1...:
THE norrnm MR. i ,
wan' I-n'.gm__o1 5 ..; __
NEW GENERATION ARPARELS E '
28-E, PEENYA;INDLiS'Tl?£}AL-H;.:*.._ 1 .
AREA 11 P1iAs3E, '.BANGAL~.€)RE 53.
REP .
PETITIONER
1 E'r1ioN.OEIm)L»{
5 " REP'-m"ITs SECY
_ }.d_INIS'PR¥mQP-"TEXTILES
A sgugea B1-!.A.VA1\!' Q
DELHI - 110 011
" E 1 ' AEEECDND APPELLATEE-COMMITTEE
' '3FZ}V'ERNMENT iN_DiA
E. MINISTRY "OF .TE_XT_l_LES
' EXPORTS-III SECTION"
UDYOG BHAVAN
NEW DELHI - 110 011
RE-P.BY ITS -JQINT SEER- ,ARY
8!. CHAIRMAN
3 APPARELEXPORT PROMOTION-'COUNCIL
10. RAiiE;_.__J'A-r3_HAiviBERS-- E E
12 MUSEUM ROAD, ; .- Arxk
E0
D A RIIIAI f\'[)Ii'
Dru! \.Il'1IJ\JI\l.'.l'G 1
REP.BY ITS JOINT DIRECTOR.
(BY SR1: N oavamss, Sr.CGSC-"FOR _
M KBOPAIAH, case Fo1~:a1-:21 f; ' 9
[By Sri : K SACHINDRA KARANTH, ADV FOR R3 .9 y _
THIS :>m1T1oi.lN;9:}s.:9li1;*1LF;;o 5319:9955 993
AND 227 01? THE CONSTITUTION O1-HNIJIA FRAYING T0
games woe ANX. Pageants? 2 AHD
THIS PETITIOIS, 'lecoiaiiie 9"o"Nli9o_;roR ORDERS. THIS
on THE comm MifiDE"I'¥HE sooyaougnuo: ~
_ __ _garment exporter when
under the New Investors
country category EU--6, 8, 340
1§§'I6. in terms of the notification dated 22-
' .- IIUIHII -'.-.__......._ _ .,
9...; .-u*..k...;.9.;*. .~......... '..... ' '
sii'::i-':'.l maul" 5 11': the Ape} .'§'.x}:o:'t P:'J"...'}Gt'.0l1
for short"). 'Bangalore, after a show cause
_ _ ndece forfe_iting_ Rs.3.77,056/- by older dated 3-9-1997
it * ilnmemue-"B", which when carried in appeal, the First
Appellate Committee by order dated 31-10-2000 Annexume-
"C", oonfirmed the order and dismissed the appeal which
M
.-- -- E<"fi'-:Si'a'.):'-§fo3_N'i':-3 "
L.
3
s' - fie'. by emer dat... 30-712-2
§:
the 'Second i\ppeilate?C'o1nmitfee. i-lenee,--i:l*;ie'i «mi; .. 'V
2. Petition is opposed by l
dated. -5-'.7-2r.ao4 of Reewaentg 1 "age 12_lend'..;Stateinent"0f
..1.:.... '........ .1... ' ' ' .7
uu ~'ci nu uuted 2l..={}'-u=2'.¥.'4%..e£. ..-e.e;r.*r.de12t Me.-3. In the
Statement of ob-jecfions 'a_i'}.ne"* "j"-f;'l*'1t 116.} an 4, ' is _
contended eindiieieihing fmm india is
basal into between
_ of developed
ihei°aeg_is of the erstwhile Mulfi Fibre-
inter.nafional_ textile trade from
pine 3,rear.l1'~.)'?fl; l.T1ie 'Importing countries referred
« , _ 'QI.=",_L eeu1J.ries_:" who have placed meetrainta on import
tcnuw ea£gu..'...e "Q_....._a iteme" '.I:i*.....lfi" the
III.-..-.du
Ill!!!-
n J uieebmmg into force of-the World Trade (imam. isafion we"-re)
ll * 1995, quantitative restrictions known as "Import quotas"
in the bilateral agieements were changed under the WTO
relating to'Ag;:e-ement on Textiles and Clothing (ATC). The
quotes also known as export entitlements are
UK
urnnnflnt -nnfljui uni g_x-[V1-r-far'-3' far
was-J IoII-'I-I I-I\J'C Inna
aiiocaiion of quotas is i'rni"mu}atr:c': so 'ts.-.
