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Issues Involved:
1. Applicability of promissory estoppel against the Government. 2. Validity of the agreement under public policy. 3. Refusal of import licenses under Rule 6(1)(c) of the Import Trade Control Order. 4. Delay in filing the petition. 5. Maintainability of the writ petition to enforce contractual rights. Issue-wise Detailed Analysis: 1. Applicability of Promissory Estoppel Against the Government: The petitioners claimed that the Government of India is estopped by principles of promissory estoppel from refusing import licenses during the subsistence of the agreement dated January 18, 1971. The petitioners argued that they altered their position based on the Government's representations and promises. The Court upheld this argument, referring to the Supreme Court's decision in M/s. Motilal Padampat Sugar Mills Company Ltd. v. The State of Uttar Pradesh and others, where it was held that the doctrine of promissory estoppel applies against the Government. The Court found that the petitioners had indeed altered their position in reliance on the Government's promise and that the Government could not repudiate its promise on vague grounds of public interest. 2. Validity of the Agreement Under Public Policy: The respondents argued that the agreement was void as it was opposed to public policy. However, the Court rejected this argument, noting that the respondents failed to provide specific facts to substantiate their claim. The Court emphasized that a mere statement that a contract is opposed to public policy is insufficient without proper foundation. The Court also pointed out that the Government had already granted import licenses under the agreement, indicating that the contract was not initially considered void. 3. Refusal of Import Licenses Under Rule 6(1)(c) of the Import Trade Control Order: The respondents contended that Rule 6(1)(c) prohibited the grant of licenses for canalised items. The Court found this argument unconvincing, noting that the rule is regulatory or discretionary, not mandatory. The Court also highlighted that the Government had entered into a contract with the petitioners despite the canalisation policy, and thus, the respondents could not refuse licenses based on this rule. The Court concluded that both orders denying the import licenses were unsustainable and unjustified. 4. Delay in Filing the Petition: The respondents argued that the petitioners approached the Court after a considerable delay. However, the Court did not find this argument sufficient to non-suit the petitioners, noting that the petitioners had engaged in extensive correspondence with the authorities seeking relief before filing the petition. 5. Maintainability of the Writ Petition to Enforce Contractual Rights: The respondents argued that the writ petition was not maintainable for enforcing contractual rights. The Court disagreed, citing the Supreme Court's decision in Balu Sukhram Singh v. Ram Dular Singh and others, which held that a writ petition is maintainable even if the right to relief arises from an alleged breach of contract, provided the action challenged is of a public authority invested with statutory power. The Court concluded that the petition was maintainable under Article 226 of the Constitution of India. Conclusion: The Court ruled in favor of the petitioners, holding that the respondents wrongfully and illegally deprived the petitioners of their rights. The petition was allowed, and the respondents were directed to grant the import licenses within eight weeks. The respondents were also ordered to pay the costs of the petition.
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