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Civil Appeal No. 297 of 1983, decided on 12th March, 1986.
(Against the Judgment and order of the Lahore High Court, Lahore, dated 6‑7‑1983 in W. P. No. 1484 of 1983).
---Arts. 185(3) & 199‑Imports and Exports (Control) Act (XXXIX of 1950), S. 31‑Gift Scheme‑Leave to appeal granted to examine question whether High Court had correctly held, respondent to be entitled to import 126 Units of trucks, less than two years old, although they were truck‑chassis and were held, to be new by High Court.
‑‑ Art. 199‑Imports and Exports (Control) Act (XXXIX of 1950), S. 3‑Departmental order‑Construction‑Principles stated.
In construing the departmental orders/proceedings two principles have to be observed. If a particular ground, reason or procedure is adopted in justification of it then that ground reason or procedure is examined strictly on merits or establishing its validity and efficacy. If it does not stand that test then all the plenary/residuary powers possessed by the department which could possibly be of avail and pleaded in justification have to be explored and examined, to protect rather than to frustrate the order.
An executive agency must be rigorously held to the standards by which it professes its action to be judged. Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. This judicially evolved rule of administrative law is now firmly established and rightly so. He that takes the procedural sword shall perish with that sword.
Acts performed and orders made by public authorities deserve due regard by Courts and every possible explanation for their validity should be explored and the whole field of powers in pursuance to which the public authorities act or perform their function examined and only then if it is found that the act done, order made or proceeding undertaken is without lawful authority should the Courts declare them to be of no legal effect.
William Vincent Vitarelli v. Fred A. Seaton, Secretary of the Interior 359 U S 535 and Chairman Railway Board v. Abdul Majid Sardar 1966 S C 725 ref.
"New"‑Meaning.
Chambers Shorter Dictionary; Oxford English Dictionary Vol. VII; Halsbury 3rd Edn., Volume 20, p. 494 Note (h) and 1963‑49 I T R 310, Morris Motors Ltd. v. Liley 1959‑3 All E R 737 and Morris Motors Ltd. v. Phelan 1960‑2 All. E R 208 ref.
S. 3(t)‑Constitution of Pakistan (1973), Art. 199 ‑ Central Government's powers to prohibit or restrict imports and exports Limit‑‑Central Government could prospectively prohibit or control imports‑Vested right‑When could be allowed to be overridden Executive powers have to be exercised fairly and justly, for advancing object of legislation‑Every such exercise of power has to satisfy test of reasons and relevance.
The department possessed untrammelled powers and could prospectively prohibit or control the imports.
All the same, even such an extensive power has its limits.
Vested rights cannot be allowed to be overridden, unless it takes place by unequivocal words, by an organ or authority competent to impair or override the vested rights.
All executive power has to be exercised fairly and justly, for advancing the object of the legislation. In other words every such exercise of power has to satisfy the test of reason and relevance.
‑‑ S. 3(1)‑Constitution of Pakistan (1973), Art. 199‑Powers of Central Government to prohibit or restrict imports and exports Discretion Limits‑Vested right‑Determination of nature of such right‑Vested right cannot be overridden in the matter of import and export, except on express words of an authority competent to legislate retrospectively and competent to override or impair such vested rights‑An agency or authority not empowered to override or impair vested rights cannot achieve that end simply by giving its dispensation in the form of a declaration‑Such vested rights were protected and preserved by principle of promissory estoppel‑Scope, extent and principles of exercise of discretion elaborated.
If contracts had been bona fide and legally entered into and had given rise to rights and liabilities enforceable at law then certainly vested rights had come into existence which could not be overridden even in the matter of import and export, except on express words of an authority competent to legislate retrospectively, competent to override or impair such vested rights. An agency or authority not empowered to override or impair vested rights cannot achieve that end simply by giving its dispensation in the form of a declaration.
Such a vested right was protected and preserved by invoking in aid the principle of promissory estoppel.
Proceedings under discretion ought to be limited and bound with the rule of reason and law. For discretion is a science or understanding to discern between falsity and truth, between wrong and right, between shadows and substance, between equity and colourable glosses and pretences, and not to do according to their wills and private affections.
