DICTION Writ Petition No 199 of 1986 Under Article 32 of the Constitution of India
with Civil Appeal No 664 of 1986 From the Judgment and Order dated 20th January 1986 of the Bombay High Court in Writ Petition No 183 of 1986
VM Tarkunde and Rajiv Datta for the Petitioner in WP No 199 of 1986
B Datta Additional Solicitor General Soli J Sorabji and KK Venugopal AG Ganguli A Subba Rao Miss Kutty Kumarmangalam CV Subba Rao Harish Salve KR Nagaraja BR Agarwala MM Jayakar and Miss V Menon for the Respondents in WP No 199 of 1986 FS Nariman and AB Diwan PH Parekh and Uday Lalit for the Appellants in CA No 664 of 1986 B Datta Additional Solicitor General KK Venlugopal AG Ganguli A Subba Rao Miss Kutty Kumarmangalam CV Subba Rao BR Agarwala MM Jayakar and Miss V Menon for the Respondents in CA No 664 of 1906
The Judgment of the Court was delivered by PATHAK J
The petitioners Ms Indo Afghan Chambers of Commerce and its President Sundar Lal Bhatia are aggrieved by the grant of additional licences to the respondents Ms Rajnikant Brothers and Ms Everest Gems for the import of dry fruits
The petitioner Ms Indo Afghan Chambers of Commerce is an association of dealers engaged in the business of selling dry fruit in North India
The dry fruit is purchased by them either locally or through imports from outside India
The respondents Ms Rajnikant Brothers and Ms Everest Gems are diamond exporters who have been issued additional licences pursuant to an order of the Court in the following circumstances
92 The respondents diamond exporters had applied for the grant of Export House Certificates under the Import Policy 1978 79 and had been denied the Certificates on the erroneous ground that they had not diversified their exports
In writ petitions filed in the Bombay High Court they were held entitled to the Export House Certificates
Special leave petitions filed by the Union of India against the order of the High Court were dismissed by this Court by its order dated April 18 1985 which while confirming the order of the High Court directed the appellants to issue the necessary Export House Certificates for the year 1978 79 and further that Save and except items which are specificially banned under the prevalent Import Policy at the time of import the respondents shall be entitled to import all other items whether canalised or otherwise in accordance with the relevant rules
 The respondents diamond exporters and other like diamond exporters were granted Additional Licences and started importing goods on those Additional Licences
It is the case of the petitioners that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy
The diamond exporters commenced the Import of acrylic ester monomers
This was challenged by Ms Raj Prakash Chemicals Ltd an Indian company manufacturing acrylic ester monomers in India by a writ petition in the Bombay High Court seeking a clarification of the order dated April 18 1985 of this Court mentioned earlier
The High Court rejected the writ petition and an appeal by Special Leave filed by the Indian company was disposed of by this Court by its order dated March 5 1986
The Court held that it was not permissible for the diamond exporters to import acrylic ester monomers under the Additional Licences granted to them during the period of the Import Policy 1985 88 but having regard to the circumstance that the High Courts had already passed orders permitting such import and further that the Import Control Authorities had specifically allowed such import this Court permitted such imports to be completed in respect of which irrevocable Letters of Credit had been opened and established before October 18 1985 the date on which for the first time an order was made by the Court imposing a restriction on the clearing of acrylic ester monomers by the Customs authorities
The Court regarded the date October 18 1985 as a critical date because the diamond exporters could be said to have been warned on and from that date that the Court could possibly take a different view from that prevailing during the period before that date when because of the orders of the High Courts and the conduct of the Import Control Authorities the diamond exporters could have legitimately believed that they were 93 entitled to effect such imports
It was made clear by the Court that cases in which irrevocable Letters of Credit had been opened and established after October 18 1985 would not be entitled to the benefit of that order
The petitioners contend that the principle which was applied to the import of acrylic ester monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances
It is asserted that the respondents diamond exporters and other like diamond exporters began to import dry fruit under their Additional Licences
It is contended that having regard to the terms of the order of this Court dated April 18 1985 as construed and clarified by its order dated March 5 1986 the diamond exporters are not entitled to import dry fruit
By order dated March 5 1986 the Court construed its order dated April 18 1985 to mean that only such items could be imported by diamond exporters under the Additional Licences granted to them as could have been imported under the Import Policy 1978 79 the period during which the diamond exporters had applied for Export House Certificates and had been wrongfully refused and were also importable under the Import Policy prevailing at the time of import which in the present case is the Import Policy 1985 88
These were the items which had not been specifically banned under the prevalent Import Policy
