JUDGMENT
Badar Durrez Ahmed, J.
1. These three writ petitions are being finally disposed of with the consent of the parties by this common judgment as the same raise common and identical issues.
2. These petitions pertain to the ‘Garment and Knitwear Export Entitlement (Quota) Policy 2000-2004 (hereinafter referred to as ‘the said Garment Policy’). The entire controversy hinges upon the interpretation of paragraph 7(iv) of the said garment policy as amended by the notification No.1/68/2000-Exports-I dated 13.06.2000 issued by the Joint Secretary, Government of India, Ministry of Textiles, New Delhi. The paragraph in question, i.e., paragraph 7(iv), after the amendment, reads as under:-
Entitlements under this system will be calculated and allotted by the Quota Administering Authority on the basis of realised value of admissible exports till 31st August of the succeeding year against the exports made during the base year. These will a so include the value of exports made in the years prior to the base year realised till the above date but would exclude the value for which the entitlement has already been in previous years. Realised value of exports shall shall be supported by an affiavit prescribed for this purpose. The exports of quota garments, which are covered under this Allotment Policy, to non-quota countries will, however, be given double weightage for the purpose of determining entitlements. The levels available will be ditributed pro-rata on the basis of the value of exports of individual applicants.
3. The entire case depends upon the interpretation of the aforesaid paragraph 7(iv) of the said garment policy.
4. Before considering the true purport and meaning of the aforesaid paragraph, it would be pertinent to note the background and the facts which give rise to the question of interpretation. The world, in so far as export of garments from India are concerned, is divided into two parts:-
i) Quota countries; and
ii) Non-quota countries.
5. The quota countries are those countries which restrict export of garments from India unless and until there is a quota given to the exporter under the Government of India’s Garment Policy. These quotas are based on bilateral agreements between India and the quota country. Thus for an Indian exporter to export to a quota country, he must have a quota allotted under the Garment Policy of the Government of India. Insofar as non-quota countries are concerned, there is no such restriction and exportersre free to export to such non-quota countries.
6. The question in the present writ petitions is with regard to the quota entitlement for export by Indian exporters to quota countries. The system of allotment is such that the quotas are allotted to exporters in four different categories:-
a) Past Performance Entitlement (PPE) System;
b) New Investor’s Entitlement (NIE) System;
c) Non-quota Entitlement (NQE) System; and
d) First Come First Served (FCFS) Entitlement System
7. As indicated in paragraph (4) of the said garment policy, in allotting the quota for a particular allotment year, a certain percentage of the annual level is reserved for each of the aforesaid four categories. Paragraph (4) to the extent relevant, is set out herein below:-
4. SYSTEM OF ALLOTMENT
(i) Quantities for export in each allotment year shall be allocated under the following systems at rates indicated against each of them:-
System of Allotment
Percentage of Annual Level
(a)
Past Performance Entitlement (PPE) System (out of which HVE)
70.00%
(b)
New Investor’s Entitlement (NIE) System
5.00%
(c)
Non-Quota Entitlement (NQE) System
15.00%
(d)
First Come First Served (FCFS) Entitlement System
10.00%
Total
100
8. From the above table, it is clear that out of the total quota for export to quota countries, 5% thereof would be reserved for exporters based on their exports to non-quota countries. In these petitions, we are concerned with this non-quota entitlement system.
9. Paragraph (3) of the said garment policy reads as under:-
3. BASE YEAR The phrase Base Year for an allotment year, wherever appearing in this notification, shall mean the calendar year preceding the year immediately before that allotment year. For example, for the allotment year 2000, the base year shall be 1998.