It should be remembered that no discretion vested in an executive officer, is an absolute and arbitrary discretion. The discretion is vested in him for a public purpose and must be exercised for the attainment of that purpose. Even though there be no express words in the relevant legal provision to that effect, the discretion is always circumscribed by the scope and the object of the law that create it and has at the same time to be exercised justly, fairly and reasonably.
Union of India and others v. Anglo‑Afghan Agencies A I R 1968 S C 718; Book's case 5 Co. REP 99(b), p. 209; The Montgomery Flour and General Mills Ltd., Montgomery v. The Director, Food Purchases, West Pakistan P L D 1957 Lah. 914 and Messrs ,East and West Steamship v. Pakistan P L D 1958 S C 41 ref. .
Munir A. Shaikh, Deputy Attorney‑General and Ch. Fazal‑i‑Hussain, Advocate‑on‑Record for Appellants.
Wasim Sajjad, Senior Advocate Supreme Court and Ch. Akhtar Ali. Advocate‑on‑Record for Respondents Nos. 1 and 2.
Date of hearing :12th March, 1986.
Leave to appeal was granted to the Federation of Pakistan to examine the question whether the Lahore High Court by its judgment dated 6‑7‑1583 had correctly held the respondent writ petitioner entitled to import 126 units of Isuzu trucks, less than two years old, although they were truck chassis and held to be new by the High Court.
The Government of Pakistan, Ministry of Commerce and Local Government (Commerce Division) notified a revised policy dated 22‑10‑1973 reflected in the following Press Note:-
According to the exiting policy of the Government, Pakistanis living abroad are' permitted to import bus and truck chassis purchased against their foreign exchange earnings, in C. K. D. condition through recognised assemblers in Pakistan. To further encourage such imports, it has been decided that they can import bus and truck chassis in both C. K. D. and built‑up condition.
(2) It has also been decided that Pakistani citizens residing in Pakistan, who want to import tractors and bus and truck chassis in both C. K. D. and built up condition without asking for foreign exchange from the Government, will also be given import permits freely. They should however, file a declaration regarding the source of foreign exchange, alongwith the application for import permits.
(3) There is no restriction on the number of tractors, trucks and buses which can be imported under this facility, and these imports would be governed by the liberalised procedure announced by the Government on 7th July, 1973."
This policy was modified by another Press Note dated 4‑3‑1978 as hereunder :‑
According to the existing policy of the Government, Overseas Pakistanis are permitted to import in personal baggage or send as gift bus/truck chassis (C. K. D. or Built‑up) purchased against their own foreign exchange earnings abroad. To provide more facilities to overseas Pakistanis, the Government has decided to also allow the import of standardised models of second‑hand buses; trucks not more than 2 years old in addition to the above‑mentioned facilities.
(2) The following makes will be importable under these rules :‑
(i) Buses‑Bedford, Isuzu and Fiat
(ii) Trucks‑Bedford, Isuzu and Hino
It is further clarified that the import of second‑hand buses/trucks of the above makes shall be against foreign exchange earning of Pakistanis working abroad duly certified by the concerned Pakistan Missions abroad. The specimen of the earning certificate required to be produced for obtaining the import permit is annexed."
Another Press Note was issued on 16th July, 1978, the relevant portion of which is reproduced hereunder ‑
"it has been decided by the Government that new bus/truck chassis (Built‑up or C. K. D.) and second‑hand buses/trucks of the following makes manufactured in the countries shown against each make shall only be importable under the facilities granted vide above mentioned Press Notes :‑
(i) Buses
(a) ------
(b) Isuzu Japan
(c) ----
(ii) Trucks
(a) -----
(b) Isuzu Japan
(c) ---------
(d) ......
(e) ......
One Syed Pervaiz Amjad working in Dubai obtained the following certificate in respect of his foreign exchange earning for import of Motor vehicles into Pakistan :‑
(To be issued by the Pakistan Diplomatic Mission)
1. This is to certify that from the documents and evidence produced by Mr. Perwaiz Amjad his/her total income by legitimate earnings during his/her stay in Dubai from 1979 to 1981 has been calculated as under :‑
(i) Gross income U. S. 713,175 (in words) U. S. Seven hundred thirteen thousand one hundred and seventy‑five only.
