LJBERTY OIL MILLS & OTHERS v. . UNION OF INDIA & OTHERS

H , O> _198ll s.c.R. 962. (2) [l983 4] s.c.c. 392 (3) 11962] Suppl. S.C.R. 37 · (4) [1976) 2 S.C.R. 115

tmEnTY OIL MILLS V. UNION (CJ.innappa Reddy, ,J.). 711

object of communication is oniy to impart knowlcdg~. · Since tllcn, a· · volume of water has flown under the bridge and we must proceed on the basis that the affected party is aware of the decision and so, what · next 7 We C30 not, of course, pro:ced to consider the qu~stion whether there is s~fficient relevant material in support of the allega- tions made against petitioners. In facl we can-not ent~r upor. the I ;;:. B merits of the controversy at all. We cannot, for example, consider . :i,. the question whether the material a'l':litabte justifies a prima facie ·conclusion that the petitioners have made illegal imports of beef- tallow. Accordiog to the contention of the petitioners, they were entitled to import beef taliO\V even after June 5, !981 if they had. valid licences and if .they had en tered into firm contracts and opened . c letters of credit before June 5, 1981. According to the authorities to is was not permissible ; the affect of paragrnph · 222(.3) of the · Import Policy was th1t the amendment which was made on June 5, · ·1981 took effect from April I, 1981 and permitted import of beef tallow. under OGL only where 'firm contracts had b.:en entered into and letters of credit had been opened prior to April I, 1981 but if D the contracts had not been. entered into and letteo of credit had not been opened hefore April I, I 981, the imports had to be through the channel of the Stute Trading Corp oration only. Though in the cases of A rvind Exports nod Jayant Mills is an appeal and review arising under the provisions of the Customs Act, ·the questio n was decided in favotir of the parties, the present stand of the" Government is that E those decisions are not binding on the authorities functioning under the Tmports (Controi) Order and that those decisions had been rendered without reference to paragraph 222(3) as welt paragraph 24 ofAppendix 10 of the Jmpolt Policy of 1980-81 which e~pressly states: ·:r "Nothing in t he Open General Licence shatl affect the applica· tion to any goods, of any other prohibition or regulation n!Tccting the import thereof, in force, at the time where they nrc tlctunlty imported.'' . . 'we consider that this i~ not a matte·r for the court to decide nt this ~G stage in a peiition under Article 226 of. the Constilution or under Article 32 of the Constitutio n questioning an ad-interim order under Clause SD. Again we cannot enter into. the controversy . wheth~r there has been mis-ur ilisation of the import~d goods by the pcll- tioncrs and whether the petitioners cun be termed as 'actual users' - within the meaning or that expression in the Import , <:ontrol Ordc.r H by the mere fact thut they subject the beer tallow to atr-treatmc~t: All thcsequestions pertain to tbo mcr..its of the controvcr1y and 1t ts 9t for us to co; bark info a discussion into these ~alters.

