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TMI Blog2007 (8) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive. We have already noted that it is not even the case of the respondent that the Notification dated 9th February, 2007 is to have a retrospective effect in its strict sense and still they are not permitting theexport of the goods as is done in the present case.For the reasons aforestated, we quash and set aside the order dated 30th April, 2007 passed by the Director General of Foreign Trade, Ministry of Commerce and Industry, Udyog Bhawan, Delhi, and direct the said Authority to hear the petitioner and pass appropriate order afresh in accordance with law and keeping in view the decision of the Court as aforereferred within four weeks from today. - W.P.(LODG.) NO. 391 OF 2007 - - - Dated:- 16-8-2007 - SWATANTER KUMAR, C. S.C.DHARMADHIKARI, JJ Represented by: Mr. K. K. Singhvi, Sr. Advocate with Mr. P.B.Shah for the Petitioner. Mr. Y. R. Mishra with Ms. H.P. Shah for the Respondent. JUDGMENT : (Per SWATANTER KUMAR, C.J.) Rule. Learned Counsel appearing for the respondent waives service. By consent, Rule made returnable and heard forthwith. 2. The petitioner, a private limited company, is engaged in the business of manufacturing and distributing Milk a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to all the exporters including the petitioner. On the date of the filing of the petition, the petitioner had three export contracts, which were to be executed and fulfilled by the petitioner, namely,: (a) An irrevocable standing L/c No. ML07002373 dated 30/01/2007 for USD 580,000/has been opened by United Global Agencies (Thailand), Exhibit E to the Petition, by which the petitioner was required to supply 1000 MT SMP at USD 2900/p. m.t. For the period from January to May, 2007 at the rate of 200 tons per month. (b) An Irrevocable standby L/c No. NR14/200700615A/RE dated /2007 for USD 1,000,000 has been opened by France International Trade, Exhibit F to the petition, by which the petitioner was required to supply 1000 MT each month upto February, 2008. (c) An irrevocable standby L/c No. 153496/05 amended on 24/1/2007 has been opened by France International trade for USD 1,000,000, Exhibit G to the petition. (d) An irrevocable standby L/c No.D06707011 dated 31/1/2007 has been opened by France International Trade for USD 6,00,000, Exhibit H to the petition. 3. As per the existing policies and with the permission to export, the petitioner had various export orders fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in terms of the Notification dated 9th February, 2007 the Skimmed Milk and Milk Food for Babies and the items mentioned in the new amendment inserted after Entry No.33 in Table B under Schedule 2 of ITC (HS) are not permitted to be exported with immediate effect as the same is made in public interest. The amendment has been directed under the powers conferred upon the Government under Section 5 of the Foreign Trade (Development Regulation) Act, 1992. In regard to retrospective operation, it is submitted that once there is a ban, on any pretext the export of these products cannot be permitted as it would violate the foreign policy. It is stated that the Government must be given adequate flexibility to take decision and to implement the same. A meeting of the Committee of Secretaries was held on 19th December, 2006 to review the prices of commodities, including milk, and the steps taken by the concerned Department. The matter was also discussed in another meeting and finally it was decided that in order to improve the domestic milk availability there would be a need to restrict export of milk powders for some time in future. This was approved by the Cabinet Committee and fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition and the delay in Court cannot be construed to the disadvantage of any party. The letters of credit opened in favour of the petitioner by its foreign buyers were dated 24th January, 2007 and 30th February, 2007 and which were even amended. The supplies were to be effected at the rate of 200 tonnes per month. It was argued on behalf of the petitioner that the action of the respondent in denying the requisite relief to the petitioner was arbitrary and was not substantiated by any plausible reasoning. In fact the order dated 30 th April, 2007 is hit by the principles of retrospectivity. In support of this contention, learned Counsel for the petitioner relied upon the judgment of the Supreme Court in the case of Union of India v/s M/s. Asian Food Industries, passed in Writ Petition (civil) No. 4695 of 2006 decided on 7th November, 2006 for the following : We, however, need not dilate on the said question as in the case of Agri Trade India Services (P) Ltd., the requirements of Section 51 of the 1962 Act had not been complied with whereas in the case of Asian Foods Industries, it was done. The Delhi High Court, however, in our view correctly opined that the notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erfere in such decisions. It is also contended on behalf of the respondent while relying upon the judgement of the Supreme Court in Kasinka Trading v/s Union of India, 1994(74) Excise Law Times 782 (S.C.), and Darshan Oils Pvt. Ltd. V/s Union of India, 1995 (75) Excise Law Times 32 (S.C.), that the power to revoke includes the power to modify and amend. Even a time bound assurance could be modified or revoked at any time in public interest and the doctrine of promissory estoppel would not be attracted. The Government is also at liberty to review its policy keeping in view the larger public interest. The doctrine of legitimate expectancy plays no role when the authority is empowered to take policy decision and burden would be on the petitioner to satisfy the Court that the same would be an abuse of power. 