(ii) Net savings after deduction of taxes Board and Lodging expenses C S 10/‑/ 5/‑ per day for 1095 days U. S. 702,225/‑ (in words) U. S. Seven hundred two thousand, two ,hundred and twenty‑five only.
2. The documents on which this Certificate is based are annexed herewith for presentation to the Chief Controller of Imports and Exports, Government of Pakistan, alongwith the Certificate at the time of applying for issue of Import Permit.
3. Also certified that it has been made clear to the applicant that the issue of the certificate does not in any way imply any commitment on the part of the Chief Controller of Imports and Exports or Government of Pakistan to issue the Import Permit which shall be governed by the rules and regulations in force at the time of filing of complete application with them.
4. This certificate is valid for six months for presentation to a Controller of Imports and Exports in Pakistan alongwith applications on Annexure I and other documents prescribed therein.
(Sd.)
Syed M. A. Wasti,
Commercial Controller
Consulate General of Pakistan,
Date 13‑9‑1982 of the Mission
Place Dubai
Encls : One."
Syed Pervaiz Amjad thereafter addressed the following letter (undated) to Controller, Imports and Exports, Lahore :‑
"Ref :‑Import Permit For Commercial Vehicles.
I have been issued Earning Certificate for U. S. 7,02,225 by the Con sulate General of Pakistan Dubai U. A. E. against which I am importing Commercial and Light Commercial vehicles into Pakistan, which I am gifting to Mr. Muhammad Aslam chaudhry residence of 7‑A, FATIMA JINNAH ROAD, Lahore.
I am authorising Mr. Muhammad Aslam Chaudhry to obtain Import Permit, from CCI&E and to pay the Customs dues and sales tax and to do all the necessary work to get the vehicles cleared."
On IS‑9‑1982 Muhammad Aslam Chaudhry, the writ petitioner, applied to the Controller, Export and Import, Lahore, for issuing him Import permit of truck chassis.. On the same date he submitted in that office (i) Earning Certificate, (ii) Purchase receipt, (iii) Invoice, (iv) Bill of lading and (v) Certificate of origin. A receipt was handed over to him showing that he was seeking "I/P Truck chassis". He was asked to call on 22‑9‑1982.
Another application was addressed by the writ petitioner to the Chief Controller of Imports and Exports which is undated but which is shown to have been received in that office under diary No. 292‑HQIP on 26‑9‑1982. He made the following request in it:‑
I am importing commercial vehicles on a bona fide earning gifted to me by S. P. Amjad amounting to 702,225 US a copy of which is attached herewith.
I have out of this earning booked 126 units of ISUZU Truck, less than two years old from a Project which was abandoned before it could take off, therefore, the above vehicles could not be registered and have been in their Godowns ever since.
I sorted advice from the Office of the Controller Imports, Lahore and was told that though the trucks in question are standardised, but do normally require a Registration Book to certify the year of Manu facture. However in its absence a certificate of the maker attested by the Chamber of Commerce, Japan and authenticated by the Pakistan Mission can be an authentic document to prove the same.
I accordingly have got a similar certificate prepared from Japan; 'which is attached with the documents of the trucks. I would be most obliged if you could accept these aforementioned documents and permit me to get released the trucks which are already under Demur rage amounting to Rs. 2,700 day, while a next lot of 10 units is on sea with a PNSC Carrier which I deliberately choose in order to extend business to the National Flag Carrier.
I once again request you to kindly allow me to clear these vehicles, as I have been looking forward to spend all this earning in some constructive department in my own country."
On 28‑12‑1982 he addressed another application seeking import permit of 126 Truck chatsis and filing all the papers concerning it and also informing that he has been issued Import Permit for nineteen such trucks and prayed that the Import Permits of the remaining 107 truck chassis be issued to him.
One of the papers submitted by the writ petitioner was a letter of confirmation dated 10‑8‑1982 issued by Tokyo Maritime Corporation con taining the following facts :‑
"We, as seller, confirm that we shall deliver and sell to you; as buyer, 126‑Units of Isuzu Truck Chassis, as is condition, with the following terms :‑
------------------------------------------------------------------------------------------
Manufacturer : Isuzu Motors Limited.
Model : TXD 55 JYTN & JCR500
Quantity 76 Units 50 Units
F. O. R. Yokohama
Unit Price yen 950,000.00 yen 1,200,000.00
Amount yen 72,200,000.00 yen 67,200,000.00
Total yen 139,400,000.00
Destination Karachi Pakistan
Payment Terms cash.
