Supreme Court of IndiaAbdul Aziz Aminudin vs State Of Maharashtra on 7 February, 1963Equivalent citations: 1963 AIR 1470, 1964 SCR (1) 830, 1963 (2) CRI. L. J. 403, 1964 (1) SCR 830, 1964 MADLJ(CRI) 368, 1964 2 SCJ 128, 1965 BOM LR 669, 65 BOM L R 669Author:Raghubar DayalBench:Raghubar Dayal,Syed Jaffer Imam,J.R. MudholkarPETITIONER:
ABDUL AZIZ AMINUDIN

	Vs.

RESPONDENT:
STATE OF MAHARASHTRA

DATE OF JUDGMENT:
07/02/1963

BENCH:
DAYAL, RAGHUBAR
BENCH:
DAYAL, RAGHUBAR
IMAM, SYED JAFFER
SUBBARAO, K.
MUDHOLKAR, J.R.

CITATION:
 1963 AIR 1470		  1964 SCR  (1) 830
 CITATOR INFO :
 R	    1966 SC1586	 (12)
 E	    1973 SC 106	 (37,146)


ACT:
Import and Export--Powers to prohibit or restrict import and
Export--Scope of--Licence to import goods issued subject  to
condition  not to sell goods imported--Contravention of	 the
condition--Licensee,  if  liable to  punishment--Import	 and
Export (Control) Act, 1947 (XVIII of 1947), ss. 3, 5-Imports
(Control) Order, 1955, Cl. 5, sub-cls. (2), (4).



HEADNOTE:
The  appellant	as  the	 Chairman  of  the  Powerloom	Sadi
Manufacturer's	 Go-operative  Association,   obtained	 the
licence for the import of certain quantity of art silk	yarn
by  the Association' The licence was issued subject  to	 the
condition  that	 the  goods  would  be	utilised  only	 for
consumption  as raw material or accessories in the  licence-
holders'  factory and that no portion thereof would be	sold
to  any party.	The Associa. tion could not arrange for	 the
necessary  finances  and therefore had	the  goods  imported
through Warden & Co., who financed the transaction.  Part of
the  goods  received  was utilised In  accordance  with	 the
condition  of  the  licence, the rest was  however  sold  by
Warden & Co., and the amount was paid to the Association  by
way of profits.	 The appellant and the other members of	 the
Association were prosecuted for committing the office  unders.  5of the Imports and Exports  (Control)  Act,1947,	 for
having	contravened the Imports (Control) Order,  1935,	 but
all  of them were acquitted by the trial court.	  The  State
appealed against the acquittal of the appellant alone  which
was  allowed  by  the  High  Court  and	 the  appellant	 was
convicted and sentenced to three months' rigorous  imprison-
ment alongwith a fine of Rs. 2,000/-.
Held,  that the power conferred unders. 3(1)of the Act  is
not restricted merely to prohibiting or restricting  imports
at  the point of entry but extends also to  controlling	 the
subsequent  disposal of the goods imported.  It is  for	 the
appropri.  ate authority and not for the courts to  consider
-the policy, which must depend on diverse consideration,  to
be adopted in regard to the control of import of goods.	 The
provision  in  cl. 5 of the order empowering  the  licensing
authority to attach
  831
a  condition  to the effect that the goods  covered  by	 the
licence	 shall	not  be disposed of  except  in	 the  manner
prescribed  by the licensing authority is a valid  provision
which  comes within the powers conferred bys. 3of the	 Act
on the Central Government.
State  of  Bambay v. F. N. Balsara, [1931]  S.C.R.  682	 and
Glass  Chatons Importers and Users' Association v. Union  of
India, [1962] 1 S.C,R. 862, held inapplicable.
Daya v. Joint Chief Controller of Imports and Export, [1963]
2 S.C.R. 73, referred to.
Held,  that in the present case the licence has been  issued
under the Order of 1955.  The language of sub-cl. (2) of cl.
5  of  that Order is wide and permits the imposition  of  'a
condition  which was outside sub-cl. (5) of cl. (a)  of	 the
Order  of  1948.  Sub.cl. (4) of cl. 5 makes  it  obligatory
upon the licensee to comply with all the conditions  imposed
or deemed to be imposed under cl. 5. The licensing authority
is competent - under the Order to impose the condition	that
the  imported  goods be not sold to any person and  thus  to
effect	 the   ordinary	 rights	 of   the   importer.	 The
contravention of any condition of a licence thus amounts  to
the contravention of the provisions of sub-cl. 4 of cl. 5 of
the Order and consequently to the contravention of the order
made  under the Act and therefore the licensee makes  itself
liable to punishment unders. 5of the Act.
