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TMI Blog2024 (8) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... tate Bank of India, commercial Branch, vasco da Gama Goa, to the petitioner along with all previous original bank guarantees. 2. The facts of the case in brief are thus: - The petitioner is a private Limited company registered under the companies Act, 1956. The petitioner is engaged in the business of mining, shipbuilding and allied activities. Relying upon the original Exim policy, 1988-91 and acting upon the said policy, the petitioner entered into a contract with one NKK corporation, Japan on 07.02.1990 for the export of processed iron ore, which was not an ineligible item in Appendix 12 under the Exim policy, 1988-91. However, the petitioner actually exported the processed iron ore and realised NFE earnings of Rs. 52,00,51,848/- between the period April, 1990 to March, 1991 during the new Exim policy. The petitioner applied for a grant of additional licence on 23.07.1992. The same came to be rejected by the Assistant chief controller of Imports and Exports on the ground that there was no provision for grant of an additional licence. In an appeal preferred by the petitioner, the Joint chief controller of Imports and Exports remanded the atter to the Assistant chief controller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director of Foreign Trade dated 05.10.1994, and remitted the matter to the ADGFT to consider the question of the petitioner's eligibility for an additional licence or in lieu thereof the petitioner is entitled to 20% premium. After remand, the second appellate authority again dismissed the appeal on the ground that the application filed by the Appellant for grant of additional licence was barred by limitation. 6. Aggrieved by the decision of the Second Appellate Authority, the petitioner filed Writ Petition No. 286/1996. By judgment and order dated 30.01.2001, the writ petition was allowed and the order of the ADGFT dated 12.01.1996 was quashed and set aside. 7. The respondents challenged the judgment dated 30.01.2001 of this Court before the Supreme Court by filing SLP. When the said matter came up for hearing on 27.08.2001, the Supreme Court granted leave in the matter and directed the petitioner to furnish a bank guarantee to the respondents for the amount due i.e. Rs. 1,21,69,200/- along with interest and on furnishing of the said bank guarantee. By order dated 09.09.2002, the Supreme Court directed the petitioner to give an undertaking that if the bank guarantee is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he process of closing the Financial Year end activities of April-March 2023. However, the office of ADGFT through its letter dated 24.04.2023 did not accede to the request of the petitioner for an extension of time and immediately directed the petitioner to pay the amount due failing which necessary action will be taken under the Foreign Trade (Development and Regulation) Act (FT Act for short). 12. On 08.05.2023, the petitioner informed the respondent that the petitioner has made payment of the amount of Rs. 1,21,69,200/- via RTGS dated 04.05.2023. By the same letter, the petitioner requested for an appointment with DGFT for clarification on the interest part of the subject matter. The office of the ADGFT vide letter dated 29.05.2023 informed the petitioner that they can avail personal hearing with the Deputy Director General on 16.06.2023. By letter dated 29.05.2023, the petitioner requested the office of the ADGFT that the petitioner has been in a bonafide manner complying with all the conditions which were imposed on them by the office of DGFT from time to time. In view of the same, a request was made for waiving off the interest as stated in the letter dated 24.03.2023 and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicating Authority'. Section 2 (a) defines "adjudicating authority ' means the authority specified in, or under, Section 13. Section 13 says that any penalty may be imposed or any confiscation may be adjudged under this Act by the Director-General or subject to such limits as may be specified, by such other officer as the Central Government may, by notification in the Official Gazette, authorise in this behalf. Thus, an appeal shall lie under Section 15 of the FT Act, if any penalty is imposed or any confiscation is adjudged under the Act, by the adjudicating authority. 16. The question is whether the demand for interest can be subject matter for adjudication by the adjudicating authority. The provisions of Chapter IV of the FT Act deal with search, seizure, penalty and confiscation. Section 1 1 provides for contravention of provisions of the FT Act, rules, orders and foreign trade policy. The provisions of sub-section (1) to sub-section (9) of Section 11 pertain to the imposition of penalty and confiscation. Sub Section (7) of Section 11 needs to be mentioned as it says that without prejudice to the provisions contained in this Section, the importer-exporter Code number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trol of such officer of customs, as if the said amount is payable under the Customs Act, 1962 (52 of 1962); or (c) the Director General may require the Assistant Commissioner of Customs or Deputy Commissioner of Customs or any other officer of Customs to recover the amount so payable by detaining or selling any goods (including the goods connected with services or technology) belonging to such person which are under the control of the Assistant Commissioner of Customs or Deputy Commissioner or Customs or any other officer of Customs, as if the said amount is payable under the Customs Act, 1962 (52 of 1962); or (d) if the amount cannot be recovered from such person in the manner provided in clauses (a), (b) and (c),- (i) the Director General or any officer authorised by him may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the District in which such person owns any property or resides or carries on business and the said Collector on receipt of such certificate shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue; or (ii) the Director General or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be credited to the Consolidated Fund of India. 