Bhatnagars And Co. Ltd. vs The Union Of India (Uoi) on 21 February, 1957

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 21 February, 1957

Coram: S.K. Das, B.P. Sinha, Gajendragadkar

In this matter the Supreme Court considered a group of five petitions that were filed by the respondents identified as Messrs Bhatnagars & Co. Private Ltd. All of the petitions were presented by the petitioner, Shri B. S. Bhatnagar, who served as the Managing Director of the company, and each petition sought the issuance of writs against orders that had been made by the Sea Customs Authorities. The petitioner contended that he had been treated inequitably with respect to licences that had been granted for the import of soda ash, and he asserted that the orders issued by the customs officials were therefore unlawful. Consequently, he had approached the High Court of Punjab and this Court by lodging several constitutional petitions under Article 32 of the Constitution, alleging a violation of his rights. The Court noted that the petitions displayed clear signs of inadequate drafting; they were excessively diffuse, often incoherent, and at times failed to present the facts in a logical or chronological sequence. In addition, the petitions contained references to matters that were immaterial to the relief sought, and the petitioner repeatedly made unsubstantiated and irrelevant accusations against the authorities. Because of this lack of clarity, the Court found it difficult to ascertain the precise nature of the petitioner’s grievance and the specific writ that he desired from the Court. Nevertheless, given that the petitions claimed jurisdiction under Article 32, the Court regarded it necessary to address the substantive points raised in order to dispose of the applications. Regarding the oral arguments, three of the petitions—identified as Petition Nos. 423 and 164 of 1956 and No. 377 of 1955—were presented by Shri Bhatnagar himself, while the remaining two petitions, Nos. 42 and 46 of 1956, were argued by counsel on behalf of the petitioner. The material facts, as distilled by the Court, were relatively few. The petitioner had obtained a licence for importing soda ash during the free‑licensing period of 1952, a licence valued at approximately Rs 5,00,000. Acting upon this licence, consignments of soda ash totalling 100 tons, 200 tons and 20 tons were received at Bombay. However, the Customs Authorities subsequently received information indicating that although the licence was issued in the petitioner’s name for a sum of Rs 5,00,000, his capital did not exceed Rs 15,000 and that he was allegedly involved in trafficking the licences. Following this information, an investigation was launched and the matter was placed under the jurisdiction of the Special Police Establishment. The Court therefore concluded that the essential facts related to the issuance of the licence, the quantities of soda ash imported, the alleged discrepancy between the licence value and the petitioner’s capital, and the subsequent inquiry by the Special Police Establishment.

During the investigation, authorities seized a number of documents both from the office of the petitioner’s company and from the office of Messrs N. Jivanlal & Co. at Bombay. The investigation confirmed the earlier complaint that the petitioner was trafficking in licences. It was discovered that a business operating under the name Messrs N. Jivanlal & Co. exercised complete control over the petitioner’s licences, while the petitioner himself received only commissions for the imports that were permitted to be carried out in the name of Messrs Bhatnagars & Co., Ltd. Regarding the two consignments of one hundred tons and twenty tons of soda ash, inspection of the documents revealed that these consignments had been imported by Messrs N. Jivanlal & Co., which possessed no licence; consequently the Collector of Customs seized the consignments. The offices of the petitioner and of Messrs N. Jivanlal & Co. were raided on 7 November 1952 and 6 February 1953 respectively. The goods arrived in Bombay in March and April 1953 and were confiscated by the Collector of Customs in May and June 1953. After the seizure, the authorities returned the seized documents, including the licences, to the petitioner.

