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TMI Blog1967 (11) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... Entitlement Certificate for Rs. 1,99,459 only/-. Representations made by the respondents to the Deputy Director and to the Union Government that they be granted Import Entitlement Certificate for the full f.o.b value- of the goods exported failed to produce any response. But in a petition under Art. 226 of the Constitution moved before the High Court of Punjab by the respondents for a writ or an order directing the Union of India, the Textile Commissioner and the Joint Chief Controller of Imports and Exports, Bombay, to issue a licence "permitting import of wool-tops, raw wool, waste and rags of the value of Rs. 3,04,012-73 nP", the orders of the Textile Commissioner and the Central Government were set aside. The High Court held that the Export Promotion Scheme specifically provided for granting certificates to import materials of the "value equal to 100% of the f.o.b. value of the goods exported", and the respondents were entitled to obtain import licences for an amount equal to 100% of the f.o.b. value, unless it was found on enquiry duly made under el. 10 of the Scheme that the respondents had by "over- invoicing" the goods disentitled themselves to the import licences of the fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce or a customs clearance permit granted by the Central Government or by any officer specified in (2) If, in any case, it is found that the goods imported under a licence do not conform to the description given in the licence or were shipped prior to the date of issue of the licence under which they are claimed to have been imported, then, without prejudice to any action that may be taken against the licence under the Customs Act, 1962 (52 of 1962), in respect of the said importation, the licence may be treated as having been utilised for importing the said goods." The Central Government also issued periodical orders which were published in biannual official publications setting out the policy governing the grant of import and export licences. By paragraph 52 of the notification published in the Gazette Extraordinary dated December 29, 1954, it was declared that in certain items there was "direct and intimate" inter-relationship between imports and exports, and since the ability to export some of those manufactured goods depended largely on the facility with which the exporter or the manufacturer could procure the basic raw materials required in the manufacture, a scheme had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, shall issue the license." Clause 10 provided: "In case where the Textile Commissioner considers that the declared value of the goods exported is higher than the real value of the goods, the matter may be investigated further by calling for further evidence, e.g. purchase vouchers and any other corroborative evidence to facilitate scrutiny. It shall be the duty of the registered exporter to furnish such evidence as is called for in this connection. On the basis of his enquiry, the Textile Commissioner may assess the correct value of the goods exported and issue an entitlement certificate on the basis of such assessed value." By notification dated January 1, 1963, the Scheme was extended to exports of woollen textiles and woollen goods to Afghanistan with effect from October 1, 1962. It was urged on behalf of the Union of India that the Export Promotion Scheme was administrative in character and the recital therein that the exporters will be entitled to import certificates equal to 100% of the f.o.b. value of the exports was a mere instruction issued by the Union Government to the Textile.Commissioner: it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty conferred upon the Textile Commissioner as representative of the Government may first be examined. Counsel for the Union said that the import and export policy of the Government is based on availability of foreign exchange requirement of goods of foreign origin for internal consumption, economic climate in the country, and other related matters, and has in its very nature to be flexible, and on that account the power of the Government to modify or adjust it as the altered circumstances necessitate, cannot be restricted on the ground that promises made by the Government in different situations are not carried out, however amoral that claim may appear to be According to Counsel the Government is the sole judge of the validity of its actions in matters relating to Import and Export Policy, and the citizens who have acted on the representations of the Government have only such rights as the Government in its wisdom chooses to recognise or accept at any given time. He relied in support of his submission upon the doctrine of "executive necessity" on which Rowlatt J, relied in Rederiaktiebolaget Amphitrite v. The King.( [1921] 3 K.B. 500) In that case during the First World War certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no damages could be awarded. In Robertson v. Minister of Pensions(1), Denning, J. observed at p. 231: "The Crown cannot escape by saying that estoppels 'do not bind the Crown for that doctrine has long been exploded. Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so. as to fetter its future executive action. That doctrine was propounded by Rowlatt J., in Rederiaktiebolaget Amphitrite v. The King [1949] 1 K,B- 227 but it was unnecessary for the decision because the statement there was not a promise which was intended to be binding but only an expression of intention. Rowlatt, J., seems to have been influenced by the cases on the right of the Crown to dismiss its servants at pleasure, but those cases must now all be read in the light of the judgment of Lord Atkin in Reilly v. The King--(1954) A.C. 176, 179). In my opinion the defence of executive necessity is of limited scope. It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract." Denning, I was dealing with a case of a serving army officer, who wrote to the War Office regarding a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment Notification dated December 29, 1954, must be deemed to be issued under s. 3 of the Imports and Exports Control Act, 1947, since the Schemes have been published in the Gazette of India, and contain general provisions relating to the grant of licences and impose restrictions upon the rights of citizens to carry on business in certain commodities. Being general provisions, restricting the rights of citizens to carry on business in certain commodities, the Schemes were, it was said, legislative in character, and the obligations imposed or the sanctions prescribed thereby must on that account be deemed to be enforceable by command of the Court. cannot be assumed merely because the Import Trade Policy is general in terms and deals with the grant of licences for import of goods and related matters, it is statutory in character. The Imports and Exports (Control) Act, 1947, authorises the Central Government to make provisions prohibiting, restricting or otherwise controlling import, export, carriage etc. of the goods and by the Imports (Control) Order, 1955, dated December 7, 1955, and by the provisions which were sought W, be repealed restrictions were already imposed. The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have 'been assumed in certain eases, that it is. executive in character, but even so it has been held that when it is declared under an export policy that a citizen exporting goods shall be entitled to certain import facilities, in appropriate cases the Courts have the power to direct the concerned authority to make that facility available to the citizen who has acted to his prejudice acting upon the representation in the policy, and has been denied that facility. In M/s Ramchand Jagadish Chand v. Union of India and Ors.( [1962] 3 S.C.R. 72) this Court was called upon to decide whether a person who had, pursuant to a representation in the Export Promotion Scheme that exporters will be awarded import licences upto a certain percentage of the export value of the goods was entitled to call upon the Union to issue in his favour import entitlement of the value of the goods exported. Under the 'Export Promotion Scheme" relating to artificial silk fabrics it was represented that with a view to stimulate exports of Indian "artsilk fabrics" etc. it was decided to grant import licences for the import of permissible varieties. of artsilk yarn upto the percentages specilied. The Scheme empow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was therefore expressed that if the power granted to the Controller was arbitrarily exercised, it was open to judicial review. In Ramchand Jagadish Chand's case([1962] 3 S.C.R. 72) a Committee was appointed to determine the value of the goods exported by the exporter and the Committee scrutinised the claim of the exporter and found that the rates of some of the items could not be accepted as reasonable, and recommended an import licence approximately of the value of 45 per cent of the goods exported. The exporter was given a right to make a representation and to be heard before the order was passed to his prejudice. In Probhudas Morarjee Rajkotia and others v. Union of India and others(A.I.R. 1966 S.C. 1044), a Special Exports Promotion Scheme for Engineering goods was promulgated by the Government of India. To give incentives to the manufacturers of engineering goods in India to export their products outside India, it was declared by the Scheme that import licences will be granted to exporters for materials upto the specified percentage of the f.o.b. value of the goods exported. An exporter claimed that he had exported goods of the f.o.b. value exceeding Rs. 9.44 lakhs and demande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake a division of the quota rights between the partners. He also applied to the Joint Chief Controller who was the licensing authority for grant of a licence for the period January to June 1957 but in the application he could not mention his share in the quota right because the Chief Controller had not before the date of the application approved of the division of the quota right. After expiry of the period for which the licence was to be issued, the Chief Controller informed the applicant that instructions had been issued to the Joint Chief Controller about the division of the quota right. But the Joint Chief Controller declined to grant a licence to the applicant on the ground that the order of the Chief Controller had