P L D 1972 Lahore 572 (PLP)

West Pakistan, Lahore. To M/s. Shameem Textile Mills, Qilla Gujar Singh, Lahore. Memorandum No. IP/B/12 (2)/60. Dated Lahore, the 2‑11‑

60. Subject:‑Issue of import license for 40 art silk specially designed power‑looms and preparatory machinery thereof for Rs. 2,72,

594. Reference your letter No. STM/6420.60, dated the 21st July 1960, on the subject noted above. (2) I am directed to inform you that the Government of Pakistan Ministry of Industries regret their inability to issue import licenses in your favour for the import of 40 powerlooms or to sanction the looms. (Sd.) For Director Industries, W. P., Lahore."

8. Consequent thereupon, the Director of Industries recalled his earlier communication dated the 30th of January 1960, (Annex "H"). The petitioners approached the Department or Departments to find out as to why the aforesaid drastic action had been taken against them and requested for a review of the entire matter, but as no heed was paid to the same, they have approached this Court fourth time in the form of the present writ petition for a declaration that the refusal to issue import license and to sanction the looms is without lawful authority and have prayed for the necessary directions requiring the department to sanction forty art silk power‑looms and grant a license for their import.

9. The respondents in this case are two, namely, (1) the Republic of Pakistan and (2) the Director of Industries, Government of West Pakistan, Lahore; both of whom have resisted the claims of the petitioners. So far as respondent No. 2 is concerned, even though he and as a matter of fact the Provincial Government granted sanction to the petitioners to set up a factory of forty power‑looms with forty‑five workers, he is trying to nullify the said sanctions by pleading that the petitioners are not eligible to set up such a factory. Again, even though he himself recommended the case of the petitioners for grant of import licenses to the Central Government, now he has pleaded that, to that also the petitioners are not entitled. Similarly, the Central Government though it takes notice of the fact of the sanction having been granted to the petitioners under section 5‑A (1) of the Factories (Punjab Amendment) Act of 1940, but has now pleaded that no such sanction could be given or that its own independent sanction to cases of the present type was essential, which it was not prepared to grant with the result that the petitioners could not set up a factory of 40 Japanese art silk power‑looms to be worked by 45 employees. As regards the import license, it has not been denied that the case of the petitioners was recommended by respondent No. 2 but it has been pleaded that no such import license could be granted to the petitioners on account of the very ineligibility of setting up a factory of the present kind and also because of some other reasons which we will note at their proper places. Case of sanction to set up a factory.

10. The first point argued by the learned counsel for the petitioners was that orders as contained and communicated in letter, dated 2‑11‑1960 (Annex "K"), brought about two results, inasmuch, as (i) they showed the inability of the Govern ment to sanction the looms; and (li) the inability to issue import licenses for forty power‑looms. So far as the question of sanctioning of the looms is concerned, (which means the very sanction to set up a factory of forty looms), learned counsel submitted that the respondents acted without lawful authority, in Indicating their disability in this respect, inasmuch as, the sanction to install a factory of forty power‑looms already existed as a result of the direction of this Court issued on 18‑10‑1956 in W. P. No. 235 of 1956 as a natural corollary of the application of section 5‑A (i) of the Factories (Punjab Amendment) Act, 1940, to the facts and circumstances of the present case and consequent compliance therewith, firstly, in the form of sanction order, dated 27‑3‑1957 (Annex "D") and secondly, in the form of order dated 27‑4‑1957 (Annex "F"), already reproduced above. He submits that no provision of law exists, whereunder once having granted a sanction under section 5‑A ibid, the authorities concerned may again say that they regret their inability to sanction that which already stands sanctioned under the law, especially, when on the earlier legally and formally communicated and ratified sanction, things had gone far ahead, the petitioners had purchased land, raised a huge building and superstructure on the spot and good deal of negotiations had been entered into for setting up a factory of forty power‑looms. Another argument raised was that the impugned orders in this respect were passed at the back of his clients without hearing them and without apprising them of the reasons in that behalf. (10‑A) The arguments raised appeared to be weighty and the learned counsel for the respondents were called upon to meet the same. They replied that the Central Government retained the power to refuse sanction and for this purpose they referred to the following material and advanced the following arguments:‑ (i) that in view of the press note issued in Civil and Military Gazette, dated 24‑10-1953, there was shortage of cotton and art silk yarn and, therefore, further allocation of these looms to Punjab Province was stopped; (ii) that under section 4 of the Development of Industries (Federal Control) Act (XIII of 1949), the Central Government could make rules by Notification in the official Gazette "to carry the provisions of this Act into effect". The relevant rules were made on the 23rd of February 1951, and were called, "Development of Industries Rules, 1950", and are printed in P L D (1951) Central Statutes Part at `pages 183‑

