in THE HIGH COURT OF DELHI AT NEV^? DELHI L.P.A. 627/2004 & CMS.7616-7618/2004 Date of Decision : November. 2004 M/S. RUBFILA.INTERNATIONALLIMITED ....Appellant Through r Mr. NeeraJ K. Kaul, Sr. Advocate witli Mr. Ablilsliek Jain. Advocate Versus UNION OF INDIA & OTHERS ....Respondents Through: Mr. P.P. Malhotra, ASGwith Ms.Meera Bhatla> Ms. Gurpreet Kaur. Advocates CORAM: THE HON'BLE MR.JUSTICE D.K. JAIN THE HON'BLE MR.JUSTICE S.RAVINDRA BHAT 1. Wlietlier reporters of local papers may be allowed to see the Judgment.? 2. To be referred to tlie Reporter or not? 3. WlietliertlieJudgmentshouldbereported I In the Digest? Jo S.RAVINDRA BHAT. J. CM 7818/2004 (delay) For tlie reasons stated hi tlie application, die delay In filing tlie appeal Is condoned. Tlie application stands disposed of. L.PA. 627/2004 & CMS.7616-7617/2004 This appeal is directed against the Judgment and order of a learned Single Judge dated 23.01.2004 In WP No.832/04. Tlie issue for consideration Is regarding legalityof two circulars of respondent No.2. Tliose circulars defined tlie period of validity of advance Ucenses Issued between 1999 to 03.07.2003. Tlie appellant founded Its action on a complaitit of discrimltiatlon and arbitrariness. LPA-627-2004 j ^^21 Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified a jjn exercise of powers under the Foreign lYade (Development and Regulation) Act 1992, tlie Central Government notified the Export and Import policy 1997-2002 (EXIM Policy). Tlie Director General of Foreign Trade, under Para 4.11 of tliat policy is empowered to prescribe tlie procedure for Issue of licenses of different categories. Pursuant to tliat power, a Handbook (liereafter "Handbook") containing two volumes was Issued. Relevant portions of Para 4.15 and 4.16 of tliat Handbook are extracted below r- "4.15 Tfys validity of inyjort license from the date of issue of license shall be as follows (0 Advanos lioense as per chapter-7 and replenishment license for Gem & Jewellery as per chapter-8 of the Policy 18 months m EPCG license 24 months 1 (ill) Others including COP, DFRC and DEPB, unless otherwise specified 12 months (iv) Advance Kcense for T\irnkey project 18 months or Co- termlnus with the contracted duration of execution of the project whichever is later (V) Advance license for Annual Requirement 12 months xxxx xxxx xxxx (c) The period of ixiUdiiy niear^ the period for shipment/dispatch of goods covered under the license. Tite oaUdMy of ati Iniport license is deckled Lotth reference to the date of shipment/dispatch of the goods from t}}e supplyii^g country as given in paragraph 15.15 of this Handbook and not the date ofarrival of the goods at an Indian port. LPA-627-2004 2 of 21 -A 4.16 The license nmy be reooMated on nisrits by the licensingauthority concerned, which has issued the Itense, for a period of six months at a tUi^ bat not beyonda periodof 12 monthsreckonedfrom the date of expiry of the ualidltyperiod. Howeuerreualidationof freely transferable licensesand stock and sale license sfmU not be permitted. Xxxx xxxx xxxx Annual amendments were carried out to the EXIM policy as on 31.03.2000 31.03.2001 and 31.03.2002, witli corresponding amendments to tlie Handbook. As far as tlie present appeal Is concerned, tliere have been no material amendments. The appellantmanufacturesand e3q)ortsheat resistantlatex rubber direads. It appliedfor and was grantedadvancelicensesas per tlie policy for tlie duration mentioned In para 4.15 (supra) of ttie Handbook. Hie dates on wlilch such licenses were Issued, togetlier wMi the correspondingentitlement Itirespect ofquantities; tlie validity of such licenses witli tlieir permissible extensions and their utilization, in terms of quantities used for Import, are extracted in tlie form of a chart, reproduced below:- S.No. license No. & Date Latex qty EnUtled Wet (Tonnes) Latex gty Used Balance Validity with Extensions (28+e^6) 1 10001686/101/10 603.00 1/05 19.02.1999 510.00 93.00 31.08.2001 LPA-627-2004 3 of 21 2 10001725/1/01/1 521.00 01/05 30.03.1999 0 521.00 30.09.2004 3 1010004551/2/03- 565.00 /OO 30.03.2001 0 565.00 30.09.2003 4 1010004201/2/03 485.00 /OO 27.02.2001 0 323.00 31.08.2003 5 1010003209/2/02 485.00 /OO 31-10.2000 0 485.00 30.04.2003 Total 2659-00 1987.00 [The advance licensing scheme entitles an ejqporter to Import the