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Petitioner: MESSRS. FRONTIER TEXTILE MILLS VS Respondent: THE TEXTILE COMMISSIONER, GOVERNMENT OF PAKISTAN, AND
P L D 1958 (W
P L D 1958 (W. P.) Lahore 345
Before S. A. Rahman C. J. and Masud Ahmad, J
MESSRS. FRONTIER TEXTILE MILLS‑Petitioner
Versus
(1) THE TEXTILE COMMISSIONER, GOVERNMENT OF PAKISTAN, and (2) CHIEF CONTROLLER OF IMPORTS AND EXPORTS, KARACHI‑Respondents
Writ Petition No. 59 of 1957, decided on 16th January 1958.
(a) Factories Act (XXV of 1934),
S. 5‑A‑Permission of Provincial Government to installation of new factory or extension of old one‑Not necessary after coming into force of Development of Industries Rules, 1950:
Held, that after the Development of Industries Rules, 1950 came into force, in view of the provisions of subsection (2) of section 49 of the Government of India Act, 1935, the executive authority of the Provincial Government (which was co‑extensive with its legislative competence), with respect to factories engaged in any of the manufacturing processes specified in the Schedule to the Development of Industries (Federal Control) Act, 1949, came to an end and, therefore, whatever may have been the number of persons employed in any such factory, the necessity of obtaining permission from the Provincial Government under section 5‑A of the Factories Act, 1934, also came to an end.
(b) Artificial Silk (Yarn Control) Order, 1955‑--
Registration (Importers and Exporters) Order, 1952‑Powers conferred on Textile Commissioner or Chief Controller‑Not of judicial Dr quasi judicial but of an administrative character.
Certain powers were conferred by the Artificial Silk (Yarn Control) Order, 1955, and the Registration (Importers and Exporters) Order, 1952, on the Textile Commissioner and the Chief Controller. In dealing with applications of consumers, dealers and importers, these two officers had to determine certain questions of fact and were expected to dispose of those applications in accor dance with the general policy and orders of the Government. In dealing with such applications these officers, apparently, acted in an administrative capacity.
Abdul Majid v. The West Pakistan Province P L D 1956 Lah. 615 rel.
(c) Constitution of Pakistan,
Arts. 11, 12, 170 proviso (a) Licensing Authority arbitrarily acting in a manner so as to deprive one of a fundamental right‑Remedy by petition under Art. 170.
If a licensing authority acts in such a manner as to deprive a person of his fundamental right to acquire and dispose of property and the power so conferred is exercised by that authority arbitrarily and capriciously, it would certainly amount to denial of the funda mental rights guaranteed by Articles 11 and 12 of the Constitution and would, to that extent, be void.
The powers conferred by Article 170 of the Constitution are wide enough and can be invoked even where the order in question is not of a judicial or a quasi‑judicial nature and has been passed by an authority in an administrative capacity. The decision would depend upon the determination of the question as to whether the discretion was exercised justly, fairly and reasonably, on a correct interpretation of and in accordance with law and without any discrimination. The fact that the authority, which passed the order in question, was acting in an administrative capacity would not be enough to oust the jurisdiction of the High Court, especially when the question of exercise of the fundamental right of the petitioners to acquire and dispose of property, guaranteed by Article 11 of the Constitution, is involved.
Rex v. Board of Education (1910) 2 K B 165 and Montgomery Flour and General Mills Ltd. v. The Director of Food Purchases, West Pakistan and others P L D 1957 (W. P.) Lah. 914 ref.
Nakhuda Ali v. M. F. De S. Jayara the P L D 1950 P C 102 distinguished.
If, due to shortage of foreign exchange, imports of artificial silk yarn had to be restricted, the decision of the Central Govern ment declining to provide raw material for those factories which were not working prior to the 31st October 1953, or which had not been installed before the 31st March 1954, cannot be considered to be unreasonable and if the respondents had for this reason refused to issue any import licences to the factories which were installed after the due dates, there would be no ground for inter ference by the High Court.