712. I ·SUPREME COURT REPORTS ·: [1984] 3 s.c.R.

A . But we may properly consider, even at this stage, the question of mala fides 'or patent lack of jurisdjction: There is no suggestion that the action wa'S mala fides. It was, however, argued that ·the order as embodied in the abeyance Circular- did not fulfll the con~ . - ditions-precedent prescribed by the statute It did not contain a re~ital of the allegations constituting the basis of ~he satisfaction B . ·contemplated by clause 8B for action under that prov}sion, and with- out a recital of the allegations it was impossible to say that ~he 'action was not based on irrelevant materiaL' It did 'riot even recite that ' which was the foundation of any action under clause 8B, namely, the · satisfaction of the ·authority that the action was in the public interest. c On the other hand, it i~sued a directive to the. licensing authorities to keep in abeyance for a period of six mo.nth~ any application received from the concerns specified for the grant of import licence or cus- toms clearance permit and al!otroent of imported goods through' agencies like the State Trading Corpt.ration of india, Minerals and Metals Trading Corporation of India arid similar- agencies, making a D bare recital that investigations into certain a}ltgation!' under. clause 8 were pending agahist the concerns. Again a large number of con- cerns were lumped together and purported lo be dealt with by a single abeyance circular. There was e:~:.f~cie nothing in the circ~lar w~ich could point to tP.e a'uthority having ~PQlied its mind and considered. the case of ,each concern separately. It is true that the I abeyance circuiar suffers from every one -of these jnfirmities and if ·there was nothing more, the parties' would be well entitled to ask us · to quash ·the circular. But the learned Addl, Solicitor Gener.al invited our attention to the statements· rpade by Shri J.P. Sharma, Deputy Chief Coiltro11er of Jmp<?rts and Exports ·and the author of. the abeyance circulars in the counter affidavit filea by him. The ... r - ' learned A.dditional Solicitor General lias also placed before us for our perusal the relevant filesof the .au!hority.~ The counter-affidavit . • of Sbri J.P, Sharma shows that th.e princip!il allegations against the P,eti't,ioners were that they bad prima facie indulged in illega1' import- ation of beef tallow and had also misutilised the b~f tallow. Why · G . the authority tOok. the prima facie view that the petitioners had . illegally· imported beef.tallow and had mis:utilised the imported beef,· tallow has been explained by him in the count~r-affidavit. Illegal importation of beef tallow and mis-utilisation of •the imported l~eef I" . . tallow ars ce'rtainly relevant grounds 0n which actio!) may be taken under clause 8B. We are, of course, not ~onj:erned with the question ii · • · of the .sufficiency of material before the authority in arri•ling at its conclusion. A persual of the fi1es shows that ·in respect of nine of t the firws:covered by the !lbeyap.ce circ\llar ~ated :No,ereb~r 71 1983 1

tiBERTY OIL MILtS v, UNION (Chinnappa Reddy, J.)

the decicision to kee) their applications and allotments in abeyance A ·".~as taken at the highest level, that is, at the level of the Minister • for Commerce, Government of fndia. Thereafter the Deputy· Chief Controller of Imports and Exports, the files show, considered the cases of 61 concerns including that of Liberty Oil Mills Limited . . and issued the a!>eyance circular dated No·.-ember 9, 1983. We find ·that the <;ases of Liberty Oil Mills Limited as well as other concerps B were separately and individually considered. Their cases having been considered by the authority separately and individually before the circular was issued, we do not think that it makes any difference· on the peculiar facts of this case that a single circular was. issued, covering a large number of concerns. Ho}vever, we wish to impress upon the authorities that those entrusted bY, statute 'With the task c of taking prejudicial action on the basis of their s.ubjective satisfac- . tion should, first, bestow careful attention to the allegations forming the basis of the proposed action and !he probable consequences which may ensue such action and, next, take the trouble of reciting iQ the order issu.ed by them the satisfaction forming the basis of the D action and a concise statement of the allegations forming the basis of the satisfaction .. If the necessary recitals are not found, there may be serious sequels. In cases involving civil liberties, the orders will necessarily have to be quashed. In other cases also, it is possible to envisage similar results depending on the _rights'involved, th~ object of the statute and other facts ansi circumstances. As it is the circulars in question are hopelessly drafted adding to the confusi'On created by . the sadly drafted Clause 8B. In the facts and circumstances of this, case, the real remedy of the party, as we conceive it, is to make a • representation to the concerned authority setting out his version of the facts and the. law and the prejudice to himself-and the public inteyest as a consequence ·of the action under clause 8B. We would F · have first directed the authority to communicate, within a specified . time, to the party ihe allegations forming the bMis of the action. But we do not consider !t necessary to do so as the party is now fully apprised of the all~gations against him. In the circumstances, we think that it would be proper if we direct the authority concerned to consider any representation that PlaY hereafter be made by the party within 10 days from the date of its receipt. Subject to this directions, the writ petition is dismiss.ed but without any· order as to eosts.

Civil Appeal No. 274 arises out of an· interlocutory order made by the Bombay High Court b~fore th! wCit p~tition was transferred

7i4 SUPREMB COURT REPORTS [1984] 3 s.c.i. A. to this court. In view of our final decision di~posing ofihe main writ petition, it is unnecessary to pass any orders iu this civil appeal, which is disposed of accordingly.

H.S.K. Petitions dismls1 e B