quantitiesIndicated, subject to certain conditions. A period of 18 montlisIs granted,as perPara4.15 and one oftlie conditionsImposed Is diat tlie export obligationhas to be fulfilled. Hie appellanthad fulfilledtliat obligationwltlilntlieInitialperiodstlpLilated,in respectof tlie five licenses. Hie question involved in diese proceedings is as regards tlie period for re-valldatlon under Para 4.16. I On 20.02.1999, a drcular was issued whereby the import of natural rubber under such advance license was not permitted; instead it was stipulated tliat such rubber had to be sourced tlirougli tlie State Trading Corporation (liereafter "STC"). Hie appeUant, tlierefore approached tlie STC on 28.04.2001 for supply of latex rubber against die advance licenses held by it. Tlie STC decUiied die request, on 01.05.2001 atid stated tliat tlie scheme of sale of rubber against LPA-627-2(X)4 4 of 21 » advance license was not In vogue. The direction Issued by the second respondent in respect of Import of natural rubber under tlie advance-licensing scheme was contained in various otlier circulars. One such circular dated 03.09.2001 was impugnedbefore tlie Bombay Hi^i Court. A DivisionBench of tlie Bombay Higli court, by its judgment and order dated 01.10.2002 reportedas Narendra UdeshiVs. Union ofIndia^ quaked the circular proliibitingimportof natural rubber. It also quashedtlie show cause notice proposing to cancel an advance license. [The respondents carried the matter to the Supreme Court under Article136. By orderdated07.05.2003,leaveto appealwas declined. the above view of the. matter, the conclusions of the Bombay High Court became final. Hie respondents issued a circular on 03.07.2003, wliich noticed tlie liistory of liie litigation culminating widi tlie order of die Supreme Court. It advised aU. licensing autlioritles to decide about admissibllity of import in die liglit of tlie Bombay Hlgli Court decision and tlie EXIM provisions and procedures. The appellant approached respondent JNo.2 on 16.07.2003 and pointed out tliat it had completed its export obligations before 1 2003 (156) ELT 819 LPA-627-2004 5 of 21 o V procuring duty free raw materials. It sought for revalldatlon of all licenses for a period of one year from tlie date of revalldatlon, to permit Import of goods. In tlie meanwMe, a writ petition was preferred by it earlier, being WP 4915/02 before tliis court. Hiere, tlie circular dated 20-2-1999 was impugned. Hiat writ petition was disposed off on 29.08.2003, by a Single Judge of tills Court on tlie statement of tlie respondents tliat upon tlie appellant's making a representation, tlielr case would be considered. rhe respondents issued a circular (hereafter called 'the first circular) dated 10.10.2003. Tills was in continuation of tlie circular dated 03.07.2003. Hie material portion of tills circular is extracted below "(q) Fresh Adocuice Licenses/DFRC/Aduance Licence for annual requirement can henceforth be Issued for Import of Natural Rubber as per normal Policy Provisions. (b) In respect of Licences issued on or after 20.02.1999, which covered Nalural Rubber as one of the items but iniport/procurernent of which could not be made direct import of the same may now be allowed by RLAs. In cases wfiere validity of License }ias expired, the same may be revaUdated after cancellingARO, if any, up to 31.12.2003. Such revalldatlon may also be allowed by RLAs in respect ofLicenses coveringNatural Rubber as one of the lten\s and issued prior to 20.02.1999, wherein imports could not be affected. However, for such revalldatlon nofee or aijpllcation In Appx. lOGofthe Hand Book (VoLi)shall be required. (c) Cases where applications werefUed on or after 20.02.1999 with Rubber as one of the inputs or the sole Inputbut Licenses have not been issued, or issued after excluding natural rubber as input, ux)uld be reviewed LPA-627-2004 6of21 and Natural Rubber rtiay be Included or fresh Licenses^ may be issued as the case may be c^er obtaint declaratLon t}m.t no ben^t of drawback has been claimed on natural rubber used in export production. If tire license was expired, the saine may be reuaHidated up to 31.12.2003 by the RLA. Hoivever, for such reualidatlon no fee or appUcntion in Appx. lOG shall be called. This shnll be applicable even in respect of licetise where No Bond or EODC fias been