LexD. NAVINACHANDRA & CO., BOMBAY & ANR. ETC. versus UNION OF INDIA & ORS.
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.\ D. NAVINACHANDRA & CO., BOMBAY & ANR ETC A v. UNION OF JNDIA & ORS. APRIL JS, 1987 [R.S. PATHAK, CJ. SABYASACHI MUKHARJI AND B RANGANATH MISRA, JJ.I Import Policy, 1978-79-Diamond Exporters granted Export House Certificates and Additional Licences pu~suant to orders of Court dated April 18, 1985-Entitlement for import of items under the Import Policy current at the time of import-Effect of subsequent ded,ions rendered by the Court. C By a common order dated April 18, 1985 in C.A. No. 1423 of 1984, etc., Union of India v. Rajnikant Bros. the Court had directed issue of Export House Certificates and Additional Licences to the petitioners and other diamond exporters under the Import Policy 1978- D 79 stating: "Save and except items which are specifically banned under the prevalent Import Policy at the time of import, the respondents shall be entitled to import all other items whether canalised or otherwise in accordance with the relevant rules". The petitioners, who were issued Additional Licences pursuant to this order, imported several consign- ments of items falling under Appendices 2B, 3 and 5 of Import Policy, E 1985-88, and, while clearing them, the Customs Authorities imposed a fine of Rs.45,000 in respect of certain items falling in Appendix 2B and issued show cause notices in respect of certain other items falling in Appendices 2B and S. The petitioners challenge was directed not only against these orders, but extended to certain subsequent decisions of the Court which, according to them, had cut down the effect of the Court's F earlier order dated April 18, 1985 in Union of India v. Rajnikant Bros. Dismissing the petitions, HEJ,D: The decislons rendered subsequent to the decision dated April 18, 1985 in Union of India v. Rajnikant Bros. do not take any G different or contrary view. Indeed, they give effect to the letter and spirit of that decision. The basic background in which the decision in Union of India v. Rajnikant Bros. was rendered was that Export Houses had been refused Export House Certificates on the ground that they had not dfversified their exports. It was found that was wrong. The wrong was undone by directing issue of Export House Certificates for H 989 990 SUPREME COURT REPORTS 11987] 2 S.C.R. A the year 1978-79 though the order was passed ih Aprii, 1985. That was a measure of restitution, bot the Court, while doing so, ensured that nothing illegal was done. It is a presumption of law that the courts act lawfully and will not ask any authority to do anything which is illegal. It was directed that except those items which were specifically banned under the prevalent import policy at the time of import, the respon- B dents therein were entitled to import all other items whether canalised or not canalised in accordance with the relevant rules. Analysing the said order, it is apparent: (1) that the importhtion that was permissible was of goods which were not specifically banned, (2) that such banning must be under the prevalent import policy at the time of import, and (3) whether items which were canalised or uncanalised would be imported in accordance with the relevant rules. These conditions had to be flillil- C led. The court never did and could not have said that canalised items could be imported in any manner not permitted nor it could have given a go-bye to the canalisation policy. ltoOOC-H) (ii) In Raj Prakash Cilemicals v. Union of India, it was explained D that only such items could be imported by diamond exporters under the Additional Licences granted to them as could have been imported under the Import Policy 1978-79 and were also importable tinder the Import Policy prevailing at the time of import. These were the items which had not been 'specifically banned' under the prevalent Import Policy. The items had to pass through two tests, firstly, they should have been E importable under the Import Policy 1978-79 and, secondly, they should also have been importable under the Import Policy, 1985-88 in terms of the Order dated 18th April, 1985 and if one may add, in such terms 'in accordance with the import rules' whether canalised or not canalised. The Court had no occasion to consider in that case the significance of the words 'whether canalised or otherwise' mentioned in the Order F dated 18th April, 1985 in Union of Tndia v. Rajnikant Bros., because that point did not arise there. I JOOOH; JOOIA-D] (iii) What did t
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