9911796707
TMI Blog1991 (4) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... 2nd respondent, his agents, officers and subordinates to forbear from cancelling or in any way rendering ineffective the said two additional im port licences. Before going into the questions raised in this Writ Petition, and to appreciate the contentions raised therein, it is necessary to narrate the facts and circumstances leading to the present Writ Petition. 2. The 1st respondent is a Government of India undertaking established on 15-11-1958 and is a large scale manufacturer-exporter. During the licensing years 1986 - 87,1987-88 and 1988-89 it exported processed iron ore and gained eligibility for grant of Trading House Certificate under Para 212(1) of the Import and Export Policy for the period April, 1988 to March, 1991. The 1st respondent made application dated 12-9-1989 for the grant of the said certificate and was granted Trading House Certificate dated 22-5-1990 and certificate of recognition No. 165 dated 18-5-1990 valid for 3 years from 1-4-1989 to 31-3-1992. Thereafter the 1st respondent applied to the 2nd respondent herein for grant of additional licences for the licensing years 1989-90 and 1990-91 and were granted the said 2 licences bearing No. P/W/3234621 and No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Additional Licence in both Customs Exchange Control purposes copies immediately to this office without making any commitments. The Special Leave Petition preferred by M/s. Nagolice Limited before the Supreme Court of India against the said order of the High Court of Delhi dismissing Writ Petition No. 2659 of 1990 dated 27-8-1990 was dismissed by the Supreme Court on 4-9-1990. On the same day, the Office of the 2nd respondent herein issued through special messanger letter dated 4-9-1990 to the 1st respondent herein with reference to the said two additional import licences as follows :- With reference to the above, I am to inform you that the additional licences against the AM. 90 exports has been issued by this office erroneously to you, as there is no policy provision for issue of additional licence against AM. 90 exports because, the item exported by you finds place in Appendix-12 of Import Policy AM. 90-93 (Vol. I). Hence you are requested to forward the above two additional licences before 6-9-1990 without fail to enable this office to take remedial action. In case you fail to forward the above two additional licences by 6-9-1990, this office will constrain to take ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into force from 1-4-1990 cannot be given retrospective effect so as to take away the entitlement to additional import licences which already accrued to the 1st respondent by virtue of having made exports during the period prior to the coming into force of the said new policy, on the basis of the promise held out under the earlier policy in force during the period when the exports were made. The petitioner also contends that the action of the 2nd respondent in issuing the impugned notices was mala fide and was motivated by political considerations and was at the behest of the unsuccessful offerer M/s. Negolice Limited. 4. The 2nd respondent filed his counter affidavit dated 18-9-1990. He contends that the Writ Petition is premature because the petitioner had no grievance whatsoever in respect of the impugned notices issued to the 1st respondent. According to the 2nd respondent, the petitioner has no locus standi for filing the present Writ Petition. The 2nd respondent denied that the calling back of the said licences was mala fide or was at the instance of the petitioner s competitors and contends that the said licences were correctly called back when the 1st respondent failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner was announced at 4-50 P.M. on 16-8-1990. It is however denied that the petitioner was assured by the representatives of the 1st respondent that the said licences would be handed over to the petitioner immediately after the dismissal of the said Writ Petition No. 2659 of 1990 by the High Court of Delhi. It is also stated that the petitioner s deposit of Rs.9,40,43,030/- by demand drafts towards the balance consideration was not deposited with the Commercial Manager of the 1st respondent as required by the notice of invitation of tender but was tendered in the Central Receive and Despatch Section of the 1st respondent. The receipt of the impugned notices through letters dated 27-8-1990 of the 2nd respondent by the 1st respondent was admitted and it is further stated that no show cause notice was given by the 2nd respondent to the 1st respondent for cancellation of the licence and that a show cause notice was issued only on 5-10-1990 by the 2nd respondent. A copy of the said show cause notice dated 5-10-1990 is filed by the 1st respondent. That relates only to the additional import licence No. P/W/3234622/C/XX/17/W/90 dated 19-7-1990 for c.i.f. value of Rs. 27,06,24,648/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1990 received by it in respect of the said two additional import licences. Therein the 1st respondent requested the 2nd respondent to inform in what context and under what provision the request for forwarding the said two licences without making any commitments, was made. The 2nd respondent was also informed by the said letter dated 31-8-1990 as follows :- It may also be pointed out in this regard that consequent to the calling of tenders the Tender Scrutiny Committee has awarded tender to the highest bidder on 16-8-1990 itself. Therefore, the question of not making a commitment does not arise at this stage. A commitment to transfer the licences to the highest bidder was already made on 16-8-1990 itself. In spite of being so informed by the 1st respondent, the 2nd respondent gave a telegram, a copy of which is filed by the 1st respondent, wherein it is stated : REFLET THIS OFFICE NO. ENGG/(9 AND 8/ADDL LIC/TH/AM 90 AND AM 91/REP II/HYD DT. 27-8-1990 (.) TWO ADDL LICENCES NOT SURRENDERED SO FAR (.) SURRENDER BOTH THE ADDITIONAL LICENCES FORTHWITH WITHOUT ANY FURTHER DELAY - CONIM- PEXTRA. This was followed by