ABDUL AZIZ AMINUDIN v. Stat1 of Maha1a.shtr•

Appeal by special leave from the judgment and order da•ed August 3, 1951, of the Bombay High Court in Criminal Appeal No. 99 of 1961. Rogh•hrD9oJ, J, Shaukat Husain and P. C. Agarwala, for the Appellant. C. K. Daphtary, Solicitor-General of India, D. R. Prem and R. N. Sachthey, for the respondent.

#1963. February 7. The Judgment of the Court was delivered by RAOHUBAR DAYAL, .J.-This appeal, by special leave, is against the order of the High Court of Bombay allowing the State appeal and convicting the appellant of the offence under s. 5 of the Imports and Exports (Control) Act, 1947, hereinafter called the Act, for having contravened the Imports (Control) the Order, and Order, l9ii5, herein~fter called sentencing him to three months' rigorous imprison ment and a fine of Rs. 2,000/- . Power loom The appellant, The appellant was the Chairman of Sadi Malegaon Manufacturer's Cooperative As<ociatinn Ltd.. hereinafter callrd the As<ociation. There were six other members of the Association. All the members were powerloom as Chairman of the weavers. Association, applied for and obtained the licence dated Janu~ry 2, 1956, for the import of certain quantity of art silk yam by the Association. The licence was issued subject to the condition that the good< would be utilised only for consumption as raw material or accessories in the licence-holders' factory and that no portion thereof would be sold to any party. The As.~ociation could not arrange for the necessary finances and the goods imported through Warden & Co., who financed the transaction. Part of the goods received was utilised therrfore had l.S.C.R. SUPRI::ME COURT ~PORTS 833 in accordancewit,h,the.,condition of the licence,-the rest wa~ however soJd _by the S'fid W:i,r;den & Co., as a result of .the corresporn; lence ending by a letter daled No,·em ber 13, 1956, from the appi:llant as 8hairman of the Association to Warden & Co. The relevant portipn .of this letter is: lf6'J .Ab®' .Aziz, Aloin..ito v. SUJt1 of MolaM~ltks. Rot,.,., /Jlfll'l, / •. '· -. t • "l,n this connection ~e.have to inform you thiit as the price of Art.silk yarn has fallen greatly it is not p'ossil;>le for our ~ss.ociatio,n. to take delivery pf the balance ·gqods. As such, you are therefore requested to ,dispose o( the balance goods lying with you in :Such manner that our Association suffers no loss whatsoever, but gets ~net profit. of at leas\ 4!o on these good~." After the disposal of the go ids Warden & Co., did pay to the Association a sum, q( Rs. 5,040/ · by way of profits of the Association. • ' The appellant and· th.e other members of the Association were prosecuted for committing the offence· under s. 5 of the Act. They were acquitted by the trial Court. acquittal of the ·app~.Jlant aloqe ... The appeal was allowed, with the result that the appellant was convicted of the.-0ffenc,e under s. 5 ,of the Act. He has come up iu 'app~l, 'fhe State appealed against ( i) T~ Act was intended Tb.e various contmtions raised for the appellant are : for the pm; pose of prohibiting or controlling imports and exports which, according to s. 2 thereof, meant respectively bringing goods into and taking out of India by sea, land or air, and in. the Order providing for the issue of a licence, tq import goods subject to-the cordition that the goods covered by the licence be not di~posed of except in the manner prescribed by the li(:ensing au\hority could not be validly made in the e.xer, cise of the powers conferred therefore any provision 1963 AblrJ Atit Aminudin v. St.ii of Mi.h'lTarhtra R.i~bor DoJal, J. 834 SUPREME COURT REPORTS [1964] VOL. thereunder and on the Central Government under s. 3 of the Act, as such a co.1dition deals with the conduct of the licensee subsequent to the import of the goods. (ii) The Order does not provide for the imposition of the condition in the licence that the lic1·nsee is not to sell the imported goods. (iii) The contravention of any condition of the licence docs not amount to a contravention of the provisions of the Act or an Order made punishable under s. 5 of 1he Act. (iv) The Association was the licensee and therefore any contravention of the condition of the licence would be committed by' the Association and not bv its Chairman and conse quently it would be the. ,\ssociation which should have been tried for thr. alleged offence under s. 6 of (v) The possession the Act and not the Chairman. of the goods had not pa5sed to the Association and therefcre the Association could not be guilty of the offence. commit the offence and therefore could not be l(Uilty the sentence is severe. of