export revenue in the economic 1. it is t ' --
stated that in furthemzncecf. the 'ailn. the ct'
India framed policies from' to time ugxpoft
Entitlement (Quota};::4'Pcfioieo';§:_ quotas are
mainly done under__ in case of
Ieadymade" genjiente:
Olét' past performance of the
V _A node: the Past Perfonnance entitiement
_ 4' {P?E_i; .c__ V .,
"1S%..tiuo"tatb:ased on new investments made for
' modemizafion of machinery under the New
--e4VA'i3:.vestors Eniitiement EM"). to eiicoiirage
eeetanente 111. mdustzy;
E? 'L
.0} 35% under Non---quota export (NOE) entitlement to
«V encourage diversification of exports in non--quott-1
muntnes;
d) 10% on First Come First Sexve (FCF-S) to provide
equal opportunities to ali exporters on 'basis 0'' iiagn \
'I l'._'I..
v 'e Realisairion.
(31
The fisinirig of 'wlieies, it is m=1......'...r|, is. in of igugrfiwer
conferred under Section 5 of the Foreign {De-i.iel,.}:-Inen- "
and Regulation) Act, 1992 (No.2? of1?99i23t} F
Appendix-I Schedule-2 of»iT{_3 (HiS)_v.i(1lassifieo;stioni'
and Import: published it
is further stated tlie policy, an
Apparel Expolt s%ill(AEPe) headed by
Director .. (luota Administering
responsible for
The availability of
quot' it it is the demand and in of
the xestzieted 'vavsil-emility. commands a Major
garments being the quota countries, it is
V " ensure quotas are fully utilised and are not
go waste due to speculative trading by
iunsertipulous elements and therefore, the policy envisages
it I '»uti.'.i%.Lo.. -1' Le quota by 30"' September of the relevant
year and failure m do so; exporter is required to
surrender the q"ota 'Md seek n-,vs1_id.etion of unutilised
quota allocated in the categoiies. in the sex' and
gjég
{III
prof.-edm as laid down in the p..nLe},r. -ef quota
beyond 30*' September and 'Tun "
relevant year is in the form of}; ofap
deposit receipt or Demand the
till the year 2000. star of EMD
by a letter of ~-datettteheegues. The
condition an exporter who
exports of entitlement, its EMD
shall of utilisation upto 75% of
in 9--.. of slow moving
it:-.n*:s.: pioportio" to the shortfall of
12'
Vu_tj]:izat:ic.-n." S is aggrieved by any outer ox
'im:;;gime,p an appeal to the F'i;rst Appellate
' 'V and thereafter to a Second Appellate Comxnittee.
' 3}' 'T'i1e.Statement-of o'o_jeotions of the £'r~ res"-_*nden.
x almost identical contentions as am advanced by
* . fiaespondent Nos.1 85 2 in their Statement of objections. 'In
addition. it is oontended that the exporter having taken the
benefit of the gannent export. entitlement policy, sought for
extension of time by fu1_'nish1'ng a bank and having
ink
to esrport "ar'"°ats in re"-' "V *'"' .'7'1V'_."'***uV_"'*--.'."£-""=.'--i.'_"
cannot be to appmbate and is e
that the petitioner is estopped :'no"---
amount could be forfeited.' file §§'¢
respondent is that the relevant
matexial in support
4. Leone ed pefifioner advances the
fin-llowm’ . i
_ ____ Ha) :t__1ie for forfeiture of the
eaifxlestiiioiaeyf ‘(a1epoeit,___i11_ entirety. for exports less than
7:’5%a’11ci Vp1’oporiion§ii.*;4:’ibii””‘r’*e r “””‘i”” ‘oetmeen ‘3’.’5%
ane s:;~.~s.ses+.r.~… En’*1P- .1I.t(NIE-i ‘
» e.unreasso1_i-able. ‘
appeiiate authority feii in error in riot
:5’:-1.:-u_1-It-U|.u.~I5’I’l:rIVIr nunflnnnn
V 1.51 u.Uhu.|.uu1..u.n.IJ |aVl\:I\rl.|\.n..r
‘ support of the claim of foroe-majeure, while
ibrteiture of the EMU.