East  India Commercial Co. v. Collector of Customs [19631  3
S.C.R.	338 and C. T. A. Pillai v. H. P. Lohia, A.I.R.	1957
Cal, 83, held inapplicable.
Held,  that for contravening the condition of  the  licence,
actual	possession of the imported goods is  not  necessary.
Further, the possession of Warden & Co , would be possession
of  the Association, as the former was its agent  to  import
the goods.
Held,  further	that the appellant aided  intentionally	 the
Association in disposing of the goods through Warden &	Co.,
and therefore abetted the contravention of the condition  of
the  licence.	The case appears to be	deliberate  case  of
securing  import licence with a view to mis-apply the  goods
imported  and  therefore,  the	sentence  of  three  months'
rigorous imprisonment and fine of Rs. 2000/- is not severe.



JUDGMENT:CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 168 of
1961.832Appeal	by special leave from the judgment and	order  dated
August 3, 1951, of the Bombay High Court in Criminal  Appeal
No. 99 of 1961.Shaukat Husain and P. C. Agarwala, for the Appellant.
C.   K. Daphtary, Solicitor-General of India, D.  R.	Prem
and R. N. Sachthey, for the respondent.1963.	February 7. The judgment of the Court was  delivered
by
RAGHUBAR DAYAL,J.-This appeal, by special leave, is  against
the  order  of the High Court of Bombay allowing  the  State
appeal and convicting the appellant of the offence under  s.
5   of	theImports  and  Exports  (Control)	Act,   1947,
hereinafter  called  the  Act, for  having  contravened	 the
Imports (Control) Order, 1955, hereinafter called the Order,
and  sentencing him to three months'  rigorous	imprisonment
and a fine of Rs. 2,000/- .The  appellant	was the Chairman of the	 Malegaon  Powerloom
Sadi	Manufacturer's	 Cooperative	Association    Ltd.,
hereinafter  called the Association.  There were  six  other
members of the Association.  All the members were  powerloom
weavers.   The	appellant, as Chairman of  the	Association,
applied for and obtained the licence dated January 2,  1956,
for  the import of certain quantity of art silk yarn by	 the
Association.	The  licence  was  issued  subject  to	 the
condition  that	 the  good,;  would  be	 utilised  only	 for
consumption  as raw material or accessories in the  licence-
holders'  factory and that no portion thereof would be	sold
to  any	 party.	 The Association could not arrange  for	 the
necessary  finances  and therefore had	the  goods  imported
through Warden & Co., who financed the transaction.  Part of
the goods received was utilised833in  accordance with the condition of the licence,  the	rest
was  however sold by the said Warden & Co., as a  result  of
the  correspondence  ending by a letter dated  November	 13,
1956,  from the appellant as Chairman of the Association  to
Warden & Co. The relevant portion of this letter is
	      "In this connection we have to inform you that
	      as  the  price  of Art silk  yarn	 has  fallen
	      greatly it is not possible for our Association
	      to  take	delivery of the balance	 goods.	  As
	      such,  you are therefore requested to  dispose
	      of  the balance goods lying with you  in	such
	      manner  that our Association suffers  no	loss
	      whatsoever, but gets a net profit of at  least
	      4% on these goods."After the disposal of the goods Warden & Co;, did pay to the
Association  a sum of Rs. 5,040/- by way of profits  of	 the
Association.The appellant and the other members of the Association	were
prosecuted for committing the offence unders. 5of the Act.