-----------------------------------------------------------------------------------------------
(1) Tokyo Maritime Corporation confirms receipt of Advance yen 6,217,500 in cash which is equivalent to 5% of the agreed F. O. R. Price, And 5 % amount will be settled in the last delivery of shipment of last units.
(2) Mr. Asim H. Kadri will take delivery of the above units on full agreed amount of F. O. R (yen 950,000 and yen 1,200,000), for which Tokyo Maritime Corporation will make a payment receipt.
(3) Tokyo Maritime Corporation guarantees that the above units shall not be sold, leased or hired to any party other than Mr. Asim H. Kadri.
(4) This sales note will valid till end of February, 1983."
Some preliminary objections were raised with regard to the Registration Certificate of these vehicles but these were resolved and on 30.10‑1982 the Ministry of Commerce issued the following authorisation ‑ ‑
"Office Memorandum
Subject : Import of Isuzu trucks under gift scheme. ‑
The undersigned is directed to refer to CCI&E's O. M. No. 5 (3)/82 Trucks/IP, dated 4th October, 1982, on the above subject and to stale that it has been decided to authorise the grant of an import permit for 9 (nine) units which have already arrived in Pakistan. In the absence of registration documents a certificate by Isuzu Motors Overseas Distribution Corporation, Tokyo, Japan indicating the year of manufacture has been accepted.
(2) The units which are in the pipeline are to be cleared after estab lishing the fact that their manufacture mouth and year was after October, 1980. Documentary evidence to that effect will have to be provided by the party himself. A similar certificate by IMODC, Japan, would be acceptable in the absence of registration document.
(3) As regards each consignment of remaining 107 units the party will make shipment after the authenticity of its import is cleared by the CCI&E."
Pursuant to the requirements of the letter just reproduced the suppliers informed Messrs Republic Motors, by letter dated 14‑12‑1982 as follows‑
Subject: Old stocks of Isuzu Trucks supplied to 3rd party by domestic dealers.
In accordance with our information for the shipment of 19 units of TXD55/JCR500/JCR360 by domestic dealers to third party, we requested IMODC to check and investigate the exact situation and have been advised as follows
(1) As you are full aware that 19 units (17 units TXD55, 1 unit JCR500 and 1 unit JCR360) were already shipped and arrived at Karachi.
(2) The balance 107 units (59 units TXDS55, 48 units JCR500) are all of 1980 Model.
(a) All the above 126 vehicles were produced for Malaysian market in 1980, however, Malaysian importer cancelled the contract.
(b) There was no other way for Isuzu Motors Ltd., but to sell all 126 units to domestic dealers and in turn ; domestic dealers sold to some agent.
(c) The said agent sold to Pakistani party all units under Home Delivery Scheme.
(d) Last September the said agent asked production year for the said 126 units to IMODC through domestic dealers and IMODC had to issue Certificate for year of production. IMODC did not know that these units would be ultimately shipped to Pakistan.
(e) Balance 107 units has now been already cleared for export for Pakistan and we, as well as IMODC are unable to suspend export because these are for third party's property and the customs clearance for the export of these vehicles has been completed.
(2) In view of the above situation, we have to advise your good self that balance 107 units of 1980 Model Isuzu Trucks shall arrive Karachi port soon. This is final lot of Isuzu and IMODC have no more stock for other market and they will never sell in future before confirmation of destination from the dealer. The chassis number of It units are as follows."
The IMODC certified the year of manufacture of all these vehicles for which Import Permit was required. It happened to be 1981 (from January to April).
On 30‑1‑1983 the Ministry of Commerce communicated to the writ petitioner its refusal in the following words‑
"Subject : Import of Isuzu Truck chassis.
I am directed to refer to your application No. Nil dated Nil on the subject nosed above and to say that it has been decided to authorise clearance permit in respect of 19 units of truck chassis mentioned in the Annexure to the letter and already arrived Karachi.
(2) As regards your request for the import of remaining 107 units, it has not been found possible to accede to your request.
(3) It may please be noted that clearance for 19 units is being issued as a special case because the trucks have already arrived Karachi."
