M/S. FRENCH INDIA IMPORTING CORPORATION, DELHI versus THE CHIEF CONTROLLER OF IMPORTS & EXPORTS AND OTHERS

Citation: [1962] 2 S.C.R. 410 · Decided: 26-04-1961 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Case Partly allowed
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Judgment (excerpt)

I96I 
Aptil 26. 
410 
SUPREME COURT REPORTS 
M/s. FRENCH INDIA IMPORTING 
CORPORATION, DELHI 
v. 
(1962] 
THE CHIEF CONTROLLER OF 
IMPORTS & EXPORTS AND OTHERS. 
(P. B. GAJENDRAGADKAR, A. K. SARKAR, 
K. N. WANCHOO, K. C. DAS GUPTA and 
N. RAJAGOPALA AYYANGAR, JJ.) 
French Establishments-Agreement to import goods-De facto 
transfer of administration to India·-lmporter, if liable to pay 
penalty and customs duty-French Establishments (Application of 
Laws) Order, r954, cl. (6)-French Establishments (Administration) 
Order, r954--Sea Customs Act, r878 (8 of 1878), s. 167(8). 
The petitioners entered into agreements with certain 
British firms for the import of cycles and cycle-parts to Pondi-
cherry, which was then a French Establishment, in the manner 
provided by French law. The goods arrived at Pondicherry after 
the French Establishments had merged into India on the basis 
of the Agreement dated October 2r, r954, between the Union of 
India and France, which was to be operative from November r, 
r954. 
By virtue of the said Agreement two Orders, dated 
October 30, r954, were issued by the Ministry of External 
Affairs under the Foreign Jurisdiction Act, rg.17, being S.R.O. 
3314, the French Establishments (Administration) Order, r954, 
and S.R.O. 33r5, the French Establishments (Application of Laws) 
Order, 1954· The first saved the operation of the pre-existing 
French Law except in so far as it was repealed by the second, 
which extended to French Settlements certain Indian Statutes· 
specified in the Schedule and amongst these were the Sea Cus-
toms Act, r878, the Tariff Act, r934, the Import and Export 
(Control) Act, r947, and the Foreign Exchange Regulation Act, 
r947. These Orders came into force on November r, 1954· On the 
same day the Government of India, by a Notification, appointed 
a Controller of Imports and Exports for the French Settlements. 
Paragraph 4 of this notification called upon the licence-holders 
under the French Law to apply to the Controller for validation 
of the licences held by them. Paragraph 17 of the Agreement, 
while saving import of goods validly ordered prior to the de facto 
transfer, made such goods liable to customs duty. As the goods 
arrived at Pondicherry on December 4, r954, the Customs 
Authorities took the view that the import was in contravention 
of the Indian Statutes and ordered the petitioners to pay a 
penalty under s. r67(8J of the Sea Customs Act, as also customs 
dutv. The Central Board of Revenue on appeal upheld the 
order and the Central Government in revision, while affirming 
that decision, reduced the penalty. Paragraph 6 of S.!~.O. 33r5 
provided as follows,-
2 S.C.R. SUPREME COURT REPORTS 
411 
"Unless therefore specially provided in the schedule all 
1961 
laws in force in the French Establishments immediately before 
the commencement of this order which correspond to the enact-
French India 
ments specified in the schedule shall cease to have effect, save as Importing Cor-
respects things done or omitted to be done before such com-
poration, Delhi 
mencement'', 
v. 
The question for determination was whether the petitioners Chief Controller of 
were liable to pay the penalty under s. 167(8) of the Sea Customs Imports & Exports 
Act, and also the Customs Duty. 
Held, (per curiam), that in view of the decision of this Court 
in Universal Imports Agency v. The Chief Controller of Imports and 
Exports, the petitioners were not liable to pay the penalty under 
s. i67(b) of the Sea Customs Act. 
Universal Imports Agency v. The Chief Controller of Imports 
and Exports, [1961] 1 S.C.R. 305, followed. 
Per Gajendragadkar, Wanchoo and Ayyangar, Jj.-That 
decision of this Court, however, did not apply to or absolve the 
petitioners from the liability to pay the customs duty. 
In order to determine the exact scope of the words "things 
done" occurring in para. 6 of S.R.O. 3315, the two orders, S.R.O. 
3314 and S.R.O. 3315 must be read along with para. 17 of the 
Agreement and para. 4 of the Notification of November l, 1954, 
appointing the Controller and so determined there could be 
no doubt that the saving clause afforded no protection to the 
petitioners so far as their liability to pay the customs duty was 
concerned. 
Per Sarkar and Das Gupta, JJ.-The words "things done" 
occurring in para. 6 of S.R.O. 3315 as construed by this Court in 
Unive1'al Imports Agency v. The Chief Controller of Imports 
and Exports, cover the petitioners' liability to pay not only
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