ORDER
Bhagabati Prasad Banerjee, J.
1. This wirt application was
moved by the petitioners, inter alia, praying
for a writ in the nature of Mandamus
commanding the respondent No. 2 to issue
the ‘No Objection Certificate’ in the form
prescribed in Appendix IV-B of the Hand-Book of Import and Export Procedure for
the year 1985-88 forthwith, entitling the
petitioners for the Import Licence for 10,000
metric tonnes of raw materials i.e. re-rollable
scrap (cutting of semi-billets, used rails and
scrap cuttings and bars as was permissible to
be imported as on 30th June, 1987 in the
name of the petitioner No. 1 for direct import
and for certain other reliefs.
2. The facts of this case in short are that the petitioners are engaged in the manufacture of M. S. Rounds, Round Bars, Plates, Angles etc. and are the Actual Users of raw materials i.e. Carbon Steel, Re-rollable Scrap, which is comprehensive terminology and covers in its purview rails, structural, plate cutting, billet cutting etc. The commodity in question, namely, Carbon Steel Re-rollable Scrap was a canalised item, which means that, those commodities can only be imported into India through the Canalising Agency. In this case the Canalising Agent is the respondent No. 2, Metal Scrap Trade Corporation Limited. Since the raw material is not normally available indigenously, the Central Government has been making policy from time to time so as to permit the Actual Users like the petitioners to import such raw materials through the Canalising Agent and ; use such raw materials for their manufacturing activities. For the purpose of assessment of the requirements of any manufacturer, the Central Government appoints Assessment Committee, known as Technical Committee to assess the requirement of such of the Units, including the petitioners whose capacity was assessed to the tune of 16,700 Metric Tonnes per annum.
3. It may be mentioned that for similar relief on identical facts the petitioners moved a writ application, one before the Delhi High
Court being CWP No. 1974 of 1984, and the
other before this Hon’ble Court in respect of their requirements for the years 1983-84 and 1986-87.
4. The points raised in this writ application were considered by me in details on identical facts for the requirement of the petitioners for the previous year 1986-87 in the case of Shree Ganesh Steel Rolling Mill v. Union of India, reported in (1988) 34 ELT 509 (Cal), wherein after considering the facts, the relevant circulars, policies laid down in the different paragraphs in the Hand Book of Import and Export Procedure for the year
1985-88 as also the various case laws on this
point I held :
“After giving consideration to the rival
contention of the parties and after going through the facts of this case, it is clearly evident that the stand of the respondent in this matter was not clear from beginning and I failed to appreciate the case made out by the respondent in this behalf. If the stand of the respondent is that the requirements of the petitioners would be specified from indigenous sources, in that event, in accordance with the provision contained in para 218 of the said procedure, it was the statutory duty and/or obligation of the respondent No. 2 being the canalising agent to try to meet the registered requirements of the petitioners from the indigenous sources partly or wholly instead of imports. But unfortunately there was no whisper in any of the letters and/or in the affidavit-in-opposition that the respondent No. 2 being the canalising agent had ever made any attempt and/or tried to meet the requirements from indigenous sources and as such the respondent cannot be allowed to take the stand that it had no statutory lity and/or obligation in this matter. If it was available from indigenous sources, the respondent No. 2 should have followed the procedure laid down in para 218 and that the respondent No. 2 cannot be allowed to contend that it has.no liability under para 218 of (or) para 223. In this case there were two alternative courses left open to the respondents either to follow para 218 or 223. It is firmly established principle that where a party dealing with another party being at liberty to adopt either of the two mutual exclusive steps, proceedings, courses of action or attitude in relation to the other party, must elect either of the two courses, of action, but the said authority cannot remain silent over the matter. When the respondents did not make any attempt or try to meet the registered requirement from indigenous sources, it is well established that under such circumstances, silence or inaction constitutes a representation inasmuch as positive language or conduct for the purpose of any estoppel. When the respondents have discarded the course of action as provided underpara 218, it cannot refuse to follow the other course of action as provided under
