2023 (12) TMI 1338 - HC - Customs

Export of non-Basmati White Rice - grievance of the petitioner- Company is that it has already entered into contract for supply of aforesaid rice to various foreign entities prior to issuance of notification (Annexure P-1) and if terms of the contract are not fulfilled, then of-course same will be create various hardship to the petitioner alongwith goodwill of his business - HELD THAT - Considering the fact that contract was already entered into for supply of non- Basmati White Rice with foreign entities and letter of credit has also been issued by the petitioner for the said quantity, therefore, this Court finds that prima facie point is made out for consideration and considering the facts of the case, objection raised by learned Deputy Solicitor General is not found to be appropriate to disallow the aforesaid application. The respondents are directed to permit the petitioner to export the Non-basmati White Rice to foreign entities in compliance of contract entered into between them, to which letter of credit has been issued by the petitioner for supply of quantity - Application allowed.

Summary

Issues:
Export of non-Basmati White Rice; Amendment to export policy; Contractual obligations; Jurisdiction of High Court; Interim relief.

Analysis:
The case involves a petitioner, a company engaged in exporting rice, specifically non-Basmati White Rice, to various countries. The petitioner had entered into three supply agreements with a buyer for specific quantities of rice. However, during the pendency of these contracts, the Government of India amended the export policy, banning the export of non-Basmati White Rice. The petitioner argued that enforcing the new policy would adversely affect their rights and business reputation, as they had already committed to the contracts based on the earlier policy and had issued letters of credit. The petitioner sought relief similar to a previous case in the High Court of Andhra Pradesh, where permission to export rice was granted based on existing contracts and letters of credit.

The Respondents, represented by the Deputy Solicitor General, contended that the alleged contract was executed outside the jurisdiction of the Chhattisgarh High Court, specifically in Andhra Pradesh. They argued that the petition was not maintainable as it involved private parties with an arbitration clause in their contract. The Respondents also highlighted a policy decision by the Central Government, banning the export of non-Basmati White Rice, and stated that unless a fundamental right was breached, a writ could not be issued. They opposed granting interim relief, claiming it would amount to final relief.

The High Court of Chhattisgarh examined the arguments and documents presented. It noted the ban on non-Basmati White Rice export by the Government but acknowledged the petitioner's predicament due to pre-existing contracts and issued letters of credit. The Court found merit in the petitioner's case, considering the contractual obligations and the potential hardships the petitioner would face if the terms were not fulfilled. The Court dismissed the objection raised by the Respondents, stating it was not appropriate to disallow the application for interim relief.

Consequently, the High Court granted the petitioner's application for an ad-interim writ. The Respondents were directed to permit the export of non-Basmati White Rice to foreign entities as per the existing contracts and letters of credit issued by the petitioner. The Court emphasized that the petitioner must comply with all legal requirements, including export duties. The Respondents were authorized to verify the alleged contract thoroughly.

In conclusion, the judgment allowed the petitioner to fulfill its contractual obligations for exporting non-Basmati White Rice, balancing the interests of both parties while ensuring compliance with legal regulations.