184. It was submitted that according to Rule 4 of the aforesaid rules, permission in writing of the Central Government was necessary to establish a new industrial undertaking likely to employ more than fifty persons; and (iii) that according to Letter No. T‑23(7)/54 dated 20‑12‑1954 from the Deputy Secretary to the Government of Pakistan, Ministry of Industries, to the Commissioner, Development and Secretary to the Government of Punjab Department of Industries and Labour of the Lahore and to others, sanction of Central Government was necessary for setting up units of more than twenty power‑looms.

11. All the objections and the material alluded to above, was brought to the notice of the Division Bench in W. P, No. 235/1956. The advertisement mentioned at S. No. (i) was Annex "D" in that writ petition. The point at S. No. (ii) mentioned above, was dealt with at great length and it was held that rule 4 ibid applied only to such cases where a factory to be installed was to have more than 50 workers whereas in the instant case, the factory was to be manned by only 45 persons. The point at S. No. (iii) with regard to letter, dated 20‑12‑1954" which was Annex "A" in that writ petition, was also examined and was held to be merely of a directory nature for the Provincial Government to be kept in view at the time of granting sanction under section 5‑A. We have reproduced the judgment of the Division Bench with a particular object and that was to shop that all these points, which are now being raised in order to plead inability to sanction the factory/looms to be manned have already been considered by this Court and cannot again be pressed into the field to avoid the direction issued by the Division Bench. The refusal to sanction looms, it was conceded by the learned counsel for the respondents, tantamounted to refusal to sanction the installation of a factory and it is obvious that if once the sanction had come into the field it could not be taken away by raising the same pleas which were raised in Writ Petition No. 235 of 1956, but were rejected. A point was raised that apart from the sanction of the Provincial Government under section 5‑A (i) the Factories (Punjab Amendment) Act, 1940, a further sanction to establish an art silk power‑looms factory, with a unit of above 20 power, looms was essential under letter of the Central Government dated 20‑12‑54, and it was this sanction which was refused by the Government earlier on 5‑4‑1958 vide letter No. P‑24 (23)/56 dated 5‑4‑1958, from the Assistant Secretary to the Government of Pakistan, Karachi to Messrs Shameem Textile Mills Punjab Cloth Market outside Delhi Gate, Lahore and copy to Textile Commissioner, Karachi, Director of Industries, West Pakistan, Lahore (Copy of which was filed in the form of Appendix 3 to the written‑statement in W. P. No. 240 of 1958). According to the learned counsel for the respondents, it was the same refusal which was reiterated by the Central Government again in its letter dated 22‑8‑1960 (copy at page 101 of the present file), on the basis of which the Provincial Authorities wrote letter Annex "K" to the petitioners. This letter of the Central Govern ment, dated 22‑8‑1960, was preceded by two earlier letters dated 6‑5‑1960 and 28‑5‑1960, copies at pages 115‑117 of the present file which pointed out that the letter dated 12‑1‑1960, on the basis of which, Provincial authorities had issued letter Annex "H" on 29/30‑1‑1960, was a forgery. Leaving aside the question of the forgery of the letter dated 12‑1‑1960, to which we will attend separately, the broad question to be examined is as to whether any independent sanction of the Central Government was also needed for setting up a rayon art silk power‑looms factory, which was likely to have less than fifty workers in it, as was the case here. Provision for such a sanction could at the most be laid down under the Development of Industries (Federal Control) Act XIII of 1949, or the rules made thereunder. The Division Bench in Writ Petition No. 235 of 1956 attended to this matter and said that the rules aforesaid referred to only such new industries which were likely to employ more than fifty workers, but as the present factory was not to contain more than 45 workers, therefore, the sanction of the Central Government was not needed. Learned counsel for the respondents wanted to place the letter, dated 20‑12‑54 on the level of rule so as to submit that sanction of the Central Govern ment was needed when the power‑looms were to be more than twenty. Apart from the fact that a letter cannot be placed at the level of rules which according to section 4 of Act XIII of 1949, were to be published by Notification in the official Gazette and were subject to a condition of "previous publication", the letter would exceed rule 4 of the Development of Industrial Rules, 1950, if it purported to embrace the factories of twenty power‑looms even if number of persons to be employed therein was less than fifty. To remain consistent, therefore, letter dated 20‑12‑1954 should be read side by side with rule 4 ibid so as to mean that in cases of factories of more than twenty power looms which were to be worked by fifty persons, the sanction of the Central Government was needed. This would show that the refusal of the Central Government was based on omission to read the said letter in the light of rule 4 ibid. Another thing to be noticed is that by 1956‑Constitution, the industry had become a provincial subject and it was doubtful as to whether thereafter in 1958‑ or 1961, the Central Government could exercise the powers of granting sanction under the letter, dated 20‑12‑1954. Be that as it may, the Division Bench with regard to this letter of 20‑12‑1954 (to excuse the repetition) held as follows:‑‑‑ "In Paragraph 3 of the written‑statement there is also an argument based on a letter of the Central Government, dated the 20th of December 1954 (copy Annex "A"), which, accord ing to the written‑statement, categorically stated that Units containing more than twenty power looms are required to obtain sanction from the Central Government. This is merely an administrative instruction to the Province which can for that reason refuse permission under section 5‑A, but if per mission is not refused, the proviso must operate."

