MESSRS. FEDCO (P) LTD. & ANOTHER versus S. N. BILGRAMI & OTHERS

Citation: [1960] 2 S.C.R. 408 · Decided: 09-12-1959 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

I959 
December 9 
408 
SUPREME COURT REPORTS [1960(2)) 
MESSRS. FEDCO (P) LTD. & ANOTHER 
v . 
. S. N. BILGRAMI & OTHERS 
(B. P. SINHA, C.J., P. B. GAJENDRAGADKAR, 
K. SuBBA RAO, K. C. DAS GUPTA and J.C. SHAH, JJ.) 
Import Licence, 
Cancellation of-Constitutional validity-
Reasonable 
opportunity of being heard, 
meaning of-Imports 
Control Order, I955. els. 9, IO-Constitution of India, Arts. I9(I)(f) 
and (g), Art. JI. 
The petitioner company applied to the Chief Controller of 
Imports and Exports, Government of India, New Delhi, for five 
import licences and obtained them from the Joint Chief Control-
ler of Imports and Exports, Bombay, purporting to grant the 
same on the authority of the former, and placed orders for goods 
·covered by these licences, some of which actually arrived in 
Bombay. Before the goods could be cleared, the company 
received a notice from the Chief Controller stating that whereas 
there were reasons to believe that these five licences had been 
obtained by fraud, the Government, in exercise of the power 
specified in cl. 9 of the Imports Control Order, 1955, proposed to 
cancel them unless sufficient cause was shown before the Chief 
Controller: The petitioner company by a telegram requested 
the Chief Controller to furnish particulars of the alleged fraud 
and give an opportunity to inspect the relevant papers and 
documents relied upon by him. By a letter it gave an explan-
ation stating that the petitioners were the victims of foul play by 
some one bent upon causing damage to them and bringing them 
in the bad books of the authorities. In that letter the company 
reserved to itself the right to add to, amend or alter the explana-
tion after it had obtained inspection of the said papers and the 
particulars of the alleged fraud. The representatives of the 
company met the ~ief Controller as also the Director of 
Administration of his office and renewed the request for the said 
particulars and the inspection. No particulars were furnished, 
nor was inspection allowed, but the Chief Controller told the 
representatives that the issue of the licences had not been autho-
rised by him and the same had been fraudulently obtained and 
the Director of Administration told them that the recommend-
ations against which the disputed licences were granted by the 
·Joint Contro11er were not genuine, but the said representatives, 
instead of denying the fraud alleged, ascribed it to some other 
party as they had done before. , It was contended on behalf of 
the petitioners that cl. 9(a) of the Imports Control Order, 1955, 
infi;inged Arts. r9(r)(f) and (g) and 31 of the Constitution and that 
no reasonable opportunity was. gh·en to the petitioners of being 
heard as required by cl. ro of the Imports Control Order. 
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S.C.R. 
SUPREME COURT REPORTS 
409 
Held (per Sinha, C.J., Gajendragadka,r, Das Gupta and 
Shah, JJ.), that cl. 9 of the Imports Control Order does not give 
unbridled authority to cancel a licence nor is there any scope for 
arbitrary action in this regard in view of the provision of cl. 10 
of the Order which amply fulfils the requirement of natural 
justice. 
It is not correct to contend that before· a licence can be 
cancelled under cl. 9, it must be shown not merely that fraud was 
committed but that the licensee was also a party to the fraud. 
The entire scheme of control and regulation of imports by 
licences being based on the grant of licences on a correct state-
ment of fact, that basis disappears if the grant is obtained by 
fraud or misrepresentation, and it is wholly immaterial whether 
the licensee is or is not a party to such fraud or misrepresentation. 
The provision for cancellation of a licence under cl. 9, therefore, 
{;Onstitutes a reasonable restriction on the rights conferred by 
Art. r9(r)(f) and (g) of the Constitution and, being imposed by a 
valiid law, cannot contravene Art. 3I. 
There can be no absolute standard of reasonableness and 
what constitutes reasonable opportunity of being heard in the 
peculiar facts and circumstances of each case is a matter to be 
decided by the Court. The Court has to satisfy itself that the 
person against whom action was propos~d had a fair chance of 
convincing the authority that the grounds on which such action 
was proposed were either non-existent or did not justify it. So 
judged, it could not be said that the omission to give the 
petitioners, in the instant case, who were more concerned to show 
that 

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