Breach of a condition of a license issued under the Imports and Exports (Control) Act, 1947 constituted an offence under S. 5 of the Act.

Judgment

M. HIDAYATULLAH

( 1 ) THIS is an appeal by certificate under Art. 134 (1) (c) of the Constitution, against the judgment of the High Court of Calcutta, dated 4/09/1963 by which the conviction of the respondent Motilal Kanoria under S. 5 of the Imports and Exports (Control) Act, 1947 and the sentence of fine of Rs. 200 (in default simple imprisonment for one month) imposed by the Presidency Magistrate, 6th Court, Calcutta, were set aside and an acquittal was entered. The facts of the case are not in controversy and may, therefore, be stated briefly. Motilal Kanoria was a director of Lachminarayan Jute Manufacturing Co. Ltd. , Calcutta. The Company was managed by a firm of the name of Mukhram Lachminarayan and Motilal Kanoria was one of the partners of the firm. The Company and the Managing Agents had a common address in Calcutta. Motilal Kanoria used to sign on behalf of the Managing Agents and also generally to deal with the affairs of the Company. All transactions in this case were by Motilal Kanoria and he had signed the documents to which reference will be made presently.

( 2 ) IN February 1955 the Government India approved of the proposal of the Company to manufacture hackle and combing pins and sanctioned the import of plant and machinery for the purpose. The Company was permitted to apply to the Chief Controller of Imports, New Delhi, for a licence. The letter of Government is Ex. 2, dated 4/02/1955. On Feb 11/02/1955 the Company applied to the Chief Controller of Imports, New Delhi, on the proper application form, for an import licence. In that application the Company stated that the machinery was to be installed or used at their Mills at Konnaggar, Eastern Railway (Ex. 1 ). On 26/05/1955 a licence was issued (Ex. 3 ). The licence read as follows :-

"this licence is issued subject to the conditions to the goods licensed as detailed in the Policy Book for the current licensing period and any public notices that may be issued in this behalf from time to time.

LICENCE No. 035925

( 3 ). In the covering letter, which was sent when forwarding the licence, the Chief Controller said inter aia, -

3. The licence is granted to you subject to the following conditions :-

(A) In case the project involves any capital issue and if such capital issue is not sanctioned the licence is liable to cancellation.

(B) That if any sanction to the project is necessary under the laws of the Central, Provincial or a State Government the same should be obtained and the position reported to this office by the licensee; in the absence of such sanction being received the licence is liable to cancellation.

4. The licence is liable to cancellation if particulars as to progress of time in accordance with the detailed instructions contained in the accompanying slip are not furnished.

5. The Government do not guarantee for supply of raw materials required for manufacture of the goods.

* * * **"

( 4 ). On 19/06/1956 of Company asked for "revalidation" of the licence and the licence was extended to 31/05/1957. This extension is mentioned in the licence above reproduced at No. 4. On 13/12/1956 the Company entered into an agreement (Ex. 25) with Shalimar Wood Products (P) Ltd. , of Calcutta for the sale of the machinery imported by the Company. The sale, it is submitted, was at invoice price and there was no profit. On the arrival of the machinery in February of the following year the Company authorised Shalimar Wood Products to receive the shipping documents from the Companys bankers and to clear it from the Docks. The plant and machinery were then cleared by the Agents of the Shalimar Wood Products and the latter took them with a view to installing them in their own factory.

( 5 ). On 30/07/1958 the Company wrote a letter (Ex. 7) to the Chief Controller of Imports informing him that owing to the death of their director Sawal Ram Kanoria who was interested in the production of the said pins the Company was compelled to sell the imported plant and machinery to