13. In view of all that has been written above, we have to hold that the permission already granted to the petitioners could not be negated by indicating that the Central Government regretted its inability to sanction the power‑looms. The aforesaid refusal on the part of the Central Government so far as the setting up of the present factory was concerned, was unauthorised and unwarranted and the same shall have to be declared as to be without lawful authority and of no legal consequence against the petitioners which we hereby do. Regarding issuance of Import License.

14. Before proceeding further it is necessary to understand just in a broad outline as to what is the procedure and system for obtaining an import license. Control on import relates to what goods and commodities can be imported into the country; who can import and the manner in which imports can be made. Goods of specified description can be imported only in accordance with the conditions of a license issued by the Chief Controller or any other officer authorised under section 3(2) of the Imports and Exports (Control) Act XXXIX of 1950. For import licensing, a year is divided in two halves, namely, July‑December and January‑June. These are called Shipping Periods. For every Shipping Period, an Import Policy is framed by the Government which is announced by the Chief Controller. Import Policy includes Government decisions regarding: ‑ (a) Items permissible for import during the Shipping Period: (b) Items to be imported for a particular region only; (c) Items importable exclusively for industrial purposes; (d) Items to be imported without license and conditions for imports (e) Items to be imported under Cash; Aid or Loan and Trade or Barter Agreements (f) Conditions for entry of new‑comers into the Import and their items; (g) Conditions for Import by established importers and industrial consumers; (h) applications for license where required; (i) restriction on import of items; and (j) items and conditions for import for personal use. Items placed under Free List do not require any license. For other items, licenses are issued to individual importers on the basis of licensing adopted. For certain Items and industries, the basis of licensing is given in the import policy itself. The basis for remaining items is decided by Licensing Boards at Karachi, Lahore and Chittagong and announced by the Regional Controllers. Importers calculate their shares according to the percentage and rates announced.

15. For licensing, Importers are broadly divided into follow ing classes:‑ (1) Commercial Importers; (ii) Industrial Consumers; and (iii) others. All Importers who import goods for sale without further processing are "Commercial Importers". For licensing, "Commercial Importers" are again classified into "Established Importers" and "New Comers". An "Established Importer" means a firm, institution, body, organization, person or group of persons registered under the Registration (Importers and Exporters) Order, 1952. These Importers hold regular categories on the basis of past performance in import trade during the "Basic Period". "Basic Period" means the five shipping periods from July‑December 1950 to July‑December 1952. "Commercial Importers" being admitted to licensing since January‑June 1960, under New Comer or OGL Schemes are known as "New Comers" They in themselves may be of two types, namely, "OGL New Comers" or "Other New Comers". In the instant case, we are not concerned with any "Commercial Importer", therefore, the discussion need not be taken any further. 17. "Industrial Consumers" are those actual users who import machinery accessories, spare‑parts, and raw‑material for use in their own manufacturing process. They include a person, group of persons proprietary/partnership firm or a limited company. These "Industrial Consumers" are required to be registered in the same manner a "Commercial Importers". "Industrial Consumers" or Units manufacturing similar pro ducts which are close substitutes of each other fall under one industry. Example of this will be Soap‑Industry, Textile In dustry, Cycle Industry, Diesel Engine Industry etc. For import control and issue of licenses industrial units are treated accord ing to the basis applicable to their Industry.

