9911796707
Advanced Search 
TMI Blog2010 (3) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent and to quash the same and direct the third respondent to pay to the petitioner the amount of Rs. 8,83,400/- being the premium for the value of the scrips surrendered to the third respondent together with interest at the rate of 18% from the date of submission of the licences to the third respondent. 3. The learned Single Judge, while passing orders in W.P. No. 23946 of 2006 dated 23-3-2009 has inter alia observed that in the present case, the rights of the petitioner have been secured by the earlier orders of this Court to the effect that the Exim Scrips sold by them were genuine. It gives an automatic right for the petitioner to claim the premium of 20% on the Exim Scrips sold by the third respondent and hence it is bound to honour the promise held out by the earlier circular issued. The contention that the respondents are estopped from denying the right of the petitioner on the principle of promissory estoppel is well founded and resultantly allowed the writ petition without costs. 4. The learned counsel for the appellant/third respondent urges before this Court that the order of the learned Single Judge in directing the appellant/third respondent to pay a sum of Rs. 8,83 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd therefore prays for allowing W.A. No. 511 of 2009 to meet the ends of justice. 8. In regard to W.A. No. 857 of 2009, the learned Senior Central Government Standing Counsel for the appellants/respondents 1 and 2 submits that the learned Single Judge has committed an error in allowing the writ petition, while directing payment to the petitioner with interest for the Exim Scrips and the same is against the law, facts and circumstances of the case and that the learned Single Judge was not correct in observing that the rights of the 1st respondent/petitioner have been secured by the earlier orders of this Court and it gives an automatic claim premium on the Exim Scrips sold by the second respondent/3rd respondent and as a matter of fact, the first respondent/petitioner was liable to pay to the appellants/respondents 1 and 2 more than what he was entitled to under the 20 Exim Scrips which was sought to be encashed and in this regard, the learned Single Judge has taken in correct view that the appellants/respondents 1 and 2 and the second respondent/3rd respondent are estopped from denying the rights of the first respondent/petitioner on the principles of promissory estoppel without c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that Exim Scrips were obtained by furnishing bogus documents. 11. That apart, it is the contention of the learned Senior Central Government Standing Counsel for the Appellants that the first respondent/petitioner has already obtained pecuniary gains by tendering licences which have been obtained by fraudulent means and therefore he has not approached this Court with clean hands in invoking jurisdiction of this Court under Article 226 of Constitution of India and if the money is paid to the first respondent as directed by the learned Single Judge in the writ petition, the appellants/respondents 1 and 2 will not have any hold on the first respondent/petitioner to recover the amount of Rs. 14,11,200/- which is duty bound to pay inasmuch as the said money was realised by tendering licences which were obtained by fraudulent means and therefore prays for allowing the above writ appeal to prevent an aberration of justice. 12. Per contra, the learned senior counsel for the first respondent submits that it is incorrect on the part of the Appellants to contend that the First Respondent/Petitioner is not entitled to get the payment of Rs. 8,83,400/- and as a matter of fact, the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant furnished a reply dated 15-12-1998 rejecting the request for payment of Exim Scrips premium. Consequently, the first respondent/writ petitioner filed W.P. No. 2194 of 1999 before this Court arraying the appellants as respondents and this Court by its order dated 24-2-2006 in paragraphs 2 and 3 has observed the following : “Mr. V.T. Gopalan, learned Additional Solicitor General represented that there was a CBI enquiry in respect of the fraud committed in Exim Scrips and that was one of the reasons why the petitioner’s request could not be complied with earlier. Now, the learned Additional solicitor General submits that the investigation so far conducted does not reveal any involvement of the petitioner and in these circumstances, the request of the petitioner will be considered and necessary orders will be passed in accordance with law within a period of four weeks and therefore, the impugned order may be set aside and suitable directions may be issued to the second respondent to meet the ends of justice. The learned Senior counsel appearing for the petitioner also agrees for the same.” and therefore without going into the merits of the case, set aside the impugned order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- and as a matter of fact, M/s. Aiysha exports Private Limited and its Directors were prosecuted after investigation conducted by the CBI and in criminal case in E.O.C.C. No. 100 of 1996 on the file of the Additional Chief Metropolitan Magistrate, E.O, Chennai for the offence punishable under Sections 120 B, r/w 420, 467, 468 and 471 r/w 468 IPC and Section 5 of Import Act and Clause 10(d) of Import (Control) Order 1955 and AI firm and A2 representing A1 company was convicted and sentenced besides a fine of Rs. 2,25,000/- was imposed on them and in the said criminal case, the first respondent/writ petitioner was a witness as P.W. 6 in the prosecution and therefore, the Exim Scrips amounting to Rs. 14,11,200/- was purchased by the first respondent/writ petitioner from the said M/s. Aiysha exports Private Limited was secured by submitting bogus and forged document and as such the first respondent/writ petitioner was bound to repay the said amount to it. 19. However, the learned Single Judge by his order dated 23-3-2009, while passing orders in W.P. No. 23946 of 2006, had observed that the rights of the first