TMI Blog1992 (11) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... policy was framed for five years commencing from 1-4-1992 and ending with 31-3-1997. Under the new policy, a prohibition is introduced against export of red-sanders in any form. The petitioner made a representation to the authorities submitting that there is a confusion in understanding the new policy and the matter should be clarified as to whether musical instruments and other chips etc. which were being exported by the petitioner could be exported even after the coming into force of the new policy. Second respondent sent a reply on 14-5-1992 under reference No. 57/1/92/E-II/230. The reply is to the effect that the export of red-sanders in any form is prohibited under the new policy and the petitioner will not be entitled to continue the export. A reference is made in the letter to Serial No. 7 of Part I, Serial No. 0.44 of Part V of Negative List of Exports in the Export and Import Policy, 1992-97. Aggrieved thereby, the petitioner has filed this writ petition for quashing the said communication dated 14-5-1992 and for the issue of a mandamus directing the respondents to grant a licence for the value of U.S. $ 75,000/- against the letter of credit No. 41-2432445-031. The petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppel will not apply to a legislative action of the respondents. According to him, the import and export policy is a result of a legislative function exercised by the Government under Sec. 3 of the Imports and Exports (Control) Act, 1947 (hereinafter referred to as `the Act'). Learned counsel contends that inasmuch as the policy is legislative in character, the Court is not entitled to apply the doctrine of promissory estoppel or any kind of estoppel and prevent the respondents from enforcing the said policy during the period for which the policy is enacted. 4.Section 3(1) of the Act empowers the Central Government to make provisions by publishing an order in the official Gazette prohibiting, restricting or otherwise controlling in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order : the import, export carriage coastwise or shipment as ships(a) stores of goods of any specified description; It is not necessary to refer to the remaining parts of sub-section (1) of Sec. 3 of the Act. Sub-section (2) of Sec. 3 refers to Sec. 11 of the Customs Act and declares that all goods to which any order under sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods exported to reduce the import certificate. The Court held that it could not be assumed merely because the Import Trade Policy was general in terms and dealt with the grant of licences for import of goods and related matters that it was statutory in character. It was held further that even though the case did not fall within the terms of Section 115 of the Indian Evidence Act, it was still open to a party who had 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 was not recorded in the form of a formal contract as required by Article 299 of the Constitution. The following passage in the judgment is relevant : "The defence of executive necessity was not relied upon in the present case in the affidavit filed on behalf of the Union of India. It was also not pleaded that the representation to the Scheme was subject to an implied term that the Union of India will not be bound to grant the import certificate for the full value of the goods exported if they deem it inexpedient to grant the certificate. We are unable to accede to the contention that the executive necessity rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el. (Vide State of Kerala v. Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. (1974) I SCR 671 : (A.I.R. 1973 S.C. 2734)." 8.A discordant note was struck by a Bench of two Judges of the Supreme Court in M/s. Jit Ram Shiv Kumar v. State of Haryana (AIR 1980 SC 1285). After referring to certain earlier decisions, it was observed that the principle of estoppel was not available against the Government in exercise of legislative, sovereign or executive power. Referring to an earlier judgment in Moti Lal Padampat Sugar Mills Co. (P) Ltd. v. State of U.P. (AIR 1979 SC 621), the Bench expressed its disagreement with the principles laid down in that case. 9.The position was clarified by a Bench of three Judges in Union of India v. Godfrey Philips India Ltd. - 1985 (22) E.L.T. 306 (S.C.) = AIR 1986 SC 806. The Bench overruled the earlier judgment of two Judges in Jit Ram's case (A.I.R. 1980 S.C. 1285) (supra), holding that it was not right on the part of the Bench of two Judges to express their dissent with the judgment in the earlier case and they should have referred the matter to a larger Bench, if they wanted to differ. Reiterating the proposition laid down in Motilal Sugar Mills' case (AIR 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being reasonable but in the sense that it is manifestly arbitrary. The following passage in the judgment is relevant for the purpose of this case : "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 notion 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 merely on the ground that it is not reasonable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m and the State following the invitation by the State they had invested Rs. 1.68 crores 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 representations made by the State and when the factories were ready and they were in a position to utilise the raw materials, 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 opinion the impugned Act suffers from the vice of taking away rights to property withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciple has been culled out therefrom by the Bench. 17.In Orissa Cement Ltd. v. Superintendent, Customs and Central Excise [1992 (61) E.L.T. 256 (Ori.)] the Division Bench of Orissa High Court has applied the principle of promissory estoppel against a notification issued under the Customs Act. In Vikrant Tyres Ltd. v. Union of India [1992 (61) E.L.T. 381] the Karnataka High Court upheld the plea of promissory estoppel as against the notification issued under the provisions of the Central Excise Rules. 18.Thus, it is clear that the uniform view taken by all the High Courts and the Supreme Court is that the doctrine of promissory estoppel will be available as against the governmental action, though the said action has been taken in exercise of statutory power. There is also no doubt that the principle of estoppel is available against subordinate legislations and delegated legislations which cannot be placed on the same pedestal as an enactment passed by the Legislature in exercise of the plenary powers. In the present case, the petitioner has produced the relevant records to show that it has acted in pursuance of the representations contained in the policy which was announced for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and places reliance on Clauses 2(k), (m) and (v) thereof. In the said clauses, the purposes for which the Central Government is entitled to issue Notifications prohibiting import or export of goods are (1) the protection of human, animal or plant life or health; (2) the conservation of exhaustible natural resources and (3) any other purpose conducive to the interests of the general public. The Respondents cannot bring the ban on export of manufactured goods under any of the aforesaid clauses. In the course of arguments, Learned Central Government Standing Counsel contended that it is open to the petitioner to sell the goods inside the country and they need not be exported to a foreign country. The said argument only cuts the nose of the Respondents themselves. If the export of goods is banned for the purpose of conserving ecological measure, there is no substance in contending that the goods could be sold inside the country. The purpose for which the policy is alleged to have been brought into force will not be served in any manner by the sale of the goods inside the country, if the trees are cut and converted into such goods. Thus, the new policy in so far as it prohibits exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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