PREM CHAND SOMCHAND SHAH AND ANR. ETC. ETC. versus UNION OF INDIA AND ANR.

Citation: [1991] 1 S.C.R. 232 · Decided: 05-02-1991 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Dismissed

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Judgment (excerpt)

A 
B 
c 
PREM CHAND SOMCHAND SHAH AND ANR. ETC. ETC. 
v. 
UNION OF INDIA AND ANR. 
FEBRUARY 5, 1"991 
[S. RANGANATHAN, N.M. KASLIWAL AND 
S.C. AGRAWAL, JJ.] 
Constitution of India, 1950: Article ]~Equality-Reasonable 
classification-Export~ Houses-Additional Import Licences-Classiji-"r--
cation of Licences for the purpose of benefit of flexibilities of import 
ite.ms under Para 215(4) of 1988-91 Imports and Exports Policy-Held 
Export Houses granted Additional Import Licences prior to 1.4.1988 on 
--
the basis of f.o.b. value of Exports and Exports Houses granted Addi-
tii;mal import Licences after 1.4.88 on the basis of the net foreign 
exchange earnings on exports do not constitute a single Class-Held 
classification of licences valid since basis and conditions of grant of 
D 
licences under 1978-79 Policy and 1988-91 policy were different. 
Y 
E 
F 
G 
H 
·Import and Export Policy, 1978-79: Paras 165, 166, 174 & 176 
Import and Export Policy, 1988-9.1: Paras 212, 214, 215 and 218-
Appendices 3 and 5 Part-A-Export Houses-Additional Export 
Licences-Benefit of flexibilities in import items under Para 215(4) 
-Benefit extended to grantees of Additional Import Licences issued 
after 1.4. I988 i.e. under I988-9I Policy and denied to grantees of 
Additional Import Licences issued prior to I.4. I988 i.e. under I978-
79 Policy, Para 2I8(10)-Held Export Houses granted Additional 
Import Licences prior to 1.4.88 cannot claim the benefit of relaxation 
of import under Para 215(4)-Para 218(10) of 1988-91 Po/icy held 
valid. 
The petitioners, carrying on import-export of diamonds, f"ded 
. applications for registration as Export Houses and grant of Additional 
Import Licences under Para 174 and 176 of the Import and Export 
Policy 1978-79 which were rejected by the authorities on the ground 
that they have failed to deversify their exports of "other products" 
during the year 1977-78. They challenged the order of the authorities by 
filing writ petitions before the Bombay High Court under Article 226 of 
the Constitution. One of the petitions was dismissed by a learned single 
judge of the High Court and the said petitioners f'Iled an appeal before a 
Division Bench of the High Court. During the pendency of the appeal 
232 
' 
...., 
( 'r 
P.C.S. SHAH v. U.O.I. 
233 
and the writ petition, the Supreme Court by its order dated April 18, 1985 
decided the case of Union of India v. Rajnikant Bros. holding that there 
was no requirement of diversification of exports as a condition for the 
grant of Export Houses Certificates in the Import Export Policy for the 
year 1978-79 but the grantee of Additional Licences were not only pro-
. hibited from importing items which were excluded in the Export Policy 
1978-79 but also from importing items excluded under the Import 
Policy prevailing at the time import. The High Court decided the cases 
of the petitioners in accordance with the decision of this Court in Union 
A. 
B 
of India v. Rajnikant Bros. Pursuant to the decision of the Bombay 
High Court petitioners were granted Export House Certificates and 
Additional Import Licences which were valid for 12 months, with the 
same condition as provided by this Court in its order dated April 
18, 1985 in the case of Rajnikant. However, the petitioners were not C 
able to make imports under the said licences till 31st March, 1988. On 
1.4.1988, the Government of India issued a revised Export and Import 
Policy for the period 1988-91. Under Para 215 of the said revised policy 
certain flexibilities were granted in the matter of imports to the grantees 
of Additional Import Licences. However, under para 218(10) of the said D 
revised Policy the holders of Additional Import Licences issued prior to 
1.4.1988 were made ineligible for the benefit of flexibilities in import as 
contained in para 215(4). Since the petitioners were holding licences 
issued prior to 1.4.1988 they could not avail the flexibilities in import as 
contained in Para 215 of the 1988-91 Policy. Consequently, they filed 
writ petitions in this Court challenging the validity of para 218(10) of E 
the 1988-91 Policy contending (i) that all the Export Houses who were 
granted Additional Licences constitute a single class and their classifica· 
tion on the basis of date or on the basis of period of exports has no 
connection with the object sought to be achieved by the 1988-91 policy; 
(ii) that Para 218(10) of 1988-91 Policy arbitrarily discriminates bet-
ween Export Houses who

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