The items had to pass through two tests
They should have been importable under the Import Policy 1978 79
They should also have been importable under the Import Policy 1985 88 in terms of the order dated April 18 1985
The case of the petitioners is that under the Import Policy 1978 79 dry fruits excluding cashewnuts could be imported by all persons under the Open General Licence
Dry fruits excluding cashewnuts is mentioned at item 22 of Appendix 10 of the Import Policy 1978 79 as open to import under the Open General Licence
There was no need to obtain an Additional Licence for importing them in the year 1978 79 and therefore the wrongful denial of Additional Licences to diamond exporters in the year 1978 79 could not justify any restitution subsequently in regard to the import of dry fruits other than cashewnuts
There is substance in the contention
Under the Import Policy 1978 79 dry fruits excluding cashewnuts could be imported by all persons for whatever purpose under the Open General Licence
No Additional Licence was required
If an Additional Licence was wrongfully denied to diamond exporters at time when dry fruits excluding cashewnuts were importable under the Open General Licence no 94 damage can be said to have been suffered by diamond exporters who had been refused Export House Certificates and consequently Additional Licences under the Import Policy 1978 79
In the circumstances no question of restitution could be said to arise for the wrongful denial of the Additional Licences
The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits excluding cashewnuts
It is urged by the respondents diamond exporters that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users Industrial
It has not been shown to us that dry fruits were placed on Open General Licence specificially for Actual Users Industrial
Under the Import Policy 1978 79 their import was open to all persons
We may assume for the purpose of this case that a diamond exporter is legitimately entitled to obtain an Additional Licence under the Import Policy 1978 79 for an item which is different from the item he may have intended to import had the Additional Licences been rightly granted to him originally
In that event the diamond exporter can succeed only if the item could have been imported under the Import Policy 1978 79 and also under the Import Policy 1985 88 in accordance with the terms of the order of this Court dated April 18 1985 as construed by this Court by its judgment dated March 5 1986
The position in regard to the import of dry fruits excluding cashewnuts is simple and suffers from no complexity
As has been mentioned dry fruits excluding cashewnuts could be imported by all persons under the Open General Licence under the Import Policy 1978 79
But under the Import Policy 1985 88 when the dry fruits excluding cashewnuts and dates are now sought to be imported dry fruits excluding cashewnuts and dates are no longer open to import under the Open General Licence
The sanction for importing them must be found under some other provision of the Import Policy
If dry fruits excluding cashewnuts and dates are regarded as items for stock and sale the import is governed by paragraph 1813 in Chapter XIII of the Import Policy 1985 88
Paragraph 1813 declares that import of dry fruits excluding cashwenuts and dates will be allowed against licences issued to dealers engaged in this trade the value of the import licence in each case being equal to 20 per cent of the CIF value of the best year s imports of the applicant in respect of dry fruits excluding 95 cashewnuts and dates during any of financial years from 1972 73 to the preceding Licencing year subject to a minimum of Rs5000
Admittedly the diamond exportes cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits excluding cashewnuts and dates
They are therefore not entitled to the advantages of paragraph 1813 of the Import Policy 1985 88
But the case of the respondents diamond exporters is that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing or manufacturing into a variety of products such as almond oil Ayurvedic drugs and medicines Unani drugs and medicines processed and package foods sweets and confectionary and we are referred to item 1 in Appendix 6 of the Import Policy 1985 88
Now item 1 of Appendix 6 speaks of 1
Raw materials components and consumables non iron and steel items other than those included in the Appendices 2 3 Part A 5 and 8
 The petitioners point out that the item is covered in Appendix 2 Part B of the Import Policy 1985 88 and therefore the respondents diamond exporters are not entitled to resort to item 1 of Appendix 6
Appendix 2 Part B List of Restricted Items contains item 121 which reads 121 All consumer goods howsoever described of industrial agriculatural or animal origin not appearing individually in Appendices 3 Part A and 5 or specifically listed for import under Open General Licence
 There can be no dispute that dry fruits must be regarded as consumer goods of agricultural origin
The words agricultural origin are used in the broadest sense
It is also clear that dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under the Open General Licence under the Import Policy 1985 88
Inasmuch as they fall within item 121 of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6 and cannot be imported as raw materials and consumables for sale to Actual Users Industrial
It is urged by the respondents diamond exporters that item 121 is not attracted because it refers to consumer goods and consumer goods are not raw material for the purposes of item 1 of Appendix 6