11-B. Empowering Settlement Commission for regularisation of export obligation default. - Settlement of customs duty and interest thereon as ordered by the Settlement Commission as constituted under section 32 of the Central Excise Act, 1944 (1 of 1944), shall be deemed to be a settlement under this Act.]" 17. On a reading of the aforesaid provisions, in our opinion, the demand for payment of interest on the amount which has been paid over to the petitioner by the respondents as per the order of the Supreme Court cannot be included in the term penalty which can be adjudicated in terms of the provisions of the FT Act or rules made thereunder. 18. The law with regard to the entertaining the petition under Article 226 of the Constitution of India in case of availability of alternate remedy is well settled. The decision relied upon by learned Deputy Solicitor General of India in PHR Invent Educational Society (supra) is significant. Paras 14 to 22 crystalizes the legal position which read thus: - "14. The law with regard to entertaining a petition under Article 226 of the Constitution in case of availability of alternative reme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly observed that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h matters. 21. Recently, in the case of Celir LLP (supra), after surveying various judgments of this Court, the Court observed thus: "101. More than a decade back, this Court had expressed serious concern despite its repeated pronouncements in regard to the High Courts ignoring the availability of statutory remedies under the RDBFI Act and the SARFAESI Act and exercise of jurisdiction under Article 226 of the Constitution. Even after, the decision of this Court in Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260], it appears that the High Courts have continued to exercise its writ jurisdiction under Article 226 ignoring the statutory remedies under the RDBFI Act and the SARFAESI Act." 22. It can thus be seen that it is more than a settled legal position of law that in such matters, the High Court should not entertain a petition under Article 226 of the Constitution particularly when an alternative statutory remedy is available." 19. As the demand for payment of interest cannot be a penalty in terms of the provisions of the FT Act, there can be no appeal against such order under Section 15 of the FT Act. We do not find an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the impugned order is dehors the provisions of the FT Act. 22. Learned Deputy Solicitor General Mr Faldessai on the other hand submitted that this is a clear case where the petitioner has utilized the amount of Rs. 1,21,69,200/- and having failed before the Hon'ble Supreme Court, the petitioner is liable to pay interest on such amount. It is further submitted that the JDGFT was competent to raise demand for payment of interest at the rate of 15% per annum as the petitioner was utilizing the amount belonging to the Revenue. It is further submitted that the JDGFT has ample power under the FT Act and the rules framed thereunder to raise such demand and enforce the same. 23. Heard learned counsel. We now proceed to deal with the contention as to whether the respondent is competent to/has jurisdiction to adjudicate upon the quantum of interest and enforce the same under the provisions of the FT Act. The Supreme Court upheld the judgment of the High Court holding that the petitioner was exporting a product (processed iron ore) which was inadmissible as per Appendix 12 to the Exim Policy. During the pendency of the petition, the Supreme Court by an interim order had directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the FT Act, any penalty may be imposed or any confiscation may be adjudged. We do not find any provision in the FT Act providing for adjudication of a claim of interest on the amount as is the subject matter in the present petition. 27. Learned Deputy Solicitor General of India was at pains to submit that under Section 17 of the FT Act, the adjudicating authority making any adjudication or hearing any appeal or exercising any powers of review under the FT Act, shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908 while trying a suit. Relying on sub-section (2) of Section 17, learned Deputy Solicitor General of India submitted that every authority making any adjudication or hearing any appeal or exercising any powers of review under this Act shall be deemed to be a Civil Court for the purposes of Sections 345 and 346 of the Code of Criminal Procedure, 1973. It is therefore, submitted that the JDGFT is a Court within the meaning of the Interest Act, 1978. The argument is that as Section 3 of the Interest Act, 1978 empowers the Court to allow interest, the order passed by the adjudicating authority is within his jurisdiction. 28. We are afrai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther party has suffered an impoverishment which it would not have suffered but for the order of the Court and the act of such party. The quantum of restitution, depending on the facts and circumstances of a given case, may take into consideration not only what the party excluded would have made but also what the party under obligation has or might reasonably have made. There is nothing wrong in the parties demanding being placed in the same position in which they would have been had the court not intervened by its interim order when at the end of the proceedings the court pronounces its judicial verdict which does not match with and countenance its own interim verdict. Whenever called upon to adjudicate, the court would act in conjunction with what is real and substantial justice. The injury, if any, caused by the act of the court shall be undone and the gain which the party would have earned unless it was interdicted by the order of the court would be restored to or conferred on the party by suitably commanding the party liable to do so. Any opinion to the contrary would lead to unjust if not disastrous consequences. Litigation may turn into a fruitful industry. Though litigation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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