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TMI Blog2008 (8) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... s before the First and Second Appellate Committees, are disentitled from questioning the validity of the forfeiture clause in the ‘Policy’. W.P. dismissed. - Writ Petition No. 36109 of 2004 (GM-RES) - - - Dated:- 13-8-2008 - Ram Mohan Reddy, J. Shri Shyam Koundinya A.S. and Vinay Paul, Advocates, for the Appellant. Shri N. Devadas, Sr. CGSC, G.L. Rawal Senior Counsel and K. Sachindra Karanth, Advocate, for the Respondent. ORDER Learned counsel for the parties submit that the order dated 17-3-2008 bearing No. 2/2008 of the Apparel Export Promotion Council in respect of 1st petitioner requires to be challenged before the First Appellate Committee at Mumbai and that the petition be disposed off reserving liberty to the 1st petitioner to do so. 2. Recording the submission of the learned counsel for the parties, the petition in so far as it relates to the 1st petitioner is accordingly disposed off. 3. The 2nd Petitioner, a manufacturer/garment exporter when allotted export entitlement under the Manufacturers Exporter Entitlement (MEE) quota in country category US/340, EC/8 during the year 1994, in terms of the notification dated 4-9-1993 (for short Policy ), effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers on basis of High Value Realisation. The framing of policies, it is said, is in exercise of power conferred under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (No. 22 of 1992) and Item No. 8 of Appendix-I Schedule-2 of ITC (HS) Classification of Export and Import published under the Export and Import policy. It is further stated that in order to implement the policy, an Apparel Export Promotion Council (AEPC) headed by Director General is designated as Quota Administering Authority, on behalf of the Government, responsible for allocation of quota in terms of the policy. The availability of quota, it is said, vastly over strips the demand and in view of the restricted availability, commands a premium. Major importers of textile garments being the quota countries, it is essential to ensure quotas are fully utilised and are not allowed to go waste due to speculative trading by unscrupulous elements and therefore, the policy envisages utilisation of the quota by 30th September of the relevant year and failure to do so, the exporter is required to surrender the quota and seek revalidation of unutilised quota allocated in the categories, in the manner and pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e non-performance, was not due to willful failure but for reasons beyond its control. (d) the earlier decisions in appeals involving identical issues and identical set of facts, the authorities having accepted the claim of force-majeure, cannot refuse to accept the petitioner s claim of force-majeure in the fact situation of this case. 7. Per contra, learned Senior counsel Sri G.L. Rawal for Respondent No. 3 contends that the challenge to the policy is unavailable to the petitioner as the garments exported having fallen short of the quota allotted to it within the period stipulated, voluntarily sought for revalidation of the entitlement beyond the period, by filing an application in the required proforma XII to the policy, and a Bank guarantee in the proforma Annexure-VI to the policy. According to the learned Senior counsel, in terms of the policy, the petitioner was fully aware of the consequences of proportionate forfeiture of Bank guarantee on failure to export garments upto 90% but not less than 75%, and forfeiture in full if less than 75%. Petitioner having accepted the terms of revalidation, it is argued, cannot be heard to contend that the policy in so far as it relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the quotas remained unfulfilled. Due to non-performance of the export obligation, in its entirety, despite the extended period of time, and in terms of the revalidation, the AEPC issued notice calling upon the petitioner to show cause as to why action should not be taken to forfeit the monies from out of bank guarantee, which was responded to by the petitioner. The AEPC, not being satisfied with the explanation offered, forfeited Rs. 4,23,569/-, calculated in proportion to the percentage of non-exported quota, from out of the amounts in the bank guarantee, by order dated 12-3-1996 Annexure- D . This order when carried in appeal before the First Appellate Committee, was confirmed by order dated 23-8-2000 Annexure- H . So also, the Second Appellate Committee dismissed the petitioner s appeal by order dated 3-8-2004 Annexure- K . 10. In the admitted facts noticed supra, the questions for decision making are, (a) Whether the challenge to the policy in so far as it relates to forfeiture, for non-fullfilment of the export obligation within the time stipulated, is sustainable? (b) Whether the AEPC and Appellate Committees were justified in rejecting the petitioner s claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction, will not transgress into the fieid of policy decision, as they are ill equipped to adjudicate on a policy decision. The court, no-doubt has a duty to see that in the undertaking of a decision, no law is violated and people s fundamental rights are not transgressed upon except to the extent permissible under constitution. 13. In almost identical circumstances, a learned Single Judge of this Court in the case of Gokaldas Images Limited v. Union of India in W.P. No. 8539/2003 and connected writ petitions, by order dated 12-3-2003, repelled the contention that the policy providing for forfeiture and imposition of penalty for non-fulfillment of the obligation under the export quota could be challenged by an exporter who had had the benefit of a policy, following the decision of the Apex Court in the case of PTR Exports (Madras) Pvt. Ltd. and Others v. Union of India and Others reported in AIR 1996 SC 3461 = 1996 (86) E.L.T. 3 (S.C.), in the matter of interference by writ courts with policy matters, by observing thus : 4 An applicant has no vested right to have export or import licences in terms of the policies in force at the date of his making application. For obvious ..... X X X X Extracts X X X X X X X X Extracts X X X X
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