factory was functioning at Mandi and it was wrong on their part to state that the notice could not be served on the petitioner or that the factory was closed down. It was contended that if the notice sent to the factory had been returned unserved it was incumbent upon the respondents to send a notice to the residential address of the petitioner.