no retrospective operation. The applicant succeeded in obtaining an order from the High Court of Madras directing the Joint Chief Controller to grant a licence. This Court confirmed the order of the High Court. It was held that the licensing authority had to deal with the application for a licence on the footing that the approved quota was given to the partners of the dissolved firm from the date of dissolution and the agreement divide, and could not refuse the lic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total amount equal 100% of the f.o.b. Value of the exports. Machinery for scrutiny of the applications and the issue of import entitlement was provided by s. 9 of the Scheme, and the Textile Commissioner was invested with the authority to determine whether in any given case the declared value of the goods exported was higher than the real value of the goods and to, assess-the correct value of the goods exported and to issue import certificates on the basis of such assessed value. Undoubtedly the Textile Commissioner had authority, if it was found that a fraudulent attempt was made to secure an import certificate in excess of the true value of the goods exported, to reduce the import certificate. But the authority vested in the Textile Commissioner by the rules even though executive in character was from its nature an authority to deal with the matter in manner consonant with the basic concept of' justice and fair-play: if he made an order which was not consonant with the basic concept.s of justice and fair-play his proceeding was open to scrutiny and rectification by the Courts. The Textile Commissioner acted upon a report of the Committee appointed by him, and before that Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of the acts done by the exporters to their prejudice relying upon the representation. This principle has been recognised by the Courts in India and by the Judical Committee of the Privy Council in several cases. In The Municipal Corporation of the City of Bombay v. The Secretary of State for India in Council(I.L.R. 29 Bom. 580), it was held by the Bombay High Court that even though there is no formal contract as required by the statute. the Government may be bound by a representation made by it.' In that case in answer to a requisition by the Government of Bombay addressed to the Municipal Commissioner to remove certain fish and vegetable markets to facilitate the construction of an arterial road, the Municipal Commissioner offered to remove the structures if the Government would agree to rent to the Municipality other land mentioned in his letter at a nominal rent. The Government accepted the suggestion and sanctioned the application of the Municipal Commissioner for a site for tabling and establishing the new markets. The Municipal Commissioner then took possession of the land so made available and constructed stables, workshops and chawls thereon. Twenty-four years thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of private owners under arrangements with them. It was held that the plaintiffs became proprietors of the canal and entitled to' have the waters of the Sutlej admitted into it so long as it was used for the purpose for which it was originally designed. Similarly in The Ganges Manufacturing Co. v. Surujmull (I.L.R. 5 Cal. 669), Garth C.J., observed that a man may be estopped not only from giving particular evidence. but from doing any act or relying upon any particular argument or contention, which the rules of equity and good conscience prevent him from using as against his opponent. Counsel for the Union invited our attention to the observations made by Patanjali Sastri J., in Collector of Bombay v. Municipal Corporation of the City of Bombay and others ([1952] S.C.R. 43). The learned Judge observed that equity cannot be enforced so as to violate an express statutory provision, and he was therefore unable to share the view expressed by Jenkins C.J. in The Municipal Corporation of the City of Bombay v. The Secretary of State for India in Council(supra)). In Collector of Bombay v. Municipal Corporation of the City of Bombay and others(a) the facts were these: Acting upon a repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of equity. 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 be the judge of its own obligation to the citizen on an ex parte appraisement of the circumstances. in which the obligation has arisen. We agree with the High Court that the impugned order passed by the Textile Commissioner and confirmed by the Central Government imposing cut in the import entitlement by the respondents should be set aside and quashed and that the Textile Commissioner and the Joint Chief Controller of Imports and Exports be directed to issue to the respondents import certificates for the total amount equal to 100% of the f.o.b. value of the goods exported by them, unless there is some decision which fails within cl. 10 of the Scheme in question. The facts which give rise to. the other appeals are substantially the same as the facts in Civil Appeal No. 885 of 1967, except that in four out of those appeals the exporters had appeared before the Committee appointed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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