Case: M/s. Ramchand Jagadish Chand Vs. Union of India &amp; Others

was exported, substantially exceeded the rate of Rs. 1.50 nP. per yard of 36" width. In the circumstances, we would not be justified in assuming that the Committee made an arbitrary decision in arriving at the value of the bush shirt cloth exported for the purpose of recommending the grant of import licence.15. The contention that the order passed by the Controller granting a licence only for 45% of the value of the goods exported infringes the fundamental right of the petitioners under Art. 19(1) (g) by imposing an unreasonable restriction cannot therefore be sustained.16. Does the fact that the petitioners have been granted licence approximately, for 45% of the total value of the goods exported amount to discrimination entitling them to protection of Art. 14 of the Constitution? Under the Export Promotion Scheme, the petitioners have exported art silk goods of the value of Rs. 7,07.709.55 nP. and may in the normal course have been entitled to import licence for 100 % of the value of the goods exported unless there was a reduction in the value of the licence for imports on account of certain circumstances such as general deterioration of the foreign exchange position or necessity to conserve a particular currency or other circumstances justifying a departure from the maxima set out in C1. 2 of appendix 42 of the Export Promotion Scheme. The reduction may also be justified on grounds personal to the petitioners or to a group to which they belonged. Any malpractice or underhand dealing may warrant such a reduction.17. It was the case of the respondents that many exporters were guilty of malpractices and with a view either to speculate in art silk goods or to repatriate unlawfully foreign assests, the value of the goods exported was unduly inflated. In the order passed by the Committee appointed by the Government of India, dealing with the case of the petitioners, it was observed that the petitioners had business relations with certain firms and that the rates at which bush shirt cloth were purchased varied from Rs. 3.87 to Rs. 3.92 nP. The Committee was not satisfied that the documentary evidence produced by the petitioners related to the goods exported by them. These findings disclosed that, in the view of the Committee, there was reason to believe that the claim of the petitioners that they had purchased goods approximately for the prices at which they were exported, was not made out. The Committee accordingly recommended that the value of bush shirt, cloth" should be computed at the rate of Rs. 1.50 nP. per yard. It is true that there is no definite evidence on the record indicating that that was the current market rate, but the court may be justified in holding that the members of the Committee who were vitally concerned with the trade in artsilk goods were conversant with the current market rates of the cloth which was exported by the petitioners.18. Counsel for the Union has placed before us in the course of the hearing the resort of the Committee in respect of seven out of the eight exporters who the petitioners claimed had been given import licence for the full value of the exports. The report of the Committee with regard to M/s. Rajasthan Exporters and Importers, Calcutta is not placed before us on the plea that it is not immediately available. On a perusal of the report of the Committee with regard to other exporters, it may be stated that the claim of the petitioners that Raghunath Rai Piyarilal were given import licence for the full value of the goods exported is not correct. It appears from the record that only 40 % of the F.O.B value was to be taken for "Glass Nylon dyed" exported in respect of application No. 36. Similarly, in respect of application No. 35, 40% of the F.O.B. value was to be taken for the purpose of granting import licences. It is true that in the cases of the other importers Premuskhdass Sitaram, Indian Exporters and Importers Corporation, M/s. Universal Watch Emporium, M/s. Jawahar Knitting Hosiery, M/s. Vastralaya Ltd., and M/s. Agarwala Trading Co. Ltd., the Committee have recommended acceptance of the purchase prices submitted by the exporters in granting Import licences. It may therefore, be assumed that these importers were given licence for 100% of the export value of the goods. But the Committee have given reasons which appear to be prima facie good for accepting the claims of these exporters. If, on the materials placed before them, the Committee were satisfied that there was some misconduct or under- hand dealing on the part of the petitioners, or that the evidence led before them justified the Committee in holding that the goods exported were not of the value claimed by the petitioners in their invoices, an order recommending that import licence may be granted for the value of bush shirt cloth computed on the basis of Rs. 1-50 nP. per yard does not amount to discriminatory treatment of the petitioners. Article 14 confers a guarantee of the equal protection of the laws - a guarantee against arbitrary discrimination between persons similarly circumstanced. On the materials placed before the Committee, there was evidence to show that the record produced by the petitioners was unsatisfactory; they were not satisfied that the prices which the petitioners said they had paid for purchasing the goods were in truth paid. If there was evidence to show that in respect of other persons who were in the opinion of the Committee found also to have inflated the prices in the manner adopted by the petitioners and still the Controller had granted import licences to those persons for the full amount of the export value or a percentage substantially in excess of the percentage for which import licence was granted to the petitioners, a case of discrimination could have been made out; but in the absence of such evidence, we do not think that any case of discrimination is made out.