JUDGMENT
Pendse, J.
1. This is an appeal preferred by the Joint Controller, Reserve Bank of India, Exchange Control Department to challenge legality of judgment dated April 15, 1988 passed by Justice Mrs. Manohar in Writ Petition No. 2385 of 1988. The learned Judge by the impugned judgment quashed the decision contained in the letter dated June 15, 1983 and reiterated in the letter dated July 25, 1983 and further directed the appellants to issue to the petitioners a blanket permit under I.T.C. Scheme for the year 1978-79 in terms of Paragraph 179 read with Appendix 28 of the Policy A.M. 1978-79. The learned Judge passed the judgment as the dispute involved in the petition was concluded by the Judgment delivered by Mr. Justice Daud on February 18, 1987 and reported in 1987 (12) ELT 273, M/s. Premchand Semchand Shah v. Union of India & Ors.
2. To appreciate the claim made by the respondents before the learned Single Judge, it is necessary to set out the relevant facts. On April 1, 1978 the Government of India announced Import-Export Policy for the period April-March 1978-79 providing for a scheme of registration of Export Houses. Paragraph 179 of the Policy provides for utilisation of foreign exchange upto 2.5% of the FOB value of the total export made by the registered export house. The procedure to avail of the foreign exchange was prescribed under Paragraph 181 read with Appendix 28 of the Policy. In pursuance of the Policy and the Scheme, the respondents applied for grant of export house certificate of June 21, 1978. The Chief Controller of Imports and Exports by order dated August 30, 1978 rejected the application on the ground that the respondents had failed to diversify the export to other products. The respondents addressed letter dated September 23, 1978 to the Chief Controller of Imports and Exports pointing out that there is no requirement of diversity of the export products either under the Policy or the Scheme and the rejection of application for grant of export house certificate was unjustified. The Chief Controller of Imports and Exports declined to reconsider the decision and communicated that fact to the respondents by letter dated October 25, 1978.
The respondents thereupon challenged the decision of the Chief Controller of Imports and Exports by filing Miscellaneous Petition No. 1458 of 1979 on the Original Side of this Court under Article 226 of the Constitution of India. The petition succeeded by judgment delivered by one of us (Pendse, J.) on November 26, 1982 and the decision of the Chief Controller was set aside and the Controller was directed to issue export house certificate within a period of one month. In accordance with the judgment, the licensing authority issued the export house certificate on December 27, 1982.
3. On receipt of the export house certificate the respondents made application on January 6, 1983 to the Assistant Controller, Reserve Bank of India for issuance of the blanket permit for promotional activities abroad. The blanket permit was sought in accordance with provisions of Paragraph 179 of the Import-Export Policy of the year 1977-78. The application for grant of blanket permit was rejected by letter dated June 15, 1983 on the ground that the blanket permit under I.T.C. Scheme was available for the year 1978-79 and there is no provision for issue of a blanket permit in the year 1983 for the earlier years. The appellants suggested that the respondents could have applied to Reserve Bank of India for release of exchange for the purpose for which the blanket permit could be used. The respondents made representation to the appellants on June 22, 1983 requesting to reconsider the decision as the ground given for rejection of grant of blanket permit was not in accordance with law. The respondents pointed out that the export house certificate was not granted to the respondents till end of year 1982 and consequently the respondents could not have applied for blanket permit before January 1983. On July 25, 1983 the appellants informed the respondents that there is nothing more to add to the decision already conveyed by letter dated June 15, 1983. In other words the appellants declined to reconsider the decision refusing to grant the blanket permit. The decision of the appellants gave rise to filing of Writ Petition No. 2385 of 1983 before the learned Single Judge and that petition came to be allowed giving rise to the present appeal.
4. Shri Andhyarujina, learned counsel appearing on behalf of the appellant submitted that the learned Single Judge was in error in granting relief in favour of the respondents by relying upon the decision recorded by Justice Daud on February 18, 1987 and reported in 1987 (12) ELT 273. Mr. Justice Daud held that the refusal by the appellants to grant blanket permit of foreign exchange on the ground that the application was made long after the time when the entitlement arose cannot be sustained because the application for blanket permit could not have been made without sanction of the export house certificate and the same was denied by the Chief Controller of Imports and Exports without any rationale. Shri Andhyarujina submits that the decision taken by the appellants that blanket permit under I.T.C. Scheme for the year 1978-79 cannot be sanctioned does not suffer from any infirmity. We are unable to accede to the submission of the learned counsel. The blanket permit under I.T.C. Scheme is granted on the basis of FOB value of exports as certified by the Chief Controller of Imports and Exports for the previous financial year. The respondents were consequently entitled to the advantage of blanket permit of foreign exchange in respect of export certificate for the financial year 1977-78. The respondents could claim the advantage of the blanket permit as per Paragraph 179 of the Import-Export Policy provided the respondents were granted an export house certificate by the Chief Controller of Imports and Exports. The respondents applied for grant of export house certificate in June 1978, but the Chief Controller declined to grant it on a totally unsustainable ground. The Chief Controller of Imports and Exports ultimately granted the certificate only on December 27, 1982 in view of the decision of this Court. The respondents could not have applied for blanket permit as long as exports house certificate was not available. The respondents immediately applied for blanket permit on January 6, 1983 and now this application is turned down on the ground that in the year 1983 it is not possible to issue blanket permit for the year 1978-79. We are unable to find any merit in the objection raised on behalf of the appellants to the grant of blanket permit. The appellants cannot take advantage of the fact that the Chief Controller of Imports and Exports erroneously refused to grant export house certificate in the year 1978. The failure of the Chief Controller of Imports and Exports to grant export house certificate when it was applied, cannot be taken advantage of by the appellants for denying the advantage of blanket permit to foreign exchange. Shri Andhyarujina submitted that the appellants have no concern in regard to grant of export house certificate and if the Chief Controller had committed an error in refusing export house certificate, that fact cannot be taken into consideration while examining the action of the appellants. There is no merit in this submission. The Chief Controller of Imports and Exports and the Joint Controller of Reserve Bank of India are authorities under the control of the Government of India, who had declarated the import-export policy and under which policy the advantage to the exporter accrues. It is futile for one of the authorities to claim that the default of another authority has no consequence as far as the action of the Reserve Bank is concerned. In our judgment, the respondents, who have complied with the requirements of exports in the year 1977-78 are entitled to grant of blanket permit for foreign exchange as provided by Paragraph 179 of the Policy for the period AM 1978-79. In our judgment, the decision of the learned Single Judge and the decision of Mr. Justice Daud do not suffer from any infirmity and the appeal is devoid of any merit.
5. Accordingly, appeal fails and is dismissed with costs.
The appellants are directed to issue the blanket permit under I.T.C. Scheme for the year 1978-79 and in accordance with the terms of Paragraph 179 read with Appendix 28 of the Import-Export Policy for the period Am 78-79 within a period of two weeks from to-day. The appellants shall issue the blanket permit in accordance with the terms and conditions in operation at the relevant time, that is in the year 1978-79.