On 20‑3‑1983 the Ministry of Commerce issued the following clarificatory Press Note‑
Subject: Import of Trucks, Buses and Light Commercial Vehicles by Overseas Pakistanis.
It is clarified that the word new' used in this Ministry's Press Notes No. 12(33)/77‑Imp. V of 21st May, 1978 and subsequent Press Release, dated the 16th July, 1978 and Press Note No. 12(2)/8l Imp. V, dated the 26th December, 1981 on the above subject means that an imported bus/truck chassis (Built up or CKD) is of the latest/current model, has been purchased directly from the manu facturers or their agents and is not physically used before import."
In this background of events, the respondent invoked the constitu tional jurisdiction of the High Court. He claimed the following reliefs‑
(i) to declare that the refusal of the respondents to allow the import into Pakistan of 107 new, unused truck chassis of Isuzu make of 1980 Model from Japan is without lawful authority and is of no legal effect ;
(ii) to direct the respondent to allow the import into Pakistan of the said 107 truck chassis ; and
(iii) to direct the respondent to reimburse to petitioner No. I the expenses incurred by him on account of illegal delay caused in the clearance of 19 truck chassis of Isuzu make of 1980 Model from 27‑11‑1982 to 29‑3‑1983.
(iv) Costs."
In the report submitted by the department the position taken was that "Although the word "new" was not elaborated in the Press Note of 16th July, 1978 (Annexure "1") yet this term has been generally regarded and was intended to refer to brand new bus/truck chassis of the latest model". The refusal of the import permit was sought to be justified by the depart ment on the following grounds :‑
"(1) The petitioner in his initial application had requested for import permit for Isuzu trucks less than two years old' whereas it transpired that the vehicles imported were truck chassis and not trucks as stated by the applicant.
(2) As the petitioner had himself stated that the trucks imported by him were less than 2 years old' which implied that the vehicles were old, whereas in chassis form, the vehicles had to be new. Since the applicant later on claimed that they were new vehicles, different agencies had to be consulted in order to establish the same.
(3) Although the truck chassis imported by the party were condition wise new, but not of the latest model.
(4) The party had not imported these chassis directly from the manufacturers or their sole agents or the authorised agents of IMODC for Pakistan.
(5) If the import of truck chassis of old Models is allowed, the market would be flooded with old model truck chassis which could be sold as latest model and they could later on turn out to be junk."
The claims made and the reliefs sought were denied in the words reproduced hereunder
"This clarification covers 107 truck chassis of 1980 Model of petition No. I as well which had not been shipped uptil 20‑3‑1983. In this regard the party had been specifically advised before hand that no import should be effected of these 107 units without prior clearance of the M/o Commerce. The petitioner No. 1 cannot, therefore, claim the clearance on the ground that the intimation of his intention to import the same had been given earlier."
The High Court by the impugned judgment held that the writ petitioner had fully satisfied the requirements of the Gift Scheme as in force immediately before 20th March, 1983 and the appellant could neither deny the benefits thereof to him nor could it apply retrospectively the revised definition of "new" as contained in the Press Note dated 20‑3‑1983. The High Court concluded the judgment as hereunder
"The outcome of the entire discussion is that the petitioners by acting on the gift scheme and the Press Note, dated 16th July, 1978 earned a right to get the import licences, for all the 126 truck chassis. The respondents thus could deny or frustrate that right only if they could show that permitting them to do so would be in violation of the same scheme or some other law but not arbitrarily. The respondents, on the other hand, came to the conclusions that the truck chassis imported or sought to be imported by the petitioners were new. They withdrew the import licences already issued and declined to issue the remaining merely for the reason that they were not of the latest/current model. Here they changed the criteria unilaterally and retrospectively which they could not do. Thus, their action in recalling the 19 import permits already issued and refusal to permit the import of the remaining 107 was without lawful authority and devoid of any legal effect. The respondents are, therefore, directed to issue the import licences for the 107 truck chassis."