another para 223 of the said procedure. Further in the instant case the respondents did not intimate to the petitioners when the petitioners made application for registering the requirements that the items in question were available from indigenous sources and when the petitioners made repeated requests and representations for issuing of ‘No Objection Certificate’ in terms of para 223(1)(a), then only after lapse of several months and that too after the expiry of the lipensing period made out a case that the same was available from indigenous sources and for that purpose asked the petitioners to approach the Steel Authority of India which in its turn refused to accept any responsibility in the matter. It is clear established that the respondents in this matter had acted from the very beginning in a manner which is on the face of it arbitrary and further public authorities have taken stand on the face of representation made in the order, such an authority has to justify its action on the basis of the facts disclosed in the order and that it is not open for such an authority to sustain the stand taken by it on some other grounds by some other letters and/or by affidavits. In this connection, reference may be made to the decision of the Supreme Court of India in the case of Mahinder Singh Gill v. Union of India wherein the Supreme Court held that the validity of the order must be sustained on the basis of the facts appearing on the order itself and it is not open to such an authority to sustain the validity on the basis of the subsequent fact and/or by affidavit. If according to the respondents the materials in question were available from indigenous sources, in that event, it was their duty to speak out at the very first instance and to inform the petitioners of the same. But on the contrary the petitioners were only informed that there was no decision for import of the said item during the year 1986-87. The respondents cannot avoid its statutory duty and/or responsibility in such a manner which is on the face unreasonable and contrary to law and that an actual: user like that of the
petitioner cannot be made because of the whims and caprice and/or inaction on their part. Public authorities are required to act reasonably and they had no unfettered discretion like private/individual. But in the instant case it appears that the respondents have shifted its stand from time to time which cannot be supported. Further, I do not find any bona fide reasons and/or grounds for communicating the petitioners for ‘No Objection Certificate’ for direct import of Re-Rollable Scrap could be issued by the petitioners because the petitioners failed to make financial arrangement within 28th Feb., 1986. This stand is wholly misconceived, inasmuch as, the question of financial arrangement is only given in case the application of the petitioners was registered upon scrutiny in terms of para 223 and only after registering the demand after scrutinising such application, the demand for deposit of earnest money can bedone within 30 days. In this case such a demand for making deposit of earnest money was not admittedly done and that there was no whisper about making of any financial arrangement for supply by a letter dated 21st of June, 1986. Secondly, in the instant case the licensing period is from 1st of April, 1986 to 31st March, 1987 and that the date according to the rules for registering the requirements and making financial arrangement is the month of Feb., 1987. So the reasons and/or the grounds disclosed by the respondent asked for not issuing of ‘No Objection Certificate’ by the letter dated 8-12-1986 are wholly untenable and unacceptable in the facts and circumstances of the case and in view of the statutory provision made in this behalf. Accordingly I have no other alternative but to hold that the reasons and/or grounds for issuing of ‘No Objection Certificate’ that the respondent No. 2 was not tenable under the law and in my view, the respondent No. 2 had acted in the matter in a manner which is contrary to the law, and failed to discharge itsstatutory duty imposed under the law. The petitioners cannot be made to suffer because
of a lapse and negligence on the part of the respondents concerned After all every citizen has right to carry on trade or business and that such a right guaranteed under Article 19(1)(g) of the Constitution of India and that such fundamental right cannot be allowed to be invaded by the respondents by such arbitrary and wrongful acts. In my view, the petitioners have been made tosuffer because of arbitrary and unreasonable actions on the part of the respondents which are not at all tenable under the law. Purported steps taken by the respondents, in my view, does not appear to be bona fide. The respondents tried to avoid its statutory duty and/or obligation in a manner which has caused a substantial failure of justice, so far as the petitioner is concerned. In my view, it is clear case where the respondent No. 2 failed to act in terms of para 218 of the said procedure and also in terms of para 223 of the said procedure by not issuing of ‘No Objection Certificate’ to the petitioners for the said licensing period and that such right of the petitioners either to get supply from indigenous sources and/or from the canalising agent cannot be denied by the Court in the facts and circumstances of the case. No decision of