TMI Blog1966 (3) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... , S.M., JJ. For the Appellant : Debrata Mookerjee, B. L. Mehta, R. H. Dhebar and B. R. G. K. Achar, For the Respondent : D. N. Mukherjee JUDGMENT Hidayatullah, J. This is an appeal by certificate under Art. 134 (1) (c) of the Constitution, against the judgment of the High Court of Calcutta dated September 4, 1963 by which the conviction of the respondent Motilal Kanoria under s. 5 of the Imports and Exports (Control) Act, 1947 and the sentence of fine of Rs. 200/(in default simple imprisonment for one month) imposed by the Presidency Magistrate, 6th Court, Calcutta, were set aside and an acquittal was entered. The facts of the case are not in controversy and may therefore be stated briefly. Motilal Kanoria was a director of Lachminarayan Jute Manufacturing Co. Ltd., Calcutta. The Company was managed by a firm of the name of Mukhram Lachminarayan and Motilal Kanoria was one of the partners of the firm. The Company and the Managing Agents had a common address in Calcutta. Motilal Kanoria used to sign on behalf of the Managing Agents and also generally to deal with the affairs of the Company. All transactions in this case were by Motilal Kanoria and he had signed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods which may be in force at the time of their arrival. Sd. Illegible Section Officer 26-5-55 for Chief Controller of Imports and Exports. 26-5-1955. Issued from file No. L. IV/49 (11) CG/55. (Space for Endorsements by Import Trade Control Authorities) This licence is issued with an initial validity period of one year from the date of issue. It will be revalidated at or before the end of the said period of one year, for a further period of two years, provided satisfactory evidence is produced that the order for the goods has been accepted by the foreign suppliers and a firm contract is made within the initial period of one year. In no case, however, will the validity period extend beyond three years from the date of issue." In the covering letter, which was sent when forwarding the licence, the Chief Controller said inter alia,- (3). The licence is granted to you subject to the following conditions:- (a) In case the project involves any capital issue and if such capital issue is not sanctioned the licence is liable to cancellation. (b) That if any sanction to the project is necessary under the laws of the Central, Provincial or a State Government the same should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Motilal Kanoria representing the Company and the Managing Agents" to answer the charge of a breach of the conditions of the licence which constituted an offence under s. 5 of the Imports and Exports (Control) Act, 1947 read with clause (5) of the Imports (Control) Order No. 17 of 1955, dated December 17, 1955. Motilal Kanoria appeared at the trial, was questioned as an accused, pleaded not guilty and stood the trial. He does not appear to have objected to being arraigned as an accused person a point he took later in the High Court and has taken before us. The prosecution examined a large number of witnesses and filed documents to prove the above facts none of which is now denied. The Presidency Magistrate, 6th Court, Calcutta, convicted Kanoria under s. 5 of the Imports and Exports (Control) Act, 1947 for contravention of clause (5) of the Imports (Control) Order, 1955 and sentenced him to a fine of Rs. 200/- or simple imprisonment for one month. On revision the High Court acquitted him but certified the case as fit for appeal to this Court and the present appeal is the result. As the prosecution is in respect of an offence under s. 5 of the Imports and Exports (Control) Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to one or more of the conditions below: (i) that the goods covered by the licence shall not be disposed of or otherwise dealt with without the written permission of the licensing authority or any person duly authorised by it; (ii) that the goods covered by the licence on importation shall not be sold or distributed at a price more than that which may be specified in any directions attached to the licence; (iii) that the applicant for a licence shall execute a bond for complying with the terms subject to which a licence may be granted; (iv) that the licence shall not be transferable except in accordance with the permission of the licensing authority or a person duly authorised by it; (v) that such other conditions may be imposed which the licensing authority considers to be expedient from the administrative point of view and which are not inconsistent with the provisions of the said Act. (b) Where a license is found to have contravened the order or the terms and conditions embodied in or accompanying a licence, the appropriate licensing authority or the Chief Controller of Imports may notify him that, without prejudice to any penalty to which he may be liable under the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he licence. (4) The licensee shall comply with all conditions imposed or deemed to be imposed under this clause." Conditions 5 (1) (i), (ii) and (iii) and 5 (3) (i) are the same as conditions (a) (i) to (iv) of the 1948 Order but 5 (3) (ii) and (iii) and 5 (4) are new. Conditions 5 (3) (i), (ii) and (iii) become a part of every licence and further the licensee has to comply with all the conditions imposed or deemed to be imposed under clause 5. The effect of these clauses has to be considered in relation to the licence granted in this case but in this context the provisions of clause 7 are also relevant and the clause may be set down here: "7. Amendment of Licence.