The learned Deputy Attorney‑General in assailing the judgment of the High Court heavily relied on the decision of this Court in Government of Pakistan v. Zamir Ahmad Khan (PLD 1975.SC667), which was not even taken note of by the High Court. The Deputy Attorney‑General relied in particular on that portion of decision where it was laid down that the "law is well‑settled that in the generality of cases, licence (simpliciter) is a privilege and not a legal right ; much less there is a legal duty for its grant. Therefore, exceptional cases apart mandamus would not issue in such cases speaking generally in such cases the emphasis is on policy and any discretion vesting in the authorities is directed towards attaining the policy objective" On its strength, it is contended that the respondent writ petitioner could not claim the import permit as of right. Besides, according to the learned Deputy Attorney‑General, after the clarification was issued as to what was meant by "new" there was left no substance in the claim of the respondent, and after the date of clarification no import permit could be issued for vehicles which did not satisfy the revised/clarified definition of "new". Finally, it was contended that the respondent writ petitioner was guilty of false declaration, as he wanted import permits for trucks and not truck chassis not new but those not over two years old. His requirement was different than what he expressed and this error in declaration itself disqualified him from claiming the import permit.
Mr. Wasim Sajjad, Advocate, the learned counsel for the respondent, also relied on the same decision of this Court on which the learned Deputy Attorney‑General was relying. He has referred for his case to the observation therein that "It must be conceded, however, that the Courts have always endeavoured to protect vested rights, by refusing to allow statutes to have retrospective operation, unless such a result becomes inevitable from the express language of the statute or its necessary intendment". According to the learned counsel, what better evidence of a right having come to have vested in the writ petitioner on provided. The hard‑earned foreign exchange, a very substantial amount indeed for an individual, was diverted and committed under a contract, no part of which was open to doubt or dispute, in strict compliance with the statutory Gift Scheme for imports, when the department sought to recede. It was not owned as a retrospective enforcement of a new import policy. Surprisingly, the department's position throughout, that in denying the import permit it was giving effect to its prerevised policy and that the word "new" had always the meaning of "latest/current model" of its direct purchase "from the manufacturers or their agents", is unsupportable in law, an arbitrary dispensation, oppressive in its results. According to him, the vehicles purchased ty the writ petitioner satisfied the strictest definition of "new". There was no mistake in declaration made by the writ petitioner at any stage and it is the department itself which has been using the word. trucks instead of truck chassis.
Before taking up the legal issues involved in the case, it is necessary to complete the historical background of Gift Scheme, the facts supplementing it are contained in a reported decision in the case of Mrs. Amina Bibi v. Islamic Republic of Pakistan (P L n 1981 Kar. 690). The relevant facts are hereunder :‑
"The Gift Scheme was introduced on 1st of April, 1975 to be effective from 1st July, 1975. One of the basic conditions for such import was that it should have been made against bona fide earning of the person making the gift. In order to ensure the correct working of this scheme a procedure was laid down in the scheme which is reproduced below. The Government noticed abuse of the scheme and on 28‑12‑1978 import of reconditioned cars was totally banned. However, as such an order was causing hardship the Government issued instructions on 1‑1‑1979 that in cases where cars have already arrived or have been shipped before 28‑12‑1978 they may be allowed to be imported. A further relaxation was granted that if the cars could not be shipped on or before 28‑12‑1978 but payments were made before 30th January, 1979 then such cars would be allowed to be imported provided each individual produces satisfactory documentary evidence of payment and further that the car arrives in Pakistan on or before 31st March, 1979."
This indicates that when the Government itself decided to modify the scheme it preserved within reasonable limits the existing contracts.
Taking up the specific point on which leave to appeal was granted, we find that it is based on the first justification offered by the department when a report on the writ petition was called for. It appears that the alleged mis-declaration was never made a ground, nor communicated to the writ petitioner as a reason for refusing the import Permit. The first application which the writ petitioner submitted on 18‑9‑1982 and on which he was issued a receipt asking him to call at the office on 29‑9‑1982 it was noted by the office that he was seeking "I/P Truck Chassis" In the second application dated 26‑9‑1982 (already reproduced verbatim) he while mentioning that vehicles were "less than two years old" also mentioned that "the above vehicles could not be registered and have been in their Godowns ever since". In his application dated 28‑12‑1982 he again mentioned that he was seeking import permit for 126 Truck Busses. The letter dated 14‑12‑1982 issued by the Suppliers after confirm ion from the IMODC (reproduced) and the certificate of the date of manufacture left no doubt in the mind of the department, about the correctness of the declarations made and the exact period of manufacture. Even if the prevalent rule of strict construction of pleadings is applied to these documents, no blame can be laid on the writ petitioner for suppressing or distorting the facts. What is more at no stage except after filing of the writ petition the department expressed dissatisfaction over writ petitioner's presentation of facts to them.
