Import licence protection under later policy preserved where irrevocable letters of credit were opened before the cut-off date.

Additional licences issued under the Open General Licence regime could not be used for goods removed by a later public notice merely because the licences were earlier issued, but their continued effect depended on the subsequent policy. That policy expressly saved pre-existing commitments where irrevocable letters of credit had been opened and established through authorised dealers in foreign exchange on or before 31 March 1990. Imports falling within that saving clause were protected, while other cases required fresh factual verification. The impugned orders were therefore unsustainable in all cases, and the matters not covered by the saving clause were remitted for reconsideration.

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Issues: (i) Whether the public notice withdrawing the goods from Open General Licence could defeat additional licences issued before the notice. (ii) Whether imports made after 1 April 1990 under pre-existing additional licences were protected where irrevocable letters of credit had been opened before the cut-off date under the subsequent policy.

Issue (i): Whether the public notice withdrawing the goods from Open General Licence could defeat additional licences issued before the notice.

Analysis: Additional licences were confined to items appearing in Part I of List 8 of Appendix 6, which formed part of the Open General Licence regime. Once the goods were removed from that appendix by the public notice, the licences could not be used for those items merely because they had been issued earlier. The Court held, however, that the later policy change could not automatically destroy the effect of licences already issued, and the question was whether the subsequent policy itself preserved earlier commitments.

Conclusion: The public notice did not by itself invalidate the earlier additional licences, and the earlier licences remained relevant subject to the later policy.

Issue (ii): Whether imports made after 1 April 1990 under pre-existing additional licences were protected where irrevocable letters of credit had been opened before the cut-off date under the subsequent policy.

Analysis: The subsequent policy expressly provided that additional licences issued before 1 April 1990 would cease to be valid for the affected items, but that restriction would not apply where firm commitments had already been made by irrevocable letters of credit opened and established through authorised dealers in foreign exchange on or before 31 March 1990. The Court applied that saving clause and held that cases falling within it were entitled to protection. It further held that factual verification was still required to determine whether the petitioners had in fact satisfied that condition in each case.

Conclusion: Imports covered by irrevocable letters of credit opened before 1 April 1990 were protected, while the remaining cases required fresh factual adjudication.

Final Conclusion: The impugned orders could not stand in all cases. Matters covered by the saving clause were entitled to protection, and the remaining matters were remitted for fresh decision in accordance with the judgment.

Ratio Decidendi: An import licence or additional licence is governed by the policy structure that preserves it, but a later policy may validly restrict its use unless the policy itself saves pre-existing firm commitments such as irrevocable letters of credit opened before the stipulated cut-off date.

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