issued by RLA." Irhe appellantrepresented to the respondents on 31.10.Z003stating that die period ofvalidity of licenses tliat had been In force but could not be utilized because of die restrictions/ban, namely, 31.10.2003 was far too short. AccordltiglyIt requested die extension of validity of such licenses until 31.12.2004. rhe respondents issued yet another circular on 11.12.2.003. £is per diis circular, tlie outer limit wltli regard to tlie validity of licenses for the import ofnatural rubber in respect of licenses Issued on or after 20.02.1999, was extended to 31.03.2004. rhe appellant approached this Court imder Article 22t5 on the ground that even tliougli it had fulfUled tlie stipulation of fulfilling export obligations, it was nevertlieless denied tlie benefit of advance license for import of duty free natural rubber in respect of die licenses in question. Hie appellant averred tliat as per tlie licenses, it collM have imported rubber at far lower prices dian were actually borne by it because of tiie action of tlie respondents. Hie appellant averred diat it LPA-627-2004 7 21 was unable to use tiie licenses and tliat when It approached tile STC for procurement of rubber, tlie same was denled> Hie embargo imposed on tlie import of tiie natural rubber was lifted finally on 10.10.2003. Hie logical coroUaiy as per tlie scheme contained in tlie EXIM policy ouglit to have been tliat tlie licenses were to be validated as per tlie Handbook (under Para 4.16) for at least a period of one year. Hie appellant tlierefore souglit for tlie quasliing of die circulars dated 10.10.2003 and 11.12.2003 to tlie extent tliat diey prescribed a sliorter time limit for existing advance licenses. [n the Judgment under appeal, after noUcing tlie submission tliat the time period fixed for operation of die advance licenses in question were Inordinately short, It was held tliat tlie flxltigof a time period for wlilcli extension ouglit to be granted is essentially executive In nature, not witliln tlie domain die Court Iti exercise of writ jurlsdlcUon. It was also held tliat die period of six montlis could not be termed as wliiuislcal or absurdly low to call for Interference. Based on diese conclusions, tlie writ petition was dismissed In Umlne. •s matter was heard at some length; on Is'"" September 2004, respondentsouglitand was granted,five days time to file Its reply, since areturn had not been filed before tlie learned Single Judge. Howevertliecounteraffidavitwasfiledonlyon 04.10.2004. LPA-627-2004 8 of 21 7 Mr. N.K. Kaul, learned senior coimsel appearing for t±ie appellant submits that tlie prescription of a period of rouglily six montlis In two separate orders as tlie period of validity of licenses issued after 20.02.1999, is arbitrary. Learned counsel submits tliat sudi a restriction is wholly unwarratited and has no correlation to tlie objective souglit to be aclileved by tlie EXIM policy and tlie Handbook. It was furtlier submitted tliat tlie impugned circular of 10.10.2003 as regards die time restriction of fresh licenses, prescribes tliat tliey would be valid for tlie period mentioned in tlie Handbook. However, die treatment meted out to licenses issued between 20.02.1999 and 10.10.2003, is discriminatory as tliey have been given an extended validity of only six montlis. ^^Leamed counsel for the appellant also submits that the grant of time untU 31.03.2004 Is not tlirougli a single indivisible period, but dirougli a broken period of two montlis (between 11.10.2003 & 11.12.2003) and tliree montlis (12.12.2003 and 31.03.2004). Tills meant tliat maiiufacturers and importers couldnot effectivelyavailof tlie benefits havingregard to tlienatureof the transactionwlilchimpliedplanning placing orders upon foreign suppliersand making payment flirougli letters of creditetc. It was also submittedtliat tlierebeltigno poHcy preventingtlie import of natural rubber once ati exporterfuMled all LPA-627-2004 ^^^21 A conditions contained in tlie license relating to export obligation, tliere was really notliing to Justify curtailing tiie periods mentioned In paras 4.15 and 4.16 (supraj. Accorditigly, learned counsel submitted tliat tlie denial of tlie normal period of re-validation spelt out In terms of tlie Handbook, which remains un-amended even today (as regard to Para 4.16] Is arbitrary. Hie