10. From the above, it is clear that if the allotment year would be year ‘n’, then the base year would be year ‘n-2’. Thus, for allotment year 2002, the base year would be year 2000; for allotment year 2003, the base year would be 2001; and for the year 2004, the base year would be 2002. It is thus clear that with each allotment year, there is an associated unique base year. This is an important consideration and its importance will be revealed hereunder. In the year 2000, the petitioners, in each of the three writ petitions, exported garments to non-quota countries to the following extent:-
i) In CW 2081/2003 = US $ 56,93,558.65
ii) In CW 2466/2003 = US $ 6,42,248.48
iii) In CW 2273/2003 = US $ 62,603.44
11. In the year 2001, the petitioners in each of the three writ petitions had no exports.
12. The question in the present writ petitions is with regard to the quota entitlement under the NQE system for the year 2003. It is pertinent to note here that the petitioners in all the three writ petitions did not apply for any quota under the NQE system in the year 2002. The case of the petitioners is that in calculating their quota entitlements for the allotment year 2003, their exports for the year 2000 should be considered in view of the amended provisions of paragraph 7(iv) of the policy which has been set out hereinabove inasmuch as they had realised the value of their exports by 31.8.2001. Before we examine the true meaning and purport of the said paragraph 7(iv) of the said garment policy as amended, it would be pertinent to note an ancillay issue with regard to a circular being QP Circular No.02/14 dated 23.05.2002 issued by the respondent No.1 (AEPC). The subject of the circular was Receipt of applications for allotment of Non-Quota Entitlement (NQE) for export of Garments and Knitwar in 2003. Thus, this circular pertains to the year in question. The relevant portion of the said circular is set out hereinbelow:-
It has been decided to receive applications from eligible registered exporters/members of the Council for allotment of Non-Quota Entitlements (NQE) for the year 2003 as per the Garment Export Entitlement Policy 2000-2004 announced by the Government of India, Ministry of Textiles vide Notification No.1/128/99-Exports I dated 12th November, 1999 and subsequent amendments issued thereof. The applications and all the details as well as the terms and conditions indicated in this circular will be subject to ny change in the Entitlement Policy which may be announced by the Government of India from time to time.
1. Allotments will be made only to those exporters who are registered with relevant Registering Authority as per the Import Export Policy.
LAST DATE:
2. Applications for allotment of NQE 2003 with requisite documents should reach any of the Regional Office of AEPC latest by 28.06.2002. On 28.6.2002, NQE applications will be received up to 6.00 P.M. In order to facilitate timely processing, exporters are requested to submit applications early without waiting for the last date. Applications received after the last date 28.06.2002 will not be entertained for allotment of NQE.
ELIGIBILITY:
3. Only those exporters will be eligible for allotment of NQE for 2003 who have realized a minimum export proceeds in foreign exchange equivalent to Indian Rs.20 lakhs in FOB value (as per the Bank Realization Certificate) in Non-Quota Exports against free currency (inclusive of exports to Non-Quota countries and Non-Quota items to Quota countries) during the base period (i.e. Calendar Year 2001). Exports of garments to Russia will, however, not be taken into account for NQE allotments.
NQE CALCULATIONS:
4. Base period for the purpose of calculation of NQE for the year 2003 would be the calendar year 2001. Exporters who have export performance by way of actual shipment of NR/OBA items to Quota countries and exports to non-quota countries during the base period 2001 and the export proceeds in respect of which would have been realised latest by 31.12.2002, shall be eligible under this system. In case exporters proceeds have not been realised as on date of filling the application in such cases exporters my give details in the Annex III-B and IV-B separately. However BRC may have to be submitted on realisation of exports proceeds. It may be ensured that BRC in such cases should be submitted immediately or latest by 15.01.2003 and failing to do so allotmens will not be made and shall stand ineligible.
13. From the above, two things are amply clear:-
Firstly, that the last date for applications for allotment of quota for 2003 was 28.06.2002 and that eligibility for such allotment of quota was indicated as those exporters who had realised a minimum export proceed in foreign exchange equivalent to Indian Rs. 20 lakhs in FOB value in non-quota exports during the base period (i.e., calendar year 2001); and Secondly, in paragraph (4) of the circular under the head NQE calculations, it was again pointed out that the base period for the purpose of calculation of NQE for the year 2003 would be the calender year 2001.
Thus, from the above circular, it was clear that unless and until the exporter had minimum export proceeds in foreign exchange equivalent to Indian Rs. 20 lakhs in FOB value during the calendar year 2001, it could not have been considered eligible for the quota for 2003.