the offence. (vi) The appellant has Wl nuens 1·ea (vii) Lastly, therefore The relevant provisions of the Act and the Order to which reference is necessary may now be quoted. The preamble of the Act reads : "An act to continue for a limited period powers to prohibit or control imports and exports. Wl-.ereas it jg expedient to con ti nu~ for a limited period, ·powers to prohibit, restrict or otherwise control imports and exports." Section 2 says that in the Act, 'import' and 'export' means respectively bringing into and taking out of India by sea, land or air. Section 3 empowers t!le Central Government, by order published in Official Gazette, to make provi~ions for prohibiting, restricting or otherwise controllin~. in all case.s or in specified classes of cases, and subject to such exceptions 1963 •• A.bdul ll!i.t A.minudin State of M""'-rashtra R,,zhu•"' DaJal, J. l S.C.R. SUPREME COURT REPORTS 835 if any, as may be made by or under. the order, the import and export of goods of any specified description. Section I\, the penalty section, provided, at the relevant time, that if any person contravened or attempted to contravene or abetted a contravention of any order made or deemed to have been made under the Act, he would be punishable with imprisonment for a term which may extend to one year, or with fine or with both. The section was amended in 1!160 and as a result of the amendment the contravening of any conditie>n of the licence granted under the Order, was also made punishable. The amended provision, however, is not applicable to the present case. Clause 5 of the Order deals with the conditions of licence. Its relevant provisions read : "(l) The licensing authority issuing a licence under this order may issue the same subject to one or more of the conditions stated below : - that the goodg covered by the licence shall (i) not be disposed of, except in the manner pres cribed by the licensiug authority, or otherwise dealt with, without the written permission of licensing authority or any person duly authorised by it; x x x x x x x (2) A licence granted under this order may contain such other conditions, not inconsistent with the Act or this order, as the licensing authority may deem fit. x· x x x x x x ( 4) The licensee shall comply with all condi tions imposed or deemed to be imposed under this clause." 1963 .. AbtL.l Azit Amin&1tli4 bhdt of Maharashtra Raghuhar Da,al, J. 836 SUPREME COURT REPORTS (1964] VOL. In support of the contention that the power conferred on the Central Government for making provisions for prohibiting-, restricting or otherwise controlling import of goods can be exercised only with respect to the actual rntry of the goods into the territory of India and not with respect to the control of the imported goods subsequent to their being brought into the territory, reference was made to the case teported as 'l'he State of Bombay v. P. N. Ba/.~ara ('). That case dealt with a different matter. It related to the powers under the Bombay Prohibi tion Act, 1949. The contention was that Provincial Legislature could not make a law regard ing production, manufacture, possession. transport, purchase and sale of intoxicating liquor in the exer cise of the pmvers under Entry 31 of List II, Scvrnth Schedule to the Governmer.t of India Act, 193.5, as the word 'import' used in Entry I Hof List I of the same Schedule did not end with ml're landing of the goods on the shore or their arrival in the customs house but did imply that the imported goods must reach the hands of the imrorter and he s 10uld be impugned Act dealt with import of goods an<l there fore encroached upon the legislative powers of the It was in this context and in Central Legislature. view of the principles apphcablc to the construing of the provisions laying down the legisl~tive limits of different legislatures that it was said at p. 700 . to possess t~em. It was argued "Under the provisions of the Government of India Act; a limited meaning must be given to the word 'import' in entry 19 of List I in order to give effect to th" very general words use<l in entry 31 of List I I." This observation cannot be applicable to the inter 'import' and pretation of the content of the words 'export' in the Act in the present case. In Glass Cha tons Importers & Usa8' Associa tilm v. Union of India ('), it was contended that s. 3 (I) (1951] S.C.R. E82. t2) (1961) I S.C.R. 862. 