Transferable import licence protects bona fide transferee from refusal of clearance after later suspension.

A bona fide transferee of a transferable import licence could not be denied clearance of goods already imported before the licence was suspended, even if the original licensee was later alleged to have obtained the licence by misrepresentation. The court noted that the licence had been transferred for value with notice to the licensing authority, the import had been completed before suspension took effect, and the transferee had no notice of any defect. The policy provision was treated as preserving action against the original exporter or licensee, not penalising a bona fide transferee. The refusal to clear the consignments was therefore unlawful, and clearance was directed on payment of customs duty and compliance with usual formalities.

---

---

Issues: Whether customs authorities could refuse clearance of goods imported under a transferable R.E.P. licence on the ground that the licence had been suspended after the transfer and import, and whether the transferee could be penalised for alleged misrepresentation by the original licensee.

Analysis: The licence was transferable under the import policy and had been transferred for valuable consideration with notice to the licensing authority. The goods were imported before the suspension came into effect, and the transferee had acted bona fide without notice of any defect in the original licensee's conduct. The policy provision relied on contemplated adjustment against the exporter's import entitlement and preserved other action against the original exporter, rather than penalising a bona fide transferee who had already used the licence. On those facts, the later suspension could not invalidate the completed import or justify refusal of clearance, and the conduct and inaction of the licensing authority supported the plea of estoppel against adverse action toward the transferee.

Conclusion: The refusal to clear the goods was unlawful, and the transferee was entitled to clearance of the imported consignments on payment of customs duty and compliance with usual formalities. The respondents were left at liberty to proceed against the original licensee in accordance with law.

Ratio Decidendi: Where a transferable import licence has been bona fide transferred and used before suspension, the transferee cannot be denied clearance of goods already imported on the basis of that licence merely because the original licensee is later found to have obtained it by misrepresentation; the proper remedy lies against the original licensee under the governing import-control scheme.

---