14. The petitioners in each of the writ petitions had applied for quota allotments for the year 2003 under the NQE system. However, their applications were rejected. The rejection by the respondent No.1 (AEPC) was similar in all the three writ petitions and the rejection letter in respect of CW 2081 is set out hereinbelow by way of sample:-
Apparel Export Promotion Council (Sponsored by Govt. of India, Ministry of Textiles) AEPC/REG/QA/C/4/NQ/2003/23301/10,013
Dated: October 29, 2002
M/s. STERLING OVERSEAS
Room No.4, Flat No.2, Ground Floor,
Naju Mansion,
Opp. Naval Transport Pool,
Wode House Road, Colaba,
Mumbai-400 005.
Subject: Your NQE application for the year 2003.
Dear Sirs,
Please note that as per the application, the base period of your performance is the year 2000, besides the date of realisation shown in BRC submitted by you is prior to 31st August, 2001. As per the Q.P. Circular only those exporters can apply for NQE-2003 whose export proceeds have been realised after 31st August, 2001.
In view of above, we regret to inform you that your application can not be considered for release of NQE-2003.
Thanking you,
Yours faithfully,
-sd-
(M.C. JOSHI)
JOINT DIRECtor(QA)
15. There are essentially two grounds for rejection of the applications. The first ground is that the base period sought by the petitioners was the year 2000; and the second ground was that the date of realisation shown by the Bank Realisation Certificate was prior to 31.08.2001 and only these exporters could apply for the NQE quota for 2003 whose exports proceeds had been realised after 31.8.2001.
16. Mr. Raj Panjwani, learned counsel appearing on behalf of the petitioners submitted that, first of all, the circular cannot override the garment policy itself. He submitted in this regard that AEPC was merely a delegate and the circular was in the nature of delegated legislation. As such, unless the delegate was specifically authorised, it could not issue any circular or notification contrary to the statutory notification by which the said garment policy was notified. In support of this contention Mr. Panjwani relied upon two decisions of the Supreme Court: (1) Sahni Silk Mills (P) Ltd. and Another Vs. Employees’ State Insurance Corporation, ; and (2) Marathwada University Vs. Seshrao Balwant Rao Chavan, (1989) 3 SCC 13 [Para 20] Insofar as this submission is concerned, I find that it is of no consequence. Even if the circular is ignored we are still left with the provisions of the said government policy and in particular with paragraphs 7(i) and 7(iv) thereof. Secondly, it was a submission that paragraph 7(iv) could be construed strictly as well as liberally. He contended that since it was a benefit being granted to the exporters, the liberal interpretation ought to be favored and the strict interpretation ought to be rejected.
17. Mr. Panjwani also submitted that a plain reading of the said paragraph would also serve the purpose in as much as the petitioners would then be entitled to a quota for the year 2003. According to Mr. Panjwani, the allotment policy is limited only for the year 2000-2004 The base year for the year 2000 was 1998. Hence, the value of proceeds realised till 31.8.1999 in terms of amended paragraph 7(iv) of the policy would have to be considered for computing the quota for the year 2000. Similarly, he submitted that for the year 2001, the base year would be 1999 and the proceeds realised up to 31.8.1999 would have to be taken into consideration for computing the quota for the year 2001. Accordingly, he submitted, for the year 2002 the cut-off date for onsideration would be 31.8.2001 and that the same method of computation would be applied until the end year of the policy i.e., 2004 According to Mr. Panjwani, the cut-off date 31st August has been applied in order to conform with the guidelines issue by R.B.I. which prescribe 180 days for realisation of export proceeds, under which it is expected that all export proceeds for the previous calender year would be realised by the 30th June of the succeeding year. Mr. Panjwani further argued that the only exception for disentitlement in para 7(iv) of the said agreement policy was that the value for which the entitlements had already been obtained in previous years would be excluded. According to Mr. Panjwani, any other interpretation would confer an advantage on those exporters who have failed to realise the value as per R.B.I. Guidelines i.e. by 30th June of the succeeding year and unjustly penalise those who have conformed with it.
