Dua, J. - (1.) This appeal by special leave is directed against the judgment and order of the Madras High Court dated March 25, 1971 dismissing at the stage of admission an appeal under cl. 15 of the Letters Patent preferred by the appellant against the judgment and order of a learned single Judge of that Court dated September 1, 1970 allowing writ petition no. 933 of 1970 filed by the respondent praying for a writ of mandamus directing the Licensing Authority under the Imports and Exports (Control) Act, 1947 to do his public duty and consider the applications for import licence made by the respondent. More than 200 writ petitions were hears together and disposed of by a common judgment of the learned single Judge, the facts in the respondent's writ petition No. 933 of 1970 being, by common consent, treated as illustrative of all the other cases as well.
(2.) On December 7, 1968 Lala Manickchand, proprietor of Messrs. Katerlla Metal Corporation, Madras, respondent in this Court, submitted an application, as a new unit, for the licensing period 1968-69 for the grant of an importing stainless steel as an actual user for manufacturing hospital requisites. The registration certificate dated December 31, 1968 issued to the respondent as a small scale industry by the Additional Assistant Director of Land and Commerce, District Madras North, reads; "DEPARTMENT OF INDUSTRIES and COMMERCE SMALL SCALE INDUSTRIES DIVISIOIN S. No. 571 Registration No. MS. N. SSI/506/033 CERTIFICATE This is to certify that M/s. Katrala Metal Corporation 54 Sydenhams Road, Madras 7 office at 90 N.S.C. Bose Road, Madras 1 is a genuine Small Scale Industry engaged in the manufacture of Hospital and Surgical Instruments. Trays, Mugs, Basins and Household Utensils out of stainless steel. Sd/- S. Gopalsrishnan. Addl. Asstt. Director of Land and Commerce, District Madras North. 31-12-68" According to Import Trade Control policy (1966-69) industries engaged in the manufacture of "medical and surgical equipment and appliances" were included in the list of priority industries at sl. no 39 of Appendix in Section V. The import policy is announced and published by the Government of India, Ministry of Commerce, on the eve of each financial year by means of a Public Notice which is issued in the form of a book called the Import Trade Control Policy, commonly known as the "Red Book". Prior to 1962 the import policy used to be published on half yearly basis. But with effect from the financial year 1962-63 the Red Book is the Handbook of Rules and Procedure on Import Trade Control. Its provisions are brought into force by a Public Notice published in the Gazette of India Extraordinary. It embodies the procedures, rules and regulations governing the submission of applications, grant of licences, their validity and utilisation and other matters relating to import trade control. The instructions contained in this book are applicable subject to future amendments and to the provisions of the relevant import trade control policy book:vide cl. 6, Chapter II of Handbook of Rules and Procedure, 1968. As is obvious from the preface of the Red Book for the year 1968-69, in formulating the import policy, account is generally taken of all the suggestions received from individuals, chambers and associations of trade and others. It appears that according to this policy import for household utensils was not available as a priority item and this necessitated further clarification from the respondent. In the meantime on January 30, 1969 Licensing Instruction No. 4/69 was issued from the Iron and Steel Control Department (I and E Division). It said: "Iron and Steel Control (I and E Division) Office Note, Licensing Instruction No. 4/69 dated 30-1-1969. 1. It has come to the notice of the Iron and Steel Controller that a large number of applications have been received for import of Stainless Steel Sheet plates and strips from newcomer units during 1968-69. As measure of precaution, the Regional Office and Licensing section were requested to suspend future issue of licence vide Iron and Steel Controller's telegram dated 9th January 1969. 2. The position has been reviewed, in consultation with the Department of Iron and Steel, and it has been decided Steel Sheets, plates and strips received should be scrutinised by the directors of Industries and the Regional Offices and Licensing Sections very carefully, before import licences are granted, with a view to ensuring that new units which are not well-equipped do not get away with import licences of this sensitive item. 3. For the purpose of scrutinising the applications, it is necessary to call for the following data from the applicants: (1) Date of registration of the unit. (2) Date on which power connection was obtained. (3) Details of the machinery installed. (4) Value of the machinery installed. (5) Whether the machinery is imported or indigenous. (6) The address of the firm from whom the machinery was purchased. (7) Date of purchase of the machinery. (8) Date of installation of the machinery. (9) Details of the end products to be manufactured. (10) Whether the unit is fully equipped to manufacture the items in question. (11) Past experience of the firm in manufacturing line. (12) Technicians employed and technical qualifications. (13) Whether any market survey has been conducted for the disposal of the products to be manufactured. If so, the results thereof. 4. Regional Officer and Licensing Sections are directed to write to all the newcomers who have sent their applications for Stainless Steel Sheets plates and strips to furnish the above information to the respective Directors of Industries direct endorsing a copy to the Regional Officers and the Licensing Sections. Copies of these letters may be endorsed to the respective Directors of Industries, with the request that they should, scrutinise the applications with reference to the date that may be furnished by the applicants carefully, and thereafter send their recommendations (revised recommendations as the case may be) to the licensing offices. 5. Regional Office and Licensing Sections are directed to take immediate action on the lines indicated above. Sd/- C. B. Mathur Officer on Special Duty."
