Import License Issuance: Prevailing Conditions Considered

The Court held that the licensing authority is entitled to consider the prevailing conditions at the time of issuing an import license, rather than when the application is made. It was emphasized that the authority has discretion to refuse a license if it is prejudicial to the State's interest or if imports are to be channeled through specific agencies. The Court found the delay in considering the respondent's application justified and ruled that there is no absolute right to a license solely based on a sponsoring authority's recommendation. The appeal was allowed, directing consideration of the application in line with the 1970-71 import policy without undue delay.

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Issues Involved:
1. Whether the application for the import license should be considered in accordance with the policy in force when the license is granted or when the application is made.
2. Whether the licensing authority can refuse to grant a license based on the prevailing import policy at the time of issuing the license.
3. Whether the respondent's application for an import license was unduly delayed by the licensing authority.
4. Whether the respondent has an absolute right to the grant of a license based on the recommendation of the sponsoring authority.
5. Whether the delay in the consideration of the respondent's application was justified.

Detailed Analysis:

Issue 1: Consideration of Import License Application
The main question before the Court was whether the application for the import license should be considered based on the policy in force at the time of application or at the time of issuing the license. The Court noted that the licensing authority had agreed to consider the respondent's application according to the policy for 1970-71. The Court highlighted that the import policy is influenced by various factors, including the availability of foreign exchange, which may necessitate changes in policy. Therefore, the licensing authority is entitled to consider the prevailing conditions at the time of issuing the license.

Issue 2: Licensing Authority's Discretion
The Court examined the provisions of the Imports & Exports (Control) Act, 1947, and the Imports (Control) Order, 1955. It was emphasized that the licensing authority has the discretion to refuse a license if it is prejudicial to the interest of the State or if imports are to be canalized through specialized agencies. The Court cited previous judgments to support the view that canalization of imports through specific channels is in the interest of the general public and that the licensing authority must consider the prevailing economic conditions.

Issue 3: Delay in Consideration
The respondent argued that there was undue delay in considering the application for the import license. The Court reviewed the history of the correspondence and found that the delay was not unreasonable. The respondent's application included items not covered by the priority list, necessitating further scrutiny. The Court noted that fresh instructions were issued in April 1969 due to a large number of new applicants, which justified the delay. The Court found no evidence of undue laches or dilatoriness on the part of the Department.

Issue 4: Absolute Right to License
The respondent contended that the recommendation of the sponsoring authority should result in the automatic grant of a license. The Court disagreed, stating that the licensing authority must consider various factors, including the overall economic impact and availability of foreign exchange. The Court emphasized that the respondent has no absolute right to a license merely based on the recommendation of the sponsoring authority.

Issue 5: Justification for Delay
The Court found that the delay in the consideration of the respondent's application was justified. The respondent's application initially included non-priority items, and the Department had to ensure proper scrutiny due to the large number of new applicants. The Court noted that the Department issued instructions in April 1970 to consider pending applications according to the policy for 1970-71, which was reasonable under the circumstances.

Conclusion
The Court concluded that the High Court was not right in making the impugned order directing the licensing authority to consider the application based on the 1968-69 policy. The appeal was allowed, and it was directed that the respondent's application be considered in accordance with the import policy for the year 1970-71 without avoidable delay. There was no order as to costs.

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