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High Court Of Delhi
UNION OF INDIA - Appellant
Versus
NORTHERN PLASTICS LIMITED - Respondent
Decided On : 05/08/1989
COB LICENCE - IMPLEADING HINDUSTAN PHOTO FILMS LTD. AS PARTY RESPONDENT - INDUSTRIAL DEVELOPMENT REGULATION ACT, 1951 - CUSTOMS ACT, 1962 - INTERPRETATION OF LETTERS ISSUED BY DESK OFFICER, DEPARTMENT OF INDUSTRIAL DEVELOPMENT - GRANT OF COB LICENCE FOR PHOTOGRAPHIC COLOUR PAPER ONLY - DENIAL OF COB LICENCE FOR OTHER PHOTOGRAPHIC ITEMS - REQUEST FOR CLEARANCE OF GOODS AT CONCESSIONAL CUSTOMS DUTY - STATUS QUO ORDER BY SUPREME COURT - IMPLICATION OF HINDUSTAN PHOTO FILMS LTD. IN THE CONTROVERSY - ERRONEOUS INTERPRETATION OF LETTER BY LEARNED SINGLE JUDGES - CLARIFICATION LETTER ISSUED BY DEPARTMENT OF INDUSTRIAL DEVELOPMENT - DUTY CONCESSION RESTRICTED TO PHOTOGRAPHIC COLOUR PAPER ONLY - MISLEADING SUBMISSIONS BY RESPONDENTS - QUASHING OF IMPUGNED ORDERS - DIRECTION TO DISPOSE OF WRIT PETITION WITHIN A FORTNIGHT.
Fact of the Case:
The respondents, claiming to be a small scale industry registered in Uttar Pradesh, applied for a COB (Carry on Business) Licence on 8-12-1986. They imported some photographic material and sought clearance as an interim measure. On 8-4-1987, the Desk Officer in the Department of Industrial Development informed the respondents that they may carry on business with their small scale registration and that the Ministry had no objection to the Customs Department clearing the consignment of jumbo rolls as per prescribed rules. On 7-12-1988, the petitioners issued the COB licence to the respondents in respect of photographic colour paper only. The respondents challenged the refusal of the respondents to grant COB Licence for the rest of the three items, viz. jumbo rolls of X Ray films, graphic arts film cinematographic colour films. They also prayed for the release of various items of photographic material at concessional rate of customs duty.
Finding of the Court:
The Court found that the erroneous interpretation of the letter dated 8-4-1987 by the learned single Judges had created a complex and highly prejudicial impact on the foreign exchange and economy. The Court also found that the respondents had misled the Court by submitting that they had permission for importing all the four varieties of photo sensitised paper at concessional rates of duty.
Issues: 1. Whether Hindustan Photo Films Ltd. should be impleaded as a party respondent in the writ petition? 2. Whether the letter dated 8-4-1987 issued by the Desk Officer, Department of Industrial Development, permitted the respondents to import all the four items of the photographic films at concessional rates of customs duty? 3. Whether the impugned orders passed by the learned single Judges were erroneous?
Ratio Decidendi: 1. The Court held that Hindustan Photo Films Ltd. should be impleaded as a party respondent in the writ petition as they had vital stakes in the decision and could not be called as busy bodies officious inter-meddlers or mere self-seekers of private interest. 2. The Court held that the letter dated 8-4-1987 did not permit the respondents to import all the four items of the photographic films at concessional rates of customs duty. The Court relied on the clarification letter issued by the Department of Industrial Development on 9-8-1987, which restricted the duty concession to photographic colour paper only. 3. The Court held that the impugned orders passed by the learned single Judges were erroneous as they were based on an erroneous interpretation of the letter dated 8-4-1987.
Final Decision: The Court quashed and set aside the impugned orders and directed the learned single Judge to dispose of the writ petition itself within a fortnight after giving fresh hearing to all the parties, including Hindustan Photo Films Ltd.
( 1 ) THE respondents herein claim that they are inter alia carrying on business of confectioning/slitting of jumbo rolls of photographic colour paper, graphic art films, cinematographic colour films and X Ray films. They claim to be a small scale industry registered in Uttar Pradesh. They applied for what is known as the COB (Carry on Business) Licence on 8-12-1986. The Government of India had announced on 18-7-86 that six months after the notification importation of photo sensitised material would not be allowed except under a licence under the I. D. R. Act. Since the application of the respondents was still under consideration and they had imported some photographic material, they applied on 4-4-87 for its clearance as an interim measure. On 8-4-1987 Mr. K. C. Kapoor, Desk Officer in the Department of Industrial Development informed the respondents that pending disposal of their application for licence they may carry on business with their small scale registration of manufacture of slitting/confectioning of photo sensitised material and that the Ministry had no objection to the Customs Department clearing the consignment of the jumbo rolls as per prescribed rules.
( 2 ) ON 7-12-1988 the petitioners issued the COB licence to the respondents in respect of photographic colour paper only. Before issuance of the regular COB licence the petitioner filed the writ petition, bearing No. 2021 of 1988, out of which the present LPA s arise. In the original writ petition the petitioner has inter alia complained that M/s. Hindustan Photo Films Ltd. , a Government of India undertaking was given favourable treatment in the matters of duty concession while the same was being refused to the petitioner. They complained of the violation of Art. 14. It was prayed that all record regarding the exemption notification dated 7-7-88 along with papers, regarding M/s. Hindustan Photo Films Ltd. should be produced. They also prayed that the respondent should issue COB licence in favour of the petitioner for all the four items of photographic material mentioned in their application dated 8-12-1986. After the COB licence was issued on 7-12-1988 the petitioner amended the writ petition challenging the refusal of the respondents to grant COB Licence for the rest of the three items, viz. jumbo rolls of X Ray films, graphic arts film cinematographic colour films. It was further prayed that the respondents be directed to issue COB licence for all the four photographic items mentioned in their application.
( 3 ) DURING the pendency of the writ petition the petitioners moved applications being CM. 4405/88, CM. 5180/88 and CM. 252/89 for the release of various items of photographic material at concessional rate of customs duty. The orders on the said applications were passed on September 26, 1988 (D. B.), October 12, 1988, December 8, 1988 and February 9,1989. These appeals arise out of the last three interim orders passed by the learned single Judges.
( 4 ) AFTER the first order dated October 12, 1988, passed by the learned single Judge for the release of graphic art films at concessional rate of customs duty, M/s. Hindustan Photo Films Co. Ltd. filed an application being CM. 5461/80 for impleading them as parties in the writ petition. That application was rejected by the learned single Judge on 1-12-1988, holding, "the applicant is neither a necessary party nor a proper party. " M/s. Hindustan Photo Films Ltd. preferred L. P. A. , which was rejected by the D. B. They went to the Supreme Court against the LPA order and the Special Leave was granted in Civil Appeal No. 2376/89. The Order of the Supreme Court while disposing of the said appeal by its order dated 4-4-89 reads:
"special leave is granted. Heard learned counsel for the parties. We are told that an appeal has been filed by the Union of India against the orders dated December 8, 1988 and Feb. 9, 1989 of the Delhi High Court which are interim orders in favour of the respondent, Northern Plastic
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