18. Units under an Industry may be: (a) Recognized; (6) Unrecognized; (c) New Units; and (d) Units set up by Public Corporations. 19. "Recognised Units" are those which have been set up under proper sanction of Government and have been already admitted to licensing. These Units are issued licenses according to import policy in force on the basis of their entitlement. 20. "Unrecognized Units" are those which have been set up without proper sanction of Government and are not registered. These Units are not admitted to normal industrial License. 21. "New Units" sanctioned by the Government are given licenses for import of machinery and plant on recommenda tions of the appropriate authority. Such of the "New Units", which are ready to go into production, are considered for issue of licenses for raw material on recommendation of the sponsoring authority.

22. Industrial Units applying for the first time have to submit their applications in the form prescribed for (i) Capital Machinery‑Form

1. C/C. M; (ii) Spares for machinery‑Form I. C/S.M. (iii) raw‑material Form I.C/R.M. These Units, if admitted to licensing are issued "Entitlement Letters". There‑, after they present license forms through their nominated banks. Generally, applications form Individual Units are not accepted direct. Applications are submitted to the appropriate sponsoring authority with documents required in the prescribed application form and in the Import Policy. In case of Indus trial Projects whose foreign exchange requirements are met by PICIC or IDBPD licenses for capital equipment are issued on recommendations of these authorities.

23. Ministry of Commerce have issued Notification No. 335/260/24 dated 12‑6‑1951 on import trade control under section 3 of Act XXXIX of 1950. This notification permits import of goods and commodities of specified description against import licenses or permits issued by the Licensing Authority. All goods and commodities have been classified in the Schedule attached to this notification into groups and sub‑groups. This is known as I. T. C. Classification. All goods that enter into import trade have been divided into four parts as under;‑‑ Part I‑Iron & Steel; Part II‑Metal (Non‑Ferrous and Ferro alloys) Part III‑Tools and Workshop Equipment; Part IV‑All other goods. Goods falling under Parts I, II and III have been given serial numbers in Arabic numerals and their classification is indicated by quoting the relevant part and serial number. Goods falling under Part IV have been further sub‑divided into various groups. These groups are indicated by mixed numbering Reference of this classification is given in the Public Notice of Import Policy issued for every Shipping Period. Since the application In this case was given by the petitioners on 22‑1‑1957, obviously, it was for shipping period January‑June 1957. Public notice of this Policy is published at pages 2191 to 2201 of the Gazette of Pakistan (Extraordinary), dated 12‑12‑1956. At page 2196, Serial No. 81 reads as follows:‑ 1 2 3 4 5 S. No. Description. I. T. C. Classification. Treaty Country Remarks.

81. Machinery & mill work and parts and accessories thereof, all sorts Nos. i.e., not otherwise specified. Item

3. France This entry occurs under "Group‑M‑2", which means that it refers to Part IV (headed "All other goods") in the Schedule of notification dated 12‑6‑51 hereinbefore referred to. Under this Part, "Group M‑2" is headed "Machinery", Mill Work and Parts "Not otherwise Specified" (i.e., not otherwise specified in the said Notification itself so as to fall under any other head or sub‑head). Item No. 3 under Group M‑2 reads as follows:‑ "Machinery and mill work and parts and accessories thereof all sorts, not otherwise specified." This was the classification from the point of view of the Con troller of Imports and Exports and is known as

1. T. C. Classifica tion. There is a similar classification made by Customs authorities which is known as "Pakistan Customs Tariff Classification of goods" (P. C. T.). Reading the two together, there is left no doubt that the items under consideration fall under group M‑2, item No.

3. Reading the relevant Public Notice, it is further evident that New Units had to submit their applications through the sponsoring and recommending authority i.e., the Provincial Government concerned. To say, therefore, that the New Units cannot apply or that there was a total ban on them is not correct.

24. The pleas of the respondents with regard to the issuance of the import license are:-- (a) that the unit in question was not sanctioned by the Central Government, therefore, it was not eligible for any import license; (b) that the import of art silk power‑looms was prohibited inasmuch as it was a totally banned item, therefore, without conceding, even if the unit be considered as a sanctioned one, the items claimed were not importable at all; (c) that an import license is merely a privilege and cannot be claimed by an applicant as of right and the Central Govern ment (and as a matter of fact its functionary, namely the Chief Controller of Imports and Exports) could not be com pelled to issue any import license to any particular applicant, and nor was a petition under Article 98 of the Constitution competent in such matters; (d) that whatever the earlier position may have been, at the moment when the writ petition is being decided, namely, April‑May 1971, the shipping period of January‑June 1971 is in force, for which two import policies one on 1‑1‑1971 (Gazette of Pakistan, Extraordinary, dated 1‑1‑1971), pages to 128 and the other on 24‑4‑1971 have been issued. Under these policies the items in question are not at all importable, therefore, the policy having undergone a change, the petitioners have no right at the moment to claim any relief.