1963 .. Abdul 4.:dz Aminudi11 State qi M oharashtra Ragh!fbar Dayal, J. 1 S.C.R. SUPREME COURT REPORTS 837 of the Act, insofar as it permitted the Central Govern ment to make the order contemplated by sub cl. {h) of cl. 6 of the order which provides for the refusal to grant a licence if the licensing authority decided to canalize imports and the distribution thereof through special or specialized ageqcies or channels, was invalid. The contention was repelled, it being held that such a restriction on the right to carry on trade and to acquire property was not unreasonable. The point urged before us was not argued in that case, in the order but the case dealt with the provision relating to the distribution of the imported goods through selected agencies, a stage subsequent to the actual import of goods and the Court held provision good. In Daya v. Joint Chief Controller of Imports ), it was held that the provisions con and Exports (1 tained in cl. 6 (h) of the order, empowering the Chief Controller of Imports and Exports to refuse a licence if the licensing authority had decided to canalize imports and distribution thereof through a special channel or agency, could be made in the exercise of the power conferred on the Central Government under s. 3 of the Act. to controlling It is clear therefore that the power conferred under s. 3 (1) of the Act is not restricted merely to prohibiting or restricting imports at the point of entry the subsequent but extends also disposal of the goods imported. It is for the appro priate authority and not for the Courts to consider the policy, which must depend on diverse considera tions, to be adopted !n regard to the control of import of goods. The import of goods can be con trolled in several ways. If it is desired that goods of a particular kind should not enter the country at all, the import of those goods can be totally prohibited. In case total prohibition is not desired, the goods could be allowed to come into the country in limited \IJ [1963J 2 s.c.R. 73. AMiii kh Am""'4i>i v. Stat1 of MoM.ashlro 838 SUPREME COURT REPORTS[I964]VOL. quantities. That would necessitate empowering persons to import under licences certain fixed quanti ties of the goods. The quantity of goods to be imported will have to be determined on consideration of the necessity for having those goods in the country and that again, would depend on the use to be made It follows therefore that the persons of those goods. licensed to import goods up to a certain quantity should be amenable to the orders of the licensing authority with respect to the way in which If the licensing authority goods are to be utilised. has no such power, its control over the import cannot It may have considered it necessary to be effective. If it have goods imported for a particular purpose. cannot conuol their utilisation for that purpose, the imported goods. after import, can be diverted to different uses, defeating thereby the very purpose for which the import was allowed and power had been conferred on the Cent•al Government to control It is therefore not possible to restrict the imports. scope of the provision about the control of import to the stage of importing of the goods at the frontiers of the country. Their content is much wider and extends to every stage at which the Government feels it necessary to see that the imported goods are properly utilised for the purpose for which their import was considered necessary in the interests of the country. We are therefore of opinion that the provision in cl. 5 of the Order empowering the licensing authority to attach a condition to the effect that the goods covered by the licence shall not be disposed of except in the manner prescribed by the licensing authority is a valid provision "which comes within the powers conferred by s. 3 of the Act on the Central Government .. In support of the second contention that the Order docs not provide for imposing the condition 1963 Abdul A!k A.minudin v. State of Maharashtra Rai:hubor D•7al, J. 1 S.C.R. SUPREME COURT REPORTS 839 that the imported goods· be ncit sold, reliance is placed the decision in East India Commercial Co. v. Collector of Customs (• ). In that case, a condition was imposed in the licence prohibiting the importer from selling the imported goods. Sub-cl. (1) of cl. (a) of Notification No. 2/ITC/48 dated March 6, 1948, provided for imposing a condition in the licence to the effect that the importer shall not dispose of or otherwise deal with the goods without the written permission of the licensing authorily or any person duly authorised. Sub-cl. (v) of cl. (a) of the Noti· fication provided : "that such other conditions may be imposed which the licensing authority considers to be the administrative point of expedient from view and which are not inconsistent with the provisions of the said Act." The actual condition