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Judgment
M.L. Pendse, J.—By this petition filed under Article 226 of the Constitution of India, petitioner No. 1 which is a partnership firm and petitioner No. 2 who is one of the partner are challenging legality of order dated February 25, 1991 passed by Additional Chief Controller of Imports and Exports directing that the partnership firm and the partners (1) Pradeep Ravani, (2) Smt. U.L. Ravani, (3) Smt. P.M. Ravani and (4) A.L. Ravani should not be granted any import licenses--CCPs--obtaining allotment of imported goods from any canalising agencies and/or from importing any goods from February 6, 1991 to March 31, 1993 up to 50% of their entitlement. A fiscal penalty of Rs. 10,00,000/- was also imposed on the firm and the partners. After perusing the petition and the order, we are, prima facie, of the opinion that the firm and its partners are guilty of committing contempt of the Supreme Court and have also committed criminal offences and are liable to prosecution. Before we proceed to take any action against the firm and its partners, it is necessary to issue notices to them to show cause why action under the Contempt of Courts Act and direction to prosecute them should not be issued. The reasons for issuing notices are as follows:
M/s. Prakash Conductors, Bangalore, had obtained Replenishment Licence dated July 4,1984 for value of Rs. 12,69,8767 for import of Aluminium/Aluminium Rods from the Office of Joint Chief Controller of Imports & Exports, Bangalore. The licence was transferable and initially it was transferred to M/s. Vina Commercial Corporation and subsequently on May 18, 1985 M/s. Vina Commercial Corporation transferred part of the licence to petitioner No. 1 firm for Rs. 9.30.000/-. The petitioner firm thereupon opened an Indent on May 28, 1985 and imported 72 MTs of Butyle (sic) Acrylate for the full value of licence. The bill of entries for clearance was filed some time in June 1985 but the goods were not allowed to be cleared by the Collector of Customs, Bombay. The partnership firm thereupon filed Writ Petition No. 11773 of 1985 in the Supreme Court against Union of India, Chief Controller of Imports and Exports, Joint Chief Controller, Bangalore and Collector of Customs, Bombay seeking that directions should be issued to the Collector of Customs, Bombay for clearance of the imported goods. The partnership firm and the partners declared in the Petition that they were the actual users of Butyle Acrylate and were registered with the Directorate of Industries, Bombay for manufacture of plastic moulded articles and plastic imitation jewellery on September 21, 1976. On the strength of the claim made by the petitioners, the Supreme Court by order dated August 16,1985 directed to release the goods imported by the petitioners on payment of duty but specifically observed:
But the goods will not be permitted to be sold until further order of this Court.
Taking advantage of the interim order passed by the Supreme Court, the petitioners cleared 72 Mts of Butyle Acrylate and thereafter by openly flouting the order of the Supreme Court, disposed of the entire quantity between September 2, 1985 to March 15, 1986 to as many as 60 parties. The impugned order sets outs the date, the quantity sold and the amount recovered from various parties by the firm and the partners. It is also required to be stated that though the licence permitted import of Aluminium/Aluminium Rods only to the extent of Rs. 9,30,000/-, the petitioner firm and the partners unauthorisedly imported Butyle Acrylate of the value of Rs. 12,69,876. After flouting the order of the Supreme Court by disposing of the entire imported material, the. petitioners withdrew the Petition on October 20, 1986, without disclosing that the entire imported material was sold in violation of the order of the Supreme Court.
On realisation that the petitioner had played fraud and had made mockery of the order passed by the Supreme Court, notice dated January 10, 1990 u/s 4-L of the Imports and Exports (Control) Act, 1947 was issued to the firm to show cause why action should not be taken against the firm and the partners and fiscal penalty shall not be imposed. The firm and the partners sent a reply claiming that it is not possible to file a detailed reply in view of the fact that the documents have been seized by C.B.I. The Additional Controller of Imports and Exports was not impressed by this claim and the impugned order states that even if the documents were with the C.B.I., nothing prevented the firm and the partners to obtain copies of the documents for filing reply and making submission. As the firm and the partners did not bother to assist and defend the proceedings, the impugned order came to be passed and which is under challenge in this petition.
Before considering the submissions urged by Shri Mehta, in our judgment, it is necessary to issue notices against the firm and the partners under the Contempt of Courts Act to show cause why the partners should not be committed for committing contempt of the Supreme Court in openly flouting the interim order and disposing of the imported material. It is also necessary to issue notices to the partners to show cause why they should not be prosecuted in Criminal Court for playing fraud upon the Court and cheating the Customs Authorities. Though only one partner has filed the present Petition, notice should be issued to other partners viz., Shri Pradeep Ravani, Smt. U.L. Ravani and Smt. P.M. Ravani. The partnership firm shall also disclose who were the other persons at the relevant time. The Prothonotary and Senior Master to serve notices upon the firm and the partners and the notices are made returnable on July 15, 1991. The papers to be placed before us for further orders on July 15, 1991.