They were acquitted by the trial Court.	 The State  appealed
against	 the acquittal of the appellant alone.	 The  appeal
was  allowed,  with  the  result  that	the  appellant	 was
convicted of the offence unders. 5of the Act.	 He has come
up in appeal.The  various contentions raised for the appellant are :	 (i)The  Actwas  intended for the purpose	 of  prohibiting  or
controlling  imports  and exports which, according to  s.  2
thereof,  meant respectively bringing goods into and  taking
out  of	 India	by  sea, land  or  air,	 and  therefore	 any
provision in the Order providing for the issue of a  licence
to  import  goods subject to the condition  that  the  goods
covered	 by  the licence be not disposed of  except  in	 the
manner	prescribed by the licensing authority could  not  be
validly made in the exercise of the powers conferred834on  the Central Government unders. 3of the Act, as such  a
condition deals with the conduct of the licensee  subsequent
to the import' of the goods. (ii) the Order does not provide
for the imposition of the condition in the licence that	 the
licensee  is  not  to sell the	imported  goods.  (iii)	 The
contravention  of  any	condition of the  licence  does	 not
amount to a contravention of the provisions of the Act or an
Order made thereunder and therefore is not punishable  unders.  5of the Act. (iv) The Association was the licensee	 and
therefore any contravention of the condition of the  licence
would  be  committed  by  the Association  and	not  by	 its
Chairman and consequently it would be the Association  which
should have been tried for the alleged offence unders. 5of
the  Act  and not the Chairman. (v) The	 possession  of	 the
goods  had not passed to the Association and  therefore	 the
Association  could  not be guilty of the offence.  (vi)	 The
appellant  has	no  mens  rea  to  commit  the	offence	 and
therefore could not be guilty of the offence. (vii)  Lastly,
the sentence is severe.The  relevant provisions of the Act and the Order  to  which
reference  is necessary may now be quoted.  The preamble  of
the Act reads :"'An  act	 to continue for  a  limited  period
	      powers  to  prohibit or  control	imports	 and
	      exports.Whereas  it  is expedient to  continue  for  a
	      limited  period, powers to prohibit,  restrict
	      or otherwise control imports and exports."Section 2says that in the Act, 'import' and 'export'  means
respectively  bringing into and taking out of India by	sea,
land or air.Section 3empowers the Central Government,  by
order published in the Official Gazette, to make  provisions
for  prohibiting, restricting or otherwise  controlling,  in
all  cases or in specified classes of cases, and subject  to
such exceptions835if any, as may be made by or under the order, the import and
export	of goods of any specified description.Section  5,
the penalty section, provided, at the relevant time, that if
any person contravened or attempted to contravene or abetted
a  contravention  of any order made or deemed to  have	been
made under the Act, he would be punishable with imprisonment
for  a	term which may extend to one year, or with  fine  or
with both.  The section was amended in 1960 and as a  result
of  the amendment the contravening of any condition  of	 the
licence	 granted under the order, was also made	 punishable.
The  amended  provision, however, is not applicable  to	 the
present case.Clause 5 of the Order deals with the conditions of  licence.
Its relevant provisions read
"(1)  The licensing authority issuing a licence	 under	this
order may issue the same subject to one or   more   of	 the
conditions stated below :-(i)  that the goods covered by the licence shall not   be
disposed  of,  except  in  the	-manner	 prescribed  by	 the
licensing  authority, or otherwise dealt with,	without	 the
written permission of the licensing authority or any  person
duly authorised by it;x	x	      x		x	  x	x      x
(2)  A	licence	 granted under this order may  contain	such
other  conditions,  not inconsistent with the  Act  or	this
order, as the -licensing authority may deem fit.x	     x		    x	       x      x	   x	 x
(4)  The  licensee shall comply with all conditions  imposed
or deemed to be imposed under this clause."836In support of the contention that the power conferred on the
Central	 Government for making provisions  for	prohibiting,
restricting or otherwise controlling import of goods can  be
exercised only with respect to the actual entry of the goods
into  the  territory of India and not with  respect  to	 the
control	 of  the imported goods subsequent  to	their  being
brought	 into the territory, reference was made to the	case
reported asThe State of Bombay v. F. N. Balsara(1).	That
case  dealt  with  a different matter.	It  related  to	 the
powers	 under	theBombay  Prohibition  Act,	1949.	 The
contention  was	 that the Provincial Legislature  could	 not
make  a law regarding production,  manufacture,	 possession,
transport,  purchase and sale of intoxicating liquor in	 the
exercise  of the powers under Entry 31 ofList	II,  Seventh
Schedule  to the Government of India Act, 1935, as the	word
'import' used in Entry 19 of List 1 of the same Schedule did
not end with mere landing of the goods on the shore or their
arrival in the customs house but did imply that the imported
goods must reach the hands of the importer, and he should be
able  to possess them.	It was argued that the impugned	 Act
dealt with import of goods and therefore encroached upon the
legislative  powers of the Central Legislature.	 It  was  in
this context and in view of the principles applicable to the
construing  of	the provisions laying down  the	 legislative
limits of different legislatures that it was said at p. 70O."Under  the  provisions of theGovernment  of
	      India Act, a limited meaning must be given  to