(d) Constitution of Pakistan,
Art. 170‑Whether and in what cases will High Court determine disputed questions of fact. Ordinarily, in exercise of the special jurisdiction conferred by Article 170 of the Constitution, the High Court declines to determine disputed questions of fact, but there may be cases where it may be necessary for that Court to give such a determination without starting an elaborate inquiry into the matter.
(e) Artificial Silk (Yarn Control) Order, 1955,
Ss. 6, 7‑Yarn imported under licence‑Cannot be withdrawn from importer --Whether and when a previous order can be cancelled.
An order can be modified or cancelled before it has been acted upon, but the power to modify or cancel an order comes to an end after a decisive step has been taken.
In this case, the intention of the Textile Commissioner under lying his subsequent order was to withdraw the goods which had been imported by the petitioners under an import licence. Such an order could not be passed after the goods had been imported and the import licence had been exhausted.
Shahbaz v. Crown P L D 1956 F C 46 ref.
The provisions of clauses 6 and 7 of the Artificial Silk (Yarn Control) Order, 1955, to the extent to which they were incon sistent with those of the Control of Essential Commodities Ordi nance, 1956 as properly understood, were not saved by section 16 of the Ordinance and hence the Textile Commissioner was not competent to pass the order intended to withdraw the yarn from the importer.
(f) Control of Essential Commodities Ordinance (IV of 1956),
S. 3.‑Whether confers power on Central Government for acquisi tion of movable property in a Province or for regulating supply and distribution of goods in a Province.
(g) Control of Essential Commodities Ordinance (IV of 1956)
Provisions how far in accordance with Constitution of Pakistan.
Held, that the provisions of the Control of Essential Commo dities Ordinance (IV of 1956) were in accordance with the Consti tution, except to the extent to which it provided for trade and commerce between a Province and the Federal Capital.
Sardar Muhammad Iqbal and Naseem Hassan Shah for Petitioners.
S. A. Mahmood, A. A. G. for Respondents.
Dates of hearing: 17th to 20th December 1957 and 6th January 1958.
JUDGMENT
MASUD AHMAD, J.‑Writ Petitions Nos. 59, 577, 277, 825 and 1258 of 1957, which are being disposed of by this judgment, arise out of the refusal on the part of the Textile Commissioner, Government of Pakistan, Karachi, (hereinafter referred to as the Textile Commissioner), to recommend to the Chief Controller of Imports and Exports, Government of Pakistan, Karachi (herein after referred to as the Chief Controller), to issue licences for the import of artificial silk yarn to the petitioners, the failure on the part of the Chief Controller to issue such licences to the petitioners and out of an order conveyed to one of the petitioners (the Frontier Textile Mills) by the Textile Commissioner, in his letter, dated the 3rd October 1956, directing them to keep intact a con signment of artificial silk yarn imported under a licence issued for the shipping period January‑June 1956. The facts of these cases, in brief, are given below.
2. A concern, by the name of the Muslim Cloth House, Lahore, gave an application under section 5‑A of the Factories Act, 1934, as inserted by the Factories (Punjab Amendment) Act, 1940, to the Director of Industries, Punjab, to obtain permission for the installation of ten power looms at Garhi Shahu, Lahore. The permission asked for was granted on the 29th June 1953 and ten power looms are alleged to have been installed by this concern shortly afterwards. On the 10th January 1955, an application was given to the same officer to obtain permission for the altera tion of the name of the concern from the Muslim Cloth House, Lahore, to the Frontier Textile Mills. This permission was granted on the 4th March 1955. It is alleged that before the end of the year 1954, twenty‑nine power looms, including ten for the instal lation of which permission had been obtained from the Director of Industries, Punjab, were installed by the Frontier Textile Mills, without obtaining further permission from the Director of Indus tries, under section 5‑A of the Factories Act, 1934, or from the Central Government, in accordance with the Rules framed under the Development of Industries (Federal Control) Act, 1949, as such permission was not considered necessary. The Textile Commis sioner recognized this concern for the issue of import licences and, on his recommendation, 3,300 lbs. of artificial silk yarn were allocated to this concern for the shipping period January -June 1955. For the next two shipping periods of July‑December 1955 and January‑June 1956 this concern was granted licences for the import of artificial silk yarn of the value of Rs. 13,000 and Rs. 10,000, respectively, by the Chief Controller, on the recommen dation of the Textile Commissioner. On the 3rd October 1956, however, the Textile Commissioner, without assigning any reasons, by means of his letter of that date (copy Annexure `D' in Writ Petition No. 59), withdrew the "recognition" of this concern and directed that the goods imported under the licence issued for the shipping period January‑June 1956 should be treated as commercial imports and kept intact for distribution to other factories. The validity of this order is being challenged in Writ Petition Nos. 59 and 577 of 1957, which are by the same petitioners. In the first- mentioned petition, it is prayed that a writ of mandamus, or any other appropriate writ, direction or order may be issued against the respondents (the Textile Commissioner and the Chief Con troller) to the effect that the order dated the 3rd October 1956 was null and void and that the petitioners are entitled to have their factory recognized for the purpose of grant of import licences. In the second‑mentioned petition, it is prayed that appropriate writ, direction or order may, be issued to the effect that their factory, consisting of twenty‑nine power looms, had been establish ed in accordance with law and that they are entitled to all the facilities regarding grant of import licences etc.