appellants also relied upon tlie doctrine of legitimate expectation to press home tiieir daim. f^Mr.PvP> Malhotra,learnedAdditionalSolicitorGeneral appearingfor tlie respondents Justified its stand. He submitted tliat tliere is no vested or legal right Inliering any person for grant of an Import license. Accordltig to lilm, tlie terms of tlie EXIM policy empowered tlie second respondent to effectchanges In regard to tlie procedui"efor issuance of license. Hie period mentioned in tiie Handbook fellwitliin tlie realm of procedure. He, tlierefore,submitted iiiat no person has a riglit to Insist upon contlnuatice of a procedure. He next submitted tliat prescriptionof periodsof validityof suchlicensesIs one of tlie poUcy, having regard to various factors. Accordingto liim, die Mterestsof domestic growers Impelled ttie Government to restrict Ucenses for naturalrubberand sourcesalesthrougliSTC. Tlie entry ofImported natural rubber tlireatened such domestic growers; consequently, manufacturers/exporterswererequiredto purdiaserubberfrom SIC, •nie Central Government,he stated, spent a considerableamount- LPA-627-2004 10 of 21 Rs.56 crores - in fiirtlieraiice of tills initiative. Eventually tlie scheme of supply tlirough STC could not be sustained. Tlie learned Additional Solicitor General also submitted tliat no discrimination can be inferred dirougli tlie impugned circulars. According to lilm, tlie licenses Issued after 10.10.2003 stand on a different footing. According to ]i?tn die licenses Issued after 20.02.1999 but before 10.10.2003, fell in a different category since tlie policy of tlie Government at tliat point in time was different. w" i^irhe learned Additional Solicitor General lastly submitted that there is no question of any legitimate expectation or odier expectation arising in favour of tlie api^eUants, for extension of a policy benefit, or continued existence of any policy. In support of tills, he relied upon tlie Judgments of tlie Supreme Court reported as Kasika Vs. Union of Indla^ and PTR Exports Vs.Union of Indie^ ^It would, for the purposes of deciding the present controversy,be necessary to notice tlie reasoning, wlilcli impelled die Bombay High >- Court to quash die circular, wlilch prolilbited Import of natural rubber. The court held that pubUc notice dated 20^^ May 2002 (prolilbltlngsuch imports) Issued by die DGFT, | second respondent here] could not be sustained as it was iiiconslstent wltli tlie EXIM 2 AIR 199SC 874 3 1996 (5)see 268 LPA-627-2004 11 of21 policy framed try tlie Central Government and tliat in fact it purported to amend tlie EXIM policy provisions wlilcli power is exclusively vested in tlie Central Government aj;id not witli die DGFT. Hie court furtlier held tliat: " By prohibLtiiig Import of natural rubber under Uie advance license in the Handbook of procedures, the DGFT has encroached upon tfie pouters of Central Government and purported to amend, the EDQM policy 2002-2007 which power is not conferred upon tfie DGFT. As stated hereinabove Section 6(3) of the Act expressly prohibits the DGFTfrom exensisLrtgthe power of amending the EXIMpolicy. Therefore, in the absence of any power under the statute, the ALC circularsand thepublicnoticedated2(f'May 2002 to prohibitimport of natural rubber under advance licetisecould not be issued by the DGFT. The said circulars and public notice being wholly contrary to the policyprovisionsof the Central Crovemment, cannot be sustained and ore liable to be quashed and set as ide." Hie specialleave petitionoftlie respondentswas rejected.Hie orderof tlie Supreme Court reads as follows: "Applicationfor impleadjnent is allowed. Heard learned counsel for the parties. Learned couFiselfor the impleading party contends that by the impugned order one million small growers of rubber will be affected by the advance Vcense issued to the respondent herein. We noticed that in the impugned judgment the High Court has held that it is open to the Government of India to chanae the policu in regard to grant of advance license for natural rubber on dutu free basis. If the Ciovemment of India thinks such interest ofgrowers should be protected, isfor them to take an appropriate djecLsion. On the facts of this case, we Und no merit in this speeial leave vetition and the same is dismissed." (emphasis supplied) LPA-627-2(X)4 