the Central Government produced in this behalf indicating that the said items were produced indigenously and available in the market and at least the Steel Authority of India completely demolished the stand taken by the respondent in this behalf. Accordingly, the respondent No. 2 in the instant case was under a duty to issue ‘No Objection Certificate’ as admittedly the said respondent failed to supply the same. In accordance with para 223, it is true that the question of ‘No Objection Certificate’ on proper construction of the said para would only arise in case the requirements of the actual users are scrutinised the application made therefor are registered and demand is made for deposit of earnest money. But in the instant case the application was not registered and demand for earnest money was not made. If in the instant case the petitioners are not granted any relief on this literal construction at para 223, in that event, in my vie,w, it will lead to an anomalous situation and if the plain and literal meaning of para 223 is given, in
that event, that would be a very purpose of incorporation of the rights to get ‘No Objection Certificate’ would be completely frustrated and nugatory. If the interpretation sought to be put forth by the respondent is accepted that would stultify, purpose of the statute and would definitely produce injustice, absurdity, anomaly and in such circumstances, we have to give a meaning which will make some sense of the enactment otherwise it would result injustice and frustrate the very purpose of such a provision and deny a party of legitimate claim on account of inaction and arbitrary action on the part of the respondent. If the literal meaning is given, the same would lead a plain and clear contradiction of the apparent purpose of the rules (sic) and would result of some culpable and evidence absurdity. It is also one of the basic canons of interpretation of statute that if one interpretation leads to an absurdity and the other does not, the Court will conclude, the legislature did not intend to an absurdity and will adopt an interpretation which will not lead to an absurdity. Accordingly, in my view, the failure on the part of the respondent No. 2 to register the application and/or to make any demand for security money did not and could not disentitle the petitioners to claim the benefit of the ‘No Objection Certificate’.”
5. Though it is not necessary to set out the. facts of this case in detail, as those are fully covered by my earlier judgment mentioned above, still some facts are necessary for the purpose of deciding this case which are as follows : —
(a) On 30th June, 1987 the petitioners filed an application with the respondent No. 2 for registering their requirement for allotment of imported Carbon Steel Re-Rolling Scrap for 10,000 metric tonnes for the year 1987-88 even though the petitioners’ capacity was assessed to 16,700 metric tonnes per year.
(b) On 15th July, 1987 the respondent No. 2 returned the said application pointing out that in view of the availability of indigenous materials, no policy had been adopted for import of the items in question for the year 1987-88.
(c) In response to the said letter dated 15th July, 1987, the petitioners informed the respondent No. 2 vide their letter dated 23rd July, 1987 that the scrap in question was not available indigenously, and as such it was obligatory and/or mandatory on the pan of the respondent No. 2 either to make arrangement for import of the said item in question or in the alternative to issue ‘No Objection Certificate’ which entitled the petitioners to have the import license for the purpose of direct import from the Office of the respondent No. 4.
(d) On 14th of September, 1987 the respondent No. 2 informed the petitioners that it would not be possible to accept the petitioners’ request for import of the said commodity. The petitioners were further informed that in terms of the Import Policy in respect of canalised items, import and distribution were to be done in consultation with the concerned Department of the Government of India, and in the case of carbon steel re-rollable scrap, the Department of Steel, Government of India had advised that having regard to the domestic availability, no import need be made and the requirement/demand of the same to be met from the indigenous sources only. In view of the same, no import of the said commodity could be considered. Further, in the said letter, the petitioners were informed that”….your demand for import of the said materials has not been registered for the year 1987-88 and such materials being available indigenously, question of issuing NOC by MSTC should not arise at all. However, MSTC as a canalising agency would advise you to procure the said materials from the indigenous source, viz…..Jessop and Company Limited…. to meet your requirerrients.” ”
(e) By the letter dated, 3rd Oct., 1987, the
petitioners approached, M/s. Jessop and
Company Limited, Calcutta for the purpose
of ascertaining whether the said concern
would be in a position to supply the said
materials as advised by the respondent No. 2
in this behalf.
