CASE NO.: Appeal (civil) 2185- of 2188 PETITIONER: Union of India & Others RESPONDENT: M/s Chowgule & Co. Ltd. & Others DATE OF JUDGMENT: 24/01/2003 BENCH: Syed Shah Mohammed Quadri & Ashok Bhan. JUDGMENT:
J U D G M E N T
BHAN, J.
1. Union of India has filed these appeals against a common
judgment/order of the High Court of Bombay, Panaji Bench, Goa
dated 16th December, 1993 passed in Writ Petition Nos. 480 of 1993,
490 of 1993, 522 of 1993 and 521 of 1993 filed by the respondents
who were the petitioners before the High Court. By the impugned
judgment the High Court has quashed the orders passed by the
authorities rejecting the claim of the respondents for grant of
additional licence against the export orders. But because of the
intervening circumstances, i.e., issuance of REP Circular No. 11 of
1993 dated 5th May, 1993 by the Directorate General of Foreign
Trade, instead of granting the additional licence the Union of India
has been directed to pay to the respondents the premium amount of
20% in terms of the said Circular. Union of India was directed to
work out the amount payable subject to the respondents producing the
Bank Certificate in respect of the realisation of foreign exchange of
export proceeds.
2. The facts which are common to all the appeals being similar are
taken from the appeal: Union of India Vs. Chowgule & Co. Ltd. &
Others.
3. Respondent is a limited company incorporated under the
Companies Act, 1956. It is engaged, inter alia, in the export of
processed iron ore of Goan origin. It is also recognised as a trading
house. Under the Import Export Policy for April 1988-March 1991
(hereinafter referred to as ‘the old policy’) trading houses were
eligible for the benefit inter alia of additional licences of defined value
against the export of processed iron ore under the policy. Old policy
was terminated and instead a new policy starting w.e.f. April 1990-
March 1993 (for short ‘the New Policy’) was introduced. During the
period 1.4.1989 to 31.3.1990 the respondents had exported processed
iron ore of the value of Rupees 21,92,15,711.69. On 4.6.1990 the
company applied to the Assistant Chief Controller of Imports &
Exports for additional licence of a value of Rs.2,12,63,924/- against
the said exports. The application was rejected by the Assistant Chief
Controller of Imports & Exports on 24th September, 1990 on the
ground that application for additional licence for the licensing year
1990-1991 could not be considered on the basis of the items appearing
in Appendix 12 of the New Policy because there was no provision for
grant of licence under the heading transitional arrangements in terms
of the paragraph 222 of the New Policy. Respondents preferred an
appeal which was dismissed on 21st January, 1991. Likewise second
appeal was dismissed on 12th March, 1992. Review Petition filed by
the respondents was also rejected on 9th June, 1993.
4. Government of India , Ministry of Commerce, Directorate General
of Foreign Trade, Udyog Bhavan, New Delhi issued REP Circular
No.11/93 dated 5th May, 1993 (hereinafter referred to as ‘the Circular
11 of 93’) providing therein:
“(b) Where the applications for issue of Exim
Scrips/REP etc. licences are pending in respect of
exports made and export proceeds realised there
against prior to 1.3.92, the 20% premium will be
straightway paid, instead of issuing the licences,
provided that licensing authority after processing
the application and determining the eligibility for
issue of licences is satisfied that the applicant is
eligible for grant of Exim Scrips/REP etc.
licences.”
5. On 14th July, 1993 respondents lodged its claim for 20% premium
instead of additional licence for the licensing year April-March 1991
against exports of processed iron ore in the preceding licensing year
April-March 1990. The claim of the company was rejected by the
Deputy Director General of Foreign Trade, Panaji vide letter dated 1st
September, 1993 on the ground that minerals and ores appearing in
Appendix 12 of the policy book 1990-1993 were ineligible for
additional licence.
6. Aggrieved against the aforesaid sets of orders the respondents
filed the writ petitions in the High Court of Bombay, Panaji Bench,
Goa seeking two-fold relief. Firstly, for quashing of the orders passed
by the various authorities as mentioned above refusing their prayer for
additional licence and secondly a writ of mandamus or any other
appropriate writ directing the Union of India to forthwith pay to them
premium of 20% of Rs.2,12,63,924/- being the face value of the
additional licence for April-March 1991 to which the respondents
were entitled to under the Circular 11 of 1993.
7. The respondents in their writ petitions raised three-fold
contentions, firstly, it was urged on their behalf that by exporting
processed iron ore during the period 1.4.1989 to 31.3.1990 under the
import export policy for the years 1988-1991 (old Policy), they had
acquired a vested right to get additional licence in the licensing year
April-March 1990-1991 of the value prescribed in the import export
policy relevant for April 1988- March 1991 and the said right could
not be defeated by the provisions of the new policy. Secondly, it was
contended that on a true construction of the relevant provisions of the
import export policy for April 1990 March 1993, in particular,
paragraph 220 thereof, the respondents were entitled to additional
licence for the licensing year April 1990 March 1991 against
exports of processed iron ore made in the preceding licensing year,
i.e., April 1989-March 1990 and that the authorities have
misconstrued the relevant provisions. Thirdly, it was contended that
the Union of India was precluded by the doctrine of Promissory
Estoppel for denying the additional licence to the company during the
licensing year April-March 1991 of the value defined having
represented to the Trading Houses/Exporters that they would be
entitled to the additional licence, the parties having acted upon that
representation and having exported processed iron ore during the
period 1.4.1989 to 31.3.1990.