c] that the petitioner having exported garments uptao
62.25% of the export entitlement. the non performance. Was
‘of d” to but for masons bewnd its m.,..n…..l
fll
{W
…} .11: e.:=.=.rlie. c1.eei_i_n_ in appeals invoivinfg .i§le1_1t1ea1
issues and identical set of facts, the gnthgarag-my’
acoepted the claim of tome-ma,je*a1e»,.oannot 4iefi1se”to:~ao1epte.
the petitioner’s claim of fome–majeuIe in of
this case.
5. Per ec.*n*.:*<.-:.,;_. G.L. Rawal
for 'Respof|""t P€o§3.V'u .;.l\1'V'V:"'9!-_H.'i.'.'»1|l.€ challenge to the
policy is as the ['§u'i"1'I.':6""iS
the gubta allotted to it
the for Ievalidation of
tl1e__..t__l:;e period, by filing an application in
the "X11 to the policy, and a Bank
the proforma Annexme-VI to the policy.
to the learned Senior counsel. in terms of the
we… fI.I.1_!y of the eonsequenoes of
i'""u':'""t'""' '*1' Bank "tzaraneee on jail-.:re to
T gannents upto 90% but not iess 75%, and
3 = jfiaitfeitlxle in full if less than 75%. Petitioner having accepted
the terms of Ievalzidation. it is a11;ued._ cannot be heard to
contend that the in so far as it Ieiates to forfeiture is
either irrational or unreasonable. Learned Senior counsel
R
PM
£13
.l'.'_-,_A.'Ih
mrmer oontends th
E?
E
t:
nwnt-*_….-n V~.e-.-_e:~e_the
vaiiflity of the policy, when «onset “of’\’~–
GOKALDAS IMAGES umEnvs,.’umorqe iotrxnxaoga.’ V
learned Single Judge of the of
plea in the decision me 347 (DEC).
Learned Senior contends that the
petitioner constituting
enbetnntiel force-majeure, the
rejetsted. the said plea.
magitee ‘!_1’4i’e~s,i:’ 5…..,”a..—– ~,~.e.;..; 1- .._.;..g ..m:+……
o_”_ the export eniitiement. the
sruthoxitieo’ in directing forfeiture of the
‘out of the bank guarantee. in full.
A ffiii. Devaairee. learned Senior mane:-.1 fir
“”«Ree1ion,ti’ente 1 Be 2 contends petitioner having.
x an allotment of a quota to export garments unfler
” the policy, without questioning the terms and conditions of
invalidation, cannot be permitted to approbate and Ieprobate
by calling in question the policy that too. after short export
of garments. Aooording to the Senior counsel, quota
M
5…:
CD
for expofi of 3*”! eats 6i”_:% %t*..:-;-‘.. m an_.r.;i_t”1’,-
E;
‘-…__.n.:
presumed that the exporter wouitiAApdischeI1§e»– am
‘i
export garments to fulfill the toiw
esnsure such oompl_iance.,9th.e
of me amounts from out stated
therein cannot vflas either or
unreasonable to. add that
gs;-me-.t quotas
the pom is to
threw; ==.:r~..–….:e-Lag to t..e 1-.-.a_m.-:_~
seam; its ‘pwvide for
fotfeituie of the guarantee,_. soas to ensure fuii and
of the quota and that is precisely what
V ” VA
‘ 7 “Having heani the iearned oounsei for the ‘parties.