- The licensing authority may, of its own motion or on application by the licensee, amend any licence granted under this Order in such manner as may be necessary to make such licence conform to the provision of the Act or this Order or any other law for the time being in force or to rectify any errors or omissions in the licence; Provided that the licensing authority may, on request by the licensee, amend the licence in any manner consistent with the Import Trade Control Regulations." Much of the argument in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hardly be said that he has contravened the order under this Act, that is, the Notification No. 2-I.T.C./48. The order No. 2-I.T.C./48 does not directly impose any duty but it gives power to the licensing officer to impose certain conditions. But contravention of condition imposed by the licensing officer cannot prima facie be regarded as contravention of the notified order itself.... When there is a special license covering certain goods and there is a condition imposed in the special license it cannot be said that by breach of the condition imposed in the special license it cannot be said that by breach of the condition there has been any breach of Order 231 I.T.C./43 or of the subsequent Notification No. 2-I.T.C./ 48. It may be mentioned that the difficulty apparently was realised in Pakistan and therefore the Imports and Exports (Control) Act, 1947, was first amended by an ordinance and then by the Imports and Exports (Control) Act, 1950, of Pakistan. Section 3(2) of that Act provides that 'no goods of the specified description shall be imported or exported except in accordance with the conditions of a license to be issued by the Chief Controller or any other Officer authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons the learned Judges applied them to this case. They noted that the breach of a condition became an offence only after the 17th of March, 1960 when Act 4 of 1960 was passed and as it could not be an offence before, even if the Order of 1955 deemed certain conditions to be a part of the licence, their breach was not an offence. They- distinguished the decision of the Bombay High Court ill State v. Abdul Aziz(A.L.R. 1962 Bom. 24) on the ground that the licence in that case was granted on January 2, 1956, that is to say, after the coming into force of the Order of 1955. The Division Bench therefore held that no offence was committed. Adverting also to the fact that there was confusion as to which of the two-the Company or Motilal Kanoria-was the accused the learned Judges held that the Presidency Magistrate was further wrong in convicting Kanoria although the prosecution was really against the Company. The questions that arise in this case are really two and they are : (a) whether by disposing of the plant and machinery without permission an offence was committed; and (b) if so, by whom ? In our judgment both these questions must be answered in favour of the State of West Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he licence was revalidated presumably under clause 7 of the Order of 1955 further fortifies the above conclusion. The submission of Mr. D. N. Mukherji that this extension was under the last paragraph of the licence is not the whole of the matter. A power might have been reserved by that paragraph but it could only be exercised by the licensing authority after December 7, 1955 by virtue of the Order of 1955 because all previous orders were repealed. There was thus an offence under S. 5 of the Imports and Exports (Control) Act for the breach of clause 5 of the Order of 1955. Mr. D. N ' Mukherjee seeks to distinguish between the transference of the licence and that of the machinery. This argument is not acceptable to us. The licence created its own conditions that the goods would be used by the licensee and the transfer of goods in circumstances is tantamount to transfer of the licence. It would be refining matters too finely to distinguish between the transfer of the licence and the transfer of the goods. Even if a distinction can be drawn the licence was for the actual use of the licensee. When the goods were sold condition No. 7 was broken and so would be a breach of the 1955 Order ..... 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