respondent/writ petitioner were secured by the earlier orders of this cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of post-audit, it is Prima facie established that the entitlement has been granted more than the due amount, the same shall be adjusted straightaway from the pending claims of the applicant under an intimation to the party etc. and in the instant case, the first respondent/petitioner was successfully in getting premium from the Appellant/Bank to an extent of Rs. 14,00,000/- and therefore, he had obtained a pecuniary gain since he purchased the bogus Scrips from M/s. Aiysha exports Private Limited and even though the premium for 20 Exim Scrips comes to Rs. 8,83,400/-, the Bank has been directed not to make premium payment against the cancelled Scrips and to recover any amount already paid on the cancelled Scrips and if necessary not to make payment on any other Scrips and therefore, the bank had withheld the payment to the first respondent and the said action of the bank is perfectly in order as per the copy of the public notice dated 31-7-1991 and resultantly the Bank is entitled to act accordingly after intimating the first respondent. 21. Also, the learned counsel for the Appellant Bank cites the decision Lloyds Bank PLC. v. Independent Insurance Co. Ltd., (1999) 2 W.L.R. 734 at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s smoothly and in particular, they may be advised to promptly (say, within 48 hours) attend to task of authentication of Scrips of the face value above Rs. 5 Lakhs received from the designated branches of State Bank of India and these Scrips would again be returned the concerned office of Joint Chief Controller of Imports and Exports after payment etc., 25. In regard to Exim Scrips, the Reserve Bank of India Circular No. 17/92 in regard to the purchase of Exim Scrips, it is among other things observed that the bona fide holder of Exim Scrips should submit an application to the designated branch of the State Bank of India in the form prescribed by the State Bank of India and the Scrips upto the face value of Rs. 5 lakhs will be straightaway purchased by the designated branch of State Bank of India and the premium amount would be paid to the holder of the Scrips and where the face value of the scrip exceeds Rs. 5 lakhs, the concerned branch would send it to the office of the Joint Chief Controller of Imports and Exports, which had issued the Scrip, for authentication and on receipt of the Scrip duly authenticated would pay the amount of premium. 26. In another Reserve Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the person to whom the representations has been made. Where the first two conditions are satisfied but the third is not, there is no scope to invoke the doctrine of estoppel’. 30. He draws the attention of this Court to the decision of Hon’ble Supreme Court in Central Airmen Selection Board v. Surender Kumar Das - 2003 (1) Supreme Court Cases 152 at paragraph 7 wherein it held hereunder : “ The question, therefore, is whether in case of this nature the principle of promissory estoppel should be invoked. It is well known that the principle of promissory estoppel is based on equitable principles. A person who has himself misled the authority by making a fake statement, cannot invoke this principle, if his misrepresentation misled the authority into taking a decision which on discovery of the misrepresentation is sought to be cancelled. The High Court has proceeded on the basis that the petitioner had not made any misrepresentation in his application to the effect that he had passed the intermediate examination. As we have found above, this finding of the High Court is erroneous, contrary to record and therefore must be set aside. In his application, the respondent had claimed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry enquiries and to ascertain all the facts relating to the property to be purchased prior to committing in any manner. Upon a sale of goods the general rule with regard to their nature or quality is caveat emptor, so that in the absence of fraud, the buyer has no remedy against the seller for any defect in the goods not covered by some condition or warranty, expressed or implied. It is beyond all doubt that, by the general rules of law there is no warranty of quality arising from the bare contract of sale of goods, and that where there has been no fraud, a buyer who has not obtained an express warranty, takes all risk of defect in the goods, unless there are circumstances beyond the mere fact of sale from which a warranty may be implied. No one ought in ignorance to buy that which is the right of another. The buyer according to the maxim has to be cautious, as the risk is his and not that of the seller.’ (paras 15 and 17) Whether the buyer had made any enquiry as to the genuineness of the licence was within his special knowledge. He had to establish that he made the enquiry and took requisite precautions to find out about the genuineness of SIL which he was purchasing. If he had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing public equity, the Government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. Once public interest was accepted as the superior equity which can override individual equity, the aforesaid principle should be applicable even in cases where a period had been indicated for operation of the promise. In that case, a notification was issued exempting customs duty on PVC. By a second notification the exemption was withdrawn. The court held that the facts of the case revealed that there was a supervening public interest and the Government was competent to withdraw the first notification without giving any prior notice to the respondent.’ 