25. As regards the point at (a), in Para. 24 above, it may be stated that we have already dealt with the question of the sanction of the Central Government. Necessity for this sanction is being urged on the basis of the letter dated 20‑12‑1954, about which lot has been said earlier and need not be repeated. At this stage, learned counsel for the respondents referred to one public notice No. DIWP/PL/NEW‑57/7 dated 4‑11‑1957, which was filed by them in this case and is contained at page 153 of the Court's file. According to this public notice, procedure was laid down for considering priorities of Schemes in private sectors. This notice is dated 4‑11‑57, whereas the sanction and no objection was given in this case by virtue of orders of this Court, dated 18‑10‑1955 and subsequent sanction orders, dated 27‑3‑57 and 27‑4‑1957. The said public notice, therefore, had no relevancy to the facts and circumstances of the present case at the relevant time and even otherwise does not go against the petitioners inasmuch as it nowhere banned the setting up of new factories.

26. As regards the point at (b) in Para. 24 above, nothing has been brought to our notice to show that the items in question were totally banned and were not importable at all even under Import License at the relevant time when the first applica tion for their import was filed. The relevant notification con taining the import policy for the shipping period January‑June 1957 was published in the Gazette of Pakistan (Extraordinary), dated 12‑12‑1956 at page 2191. In those days there did not exist "Licensing Boards", which probably were constituted somewhere in September 1957, and the basis for licensing used to be laid down by the Chief Controller of Imports and Exports. The sponsoring and appropriate authority for recommending cases for new units used to be the Provincial Governments concerned. In the instant case, it is a common ground that the case of the petitioners was sponsored and recommended by the Provincial Government, as it is even otherwise also evident from the letter of the Provincial Government, dated 11‑2‑1957, filed in W. P. No. 240 of 1958 in the form of Annex "D". However the same was rejected by the Central Government and we have not been satisfied that the aforesaid rejection was lawful or was, otherwise justified in any manner. The case of the petitioners was to be examined from the point of "New units" as analysed above (and should not have been mixed up with "New comers" which is a terminology peculiar to the commercial consumers nor with the "recognised" and "unrecognised" industrial units). It appears that the case of the petitioners at the relevant time was not examined from a correct standpoint. Again the respondents have not produced the relevant "licensing basis" before us to establish their pleas. On the other hand, the petitioners have filed an affidavit dated 30‑1‑1969 containing list of cases in which import of these items was allowed. The Department has not sufficiently rebutted the same by producing a copy of the relevant "licensing basis", and the chart filed in reply was evasive and confusing, and was not accompanied by all the necessary and relevant documents or other materials.

27. As regards the points at (c) in Para. 24 above to start with, it Is essential to refer to section 3 of the Imports and Exports (Control) Act XXXIX of 1950. This section reads as follows:‑. "

3. Powers to prohibit or restrict imports and exports-‑(1) The Central Government may, by order published in the official Gazette and subject to such conditions and exceptions as may be made by or under the order, prohibit, restrict or otherwise control the import or export of goods of any specified description, or regulate generally all practices (including trade practices) and export of such goods, including the submission of applications, for licenses under this Act, the evidence to be attached to such applications and the grant, use, transfer or sale or cancellation of such licenses. (2) 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 in this behalf by the Central Government. (3) All goods to which any order under subsection (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted made under section 19 of the Sea Customs Act, 1878, and all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word 'shall' therein the word `may' were substituted. (4) Notwithstanding anything contained in the aforesaid Act the Central Government may, by order published in the official Gazette prohibit, restrict or impose conditions on the clearance whether for home consumption or for shipment abroad of any imported goods or class of goods." In pursuance of the provisions of the above section, Import Policies are issued by the Government twice in a year. Against the orders passed thereunder a party has a right of review, appeal and revision, as provided in the Review, Appeal and Revision Order, 1957. This will show that a right to apply for an import license is not a fake right but is a valuable right which 1s to be regulated and decided by the authorities concerned in accordance with the law on the subject, against whose decisions review, appeal and revision is also available. It is not a mere executive action which is not controlled by any law on the subject and against which no right of appeal exists. If the case is examined, as for instance, from the point of view of fundamental right of carrying on a lawful business or trade, as laid down in Fundamental Right No. 8 of the Constitution of 1962, the matter can be easily understood. In that provision while authority is given to "the regulation of any trade, or profession by licensing system", the point nevertheless remains that subject to such a regulatory law, the right is there. If the aforesaid law, which regu lates any trade or provision by a licensing system is violated and the authorities entrusted with its administration, mal-administered It, then proper remedies, according to the law of the land including constitutional remedy of moving a High Court under Article 98 of the Constitution may well be available. Somewhat similar views were expressed in Messrs Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh and others (AIR 1954 SC 224).