(f) Apart from M/s. Jessop and Company Limited, the petitioners moved 11 other authorities as specified by the respondent
No. 2 in their letter dated 14th Sept., 1987, but all the authorities who were directed to be approached by the petitioners by the respondent No. 2 remained significantly silent, and did not indicate that they were in a position to supply the said commodity from indigenous sources at all or not,
(g) On 3rd of Oct., 1987 the petitioners also wrote a letter to the respondent No. 2 i.e. M/s. Metal Scrap Trade Corporation Limited pointing out that as per advice of the said authority, the petitioner company had approached all the authorities specified by them for the purpose of obtaining this commodity from the indigenous sources.
(h) By the letter dated 28th Oct., 1987 M/s. Metal Scrap Trade Corporation Limited advised the petitioners to approach some other Public Sector Undertakings numbering about 60 all over the country for the purpose of obtaining supply of the said commodity,
(i) On 14th of Nov., 1987 the petitioners again approached the respondent No. 2 stating the entire facts of this case and requested the said authority to issue ‘No Objection Certificate. It was pointed out the attitude of the respondent No. 2 was thoroughly harassing and things were done without , applying their mind and looking into the facts of the case. In the said letter it was also categorically stated that “if there is no surity of supply of raw material, no industry can plan their production planning. If there is no planning, no industry can develop”.
(j) Thereafter, by a letter dated 25th’Jan., 1988 the respondent No. 2 informed the petitioner “This has reference to your request for supply of imported steel re-rollable scrap for consumption in your Re-rolling Unit. The import of this item is canalised through this Corporation as per, the import policy. To discuss on the subject, a meeting has been convened at our office at the above address on 4-2-88 at 14-30 hours. Kindly depute your representative for the meeting along with details of your re-rolling mill facilities, size and type of rolling scrap suitable for your unit, past production of rolled products made by you during last three years showing separately consumption of Billets/Ingots and Re-rolling scrap etc.”
(k) Again by their letter dated 27th Jan., 1988 the respondent No. 2 informed the petitioners inter alia that –
“Before arranging import, MSTC will ask for Inland Letter of Credit covering the quantity you desire to import, subject to ceiling limit. The payment is to be made at sight and import will be made at Bombay Port. Imported materials will be supplied by MSTC to the actual users on the basis of high-seas sale.”
(1) By a letter dated 2nd Feb., 1988 the petitioners informed the respondent No. 2 that the petitioners had deputed their representative to attend the meeting scheduled to be held on 4-2-88 and further informed that the petitioners had indicated the petitioners’ demand vide petitioners’ application dated 30th June, 1987 on quarterly basis, and that the petitioners would arrange the Letter of Credit on hearing from the respondent No. 2 regarding the details of tonnage allotted, rate per metric tonne etc.
6. At that point of time, namely, 6th Feb., 1988, Guidelines for import of Carbon Steel Re-rollable Scrap through Metal Scrap Trade Corporation Limited for the year 1987-88 was issued and in the said Guidelines it was inter alia laid down that –
“Actual users will be allowed to import to the extent of quantity covered by their I/C submitted to MSTC, within a limit of 10% of their licensed capacity or 1500 tonnes whichever is less. The actual import is however subject to availability of foreign exchange.”
