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TMI Blog2024 (8) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... and foreign trade policy. In the present case, the Supreme Court held that the petitioner was exporting a product which was inadmissible as per Appendix 12 of Exim Policy. Consequently, the petitioner was not entitled to the benefits of the claim of cash amount of 20% premium that would be paid against the additional licence. The contravention of the provisions of the FT Act, rules, orders and foreign trade policy lead to the consequences provided under the FT Act. The demand by the respondent is for payment of interest on the amount of Rs. which according to the respondent was utilized by the petitioner to which they were not legally entitled to. The respondent may have a claim against the petitioner for payment of interest but in our opinion the same cannot be adjudicated under the provisions of the FT Act, 1992. Under the provisions of the FT Act, any penalty may be imposed or any confiscation may be adjudged. We do not find any provision in the FT Act providing for adjudication of a claim of interest on the amount as is the subject matter in the present petition. It is not found that any provision in the FT Act for levy of interest on such delayed payment moreso when the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im policy, 1988-91 and acting upon the said policy, the petitioner entered into a contract with one NKK corporation, Japan on 07.02.1990 for the export of processed iron ore, which was not an ineligible item in Appendix 12 under the Exim policy, 1988-91. However, the petitioner actually exported the processed iron ore and realised NFE earnings of Rs. 52,00,51,848/- between the period April, 1990 to March, 1991 during the new Exim policy. The petitioner applied for a grant of additional licence on 23.07.1992. The same came to be rejected by the Assistant chief controller of Imports and Exports on the ground that there was no provision for grant of an additional licence. In an appeal preferred by the petitioner, the Joint chief controller of Imports and Exports remanded the atter to the Assistant chief controller of Imports and Exports for afresh adjudication. 3. The Assistant chief controller of Imports and Exports again rejected the said application by observing that the item iron ore processed exported by the Appellant during April 1990 to March 1991 is included in Appendix 12 of the Exim policy, Book 1990- 91. The Ministry of commerce vide REP Circular No. 11/93 dated 05.05.1993 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licence was barred by limitation. 6. Aggrieved by the decision of the Second Appellate Authority, the petitioner filed Writ Petition No. 286/1996. By judgment and order dated 30.01.2001, the writ petition was allowed and the order of the ADGFT dated 12.01.1996 was quashed and set aside. 7. The respondents challenged the judgment dated 30.01.2001 of this Court before the Supreme Court by filing SLP. When the said matter came up for hearing on 27.08.2001, the Supreme Court granted leave in the matter and directed the petitioner to furnish a bank guarantee to the respondents for the amount due i.e. Rs. 1,21,69,200/- along with interest and on furnishing of the said bank guarantee. By order dated 09.09.2002, the Supreme Court directed the petitioner to give an undertaking that if the bank guarantee is not renewed by the petitioner two months prior to its expiry, the Union of India would be entitled to invoke the bank guarantee. The Supreme Court further directed the Union of India to release the amount within four weeks. The respondents paid the amount of Rs. 1,21,69,200/- only without any interest. The petitioner continued to renew the said bank guarantee from time to time. 8. The Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort). 12. On 08.05.2023, the petitioner informed the respondent that the petitioner has made payment of the amount of Rs. 1,21,69,200/- via RTGS dated 04.05.2023. By the same letter, the petitioner requested for an appointment with DGFT for clarification on the interest part of the subject matter. The office of the ADGFT vide letter dated 29.05.2023 informed the petitioner that they can avail personal hearing with the Deputy Director General on 16.06.2023. By letter dated 29.05.2023, the petitioner requested the office of the ADGFT that the petitioner has been in a bonafide manner complying with all the conditions which were imposed on them by the office of DGFT from time to time. In view of the same, a request was made for waiving off the interest as stated in the letter dated 24.03.2023 and return back the original bank guarantee. However, there was no response from the office of the DGFT. 13. As there was apprehension that the respondents may encash the bank guarantee, the petitioner filed a Miscellaneous Civil Application No. 239 of 2024 (F) in Writ Petition No. 286 of 1996 on 25.01.2024 praying for the return of the original bank guarantee, in view of the payment of Rs. 1,21, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorise in this behalf. Thus, an appeal shall lie under Section 15 of the FT Act, if any penalty is imposed or any confiscation is adjudged under the Act, by the adjudicating authority. 16. The question is whether the demand for interest can be subject matter for adjudication by the adjudicating authority. The provisions of Chapter IV of the FT Act deal with search, seizure, penalty and confiscation. Section 1 1 provides for contravention of provisions of the FT Act, rules, orders and foreign trade policy. The provisions of sub-section (1) to sub-section (9) of Section 11 pertain to the imposition of penalty and confiscation. Sub Section (7) of Section 11 needs to be mentioned as it says that without prejudice to the provisions contained in this Section, the importer-exporter Code number of any person who fails to pay any penalty imposed under this Act, may be suspended by the Adjudicating Authority till the penalty is paid or recovered, as the case may be. Section 11 which is important having a bearing on the present controversy needs to be reproduced which reads thus: [11. Contravention of provisions of this Act, rules, orders and foreign trade policy. (1) No export or import s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol of the Assistant Commissioner of Customs or Deputy Commissioner or Customs or any other officer of Customs, as if the said amount is payable under the Customs Act, 1962 (52 of 1962); or (d) if the amount cannot be recovered from such person in the manner provided in clauses (a), (b) and (c), (i) the Director General or any officer authorised by him may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the District in which such person owns any property or resides or carries on business and the said Collector on receipt of such certificate shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue; or (ii) the Director General or any officer authorised by him (including an officer of Customs who shall then exercise his powers under the Customs Act, 1962 (52 of 1962) and in accordance with the rules made in this behalf, detain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid, as if the said amount is payable under the Customs Act, 1962 (52 of 1962); and in case, any part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the amount which has been paid over to the petitioner by the respondents as per the order of the Supreme Court cannot be included in the term penalty which can be adjudicated in terms of the provisions of the FT Act or rules made thereunder. 