	      the  word	 'import' in entry 19 of List  1  in
	      order to give effect to the very general words
	      used in entry 31 of List II."This observation cannot be applicable to the  interpretation
of the content of the words 'import' and 'export' in the Act
in the present case.InGlass Chatons Importers & Users' Association v. Union  of
India(2), it was contended thats. 3
(1) (1951)S.C.R. C82.	  (2) [1962] 1 S.C.R. 862,837of  the Act, insofar as it permitted the Central  Government
to  make the order contemplated by sub cl. (h) of cl.  6  of
the order which provides for the refusal to grant a  licence
if  the licensing authority decided to canalize imports	 and
the  distribution  thereof through  special  or	 specialized
agencies  or  channels,	 was invalid.	The  contention	 was
repelled, it being held that such a restriction on the right
to   carry  on	trade  and  to	acquire	 property  was	 not
unreasonable.	The point urged before us was not arguedin
that  case,  but the case dealt with the  provision  in	 the
order  relating	 to the distribution of the  imported  goods
through selected agencies, a stage subsequent to the  actual
import of goods and the Court held that provision good.InDaya v. Joint Chief Controller of Imports  and  Export-3(1), it was held that the provisions contained in cl. 6	 (h)
of the order, empowering the Chief Controller of Imports and
Exports	 to refuse a licence if the licensing authority	 had
decided to canalize imports and distribution thereof through
a  special channel or agency, could be made in the  exercise
of the power conferred on the Central Government unders.  3of the Act.It  is clear therefore that the power conferred under  s.  3
(1)  of the Act is not restricted merely to  prohibiting  or
restricting  imports at the point of entry but extends	also
to   controlling  the  subsequent  disposal  of	 the   goods
imported.   It is for the appropriate authority and not	 for
the  Courts  to consider the policy, which  must  depend  on
diverse	 considerations,  to  be adopted in  regard  to	 the
control of import of goods.  The import of goods can be con-
trolled	 in several ways.  If it is desired that goods of  a
particular  kind  should not enter the country at  all,	 the
import	of those goods can be totally prohibited.   In	case
total prohibition is not desired, the goods could be allowed
to come into -the country in limited
(1)  [1963] 2 S.C.R. 73.838quantities.   That would necessitate empowering	 persons  to
import under licences certain fixed quantities of the goods.
The  quantity  of  goods 'to be imported  will	have  to  be
determined  on	consideration of the  necessity	 for  having
those  goods in the country and that again, would depend  on
the  use  to be made of those goods.  It  follows  therefore
that  the persons licensed to import goods up to  a  certain
quantity  should be amenable to the orders of the  licensing
authority  with respect to the way in which those goods	 are
to  be	utilised.  If the licensing authority  has  no	such
power, its control over the import cannot be effective.	  It
may have considered it necessary to have goods imported	 for
a   particular	 purpose.   If	it  cannot   control   their
utilisation  for  that purpose, the  imported  goods,  after
import, can be diverted to different uses, defeating thereby
the very purpose for which the import was allowed and  power
had  been  conferred on the Central  Government	 to  control
imports.  It is therefore not possible to restrict the scope
of the provision about the control of import to the stage of
importing  of  the goods at the frontiers  of  the  country.
Their  content is much wider and extends to every  stage  at
which  the  Government feels it necessary to  see  that	 the
imported  goods	 are properly utilised for the	purpose	 for
which their import was considered necessary in the interests
of the country.We  are therefore of opinion that the provision in cl. 5  of
the  Order  empowering the licensing authority to  attach  a
condition  to  the  effect that the  goods  covered  by	 the
licence	 shall	not  be disposed of  except  in	 the  manner
prescribed  by the licensing authority is a valid  provision
which comes within' the powers conferred bys. 3of the	 Act
on' the Central Government.In  support of the second contention that the.	 Order	does
not provide for imposing the condition839that  the imported goods be not sold, reliance is placed  on
the  decision inEast India Commercial Co. v.  Collector  of
Customs(1).  In that case, a condition was imposed in	 the
licence	 prohibiting the importer from selling the  imported
goods.	Sub-cl. (1) of cl. (a) of Notification No.  2/ITC/48
dated  March 6, 1948, provided for imposing a  condition  in
the  licence  to  the effect that  the	importer  shall	 not
dispose	 of  or otherwise deal. with the goods	without	 the
written permission of the licensing authority or any  person
duly authorised.  Sub-cl. (v) of cl. (a) of the Notification
provided :"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;"The  actual condition imposed, however, did not fall'  under
sub-cl.	 (1)  of cl. (a) and was sought to be  supported  by
relying	 on  sub-cl. (v).  This Court held that	 under	that
clause	a licensing authority was competent to	impose	only
such  condition as may be expedient from the  administrative
point'.	 of view.  ThisCourt further heldthat	 prohibiting
an importer from disposing of the goods imported affects the
rights of that person and therefore such a condition  cannot
be  prescribed	in  the licence in the	absence	 of  a	rule
permitting  that  to be done.  In the case  before  us,	 the
licence	 has  been  issued under the  Order  of	 1955.	 The
language  of sub-cl. (2) of cl. 5 of that Order is wide	 and
permits the imposition of a condition which was outside sub-
cl. (v) of cl. (a) of the order of 1948.  Sub-cl. (4) of cl.