7. It may be mentioned that the Guidelines issued on 6th Feb., 1988 is the only additional point over and over above the points already decided by me in the above case referred to above for the earlier year and that it is necessary to decide the scope and effect of the Guidelines issued in this behalf, and it is also necessary to decide whether it is open for the respondents to refuse registration or otherwise ask the petitioners and whether the rights of the petitioners in this behalf could be interfered with and/or abridged by the impugned Guidelines dated 6th Feb., 1988.
8. It is worthwhile to mention that the validity period of the year 1987-88 was to expire on 31st March, 1988 and the said Guidelines have been issued practically at the fag-end of the financial year in question when the petitioners registered their demand on 30th June, 1987. In this connection, reference was made to the decision of the Supreme Court in the case of East India Commercial Company Limited v. Collector of Customs, Calcutta , which reads :
“(31) Underpara 5, importers are requested to study the Appendix carefully and avoid making applications for import licences, for articles which will not be licensed; para 7 prescribes the form of application; para 8 says that in the case of articles which are subject to over all monetary limits, where goods are raw materials and accessories used in industrial concerns, applications from actual consumers of goods will receive consideration, and that actual consumers should clearly specify in their application their past and estimated consumption of the articles concerned as required in para 6 of the form of application. Paragraph 11 says that no time limit has been fixed for receiving applications from importers who are actual consumers of industrial raw material and accessories and who have imported the commodities concerned during any financial year between 1938-39 and 1947-48 (inclusive) and that hoped to deal with applications chronologically as and when received. Paragraph 13 describes the authorities to whom applications should be made. A perusal of this Notice shows that it is intended to give information to the public as regards ihe procedure to be followed in the matter of filing applications by different categories of applicants. It not only does not on its face purport to be a statutory order issued under Section 3 of the Act, but also the internal evidence furnished by it clearly shows that it could not be one under that Section. That apart, this order does not amend the previous orders or direct the imposition of a condition on an importer not to sell the goods to a third party or provide for a penalty for doing so.”
9. Reference was also made to another decision of the Supreme Court in the case of Oswal Woollen Mills Ltd. v. Union of India wherein the Supreme Court held (at p. 973) :
“It is significant to note that para 138(1) was not mentioned in para 140 of the Import Policy, 1981-82. It is also significant to note that in the Import Policy for the subsequent year 1982-83 the said words “against their Exports of products manufactured by them” have been actually inserted in para 138(1) after the words “REP Licences issued to manufacturers exporter” and before the words “will be valid within the overall value for import of any items of raw materials, components, consumables, spares and packing materials required by them for use in their factories subject to ‘Actual User’ condition. “In view of the respondents’ contention that the Circular dated August 31, 1981 is only clarificatory of para 138(1) of the Import Policy, 1981-82 and does not amend or modify that paragraph it is unnecessary for us to go into the question whether the Circular issued by the Joint Chief Controller of Imports and Exports can validly amend the Import Policy 1981-82. Ona perusal of the relevant paragraphs of the Import Policy, 1981-82 mentioned above we agree with Mr. Soli J. Sorabjee, Senior Advocate for the appellants that the condition mentioned in the third respondents’ impugned letter dated October 15, 1981 is not there is para 138(1) of the Import Policy 1981-82, that the Circular dated Aug. 31, 1981 is invalid and that the rejection of the petitioners’ request made in the letter dated September 23, 1981 by the third respondent in the letter dated Oct. 15, 1981 is unwarranted, and the request should have been complied with. We are unable to agree with Mr. M.M. Abdul Khader, Senior Advocate for the respondents that the condition mentioned in the letter dated Oct. 15, 1981 is to be found in para 138(1) of the Import Policy, 1981-82.”
