Territorial waters import and statutory approval limits: vessel sale conditions cannot be imposed by writ court, standing upheld.

Under the Customs Act, a foreign vessel is imported once brought into India's territorial waters, and later intended scrapping does not undo that import. The canalising agency regime for old ships did not apply to vessels already imported and registered for plying, so MSTC clearance and no objection certificates could not be imposed as a condition for approval under Section 42(1) of the Merchant Shipping Act, 1958. The writ court could review the legality of statutory conditions, but it could not mandate fresh advertisements or fix minimum sale prices, as those matters lay with the competent authority. Locus standi was upheld because the appellant had subsisting purchase offers and a sufficient interest in the sale process.

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Issues: (i) whether the two vessels were imported into India when they were brought into territorial waters and, if so, whether the canalising agency guidelines and the requirement of no objection certificates applied; (ii) whether the High Court could direct fresh advertisements and prescribe minimum sale prices for the vessels; (iii) whether the appellant had locus standi to maintain the writ applications and appeals.

Issue (i): Whether the two vessels were imported into India when they were brought into territorial waters and, if so, whether the canalising agency guidelines and the requirement of no objection certificates applied.

Analysis: Import under the Customs Act means bringing goods into India from outside India, and India includes territorial waters. The vessels, though later intended for scrapping, had been brought into India long before the dispute and could not be treated as not imported merely because they were not then brought for breaking up. The canalising agency regime relied upon by MSTC applied to old ships and vessels for breaking up, not to vessels already imported and registered for plying. Accordingly, the later guidelines of MSTC and the insistence on its clearance could not be imposed as a condition for approval under Section 42(1) of the Merchant Shipping Act, 1958.

Conclusion: The finding that MSTC had no role as canalising agency in respect of these vessels was upheld, and the requirement of no objection certificates from MSTC was rejected.

Issue (ii): Whether the High Court could direct fresh advertisements and prescribe minimum sale prices for the vessels.

Analysis: The power under Section 42(1) of the Merchant Shipping Act, 1958 lay with the Central Government to consider approval for transfer or acquisition of an Indian ship. The writ court could test the legality of the conditions imposed, but it could not itself create a fresh tender process, dictate advertisement modalities, or fix minimum sale prices as conditions precedent to governmental approval. Those matters belonged to the statutory authority's consideration.

Conclusion: The directions requiring fresh advertisements and fixing minimum sale prices were set aside.

Issue (iii): Whether the appellant had locus standi to maintain the writ applications and appeals.

Analysis: The appellant had made subsisting offers for purchase of the vessels and would be prejudiced by any fresh invitation of offers. The appellant's interest was therefore sufficient to challenge the directions affecting the proposed sale and the statutory approval process.

Conclusion: The appellant was held to have locus standi.

Final Conclusion: The appeal succeeded to the extent of removing the High Court's mandatory directions for fresh advertisements and fixed minimum prices, while the challenge to the MSTC clearance requirement failed and the appellant's standing was affirmed.

Ratio Decidendi: For purposes of the Customs Act, import occurs when a foreign vessel is brought into India's territorial waters, and a writ court cannot impose substantive sale conditions that are statutorily entrusted to the competent authority under Section 42(1) of the Merchant Shipping Act, 1958.

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