STAR DIAMOND CO. INDIA versus UNION OF INDIA & ORS.

Citation: [1986] 3 S.C.R. 781 · Decided: 12-09-1986 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Disposed off

Judgment (excerpt)

I 
STAR DIAMOND CO. INDIA 
v. 
UNION OF ·INDIA $l. ORS. 
SEPTEMBER 12, 1986 
[R.S PATHAK AND SABYASACHI MUKHARJ!, JJ.] 
Import Policy 1985-88: Holders of Additional Licences for 1978-
79--Whether entitled to import both 'canalised' and 'non-canalised' 
items~Effect and interpretation of Courts or:der. 
Constitution of India, Art.ic/e 141; Court's decision laying down 
position in law binding on all. ' 
Administrative law. 
• 
Administrative instructions-Whether create estoppel against 
subsequent directions. 
This Court by its order dated 18th April 1985 in Uninn of India v. 
Rajnikant Bros. (Civil Appeal No. 1423 of 1984) directed that save and 
except items which were specifically banned under the prevalent Import 
Policy at the time of import, parties would. be entitled to import all 
~ther items whether 'canalised' or 'uncanalised' and in accordance with 
the relevant rules. The effect of this direction came to be considered in 
Raj Prakash Chemicals Ltd. v. Union of India, [1986] 2 sc·c 297, and 
M/s. fndo Afghan Chamber of Commerce & Ors. v. Union of India, 
(AIR 1986 SC 1567). The effect has also been expl,ained in Union of 
India v. M/s. Godrej Soaps Pvt. Ltd., (S.L.P. No. 8144of1986). 
The applicant was neither a party nor was served with any notice 
of the aforesaid proceedings. The respondents having not permitted 
clearance of its goods in view of the decisions in Ra/ Prak ash's case and 
A 
B 
c 
D 
F 
Jndo Afghan Chamber of Commerce's case the applicant liled petitions 
G 
contending that it was not bound by the directions contained therein. 
, . 
Disposing of the petitions, the Court, 
HELD: Decisions of this Court laying ilown the position in law, 
are laws binding on all. [782G] 
H 
78 J 
782 
SUPREME COURT REPORTS 
[1986] 3 S.C.R. 
A 
Whether importation of canalised items would be covered by the 
B 
c 
D 
order. was not adverted to in the first order dafed 18th April, 1985. Use 
of the expression "Whether canalised or not" was intended to convey 
that both canalised and non-canalised items would be covered witliin 
the ambitofthe order. [783G) 
The position has been clarified by the respondent's letter dated 
June 18, 1986. The Government of India's letter dated April 23, 1986 
which is not in consonance with the subsequent direction, would not in 
any way affect the position or create any estoppel. Nor can such a letter 
be used as an argument that that was the Government's understanding 
of the matter. [783H; 784A-B) 
CIVIL APPELLATE JURISDICTION: Civil Misc. Petitions 
Nos. 20021-22 of 1986. 
in 
Civil Appeal No. 2924 of 1984. 
From the Judgment and Order dated 22.7.1983 of the Delhi High 
Court in W.P. No. 963 of 1982. 
S.N. Kacker, P.M. Amin, Atul, B. Munim and Ashok Grover 
E 
for the Applicant. 
F 
A.K. Ganguli, Miss Sushma tlelan .and Miss A. Subhashini for 
the Respondents. 
The Judgment of the Court was delivered by 
. SABYASACHI MUKHARJI, J. These two Civil Misc. Petitions 
are ~y Star Diamond Company India. The applicant has referred to 
the judgments of this Court in Raj Prakash's case I 1986) 2 SCC 297 
dated 5th March, 1986 and Jndo Afghan Chamber of Commerce's case 
AIR 1986 SC 1567 dated 15th May, 1986. The applicant states that the 
G 
applicant was neither a party nor was served with anynotice of the said 
proceedings resulting in the said two decisions. According to the 
applicant, it was not bound by the directions therein. We are unable to 
accept the said contentions. Such decisions of Court laying down the 
position in law are laws binding on all. 
· 
H 
In the order of this Court dated 18th April, 1985, the question of 
STAR DIAMOND v. U.0.1. {MUKHARJI,J.J 
783 
entitlement 'under certain circumstances came up for consideration. 
The Government had wrongfully refused to allow Export House 
Certificates to those who had not diversified their exports. It was held 
by this Court following the decisions of several High Courts that this 
was wrong. This Court in the order dated 18th April, 1985 in Civil 
Apeal No. 1423 of 1984, (a) confirmed the orders of the High Court, 
quashed the impugned orders of the Government and directed the 
· Government to issue necessary Export House Certificates for the year 
197.8-79; (b) It was further directed that Export House Certificates 
should be granted within 'three months from this date. (c) Save and 
except items which are 'specifically banned under the prevalent in)port 
policy at the time of import', the parties-the merchants would be 

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