The petitioner contested the confiscation of the goods by filing an appeal before the Central Board of Revenue; that appeal was dismissed. He then moved the Central Government against the order, but on 22 September 1955 the Central Government refused to interfere. On 31 March 1956 the Collector of Customs issued an order that the seized goods should be auctioned. When this order was passed, the petitioner instituted one of the present petitions before the Court. He obtained an interim order of stay, which was later vacated. In broad terms, these events constitute the factual basis of the present petitions. Although five petitions were filed, the petitioner’s principal grievance concerns the confiscation of the soda‑ash consignments and the seizure of his licences by the investigating authorities. Each petition frames the grievance in a slightly different manner, and the ultimate relief sought varies, but essentially the petitioner asks the Court to grant relief against what he considers an illegal seizure of the goods and the effective nullification of his import licences. Since the period during which the licences could have been used has now expired, the petitioner, in one of his petitions, requests that the Court direct the Government to re‑validate the licences so that he may import the article during any unexpired portion of the licence term.

In considering the applications, the Court decided to treat each petition individually and to examine the issues raised in each one separately. Petition number 423 of 1956, in particular, is distinguished from the other petitions that are grouped in this proceeding. Although the petitioner repeats in this petition the same factual background that has already been set out, the principal relief that he seeks is quite different. He alleges that the Union of India and the other respondents to the petition have committed contempt of this Court and therefore he asks that the Court take appropriate action against those respondents.

The basis of this allegation is traced to an earlier petition that the petitioner filed, identified as petition number 571 of 1954, which concerned one of the three consignments that are the subject of the present disputes. That earlier petition was scheduled for hearing before this Court on 24 March 1955, and counsel appeared on behalf of the petitioner. The order issued by the Court after that hearing records that the learned Solicitor‑General of India made a statement to the Court indicating that the confiscated goods would not be sold or otherwise dealt with for a period of one month from the date the petitioner was informed of the final order that the Central Government might issue in response to the revisional petition that the petitioner had filed before the Government.

Relying on the undertaking given by the Solicitor‑General, the Court granted the petitioner a period of one month, measured from the date he received communication of the Central Government’s final order, within which he could file a petition for special leave to appeal, should he wish to do so. The order also recorded the Solicitor‑General’s undertaking. Subject to that order, the petitioner’s petition was dismissed, although no order as to costs was made.

It is accepted as common ground that for several months after that dismissal the revisional petition that the petitioner had lodged with the Central Government remained unresolved, and eventually it was also dismissed. The petitioner appears to be under the impression that the Solicitor‑General, acting for the Central Government, had undertaken to dispose of his revisional petition within a specific, very short time—perhaps a day or two. The petitioner therefore contends that because the revisional petition was not disposed of within the time that he says was promised, the respondents are guilty of contempt.

The Court finds that the petitioner’s grievance and the relief he seeks are fundamentally misconceived. He is wholly mistaken in assuming that the Union of India, through the Solicitor‑General, gave any undertaking that his revisional petition would be decided within one or two days. In fact, the Solicitor‑General merely expressed a hope that the Central Government would deal with the revisional petition at an early date, and that hope was not part of the formal undertaking recorded in the Court’s order.

The Court observed that the Solicitor‑General’s statement that the Central Government would consider the petitioner’s revisional petition “at an early date” was merely an expression of hope and did not constitute a binding undertaking, nor was it the same undertaking that had been recorded in the Court’s order. The petitioner appeared to believe that the order required the Central Government to dispose of his revisional petition within a period of one month. The Court held that this belief was wholly unfounded. The reference to a one‑month period in the order, the Court explained, was the time allotted to the petitioner to file a petition for Special Leave in this Court after the Central Government had communicated its decision on the revisional petition. In effect, if the Central Government’s decision had been adverse to the petitioner, the petitioner would have had a month in which to approach this Court for Special Leave, and during that month the Union of India had agreed not to act upon or dispose of the petitioner’s property. The Court found the order to be clear and unequivocal, leaving no room for any misinterpretation. Because no such undertaking existed as the petitioner alleged, the Court could not see how any contempt of Court could be alleged on the ground of non‑compliance with a non‑existent promise. Moreover, the petitioner had failed to consider which individual the Union of India represented as Respondent No. 1, nor had he examined how any of the other respondents might be liable for contempt. Accordingly, the Court had no hesitation in concluding that the petitioner’s prayer for a writ on the alleged contempt was entirely unjustified and, as the Court regretted to note, wholly irresponsible. Since this was the sole ground raised by the petitioner, the Court dismissed the petition and ordered the petitioner to pay costs.