at the pleadings. there can he no more dispute that in
V ” of the ‘Policy’. the petitioner applied for and
allotment of quotas to export _gam_1en_ts and to-
do so within the time specified. -sought for and
obtained Ievalidation of the gt__1otas.’_de_sp_ite whic_h- the_q§1¢3tas –
M
,L…
vu ~-
pa
p-I
remained ne m nenewrfenraenee ‘.’.i’5
obligation, in its entirety, despite the –«-f°-..
time. and in terms of the ‘issi1ed’~.._ V
notice calling upon the petitionef as nfhy
action should not be out of
bank guarantee, to the petitioner.
The AEPC. not ‘t11e._’fexplanafion ofieived.
tlorfeited 1a:s;3″j;7?,o5e;c;. fin-In ‘ef___the amounts in the bank
§nai~antee,–j_ 849-“1997 .A._!1_exLme-“B”. This
older befere the F-Jxet .A.ppeLe.1.r..–
committee, Vw§’e._li’eqn.finned by order dated 31-1e–2e-oe
A11. KI i,,,j’~t(_’,”V,’v–_ the Second Appellate Committee
the ‘1’»etitioneI’s appeal by order dated 30-12-2003
‘ In the admitted noticed supra; the “””t:ions
_ fo’r-clecision making are,
at whether the challenge to me in so far as it
relates to forfeiture,_ for non-fulfillment of the export
obligation within the time stipulated, is
sustainable?
pg:
10
b) whether the :”‘u’f’-;PC«__a.”P:.{‘. Apmllate
juetified in_1ejecting the peuuonexis er
majeure. while dismisefin’g’t11e V’
9. inn’ fut unjr, fl’1″, of the
to the petitioner was at _.oi’=the ttho
filed an application’ to garruents for the
balance of the quge t stipulated, and
voluntari1_-g. interalia.
oovena.1nt:i1tg-., to fulfill the export
obligafiong; “in be subject to torfeiture
_.1.Va.1_ee 4’_1″”Tl_1’e’ petitioner consciously agreed to
the $12′-:r.e. of .t.’1:_”fe_rfei..:.*r; t1I.=.=.- if it e.tq_K_vrt1__:d garments
beyond H 9L”r”:ri: _ of the export en’-:i”‘ment, after
–» _1Vevo;lide~.t:;its11_, it would be liable forfeiture
75%, forfeiture would be in full, from out of
in the Bank guarantee, The consent of the
‘A : 4_pefit1’.oner to be subjected to the terms of the policy. relating
forfeiture in the event of failure to fulfill the export
entitlement. in the czimumtanee cannot be permitted to
appmh-at.. a__ _,probete nor assume inconsistent positions.
36 ‘*’w ha’v’i’.1g been ‘.:1:e’.1_-‘~%..’=..at’-… 1°_r-. t1n._. .p1,:Ie-ate before the
ML
L) \
pa
(:3
First and ‘Second fipwiiate nit.-gees, axe _z§.isen~;;tlea–g.;m
questioning the validity of the forffeiture ciause: intiieaég-c@cyo’. ”
10: _h_.. —
i1′–fi.-;….1 and u’.:maso:=..-at.-ie:’L:’;:a:%»t..-.’ci, beyontl
of considexatioial i it mliw of
allotting quotas is foieifyi
exchange, is the county anti as
a iuiider the quota allocated
is itiisl object of maximising
the policy provides a clause for .
tbxfoituuje. _ The Government entitled to formulate a
on precise tithing and “manner of
J…J..’…..