33. The learned senior counsel for the first respondent/petitioner contends that in W.P. No. 2194 of 1999 (filed by the first respondent/petitioner), learned Single Judge in his order dated 24-2-2006 in second paragraph has observed that ‘the learned Additional Solicitor General represented that there was a CBI enquiry in respect of the fraud committed in Exim Scrip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remium amount already made to him against the Exim Scrips issued on the basis of forged documents and consequently, rejecting the representation of the first respondent/petitioner dated 25-4-2006 is not correct in the eye of law. 36. He also relies on the decision in Commissioner of Customs (E.P.) v. Jupiter Exports - 2007 (213) E.L.T. 641 (Bom.) at 645 wherein at paragraph 23, it is observed thus : “With regard to the third question of law, namely, ‘whether the license holder or the transferee of the license obtained by manipulation and forging the documents for creating false records are entitled to import validly and legally and exempted from payment of duty?’. This question relates to the transferee. As such it cannot be allowed to be raised in this application, since the Commissioner has held that the transferees of the license were entitled to import and no import duty could be recovered from them. However, held that the import duty could be recovered from the respondent-petitioner. The Tribunal negatived this and correctly held that duty under Section 28 could only be recovered from ‘ a person chargeable to duty’ and that such a person would be that the importer in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w any involvement of the first respondent/petitioner and therefore, the Appellant/Bank may be directed to pay a sum of Rs. 8,83,400/- being the premium value of genuine Exim Scrips because of the fact that the appellants now are precluded to take a plea of doctrine of ‘promissory estoppel’ based on the reason, the right of the first respondent/petitioner has not been destroyed and his right to claim the amount by insisting the Appellant/Bank the said amount of Rs. 8,83,400/- is nothing but a legitimate expectation of a substantive benefit which is quite applicable to him by all means. 39. At this stage, we deem it appropriate to make a significant mention that ‘Estoppel is a rule whereby a party is precluded some previous act to which he was party or privy from denying a fact, whether in reality it is true or not. It is a rule of exclusion, making evidence of a relevant fact inadmissible. Estoppel prohibits disproof by the party relying upon it (the estoppel; denial) and thus dispenses with proof by the party relying upon it (the estopper asserter). No wonder ‘Estoppel is based on Equity and Good conscience and the object is to prevent fraud and secure justice between parties by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party, (b) the representation must be intended to create legal relations or affect the legal relationship to arise in the future, and (c) a clear foundation has to be laid in the petition before the Court with supporting documents. It has to be shown that the party invoking the doctrine has altered its position relying on the promise. It is possible for the Government, which, it is claimed, has made such a promise, to resile from its promise when public interest would be prejudiced if the Government were required to carry out the promise. The Court will not apply the doctrine in the abstract. The Government cannot claim to be exempt from liability to carry out the promise on some indefinite and undisclosed ground of necessity or expediency. The Government is required to place before the Court the entire material on account of which it claims to be exempt from inability. Mere claim of change of policy would not be sufficient to exonerate the Government from liability. It is only when the Court is satisfied that the Court would decide to enforce the promise against the Government. However, the burden is on the Government to show that itwould be inequitable to hold the Government boun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner was not permitted to realise the same on the footing that he had to repay an amount of Rs. 14,11,200/- in respect of first set of Exim Scrips. 48. In this connection, a closer perusal of the orders passed by a Division Bench of this Court in W.A. Nos. 294 to 297 of 1994 shows that the first respondent/petitioner had been directed to furnish adequate security of immovable property having clear and marketable title or bank guarantee which ever is convenient to him to the satisfaction of the second appellant (Joint Chief Controller of Imports and Exports, Madras) only on accepting the security, payment of Rs. 8,83,400/- would have to be made. The first respondent/petitioner had not obeyed the orders passed in W.A. Nos. 294 to 297 of 1994 dated 21-2-1994. 49. As against the orders passed in W.A. Nos. 294 to 297 of 1994 dated 21-2-1994 to which the first respondent/petitioner who is a party in the said proceedings, he has not taken any further proceedings in the manner known to law. In our considered view, as such the said orders have become final, conclusive and binding between the parties inter se as per Section 43 of the Indian Evidence Act. 50. Though, the first respondent/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere to honour the same public interest would certainly suffer and therefore, the appellants in W.A. No. 857 of 2009 are quite right in rejecting the representation of the first respondent/petitioner, viewed in this perspective, we are not in agreement with the observation of the learned single Judge in W.P. No. 23946 of 2006 to the effect that ‘the rights of the first respondent/petitioner have been secured by earlier orders of this Court to the effect that the Exim Scrips sold by them were genuine and it gives an automatic right for the first respondent/petitioner to claim the premium of 20% on the Exim Scrips sold by the third respondent/appellant in W.A. No. 511 of 2009 and therefore, the bank is bound to honour the promise held out by the earlier circular and further that the appellants are estopped from denying the rights of the first respondent/petitioner on the principle of promissory estoppel is well founded’ are not correct in our considered view. 53. Accordingly, we set aside the order passed in W.P. No. 23946 of 2006 dated 23-3-2009 in directing the Appellant/Bank to pay a sum of Rs. 8,83,400/- together with interest at the rate of 6% p.a. from the date of submission of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
