Actual User condition controls transferable import licences and prevents a non-user purchaser from enforcing import rights.

A Duty Free Replenishment Certificate licence issued subject to an Actual User condition and export-policy restrictions could not be enforced by a purchaser who was not the Actual User. Although the licences were described as transferable, the governing textile policy required the imported materials to be used only for further export production and barred transfer contrary to that policy. A transferee who bought the licences for consideration acquired no independent right to use them for import. Any grievance lay against the transferor, and the absence of a show-cause notice to the purchaser did not affect the validity of cancellation where notice had been given to the original licence holders.

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Issues: Whether a purchaser of Duty Free Replenishment Certificate licences could claim a right to use them for import despite the licences being subject to an Actual User condition and policy restrictions on transfer.

Analysis: The licences, though marked transferable, were also issued subject to the Foreign Trade (Development and Regulation) Act, 1992 and the relevant policy note governing textile items under Sl. Nos. J-270 to J-297. That policy required Actual User status and stipulated that the materials imported against such licences could not be transferred and had to be utilised only for further export production. A purchaser who was not the Actual User could not claim the benefit of the licences merely because they were bought for consideration. Any sale or transfer contrary to the policy was impermissible, and the petitioner's remedy lay against the persons from whom the licences were purchased. The absence of a show-cause notice to the petitioner did not alter the position, as notice had been issued to the original licence holders and the cancellation flowed from their non-surrender of the licences.

Conclusion: The petitioner had no enforceable right to use the licences for import, and the cancellation of the licences was upheld.

Final Conclusion: The writ petition failed because the licences could not be utilized by a non-Actual User in the face of the governing export-import policy restrictions.

Ratio Decidendi: A licence issued subject to an Actual User condition and policy-based non-transferability cannot be enforced by a transferee who is not the Actual User, notwithstanding the licence being described as transferable.

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