8. The appellants apart from raising certain preliminary objections
regarding the maintainability of the writ petitions which were rejected
by the High Court and which have not been pressed before us did not
dispute the factual statements of facts made in paragraphs 1 to 8 in the
writ petitions stating that these were matters of records. In so far as
the claim of the respondents for 20% premium it was contended that
there was no application from the party pending for entitlement of
additional licence as their application for additional licence was
rejected. It was denied that their action in rejecting the application of
the respondents for the grant of additional licence was contrary to law
or null and void or in excess of jurisdiction. That the claim for
additional licence in subsequent year was ineligible under the new
policy although that might have been available under the old policy,
which, however, ceased to exist after 31st March, 1990. Claim of
respondents/writ petitioners that they had acquired any vested right to
get an additional licence by virtue of exports made during the year
1989-1990 was denied. That the amendment made in the policy was
valid and the consequences flowing thereof were in the public interest
and therefore not opened to challenge. Circumstances which
necessitated the amendment in public interest were set out. According
to the appellants the export incentive was subject to changes from
time to time during the policy period. A change when it was brought
in the policy after 30th March 1990 could thus be made and was
binding upon the parties and that the said amendment was made in
public interest particularly taking into account that in spite of other
existing financial burden on the exchequer, incentive on iron ore was
further amounting to large amount of outflow of foreign exchange by
way of additional licence and higher REP benefits. For these reasons,
according to the appellants, there did not arise any question of any
promise having been made by the government to the Trading
Houses/Exporters and, therefore, the principal of Promissory Estoppel
could not be invoked and the same was not applicable to the facts of
the case. It was maintained that the application for additional licence
made by the respondents was rejected in accordance with the position
of law as it obtained on that date.
9. It may be highlighted that appellants did not dispute that the
respondent’s company was a recognised Trading House. The extent
of export of processed iron ore made by the respondents between
1.4.1989 to 31.3.1990 and the value thereof stated in the writ petition
were not controverted. The value shown by the respondents for the
purpose of additional licence was also not disputed. No issue as
regards the net foreign exchange earnings as may have been earned
against the export of iron ore was raised. Except from contending that
the respondents were ineligible for grant of additional licence as per
the new policy it was not stated that the application for licence was
liable to be rejected on any other ground. Issuance of the Circular 11
of 93 for payment of premium in the manner provided instead of
additional licence to which the applicant may have been entitled to
was also not disputed.
10. The High Court by the impugned order independent of and
relying upon an earlier division bench judgment of its own court held
that the writ petitioners were entitled to the grant of additional licence
and accordingly quashed the orders passed by the authorities rejecting
their claim for the additional licence. Because of the coming into
force of the Circular 11 of 93 instead of directing the authorities to
grant the additional licence it was declared that the respondents
would be entitled to the payment of premium of 20% in terms of the
relevant clause of which extracted in paragraph no.4 of this judgment.
11. The short point to be decided in these appeals is: as to whether
the respondents who were admittedly entitled to grant of additional
licence under the old policy stand debarred from claiming the said
additional licence because of the new import export policy which
came into force from 1st April, 1990 and further the applicability of
the Circular 11 of 93 dated 5th May, 1993 and the effect thereof.
12. Before addressing on the controversy, the salient features of the
old import export policy effective for April 1988-March 1991, which
was terminated on 30th March, 1990 and was replaced by the new
import export policy April 1990-March 1993, may be set out.
Paragraph 211 of the old policy sets out the objectives of the scheme
for registration of export houses and trading houses. It states that it is
to grant recognition and facilities to a select band of efficient
registered exporters who would develop a strong marketing capability
and that it is expected that they would operate as highly specialized
and dynamic institutions with a strong marketing infrastructure and
act as an important instrument for export growth. Paragraph 212
provides that the eligibility for grant of Trading Houses/Export
Houses certificate shall be determined on the basis of the net foreign
exchange earnings from the exports actually made during the past
period subject to the conditions set out in sub-paragraph (2) of the said
paragraph. Paragraph 215 provides for additional licence.
Thereunder the Trading Houses/Export Houses will be eligible to
additional licence on the basis of the admissible exports made in the
preceding licensing year and that the value of this licence will be
calculated at 10% of the net foreign exchange (NFE) earnings on the
total eligible exports made in the preceding licensing year.
Remaining part of the paragraph is not material and therefore is not
being set out. Sub-paragraph (2) laid down that the additional licence
shall be valid for the export of the items listed thereunder. Sub-
paragraph (8) provides that the items permissible shall be those
eligible under the policy on the date of issue of the licence. Paragraph
218, inter alia, provides that where the applications for additional
licence have not been disposed of by 31st March of the preceding
licensing year, the rate of entitlement will be the same as permissible
during the licensing year to which the applications pertained but the
items to be allowed will be as per the import policy on the date of the
licence. Appendix 12 of the old policy does not list iron ore as
ineligible product for import replenishment licence or additional
licence.