18. On the other hand, Mr. Rawal appearing on behalf of the respondent No.1 (AEPC) contended that the object and purpose of the policy must be kept in mind while interpreting the said paragraph 7(iv) of the said garment policy and he further contended that the plain meaning is not necessarily to be adhered to if it runs contrary to the intention of the policy. In support of this contention, Mr. Rawal relied upon:-
i) M/s Girdhari Lal and Sons v. Balbir Nath Mathur and Others: . The relevant para reads as under:-
9.So we see that the primary and foremost task of a Court in interpreting a statute is to ascertain the intention of the legislature, actual or imputed. Having ascertained the intention, the Court must then strive to so interpret the statute as to promote/advance the object and purpose of the enactment. For this purpose, where necessary the Court may even depart from the rule that plain words should be interpreted according to their plain meaning. There need be no meek and mute submission to the planness of the language. To avoid patent injustice, anomaly or absurdity or to avoid invalidation of a law, the Court would be well justified in departing from the so-called golden rule of construction so as to give effect to the object and purpose of the enactment by supplementing, the written word if necessary.
ii) Kehar Singh and others v. The State (Delhi Admn.): The relevant paragraphs read as under:-
227.Before I come to consider the arguments put forward by each side, I venture to refer to some general observations by way of approach to the questions of construction of statutes. In the past, the Judges and lawyers spoke of a ‘golden rule’ by which statutes were to be interpreted according to grammatical and ordinary sense of the word. They took the grammatical or literal meaning unmindful of the consequences. Even if such a meaning gave rise to unjust results which legislature never intended, the grammatical meaning alone was kept to prevail. They said that it would be for the legislature to amend the Act and not for the Court to intervene by its innovation.
228. During the last several years, the ‘golden rule’ has been given a go-by. We now look for the ‘intention’ of the legislature or the ‘purpose’ of the statute. First, we examine the words of the statute. If the words are precise and cover the situation in hand, we do not go further. We expound those words in the natural and ordinary sense of the words. But, if the words are ambiguous, uncertain or any doubt arises as to the terms employed, we deem it as our paramount duty to put upon the language of the legislature rational meaning. We then examine every word, every section and every provision. We examine the Act as a whole. We examine the necessity which gave rise to the Act. We look at the mischiefs which the legislature intended to redress.
We look at the whole situation and no just one-to-one relation. We will not consider any provision out of the framework of the statute. We will not view the provisions as abstract principles separated from the motive force behind. We will consider the provisions in the circumstances to which they owe their origin. We will consider the provisions to ensure coherence and consistency within the law as a whole and to avoid undesirable consequences.
iii) Directorate of Enforcement v. Deepak Mahajan: . The relevant paras read as under:-
32. Krishna Iyer, J has pointed out in his inimitable style in Chairman, Board of Mining Examination and Chief Inspector of Mines and Another v. Ramjee To be literal in meaning is to see the skin and miss the soul of the Regulation.
33. True, normally Courts should be slow to pronounce the legislature to have been mistaken in its constantly manifested opinion upon a matter resting wholly within its will and take its plain ordinary grammatical meaning of the words of the enactment as affording the best guide, but to winch up the legislative intent, it is permissible for Courts to take into account of the ostensible purpose and object and the real legislative intent. Otherwise, a bare mechanical interpretation of the words and application of the legislative intent devoid of concept, purpose and object will render the legislature inane. In cases of this kind, the question is not what the words in the relevant provision mean but whether there are certain grounds for inferring that the legislature intended to exclude jurisdiction of the Courts from authorising the detention of an arrestee whose arrest was effected on the ground that there is reason to believe that the said person has been guilty of an offence punishable under the provisions of FERA or the Customs Act which kind of offences seriously create a dent on the economy of the nation and lead to hazardous consequences. Authorities, a few of which we have referred to above, show that in given circumstances, it is permissible for Courts to have functional approaches and look into the legislative intention and sometimes may be even necessary to go behind the words and enactment and take other factors into consideration to give effect to the legislative intention and to the purpose and spirit of the enactment so that no absurdity or practical inconvenience may result and the legislative exercise and its scope and object may not become futile.
Mr. Rawal also relied upon P.T.R. Exports (Madras) Pvt. Ltd. And others V. Union of India and others: for the proposition that the petitioners did not have any vested right to export or to the grant of the quota. Their entitlement would be governed by the policy applicable on the date their entitlement is being considered. This last decision is not very helpful to Mr. Rawal’s case. The Supreme Court held that the Government is entitled to change policy and nobody has a vested right on claiming application of the old policy when the new policy has come into force. This is not the case here.