imposed, however, did not fall under sub-cl. (1) of cl. (a) and was sought to be sup ported by relying on sub-cl. (v), This Court held a licensing authority was that under that clause competent to impose only such condition as may be expedient from the admini5trative point of view. This Court further held that prohibiting an importer from disposing of the goods imported affects the rights of that person and therefore such a condition cannot be the licence in the absence of a rule prescribed in In the case before us, permitting that to be done. the licence has been issued under the Order of 1955. The language of sub-cl. (2) of cl. 5 of that Order is wide and permits the imposition of a condition which was outside sub-cl. (v) of cl. (a) of the order of 1948. Sub-cl. ( 4) of cl. 5 further makes it obligatory upon the licensee to comply with all the conditions impo sed or deemed to be imposed under cl. 5. We therefore do not agree with the second contention and hold that the licensing authority is cempetent impo11e the condition that the under the Order to ( 1 l c 196JJ s s.c.R. 338, 1903 ... ii.lulu/ A"iz Am;nudin Sta11 OJ MahtJrq.shlra_ "- Rozhu6ar Da.Jal, J. ' 840 SUPREME COURT REPORTS [1964] VOL. ·imported goods be not ~old to any per'son and thus _ to affec~ the ordinary rights'. of the impo'rter. licensee The third. contention too has no force. Sub cl. (4) ·of<;!. 5, provides that sh<tll comply with all conditions imposed or deemed to be imposed under that clause. :rhe .contravention of any condition or a licence thus <1mbunts:to the.contra vention of the_ provisions.of s,ub-cl. '(4) of cl. 5 of the Order-and ccinsequeritly to ;the c<~otravention of the .Order ,made under: the A'ct. Jt follows that if the Association, the licensee, does not comply with the conditions of -the licence about use of the' good~· to 0e imported, it,;;Qntrav.~nes tl)e Order made under the Act -and makes to punishment under s. 5 of the Act. " The cases reported a1i C. T. A. Pillai'v. H.P. Lakia (1), and East India Vommercial Co. v. CollecJ;or of Customs ('), holding that the infringement of a condition in tl, ie licence nbt to ,sell goods imported to. third parties is not an infringement of the Order, are n'ot of help as they deal with the contrave; ition of the conditions of the licence grant_ed under orders dated July 1, 1943 ancf .N:arch 6, 1!!48 which did not:· contain a provision comparable with _provisions of sub-cl. (4) ofcl. 5 of !he Order of 1955. itself liable W!! accept the fourth contention that it is the Association, the licensee, which alone could contra vene 'the condition of the licence and thus contravene the Order, but .do not agree with th~ fifth contention that it could not be guilt5' of the offence as it had not got actual possession of tpe imported goods. ·For contravening the condition of the licence, ac~ual the imported goods is not necessary. possession of Further, the possession.of Warden & Co., ·would be .possession of the Association, as the former was its agent to import.the goods. Re : the sixth poinf' that tlie appellant had no intention to commit the offence, the finding of the (I) A.I.R. 1957 Cal. 83. (2) [1963] 3 8.C.R. 338. 1963 .Abdul Adz Arninudin v. Stat1 of MaharOJhlr• Roihubor DaJtd, J, l S.C.R. SUPREME COURT REPORTS 841 High Court is against the appellant. The High C:ourt rigntly held him guilty of the offeµce under s. 5 of the Act on a finding that he intentionally aided· the Association, the licensee, in committing the offence under s. 5 of the Act, and thus abetted the contravention of the offence by the Association. The appellant, as Chairman, authorised Warden & Co .. to dispose of the goods which the Association did not want to utilise on account of the decline in price. He thus aided intentionally the Association in disposing ·of the goods through Warden & Co., therefore abetted the contravention of the condition of the licence to the eff~ct that the good~ imported would be utilised by the licensee alone and would not be sold to any other party. We do not consider that the sentence is severe in the circumstances of the case .which indicate that from the very beginning the appellant, as Chairman of the Association, knew that the Association would not be able to utilise all the yarn to be imported under the licence applied for. The fact that Warden & Co., did pay over Rs. 5,000/- to the Association indicates that the goods did fetch a price higher than the price paid ·for their importation. The case to be a deliberate case of securing import appears licence With a view to mis-apply the goods imported. We therefore dismiss the appeal. Appeal dismissed.