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HIGH COURT OF CALCUTTA
J. P. MITTER, SEN GUPTA
C. T. A. PILLAI - Appellant
Versus
H. P. LOHIA - Respondent
Criminal Revn. 1124 Of 1953
Decided On : MARCH 03, 1955
IMPORTS AND EXPORTS (CONTROL) ACT, 1947 - SECTION 5 - OFFENCE - CONDITION IMPOSED BY LICENSE - VALIDITY - DELEGATION OF POWER - DISTRIBUTION OF GOODS AFTER IMPORT - COMPETENCE OF CENTRAL GOVERNMENT - PENALTY FOR CONTRAVENTION OF CONDITION.
Fact of the Case:
The accused were charged with an offence under Section 5 of the Imports and Exports (Control) Act, 1947 for violating the condition of a license granted to them by the Chief Controller of Imports, New Delhi, which prohibited the sale of the imported goods to any party. The condition was imposed under a notification issued by the Central Government which authorized the Chief Controller of Imports to impose such conditions as he considered expedient from the administrative point of view. The accused challenged the validity of the condition on the grounds that it was imposed by an order of the Chief Controller of Imports which was ultra vires of the Act, that the Chief Controller of Imports had no authority to sign the license and the condition, and that the Central Government had no power to make any provision about the distribution of goods after the same had been imported.
Finding of the Court:
The court held that the condition imposed by the license was valid and that the accused were guilty of an offence under Section 5 of the Imports and Exports (Control) Act, 1947. The court found that the delegation of power to the Chief Controller of Imports to impose conditions on licenses was not ultra vires of the Act, that the Chief Controller of Imports had the authority to sign the license and the condition, and that the Central Government had the power to make provisions for controlling imports, which included the power to impose conditions on the use of imported goods.
Issues: 1. Whether the condition imposed by the license was valid? 2. Whether the accused were guilty of an offence under Section 5 of the Imports and Exports (Control) Act, 1947?
Ratio Decidendi: 1. The delegation of power to the Chief Controller of Imports to impose conditions on licenses was not ultra vires of the Act because the Central Government had the power to make provisions for controlling imports, which included the power to impose conditions on the use of imported goods. 2. The Chief Controller of Imports had the authority to sign the license and the condition because he was the licensing authority for the purpose of the license. 3. The Central Government had the power to make provisions for controlling imports, which included the power to impose conditions on the use of imported goods, because the term "import" includes the subsequent possession and sale of the imported goods.
Final Decision: The court convicted the accused of an offence under Section 5 of the Imports and Exports (Control) Act, 1947 and sentenced them to imprisonment for a term of six months.
( 1 ) THIS revisional application is directed against an order of Sri K. C. Sen, Presidency Magistrate, Calcutta, discharging the accused Hari Prasad Lohia and Manick Chand Lohia in respect of an offence under Section 5, Exports and Imports' (Control) Act, 1947. The petitioner C. T. A. Pillai is Assistant Collector of Customs, Calcutta. The accused Hari Prasad Lohia is a Managing Director of a Company styled 'east India Commercial Co. Ltd. , with its office at 38 Netaji Sub-has Road, Calcutta. The accused Manick Chand Lohia is an employee of Hari Prasad Lohia. The East India Commercial Co. Ltd. , has a jute mill at Ellore in Madras State known as Srikrishna Jute Mills.
( 2 ) ON 27-9-1948, Hari Prasad Lohia as Director of the East India Commercial Co. Ltd. , filed an application to the Chief Controller of Imports, New Delhi, for a license for importing 20,000 fluorescent tubes and 2000 fixtures for fluorescent tubes from the United States of America. In the application he specified that the goods were required 'for own use', and not for sale. He was granted a license signed by M. L. Gupta, a licensing officer attached to the office of the Chief Controller of Imports, New Delhi and the license is dated 8-10-1948.
( 3 ) IN the license granted the following condition was rubber-stamped:"this licence is issued subject to the condition that the goods will be utilised only for consumption as raw material or accessories in the licence-holder's factory and that no portion thereof will be sold to any party". This condition was also signed by the licensing officer Mr. M. L. Gupta and there are the words 'for Chief Controller of Imports' below the signature of M. L. Gupta under the stamped condition. After the goods had arrived, report reached the Chief Controller of Imports that the company was violating the condition of the licence and was selling the goods to various parties all over India. The matter was taken up by the Special Police Establishment, Government of India, and the Special Police Establishment submitted a chalan against Hari Prasad Lohia and others. The Assistant Collector of Customs C. T. A. Pillai lodged a petition of complaint against the two accused in respect of the offence under Section 5 of the Imports and Exports (Control) Act, 1947 which appeared to have been committed by them by violation of the condition of the licence.
( 4 ) THE learned Magistrate after examination of 68 witnesses and marking of 243 Exhibits, heard arguments of both the sides on the question whether a prima facie case under Section 5, Imports and Exports (Control) Act, 1947 had been made out. He observed that there was prima facie evidence to show that the accused persons in the name of a bogus Company styled 'the Bengal Electrical Co. Ltd' had sold a portion of the fluorescent tubes and other fixtures to various parties and therefore' there was prima facie violation of the condition of the licence. The learned Magistrate however held that the accused were not legally liable for the offence under Section 5, Imports and Exports (Control) Act, 1947 because of the following reasons. " (1) The condition that the goods would be utilised for consumption as raw materials or accessories in the licence holder's factory and that no portion thereof would be sold to any party, was imposed by an order of the Chief Controller of Imports, New Delhi. The Chief Controller of Imports was purporting to act under Clause (a) (v) of the Government Notification No. 2-IT. C/48 of 6-3-1948 which provides "that such other conditions may be imposed which the licensing authority considers to be expedient from the administrative point of view and which are not inconsistent with the provisions of the said Act"; but this delegation of power to the Chief Controller of Imports was ultra vires of the Act. (2) The Chief Controller of Imports derived his authority to issue license for imports under Clauses (IX) and (XIII) of the Government Notification No. 23-I. T. C
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