In the second petition, identified as Petition No. 164 of 1956, the Court examined the petitioner’s grievance concerning two policy statements issued by the Government: a Press Note dated 3 February 1955 and Public Notice No. 25‑ITC(PN)/56 dated 30 June 1956. The petitioner contended that the policies set out in those documents created a monopoly and therefore sought writs from this Court to terminate the alleged monopoly and to protect his fundamental right to carry on his trade and business. The Court found this petition to be similarly misconceived and lacking any substantive basis. The Court emphasized that, in contemporary practice, the export‑import policy of a democratic State must be flexible in order to respond to the nation’s changing needs, the state of foreign exchange, the necessity of protecting domestic industries, and other relevant considerations, all of which the Central Government must review and adjust from time to time. Consequently, it would be futile to argue that there should be an absolute, unrestricted freedom in matters of export and import, as such a position would disregard the legitimate need for the Government to regulate trade in accordance with the country’s economic requirements. The Court therefore concluded that the petition did not raise any viable legal issue and could not be entertained.

In this case, the Court observed that it would be unreasonable to expect an unrestricted or unchanging policy of export and import, and that the government’s policy must be adaptable to the nation’s needs. Accordingly, the policy statement issued in the Press Note of 3 February 1955 had to be examined in this flexible context. Although the Press Note addressed many commodities, the Court zeroed in on the provisions relevant to light soda ash, the commodity at issue in the present petition. The Press Note indicated that the government had resolved to channel the import of light soda ash through importer‑stockists who were to maintain buffer stocks and sell the product in a manner that would prevent the price and supply fluctuations that consumers had recently suffered.

The Court noted that, prior to this canalisation, consumers were dependent on individual importers, and the uniform distribution of the commodity to all regions where it was required proved difficult. To remedy this, the government chose to employ two selling organisations—Messrs Tata Oil Mills Co. Ltd. and Messrs I.C.I. (India) Ltd.—to assist in the distribution. These two firms agreed to procure soda ash from suppliers selected on the basis of offers invited through a public notice issued on the same day as the Press Note. The Press Note further stipulated that the imported soda ash would be stocked at convenient centres and sold according to general directions that the government might issue from time to time. The government would fix the sale price on a port‑basis, and the importer‑stockists would receive remuneration at the rate of twelve and a half percent of the landed cost, with any additional profit on the transaction being passed on to the government.

The Court also referred to the public notice issued contemporaneously, which provided the details concerning the import of soda ash and other commodities. Tenders were called for, and clause 4 of the notice specified that the offerer whose bid was accepted by the Chief Controller of Imports would be required to enter into a contract within ten days of acceptance with the importer‑distributor designated by the government. The Chief Controller retained discretion to reject any offer without assigning a reason. Subject to the terms contained in the notice, once a contract was concluded, an import licence for the contracted quantity would be issued to the buyer, subject to conditions that the Government of India might impose.

Finally, the Court pointed out that before 1953 import licences had been granted freely, but from 1953 onward licences were awarded to established importers subject to certain conditions, reflecting the evolution of the government's approach to regulate imports.

It was observed that before the year 1953 the Government had issued import licences without restriction. Beginning in 1953 the practice changed so that licences were granted only to importers who were already established, and the grants were made subject to certain conditions. The Government also periodically determined the total amount of the specific commodity that should be imported. After fixing this total, the authorities examined the volume of business each applicant had conducted during the prescribed period and then allocated the overall import quota among the various applicants in proportion to their respective business shares.

When the authorities realized that this proportional allocation method still did not produce satisfactory results, they decided to introduce a system of canalised distribution. Under this system tenders for import licences were still invited, the tenders were evaluated on their merits, and licences were awarded to several successful claimants. It was possible that, if firms such as I.C.I. and Tata Oil Mills Co. Ltd. were among the applicants, their competitors might have found it difficult to compete with these large and powerful firms. However, the Court emphasized that such difficulty for competitors was not the same as the Government having created a monopoly over the import of the commodity in question.

