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TMI Blog1994 (5) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... id not affect the pre-existing licencees. However, this was altered by the two impugned Notifications dated 25-1-1994 and 29-1-1994. The petitioner relies on the doctrine of promissory estoppel to contend that the licence issued to the petitioner was a promise held out to him, permitting the import of goods in question without restriction as to its quantity and that the impugned Notifications are unreasonable restrictions on his fundamental right to carry on with his trade, granted under Article 19(i)(g) of the Constitution of India, further, the petitioner contended that the impugned Notifications were not in the public interest; instead, they were issued to protect certain "local manufacturers". 3.On 21-2-1994, the Bench issued notice to the respondents for 9-3-1994 to show cause as to why Rule Nisi be not issued. Court directed the respondents to file reply by that date. On 9-3-1994, the Court granted further four weeks `to file counter and directed listing of the case on 2-5-1994 and issued Rule. On 2nd May, 1994 the matter was adjourned; on 16-5-1994, again the case was adjourned to 19-5-1994, on which date Court heard the matter. It is obvious that, since the period of lice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctrine of promissory estoppel in support of this plea. The State, instead of explaining the reason for withdrawing the scheme, orally submitted that because of large scale misuse of the scheme, the scheme was withdrawn. The Supreme Court rejected this plea, at page 1248 the Court held :- "The first contention of the learned counsel for the appellants is that the doctrine of Promissory Estoppel was not applicable in the present case because it was found by the Government of Karnataka that the concessions granted under the said order dated 30th June. 1969 were being misused and undue advantage was being taken of the same. It was submitted by him that in view of this, it would not be proper to hold the Government, to the promises or the assurances it had given under the said order dated 30th June, 1969. We are afraid it is not possible to accept this submission. No counter affidavit was filed by the appellant before the trial Court in the writ petition. Beyond the statement of counsel, there is nothing to show that any misuse was made of these concessions or undue advantage taken of the same. It is true that the preamble to the order dated 12th January; 1977 does recite that the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er decision in Municipal Corporation of Delhi v. Birla Cotton Spinning and Weaving Mills, Delhi and Another - AIR 1968 SC 1232. Court thereafter referred to an earlier decision in Municipal Corporation of Delhi v. Birla Cotton Spinning Weaving Mills (AIR 1968 SC 1232), in support of the proposition. In para 73, the Court proceeded to say : "A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. In addition it may also be questioned on the ground that it does not conform to the statute under which it is made. It may further be questioned on the ground that it is contrary to some other statute. That is because subordinate legislation must yield to plenary legislation. It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifest arbitrary." At para 27 the Court held : "We do not, therefore find much substance in the contention that the courts cannot at all exercise judicial control over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is exercised under Section 3, resulting in the restriction. 12.It has been said that the burden of showing the reasonableness of the restriction under Article 19(6) is on the State, similarly, to justify a restriction under Article 19(6), it will be necessary that the restriction is in the interest of the general public. These two elements of reasonableness and public interest would be based on the particular facts. It follows therefore, the particular facts leading to the inference that the exercise of the power was reasonable and in the interest of the public, shall have to be proved before the Court by the State. 13.Ld. Counsel Madan Lakur relied on the decision of the Supreme Court in M/s. Andhra Industrial Works v. Chief Controller of Imports and Others AIR 1974 SC 1539. A reading of paragraphs 17 and 18 of the report, shows that, on facts, Court found the restrictions reasonable and in the interest of public; and the facts were placed before the Court by the respondents by filing a counter-affidavit (vide para 13). 14.If there is a scope to interpret the order imposing the restriction in a way to reduce the hardship and advance the right to trade, the Court would adop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (4) and (7), no doubt, on their plain wording present certain constructional difficulties and the view sought to be put across by Shri Subba Rao for the appellants, on the plain language of clause (7), is not without possibilities. However, the basis of a harmonious construction which commended itself to the High Court in other similar cases appears to us to advance and promote the objects of the policy in paragraph 185(4) and is, at all events, not an unreasonable view to take of the matter." 15.There is a presumption that the law is constitutional and is enacted to advance the `public interest'. Similar presumption is available to subordinate legislation as also to the exercise of the executive power of the State. However, there is a difference in the weight or the degrees of these presumptions. The presumption attached to a legislative enactment ought to be weightier than the presumption attached to the subordinate legislation or of the exercise of an executive power. Legislative enactment is preceded by debates in the legislature and the representatives of the public have a direct say while enacting a law. That is not the case with a subordinate legislation or an executive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicated for those inputs, except inputs specified as sensitive items. The sensitive items may be imported only to the extent of the quantity of value specified in the licence. Under a value based Advance Licence, both the quantity, and FOB value of the exports to be achieved shall be specified. It shall be obligatory on the part of the licence holder to achieve both the quantity and FOB value of the exports specified in the licence." 17A.Another benefit is found in para 120 of Hand Book of Procedures : "The licence granted under this scheme shall be subject to Actual User condition till redemption of BG/LUT. The Advance Licence holder may, however, transfer the duty free imported materials to his supporting manufacturers whose names are entered in the DEEC for the purpose of export production." 18.There is no dispute that the value based licence is granted to a prospective exporter for duty free import of the raw-material, components, intermediates, consumables, parts, spares including mandatory spares, packing material and computer software, subject to fulfillment of a time bound export obligation and the value condition, as per the prescribed to apply for obtaining a val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... international market of the imported material is merely Rs. 15-17 per kg. but the indigenous manufacturers who are having the monopoly of the items in the country, are selling the said material at the price ranging from Rs. 40-45 per kg. which in turn is inflating the value of all finished goods being manufactured out of the said raw-material. Whereas on the contrary, when competition was faced, the price has substantially reduced down. It is only because of this loss that the Indigenous manufacturers have created a lobby against the genuine exporters who had availed the benefit of this scheme and have attempted to malign the parties which has resulted in huge losses of export proceeds to the Government and also losses to the parties including the petitioner." Again it is averred : "It is submitted that the petitioner cannot be bound by the sensitive items which were introduced in a public notice dated 14-9-1993 and cannot be used against the petitioner but in the case of petitioner only sensitive items on the date of issuance of licence can be used against the petitioner. It is submitted that at the time when the said notification was issued, the respondent has rightly not mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they can reap exorbitent profits whereas on the contrary the value of similar indentical goods in the international market is on a very very lower side and, therefore, it is clear that the price in the Indian market has been artificially increased." 20According to the petitioner, this action of the. respondents is not in public interest. 21.The assertions of the petitioner are not denied. Therefore, the basic facts alleged in the writ petition has a foundation for the relief sought by the petitioner, could be accepted as correct. The licence issued to the petitioner held out a promise that he may import the goods in question without any restriction as to its quantity. This promise was acted upon by the petitioner, because, to avail of this promise, petitioner had to export certain goods; the petitioner had to discharge his obligations and avail the benefit within a period of 12 months. Petitioner look steps to fulfil his obligations and expended large sums of money. In these circumstances, if the petitioner is now asked to change the mode of importation in the sense, his right to import the goods in question is reduced drastically, it can safely be held that (i) a detriment i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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