There is a fallacy here
It will be noticed that consumables are referred to in item 1 of 96 Appendix 6 of goods meant for Actual Users Industrial
We are not satisfied that consumer goods in item 121 of Appendix 2 Part B cannot refer to dry fruits imported for supply to Actual Users Industrial
In construing the order dated April 18 1985 of this Court the judgment dated March 5 1986 of this Court explained the singificance of the words specifically banned occurring in the former order
The expression determines the range of the items open to import by diamond exporters holding Additional Licences
It was declared that the items exluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy
Appendix 2 Part A is the successor of Appendix 4 List of Absolutely Banned Items of Import Policy 1978 79
A question arose before us whether Appendix 2 Part B of Import Policy 1985 88 could also be regarded as a successor of Appendix 4
It appears from the material placed before us that Appendix 2 Part B List of Restricted Items was also successor of Appendix 4 List of Absolutely Banned Items
Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List
In the Import Policy 1982 83 the same Appendix 4 is described as List of Non Permissible Items Banned
The same description of Appendix 4 continued in the Import Policy 1983 84
During that year Beef Tallow was added in Appendix 4
In the Import Policy 1984 85 Appendix 4 became Appendix 2 Part A and Appendix 2 Part B Appendix 2 Part A was described as a List of Banned Items and Appendix 2 List B was described as List of Restricted Items
In the Contents of the Import Policy 1985 88 the list of Appendices makes clear that Appendix 4 of Import Policy 1983 84 became Appendix 2 Part A and Appendix 2 Part B of the Import Policy 1984 85
The same description of Appendix 2 Part A and Appendix 2 Part B was continued in the Import Policy 1985 88
Therefore it is apparent that the present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 List of Absolutely Banned Items under the Import Policy 1978 79
On the reasoning which found favour with the Court in its judgment dated March 5 1986 we hold that diamond exporters holding Additional Licences were not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 88
On that ground also the respondents diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits
As held by this Court in its judgment dated March 5 1986 holders of Additional 97 Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88
Dry fruits are not included in that List and therefore they cannot be imported under Additional Licences
In our opinion the respondents diamond exporters are not entitled to import dry fruits under the Import Policy 1985 88 under the Additional Licences possessed by them
They are also not entitled to the benefit extended by the judgment of this Court dated March 5 1986 to those diamond exportes who had imported items under irrevocable Letters of Credit opened and established before October 18 1985
It appears from the record before us that the respondents diamond exporters opened and established the irrevocable Letters of Credit after that date
One more contention of the respondents diamond exporters remains to be noticed
It is urged that the writ petition under Article 32 is not maintainable because the petitioners  fundamental rights are not violated
It is pointed out that no appeal has been filed by the Customs authorities or by the Import Control authorities against the interim order dated January 8 1986 of the Bombay High Court directing the Customs authorties to permit Ms Everest Gems to clear the imported consignment of almonds
We do not think that an interim order can defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs authorities or the Import Control authorities
The writ petition is allowed and the respondents Nos 10 and 11 Ms Rajni Kant Brothers and Ms Everest Gems are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79
In the circumstances there is no order as to costs
Civil Appeal No 664 of 1986 is directed against the judgment and order of the Bombay High Court rejecting the appellants  writ petition challenging the import of dry fruits by the respondent Ms Everest Gems under Additional Licences granted under the Import Policy 1978 79
The questions raised in this appeal are identical with those raised in the writ petition disposed of earlier
In the result this appeal is allowed the judgment and order dated January 28 1986 of the Bombay High Court are set aside and the writ 98 petition filed in the High Court is allowed
The respondent Ms Everest Gems is restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79
There is however no order as to costs
APJ Appeal allowed


Summary:
The petitioner an associations of dealers engaged in the business of selling dry fruit in North India who purchase dry fruits either locally or through imports from outside India challenged the grant of additional licences to the respondents diamond exporters under Article 32 of the Constitution
On behalf of the petitioners it was contended i that the goods sought to be imported on the Additional Licences included those which were prohibited by the prevalent Import Policy ii that the principle which was applied to the import of acrylic easter monomers extends likewise to the import of all other commodities under Additional Licences granted to diamond exporters in similar circumstances and therefore the diamond exporters are not entitled to import dry fruit and iii that the import of dry fruit is covered by item 121 in Appendix 2 Part B List of Restricted Items of the Import Policy 1985 88 and therefore the respondents are not entitled to resort to Item 1 of Appendix 6