28. Learned counsel for the respondents submitted that license was a mere privilege, therefore, no question of any right was involved in It and, as such, the same could not be enforced through writ petitions. Reference was made to Nakhuda Ali v. Jayarandne (1951 AC 66). In that case the Textile Controller, under an Emergency Regulation revoked a textile license on the ground of misconduct of the licensee. The Controller had, in fact, given the licensee a hearing and also allowed the licensee's lawyer to appear before him before ordering the revocation, and the Ceylon Supreme Court held, that the requirements of natural justice had been satisfied. The Privy Council agreed with the finding that a hearing had, in fact, been given but made an observation that the Regulation did not require a hearing and no quasi‑judicial obligation could be implied because the Controller was "withholding a privilege" and hence certiorari could not lie. Before attending to the aforesaid case, we may refer to the position of the law in England about "licensing", where the cases cropped under certiorari (from the point of view of the question as to whether a hearing was essential before deciding an application for license) and under Mandamus (from the point of view of the question as to whether a Mandamus could be issued in this matter and to what extent and especially, could a Mandamus be issued to compel the authority to grant a license).

29. Reg. Certiorari. (a) in England it is settled that the consideration of application for licenses under statutory powers is a quasi‑judicial act and that certiorari lies to quash an order of the Licensing Authority on the ground of defect of jurisdiction. See R. v. Brighton Justice Ex parte: Jarvis ((1934) 1 All E R 197) or breach of the principles of natural justice. See R. v. L. C. C. ((1931) 2 K B 215 (C A)). (b) There were, of course, earlier decisions where it was held that the function of granting or renewing license was an administrative function. See The Queen v. Sharman and others Justice Ex parte Denton ((1898) 1 Q B 578), The King on the Prosecution of Jane Emma Smith v. Howard and others ((1907) A C 420), Lord Mayor & Co. of Leeds v. Ryder and others ((1852) 18 Q B 687) and Reg. v. The Overseers of Salford (4) (Excise License Case). (c) But there is a larger body of decisions holding that where a license has to be granted to some competing applicants, it is a quasi‑judicial function. See R. v. Walsal, JJ ((1954) 3 W R 691), The King. v. The London County Council ((1931) 2 K B 215), The King v. Justices of Sunder Land ((1901) 2 K B 357), The King v. Woodhouse and others ((1906) 2 K B 501) and Royal Aquarium and Summer and Winter Garden Society Limited v. Parkinson ((1892) 1 Q B 431), (Cinematograph License) whether or not the Statute expressly provides for quasi‑judicial obligation, and Prome United Breweries Company Limited and another v. Keepers of the Peace and Justices for Country Borough of Bath (1(1926) A C 586 (H L)).

