TMI Blog1975 (10) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... n shell, with a view to increase export and to augment the foreign exchange earnings for the country. According to the Scheme the registered exporters of the aforesaid commodities were to be given cash assistance against exports of walnut, kernel as well as shell, at the rate of 5 per cent of the f.o.b value on exports made during the period from 1-10-1972 to 30th September, 1975; in addition to the above 5 per cent cash assistance an additional cash assistance of 2 per cent. of the f.o.b value was also to be allowed to the individual registered exporter on exports made during the period from 1-10-1972 to 30th September, 1973, provided the f.o.b value of the exports during the aforesaid period exceeded by at least 10 per cent. the f.o.b value of the exports during the immediately preceding 12 months period i.e 1-10-71 to 30-9-72. This additional 2 % cash assistance of the f.o.b value was also, similarly, to be given for the period from 1-10-73 to 30-9-74 provided the f.o.b value of exports during that period exceeded by at least 10 per cent. the f.o.b value of the exports during the immediately preceding twelve months period. On the same basis the same additional assistance of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pped from going back on that representation. It has also been averred that an equity has been created in favour of the petitioner firms and against the respondents by virtue of the promises made in the scheme which are enforeable at law on the basis of doctrine of equitable estoppel. The petitioners also filed supplementary affidavits on 23rd May, 1974, by which they placed on record the statements of exports made by them during the period of October 1973 onwards and the period preceding October 1973 with a view to show that they had qualified for receiving the cash assistance. Reply to the petition was filed on the affidavit of Shri S.N Gupta, Joint Director (Export Promotion) in the Ministry of Commerce, Government of India on behalf of respondent No. 1. Preliminary objections were taken to the effect that no legal or fundamental rights of the petitioners had been infringed, and the writ was not maintainable. It was also maintained in the reply affidavit that the cash assistance scheme is in the nature of a concession and the same cannot be enforced by way of the writ petition. It was also stated as a preliminary objection that the petitioners had failed to show any actual loss a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been unjust to the other sections of the society, for whose welfare the public money thus saved could be utilized. Such continuance, it is maintained, would have been against the principles of social justice which has come to be accepted as a just principle by the courts. It was denied that the petitioners have suffered any actual loss in the trade directly as a result of the withdrawal of the cash assistance scheme. It was also stated in the reply affidavit that due opportunity was given to the exporters, through their association M/s. Upper India Exporters Association, to represent their case for continuance of cash assistance and the scheme was withdrawn after the period of filing the representation had expired. Since no meaningful representation was made it was deemed proper to withdraw the cash assistance from the beginning of the new session. The scheme withdrawn by order of the Government of India dated 26th September, 1973, was for the period 1-10-1973, onwards. It was also stated in the reply affidavit that since the cash assistance scheme is in the nature of a concession, which was entirely in the discretion of the Government it could be extended or withdrawn at any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not involve any disputed question of facts, and that by means of the writ petition the petitioners were only seeking a direction that the Government should honour the undertaking given, which is a matter essentially of maintaining the public standards. The reply to the other preliminary objection, it is urged is contained in the arguments in support of the petition. 6. In reply Mr. A.D Singh, the learned Deputy Advocate General has vehemently argued that in the view of the preliminary objections the petition needs to be dismissed. It is argued that the effect of granting the writ petition would be that a direction would have to be given to the Government to show indulgence to the petitioner in the matter of granting concessions and in view of the settled law by their Lordships of the Supreme Court in AIR 1967 SC 993 the grant of concession cannot be enforced by means of a writ petition. It is also urged that the doctrine of equitable estoppel cannot apply to Government when discharging its governmental functions. The petition, it is further argued, involves the determination of disputed question of facts as to whether or not any loss has been suffered by the petitioners and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment of the recent times and this new type of estoppel appears to be something beyond the ordinary rule of estoppel as envisaged under Section 115 of the Evidence Act. Their Lordships of the Supreme Court considered the question of promissory estoppel or doctrine of equitable estoppel in the case of Union of India v. Anglo Afghan Agencies Ltd., AIR 1968 SC 718. In that case, the Textile Commissioner published a scheme called the Export Promotion Scheme providing incentives to exporters of woollen goods. The scheme had been extended in relation to exporters of woollen goods to Afghanistan. The representation contained in the export promotion scheme was to the effect that the exporters would be entitled to import raw material of the total amount equal to 100 per cent. of the f.o.b value of the exports made by them. Relying on the terms and representations contained in the scheme, M/s. Anglo Afghan Agencies exported certain goods to Afghanistan and claimed import-entitlement certificates for the f.o.b value of the woollen goods exported to Afghanistan. While granting the Import Entitlement Certificate, the Textile Commissioner imposed certain cuts, and did not grant the import en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rowlatt J. in 1921-3 KB 500 but it was unnecessary for the decision because in 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, 1934 AC 176 at 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. and on its basis their Lordships of the Supreme Court held that the Government was bound by estoppel. However dealing with the merits of the Anglo Afghan case their Lordships observed: Reduction in the amount of import certificate may be justified on the ground of misconduct of the exporter in relation to the goods exported, or on special considerations such as difficult foreign exchange position or other matters which have a bearing on the general interests of the state. In the present case the scheme provides for grant of import entitlement of the value, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing application of the doctrine of promissory or equitable estoppel. The doctrine of equitable estoppel or promissory estoppel in its application to the Government enunciated and approved by their Lordships of the Supreme Court in the authorities quoted above, has undergone some radical changes. Generally speaking, the rethinking about the application of doctrine of Estoppel has been to the effect that the State is not subject to the application of the doctrine of estoppel to the same extent as is an individual or a private corporation, for otherwise, it might render the State helpless to assert its powers while discharging its governmental functions. In M. Ramanathan Pillai v. State of Kerala, (1973) 2 SCC 650 (656) : (AIR 1973 SC 2641) Ray, C.J speaking for the court held, as a general rule, that the doctrine of estopple will not be applied against the State in its governmental, public or sovereign capacity. An exception, however, it was stated arises in the application of estoppel to the State where it is necessary to prevent fraud or manifest injustice. Their Lordships quoted with approval paragraph 123 appearing at page 783 of the American Jurisprudence 2d, viz. Generally a S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs, and, therefore, it was argued that, so far as the company is concerned, the agreement not to legislate should operate as equitable estoppel against the State. We do not see how an agreement of the Government can preclude legislation on the subject. The High Court has rightly pointed out that the surrender by the Government of its legislative powers to be used for public good cannot avail the company or operate against the Government as equitable estoppel. 14. From a discussion of the above cited authorities which are latest in point of time it clearly emerges that the doctrine of estoppel in its application to the State has undergone some radical rethinking since the judgment in Anglo Afghan case, AIR 1968 SC 718 and the Century Spinning case, (1970) 1 SCC 582 : AIR 1971 SC 1021 (supra). Indeed, the judgments in the Anglo Afghan case and Century Spinning case (supra) have not been overruled by their Lordships, but the scope of the application of the doctrine of estoppel has certainly been narrowed down. Now, the doctrine of equitable or promissory estoppel would have no application to the public, governmental or sovereign action of the State except to prevent manifest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it clashes with the interest of the public at large, except where it is necessary to prevent fraud or manifest injustice and to that extent, in my opinion, the doctrine enunciated in the Anglo Afghan case, AIR 1968 SC 718 (supra) and the Century Spinning case, (1970) 1 SCC 582 : AIR 1971 SC 1021 (supra) has been narrowed down by their Lordships by their subsequent pronouncements referred to above in the judgment. So far as the judgment of Punjab and Haryana High Court in Amrit Banaspati Co. Ltd. v. State of Punjab, 1975 Pun LR 557, is concerned that authority is clearly distinguishable and not at all applicable to the facts of the present case. Apart from the fact that Muni Lal Verma, J., of the Punjab and Haryana High Court has not considered the subsequent authorities of the Supreme Court (presumably the same were not brought to the notice of his Lordship) no argument seems to have been raised in the Punjab and Haryana High Court on behalf of the State to this effect that there cannot be an estoppel against the Government while functioning in the public, governmental or sovereign capacity as has been canvassed before me, and no decision on that point was, therefore, given. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to offset the loss, which exporters were likely to suffer on being induced to export and earn the foreign exchange, which it is well known is very badly needed for the various projects undertaken by the State, the withdrawal of the scheme on finding that the exporters were not likely to suffer any losses due to the favourable position in the international market cannot but be held justified. Ours is not a country with unlimited financial resources and the courts of law cannot ignore this fact. The utilisation of the meagre financial resources by the Government therefore, has to be left to the judgment of the Government which is the best Judge of the need of its people. The courts will only bind the Government by its promises to prevent manifest injustice or fraud and will not make the Government a slave of its policy for all times to come when the Government acts in its governmental, public or sovereign capacity. In its commercial activity the position would, of course, be different. In the present set up of the country, when finances are required for starting and completing various projects in the interest of the public at large, the Government cannot be held bound by a represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the scheme and opposed the withdrawal of the scheme. Even if no notice was specifically given but the petitioners somehow or the other acquired the knowledge that the Government had under contemplation that withdrawal of the scheme and the petitioners opposed such withdrawal, it would be sufficient compliance with the rules of natural justice especially when the withdrawal of the scheme is not actuated by any malice on the part of the Government. 18. The petitioners have attempted to show that the withdrawal of the scheme caused them prejudice by giving various figures in the annexures attached with the supplementary affidavits. These figures, cannot advance the case of the petitioners because there is not an iota of evidence to show that the petitioners have suffered any actual loss subsequent to the withdrawal of the scheme which may necessitate the issuance of a direction to the Government to compensate them for the loss suffered. As already observed above the loss which the petitioners seem to have suffered is the denial of additional profit. In the reply affidavit it has been specifically mentioned that no loss has been suffered by the petitioners, and therefore, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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