The Court also pointed out that the petitioner himself was not an established importer. He had obtained a licence only during the earlier period when licences were issued freely. Consequently, the Court found it hard to accept the petitioner’s contention that a monopoly had been created and that his fundamental right to carry on his trade had been taken away. The Government had discovered that importers of soda ash were engaged in improper practices that caused speculation and sharp price fluctuations. Considering the national interest, the Government was entitled, and indeed required, to step in and regulate the distribution of the commodity in an appropriate manner. The policy statement that the petitioner challenged was merely the Government’s exercise of this regulatory power. The Court concluded that the petitioner’s argument that an alleged monopoly impaired his right to trade could not be sustained. In effect, no monopoly had been established, and the petitioner’s application was deemed wholly misplaced. Accordingly, the petition was dismissed and the petitioner was ordered to pay costs.

Petition No. 377 of 1955 was filed broadly against orders of confiscation and sale that had been issued by the relevant authorities. The petitioner sought a writ directing those authorities to refrain from implementing the confiscation and sale orders. The Court reiterated the material facts concerning the seizure of two consignments of soda ash, one weighing one hundred tons and the other twenty tons, which were the foundation of the present proceedings. An order dated 3 May 1954, issued by the Controller of Imports and Exports on behalf of the Chief Controller of Imports and Exports, communicated to the petitioner the decision of the Chief Controller that no licence or customs‑clearance permit would be granted to him for his application covering the licensing period up to July 1953. Nevertheless, the petitioner was informed that his applications for the licensing period of January‑June 1954 would be processed in the normal course according

In the order, reference was made to the policy set out in the Red Book. The order further stated that the authorities had concluded that re‑validation of the licences listed in Annexure ‘A’ to the petitioner’s counsel’s letter dated 20 April 1954 could not be permitted. Consequently, those licences were sent back to the petitioner. The petitioner claimed that this portion of the order caused his grievance and formed the basis of the relief he sought in the present petition. According to the petitioner, licences granted to him were to remain valid for one year beginning on 13 February 1952; therefore, the alleged illegal seizure of those licences and the unauthorised confiscation of the related consignments had inflicted considerable prejudice upon him. Because the licences had already expired by the time they were returned, the petitioner argued that the return offered only inadequate compensation. He requested that the licences be re‑validated, meaning that the period during which he could operate under them should be suitably extended. The Court observed that, while the authorities could have chosen to re‑validate the licences, it was difficult to see how the petitioner could invoke the jurisdiction of this Court under Article 32 of the Constitution to obtain such relief. The Court noted that it would not elaborate further, as the legal position was clear. The authorities had found that, although the licences were issued in the petitioner’s name, he had been trafficking in those licences, that the consignments had been ordered by another firm, Messrs. N. Jivanlal & Co., which held no licence for the import of soda ash, and consequently the consignments received by that firm were liable to confiscation. The Court held that if the petitioner’s grievance concerned an erroneous view taken by the authorities, that issue could not be properly raised in a petition under Article 32. The Court suggested, as the learned Solicitor‑General had indicated, that the petitioner might have a remedy by filing a suit for damages, but that matter lay outside the Court’s consideration. Since the goods had been seized in accordance with law and based on findings recorded by the competent authorities under the Sea Customs Act, the Court deemed it inappropriate to direct the authorities to exercise discretion in favour of the petitioner by extending the life of the licences. The petitioner’s grievance was essentially against the factual conclusions reached by the authorities, and such conclusions could not be challenged in the present writ petition. Accordingly, the petition failed and was dismissed with costs.

