JOINT CHIEF CONTROLLER OF IMPORTS AND EXPORTS, MADRAS versus M/S. AMINCHAND MUTHA ETC.

Citation: [1966] 1 S.C.R. 262 · Decided: 21-07-1965 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

JOINT CHIEF CONTROLLER OF IMPORTS AND 
A 
EXPORTS, MADRAS 
V, 
M/S. AMJNCHAND MUTIIA ETC. 
July 21, 1965 
[P. 8. GAJENDRAGADKA.R, C.J., K. N. WA'.'ICHOO, J. c. SHAH, 
J. R. MUDHO!.KAR AND S. M. SIKRI, JJ.] 
B 
Imports (Control) Order, r. 3 and lmpon Trade Control Policy Instruc-
tions, lnsrrucrion 7 l-Apprvva/ by Chief Control/er of transfer of quotas-
C 
Date •vhen effective. 
By s. 3 of the Imports and Exports (C<mtrol) Act, 1947 the Centzal 
GO'Vernment was given power, . by means of an Order publisbcd in the 
Gazette, to provide for prohibiting r~tricting or otherwise controlling 
the import of goods into India. In pursuance of that power, the C'..cntral 
Government issued the Imports (Control) Order. It provided for a system 
of licensing and r. 3 thereof provided that no person shall import t.lte 
goods specified in Schedule I cxc-.:pt under a licenc'e granted by the proper 
authority. Rule 6 gave power to the licensing authority to rcfu~e to grant 
a licence on the ground that the application was defective. In 
order to 
guide the licensing authorities in the matter of granting licences, the Cen· 
tral Government iss~d adm'.nistrativc instrut.'tions. 
The instructions pro· 
vide for the granting of licences to "'cstJblished in1p<:>rtcrs", that is, per· 
sons engaged in import trade for at least one financial year falJing within 
a specified period called tile basic period. 
ln•truction 71 of the Instruc-
tions provided for division of quota rights of a firm an1ong its partners, 
when the firm was diswlved. It lays down that the partners shall get their 
shares in the quota rights according to the provision of the agreement 
between them. Quotas are for the purpose of informing the licensing autho-
rity that a particular person has been rcco1.!fliscd as an established importer, 
and it is for the licensing authority to i55ue a licence to the quota holder 
in accordance with the licensing policy for the period with which the 
licence deals. 
1be re•pondent was a panner of a firm which wa• an established 
importer. 
The firm was dissolved in January 1957 and on 4th March 
1957, an application v.·as made to the Chief ConlroUer on behalf of the 
dissolved firm, for a division of the quota between the partnors. 
Since 
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the application for a licence for January-June period should be made by 
3 !st Marcb, the respondent applied for the grant of licence for the period 
January-June 1957, on 25th March 1957 without mentioning his quota as 
G 
required by the Instructions, because the Chief Controller had not by 
then approved the division of quota rights among the partners. 
Since 
the application was defective the respondent was informed in April 1957 
that before a licence could be given. the respondent should get such 
approval. 
Tn September 1957, the Chief Controller informed the res-
pondent that instructions had been issued to the Joint Chief Controller, 
who was the licensing authority; but the Joint Chief Controller informed 
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the respondent that a licence cou1d not be jssued. since the transfer of 
quota rights in respondent's favour was recognised by the Chief Controller 
only after the expiry of the licensing period to which the application related. 
After an un.<ucccssful appeal, the respondent moved the High Court 
• 
• 
• 
CONTROLLER v. AMINCHAND (Wanchoo, !.) 
263 
A 
for the issue of an appropriate writ, and the High Court allowed the 
petition. 
B 
c 
D 
E 
F 
G 
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In his appeal to this Court, 
the Joint Chief Controller con-
tended that, since the transfer of quota rights was a condition precedent 
to the grant of an import licence, the person in whose favour such a 
transfer had been recognised or sanctioned was entitled to rely upon that 
transfer only for a period subsequent to such sanction or recognition and 
not for any anterior period. 
HELD: (Per P. B. Gajendragadkar, C.J., K. N. Wanchoo, J. C. Shah 
and S. M. Sikri, JJ.) The licensing authority had to deal with the appli-
cation for a licence on the basis that the approyed quotas were given 
to the partners of the dissolved firm from the date of the dissolution and 
the agreement to divide, and could not refuse the licence solely on 
the ground that the approval of the Chief Controller was granted after 
the expiry of the import period. [269 E, G-Hl 
Since the Chief Controller had no power to refuse division of the quota 
rWits if he was satisfied as to the dissolution of a firm, it follows that 
wlien he gives his approval it mus
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