The ground which actually prevailed with the department in refusing the Import Permit has been expressed in the following words in the summary of the case (para. 2) and parawise comments (para. 16). Para. 2 is reproduced hereunder
"Although the word new was not elaborated in the Press Note of 16th July, 1978 (Annexure 1) yet this term has been generally regarded and was intended to refer to brand new bus/truck chassis of the latest."
Para. 16 is re‑produced‑ hereunder :‑
"The Federal Government Is fully empowered/competent to prohibit, restrict or otherwise control/regulate the import of goods of any specified description in terms of Imports and Exports (Control) Act, 1950. It may be stated that various Press Notes authorising import of vehicles and laying conditions for imports really amount to extending a favourable/concession as these items are not otherwise importable. )f an earlier Press Note, on the authority of sub which the petitioner had imported the chassis, is accepted by the petitioner as having been issued by the Federal Government in , exercise of its lawful authority, then the subsequent Press Note POW clarifying or modifying the earlier one has also to be accepted by the petitioner as having the same legal effect. Under the current policy import of truck chassis of 1980‑Model‑whether used or unused‑is not permissible."
In construing the departmental orders proceedings two principles have to be observed. If a particular ground, reason or procedure is adopted in justification of it then that ground reason or procedure is examined strictly on merits for establishing its validity and efficacy. If it does not g stand that test then all the plenary/residuary powers possessed by the department which could possibly be of avail and pleaded in justification have to be explored and examined, to protect rather than to frustrate the, order. The first principle has been expressed with clarity and precision by Frankfuter, Judge in William Vincent Vitarelli v. Fred A. Seaton, Secretary of the Interior (359 U S 535), in the following words :
"An executive agency must be rigorously held to the standards by which it professes its action to be judged. Accordingly, if dis missal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. This judicially evolved rule of administrative law is now firmly established and. if I may add, rightly so. He that takes the procedural sword shall . perish with that sword."
The second principle finds recognition in Chairman Railway Board v. Abdul Majid Sardar (PLD1966SC725) in the following words :‑
"Acts performed and orders made by public authorities deserve due regard by Courts and every possible explanation for their validity should be explored and the whole field of powers in pursuance to which the public authorities act or perform their function examined and only then if it is found that the act done, order made or proceeding undertaken is without lawful authority should the Courts declare them to be of no legal effect."
Keeping in view these principles, we find that the word "new" has the ordinary dictionary meaning of "lately made, invented, discovered" (Chambers Shorter Dictionary), or "Recently made, not yet used or worn, still unimpaired by use" (Oxford English Dictionary Vol. VII). In the Income Tax Law with reference to machine the word "new" mean "unused and not second‑hand" (Halsbury 3rd edition, Volume 20 page 494 Note (h) and (1963) 49 I. T. R. 310). In Morris Motors Ltd. v. Liley ((1959)3 All ER737) and in Morris Motors Ltd. v. Phelan ((1960) 2 All E R 208) it was held that a car ceased to be new when it was sold by retail sale, registered with the local authority, had number plates put on. it, and had been driven away by the purchaser. An experts committee appointed by the Ministry pursuant to an order of this Court dated 12‑9‑1983, after inspecting the vehicles in question gave the following opinion :‑
"The committee physically examined the trucks in the presence of the importer, his Clearing Agent and the nominee of the Importer and noted that all the Truces were new inasmuch as they had neither been used nor they had been put on road. Their engines were in excellent condition. There was some rust which was obviously due to their sea voyage and storage."
The contention of the department that the meaning given to the word "new" in Press Note dated 20‑3‑1983 that it should (i) be of the latest current model, (ii) have been purchased directly from the manufacturer of their agent and (iii) not physically used before import was in its entirety implicit and already contained in the use of the word "new" in the earlier notification is, therefore, untenable. The clarification is declaratory in form but not in substance.