‘ 2 , i:’uf:1en1e12_ u n ‘*ft}1-a quota to achieve 9. mm –_ nr bjcctive,
in ‘me matters ‘ff ‘o”‘-‘tar-.131 tafaée, in my
opinion; being peculiar in its nature. the Governme”t W”
. , utelliiwithin its rights to pmvide for forfeiture and therefore,
V’ ‘ — cannot be termed as either irrational or unconstitutional. It
must be borne in mind that there must be free play with the
Government in matters of economic policies which are not
subject to judicial review, unless demonstrated to be
M
\
14
contrary to statutory provisions or the Oonetitut:’.on;.j’ fit’ is
weh e.e..t!…. law that eoI.1_rt..s_:, in exercise
are equipped to adjutiieute at-»:-erg;
court, no–doubt has a of
a decision, no ‘ie :4 Vtundamental
rights are not to the extent
P°11l1iss1’b}e ‘ . x V ‘
____ H citfzumstanoes. n iearneci Single
Jutige__ of GOKALDAS IMAGES
L1MI’:EDtt INDIA in W.P.No.8539]2_003 and
foonnectedf %writ. iretitiona, by order dated 12-03-2003,
. –. A ~t§_l1e that the policy prov1d1n’ ‘ g for forfeiture
‘V of penalty for non-fulfillment of the obligation
A unt}.er_ “the 9%.. qu..t.. ct.-1-I…..I|d be _.@enged_ byan exporter
wi:o7-“” had th” B”-fit of_a policy. fo%wLng. the r..1eoi_eio__ _f
t v __ the Apex Court in the ease of PTR (Medias) Pvt. Ltxl.
and Others. Va. Union of india and Othem -reporter’! in AFR –
1996 SC 3461, in the matter of interlierenee by writ courts
– \ I
with policy matters, by observing thus: ‘
[mm
(L?!
“4. An has no nested Iighfia _»_
export or import licences in terms of ”
force at the date of his V
obvious reasons. gruntinfgz _
upon the policy prevailing oft date 5*.’ * V
ofthe finance or «fie; V 3-
way be in a As’;-e*.!.er ;- overall
pictune of mass the pennit or refuse
to grant goods.
eEé.’oisiow1;:” wquze be taken from
_;:e;):g’p’ 5 whit}: the
is ira ii.:.’izeiierr prrar’i’fi’o”i “i:ru’ess’,
st’.-‘fled the re.g,h.4-s-Lia! is nu1_la,fide
as is st: tins power in which event it is for
plead and prove to the
sii:’isjo>z:!ion”‘oj’A Court that the refusal was
‘ 5 flwiateéi above factors.
P.’ as–owd, *.’he.-r.-:;.*’:.-r.-2, !.u..= d..–a.r -ha..! of .
depends upon the policy prevaifirtg as on
as date of the grant of the licence. The Court,
therefore, would not bind the Government with a
policy whidz was existing on the date of
appifanfion as per A prior
ciecision woe.-id no! the C-Lrzternrzgent for all
times to come. When the Govemment are %
satisfied that change in the policy was nsasssasy “%
M
I
‘: -511:»-111:2 ll fl ‘
um bu .5…-…mu
:___. nolicy lay new poh’ql,l.-. T
therefime, would prefer tojdflau-. fiige A
Government to evolve in 1;:
interest and to ad amp agitate.
Government is iefi fiée. aetenn ine hgznorstierh in
-u. ‘ ~.
Av-Anon» -.
4′ n .. *
um I Gala l’7JlV_i”-ii.’-IaI’g=U.”-WI -»_Gl”I I’3I”.uvu’..~.~.nru-v.:.-*s.ru.u5 G’?
h:-‘zi._hfi__- h.«:.;;hhuc interest. It
or ?'”*d?3’i¢1 the at % W0″ policy in
1i)”u?’1::’_12.”‘”l«Q.8(‘..}labfi’f’lf.¥ evolved. . . .”
1.-5;’ u ‘fluun U1 3. Lcanuuu uhufi uu up G;
the pfjDe_ih:h¢%ih Goicaidas images Limimi supra,
‘ ‘in AI’ Inn.’-n-u.n.:-I ‘ ah. In livdnn {:
2007(7)””SIfR .3e:7A(oEe)% took the View that garment export h
‘its nature on account of quotas being
V country. the Government was well within
iiis formulate a policy for full and maximum
uhfishhhn of the quota which cannot be interfered with.