the letter dated 4-9-1990 of the 2nd respondent s office refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort House/Trading House certificate shall be determined on the basis of the Net Foreign Exchange Earnings from the exports actually made in the preceding three licensing years termed as base period . The earnings from (i) the exports of products specified in Appendix 12, (ii) re-exports as defined in para 191 of this policy, (iii) Deemed Exports as defined in Chapter XVI, and (iv) export from free Trade/Export Processing Zones and 100 per cent EOUs whether made directly or through others, shall not qualify for this purpose ... Similarly para 220(1) of the said Import-Export policy AM 1990-93 which relates to grant of additional licences reads as under :- ...The Export House/Trading Houses will be eligible to additional licences on the basis of the admissible exports made in the preceding licensing year. The value of these licences will be calculated at 10% of the NFE earnings on the total eligible exports made in the preceding licensing year. This percentage shall be 13% in cases where an Export/Trading House is able to achieve a minimum growth of 30% in terms of NFE realisation in the previous year over and above the year preceding the same. The NFE earning for thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have a right to proceed on the footing that if he exports that item, he would be entitled to the benefits which are provided in respect of such exports under the Import- Export Policy. In other words, the export of such a permissible item would in fact give rise to a vested right in the exporter to the benefit in question. Such a vested interest cannot possibly be considered to be defeated or destroyed merely be cause of a subsequent amendment of the list of impermissible items. It is, therefore, absolutely clear that any such amendment to the list of impermissible items would have effect only with regard to the future and not with regard to the past and the same cannot possibly be considered to take away or destroy any vested right. Any amendment of the Policy can only be prospective and cannot effect vested rights. In the present case, the exports of Processed Iron Ore were made by NMDC before 31-3-1990. Processed iron ore was, at the relevant point of time, a permissible item and was not covered by Appendix 12. In these circumstances, it is submitted that the provisions of the said amended Import-Export Policy, 1990-93 have no effect or consequences in the present case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to be mentioned for rejection. By the time the Writ Petition was filed on 11-9-1990 the 2nd respondent issued two letters containing notices dated 27-8-1990 requesting the 1st respondent to forward the two additional licences in respect of which the petitioner not merely made the earnest money deposit of Rs. 30,00,000/-but also paid the entire balance consideration of more than Rs. 9.40 crores by demand drafts on 25-8-1990. By another letter dated 4-9-1990 the 2nd respondent once again asked the 1st respondent to forward the said two additional licences before 6-9-1990 without fail for enabling him to take remedial action and that if that was not done, he would be constrained to take steps for suspending the operation of the said additional licences. Thereafter, even though the petitioner was not aware, the 2nd respondent issued suspension order dated 7-9-1990 in respect of the additional licences bearing No. P/W/3234622/C/ XXX/17/W/90 dated 19-7-1990. In the circumstances, it is too much for Mr. I. Koti Reddy to contend that the Writ Petition is premature. Yet another contention advanced by Mr. I. Koti Reddy is that the petitioner had an alternative remedy. I am not impresse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 and it relates only to the additional import licence No. P/W/3234622/C/XX/17/W/90 dated 19-7-1990 for c.i.f. value of Rs. 27,06,24,648/- in respect of import period A.M. 90 i.e., 1-4-1989 to 31-3-1990. In the said show cause notice, it is made clear that it was issued subject to final decision in this Writ Petition. In the circumstances, I am of the view that the present Writ Petition cannot be thrown out on the ground of alternative remedy. 7. Now for the main contentions. Mr. Koti Reddy appearing for respondents 2 and 3 concedes that as regards additional import licence No. 3234621 with reference to export period A.M. 89 there is no dispute any more and that no action is proposed to be taken by the authorities concerned. Therefore, arguments are confined only to additional import licence No. 3234622 in respect of export period A.M. 90. Mr. V.R. Reddy appearing for the petitioner submits that during the export period A.M. 90 with reference to which the said additional licence was issued Import Export Policy announced on 30-3-1988 effective for a period of 3 years from the 1st April, 1988 to 31-3-1991 was in force. Chapter XVIII of the said Import Export Policy for the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (s). It may not, therefore, be necessary for an applicant Export House/Trading House to hold a valid Export House/Trading House Certificate at the time of submission of the application for the Additional licences, if otherwise due. Para 216 dealing with the Utilisation of Additional Licences provides as follows :- 216. TheAdditional licences will be issued in the name of the Export Houses/Trading Houses only and will not be subject to Actual User" conditions. Except for cases covered by sub-paras (3) and (5) of para 215 above, a licence holder may transfer the licence in full or in part in favour of any other person. The transfer of the licence will not require any endorsement or permission from the licensing authority ............. Whenever an Additional licence is transferred, the transferor should give a formal letter to the transferee, giving full particular sregarding No., Date and Value of the licence transferred and the name and address of the transferee." The1st respondent applied for Trading HouseCertificate by application dated12-9-1989 on the basis of its exports of iron ore processed during the three preceding licensing years 1986-87,1987-88 and 1988-89 under P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport of these contentions, Mr. V.R. Reddy places reliance on the fact that the additional licences are intended as incentives for promoting exports in national interest and that additonal licences are very valuable and that very large sums can be earned by transferring them which in fact exporters like the 1st respondent take into consideration in effecting exports by reducing the price of export commodities to meet international competition. 