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Issues:
1. Application for grant of Export House Certificate under the Import Policy of April 1978-March 1979. 2. Rejection of the application based on failure to diversify exports of other products during the year 1977-78. 3. Claim of substantial loss to the Government due to granting Export House Certificates. 4. Legal basis for rejection of Export House Certificate application. 5. Comparison with a judgment from the Delhi High Court supporting the petitioner's contention. Analysis: Issue 1: Application for Export House Certificate The petitioner, a Diamond Merchant, applied for an Export House Certificate under the Import Policy of April 1978-March 1979 to avail special facilities for exporting diamonds. The petitioner met all requirements but the application was rejected based on alleged failure to diversify exports of other products during 1977-78. Issue 2: Rejection based on Diversification Requirement The rejection letter cited lack of diversification in exports of other products during 1977-78 as the reason for denial. However, this requirement was not part of the scheme published by the Union of India on April 3, 1978. The rejection was deemed erroneous as the scheme did not mandate diversification of exports as a condition for granting Export House Certificates. Issue 3: Claim of Government Loss The respondents claimed that granting Export House Certificates to diamond exporters would lead to a loss of foreign exchange exceeding 100%. However, this claim lacked a legal basis as there was no policy explicitly rejecting applications where replenishment license exceeded 100%. The rejection based on potential loss to the Government was considered unjustified. Issue 4: Legal Basis for Rejection The rejection lacked a valid legal basis as the scheme did not include diversification requirements or restrictions based on potential foreign exchange loss exceeding 100%. The rejection was deemed arbitrary and without merit, leading to the petitioner being entitled to the relief sought. Issue 5: Comparison with Delhi High Court Judgment A Delhi High Court judgment supported the petitioner's contention, further strengthening the argument that the rejection of the Export House Certificate application was unjustified. The judgment provided additional legal backing to the petitioner's claim. In conclusion, the High Court ruled in favor of the petitioner, quashing the rejection of the Export House Certificate application and directing the respondents to issue the certificate within a month. The court also allowed the petitioner to apply for additional facilities within three months of receiving the certificate. No costs were awarded in this case.
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