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]authority to grant or refuse to gram licences is conferred upon high officers of the State and the grant of licences is governed by the Import Trade Control Policy which is issued from time to time and detailed provisions are made in the Imports (Control) Order setting out the grounds on which licences may be refused amended, suspended or cancelled (see Cls. 6 to 9 of the order). Provision to afford a hearing to the licencee before action is taken under Cls. 6 to 9 is also made. It cannot therefore be said that the power conferred is uncanalised orclause invests the Controller with authority, it does not impose an obligation upon him enforceable at the instance of the exporter, to issue a licence for the amount (subject to the maximum prescribed) claimed by the exporter. The power is plainly discretionary. It is true that the discretion has to be exercised reasonably and not arbitrarily The licensing authority would normally issue an import licence for 100% of the value of the goods exported, but having regard to special considerations such as difficult foreign exchange position or other matters which have a bearing on the general interest of the State import licences for a smaller percentage may be granted to the exporters. But by the use of the expression "upto the following percentage of the rupee equivalent" power to fix arbitrarily a percentage of the value of the goods exported for awarding an import licence is not granted.9. In granting a licence to the petitioners for Rs. 3,19,354 has the authority been exercised arbitrarily or is it supported by some reasonably discermible principle ? Ram Murth Sharma Deputy Chief Controller of Imports and Exports in his affidavit stated that of the Export Promotion Scheme wrongful advantage was taken by some exporters of artsilk fabrics: it was found by the Government of India that invoice values or artificial silk fabrics were inflated by the exporters by more than 100% of the value with the object of importing "speculative commodities like artificial silkindex number of wholesale price n India in respect of "silk and reyon fabrics during the month of June, 1957, was 85 and during the month of March, 1959 it rose to 95.7 only thus showing a rise of about 11%. Against this rise, the rise in the price invoiced by the exporters showed a rise of over 125% during the span of the same period. This will clearly show that the aforesaid rise was shown by merchants merely with a view to get licences for higher value for the import of speculative item like "Art Silkappears therefore that some exporters under cover of the Export Promotion Scheme by inflating the prices were found not only to import speculative varieties of goods for very much larger values than the real prices justified, but were suspected by the authorities even to repatriate foreign assets without disclosing the same to the State as required by law. It cannot therefore be said that the power granted to the licensing authorities to grant licences only upto the maximum specified in C1. 2 is by itself an unreasonable restriction; nor will the notification directing scrutiny of all applications amount to imposing an unreasonablereduction may also be justified on grounds personal to the petitioners or to a group to which they belonged. Any malpractice or underhand dealing may warrant such ais true that there is no definite evidence on the record indicating that that was the current market rate, but the court may be justified in holding that the members of the Committee who were vitally concerned with the trade in artsilk goods were conversant with the current market rates of the cloth which was exported by thethe materials placed before the Committee, there was evidence to show that the record produced by the petitioners was unsatisfactory; they were not satisfied that the prices which the petitioners said they had paid for purchasing the goods were in truth paid. If there was evidence to show that in respect of other persons who were in the opinion of the Committee found also to have inflated the prices in the manner adopted by the petitioners and still the Controller had granted import licences to those persons for the full amount of the export value or a percentage substantially in excess of the percentage for which import licence was granted to the petitioners, a case of discrimination could have been made out; but in the absence of such evidence, we do not think that any case of discrimination is made out.