TMI Blog2009 (3) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 7-11-2008 was filed. The third respondent also filed a counter affidavit dated 22-9-2006. 3. It is seen from the records that the first respondent Union of India introduced a scheme for issue of exim scrips with effect from 4-7-1991 at the rate of 30% on the foreign exchange earned by the exporters by the issuance of a public notice No. 185 ITC dated 31-7-1991. The exim scrips were easily transferable and saleable. Thereafter, when the issuance of exim scrips were withdrawn, the State Bank of India was authorised to buy exim scrips at a premium of 20% of the sale value of exim scrips. 4. On 27-3-1992, the first respondent designated branches of the State Bank of India (third respondent) stating that the exim scrips will be purchased by the notified list of branches and the bona fide holders of the exim scrips were directed to submit an application and the branches of the bank were authorised to straightaway purchase the scrips upto the face value of Rs. 5 lakhs and the premium amount will be paid to the holder of the scrips. The dates which were given were extended from time to time. On 5-6-1992, the first respondent issued a circular extending the date upto 31-7-1992 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts director and imposed a fine of Rs. 2,25,000/-. In that case, the petitioner was arrayed as a witness (P.W. 16). In that case, the accused also filed a petition for pleading guilty and prayed for leniency on the quantum of punishment. 8. Therefore, it was stated that the first set of exim scrips to the value of Rs. 14,11,200/- purchased by the petitioner from the said Ayisha Exports and got encashed, was obtained by submitting bogus and forged documents. 9. However, the petitioner filed W.P. No. 18382 of 1992 before this court for the issuance of a writ of mandamus to direct the State Bank to pay a sum of Rs. 8,83,400/- in respect of the genuine exim scrips purchased by the petitioner. The writ petition was heard along with other writ petitions filed by other individuals. The following passages found in paragraph 7 may be usefully extracted below :- 7......The claim of the petitioners that they were bona fide purchasers and therefore payments to them cannot be invalidated is not an issue on which I am rendering a judgment in this case. I make it clear, I am concerned in these writ petitions only with regard to the exim scrips purchased by the petitioners from genuine expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to be withheld, nor can it be withheld by the appellants. Therefore, we are of the view that safeguarding the interest of the appellants, the amounts payable under the present exim scrips can very well be directed to be paid. Accordingly, we dispose of the writ appeals in the following terms : If the petitioners as detailed below, furnish adequate security of immovable property having clear and marketable title or bank guarantee whichever is convenient to the writ petitioners, to the satisfaction of the second appellant (Joint Chief Controller of Imports and Exports, Madras) the appellants shall on accepting such security, pay the amounts payable on the present exim scrips. W.P. No. Security of immovable property for Appellants shall pay to petitioners 17894/92 Rs. 12,58,200/- Rs. 19,47,315/- 18294/92 Rs. 13,68,900/- Rs. 15,94,400/- 19205/92 Rs. 10,44,900/- Rs. 35,000/- 18382/92 Rs. 14,11,200/- Rs. 8,83,400/- The order of the learned Single Judge stands modified accordingly. 11. Thus it can be seen the exim scrips purchased by the petitioner were also referred to by the Division Bench. Subsequent to the Division Bench order dated 21-2-1994, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second respondent has directed the petitioner to pay Rs. 14,11,200/- together with interest within seven days from the date of the said order to enable the second respondent to consider the petitioner s request for payment of premium as against the present 20 scrips for the value of Rs. 8,83,400/-. 15. Mr. Habibullah Badsha, the learned Senior counsel contended that the respondents are bound to make the payment on the principle of equitable estoppel, it is also stated that the second respondent has no power to direct the third respondent not to honour the circular issued by the RBI and such an action is violative of Articles 14 and 19(1)(g) of the constitution. He also submitted that the respondents cannot go behind the order passed by this Court both by the learned Judge as well as the Division Bench in rejecting the claim of the petitioner. The respondents though sought for a set-off claim, the legal basis for such a claim was not revealed. No provision of law has been referred to for making a counter-claim. If for some reason the first set of scrips was found to be not genuine, then that should not have been honoured but should have been straightaway rejected. In the alternat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate shall not only be expressed by reason of notifications issued under the statutory provisions but also under the executive instructions. The appellants had undoubtedly been enjoying the benefit of (sic exemption from) payment of tax in respect of sale/consumption of electrical energy in relation to the cogenerating power plants. Para 122. Unlike an ordinary estoppel, promissory estoppel gives rise to a cause of action. It indisputably creates a right, it also acts on equity. However, its application against constitutional or statutory provisions is impermissible in law. This aspect of the matter has been considered in State of Bihar v. Project Uchcha Vidya, Sikshak Sangh stating: (SCC pp. 575-76, para 77) 77. We do not find any merit in the contention raised by the learned counsel appearing on behalf of the respondents that the principle of equitable estoppel would apply against the State of Bihar. It is now well known, the rule of estoppel has no application where contention as regards a constitutional provision or a statute is raised. The right of the State to raise a question as regards its actions being invalid under the constitutional scheme of India is now well recog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of U.P. this Court observed: (Nestle India Ltd. case, see pp. 475-76, para 29) 29. As for its strengths it was said: that the doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise is intended to create legal relations or affect a legal relationship which would arise in future. The Government was held to be equally susceptible to the operation of the doctrine in whatever area or field the promise is made -contractual, administrative or statutory. To put it in the words of the Court: The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable where a right has already accrued; for instance, in a case where the right to exemption of tax for a fixed period accrues and the conditions for that exemption have also been fulfilled, the withdrawal of that exemption cannot affect the already accrued right. Para 128. In MRF Ltd. it was held that the doctrine of promissory estoppel will also apply to statutory notifications. Para 129. We may also notice an interesting observation made by Beg, in Madan Mohan Pathak v. Union of India wherein the learned Judge in his concurrent judgment while striking down the Life Insurance Corporation (Modification of Settlement) Act, 1976, opined: (SCC p.87, para 34) 34. Furthermore, I think that the principle laid down by this Court in Union of India v. Indo-Afghan Agencies Ltd. can also be taken into account in judging the reasonableness of the provision in this case. It was held there (at SCR p.385) : Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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