TMI Blog1992 (8) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... d 28th September, 1989 by the RBI expressing regret to release any foreign exchange under the Existing Control Regulations and also the impugned communication dated 13th January, 1990 by the RBI to the effect that under the policy guidelines presently followed by the Bank foreign exchange cannot be released for LL.B. Course leading to Honours degree except only at Cambridge/Oxford Universities. 2. The petitioner No. 2 was able to secure a confirmed admission in the University of Leeds for higher studies in LL.B. (Hons.) of three-year degree course with the intention of joining the legal profession in India. The petitioner No. 1, the father of the petitioner No. 2, having adequate means was willing to render financial support to his son for prosecuting his studies abroad. Soon after the publication of Part-II Examination by the University of Calcutta in September, 1989 the petitioner No. 2 duly applied to the RBI for requisite permission for release of foreign exchange for higher studies in U. K. as the session was to commence from 4th October, 1989 at Leeds. The petitioner No. 2 was subjected to various queries by the RBI. It is alleged in the petition that the respondent No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a few persons for LL.B. Course was due to mistake and such release was irregular. The question arises whether the guidelines as contained in the Book of Instructions have any statutory force or whether the guidelines have mandatory or directory force. It is well-known that guidelines is simply for guidance for the officers of the concerned establishments in dealing with various matters and it is an internal affair of the Bank and cannot be said to have any statutory force, or any mandatory or directory effect. The word may is not always been constituted as mandatory and by making guidelines the Bank cannot over power the Foreign Exchange Regulation Act, 1973. In this connection reference may be made to several decisions such as 1986(8)ECC189 , (L.I.C. v. Escorts) and [1961]2SCR295 , (M.M. Penkiah v. M. Veeramallapa). It is crystal clear that departures were made previously from the provisions of the guidelines and this fact indicates that the provisions of the guidelines are not mandatory. It shows that there was no rigid form and the position is fluid from person to person at the whim of the officials of the Reserve Bank of India. 4. Instances have been provided by the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iversities thereby demonstrating that RBI is following a policy of sheer discrimination, rather violation of the Constitution. The Court has a jurisdiction to strike down any policy which appears to it arbitrary and discriminatory, [1973]2SCR757 , Beenet Coleman v. Union of India. The plea of 'mistake' of the Bank appears to the Court an after-thought defence. 5. Mr. Roy Chowdhury, the learned, Counsel for the RBI, in eloquent defence submitted that the constitutional challenge is directed towards the policy directions of the Reserve Bank of India relating to release of foreign exchange to Indian students for studies in Foreign Universities as recorded in paragraph 56 of the Chapter XVI-30 of 1988 Edition of the Book of Instructions. The learned Counsel referred to three exceptions. The third exception which is the subject matter of the writ petition is that foreign exchange would be released if the Indian student has obtained admission for a course leading to Tripose/honours degree at Cambridge/Oxford Universities in U. K. The challenge is thrown that under the Advocates Act, the Bar Council of India is entitled to give recognition to foreign universities whose law degr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have their origins in the Twelfth and Thirteenth centuries with the foundation of the Universities of Oxford and Cambridge. It is further emphasized in the said article that both the universities enjoy reputation for science and scholarship which is unrivalled. It is submitted that there is a national nexus between the aforesaid differentia, and the object to be achieved under the Foreign Exchange Regulation Acts of 1947 and 1973. The decision reported in AIR 1981 SC 2138 : (1982 Tax LR 197) (R.K. Garg v. Union of India) was cited to establish that the Court must be very cautious in giving rulings in economic matters and an American decision in the case of Marey v. Doud, reported in (1957) 354 US 457 has also been quoted where Justice Frankfurter observed that the Courts have only the power to destroy, not to construct . Well, it is difficult to swallow the remark of Justice Frankfurter. The admission of the petitioner No. 2 in Leeds University does not satisfy the RBI that the qualification for admission in that University is similarly situated as those in Cambridge and Oxford so as to entitle him to the release of foreign exchange. I cannot reconcile myself with the decision pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the affairs can always interfere to deviate from the guidelines in particular cases for the ends of justice. The plea of 'mistake' cannot solve the problem of the petitioners and cannot be taken seriously by the Court. On behalf of the Bank the decision reported in 1984(17)ELT607(SC) , (Coromondal Fertilizers Ltd. v. Union of India), has been referred wherein the Supreme Court observed: A wrong decision in favour of any particular party does not entitle any other party to claim the benefit on the basis of the wrong decision . No one can disagree with the observation of the Supreme Court but the decision in the instant case was not in favour of any party but in respect of several parties and there was basically discrimination when the petitioner No. 2 was denied the same benefit in the garb of guidelines which once did not stand in respect of others. The defence has also objected to the fact that the petitioner No. 2 was extended the help by his uncle by sending requisite sponsorship certificate for the issue of visa by the local Deputy High Commissioner for U.K. On this count it is stated that such sponsored students are given U.S. $200 towards incidental expenses only a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sities cannot be deprived of the same privileges which are extended by the Reserve Bank of India to the above two Premier Universities. The point which must also be noted that the Cambridge and Oxford Universities cannot be given the nomenclature of National Universities but they, of course, may be described as National Institutions for advancement of learning in England (120 ER 68). The judicial notice can be taken only this far and no further. Undoubtedly the Oxford and Cambridge Universities provide high standards of instructions in under-graduate disciplines in the U.K. and have a position of their own in the world but it cannot be said as a matter of rule that every student of these Universities is bound to be a better product than other Universities of the U.K. On this count Cambridge and Oxford Universities cannot have a justified extraordinary status of the release of foreign exchange from the Reserve Bank of India. It must also be noted that the controversy of National Universities and National Institutions have erupted from the Oxford Poor Rate case (supra) but this case itself is not based exclusively on the standard of teaching in the Universities of Oxford or C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : .....the State's duty is to produce rule of equality, rather egalitarian justice in actual life . This approach must be the guiding factor in giving judicial pronouncement. In my opinion, the classification! made by the Reserve Bank of India in favour of the Oxford and Cambridge Universities vis-a-vis other universities of the same country is quite unreasonable and discriminatory and violative of Art. 14 of the Constitution and, accordingly, illegal and void. It must be examined whether there is any rational and proximate nexus between the object of FERA and the condition imposed by the RBI in this particular case. The object of FERA was to conserve and direct to the best uses, the limited supplies of the countries foreign exchange and to control transaction in foreign exchange, securities and gold. The whole idea was to see that the countries foreign exchange resources were not vested under any circumstances and where properly utilises to advance the national interest. In the instant writ application the above principle it must be held has no rational or proximate nexus. Here the foreign exchange has been asked to be utilised properly for the advancement of national interes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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