GENERAL FILMS DISTRIBUTORS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners are a Limited Company incorporated under the Indian Companies Act, 1913 and the petitioners, inter alia, carry on the business of distribution of British films in India. The petitioners are in this line for last over 30 years and their main activity has been the distribution of British feature films from United Kingdom.

(2.) On March 11, 1969, the petitioners entered into an agreement with Crompton Group Limited in England and by the said agreement, the British Company agreed to grant to the petitioners exclusive right to distribute British films. The petitioners were given the right to distribute the films for a period of 5 years from the date of delivery of the first print. In the year 1969-70, the Government of India informed the petitioners that permission to import films will be granted provided all the shares of the petitioner Company are held by Indians. In pursuance of this direction from the Government on December 9, 1970, the petitioners converted entire share-holding and thereafter all the share-holders of the petitioner Company are Indian citizens.

(3.) The Government of India declared its import policy for the year 1970-71 in respect of the exposed cinematograph films. The import of such films was allowed only through the S.T.C., New Delhi. The petitioners addressed a letter to the Joint Secretary, Ministry of Foreign Trade on December 24, 1970 for approval of agreement dated March 11, 1969 between the petitioners and the Crompton Group Limited and also sought permission to import feature films. The petitioners thereafter sent several reminders and ultimately on January 18, 1971, an agreement was arrived at between the petitioners and respondent No. 1 - the Union of India - in regard to the import of films by the petitioners. A copy of the agreement is annexed as Ex. C to the petition and it sets out that the terms of agreement will apply to all films imported from U.K. through M/s. Crompton International Films Limited. The agreement between the petitioners and the Union of India was to come into effect from January 18, 1971 and was to continue for a period of 4 years. The petitioners thereafter wrote a letter to the Ministry concerned on February 12, 1971 requesting to inform the Reserve Bank of India of approval of the agreement between the petitioners and respondent No. 1. The Ministry called upon the petitioners to secure an affidavit from M/s. Crompton International Films Limited accepting the terms of agreement between the parties. After receipt of such approval from the British Company evidenced by the resolution of M/s. Crompton International Films Limited dated November 25, 1971, the Ministry further called upon the petitioners to verify the name of signatory to the agreement dated January 18, 1971. Ultimately, on April 29, 1971, the respondent No. 2 - the Joint Chief Controller of Imports and Exports - forwarded import licences to the petitioners. It is required to be stated that the item of exposed cinemautograph films was a canalised item even prior to the agreement between the petitioners and the Union of India. The same policy of import through S.T.C. continued for subsequent years but the application for import licence made by the petitioners on June 10, 1971 was turned down by respondent No. 2 on February 9, 1972 on the ground that such import is only through S.T.C. and no licence can be issued to the petitioners. The subsequent application of the petitioners made on May 20, 1972 was also rejected by respondent No. 2 by an order dated July 6, 1972 on the ground that there is no provisions for import of item of films during the relevant year. The ground given for rejecting this application is obviously wrong because the import policy even for the year 1972-73 was identical as in the previous years. The rejection of the two applications on February 9, 1972 and July 6, 1972 has led to the filing of the present proceedings under Article 226 of the Constitution of India. The petition was filed on December 20, 1973 after the petitioners sought relief from the authorities concerned by entering into a large number of correspondence.