Saving clause for pre-transfer import transactions protected integrated purchases from later confiscation under the new regime

Paragraph 6 of the French Establishments (Application of Laws) Order, 1954 was read to preserve pre-transfer import transactions from later import restrictions where the earlier acts and later delivery formed one integrated transaction. The majority held that "things done" covered completed steps such as placing orders, opening letters of credit and arranging foreign exchange, together with their legal consequences, so goods ordered before the de facto transfer could not be confiscated merely because they arrived afterwards. The confiscation orders were therefore invalid. The dissent confined the saving clause to acts completed before transfer and treated post-transfer arrival as subject to the new import-control regime.

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Issues: Whether paragraph 6 of the French Establishments (Application of Laws) Order, 1954, saved import transactions concluded before the de facto transfer so as to prevent confiscation of goods brought into Pondicherry after the transfer without a licence.

Analysis: The majority held that the expression "things done" in the saving clause was wide enough to include not only the completed acts of placing orders, opening letters of credit and arranging foreign exchange, but also the legal consequences flowing from those pre-transfer transactions. It treated the contract of purchase and the eventual bringing of the goods into India as parts of one integrated import transaction. Since the orders were placed and the foreign exchange was committed before the merger, the later arrival of the goods could not be isolated from the earlier acts. The majority also read the saving clause consistently with the Indo-French Agreement, especially the provision that pre-transfer orders finalised through the grant of a licence were to be honoured, and concluded that the imported goods were protected from the post-transfer import restrictions.

Conclusion: The confiscation orders were invalid and the import transactions were protected by paragraph 6 of the Order, in favour of the petitioners.

Dissenting Opinion: Sarkar J. and Shah J. took the view that the saving clause protected only acts done before the transfer and not the later legal consequences or rights claimed from them. On that approach, goods brought into Pondicherry after the transfer were subject to the Indian import-control regime and the confiscations were valid.

Ratio Decidendi: A saving clause preserving "things done" before a change in legal regime may extend to the legal consequences of prior transactions when the later event is part of the same integrated transaction and the clause is intended to protect pre-existing dealings.

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