3. The petitioners in Writ Petition No. 277 of 1957, the Allied Textile Mills, claim that they had set up twenty power looms in the year 1954 and though they applied to the Textile Commissioner, on the 27th November 1954 and the 24th February 1956, for the supply of artificial silk yarn, neither any such yarn has been supplied to them, nor have the grounds of refusal been communi cated to them. They pray that a writ of mandamus, or any other appropriate writ, order or direction be issued to the respondents directing them that the petitioners are entitled, like other such factories, to the supply of artificial silk yarn.
4. The next petition (No. 825 of 1957) is by the Asia Cloth Mills. This factory, consisting of fifteen power looms, is alleged to have been set up in September 1953, without obtaining any permission from the Director of Industries, Punjab, under section 5‑A of the Factories Act, 1934, as inserted by the Punjab Act of 1940. A quota of artificial silk yarn, of the value of Rs. 12,460, was granted to this concern, on the 17th November 1953. Subsequently, two applications, the first sometime after the 18th December 1954, and the second, sometime after the 16th August 1955, were submitted by them to the Textile Commissioner for being granted a licence for the import of artificial silk yarn and sometime after the 5th May 1955, another application was given for the grant of a quota. No reply is said to have been received by the petitioners to any of these applications, nor have the respondents communicated to them the grounds of their refusal to issue the import licences and to allocate quota of artificial silk yarn, though informally it has been made known to them that as their factory was not set up with the permission of the Central Government, it could not be recognized for the purpose of alloca tion of quotas and for the grant of import licences. The relief asked for in this petition is that a writ of mandamus, or any other appropriate writ, order or direction may be issued to the respon dents requiring them to recognize that the petitioners had set up their factory, consisting of fifteen power looms, in accordance with law and that they are entitled to all the facilities for the supply of artificial silk yarn and for the grant of import licences.
5. The petitioners of the last of these petitions (No. 1258 of 1957) are M/S. Muhammad Ibrahim & Sons. Their allegations are that on the 30th April 1952, permission was granted to them for the installation of ten power looms at Grand Trunk Road, Lahore, and shortly afterwards, the same were duly installed. They claim to have installed, before the 31st October 1953, without obtaining permission, eleven more power looms, making a total of twenty one. An application for the grant of a licence for the import of artificial silk yarn was submitted by them on the 5th May 1956, but they were allotted quota only for thirteen power looms. They pray that an appropriate writ may be issued to the respondents directing them to admit the petitioners' claim for the grant of quota, or import licences, for twenty‑one power looms.
