1989 PLP 376 (SCMR)

SAAD SAOOD JAN, J.‑‑These are four appeals by special leave from the judgments and orders dated 30‑4‑1970, 8‑4‑1971, 16‑4‑1971 and 13‑7‑1971 of the Sind and Baluchistan High Court.

2. In the Import Policies issued for the years 1969 and 1970 the Steel Plate Sheets were placed on the free list and the importers were permitted to import them against U.S. Aid Loan from the United States without a licence by ships bearing the Pakistan flag. They were given the further facility of paying the freight charges in Pakistani currency m Pakistan.

3. During the relevant period the Bonus Voucher Scheme was in force. Under the Scheme, the Pakistani shippers were entitled to receive bonus vouchers to the extent of 30% of the net foreign exchange earned by them. These vouchers could be utilised by the shippers inter alia for opening and maintaining branch offices in foreign countries.

4. On 26‑12‑1968 the State Bank of Pakistan issued two circulars to the shippers, air‑liners and travel agents. The object sought to be achieved by these circulars was clearly to conserve foreign exchange by requiring the importers who had been given the benefit of paying the freight charges in Pakistani currency, to provide bonus vouchers which, were under the Bonus Vouchers Scheme, payable to the shippers. Thus, by the circulars the shippers were informed that they would receive the bonus vouchers only if their clam form was accompanied by a `P' form obtained by the importers from the State Bank. On its part, the State Bank would not issue a `P' form to the importer unless he surrenders bonus vouchers to the extent of 30%v of the freight charges.

5. As stated at the Bar, the facts in all these appeals are basically the same. Briefly speaking, the appellants imported Steel Plate Sheets from the United States on ships flying the Pakistan (lag. While accepting the freight charges in Pakistan in Pakistani currency the shippers called upon the appellants to surrender ?P? form. The appellants resisted the demand of 'P' form and invoked the constitutional jurisdiction of the High Court to challenge the legality of the said circulars. A Division Bench in the High Court took the view that the circulars did not suffer from any infirmity. Accordingly, the constitutional petitions were dismissed.

6. A number of importers in the former Province of East Pakistan were also called upon by the shippers to surrender ?P? forms alongwith the freight charges on the basis of the same circulars. They too took the matter to the High Court to challenge the legality of the circulars. The Dacca High Court took a different view and declared the circulars to be of no legal effect.

7. From the judgment of the Dacca High Court, the State Bank sough; leave to appeal from this Court. In view of the conflicting view taken by the two High Courts on the question of the legality of the two circulars, leave was granted. However, before these appeals could be disposed of the Eastern Province seceded from Pakistan; as such the appeals became in fructuous.

8. The circulars in question have been issued by the State Bank of Pakistan in exercise of its powers under section 20(3), Foreign Exchange Regulation Act. This subsection reads as follows:‑‑ "The State Bank may give directions in regard to the making of payments and the doing of other acts by bankers, authorised dealers, travel agents, carriers, whether common or private, or stock brokers and other persons who are authorised by the State Bank to do anything in pursuance of this Act in the course of their business, as appear to it to be necessary or expedient for the purpose of securing compliance with the provisi s of this Act and any rules, orders or directions made thereunder " The only contention raised in support of these appeals is that there is no provision in the Foreign Exchange Regulation Act which can be said to have any nexus with the circulars issued by the State Bank. This argument was also raised before the Sind and Baluchistan High Court and it was repelled with the following observations:‑‑ "From the language of these sections (that is sections 20(3) and 25 it is clear that the two impugned circulars by which the petitioners were obliged to import their goods on board of Pakistani vessels and to pay to the shipping Company a part of the freight at the bonus vouchers rate, were relatable to the power of the State Bank of Pakistan in the discharge of its duties under the Act which in the language of its preamble were meant to secure "the economic and financial interest of Pakistan". In this view the stand taken by respondents 1, 2 and 3 appears to be valid that the impugned circulars have been issued under the authority of the Act." After hearing the learned counsel for the appellants we are not inclined to take a different view in the matter. The said Act was passed, as its very preamble states, to regulate inter alia dealings in foreign exchange in the economic and financial interests of Pakistan. Its various provisions have been devised to achieve this object. There can be little doubt that issuance of bonus vouchers had a bearing on the foreign exchange reserves of the country. There is, therefore, no reason why in exercise of its power under section 20(3), ibid, the State Bank could not issue directions of the nature contained in the two circulars. We would, therefore, agree with the view taken by the Sind and Baluchistan High Court that the circulars in question were well within the competence of the State Bank. 9.???????? There is another aspect of the matter also. By being permitted to pay the freight charges in Pakistan, the appellants enjoyed the benefit of utilizing the entire amount of the foreign exchange made available to them in importing the sheets. Had this racility not been given to them, they would have been required to pay the freight charges is the currency of the port of export. On the other hand, the use of the facility made the State Bank liable to give bonus vouchers to the shippers to the extent of 30% of the freight charges. We are unable to discover any principle which would stand in the way of the State Bank from transferring its liability in this regard to the importers who had taken benefit of the facility. Apart, from that, as noticed by the High Court, the appellants must have been aware while importing the sheets that to accordance with the circulars they would be required to surrender bonus vouchers as part of the freight charges. Having taken advantage of the facility, it is not open to them to later challenge the legality of the circulars.

10. For the reasons stated above, we find no merits in these appeals which are dismissed. There will be no order as to costs. AA./J‑38/S????????????????????????????????????????????????????????????????????????????????????????? Appeals dismissed.