The petitioner had filed two separate writ petitions, identified as Petition No. 42 of 1956 and Petition No. 46 of 1956. Both petitions were presented before the Court by counsel representing the petitioner, who articulated three distinct submissions for consideration. The first submission asserted that the Imports and Exports (Control) Act, 1947 does not extend to the commodity known as soda ash, and that every citizen possesses an inherent right to import and export this material without the necessity of obtaining a licence. According to this line of argument, if the Act indeed fails to encompass soda ash, then the seizure of the two consignments of that substance would lack legal basis, and the petitioner would be entitled to a writ directing the Central Government to relinquish the confiscation. The second submission, offered as an alternative, contended that the statutory framework authorising the issuance of licences operates as delegated legislation and, consequently, is void for lacking proper legislative authority. Should this contention be upheld, the confiscation of the consignments would likewise be unlawful, thereby justifying the grant of a writ in favour of the petitioner. The third submission, positioned as a fallback should the first two be rejected, argued that the finding of the competent authorities—that the petitioner had been engaged in the trafficking of licences—was unsupported by any legal evidence. The counsel maintained that this finding ought to be set aside, asserting that the licences in question had been obtained in good faith for the petitioner’s personal use, and that the contrary conclusion reached by the authorities, together with the subsequent seizure of the goods, amounted to an ultra‑vital and illegal act. The Court indicated that it would now address these three points in the sequence in which they were raised. Turning to the first point, the counsel observed that when the Parliament enacted the Imports and Exports (Control) Act, 1947 (Act No. XVI of 1947), it deliberately omitted the provisions contained in Rule 84(2) of the Defence of India Rules. The counsel’s argument, which may be described as inventive, posited that the omission was intended to exempt from the operation of the Import Act those articles that would otherwise have fallen within the scope of the omitted rule. Rule 84 of the Defence of India Rules, by its first sub‑rule, defines “import” as the conveyance of goods into British India by sea, land, or air, and defines “export” as the removal of goods from British India by the same modes. The second sub‑rule of Rule 84 provides that the Central Government may, by a notified order, prohibit or restrict the import or export of any goods or any specified category of goods, either generally or with respect to particular persons or classes of persons. The third sub‑rule further empowers the Central Government, by a notified order, to make provisions for prohibiting, restricting, or otherwise controlling, in all cases or in specified categories of cases, subject to any exceptions that may be provided, such matters as (i) the import, export, coastal carriage, or shipment of goods as ship’s stores for any specified description, (ii) the shipment of fresh water on sea‑going vessels, and (iii) the bringing into any port or place in British India of goods of any specified description intended to be taken out of British India without being removed from the ship or conveyance in which they are being carried.

In this case, the Court examined the phrase “goods of any specified description intended to be taken out of British India without being removed from the ship or conveyance in which they are being carried.” Shri Umrigar argued that the import of soda ash could be validly regulated only under rule 84, sub‑rule (2) of the Defence of India Rules, and because that sub‑rule had not been incorporated into Act XVIII of 1947, any regulations issued by the Central Government, including licence conditions, were beyond the authority of that Act. He noted that Act XVIII of 1947 gave essentially the same definitions to “export” and “import” as those found in the Defence of India Rules and that the operative portion of the Act was section 3, which reproduced the language of rule 84, sub‑rule (3). To support his contention, Shri Umrigar sought to impose a very narrow and artificial limitation on section 3, sub‑section (1)(a) of the Act. The Court therefore set out the full wording of that section for reference. Section 3 provided that the Central Government, by order published in the official Gazette, could make provisions for prohibiting, restricting, or otherwise controlling, in all cases or in specified classes of cases and subject to any exceptions, the import, export, carriage coastwise, or shipment as ships’ stores of goods of any specified description; it also covered the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they were being carried. Further, subsection (2) declared that any goods to which an order under subsection (1) applied would be deemed to be goods whose import or export had been prohibited or restricted under section 19 of the Sea Customs Act, 1878, and that the provisions of that Act would apply, except that the word “shall” in section 183 would be read as “may.” Subsection (3) added that notwithstanding anything in the foregoing, the Central Government could by Gazette order prohibit, restrict, or impose conditions on the clearance, whether for domestic consumption or for shipment abroad, of any goods or class of goods imported into India. Shri Umrigar maintained that section 3(1)(a) could not be applied to soda ash because, in his view, the provision only concerned goods of a specified description that were imported or exported, carried coastwise, or shipped as ships’ stores, and that the phrases “carriage coastwise” and “shipment as ships’ stores” functioned as adjectival clauses limiting the words “import” and “export.” The Court found this construction unreasonable and emphasized that the provision should be read disjunctively and distributively, so that the import of goods of any specified description would fall within its scope.