6. All the five writ petitions are contested by the two respon dents, the Textile Commissioner and the Chief Controller, on almost the same legal grounds, namely, that the grant of import licences and release of quota are within the sole discretion of the Chief Controller and the Textile Commissioner and that their decisions are neither judicial nor quasi‑judicial and, as such, the orders passed by them are not capable of interference by this Court in exercise of the writ jurisdiction. They also contend that none of the petitioners has any legal right to the grant of any quota or import licence. On facts, they contend that in accordance with the declared policy of the Central Government (which was based on the recommendations of a committee set up for. the pur pose and which was notified by means of a press note on the 20th December 1954), installation of new power looms was stopped with effect from December 1954 and only those factories which were working on the weaving of artificial silk fabrics, on or before the 31st October, or those which had been installed before the 31st March 1954 with permission of the Provincial authorities granted before the 31st October 1953, were to be recognized for the purpose of supplying artificial silk yarn and necessary facilities for procure ment of raw material were to be extended to them. According to them, by making false representations the Frontier Textile Mills managed to obtain quotas of yarn and import licences from the Government, but when it was found that they had not installed power looms for the weaving of artificial silk fabrics before the 31st October 1953, the goods imported by them, on the basis of the import licence issued for the January‑June 1956 shipping period, were ordered to be treated as commercial imports, so that the same maybe made available for the use of other factory -owners. With regard to the Allied Textile Mills, the respondents contend that no power looms had at all been set up by them and, therefore, they were not eligible for the supply of artificial silk yarn. Regarding the Asia Cloth Mills, while impliedly admit ting that they had set up six power looms before the 31st October 1953, the respondents contend that as no sanction of the Provincial authorities was obtained to the installation of power looms in their factory, they were not entitled to the grant of any quota, or import licence. Lastly, with regard to M/S. Muhammad Ibrahim & Sons, their contention is that they were not in possession of twenty‑one power looms in working order on the 31st October 1953, though they had installed ten prior to that date, and that on the basis of ten power looms and some hand‑looms, which had been installed by them before the due date, they were supplied artificial silk yarn for running thirteen looms.
7. Before taking up the case of each of the petitioners individually and deciding whether. any of them are entitled to the reliefs asked for, it would be useful to explain the procedure which was followed in the matter of grant of quota and import licences, the legal sanctions behind the various orders passed by the respondents and the extent of validity of the Factories (Punjab Amendment) Act, 1940, and the Artificial Silk (Yarn Control) Order, 1955.
8. To place restrictions on and to otherwise control the imports into, and exports from, Pakistan of various goods, the imports and Exports Control Act, 1950, was enacted. Subsection (1) of section 3 of this Act laid down that 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 the procedure connected with the import and export of such goods, including the submission of applications for licences under this Act, the evidence to be attached to such applications and the grant, use, transfer, or sale or cancellation of such licences. Under subsection (2) of section 3 of the Act, it was provided that no goods of the specified description shall be imported into or exported from Pakistan except in accordance with the conditions of a licence to be issued by the Chief Controller, or any other officer authorised in this behalf by the Central Government. In exercise of the powers conferred by subsection (1) of section 3 of the Imports and Exports Control Act, 1950, the Central Government on the 11th December 1952, issued the Registration (Importers and Exporters) Order, 1952, by means of which detailed procedure was laid down for the grant of registration certificates by the Chief Controller, without which no person could import any goods into or export out of Pakistan. On the same date, a notification was issued exempting all exporters from the provisions of clause (3) of that Order, the effect of which was that that Order was to apply only to those persons who were to import goods into Pakistan. That Order did not lay down any procedure for the grant of licences for the import of goods into Pakistan, nor did it specify the powers of the Chief Controller in this respect. On the 24th November 1953, in exercise of the powers conferred by section 3 of the Essential Supplies (Temporary Powers) Act, 1946, the Artificial Silk (Yarn Control) Order, 1953, was issued, which remained in force up to the 18th January 1955. On the 3rd May 1955, the Artificial Silk (Yarn Control) Order, 1955, was issued, under the same provision of law. The last‑mentioned Order, under which action is being taken by the Textile Commissioner, from time to time, empowered him to fix the maximum prices above which no importer, or dealer, was to sell any specified kind of artificial silk yarn. Clause (6) of this Order empowered the Textile Commissioner, by notification in the Official Gazette, to direct importers, dealers, or consumers, to obtain licences for the import, sale or purchase, as the case may be, of artificial silk yarn, under such conditions and on payment of such fees as may be specified in the notification. So long as any such notification remained in force, no importer or exporter could carry on import or wholesale or retail trade in artificial silk yarn and no consumer could purchase such yarn unless he had obtained the necessary licence. Further, for the purpose of securing proper distribution of artificial silk yarn, or of securing due compliance with his orders, the Textile Commissioner was empowered by clause (7) to direct any importer or dealer to sell to such person, or class of persons, such quantities of artificial silk yarn as may be‑specified by him, or not to sell or deliver artificial silk yarn of a specified description, except to such person or persons and subject to such conditions as he may specify. We were told that no notification under clause (6) of this Order has so far been issued by the Textile Commissioner.
