2008 (8) TMI 792 - HC - Indian Laws

Whether the challenge to the policy in so far as it relates to forfeiture, for non-fullfilment of the export obligation within the time stipulated, is sustainable? Whether the AEPC and Appellate Committees were justified in rejecting the petitioner s claim of force-majeure, while dismissing the Appeals? Held that - The consent of the petitioner to be subjected to the terms of the policy, relating to forfeiture in the event of failure to fulfill the export entitlement, in the circumstances cannot be permitted to approbate and reprobate nor assume inconsistent positions. So also having been unsuccessful in the appeals before the First and Second Appellate Committees, are disentitled from questioning the validity of the forfeiture clause in the Policy . The consent of the petitioner to be subjected to the terms of the policy, relating to forfeiture in the event of failure to fulfill the export entitlement, in the circumstances cannot be permitted to approbate and reprobate nor assume inconsistent positions. So also having been unsuccessful in the appeals before the First and Second Appellate Committees, are disentitled from questioning the validity of the forfeiture clause in the Policy . W.P. dismissed.

Issues Involved:
1. Challenge to the policy regarding forfeiture for non-fulfillment of export obligations.
2. Justification of the rejection of the petitioner's claim of force-majeure by AEPC and Appellate Committees.

Detailed Analysis:

1. Challenge to the Policy Regarding Forfeiture for Non-Fulfillment of Export Obligations

The petitioner, a manufacturer and garment exporter, was allotted export entitlements under the Manufacturers Exporter Entitlement (MEE) quota. The petitioner failed to meet the required export percentage, leading to the forfeiture of Rs. 4,23,569 by the Apparel Export Promotion Council (AEPC). The petitioner challenged the policy's forfeiture clause, arguing it was irrational and unreasonable. The court, however, found that the petitioner had voluntarily sought revalidation of the quota and agreed to the terms, including the forfeiture clause. The court emphasized that the policy aimed to maximize foreign exchange, which is crucial for the country. The court stated that the government has the right to formulate policies to achieve specific economic objectives and that such policies are not subject to judicial review unless they violate statutory provisions or the Constitution. The court cited previous judgments, including the case of Gokaldas Images Limited v. Union of India, to support its stance that the policy was neither irrational nor unconstitutional.

2. Justification of the Rejection of the Petitioner's Claim of Force-Majeure by AEPC and Appellate Committees

The petitioner argued that the failure to fulfill the export obligation was due to force-majeure conditions, specifically defective fabric, which was beyond their control. The AEPC and the Appellate Committees rejected this claim due to the lack of substantial legal evidence. The court upheld this decision, stating that the petitioner had not provided relevant material to support the claim of force-majeure. The court also dismissed the petitioner's argument that similar claims had been accepted in previous cases, noting that the acceptance of force-majeure claims depends on the specific facts and documentary evidence of each case. The court concluded that the petitioner's case did not meet the criteria for force-majeure and that the authorities were justified in their decision to forfeit the amount proportionate to the unfulfilled quota.

Conclusion
The court dismissed the writ petition, upholding the policy's forfeiture clause and the rejection of the force-majeure claim by the AEPC and the Appellate Committees. The court emphasized the importance of maximizing foreign exchange and the government's right to formulate and enforce economic policies.

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