30. Reg. Mandamus.‑From the point of view of Mandamus, it has been held that a Mandamus will lie to direct the authority to determine the application according to law, where:‑ (i) It grants or refuses to grant an application for license, The Queen v. Bowman and others (1898) I Q B 663; Rex. v. Weymouth Licensing Justices (1942) 1 K B 465; or renewal of license R. v. Country Licensing (Stage Plays) Committee of Flint County Council (1957) 1 All E R 112 (C A); on irrelevant grounds or extraneous considerations, Dwarika Prasad v. Member. Board of Revenue, Bihar and others A I R 1961 Pat. 328, as for example where an application for renewal is refused or a restriction imposed in the absence of any change in the circumstances since the grant of the original license, merely, on the ground of consistency with the order made in another application by another person; R. v. County Licensing (Stage Plays) Committee of Flint County Council. (ii) It refuses to specify the grounds for its determination where so required by the Statute expressly or impliedly The Queen v. David Sykes and others (1876) 1 Q B D 52. (iii) It refuses to exercise its discretion with reference to the merits of the individual case before it; The King v. London County Council (1918) 1 K B 68, as for example by acting according to pre‑determined rules R. v. Rotherham Licensing JJ (1939) 2 All E R 710 or its own order in previous cases R. v. County Licensing Committee of Flint County or the directions or instructions of a superior or other authority, Mannalal Jain v. State of Assam and others A I R 1962 S C 386 and Commissioner of Police v. Gordhandas Bhanji 1952 S C R (Ind.) 135. (iv) Even where the authority formulates a general policy, it must hear each particular case to see whether the general policy would be applicable to that case and in case of refusal to such hearing, Mandamus will lie. R. v. Torquay Licensing Justice: Ex parte Brockmen (1951) 2 All E R 656. (v) Where the discretion is not absolute, but is circumscribed by statutory conditions, Mandamus will issue to direct the authority to exercise its discretion in conformity with statutory condition Y. Mahboob Sheriff & Sons v. Mysore State Transport Authority A I R 1960 5 C 321 and Messrs Dwarka Prasad Laxmi Naraln v. The State of Uttar Pradesh (1954) S C R (Ind.) 803. (vi) There are certain statutes under which the authority has a duty to grant the license if the statutory conditions are complied with by the applicant e.g. section 58(2) (Eng.) Licensing Act, 1953. In such circumstances, Mandamus will lie to compel the authority to grant a license, if he refuses to grant it notwithstanding the fulfillment of the statutory conditions, the Court being competent to enquire whether the statutory conditions have been fulfilled; R. v. City of London Licensing Justice: Ex parte Steward and another (1954) 3 All E R 270."

31. With this background of the law on the subject stage is now ripe to attend to Nakhuda All's case. This came up for examination in Messrs Faridsons Ltd., Karachi and another v. Government of Pakistan and another (P L D 1961 S C 537) and was not followed by holding that the Privy Council in that case had gone too far. The facts of the case of Messrs Faridsons Limited were that the Chief Controller of Imports and Exports had passed an order whereby he suspended the registration certificates of the two petitioner firms and the provisional registration certificate given to one of them which had earlier been granted under the Registration (Imports and Exports) Order of 1952, which was a sine qua non for obtaining import licenses or doing import and export trade business. The Supreme Court held that the Chief Controller of Imports and Exports in such a case was acting in a quasi‑judicial capacity and should have heard the petitioners before canceling their registration. A point was raised that the question of hearing could arise only in those cases where an authority was deciding a lis inter partes, but as in cases of the type under discussion there was no dispute inter partes, the theory of hearing had no application. Hamoodur Rehman, J. (as then his Lordship was) attended to the theory of Us inter partes and pointed out that proceedings may nevertheless be quasi‑judicial even though there were no parties arrayed as such against one another, so long as the nature of Its was itself of a quasi‑judicial nature, in the sense, that the authority dealing with the same had himself to decide upon the rights of the subjects. This will show that the "orthodox view" of inter partes lis, has been advanced further and now matters are approached from (what is called a) "functional view", and so long as the functions performed are such which decided the rights of an applicant the principle of hearing the person likely to be affected thereby a once gets attracted. A discussion of this matter is contained also at pages 564, 544 and 546 of the Commentary on the Constitution of India by Basu, Volume III (4th Edition). The Supreme Court case of Faridsons further shows that had the import license not been a matter of right but only a matter of mere privilege, the question of issuing a writ under Article 170 of the late Constitution of 1956 would not have arisen. The Supreme Court had issued the requisite writ indicating that the view that an import license is a mere matter of privilege was not accepted by them, especially, when they expressly held that the Privy Council had gone too far in Nakhuda Ali's case. Another thing to be pointed out with reference to P L D 1961 S C 537 is that at page 542, Cornelius, J., wrote as follows:‑ "It is plain that in these cases, certain essential elements of judicial proceedings were present. For instance it was a case of sequestration of an individual right to valuable property, namely, a license under which the individual was enabled to engage in foreign trade. Protection of an individual's right in person and property is a matter belonging peculiarly to the jurisdiction of Judges." It will be evident that import license has been treated by the then Chief Justice of Pakistan as a "valuable property". In Rameshwar Prasad Kedarnath v. The District Magistrate and others (A I R 1954 All. 144), a license was not considered to be a men; privilege, but a right. The same was the position in Messrs Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh etc. (A I R 1954 S C 224). In Akram Bus Service and others v. Board of Revenue, West Pakistan and 2 others (P L D 1963 S C 564) our Supreme Court interfered in the matter of route permits under the Motor Vehicles Act. In the face of all this it is not possible to accept the contention of the learned counsel for the respondents that an import license is a mere matter of privilege or cannot form subject‑matter of a petition under Article 98 of the Constitution of 1962, which in its own terms, is very wide to cover all actions of the Executive which are without lawful authority or where the Executive refuses to do that which is its duty to do. The case of Nakhuda All was itself disapproved by House of Lords in a Second Appeal in Ridge v. Baldwin and others ((1963) 2 All E R 66). (See judgment of Lord Reid). The first appellate Court's judgment is reported in (1962) 1 All E R 834) and the trial Court's judgment is reported in (1961) 2 All E R 523.

