Case: M/S. Universal Imports Agencyand Another  Vs. The Chief Controller Of Importsand Exports And Others. (And Connected Petitions)


Decision reasoning: 1[ds]Briefly stated, the Indian law as disclosed by the aforesaid Acts is that imports into India without a licence are prohibited, the goods so imported in contravention of the restrictions imposed are liable to be confiscated and that foreign exchange cannot be obtained otherwise than under the provisions of the Act. Persons infringing the laws are liable to prosecution in addition to confiscation of the goodsthe Acts governing the imports nor any authoritativedisclosing the relevant law have been place before us. But from the affidavits filed in the case the state of law corresponding to the relevant Acts referred to in Para. 3 of the Order can easily be ascertained. Pondicherry had been a free port, there being no restrictions on imports except on a few items like gold,etc. For effecting payment for the imports, the importers of Pondicherry could acquire foreign exchange either at the official rate or at the open market rate, whichever might be conveniently available, both methods being recognised by the French Government askinds of permits for obtaining official exchange by importers were issued by the Chief Commissioner in Pondicherry, which were known as authorization and attestation respectively. They were signed by theof the French Indian Establishments himself or by hisThe Government of France used to make an overall allotment of foreign exchange to the French territories. Apart from that allotment, it made other currency allotments in the light of trade agreements entered into by France with other countries. Authorizations were issued in respect of goods imported from countries with which France had entered into trade agreements and attestations in respect of goods imported from France and other French colonies. Further, in respect of other transactions exchange was arranged by importance through banks dealing in foreign exchange. The Department of Affairs of Economics used to authorize the banks in respect of such transactions. Shortly stated, Pondicherry was a free port without any restrictions on imports, except on a few items, and the importers could acquire foreign exchange either at the official rate in respect of some transactions or at the open market in respect ofpetitioners in the course of their import trade, having obtained authorization for the foreign exchange through their bankers, entered into firm contracts with foreign dealers on C.I.F., terms. In some cases irrevocable Letters of Credit were opened and in other bank drafts were sent towards the contracts. Under the terms of the contracts the sellers had to ship the goods from various foreign ports and the buyers were to have physical delivery of the goods after they had crossed the customs barrier in India. Pursuant to the terms of the contracts, the sellers placed the goods on board the various ships, some before and others after the merger and the goods arrived at Pondicherry port after its merger with India. The prices for the goods were paid in full to the foreign sellers and the goods were taken delivery of by the buyers after examining them on arrival. Before the merger if the Customs Authorities had imposed any restrictions not authorized by laws, the affected parties could have enforced the free entry of the goods in a court ofis not necessary to consider in this case whether the concept of import not only takes in the factual bringing of goods into India, but also the entire process of import commencing from the date of application for permission to import and ending, with the crossing of the customs barrier in India. The words "things done" in paragraph 6 must be reasonably interpreted and if so interpreted, they can mean not only things done but also the legal consequences flowing therefrom. If the interpretation suggested by the learned counsel for the respondents be accepted, the saving clause would become unnecessary. If what it saves is only the executed contracts i.e., the contracts whereunder the goods have been imported and received by the buyer before the merger, no further protection is necessary as ordinarily no question of enforcement of the contracts under thelaw would arise. The phraseology used is not an innovation but is copied from other statutory clauses. Section 6 of theAct (X of 1897) says that unless a different intention appears, the repeal of an Act shall not affect anything duly done or suffered thereunder. So too, the Public Health Act of 1875 (38 and 39 Vict c. 55) which repealed the Public Health Act of 1848 contained a proviso to S. 343 to the effect that the repeal "shall not affect anything duly done or suffered under the enactment hereby repealed.Nor can we find any justification for the second criticism. In the instant case the legal position is exactly the same. By reason of theAgreement the Government of India made the Order under the Foreign Jurisdiction Act applying the India laws toeffect of that Order was that the French law were repealed by the application of the Indian laws in the same field occupied by the French laws subject to a saving clause. The position is analogous to that of a statute repealing another with a saving clause. If the English decisions apply to the latter situation, we do not see how they do not apply to the former. In both the cases thelaw continues to govern the things done before a particular date.We, therefore, hold that the words "things done" in paragraph 6 of the Order are comprehensive enough to take in a transaction effected before the merger, though some of its legal effects and consequences projected into thee effect of the contracts under thelaw was that the terms thereof could have been implemented without any customs bar, placed against the import.Applying the said principles to an import sale it may be stated that a purchase by import involves a series of integrated activities commencing from the contract of purchase with a foreign firm and ending with the bringing of the goods into the importing country and that the purchase and resultant import form parts of a same transaction. If so, in the present case the bringing of the goods into India and the relevant contracts entered into by the petitioners with the foreign dealers form parts of a same transaction. The imports, therefore, were the effect or the legal consequences of the "things done" i.e., the contracts entered into by the petitioners with the foreign dealers.21. This conclusion is also reinforced by the terms of theAgreement. It is common case that the terms of the said Agreement cannot be enforced in a municipal court of India. We are only referring to it as the terms thereof throw some light on the proper understanding of the saving clause. By Art. 17 of the Agreement, in so for as material for our purpose all orders placed outside the Establishments and finalised through the grants of a licence by competent authorities in accordance with laws and regulations in force prior to the date of the de facto transfer were to be fulfilled by the Government of India and the necessary foreign exchange granted if the goods were imported within the period of validity of the relevant licences subject to payment of customs duty and other taxes normally leviable at Indian ports. That is, orders placed outside the Establishemnts and finalised through the grant of a licence were to be honoured by the Government of India. The word "licence" in this Article may be construed rather widely to take in a permit or an authorization; otherwise it would lead to the anomaly that when a licence, strictly so called, is required for a transaction and therefore obtained, the transaction is protected by the Article, whereas the transaction which requires only a permit is excluded therefrom. It may be recalled that the petitioners obtained authorizations of the Economics Department in respect of their orders. This Article indicates the intention of the two Governments that the orders so placed outside the Establishments should be honoured. If paragraph 6 of the Order is construed in the manner suggested by the State, we would be imputing to the framers of the Order a conscious breach of the terms of the Agreement between the two countries, for even the orders covered by Art. 17 of the Agreement would be excluded from the operation of the saving clause.