12 of 21 |rhe above course of litigationIndicatesthat the challengeto the policy not to permit Import of natural rubber, uiider a class of licenses- In wlilch the subject matter of controversy admittedly falls- succeededon die ground of kickofcompetence ofthe second respondent.Hie SupremeCourt upheldtliefkidlngsoftlieBombay Hlgli Court. On an express plea about tlie need to protect domesticgrowers,tlie CourtIndicatedtliat notlilngpreventedtlie Central Government from formulating a policy. frhe submissionsof the respondentshave to. therefore,be viewed keeping In mind tlie following: al tlie policy of not allowingImport of rubber under advance licenses, Issued by die second respondent, was held to be Illegal, atid beyond Its competence: b] Hie Supreme Court too, upheld tlie findings of tlie Bombay Htgh Court as regards tlie lack of competence, on merits. Hie Issue, dierefore attained finality. c] Hie Central Government did not formulate any policy restricting tlie scope of tlie licenses or prohibiting die Import of rubber, eltlier during tlie period of tlie restriction Imposed by die second respondent (20-2-1999 to 10-10-2003) or LPA-627-2004 13 of 21 tliereafter. dj tlie secondrespondenthasnot -amendedHie Handbook. e] die appellant had been granted tlie subject licenses. However, it could not utilize diem since, during tlie itiltlal period, tlie circulars of respondent No 2 prolilbltlngImport were In force: f] tlie appellantsouglitfor, but was refused, supply ofnatural rubber, by STC. 24. Hie objectsof the EXIM policyare to enablean exporterto Import raw materials,etc for producinggoods for export. Tliey are ty way of Incentive (See S.B InternationalLtd-vs-Asst DirectorGeneralof F.T , where It has also been held tliat tliere Is no vested rlglit Mierlng in favourofan applicant,for tliegrant ofadvancelicense).Tlierespondents' contention about tliere being no vested rl^it for grant of a license In favour of a person Is tliereforewell founded.Equally,we are conscious of tlie fact tliat tlie doctrine of legitimate expectation has limited application. As remarked In a decision®it [ legitimate expectation] is " not tlie key wlilch unlocks tlie treasury of natural Justice and it ouglit not to unlock tlie gates tliat shuts die court out of review on die merits." In RT.K E>cports (Madras) (p; Ltd. u. Union of India,(supra, at page 272 of see reports] It was held tliat: 4 AIR 1996 SC 2921 5 Union ofIndia-vs- HiniiastanDevelopmentCorporation1993[3] SCC499 LPA-627-2(X)4 14 of 21 "Tfie doctrine of legftbnate expectatLon plays no rote when tJie appropriate authority is empowered to take a decision by an executive policy or wider law. The court leaves the authority to decide its full rar^e of choice within the executive or legislative power. In matters of economic policy, it is a settled law that the court glues a large leeway to trie executive cuid the legislature. Granting licences for import or export is by executive or legislative policy. Government i£!Ouki take diverse factors for formulating the policy for Unport or export of Uie goods gratUlrig relatively greater priorities to various items in the overall larger interest of the economy of the country" Hie limitations of testing state or public actions on a sole application of "legittmate expectation" have been judicially spelt out.® That doctrine is only a facet of Article 14 of tlie Constitution In requiring non-arbitrary treatment; by Itself, it does not give rise to ati enforceable riglit. It is only wliUe testing die action taken by a government audiorlty, in Judicial review, as to wlietlier it is arbitrary, tliat tlie doctrine is relevant. 25. Hie mandate of Article 14 covers aU State action. Non- arbitrariness, and fairness. If one can so term tliem, are tlie two cornerstones of a "legal behavioral baseline" diat cannot be sliifted or altered. Hiereforeeveiy action,evena change ofpolicy,In any realm of state activity has to be hiformed, fair, and non-arbltraiy.In Union of India V. InternationalTradingCo^ the SupremeCourtheld that: "WlUlethediscretionto changetfiepolicyIn exerciseoftheexecutive pou^r, when not trammelledby any statuteorruleis wideenough, what Is Imperativeand unpUclt In terms of Article 14 Is tfiat a change Ln policy must be moAe fairly and shouM not give the 6SlateofWB. v. NiranjmSmgha,(2001)2SCC326 ,at page 329and FoodCorpn ofIndia v KamdhenuCatlleFeedIfidustries 1993(1)SCC71 7.2003(5) S<X437, at page445 LPA-627-2004 Impression that II ldos so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qu£d^ylrtg for its vaMity on this touchstone irrespective of trie field of acUvily of the State is a.n accepted tenet The basic requirement ofArticle 14 is fairness in action by the State, atid non- arbitrariness in essence and substance is the heartbeat offair play. 26. Hie focus of Inquiry therefore is wlietlier tiie impugned notifications are arbitrary or unfair, in tliat tiiey Impose a restricted period for tlie purpose of revalidatlon. 