32. Examining the present case in the light of the discussion hereinbefore made, it will be evident that:‑ (i) The application or applications of the petitioners for grant of an import license was or were not disposed of after hearing them and rather the orders (if at all) were passed in the secrecy of official chambers without affording them an opportunity to meet any objection. (ii) We have not been shown any order of the CCI & E, which means that the case was not allowed to be dealt with by a statutory functionary and the Central Government in its own ministerial department rejected the applications. This deprived the petitioners of the right of review, appeal and revision and even otherwise rendered the procedure adopted as invalid. (iii) That while deciding the matter the Central Government took into consideration extraneous factors and circumstances, namely, that no prior sanction for the establishment of the factory had been obtained from it due to which the petitioners were thought not eligible to get any import license. (iv) The plea now taken is that the items in hand were at that time banned. Firstly, no order to this effect has been produced and secondly, if this was the ground for rejecting the application then it has not turned out to be correct as analysed above. There are indications in the subsequent affidavit and the list of cases provided by the petitioners to the effect that import licenses were being issued to various concerns. The respondents have failed to produce the relevant licensing basis before us. (v) That no doubt the earlier letter whereby sanction was granted was held to be a forgery, but we do not want to go into the same and all that we would like to observe is that even on that aspect of the matter, the petitioners were never heard and they were confronted with this side of the matter only in the form of a written statement in this Court. (vi) That the effect of the judgment of this Court dated 18‑10‑1956 in W. P. No. 235/56 was not correctly appreciated.

33. On these grounds the petitioners are definitely entitled to the relief which will be indicated in the subsequent paragraphs of this judgment. At this stage, learned counsel for the respondents submitted that the petitioners have not approached this Court with clean hands inasmuch as, they based their case on a letter of the Central Government, dated 12‑1‑1960, which was a forgery. It was submitted that in these circumstances, they were not entitled to the exercise of the discretionary jurisdiction under Article 98 of the Constitution in their favour. We do not want to enter into this controversy, because from the side of the petitioners accusation of forgery is not being admitted and we have neither time nor the necessary material to thrash out this factual matter. Since we have decided to remand the case to the respondents, to decide it afresh, the said respondents can attend to this point for whatever worth it is after giving the petitioners an opportunity to defend themselves In this respect. It is to be pointed out that even according to the stand of the respondents in this Court, the matter has remained untraced on their end, which makes it all the more advisable that we should not inflict any penalty on the petitioners by pre‑judging the matter or throwing away their writ petition on this ground alone, especially, when it has remained in this Court for the last nine years.

34. Lastly, it was suggested that since in the new Import Policy announced on 1‑1‑1971, textile machinery and looms are not importable even on bonus, as is indicated from Annex XXXII attached to the policy, therefore, in terms of the objection raised in sub‑paragraph (d) of Para. 24 of this judgment, the petitioners' case merited dismissal. The heading of Appendix XXXII hereinbefore mentioned, shows that such item, cannot normally be so imported, which means that if there are exceptional circumstances, the import of these items can be allowed. Since we are remanding the case to the authorities concerned, this matter will also be open for judicial adjudication in accordance with law for the purpose of finding out as to whether the circumstances of the present case are exceptionable or not so as to warrant relaxation of any normal rule.

35. The result is that the writ petition is accepted; the impugned orders in so far as they cancelled the sanction or refused to sanction the looms or the setting up of the factory workable with 45 persons are declared to be without lawful authority and of no legal consequence against the petitioners and are quashed as indicated in Paragraph 13 of this judgment above. In so far as the question of issuing an import license to the petitioners is concerned, the case is remanded to the Central Government to be decided afresh by its functionary, namely, the Chief Controller of Imports and Exports, in accordance with law. It is to be pointed out that it is a very old application of the petitioners, dated 22‑1‑1957, supported by another application in 1960 and a third application in 1968 which should all be decided together after hearing the petitioners and providing them an opportunity to defend their case. There will be no order as to costs. Petition accepted.