8. In support of his contention, based on the doctrine of equitable estoppel, Mr. V.R. Reddy relied on the decision of the Supreme Court in Union of India v. Anglo Afghan Agencies - AIR 1968, Supreme Court, 718 which is also a case which arose under Imports Exports (Control) Act, 1947 and Imports (Control) Order, 1955. In that case, the Supreme Court considered the scope of incentives to exporters of woollen goods under a scheme called the export promotion scheme published by the Textile Commissioner. The said scheme was extended to exports of woollen textiles and woollen goods to Afghanistan. Under the said scheme, it was represented that exporters of the said goods would be entitled to import certain goods for a value equal to 100% of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such overriding public interest, it may still be competent to the Government to resile from the promise on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position provided of course it is possible for the promisee to restore status quo ante. If, however, the promisee cannot resume his position, the promise could become final and irrevocable. He also relied on the judgments of the Supreme Court in Union of India v. Godfrey Philips India Ltd. - AIR 1986 Supreme Court, 806 = 1985 (22) E.L.T. 306 (S.C.), in PoumamiOil Mills v. State of Kerala - AIR 1987 Supreme Court, 590 = 1987 (27) E.L.T. 594 (S.C.) and m M/s. D. Navinchandra Co. v. Union of India - AIR 1987 Supreme Court, 1794 =1987 (29) E.L.T. 492 (S.C.). In this connection, the judgments of a Division Bench of the Bombay High Court in Union of India v. Hindustan Platinum Private Limited - 1989 (44) E.L.T. 443 and of a Division Bench of the Madras High Court in Union of India v. Chakra Tyres Limited -1990 (4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 3234622 in respect of the export period A.M. 90 was granted through inadvertence or mistake and therefore can be cancelled under Clause 9(l)(a) of the Imports (Control) Order, 1955. 11. In fact the suspension order dated 7-9-1990 issued by the 2nd respondent to the 1st respondent and the show cause notice dated 5-10-1990 issued by the 2nd respondent to the 1st respondent set up the same case. In the said suspension order, it is stated that the additional licence now in question was issued to the 1st respondent erroneously because against the exports of A.M. 90 period the licensing period is A.M.91 and during this period, the said item of export is not eligible for additional licence as the same is figuring in Appendix 12 of Import Export Policy Volume-I, 1990-93". In para 2 of the said show cause notice also the same thing is repeated. As already stated above, the 1st respondent gave a detailed reply dated 12-10-1990 to the said show cause notice. In the said reply the 1st respondent contends that the change introduced in Item 1 of Appendix 12 under the New Policy does not at all have the effect of consequences that the export of items which were made in the past and which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows :- 183(1):- All exports, except those mentioned in para 191 will qualify for the grant of import replenishment provided :- (a) the exports are made in accordance with the export policy in force; and (b) the exported products are not listed in Appendix 12 of this policy. In sub-para (1) of Para 218 also the language adopted is as follows :- 218(1):- The eligibility for the grant of Export House/Trading House Certificate shall be determined on the basis of the Net Foreign Exchange Earnings (NFE earnings) from the exports actually made in the preceding three licensing years termed as Base Period . The earnings from (i) the exports of products specified in Appendix 12, (ii) re-exports as defined in para 191 of this Policy, ...... ................ ... shall not qualify for this purpose." It is significant that in sub-para (1) of Para 220 there was no reference to Appendix 12 at all, leave alone Appendix 12 of this Policy . I am of the view that in interpreting admissible exports made in the preceding licensing year in Para 220(1) the fact that additional licences are granted as an incentive for promoting exports and that the doctrine of equitable estoppel would ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding counsel was not able to explain under what provision of law the 2nd respondent could call for the said two additional licences or suspend them without initiating any proceeding under sub-clause (3)of Clause 9 of the Imports (Control) Order, 1955. As it transpires, the 2nd respondent did not proceed further as regards the additional licence No. 3234621 relating to export period A.M. 89, the approximate value of which is Rs. 21,45,90,506/-. The 2nd respondent has not explained in his counter affidavit why additional licence No. 3234621 was also called back on the ground that it was erroneously issued. One would expect the authorities to act in matters like this with due deliberation and care, to say the least. 14. On the facts and circumstances of this case and for the reasons stated above, I hold that exports of iron ore processed were admissible exports made by the 1st respondent during the Export Period A.M. 90. The 1st respondent is entitled to additional licence during the following year i.e., A.M. 91 under the said sub-para (1) of Para 220 of the New Policy. Respondents 2 and 3 have failed to establish that there is any error in the issuance of additional licence No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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