9. After control on the purchase, sale etc., of artificial silk yarn was re‑imposed on the 3rd May 1955, by means of the Artificial Silk (Yarn Control) Order, 1955, consumers, dealers and importers, as defined in this Order, were required to apply to the Textile Commissioner for grant of licences to import artificial silk yarn and on his recommendations, the Chief Controller granted licences for the import of such yarn to industrial consumers and commercial importers. Before recommending such applications, the Textile Commissioner made necessary inquiries through his own officers or through the Director of Industries, Punjab, and normally the recommendations made by him were accepted. As a result of such inquiries, or otherwise, if the Textile Commissioner thought that an applicant was not a deserving one his application was not forwarded to the Chief Controller.
10. The Essential Supplies (Continuance of Temporary Powers) Ordinance, 1955, under which the Artificial Silk (Yarn Control) Order, 1955, was issued and which has now been replaced by the Essential Supplies Act, 1957, has an interesting history and it would be useful, at this stage, to make a brief reference to it. This Ordinance had replaced the Essential Supplies (Temporary Powers) Act, 1946, which had been enacted in exercise of the powers conferred by section 2 of the India (Central Government and Legislature). Act, 1946, an Act of the British Parliament, which empowered the Central Legislature to enact laws on some of the matters which had been enumerated in the Provincial List of the Seventh Schedule to the Government of India Act, 1935. This Act had a limited life and was kept alive by virtue of the resolutions, passed from time to time, by the Constituent Assembly of Pakistan, in accordance with the provisions of section 4 of the Act; the last of these resolutions having been passed on the 30th March 1954. The Act was to come to an end o the 1st April 1955, and before it expired the Essential Supplies (Continuance of Temporary Powers) Ordinance, 1955, was promulgated by virtue of the Proclamation of Emergency issued under section 102 of the Government of India Act, 1935, on the 30th August 1948. The Proclamation of Emergency came to an end with effect from the Constitution Day, namely, the 23rd March 1956, and with it ended the power of the Parliament to enact laws with respect to matters enumerated in the Provincial List of the Fifth Schedule to the Constitution, except with regard to the Federal Capital. The Essential Supplies (Continuance of Temporary Powers) Ordinance, 1955, was, therefore, replaced by the Control of Essential Commodities Ordinance, 1956, which was promulgated on the 25th April 1956. The last‑mentioned Ordinance was replaced by another Ordinance of the same name (No. V of 1956) and this, in its turn, was replaced by the Essential Supplies Ordinance, 1956, which was promulgated on the 17th November 1956. Each of these three Ordinances had a savings clause, the effect of which was to keep alive any orders made, or deemed to have been made, under the repealed Ordinance, in so far as they were not incon sistent with the provisions of the new Ordinance. The last of these Ordinances of the year 1956 was replaced by the Essential Supplies Act, 1957, which, while repealing the Essential Supplies Ordinance, 1956, did not have a savings clause similar to the one in each of the three previous Ordinances, but, by virtue of the provisions of sections 24 and 30 of the General Clauses Act, 1897, any orders made, or deemed to have been made, under the Essential Supplies Ordinance, 1956, if they were not inconsistent with the provisions of the Act of the year 1957, would be deemed to be still in force.
11. The Artificial Silk (Yarn Control) Order, 1955, which, as indicated above, was issued in exercise of the powers conferred by the Essential Supplies (Continuance of Temporary Powers) Ordinance, 1955, has not yet been repealed and by virtue of the savings clauses contained in the three Ordinances of the year 1956 and the provisions of sections 24 and 30 of the General Clauses Act, 1897, still remains in force, to the extent to which its provisions are not inconsistent with those of the Essential Supplies Act, 1957, but it cannot be considered to be operative to the extent to which it comes into conflict with the…
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