GHULAM SAFDAR SHAH, J.--This petition under Article 98 of the Constitution impugned the two circulars of the respondents both dated 26-12-1968 and it is prayed that they be declared to be without lawful authority.
2. Briefly stated the relevant facts of the case are that the petitioner-company imported certain goods consisting of cold-rolled steel-sheets from its principles in the United States of America.
These goods were imported against the U. S. AID and in terms of the notification of the Chief Controller of Imports and Exports, dated 13-8-1969 the petitioners were obliged to import them on board a Pakistani vessel. The goods in question were accordingly imported into the country on board s. s. "ALHAMDI" a Pakistani flag ship belonging to respondent No, 4, namely Muhammadi Steamship Navigation Company. No sooner the ship sailed from the port of Baltimore the shipping company by its letter dated 24-1-1970 called upon the petitioners to pay the freight amount of Rs, 55,937.37 and further that 30% of this amount should be paid at the rate of bonus voucher in terms of the two impugned circulars of the respondents.
3. The grievance of the petitioners is that the impugned circulars without lawful authority and consequently the demand of respondent No, 4 that part of the freight should be paid at the bonus voucher rate is illegal. Mr. Fakhruddin, the learned counsel contended that this demand of respondent No, 4 is in violation of the import policy of the Chief Controller of Imports and Exports published in the Gazette of Pakistan Notification, dated 14-8-1969. We have gone through this notification but all that it says is that M. S. plates, M. S. sheets and tin plates, i,e,, the type of goods which the petitioners imported, would be shipped on Pakistani vessels and the rest of the commodities on U. S. vessels. However, the notification is silent as to how the petitioners would pay the freight to the shipping company although in regard to other goods imported on U. S. vessels it provides that 90% of the cost of freight would be financed by AID and the remaining 10%, representing port charges, in Pakistan would be paid by the importers. This being the entire purport of this notification we have not been able to appreciate as to how does it advance the case of the petitioners.
4. The case of respondents 1, 2 and 3, as set out in their parawise comments, on the other hand is that respondent No, 4 is entitled to claim from the petitioners' part of the freight at the bonus voucher rate in terms of the two impugned circulars which according to them are completely legal.
In this respect their case is that F. E. Circular No, 149 was issued by the State Bank of Pakistan, Exchange Control Department, under section 25 of the Foreign Exchange Regulation Act, 1947 (hereinafter called the Act) with the prior approval of the Ministry of Finance, Government of Pakistan and S. P. A. Circular No, 8 was issued in exercise of the power under section 20 (3) of the Act. In order to appreciate the stand of the respondents these provisions of the Act may be reproduced : "20. (1)........................................
(2)................................................
(3) The State Bank may give directions in regard to the making of payments and the doing of other acts by bankers, authorised dealers, travel agents, carriers, whether common or private stock brokers and other persons who are authorised by the State Bank to do anything in pursuance of this Act in the course of their business, as appear to it to be necessary or expedient for the purpose of securing compliance with the provisions of this Act and any rules, orders or directions made thereunder.
25. For the purposes of this Act the Central Government may from time to time give to the State Bank such general or special directions as it thinks fit, and the State Bank shall, in the exercise of its functions under this Act, comply with any such directions."
5. From the language of these sections it is clear that the two impugned circulars, by which the petitioners were obliged to import their goods on Board a Pakistani vessel and to pay to the shipping company a part of the freight at the bonus voucher rate, were relatable to the power of the State Bank of Pakistan in the discharge of its duties under the Act which in the language of its preamble were meant to secure "the economic and financial interest of Pakistan". In this view the stand taken by respondents 2 and 3 appears to be valid that the impugned circulars have been issued under the authority of the Act.
6. Mr. Fakhruddin, the learned counsel next argued that the impugned circulars are in violation of Articles 2 and 48 of the Constitution, but we have not been able to appreciate this contention. All that Article 2 says is that every citizen has the right to be treated in accordance with law and that no action detrimental to his life, body, reputation or property shall be taken except in accordance with law. Surely, the two impugned circulars, having been issued under the provisions of the Act, would be covered by the term law" within the meaning of Article 2 of the Constitution and consequently the petitioners would be obliged to pay to the shipping company a part of the freight at the bonus voucher rate.