On behalf of the respondents it was contended i that paragraph 176 of the Import Policy 1978 79 envisages the grant of Additional Licences for the import of raw materials which have been placed on Open General Licence for Actual Users Industrial ii that they import the dry fruits as raw material for the purpose of selling to eligible Industrial Actual Users for processing for manufacturing into a variety of products under Item 1 of Appendix 6 of the Import Policy 1985 86 iii that item 121 of Appendix 2 Part B List of Restricted Items is not attracted because it refers to consumer goods and consumer goods 89 are not raw material for the purposes of item 1 of Appendix 6 and iv that the petition under Article 32 is not maintainable because the petitioners  fundamental rights are not violated in as much as no appeal has been filed by the Customs Authorities or by the Import Control Authorities against the interim order dated January 8 1986 of the High Court directing the Customs Authorities to permit the respondents to clear the imported consignment of almonds
Allowing the Writ Petition and the Appeal  HELD 1
Respondents Nos 10 and 11 are restrained from importing dry fruits during the period 1985 88 under the Additional Licences granted to them under the Import Policy 1978 79
97F 2
Under the Import Policy 1978 79 dry fruits excluding cashewnuts could be imported by all persons for whatever purpose under the Open General Licence
No Additional Licence was required
By wrongful denial of Additional Licence to diamond exporters no damage can be said to have been suffered by them and no question of restitution could therefore be said to arise
The wrongful denial of the Additional Licences was wholly immaterial to the importing of dry fruits exluding cashewnuts
The respondents have not shown that the dry fruits were placed on Open General Licence specifically for Actual Users Industrial
Under the Import Policy 1978 79 their import was open to all persons94FC 3
The position in regard to the import of dry fruits excluding cashewnuts is simple and suffers from no complexity
Dry fruits excluding cashewnuts could be imported by all persons under Open General Licence under the Import Policy 1978 79
But under the Import Policy 1985 88 dry fruits excluding cashewnuts and dates are no longer open to import under Open General Licence
If dry fruits excluding cashewnuts and dates are regarded as items for stock and sale the import is governed by paragraph 1813 is Chapter XIII of the Import Policy 1985 88 which declares that import of dry fruits excluding cashewnuts and dates will be allowed against licences issued to dealers engaged in this trade
94E H 4
The diamond exporters cannot be regarded as dealers engaged in the trade of stocking and selling dry fruits excluding cashewnuts and dates
They are therefore not entitled to the advantage of paragraph 1813 of the Import Policy 1985 88
95A B 5
Dry fruits must be regarded as consumer goods of agricultural 90 origin
The words agricultural origin are used in the broadest sense
Dry fruits do not appear in Appendix 3 Part A and 5 nor can be imported under Open General Licence under the Import Policy 1985 88
In as much as they fall within item 121 of Appendix 2 Part B they are excluded from the scope of item 1 of Appendix 6 and cannot be imported as raw materials and consumables for sale to Actual Users Industrial
Consumables are referred to in item 1 of Appendix 6 as goods meant for Actual Users Industrial Consumer goods in item 121 of Appendix 2 Part B can refer to dry fruits imported for supply to Actual Users Industrial95F H 96A 6
The expression specifically banned occurring in the order dated April 18 1985 of this Court determines the range of the items open to import by diamond exporters holding Additional Licences
The items excluded from import by diamond exporters under Additional Licences under the Import Policy 1985 88 were the items enumerated in Appendix 3 and Appendix 2 Part A of that Import Policy
Appendix 2 Part A is the successor of Appendix 4 List of Absolutely Banned Items of the Import Policy 1978 79
Appendix 2 Part B List of Restricted Items was also the successor of Appendix 4 List of Absolutely Banned Items
Appendix 4 in the Import Policy 1978 79 was described as the Absolutely Banned List
96B E The present Appendix 2 Part A and Appendix 2 Part B constitute together what was originally List 4 List of Absolutely Banned Items under the Import Policy 1978 79
The diamond exporters holding Additional Licences were therefore not entitled to import goods enumerated in Appendix 2 Part B of the Import Policy 1985 8896F G 7
The diamond exporters are not entitled to take advantage of item 121 of Appendix 2 Part B for the purpose of importing dry fruits
The holders of Additional Licences are entitled to import only those goods which are included in Appendix 6 Part 2 List 8 of the Import Policy 1985 88
Dry fruits are not included in that List and therefore they cannot be imported under Additional Licences
They are also not entitled to the benefit extended by the judgment of this Court dated March 5 1986 to those diamond exporters who had imported items under irrevocable Letters of Credit opened and established before October 18 1985
97B C 8
An interim order cannot defeat the fundamental rights of the petitioners merely because it has not been questioned by the Customs Authorities or the Import Control Authorities
97E 91