(3.) It is quite clear from these instructions that stainless steel sheets were considered a sensitive item and that a large number of newcomers had applied for import of stainless steel sheets, plates and strips whose applications required close scrutiny. On may 2, 1969 the respondent, while giving information about end-products, stated in a letter that hospital requisites such as surgical bowls, spittoons and trays were intended to be manufactured by the industry. On May 19, 1969 the Chief Controller of Imports and Exports, from the Ministry of Foreign Trade and Supply issued General Licensing Instruction No. 29/ 69 on the subject of import licences to units engaged in the manufacture of hospital equipments. Those instructions pertained to the import policy for April 1969 March, 1970, and referred to "medical and surgical equipment and appliances" which was the subject matter of Item No. 39 in Appendix I of the Red Book for that year. In para 2 it was stated that some Licensing Authorties were treating the manufacture of "hospital equipment" as priority industry the general heading "medical and surgical equipment and appliances". It was pointed out that all types of hospital equipment and hospital appliances were not classified as priority industries and it was added by way of illustration that lotion bowls, kidney trays, instrument trays, wash bowls, measuring jugs, ointment jars and medicine cups as end-products were in nonpriority category. The sponsoring authorities were accordingly directed to ensure that only those hospital equipment and appliances were to be treated as priority industries, which would appropriately be classified as "medical and surgical equipment and appliances". On May 29, 1969 the Chief Controller of Imports and Exports issued General Licensing Instruction No. 31 of 1969 on the subject of "grant of import licence to units engaged in the manufacture of hospital equipment". After inviting attention to the earlier G. L. I. No. 29/69 dated May 19,1969 it was stated in this instruction that after further consideration in consultation with the D. G. T. D. a list had been prepared in respect of the end-products which alone would be treated as priority industries under the general heading "medical and surgical equipment and appliances." That list was enclosed for the guidance of the Licensing and Sponsoring authorities and in case of doubt those authorities were directed to refer the mater to headquarters Special Licensing Cell. On October 31,1969 the Director of Industries, Madras, confirmed the Essentiality Certificate already issued to the respondent. It was observed in that letter that the firm had "installed machinery and taken action to obtain power supply etc. Hence the Essentiality Certificate issued to the firm already is confirmed." On February 23, 1970 a letter was written by the Director of Industries and Commerce, Madras to the Deputy Assistant Iron and Steel Controller, Madras, in which after referring to his earlier letter dated October 31,1969 and to the respondent's letter dated February 6, 1970, it was stated: "In view of the assurance given by the firm that they would manufacture only Surgical Equipment like Sterilisers, Operation Tables, Autoclaves etc., I recommend that M/s. Katrela Metal Corporation, 54, Sydanhams Road, Madras for whom Essentiality Certificate has been issued for import of stainless steel sheets for the period April-March, 1969 may please be treated as Priority Industry and licence issued to them on this basis." Apparently, the Director of Industries was the sponsoring authority in this case. It was in these circumstances that the respondent filed the writ petition in the High Court on March 30, 1970 claiming a writ of mandamus as stated earlier, the sole grievance being that the respondent's application for import licence had during all this period not been taken up for final disposal. According to the respondent's case in the High Court, the firm's factory had been manufacturing various items since 1962 by purchasing raw material from local market with the annual turnover of about 8 to 10 lacs. With regard to the respondent's application for import licence for manufacturing hospital and surgical equipment it was added that the Director of Industries had issued the Essentiality Certificate in April, 1969 and recommended the respondent for treating it as a priority industry on February 23, 1970. In the counter-affidavit in that Court it was not contested that the writ petitioner was entitled to have his applications considered. According to para 10 of the counter-affidavit on which the learned single Judge of the High Court disposing of the writ petition relied, it was stated inter alia: "in the case of units engaged in the manufacture of non-priority end-products, as in the case of the petitioner, the Chief Controller of Imports and Exports had advised the department to keep the applications pending until the completion of the examination. The petitioner's application could not therefore be disposed of. However, instructions have since been received vide the Chief Controller of Imports and Exports, New Delhi letter dated 8-4-1970, which inter alia provided that applications received by the sponsoring authorities in time may be considered irrespective of the date on which they were forwarded to the licensing authorities and in terms of the licensing policy for 1970-71." It was added in this para of the counter-affidavit: "According to policy for 1970-71, the material stainless steel sheets is a canalised item for non - priority industries and release orders are to be issued on Minerals and Metals Trading corporation." In the judgment of the learned Single Judge it was stated to be common ground that the applications of the writ petitioners had to be dealt with in terms of the relevant import policy in force for the year 1968-69. However, a little lower down in that judgment. After reproducing the relevant portion of paragraph 10 of the counter-affidavit, it was also observed: "Learned counsel for the Central Government urged that the Licensing Authority whoever it is, is prepared to consider the applications of each of the petitioners in this batch of writ petitions, but such appraisal of the applications would be in terms of the licensing policy for the year 1970-71. Thus in effect, the respondents concede the right of the petitioners to have their applications considered and disposed of in a manner known to law, but the only opposition is that such applications filed and now pending will be considered in light of the licensing policy for 1970-71." It was in this context that the High Court observed that it was practically conceded that the rule nisi had to be made absolute and that some more directions were necessary. Relying on R. 7 (2) in Chapter II of the Handbook of Rules of Procedure, Import Trade Control for the year 1968, according to which applications for licences were required to be considered in terms of the relevant policy in force, the learned single Judge directed:" that the Licensing Authority to consider the applications now pending before him which are the subject matter of these writ petitions within six months from this date bearing in mind the above directions and in particular deal with the said applications, applying the import trade control policy prevailing in 1968-69 or 1969-70, as the case may be according to the dates of application for licence.";