27. In tlie present case, it Is not possible for tlie respondents to Justify tlie differential treatment based on tlie circulars tliat baimed import of natural rubber. Tliose circulars were held Illegal; tlie Judicial declaration became final In tliat even tlie Supreme Court declined to Interfere, in tlie matter. Hence, tliose circulars cannot afford a defence in tlie present proceeding as a JustiQcatlon for ttie treatment tliat Is facially dlscrlminatorj?-. Equally, tliere has been no action on tlie part of die respondents, in public interest, or in die interest of domestic growers, restricting die Import ofnatural rubber, in terms of tlie EIXIMPolicy after tlie order of die Supreme Court. Tliese factors are critical, since tlie contention talcen by tlie respondents Is tliat die appellants have no vested right, nor can found dieir claim on legitimateexpectaUon,and tliat poUcyimperativesJustifytlie shortenedperiodfor revalidationin tlie case of old licenses. LPA-627-2004 28. Hie differential treatment of old licenses as regards restriction In time ( for re-valldatlon] lias also been Justified on tiie basis tliat tlie Respondent No.2 lias tlie power, under tlie Handbook to amend procedure; that tlie period of validity ( or Its time limit] Is a matter of procedure, and tliat no one has a vested rlglit In procedure. We ajre unable to persuade ourselves to tliat view. Hie existence of power alone caimot be a Justification for dMerentlal treatment. E^en If It is accepted tliat tlie |x:riod is a matter of procedure, die issue tliat would remain un- addressed is tlie rationale for a shorter re-valldity period in the case of licenses issued prior to 10-10-03 ( namely until 31-12-03, later extended to 31-3-04) normal period of validity, (18 months] and re-vaHdation periods ( 6 months+ 6 montlis] as per tlie Handbook, in tlie case of fresh licenses and absence of any amendment In the Handbook. in a recent decision, viz State ofU.P. v. Johri Mol,®the Supreme Court held as foUo^rs : "where cidmlnlstratlueaction Is cfuodlengedunder Article Mas being discriminatory,equals are treated unequaUyor unequats are treated equaily, the question is for the ConstitutionalCourts as priniary reviewing courts to consider the correctness of the level of discrimination applied cmd whetfjer it is excessive and whether It has a nexus with the objective intended to be achieved by the adffiifiistrator.Forjudgir^the arbitrarinessofths order, the testof unreasonableness may be applied. 8(2004)4 see 714,at page735 LPA-627-2004 Xxx XXX XXX A basic and obvious test to apply In such cases Is to see whether there is any discemibte principle emerging from the impugned, option a!\d if so, does It really satisfy the test of reasonableness." 29. On a consideration of tiie facts, and tlie principles applicable, we cannot agree wMi tiie reasoning In uie Judgment under appeal. Hie record does not Indicate any rationale for discriminating between fresh licensees and old licensees ( who could not utilize tlie period of license due to tlie prolilbltlon Imposed by tlie respondent No.2, wlildi was held to be Illegal). NeMier any policy, nor any material was shown to us to JusUfy the Impugned differential treatment. In order to sustalti an attack on classification, die state has to show tliat tlie differentiation Is Intelligible.Here, tlie only differentiation is on tlie basis of date, wliich in turn is based on die existence of old (in some cases, even lapsed) licenses wliich could not be utilized on accoimt of die Illegal prohibition imposed by Respondent No. 2. Hence, tliat differentia. In a sense has tlie effect of perpetuatliig tlie Illegality tliat had been found by die