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TMI Blog1975 (7) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... urage this export, a scheme was announced by the Government on 2nd February, 1973, to be effective for three Years from 1st October 1972 to 30th September, 1975. The first Paragraph of the scheme stated the decision of the Government to allow cash assistance against exports of walnut kernel as well as in shell at 5 Per cent of the F. O. B. value to the registered exporters on exports made during the period from 1st October, 1972, to 30th September, 1975. Over and above this normal cash assistance of 5 per cent an additional incentive assistance was also announced in the second paragraph of the scheme as follows:- (1) 2 1/2 per cent of the F. O. B. value if the exports of a registered exporter during 1-10-1972 to 30-9-1973 exceed by at least 10 per cent of their exports during 1-10-1971 to 30-9-1972. (2) 2 1/2 per cent of the F. O. B. value on the exports made during 1-10-1973 to 30-9-1974 if they exceed by at least 10 percent of the exports for the year 1-10-1972 to 30-9-1973, and (3) 2 1/2 per cent of the F. O. B. value of the exports made during 1-10-1974 to 30-9-1975 if the experts exceed by at least 10 percent. of the exports during the Previous year. namely A-10-1973 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned counsel for the petitioners, namely Shri Anoop Singh and Shri P. C. Khanna, confined themselves in urging only the following grounds, namely : - (1) The Government by the promulgation of the scheme dated 2nd February, 1973 made a representation that the scheme would operate for three years from 1-10-1972. Relying upon this representation the petitioners changed their position to their detriment by investing and spending a lot of money on the urbanisation of their trade and by entering into contracts for the purchase of walnut to be exported to foreign countries. The walnut season ends with September each year. The purchase of the walnut in the season and its transport from Jammu and Kashmir to the Ports and its export outside can be completed only after September. Due to the action of the Government in winding up the scheme from 30th September, 1973, the petitioners could not take advantage of the cash assistance even for the year 1972-73, Further, the Government was estopped from withdrawing the scheme before the end of the promised three years both by promissory estoppel as also by equity. (2) The justification for the withdrawing of the scheme was based on the ris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the rejoinders filed by the petitioners, there was no denial of the averment of the Government that world prices had risen in 1972-73 after the promulgation of the scheme and that the exporters were, Therefore, not likely to suffer any loss. The petitioners evaded the issue by denying that the cash assistance had been announced by the Government with the object of off-setting the losses to the exporters. The petitioners said that the question of actual loss having been suffered or not by the exporters was irrelevant. The petitioner in the present writ petition, however, admitted that it may be correct that the cash incentive was not intended to be given as a source of profit to the exporters but it was given to reduce losses which the trade was suffering in competition with China and the United States and the uncertainty for booking orders in advance by foreign buyers. The petitioners pointed out that the contracts with foreign buyers had been entered into by them long before the cash assistance scheme was withdrawn. The petitioners would have to fulfill these contracts. Had the Government withdrawn the cash assistance before the petitioners entered into these contracts, the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor have they discontinued the exports after they found they could not rely on the scheme. It was urged for them that they were encouraged to expand their trade by relying upon the scheme. It may be assumed for the sake of argument that some of the expansion would not have occurred but for the scheme. But the expansion of the trade cannot be said to be an act which caused any detriment to the petitioners. Therefore, even considering the principle of promissory estoppel or some principle of equity analogous to the equity in Ramsden v. Dyson, (1866) 1 Hl 129 which has been applied in India, it cannot be said that the petitioners have changed their position to their detriment by acting upon the representation made by the Government. 11. The application of the principle, of promissory estoppel for an analogous principle of equity is rendered more difficult in relation to the Government as distinguished from a private person. The executive action of the Government may be of two distinct kinds. Firstly, the Government may act like a private person under the rules of private law. When, for example the Government purchases property or enters into contracts in such transactions, the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if it does so it must perform it like anybody else or pay damages for the breach. But this was not a commercial contract, it was an arrangement whereby the Government purported to give an assurance as to what its executive action would be in the future in relation to a particular ship in the event of her coming to this country with a particular kind of cargo. And that is, to my mind, not a contract for the breach of which damages can be sued for in a Court of law. It was merely an expression of intention to act in a particular way in a certain event. My main reason for so thinking is that it is not competent for the Government to fetter its future executive action, which must necessarily be determined by the needs of the community when the question arises. It cannot by contract hamper its freedom of action in matters which concern the welfare of the State." The latest refinement of this doctrine is to be found in the recent decision of the Supreme Court in the Indian Aluminium Company v. State of Kerala, announced on 23rd July, 1975, (Reported in MANU/SC/0310/1975MANU/SC/0310/1975 : [1976]1SCR70 ). The Electricity Board had entered into a contract with the company to charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on the general interest of the State warranted." In M/s. Ramchand Jagadish Chand v. Union of India. MANU/SC/0160/1961MANU/SC/0160/1961 : [1962]3SCR72 , also the Supreme Court had observed that though the licensing authority would normally issue an import license for 100 Per cent of the goods exported "having regard to special considerations such as difficult foreign exchange position or other matters which have a bearing on the general interest of the State, import licenses for a smaller percentage may be granted to the exporters". These decisions recognise the power of the Government to change its policy due to general circumstances. Even if a concluded contract cannot fetter this discretion of the Government muchless can a mere representation do so. 15. Courts have recognised such implied terms even in contracts entered into by Government. On the same principle, representations of policy made by Government would also be subject to such implied terms. In Crown Lands Commissioners v. Page, (1960) 2 Qb 274, the Court refused to imply a covenant for quiet enjoyment in a Crown lease so as to exclude the Crown from exercising the statutory exclusion powers. Professor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsidy was necessary to offset the trade losses of walnut exporters. Further, an opportunity was given by the Government to the Trade to show cause why the policy should not be changed. It is the trade which failed to take advantage of the opportunity probably because the traders were aware that the change of policy was justified. As they had no cause to show why the policy should not be changed, they did not attempt to do so. 18. At the time of declaring the policy, the Government may not anticipate that the circumstances on which the policy is based would change. The declaration of policy may not also be expressly based an the existence of circumstances. But it is always implicit in the promulgation of the policy that it is based on the existence of circumstances and is made with a view to achieve certain objects. If the circumstances change and the achievement of objects become either impossible or unnecessary then a change in policy would be justified. Further, instances of reasons which would justify the change of policy by the Government are furnished by two subsequent decisions of the Supreme Court. 19. In State of Tamil Nadu v. S. K. Krishnamurti, MANU/SC/0026/1972MANU/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, the price went up from £ 435-440 in May 1972 to £ 805-815 in May 1973 and to £ 825-835 in August 1973. The unit value realisation during the period 1-4-1973 to 31-8-1973 had also gone up to ₹ 8.09 per Kg. in the case of walnuts in shell and ₹ 10.88 per kg. in the case of walnut kernels as against ₹ 3.83 and ₹ 8.29 per kg. respectively during the corresponding period of the previous year. This assertion of fact was not denied by the petitioners. The petitioners, on the other hand, argued that the question of loss was irrelevant. We are of the view that the offsetting of losses of the trade was the basic consideration for the grant of the cash assistance. It is well known that subsidy is not granted merely to enrich the exporters. We believe the Government affidavit that it was granted to offset the losses. The Petitioners have not rebutted the figures given by the Government from which it would appear that with the increase in the world prices the unit realisation. of the exporters went up. The exporters, Therefore, made profit in stead of incurring any losses. The figures filed by the petitioners in Civil Writ No. 183 of 1974 at Annexur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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