8. In the present case it cannot be disputed that when the Letters of Intent were issued in favour of the petitioner the declared policy of the Government did not impose any ban upon export of SMP and its alike products. The right by virtue of the contract between the exporter and importer should settle for them. The expression export obligation as defined in the Foreign Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability. Once it chose to reserve such powers, obviously, then the powers have to be exercised judiciously and fairly. Even the order of the Division Bench of this Court dated 16th March, 2007 indicates that the Ministry of Commerce was expected to consider the representation of the petitioner in the light of the observations made in its order. To decide policies and take actions is in executive domain of the Government but these are expected to be in conformity with law and not arbitrary or ultra vires. The policies of the Government may not be static as they change in terms of need based upon the decision of the authority. Judicial review of the policy matters per se would not fall within the limitation of judicial review but once it is tainted with unfairness or arbitrariness the Court would have to examine the pros and cons of such decision. Even where there is a change in Government policy as a result of change in the Government, the decision bringing out a change in execution of the policy may not be questionable and court may not embark upon any judicial review unless such a decision was contrary to law, malafide and offended public policy. The Supreme Court in a recent jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public interest and subsequently withdrawn in exercise of the same powers again in public interest. In our opinion, no justifiable prejudice was caused to the appellants in the absence of any unequivocal promise by the Government not to act and review its policy even if the necessity warranted and the `public interest' so demanded. Thus, in the facts and circumstances of these cases, the appellants cannot invoke the doctrine of promissory estoppel to question the withdrawal notification issued under Section 25 of the Act. 37. The decision in Kasinka Trading has been distinguished in the later decision by this Court in State of Punjab v. Nestle India Ltd. On the ground of the inherent nature of an exemption notification issued under Section 25 of the customs Act. Even in respect of a notification under Section 25 of the Customs Act this Court has taken the view that the withdrawal even of such a notification must not be arbitrary or unreasonable (see DaiIchi Karkaria Ltd. v. Union of India). 38. The principle underlying legitimate expectation which is based on Article 14 and the rule of fairness has been restated by this Court in Bannari Amman Sugars Ltd. vs. CTO. Itwas obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial review only to the extent that the State must act validly for discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely decided. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action an if so, does it really satisfy the test of reasonableness. )emphasis supplied) 39. MRF made a huge investment in the State of Kerala under a promise held to it that it would be granted exemption from payment of sales tax for a period of seven years. It was granted the eligibility certificate. The exemption order had also been passed. It is not open to or permissible for the State Government to seek to deprive MRF of the benefit of tax exemption in respect of its substantial investment in expansion in respect of compound rubber when the State Government had enjoyed the benefit from the investment made by MRF in the form of industrial development in the State, contribution to labour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case, would show that the doctrine of legitimate expectancy, and for limited extent of constructive promissory estoppel, would have some application. The petitioner has invested huge amount to establish a plant and export facilities of international standards. The declared policy was to operate during the period of 2004 to 2009. Prospective application of the ban is not in question before us. On various grounds the same could even be justified. However, if the concluded contracts, which have been acted upon between the parties partially prior to the cutoff date are not fulfilled, it would, to a great extent, amount to disturbing the settled things. Such an approach would be greatly unacceptable in view of the fact that the respondent themselves had reserved the right to examine on case-to-case basis the existing export obligations. Nowhere in the order, and for that matter even in the counter affidavit, it is stated what would be the existing export obligation and under what circumstances the benefit of the decision could be given to the affected parties. Public interest is a term of wide connotation and it has to be considered keeping in view the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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