AA ‘ “I:iAavVisng read the entire text of the judgment. I fmd no good
fifl
-4
13 “”*=- ela-Lee e1’e.:”.-lee-mm n+’fi~zee-:.n_e.je!3i*e; evenciitie
‘In Q9
based on iaie Ieeeipt ‘f “”bx–i€s ri”e in h”_”*5*
in_ Tamil Nadu. Aithough tho i;’neV..
petitioner contend that fi1%”~.___ not
consider the 1’-aotum of poeogumme of fabric
from Chennai, the tlxeitrevnsport strike
during the third not impressed by
that subngieeipii. -export entitlement
was -4; upto 31-12-1996 to
“‘r”.””‘fs’e The mntentien t..L-_ there
waeheavy of Nada ‘6″ “hieh the
man um onuers ~o1″the«..£obxio were unable to cieiiver goods on
does a ‘i1et…..:31ean that the downpour was over a
‘ ” of several days and months. It was for
i’ . h “the to have made necessary arrangements in its
taking into consideration the yearly phenomena of
AA rains in coastal Tamil Nadu during the months of
e.__..r n d December ensure receipt of fabrics well
I
b”far-‘ th-= *-‘*or.%r. m wmply ‘.-.*it.. the exp-J,-rt ehligelie-ni
1 . Accordirtg w the learned. comn..e1,_..’t3e1;tZ-ioI;er
placed Ieiiance upon newspaper cutfififis “%{§}~du’
the relevant purchase indents
receipt of the fabrics was d.ue_ or
the petitioner. An of of
Committees diselonen. toe material on
record. In fact. the observed that
the 2 of meteorological
on that the petitioner had
ii’.lW%’.'””n+”” and Salem; In
odtiition, tit what is piibiifiied to the
by “V-the-._il’Vieteo1ological Department that
on 1o*h”Deeembe1′, eoitnbotote and Salem did hardly
‘ .i’ains although some parts of Tamil Nadu like –
heavy rains. Thus. in the opinion of
itiztet Appellate Committee. it did not constitute a force-
* ‘ ~mnieI II: condition. The Second Appellate committee. in its
order Annex-.:.**e.-“.13″ Am a._m_eed the on record and
B
connrmeu l].IlS;lii”lfi” ‘ft1.|” }’t’irst Afipeliate …cme\.ittee. .-
M
KJ \
15. .he plea ..f .._:I._po1’I.2.ers.I’ !_1t_Iil§§ last
week of {‘:ec:ember, 1996 m”st
admittedly. the manufacture of’ _ ‘*”d V
transported only during i’199’7.1 iotiilefg
the manufactured goods the
of December 1996» it
16. of that the in
map? t .0-*5 morennc vvnen nu e-nae’ tum ‘ into
1997 which aspect of the
bmught to the notice of the ‘First –
the Second
tires not considemtion is without merit since the
‘ teeonsiderat1orn’ .
A tact finding authorities having recorded a
it the material on record was not satisfactory proof
it ‘ of eicistenoe of fame-majeure oondition so as to entitle the
ftiefifioher to the benefit of waiver of the forfeiture. in my
winter. %’i:=.e-t be …v;e-.=-zed. in exe1t_2i__ -1′-e;:t:ra–o;dinar_y writ
This Court, exercising writ jurisdiction. is fézfat as’ .a
court of appeal to re-appreciate entire’
contention of the leamed ccuiigsele
necessarily fail.
18. The last extended by
the authorities in identicaii in pm-decided
de15encisnt.iVj1ipo:ti:factsjaf eacii case. based on (iocum
evidence to estnbiish~ existence of such conditions. It is
:in’.’otiiefcnses the authority may have extended
txasextiioflrelevant documents in support of the plea
‘ kt es The decision to extend the benefit of the
being dependant upon the facts and
hrnna urifhnt An I
e’ V-nun
cizeuznstances and record in a particular case, it
ideniicai, have appiicaiion. M
4.. .:.’…….’….;..-I” ‘ -.
in uxnuumwguu ~
«Id
KS