18. The law with regard to the entertaining the petition under Article 226 of the Constitution of India in case of availability of alternate remedy is well settled. The decision relied upon by learned Deputy Solicitor General of India in PHR Invent Educational Society (supra) is significant. Paras 14 to 22 crystalizes the legal position which read thus: - 14. The law with regard to entertaining a petition under Article 226 of the Constitution in case of availability of alternative remedy is well settled. In the case of Satyawati Tondon (supra), this Court observed thus: 43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution. 16. The view taken by this Court has been followed in the case of Agarwal Tracom Private Limited v. Punjab National Bank and others [(2018) 1 SCC 626]. 17. In the case of Authorized Officer, State Bank of Travancore and Another v. Mathew K.C. [(2018) 3 SCC 85], this Court was considering an appeal against an interim order passed by the High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260], it appears that the High Courts have continued to exercise its writ jurisdiction under Article 226 ignoring the statutory remedies under the RDBFI Act and the SARFAESI Act. 22. It can thus be seen that it is more than a settled legal position of law that in such matters, the High Court should not entertain a petition under Article 226 of the Constitution particularly when an alternative statutory remedy is available. 19. As the demand for payment of interest cannot be a penalty in terms of the provisions of the FT Act, there can be no appeal against such order under Section 15 of the FT Act. We do not find any provision prescribing an alternate efficacious remedy to the petitioner under the FT Act for redressal of the grievance. There is thus no merit in the preliminary objection of the learned Deputy Solicitor General of India about the existence of an effective alternative remedy. We proceed to entertain the petition in its challenge to the impugned order. 20. So far as the impugned order by which the demand for interest at the rate of 15% on the amount of Rs. 1,21,69,200/- is concerned, it will be necessary to br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging to the Revenue. It is further submitted that the JDGFT has ample power under the FT Act and the rules framed thereunder to raise such demand and enforce the same. 23. Heard learned counsel. We now proceed to deal with the contention as to whether the respondent is competent to/has jurisdiction to adjudicate upon the quantum of interest and enforce the same under the provisions of the FT Act. The Supreme Court upheld the judgment of the High Court holding that the petitioner was exporting a product (processed iron ore) which was inadmissible as per Appendix 12 to the Exim Policy. During the pendency of the petition, the Supreme Court by an interim order had directed the Union of India to pay an amount of Rs. 1,21,69,200/- to the petitioner subject to furnishing bank guarantee. After the dismissal of the petition, the amount of Rs. 1,21,69,200/- was paid by the petitioner to the respondent. The question is whether the respondent could adjudicate on the quantum of interest and enforce the same under the provisions of the FT Act by revoking the bank guarantee and putting the IEC number of the petitioner on the DEL. 24. It is pertinent to note that under the orders of the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Code of Civil Procedure, 1908 while trying a suit. Relying on sub-section (2) of Section 17, learned Deputy Solicitor General of India submitted that every authority making any adjudication or hearing any appeal or exercising any powers of review under this Act shall be deemed to be a Civil Court for the purposes of Sections 345 and 346 of the Code of Criminal Procedure, 1973. It is therefore, submitted that the JDGFT is a Court within the meaning of the Interest Act, 1978. The argument is that as Section 3 of the Interest Act, 1978 empowers the Court to allow interest, the order passed by the adjudicating authority is within his jurisdiction. 28. We are afraid that the submissions of the learned Deputy Solicitor General are completely misconceived. Having come to the conclusion that in the facts of the present case, the JDGFT has no jurisdiction to adjudicate upon a claim for payment of interest, the question of exercising powers of Civil Court in respect of the matters stipulated in Section 17 of the FT Act will not arise. The contention that the adjudicating authority is a Court within the meaning of the Interest Act, 1978 is untenable. 29. We do not find any provision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er when at the end of the proceedings the court pronounces its judicial verdict which does not match with and countenance its own interim verdict. Whenever called upon to adjudicate, the court would act in conjunction with what is real and substantial justice. The injury, if any, caused by the act of the court shall be undone and the gain which the party would have earned unless it was interdicted by the order of the court would be restored to or conferred on the party by suitably commanding the party liable to do so. Any opinion to the contrary would lead to unjust if not disastrous consequences. Litigation may turn into a fruitful industry. Though litigation is not gambling yet there is an element of chance in every litigation. Unscrupulous litigants may feel encouraged to approach the Courts, persuading the court to pass interlocutory orders favourable to them by making out a prima facie case when the issues are yet to be heard and determined on merits and if the concept of restitution is excluded from application to interim orders, then the litigant would stand to gain by swallowing the benefits yielding out of the interim order even though the battle has been lost at the end. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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