5  further makes it obligatory upon the licensee  to  comply
with  all  the conditions imposed or deemed  to	 be  imposed
under  cl.  5.	We therefore do not agree  with	 the  second
contention   and  hold	that  the  licensing  authority	  is
competent under the Order to impose the condition that the
(1) [1963] 3 S.C.R. 338,840imported goods be not sold to any person and thus to  affect
the ordinary rights of the importer.The third contention too has no force.	Sub-cl. (4) of cl. 5
provides that the licensee shall comply with all  conditions
imposed	 or  deemed to be imposed under	 that  clause.	 The
contravention of any condition of a licence thus amounts  to
the Contravention of the provisions of sub-cl. (4) of' cl. 5
of  the Order and consequently to the contravention  of	 the
Order	made  under  the  Act.	 It  follows  that  if	 the
Association,   the  licensee,  does  not  comply  with	 the
conditions  of	the  licence about use of the  goods  to  be
imported,  it contravenes the Order made under the  Act	 and
makes itself liable to punishment unders. 5of the Act.
The  cases reported asC. T. A. Pillai v. H. P.	 Lohia(1),
and  East India Commercial Co. v. Collector of Customs(2),
holding that the infringement of a condition in the  licence
not  to	 sell  goods imported to third	parties	 is  not  an
infringement of the Order, are not of help as they deal with
the  contravention of the conditions of the licence  granted
under orders dated July 1, 1943 and March 6, 194S which	 did
not  contain a provision comparable with the  provisions  of
sub-cl(4) of cl. 5 of the Order of 1955.We accept the fourth contention that it is the	Association,
the licensee, which alone could contravene the condition  of
the licence and thus contravene the Order, but do not  agree
with the fifth contention that it could not be guilty of the
offence as it had not got actual possession of the  imported
goods.	 For  contravening  the condition  of  the  licence,
actual	possession of the imported goods is  not  necessary.
Further, the possession of Warden & Co., would be possession
of  the Association, as the former was its agent  to  import
the goods.Re : the sixth point that the appellant had no intention  to
commit the offence, the finding of the
(1) A.I.R. 1957 Cal. 83.(2) [1963] 3 S.C.R. 338,841High Court is against the appellant.  The High Court rightly
held  him guilty of the offence underS. 5of the Act  on  a
finding	 that  he intentionally aided the  Association,	 the
licensee,  in committing the offence unders. 5of the	Act,
and  thus  abetted the contravention of the offence  by	 the
Association.  The appellant, as Chairman, authorised  Warden
& Co., to dispose of the goods which the Association did not
want to utilise on account of the decline in price.  He thus
aided  intentionally  the Association in  disposing  of	 the
goods  through	Warden	& Co.,	and  therefore	abetted	 the
contravention of the condition of the licence to the  effect
that  the goods imported would be utilised by  the  licensee
alone and would not be sold to any other party.
We  do	not  consider that the sentence	 is  severe  in	 the
circumstances of the case which indicate that from the	very
beginning  the	appellant, as Chairman of  the	Association,
knew  that the Association would not be able to utilise	 all
the yarn to be imported under the licence applied for.	 The
fact  that  Warden' & Co., did pay over Rs. 5,000/-  to	 the
Association  indicates	that  the goods did  fetch  a  price
higher than the price paid for their importation.  The	case
appears	 to be a deliberate case of securing import  licence
with a view to mis-apply the goods imported.
We therefore dismiss the appeal.Appeal dismissed.842