KANTILAL MANILAL AND CO Vs. UNION OF INDIA

JUDGEMENT

(1.) The 5th respondent is an Export House and held 18 import licences. The Import Policy for 1979-80 provided that import of items appearing in Appendix 9 thereto would be governed by the connected policy of Government in the respective Ministries, as detailed therein; no other person would be eligible to import them unless specifically licensed by the Chief Controller of Imports and Exports, New Delhi. On 18th July, 1980 the 5th respondent sent the licences to the Chief Controller and asked for endorsement thereon to enable them to import the drugs mentioned in Appendix 9. On 19th September, 1980 Miss S.K. Grewal, Joint Chief Controller of Imports and Exports, wrote to the 5th respondent enclosing therewith the licences. She stated that she had endorsed thereon : "The drugs appearing in Appendix 9", as desired by the 5th respondent and that the drugs could be imported without any restriction in respect of value or quantity. Alongside her endorsements upon the licences were her signature and the security seal of the Department. On 10th October, 1980 the 5th respondent wrote to the Chief Controller and asked for confirmation that the Import Policy applicable was the Import Policy, April 1980-March 1981. This was confirmed on 23rd October, 1980.

(2.) On 29th September, 1980 the 5th respondent executed letters of authority in favour of the Petitioners in respect of the licences. The letters of authority irrevocably authorised the Petitioners to operate upon the licences for import of the drugs appearing in Appendix 9. The letters of authority stated that the functions of their holder were to place orders, to open letters of credit, to make remittances in payment for the goods, to arrange movement and to clear the same through Customs having regard to Section 147 of the Customs Act, 1962, on behalf of the 5th Respondent and other related matters connected with the operation of the licences. The letters of authority were stated to be given under the terms of Para 382 of the Hand Book of Import-Export Procedures, 1980-81.

(3.) On 20th and 27th December 1980 two summonses were issued to the partners of the Petitioners alleging that drugs had been smuggled into the country. The drugs were those which had been imported and cleared on the strength of the licences. Raids were thereafter carried out by the Customs authorities and the imported drugs seized in the hands of the buyers thereof. Uncleared drugs were detained.