10. The guidelines issued practically at
the end of the year cannot set at naught the
rights, if any, accrued to the parties on the
basis of the law existing when such application
was filed namely on 30th June, 1987. By issuing such Guidelines just one month and few days before the completion of the year, the application filed at the beginning of the year could not be rejected and/or the rights could be taken away. It also appears that the Guidelines have been issued without rhyme or reason. The very concept of fixing duration period for issue of ‘No Objection Certificate’ or otherwise making supplies like 30/60 days in para 223 goes to the root of the matter. Even assuming that the Guidelines were binding on the petitioners and that the same had been lawfully issued by the authorities empowered in this behalf, the same should be limited to cases where applications are filed only after that date. Administrative orders and/or circulars cannot be given retrospective effect and by issue of administrative orders and/or directions, the rights which already accrued, could not be interfered with. The same at best could be allowed to give effect prospectively. The rights already accrued to the petitioners for obtaining ‘No Objection Certificate’, which would ultimately entitle the petitioners to have import licence for direct import of the raw material in question, could not be interfered with by administrative orders and/or circulars by giving retrospective effect. The statutory rights of getting ‘No Objection Certificate’, accrued immdediately after the expiry of a fixed period and that when such rights accrued or such rights vested to the petitioners, the same could not be taken away by issuing a Circular after the expiry of few months of the date of accrual of the statutory orders or statutory provisions of the Import Policies. Such administrative orders cannot also interfere with the fundamental rights of the citizens to carry on trade or business guaranteed under Article 19(1)(g) of the Constitution of India.
11. Administrative orders and/or circulars cannot have any retrospective effect. Only law could be made retrospectively if it was expressly provided by the legislature in the statute.
12. It is the established principles of interpretation that unless contrary intention
appears, an enactment is presumed not to be initiated to have retrospective operation. This is the position regarding enactment. In this case, on the basis of an administrative circular, the rights of the petitioners cannot be denied by the respondents which had accrued long before the issue of such a circular.
13. In my view, on the basis of the guidelines, being administrative in nature, issued in this behalf, only few days before the expiry of the period, the petitioners’ right accrued in this behalf could not be taken away or interfered with. Accordingly I hold that the said guidelines have no manner of application in that case and the same cannot affect the petitioner’s right in this behalf and as such following my decision between the parties in respect of the earlier financial year, the petitioner is entitled to relief as prayed for.
14. In respect of the earlier year, this Court issued a writ in the nature of mandamus commanding the respondent No. 2 to issue ‘No Objection Certificate’ entitling the petitioners for grant of Import Licence, in the name of the petitioners, for direct import of 7700 metric tonnes of re-rollable scrap, as the petitioners were found entitled to import, as was permissible to be imported, as on 14th July, 1986 (i.e. the date of making the application for registering the requirements of the petitioners).
15. In the instant case, the petitioners made an application on 30th June, 1987, registering their requirement, and in the instant case as it is admittedly found that this commodity in question could not be obtained from indigenous sources and further, admittedly, the Government had not adopted any policy for import of the said commodity, the petitioners are entitled to get ‘No Objection Certificate’ from respondent No. 2 for the purposeof obtainingan import licence from the respondent No. 4 for direct import of 10,000 metric tonnesof re-rollable scrap as per policy for 1985-86.
16. Accordingly, the writ petition succeeds. There will be a writ in the nature of mandamus commanding the respondent No. 2
to issue ‘No Objection Certificate’ in the form prescribed in Appendix IV-B of the Hand Book of Import and Export Procedure for 1985-86, entitling the petitioners for grant of Import Licence in the name of the petitioners for direct import of 10,000 metric tonnes of re-rollable scrap as the petitioners were entitled to import as on 30th June, 1987, on the basis of their registered requirements, within a period of 10 days from the date of communication of this order, and the respondent No. 4 is directed to issue import licence accordingly in the name of the petitioner No. 1 for direct import of 10,000 metric tonnes of re-rollable scrap as per policy prevailing as on 30th June, 1987, within a period of 15 days from the date of presentation of the ‘No Objection Certificate’ in this behalf.
17. The writ petition succeeds to the extent indicated above. There will be no order as to costs.
As prayed for, let the plain copy of the operating portion of the order, countersigned by an officer of this Court, be given to the learned Advocates for the parties.