- (1.) . - These twenty-nine petitions under Article 32 of the Constitution raise common questions and will be dealt with together. They have been filed by two firms who obtained 'patentes' to carry on business in Pondicherry in September 1954 for the first time. As the facts in all the petitions are similar, we shall only give the facts generally to understand the questions raised before us. The two firms, it may be mentioned, did not carry on any business in Pondicherry before September 1954 when they got a 'patente' each and the proprietor of one of them is a resident of New Delhi while the proprietor of the other is a resident of Bombay.
(2.) The administration of Pondicherry was taken over by the Union of India from November 1, 1954. Before that Pondicherry was under the administration of the Government of France and was a free port. Import into Pondicherry was thus not subject to any restriction, except with regard to certain goods with which we are not concerned in the present petitions. Any merchant desiring to carry on business in the territory of Pondicherry had however to obtain a 'patente' before could do so. These 'patentes' were of five kinds one of which was a 'patente' authorising the trader to carry on the business of import of goods other than those which were under restriction. Though the importers were entitled by virtue of the 'patente' to import goods subject to certain restrictions, this right could only be exercised by securing foreign exchange which was subject to certain limitations and was controlled by the Department of Economic Affairs at Pondicherry. There were two ways in which foreign exchange could be acquired, namely, (i) at the official rate through the Department of Economic Affairs, or (ii) in the open market at such rate as might be available; and both these ways were considered valid before November 1, 1954. Further there used to be authorisations for the purpose of import and the authorisations indicated the limit within which foreign exchange could be acquired either at the official rate or through the open market.
(3.) The petitioners' case is that though the 'patentes' were secured in September 1954, orders for import were placed before August 15, 1954. Thereafter after authorisations had been obtained from the. French authorities, foreign exchange was acquired in the open market for the purpose of financing the import. There were in all twentynine transactions by the two firms, which are the subject-matter of these petitions, and in certain cases advances were paid, the balance being payable by means of bills of exchange drawn on "documents against payment" basis. But though the orders were placed before August 15, 1954 and necessary foreign exchange had also been secured in the open market later, shipments could not be made because of an unexpected dock strike in England and on the Continent and also for want of shipping space, and therefore most of the consignments on the basis of the twenty-nine orders were shipped after November 1, 1954, and only three consignments out of twenty-nine could be shipped in October 1954, that is before the administration of Pondicherry was taken over by the Government of India. The goods in all these cases arrived at Pondicherry after November 1, 1954. In the meantime the administration of Pondicherry was taken over by the Government of India from November 1, 1954 in pursuance of an agreement between the Government of India and the Government of France, and two notifications were issued by the Government of India, namely, S. R. Os. Nos. 3314 and 3315. By S. R. O. 315, which was made under S. 4 of the Foreign Jurisdiction Act, No. XLVII of 1947, the Sea Customs Act, 1878, the Reserve Bank of India Act, 1934, the Imports and Exports (Control) Act, 1947 the Foreign Exchange Regulation Act, 1947 and the Indian Tariff Act, 1934 were extended to Pondicherry. This S. R. O. contained a saving clause which laid down that :- "Unless otherwise specially provided in the Schedule, all laws in force in the French Establishments immediately before the commencement of this Order, which correspond to the enactments specified in the Schedule, shall cease to have effect, save as respects things done or omitted to be done before such commencement." As a consequence of these two S.R. Os. a press communique was issued by the Government of India on November 1, 1954, explaining the effect of these notifications, in which it was stated that imports into and exports from the French Establishments would be regulated in accordance with the provisions of the Imports and Exports (Control) Act, 1947. It was further stated that as regards orders placed outside the Establishments and finalised through grant of a licence by competent French authorities in accordance with the law and regulations in force prior to November 1, 1954, licence-holders were advised to apply to the Controller of Imports and Exports for validation of licences held by them. Licence-holders were further advised not to arrange for shipment of goods until the licences held by them had been validated by the Controller of Imports and Exports. In view of this press communique the petitioners tried to stop shipment until the authorisations held by them were validated by the Chief Controller of Imports and Exports, Pondicherry. But their suppliers told them that this could not be done, as the goods were in the course of shipment and it was too late to stop the shipment. The petitioners then applied for validation of the authorisations, but the Chief Controller of Imports and Exports. Pondicherry refused to validate them. The petitioners' case is that this refusal was arbitrary. Eventually, when the goods arrived at Pondicherry after November 1, 1954, the petitioners approached the Collector of Customs at Pondicherry to permit clearance of the goods. They were not however allowed to clear them, and notices were issued to them to show cause why the goods should not be forfeited on the ground that the import had been made in contravention of the Imports and Exports (Control) Act, 1947 and the Sea Customs Act, 1878. The petitioners thereupon showed cause and their case was that orders had been placed before August 15, 1954 and the imports had been made strictly in accordance with the law in force in Pondicherry before November 1, 1954 and therefore could not be said to be unauthorised. The Collector of Customs however refused to accept this explanation and ordered confiscation of the goods and in the alternative imposed penalties for clearing them. These penalties amounted to over Rs. 64,000/- in the case of one of the firm and over Rs. 96,000/- in the case of the other firm. There were then appeals by the petitioners before the Central Board of Revenue against the orders imposing penalties. These appeals were dismissed, though the penalty was reduced to over Rs. 35,000/- in the case of one firm and Rs. 60,000/- in the case of the other firm. The petitioners then went in revision to the Government of India but their revisions were rejected on January 23, 1957. It appears that the petitioners paid the penalty though the date is not clear from the petitions and cleared the goods. The petitioners were apparently satisfied with the orders passed against them for they took no steps to go to Court after the revisions had been dismissed by the Government of India in January 1957, though they say that they have been making representations to the Government of India in that behalf without any effect and that the last communication from the Government of India was received by them in this connection in August 1961.;