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1993 (3) TMI 374

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..... ce in the past several years from Tamil Nadu as per the exports and imports policy prevailing up to 31-3-1992, The export of the said products was on the basis of the licence issued by the Chief Controller of Imports and Exports, New Delhi. As a matter of fact, the export and import policy was announced for the period from April 1990 to March 1993. But, however, in March 1992, the export import policy was suddenly changed and a new policy was framed for 5 years commencing from 1-4-1992 and ending with 31-3-1997, Under the export import policy for the period from 1-4-1992 to 31-3-1997, (hereinafter referred to as new policy) a prohibition is introduced against export of red sanders in any form. The respondent made a representation to the authorities and wanted to know from them as to whether musical instruments and other chips made out of red sanders wood, which was being exported by the respondent, could be exported, even after the coming into force of the new policy. The second appellant sent a reply dated 14-5-1992 Stating that the export of red sanders wood in any form is prohibited under the new policy and that the respondent will not be entitled to continue export. Aggrieved b .....

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..... mport policy for the years 1990 to 1993, export of red sanders wood, was not prohibited. It is only Clause 7 of Part I of the Negative List of the new policy which prohibits export of wood and wood products in the form of logs, timber, stumps, roots, barks, chips, powder, flakes, dust, pulp and charcoal. Therefore, under the new policy, even chips, powder of red sanders are prohibited. Serial Number 44 of Part V of the Negative List of the new policy allows export of processed timber alone of all species, excluding sandalwood and red sanders wood. 4. Before the learned single Judge, who heard the writ petition, it was contended on behalf of the respondent herein, that the principle of promissory estoppel would apply to the case of the respondent and. the respondent having acted upon the representations made by the appellants in the earlier export and import policy which was to be in force till 31-3-1993 and suffered detriment by availing loans from financial institutions for the purpose of purchasing red sanders and manufacturing parts of musical instruments, it is not open to the appellants to change the export and import policy all of a sudden and prevent the respondent from f .....

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..... gainst executive actions of the Government, but not against legislature. In that decision the Full Bench of the Delhi High Court, further held that the export control orders issued under Section 3 of the Act are examples of delegated legislation and they can be amended from time td time and they being legislative in nature, the doctrine of promissory estoppel of cannot be invoked against the provision for such orders. 6. Per contra, Mr. R. Krishnamurty, learned Senior Counsel appearing for the respondent, reiterated the contentions urged on behalf of the respondent before the learned single Judge and submitted that the principle of promissory estoppel will apply to the case of the respondent, because on the representations made by the appellants in the earlier policy which was to be in force up to 31-3-1993, the respondent suffered detriment by purchasing red sanders wood after taking loans from financial institutions and by manufacturing parts of musical instruments and, therefore, it is not open to the appellants to change the policy even before 31-3-1993 and prevent the respondent from fulfilling its pre-ban contractual obligations. The learned Counsel for the respondent also .....

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..... imilar manner in dealing with the representation of the respondents. In the appeal before the Supreme Court, it was contended inter alia, on behalf of the Union of India that the Export Promotion Scheme was administrative in character, that it contained mere executive instructions issued by the Central Government to the Textile Commissioner, and created no enforceable rights in the exporters, who exported their goods in pursuance of the Scheme and that it imposed no obligations upon the Government to issue import certificates. The Supreme Court while repelling the above contention of the appellant, held as follows at page 727 : This case is, in our judgment a clear authority that even though the case does not fall within the terms of Section 115 of the Evidence Act, it is still open to a party who has acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though the promise is not recorded in this form of a formal contract as required by the Constitution. In the above decision, the Supreme Court while holding, that the Government is not exempt from liability to carry out the representations made by .....

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..... y Parliament never intended authority to make such rules. They are unreasonable and ultra vires . In paragraphs 76 and 77 of the above judgment, the Supreme Court further observes thus: A distinction must be made between delegation of a legislative function in the case of which the question of reasonableness cannot be enquired into and the investment by statute to exercise particular discretionary powers. In the latter case the question may be considered on all grounds on which administrative action may be questioned, such as, non-application of mind taking irrelevant matters into consideration, failure to take relevant matters into consideration, etc. etc. On the facts and circumstances of a case, a subordinate legislation may be struck down as arbitrary or contrary to statute, if it fails to take into account very vital facts, which either expressly or by necessary implication are required to be taken into consideration by the statute or, say, the Constitution. This can only be done on the ground that it does not conform to the statutory or constitutional requirements or that it offends Article 14 or Article 19(1)(a) of the Constitution. It cannot, no doubt, be done merel .....

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..... ition No. 794/86 had claimed that pursuant to the arrangement entered into between them and the State following the invitation by the State they had invested ₹ 1.68 crore in shape of plant and machinery and 63 lacs of rupees by way of land and buildings. The petitioner in the other two cases stated that investments had been made by them as well. The petitioners were invited to set up industries by assuring them supply of the raw material. They changed their position on the basis of representation made by the State and when the factories were ready and they were in a position to utilise the raw material, the impugned Act came into force to obliterate their rights and enabled the State to get out of the commitments. We are inclined to agree with the submissions made on behalf of the petitioners that the circumstances gave rise to a fact situation of estoppel. It is true that there is no estoppel against the legislature and the vires of the Act cannot be tested by invoking the plea but so far as the State Government is concerned the rule of estoppel does apply and the precedents of this Court are clear. It is unnecessary to go into that aspect of the matter as in our considered .....

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..... f the Act, whether such policy is considered as a governmental action taken in exercise of the statutory power, or as subordinate or the delegated legislation, the doctrine of promissory estoppel can be applied against the enforcement of the new policy on the facts and circumstances of a given case. 16. Coming to the facts of the present case, the materials on record go to show that the respondent had acted in pursuance of the representations contained in the earlier export and import policy, which was announced for the period from 1-4-1990 to 31-3-1993 to the effect, that the export of red sanders in any form was permitted and entered into contract with foreign buyers for the export of musical instruments parts made out of red sanders wood and under one such a contract entered into by the respondent with a foreign purchaser, products worth US Dollars 1,00,000/-were agreed to be exported and for which purpose an open and irrevocable letter of credit No. 41-2432445-031 dated 21-2-1992 was opened, the beneficiary being the respondent herein. The materials on record further disclose that pursuant to the said contract, as part fulfilment of the same, US Dollars 25,000/- worth of pro .....

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..... fter the trees are cut and converted into parts of musical instruments, as an ecological conservation measure. In view of the specific case of the respondent that the necessary manufacturing processes have been. completed and that the musical instruments parts made out of the red sanders wood are kept ready for export, it is not known how the refusal to issue licence for the export of the finished goods will help in maintaining or conserving the ecological balance in the area. In the above circumstances, we have no hesitation in accepting the contention of the learned counsel for the respondent that the new policy in so far as it prohibits export of finished goods which are ready for export is Unreasonable and arbitrary and it has no nexus whatever with the proclaimed object of the new policy. Therefore, the learned Judge is quite right in issuing a writ of mandamus directing the appellants to issue a licence for the export of the goods to the value of US Dollars 75,000/- against the Letter of Credit No. 41-2432445-031. 18. For all the reasons stated above, we cannot take exception to the view taken by the learned single Judge and we see no infirmity in the order of the learned .....

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