19. Thus, according to Mr. Rawal, in view of the first three decisions of the Supreme Court, if the plain meaning of paragraph 7(iv) were to run counter to the intention behind the said garment policy then the plain meaning would have to give way to the meaning which is in line with such intention. In this background Mr. Rawal submitted that the interpretation which was sought to be given by the petitioners was incorrect and misconceived. According to him from a perusal of paragraph 7(iv), it would show the falsity of the stand taken by the petitioner. The provisions are to be read as a whole and not in isolation and a perusal of the same would show that entitlement would exclude the value of exports which was available in the year previous to the base year. According to Mr. Rawal, the benefit of the years prior to the base period can only be availed subject to the satisfaction of the exclusion clause which prevents the petitioner from availing benefit of the export prior to the base period. It is Mr. Rawal’s contention that only those exports, value of which had been realised after 31st August, 2001 and till 31st August, 2002, could be considered for entitlement of quota for the allotment year 2003. The entire realisation of the petitioners has been prior to 31.8.2001. Hence, they would not be entitled to be considered for quota entitlement.
20. Mr. Alakh Kumar, who appeared on behalf of the respondent No.2 in CW 2273/2003, adopted the arguments of Mr. Rawal. Ms. Jyoti Singh, who appeared for Respondent (Union of India) also adopted Mr. Rawal’s arguments and supplemented it further by saying that firstly, the notification and the circular were not contradictory and secondly, that the only thing that was required to be seen in the present case was that while considering the entitlement for the allotment year 2003, the relative base year was 001. In the case of the petitioners, nothing at all was exported in the base year, i.e., 2001. As such, they were not entitled to any quota for the year 2003.
21. Now, let us examine the relevant paragraph 7(iv). Paragraph 7(iv) so much as is relevant for our purposes is set out herein below:-
Entitlements under this system will be calculated and allotted by the Quota Administering Authority on the basis of realised value of admissible exports till 31st August of the succeeding year against the exports made during the base year. These will also include the value of exports made in the years prior to the base year realised till the above date but would exclude the value for which the entitlement has already been in previous years.
The aforesaid portion is actually to be read as two separate portions. The first portion being:
Entitlements under this system will be calculated and allotted by the Quota Administering Authority on the basis of realised value of admissible exports till 31st August of the succeeding year against the exports made during the base year. and the second portion being:
These will also include the value of exports made in the years prior to the base year realised till the above date but would exclude the value for which the entitlement has already been in previous years.
22. From first portion, it becomes absolutely clear that the question of realisation of the value of exports is only in respect of the exports made during the base year. These are the key words. Thus, when we are considering the entitlement for the year 2003, we have to see what are the exports made during the relevant base year, i.e., 2001. In the present case, the petitioners have exported nothing in the year 2001. This is an admitted position. Thus, at the threshold, they are not entitled to be considered for allotment of quota in the year 2003. The second portion mentioned above would only come into play if the petitioners were to cross the threshold. They do not. Hence, the second portion with regard to realisation of the value of exports does not come into play at all. The niceties of interpretation urged by the learned counsel for both the sides do not come up for consideration at all. Neither do the questions of realisation of exports before or after 31.8.2001 arise. Since, the petitioners did not export anything in the year 2001, which is the relevant base year for allotment of quota entitlement in the year 2003, in terms of the said garnment policy itself dehors the question of the circular, the petitioners would not be entitled to any quota allotment. In this regard paragraph 7(i) of the policy is set out hereinbelow:-
(i)Exporters of garments to non-quota countries and non-quota garments to quota countries shall be eligible for allotment under this system provided the payment is received in free currency, and the exporter has a minimum export performance of Rs.20 lacs during the base year. Exports of garments to Russia will, however, not be taken into account for NQE allotments.
23. It will be clear that this sub-para clearly requires that the exporter must have a minimum export performance of Rs. 20 lacs during the base year. None of the petitioners satisfy this condition for the year 2001 which is the relevant base year. Hence, none of them are entitled for allotment of quota under the NQE system for the year 2003 and the impugned orders of rejection of their respective applications are not liable to be interfered with.
24. Accordingly, in view of the aforesaid discussion, the writ petitions are dismissed. There shall be no orders as to costs.