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Directorate General of Foreign Trade Versus M/s. Masumi Overseas Pvt. Ltd.

2015 (9) TMI 195 - DELHI HIGH COURT

Amendments to petition – Cancellation of Importer-Exporter Code no. – Certain disputes arose between respondent and STC – STC filed summary suits for recovery against respondent against which petition was filed – Meanwhile Addl. DGFT issued Show Cause Notice to respondent for having prima facie violated provisions of Foreign Trade (Development and Regulation) Act, 1992 and was called upon to show cause why its Importer- Exporter Code No.(IEC) should not be cancelled – Pursuant to which responden .....

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adings as provided in CPC would be guiding factor while adjudicating applications for amendment in writ petition – Amendment now sought by respondent has effect of changing entire writ petition substantially – New facts and issues are being added to petition – Amended petition would virtually tantamount to substitution of altogether new case when compared to original case – It is appropriate that respondent challenges Show Cause Notice in different proceedings and not mix up facts and submission .....

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by the learned Single Judge. By the impugned order the application filed by the respondent under Order VI Rule 17 CPC for amendment of the petition was allowed. 2. Respondent filed the writ petition seeking a Writ of Certiorari for setting aside the communication/order dated 25.3.2011 issued by the appellant putting the respondent on the Denied Entity List (DEL) issued by the appellant. It was the contention of the respondent in the writ petition that the respondent had entered into an agreement .....

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Exporter as defined under section 2(20) of the Customs Act, 1962 and the role of the respondent was that of a Shipper . 3. It was further urged by the respondent that certain disputes arose between the respondent and STC. It is the contention of the respondent that after 2009 STC has not cleared the dues of the respondent despite repeated requests. The respondent states that it invoked the arbitration clause as per the agreement. Different proceedings have been filed by both STC and the respond .....

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the order dated 25.3.2011 was never supplied to it and no opportunity whatsoever was given to the respondent to show cause. Hence, the writ petition was filed. 4. During pendency of the writ petition it appears that on 27.3.2015 the Additional Director General of Foreign Trade, Mumbai issued a Show Cause Notice to the respondent for having prima facie violated the provisions of The Foreign Trade (Development and Regulation) Act, 1992. The respondent was called upon to show cause why its Importe .....

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application holding that the amendment sought will not change the nature of the petition and is formal in nature. 7. We have heard learned counsel for the parties and perused the record. The learned Additional Solicitor General who has appeared for the appellant has argued that the amendment application was mischievous, malafide and an abuse of the process of Court. He submits that the impugned Show Cause Notice dated 27.3.2015 is issued by the Bombay office of the appellant and in case the sai .....

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t amendment which has now been allowed by the impugned order seeks to completely change the nature of the writ petition which would cause grave prejudice to the appellant and is impermissible in law. 8. Learned counsel appearing for the respondent, however, submits that the amendment which was allowed permits the respondent to impugn the Show Cause Notice dated 27.3.2015 which is based on the same set of facts as the earlier impugned order dated 25.3.2011. 9. We may first have a look at the rele .....

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etition is taken on record. The application stands disposed of. 10. The original relief as claimed by the respondent in the writ petition reads as follows:- i) Issue a writ of certiorari thereby setting aside the impugned communication/order dated 25.3.2011 issued by the respondent which has never been supplied to detenue but is clear from the DEL status obtained from the website of the respondent. 11. A perusal of the writ petition as originally filed by the respondent shows that the case of th .....

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order after giving an opportunity of hearing. It is also contended that the dispute between the respondent and STC is a contractual dispute on which suits/arbitration proceedings have been initiated. 12. A perusal of the Show Cause Notice dated 27.3.2015 now issued to the respondent which is sought to be added as an impugned document to the petition, shows that it notes the following reasons to cancel the IEC of the respondent:- a. Committing economic offence under the Negotiable Instruments Ac .....

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is one of the most important government canalizing agency for exports and imports. c. You have failed to realize an amount of ₹ 17.93 Crores from various foreign importers. Since you have failed to give the factual details on when the said amount was supposed to be realized and whether you have obtained any extension for the period of realization after the due period of realization was over and if so from which authority the said extension was obtained, you have created a position which g .....

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15.12.2006 has bounced; b) There is reason to believe that while you had entered in to an agreement with State Trading Corporation wherein you had taken full responsibility in terms of clause 10 (b)(v) of the said agreement to arrange as shipper, the realization of the export proceeds from the foreign buyer, you failed to fulfill this commitment and, therefore, acted gravely prejudicial to the interest of State Trading Corporation which is engaged in imports and exports and therefore, violated .....

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points towards an economic offence committed by you under FEMA and have, therefore violated provisions of Section 8(a) of Foreign Trade (D&R) Act. 1992. 14. In the aforesaid factual matrix the Show Cause Notice seeks to cancel the Importer Exporter Code of the respondent. 15. A perusal of the application filed by the respondent for amendment shows that detailed amendments are now sought to be added to explain as to why the Show Cause Notice dated 27.3.2015 is erroneous and is liable to be q .....

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invoke the insurance policy to recover the money due. LPA 553/2015 Page 8 of 11 (c) Afterwards the respondent requested STC to reconcile accounts and the respondent also invoked the arbitration clause. (d) STC in a malafide manner, despite knowing that because of bonafide disputes the respondent had sent a letter regarding stop payment of PDCs which have been given on secondary securities, sought to encash the said post dated cheques. (e) STC was not interested to proceed with the arbitration p .....

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context of amendments of pleadings in a suit the legal position is well settled. Amendments which seek to add entirely new cause of actions which virtually amount to substitution of a new plaint or a new cause of action in place of what was originally there, would normally be refused by a Court. Reference in this context may be had to the judgment of the Supreme Court in Ganesh Trading Co. Vs. Moji Ram, AIR 1978 SC 484 where the Supreme Court in paragraph 5 held as under:- 5. It is true that, if .....

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n an essential fact does not, by itself, constitute a new cause of action… 20. Reference in the above context may also be had to Abdul Rehman and Anr. vs. Mohd. Ruldu and Ors., (2012) 11 SCC 341 and State of Madhya Pradesh vs. Union of India AIR 2012 SC 2518. 21. No doubt the Code of Civil Procedure does not apply to writ proceedings under Article 226 of the Constitution of India. Section 141 of CPC provides that the procedure provided in the Code regarding a suit shall be followed in all .....

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urt held as follows:- 9. We have not been able to appreciate the anxiety on the part of the different courts in judgments referred to above to apply the provisions of the Code to Writ Proceedings on the basis of Section 141 of the Code. When the Constitution has vested extraordinary power in the High Court under Articles 226 and 227 to issue any order, writ or direction and the power of superintendence over all courts and tribunals throughout the territories in relation to which such High Court .....

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