In interpreting the statute, the Court held that the provision must be read so that the import of any goods described in a particular specification falls within its scope. Accordingly, the import of goods of any specified description would attract the operation of the provision. When the definitions of the words “import” and “export” are considered, it becomes clear that items which are carried coastwise do not qualify as either imports or exports. The suggestion that the Legislature intended to exempt all categories of goods from the application of section 3(1)(a) is, in the Court’s view, entirely at odds with the plain and natural meaning of the clause. Consequently, the Court rejected Shri Umrigar’s argument without reservation. By giving the words in the clause their ordinary meaning, the Court found that the Legislature, when enacting the Act, must have considered it unnecessary to duplicate the provisions that were previously contained in rule 84(2). The specific matters that rule 84(2) dealt with are in effect incorporated into section 3(1)(a) of the present Act. Thus, the Court concluded that the contention that no licence was required for importing soda ash, and that therefore all orders issued by the appropriate authorities to seize the consignments were invalid, could not succeed.

The subsequent contention advanced by the petitioner was that the material provision was ultra‑vires because it amounted to delegated legislation. The Court observed that challenges to the validity of statutes on the basis of delegated legislation often raise complex questions that are not easy to resolve. Recent judicial decisions, while showing a range of opinions on how to address such challenges, have nevertheless established certain principles that are now fairly settled. One clear principle is that conditional legislation, properly described as such, must be distinguished from delegated legislation. Shri Umrigar accepted that when the Legislature enacts a statute and sets out the underlying principles as well as guidance for implementing or enforcing those principles, it may lawfully delegate the actual implementation or enforcement to a chosen authority. In appropriate cases, the Legislature may validly leave to the delegate the determination of the time, period, or place for the application of the provision. However, Shri Umrigar argued that, in the impugned Act, the Legislature did not lay down any principle nor provide any guidance to the delegate, and it left the implementation of the statutory provisions entirely to the delegate. He alleged that this omission rendered the enactment invalid because the Legislature had, in effect, surrendered its legislative authority to the delegate. In addressing this narrow ground of attack, the Court explained that it was necessary to examine the preamble and the substantive provisions of the Act to ascertain whether the Legislature had clearly decided the policy questions and whether it had supplied sufficient guidance to the delegate for the implementation of the provisions of the statute.

In this matter, Shri Umrigar challenged the validity of the contested provision of the Imports and Exports Act. The Court observed that his challenge was fully covered by its earlier decision in Harishankar Bagla v. State of Madhya Pradesh. In that precedent, sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, had been attacked on the ground that they amounted to ultra vires delegated legislation. The Court repelled that attack. While rejecting the argument of unlawful delegation, Chief Justice Mahajan, who delivered the judgment, affirmed that “the Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law.” He further explained that “the essential legislative function … consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct.” The Chief Justice noted that the Legislature had indeed laid down a principle, namely the maintenance or increase in the supply of essential commodities and the securing of equitable distribution and availability at fair prices. The Court held that this principle was clear and provided sufficient guidance to the Central Government in exercising its powers under section 3. In other words, when the Court examined whether the delegate had been given guidance to implement the material provisions of the Act, it looked both at the statement of principles in the Act’s preamble and at the substantive content of section 3 itself. The decision therefore establishes that if a reasonably clear statement of policy can be found either in the operative provisions of an Act or in its preamble, no part of that Act may be attacked on the ground of delegated legislation by alleging that policy questions have been left to the delegate.