13. Paragraph 204 of Chapter XV of the new policy provides that in
the case of exports made prior to 1.4.1990 against which REP licence
was issued on or after 1.4.1990, the rate of import replenishment will
be as admissible on the date of export but subject to the conditions
laid down in 1988-1991 policy book. Chapter XVI deals with deemed
exports. Under paragraph 210 the deemed exports will qualify for
grant of import replenishment licence. The material provision,
however, is contained in Chapter XVIII. Part-A thereof deals with
Export Houses/Trading Houses. The objective is similar to that of
earlier policy. The eligibility criteria laid down in paragraph 218 for
the grant of export/trading housing certificate is to be determined on
the basis of NFE earnings from the exports actually made in the
preceding three licensing years termed as “base period”. The earnings
from export of products in Appendix 12 shall not qualify for this
purpose. Paragraph 220 deals with additional licence and provides,
inter alia, that the export houses/trading houses will be eligible for
additional licences on the basis of admissible exports made in the
preceding licensing year and the value of the licence will be
calculated at the rate of 10% NFE earnings on the total eligible
exports made in the preceding licensing year. Paragraph 222 deals
with transitional arrangements and the same reads as under:
” 222. Where the applications from Export
Houses/Trading Houses for Additional Licences
for any of the preceding licensing year, have not
been disposed of by the end of the licensing year,
licences will be issued as per the relevant Policy
provisions prevailing during the period to which
the Additional Licences relate, subject to the
condition that the permissibility of the items
allowed for import against such licences will be
governed by the relevant provisions of the Import
Policy in force, at the time of their actual import.”
14. Coming to the point raised it is to be noticed that paragraph 215
of the old policy is clear and provides that eligibility to the additional
licence was to be determined on the basis of the admissible exports
made in the preceding licensing year. Paragraph 222 of the new
policy which has been extracted above provides that where the
applications from export houses/trading houses for additional licences
for any of the preceding licensing year, have not been disposed of by
the end of the licensing year, licences will be issued as per the
relevant policy provisions prevailing during the period to which the
additional licences relate. Meaning thereby that if an application for
additional licence for any preceding licensing year is pending which
in this case shall be deemed to be pending as the controversy is still
alive being adjudicated then the licence has to be issued as per the
relevant policy provisions prevailing during the period to which the
additional licence relates which in the present case would be under the
old policy. The grant of additional licence in paragraph 222 has been
made subject to the condition that the permissibility of the items
allowed for import against such licences will be governed by the
relevant provisions of the import policy in force at the time of their
actual import meaning thereby that the items which can be imported
would be relatable to the import policy in force, i.e., the new policy.
Transitional arrangements stated in paragraph 222 makes it
abundantly clear that the applications from export houses/trading
houses which have not been finally disposed of by the end of the
licensing year would be entitled to the issuance of the additional
licence as per the relevant policy provisions prevailing during the
period to which the additional licences related. The entitlement of the
export houses/trading houses to get the additional licence has not
been taken away. The only condition to which the additional licence
has been subjected is that the permissible items allowable for import
against such (additional licencing) would be governed by the
provisions of the import policy in force at the time of their actual
import. Contentions raised on behalf of the Union of India that the
respondents/writ petitioners had to lodge their right/entitlement to get
the additional licence under the new policy for the exports made
during the period when the old policy was in force cannot be
accepted. The application for the additional licence could be made
only after the end of the fiscal year, as only thereafter the export house
could know its entitlement. The High Court was, therefore, right in
holding that the interpretation put by the authorities on the new policy
in declining the claim of the respondents for the grant of additional
licence was unacceptable. Under the new policy as well, the export
houses/trading houses would remain entitled to the additional licence
for the exports made during the period when the old policy was in
force but subject to the condition that they would be allowed to import
against the additional licence such items which are governed by the
policy in force at the time of the import of the goods.
15. For the reasons stated above, we do not find any infirmity in the
orders passed by the High Court in quashing the orders passed by the
authorities rejecting the claim of the respondents for grant of
additional licence.
16. Similarly, we do not find any infirmity in the orders passed by
the High Courts in the issuance of writ of mandamus directing the
Union of India to forthwith pay to the respondents the premium of
20% instead of issuing the additional licence in terms of the Circular
11 of 93. Circular 11 of 93 provides that where application for grant
of additional licence are pending in respect of the exports made and
export proceeds relating to the period prior to 1.3.1992 then instead of
issuing the licences, the 20% premium shall be paid. The order
passed by the High Court is strictly in conformity with the Circular 11
of 93 issued by the appellants itself.
17. Bank guarantee given by the respondents in pursuance to the
Order of this Court dated 28.3.1994 shall stand discharged. The
appeals being without any merit are, therefore, dismissed. Parties
shall bear their own costs in these appeals.