The department's contention that it possessed untrammeled powers and could prospectively prohibit or control the imports is correct considering the wide amplitude of powers conferred by section 3 (1) of Act XXXI of 1950 and the nature of the right that a seeker of the import licence can claim. Such a power has been recognised by this Court in Zami Ahmad's ,care. All the same, even such an extensive power has its limits. One such limit was spelt out in Zamir Ahmad's case and it is that vested rights cannot be allowed to be overridden, unless it takes place by unequivocal words, by an organ or authority. competent to impair of override the vested rights. The question will still remain whether the respondent writ petitioner at that stage of the proceedings had at all acquired any vested rights. The second limit now well‑recognized is that all executive power has to be exercised fairly and justly, ford advancing the object of the legislation. In other words every such exercise of power has to satisfy the test of reason and relevance.
In order to ascertain the nature of the right and to determine whether it had come to vest in individuals, we must in the first place note that it was not a totally unoccupied field which was sought to be controlled or regulated by Press Note dated 20‑3‑1981. The Gift Scheme had been in existence since 1st July, 1975. Pakistanis living abroad were the beneficiaries. They were provided the incentive to conserve their foreign exchange earnings, to enter into contracts with foreign suppliers for repatriation of their earnings in the form of specified goods and articles and to inject them in the mainstream of nation's economy. If these contracts had been bona fide and legally entered into and had given rise to rights and liabilities enforcible at law then certainly vested rights had come into existence which could not be overridden even in the matter of import and export, except on express words of an authority competent to legislate retrospectively, competent to override or impair such vested rights. An agency or authority not empowered to override or impel vested rights cannot achieve that end simply by giving its dispensation in the form of a declaration.
Such a vested right was protected and preserved in the case of, Union of India and others v. Anglo‑Afghan Agencies (A I R 1968 S C 718) by invoking in aid the principle of promissory estoppel in the words that follow :‑
"We hold that the claim of the respondents is appropriately founded upon the equity which arises in their favour as a result of the representation made on behalf of the Union of India in the Export Promotion Scheme, and the action taken by the respondents acting upon that representation under the belief that the Government would carry out the representation made by it. On the facts proved in this case, no ground has been suggested before the Court for exempting the Government from the equity arising out of the acts done by the exporters to their prejudice relying upon the representation. This principle has been recognised by the Courts in India and by the Judicial Committee of the Privy Council in several cases."
As regards the other limit on exercise of public power, reference can be made to Rook's case (5 Co. R E P 99 b) p. 209) and the following observations made therein :‑
"Notwithstanding the word of the Commission give authority to the Commissioners to do according to their discretions, yet the proceedings ought to be limited and bound with the rule of reason and law. For discretion is a science or understanding to discern between falsity and truth, between wrong and right, between shadows and substance, between equity and colourable glosses and pretences, and not to do according to their wills and private affections."
In the case of The Montgomery Flour and General Mills Ltd.,
Montgomery v. The Director, Food Purchases, West Pakistani (P L D 1957 Lah, 914) the following , law was laid down :‑
"It should be remembered that no discretion vested in an executive officer is an absolute and arbitrary discretion. The discretion is vested in him for a public purpose and must be exercised for the attainment of that purpose. Even though there be no express words in the relevant legal provision to that effect, the discretion is always circumscribed by the scope and the object of the law that creates it and has at the same time to be exercised justly, fairly and reasonably."
This Court approved of this principle in Messrs East and West Steamship v. Pakistan (P L D 195E S C 41) in the words that follow:‑
"I have no doubt that the High Court by issuing an appropriate writ would have controlled such improper exercise of that discretion because there can be little dispute about the proposition that where a statutory functionary acts mala fide or in a partial, unjust and oppressive manner, the High Court in the exercise of its writ jurisdiction has ample power to grant relief to the aggrieved party, and it seems to me to be equally clear that if the allegation be that a statute is being administered by a functionary in a discriminatory manner, his action can be successfully called in question on the ground that it offends against Article 5 of the Constitution.
On a consideration of all the facts and the law we uphold the ‑finding of the High Court that the respondent writ petitioner was entitled to have his application for import permit considered according to the import policy in force before its revision on 20‑3‑1983, that from all the enquiries got made by the appellant he satisfied those requirements and if the vehicles received conform to the description particulars provided, he is entitled to the grant of import permits for them. This appeal fails and is dismissed with no order as to costs
M. B. A. Appeal dismissed.
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