JUDGMENT

KRISHNA IYER, J.:—Silver is a precious metal and policy decision that the silver resources of the nation shall be conserved may well be wise policy. But public morality is more precious than silver and gold for individual and nation and to honour the plighted word of a public body is proof of this higher policy. The relevance of this observation, about the link-up of law and morality is basic to the decision of this case. What then, is the morality of the law vis a vis Government policy on export of silver? This is the question, in its jural dimensions, which has been ably argued by counsel. Such a capsulated statement, we know, is but an oversimplification, and we will proceed to unfold in fuller detail the facts and the law, the conflict and its resolution.

2. Arguments have been heard on the substantive issues as if we were disposing them of finally and not provisionally on an interlocutory basis. This has been made clear even in the ad interim order passed by this Court while granting leave. Therefore, this decision will virtually end the writ petition pending in the Bombay High Court. This procedure has the consent of all the counsel and their parties and brings to a close a litigation whose life may otherwise lengthen into after-life.

3. We are in the province of export of silver which is governed by the Imports and Exports (Control) Act, 1947. (for short, the Act), Section 3 clothes the Central Government with power to:

".......make provision for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order:

(a) the import, export, carriage coastwise or shipment as ship stores of goods of any specified description;

(b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried.

(2) All goods to which any order under sub-section (1) applies shall be deemed to be goods of which the import or export has been prohibited under Section 11 of the Customs Act, 1962, and all the provisions of that Act shall have effect accordingly.

(3) Notwithstanding anything contained in the aforesaid Act, the Central Government may, by order published in the Official Gazette, prohibit, restrict or imposes conditions on the clearance, whether for home consumption or for shipment abroad, of any goods or class of goods imported into India."

4. Pursuant to Governments broad policy, it promulgated, inter alia, the exports (Control) Order 1977, clause 3 whereof reads thus:

Restrictions on export of certain goods:-

(1) Save as otherwise provided in this Order no person shall export any goods of the description specified in Schedule 1, except under and in accordance with a licence granted by the Central Government or by an officer specified in Schedule II.

5. The anatomy of the Order discloses two parts-Parts A and B to Schedule L. Items included in Part A are not nor mally allowed to be exported while those in Part B are more liberally exportable.

6. The story of silver and its export has been one of fluctuating fortunes. Until February, 1974, its export had been banned. Then followed a permissive period for private exporters until Aug. 26, 1976. Thereafter, export trade in silver was canalised through the State Trading Corporation (we may use the acronym STC, for convenience) which is wholly government-owned but with separate statutory personality. By the Exports (Control) Fifteenth Amendment Order, 1979, silver jumped from Part B to Part A to Schedule I. This switch came about since February 20, 1979, and meant a virtual ban (not normally allowed to be exported) on export of silver. This embargo on export of bullion hurt the Respondent (M/s. Damani & Co. or, for short, Damani) for reasons we will now state.

7. There is big money in bullion dealings, more so in the export/import business thanks to wild v