7. So far as Article 48 is concerned it appears to be irrelevant. This article provides that no tax shall be levied for the purposes of the Central Government except by or under the authority of an Act of the Central Legislature.
However the petitioners' own case is that the entire freight is payable to respondent No, 4 company and no part of it is payable to the Central Government.
8. Mr. Fakhruddin next contended that the payment of part of the freight at the bonus voucher rate would amount to penalizing the petitioners which according to him would be impermissible in view of the bar of Article 2 of the Constitution. In order to appreciate the force of this contention it would be necessary to briefly refer to the history of imports of goods in this country against the U. S. AID. In this respect we would like to reproduce the contents of the impugned F. E. Circular No, 149, dated 26-12-1968 which reads : "Attention of Authorised Dealers is invited to para. 1 of our Circular No, 50 of 1961 in terms of which imports under U. S. AID Loan can be made on F. 0. B. basis for the full value of C & F sub- authorisations provided the shipment is effected on a Pak. flag vessel.
It has been decided that the facility of utilising C & F sub-authorisations or licences on F. 0. B. basis for the full value under U. S. AID Loan will be subject to surrender of bonus vouchers equivalent to 30% of the freight involved. The shipping companies will not therefore accept freight in Pakistani rupees in the above cases without a " P " form provided by the State Bank. Authorised Dealers may please bring this to the notice of their constituents concerned. P ' Form applications of payment of freight should be submitted by the intending importers through their bankers duly supported by bonus vouchers equivalent to 30% of the freight certified by the shipping company concerned.
The above instructions come into force with immediate effect but will not apply to the consignments accepted for shipment before the date of this circular.
9. It would be seen that this circular is based on an earlier circular of 1961 and permits the import of goods under U. S. AID Loan on F. 0. B. basis for the full value of C & F sub-authorisation provided the goods are shipped on Board a Pakistani vessel and 30% of the freight is paid to the shipping company at the rate of bonus voucher. Apart from the fact that this and the subsequent circulars were issued by the State Bank of Pakistan under sections 20 (3) and 25 of the Act and would therefore be valid we have not been able to appreciate as to how this arrangement would amount to penalising the petitioners. After all before the coming into force of the two impugned circulars part of the foreign exchange allocation, against which the goods used to be imported in the country, was utilized for defraying the cost of freight which in view of the changed policy the importer is now entitled to utilise for the purpose of goods. In other words instead of defraying the cost of entire freight from the foreign exchange allocation the petitioners are now required to pay the bulk of these charges in Pakistani rupees except that 30 % of it they are required to pay at the rate of bonus voucher. In this view also it is difficult to appreciate as to how the petitioners can be said to have been penalized by the two impugned circulars.
10.There is yet another reason for which the petitioners cannot be said to have any grievance. The impugned circulars have been addressed to all authorised dealers in foreign exchange, Air Lines, Shipping Companies and Travelling Agencies. "Authorised Dealer" has been defined by section 2 of the Act to mean a person for the time being authorised under section 3 to deal in foreign exchange in such manner as may be prescribed by the State Bank of Pakistan. Mr. Fakhruddin, the learned counsel did not deny that the bankers, through whom the petitioners negotiated the transaction, were authorised dealers within the meaning of the Act and consequently it has to be presumed that the two impugned circulars were within the knowledge of the petitioners' bankers. Had this not been the case they said bankers would not have negotiated this transaction on behalf of the petitioners as they would be liable to penal action under the provisions of the Act. As already pointed out F. E. Circular No, 149 of the State Bank of Pakistan clearly warned the authorised dealers as to how payment of freight would be made by an imp rater against the allocation of foreign AID. It would, therefore, follow that the petitioners were aware of the contents of this circular when they instructed their bankers to negotiate the transaction on their behalf and consequently they cannot possibly pretend not to have known that they had to pay part of the freight at the rate of bonus voucher.
11. In view of this discussion we find no force in this petition which is summarily dismissed.