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HIGH COURT OF CALCUTTA
D. Basu
RAM KRISHNA KULWANT RAI - Appellant
Versus
UNION OF INDIA (UOI) - Respondent
Civil Revn. 810 (W) Of 1966
Decided On : APRIL 2, 1968
CONSTITUTIONAL LAW - ARTICLE 226 - WRIT OF CERTIORARI - BANNING ORDER - VALIDITY - SCOPE AND EFFECT - ENCROACHMENT UPON PETITIONER'S DEALINGS - LEGALITY - ARTICLE 14 - ARTICLE 301 - ARTICLE 77 - IRON AND STEEL (CONTROL) ORDER, 1956 - IMPORTS (CONTROL) ORDER, 1955 - INTERPRETATION AND APPLICABILITY - DECLARATORY RELIEF.
Fact of the Case:
The petitioner, a firm carrying on the business of export and import of Iron and Steel materials, challenged the validity of a step taken by the respondents to prevent undesirable persons from carrying on dealings with the Government of India or its agencies in the sphere of public business or like transactions.
Finding of the Court:
1. The impugned banning order, which prohibited the petitioner from entering into any business dealings with the Government Departments in the non-statutory field, was held to be valid as the Government has the freedom, no less than that of a private trader, to choose the parties with whom it would have its transactions and that no individual has any legal or constitutional right to insist that Government must enter into contracts with him. 2. The impugned decision could not be applied to induce any statutory corporation or other authority outside the Governmental organisation to boycott the petitioner in their dealings with the petitioner. 3. The impugned decision could not be applied to enable any statutory authority, including the Iron and Steel Controller, or the chief controller of imports to take any action in respect of the Iron and Steel business, outside or contrary to the statutory provisions by which the powers and obligations of such statutory authority may, for the time being, be governed. 4. The impugned decision could not be applied to affect the acquisition, import, supply or distribution of any goods which is or in so far as it is subject to statutory control for the time being.
Issues: 1. Whether the impugned banning order, which prohibited the petitioner from entering into any business dealings with the Government Departments in the non-statutory field, was valid? 2. Whether the impugned decision could be applied to induce any statutory corporation or other authority outside the Governmental organisation to boycott the petitioner in their dealings with the petitioner? 3. Whether the impugned decision could be applied to enable any statutory authority, including the Iron and Steel Controller, or the chief controller of imports to take any action in respect of the Iron and Steel business, outside or contrary to the statutory provisions by which the powers and obligations of such statutory authority may, for the time being, be governed? 4. Whether the impugned decision could be applied to affect the acquisition, import, supply or distribution of any goods which is or in so far as it is subject to statutory control for the time being?
Ratio Decidendi: 1. The Government has the freedom, no less than that of a private trader, to choose the parties with whom it would have its transactions and that no individual has any legal or constitutional right to insist that Government must enter into contracts with him. 2. The impugned decision was capable of being circulated to or implemented by statutory authorities so as to cause inroads upon matters governed by statutory provisions. 3. The petitioner was entitled to a declaration that the impugned decision at Ann. C to the petition cannot be applied to the acquisition, supply or distribution of any goods which is subject to statutory control for the time being, because if the Government excludes the petitioner from such business, it would amount to an absolute deprivation of the fundamental right of the petitioner to carry on business in such goods as well as upon the freedom of movement of such goods guaranteed by Article 301, which can be imposed only by law and not administrative action. 4. The petitioner was also entitled to a declaration that the impugned decision at Ann. C cannot be applied to exclude the petitioner from the business of Import of Iron and Steel goods the import of which is subject to the Imports Control Order, 1955.
Final Decision: The petition was allowed in part and the Rule was made absolute, without any order as to costs, with the declaration that the respondents cannot so use or apply the impugned decision at Ann. C to the petition- (a) as to induce any statutory corporation or other authority outside the Governmental organisation to boycott the petitioner in their dealings with the petitioner; (b) as to enable any statutory authority, including the Iron and Steel Controller, or the chief controller of imports to take any action in respect of the Iron and Steel business, outside or contrary to the statutory provisions by which the powers and obligations of such statutory authority may, for the time being, be governed. (c) as to affect the acquisition, import, supply or distribution of any goods which is or in so far as it is subject to statutory control for the time being.
( 1 ) THE petitioners in these five cases have brought Petitions under Article 226 of the Constitution to challenge the validity of a step taken by the respondents to prevent undesirable persons from carrying on dealings with the Government of India or its agencies in the sphere of public business or like transactions.
( 2 ) THOUGH these petitions raise common issues, it would be convenient to take up the facts of C. R. 710 (W)/66 in the first instance. C. R. 710 (W)/66
( 3 ) THE petitioner firm, Ram Krishan Kulwant Rai, is a firm carrying on, inter alia, the business of export and import of Iron and Steel materials and acts as 'handling agents' of the Union of India (Respondent No. 1) in respect of the imported Iron and Steel materials.
( 4 ) AT the material time iron and steel was a controlled commodity under the provisions of the Iron and Steel (Control) Order, 1956, under which no one could purchase or sell iron and steel materials except in pursuance of permits issued by the Iron and Steel Controller (Respondent No. 2, hereinafter referred to as 'the Controller' ). In 1960, the Union of India decided to enter into a barter deal in respect of the import and export of steel goods and in pursuance of this policy. Respondent 2 the Iron and Steel Controller (hereinafter referred to as 'the Controller') granted the Import Licences in Annexure A series to the petition (vide also pages 35-36 of the Petition), on the following conditions, inter alia- (a) The Petitioner was to export a certain quantity of slabs, ingots etc. produced by the Hindusthan Steel Ltd. , which were surplus in their hands. (b) In consideration of the said export the petitioner would be permitted to import steel materials of various descriptions against the total F. O. B. value of the exported goods. (c) The steel materials so imported by the petitioner would be subject to distribution control by Respondent No. 2 (vide page 35 to the Petition ).
( 5 ) SO far as the import part of the aforesaid barter is concerned, the petitioner has duly imported the materials covered by and in terms of the licences.
( 6 ) AS to how the petitioner could carry on imports before making any export under the barter deal, it must be pointed out that it has been due to leniency shown by the Respondents themselves at a latter stage of the barter arrangement. On 5-5-60 (Annexure 'e' to the Affidavit-in-op-position) while finalising the terms of the barter deal, the Deputy Controller intimated that though export of the steel materials under the deal should normally precede the corresponding import, "proposals for pre-import may also be considered if satisfactory irrevocable letters of credit for exports are produced and suitable Bank Guarantees are furnished". It must be said that this softness has been at the root of the loss of foreign exchange which the respondents have to complain of later on. In a battle of wits I may constrained to say, the petitioner has eventually won against the public servants whose duty it was to safeguard the national interests. In this context, it may be noted that though in his letter of 2-2-60 (Annexure 'a' to the counter Affidavit), the Officer on Special Duty recommended to the Controller that "it should be made clear to the exporter that in case of failure to export, Iron and Steel Controller will have no further dealings with him", this term was not incorporated in the final embodiment of the terms on 5-5-60 by Annexure 'e' to the counter-affidavit.
( 7 ) THE dispute between the parties has arisen over the export part of the barter deal, after the petitioner had reaped the full advantage of the other part which was 'normally' to follow the export. The petitioner's case, in short, is that the petitioner placed orders with the Hindusthan Steel Ltd. for the supply of a huge quantity of slabs and ingots for export (Ann. B to the Petition) but that they have failed to supply such materials of an exportable quality as would be acceptabl
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