Applying that principle to the present case, the Court noted that the impugned sections of the current Act are intended merely to continue, for a limited period, the powers to prohibit or control imports and exports that had already been created by the Defence of India Act and the rules made thereunder. Accordingly, the present Act does not create new material provisions but extends existing ones. Consequently, it is proper to examine the preamble of the predecessor legislation and its relevant provisions to determine whether the Legislature had unmistakably set out the policy underlying that earlier Act and had articulated principles to guide those to whom implementation authority was delegated. The preamble of the present Act states that it was expedient to continue, for a limited period, powers to prohibit, restrict, or otherwise control imports and exports. This preamble, read alongside the predecessor’s preamble, confirms that the overarching policy is the maintenance of supplies essential to the life of the community, mirroring the principle identified in the Essential Supplies Act case.

In referring to the Defence of India Act, the Court observed that the pre‑amble of that legislation alludes to the emergency situation that existed at the time the Act was enacted and, inter alia, emphasizes the need to adopt special measures for safeguarding public safety and the public interest. Section 2 of the same Act further declares that the Central Government considered it essential to secure public safety, to maintain public order, and, more importantly, to ensure the maintenance of supplies and services that are indispensable for the life of the community. From these provisions the Court inferred that the overarching and principal objective of the present Act, just as it had been for its predecessor, is to preserve the supplies that are essential to the life of the community. Consequently, when the pre‑amble and the relevant section of the earlier Act are read together with the pre‑amble of the present Act, the Court found it difficult to draw a distinction between the present legislation and the Essential Supplies Act that was the subject of the decision in Harishankar Balga’s case. The Court also noted, by way of illustration, that in the case of Pannalal Binjraj v. The Union of India [[1957] S.C.R. 233] the validity of section 5(7‑A) of the Income‑Tax Act was challenged. That challenge was rejected, and, in the judgment delivered on December 21, 056, the Court took into account the legislative history of the earlier Income‑Tax Acts in order to discern the policy that underlies the provisions of the impugned section.

The Court then turned to the last argument raised by Shri Umrigar and described it as patently untenable. While Shri Umrigar began his submission by asserting that the finding against the petitioner—that the petitioner was trafficking in his licences and that the consignments in question did not truly belong to him—was unsupported by any evidence, he eventually had to concede that the authorities had relied on certain circumstances in reaching their conclusion. The Court explained that it is easy to claim that a finding of a competent authority lacks legal evidence, but such a claim can succeed only if it is shown that there is absolutely no legal evidence supporting the authority’s view. In the present matter, the Court found it impossible to accept the proposition that no legal evidence existed against the petitioner. The Court listed the petitioner’s poor financial resources, his conduct at every material stage when the consignments were ordered, the suspicions surrounding the very existence of the firm Messrs. N. Jivanlal & Co. in Bombay, the prominent role played by that firm at all stages of the transaction concerning the consignments, and the reckless allegations made by the petitioner before the authorities, which were subsequently found to be untrue by those authorities. The Court held that none of these matters could be summarily dismissed as irrelevant or as lacking legal evidentiary value. At the highest, the Court observed that there are some circumstances on which Shri Umrigar wishes to rely in favour of the bona fides of his

The Court noted that, irrespective of any assertion by the client, a considerable number of circumstances existed that weighed against him. The Court further observed that if every competent authority, after a careful assessment of those circumstances, arrived at a conclusion that was uniformly adverse to the petitioner, such a conclusion could not be legitimately contested or agitated through the present petition. Because the adverse findings of the authorities were consistent and conclusive, the Court decided that there was no need to examine that particular line of argument any further. Accordingly, the Court concluded that both Petition No. 42 of 1956 and Petition No. 46 of 1956 had failed to establish any valid ground for relief. As a result, the Court ordered that each of the two petitions be dismissed. In addition to the dismissal, the Court directed that the costs of the proceedings be awarded against the petitioners. Thus, the final order of the Court was that the petitions be dismissed with costs, and no further consideration of the matter was to be undertaken.