Judgment:
Bobde S.A., J.
1. By this petition, the petitioners, a registered export house exporting processed iron ore, seeks a mandamus to the respondents to grant additional licences or to pay premium of Rs. 1,21,69,200/- (being 20 % of Rs. 6,08,46,000/-) in lieu of 10 % additional licences for imports. Though this lis has a chequered history, now the scope of controversy has been restricted by the judgment of the Supreme Court in C.A. No. 5764 of 2001, delivered on 4.4.07 in the latest round of litigation by the parties. The only point that survives for decision is whether the petitioners are eligible for grant of an additional licence as per Appendix 12 attached to Import and Export policy from April, 1990 to March, 1993. Appendix 12 of the Policy is a list of items which, if exported, does not make an exporter eligible for an export house licence and therefore an additional licence.
2. The respondents' contention is that the petitioners are not entitled to grant of an additional licence or a premium in lieu thereof since the petitioners have exported processed iron ore during the period from April, 1990 to 31st March, 1991, under the new policy when all mineral and ores were specified in Appendix 12 and, thus could not be considered to be admissible export for the purpose of the grant of an additional licence.
3. The controversy arose this way. Under the Import and Export Policy which was announced in the year 1988 to 1991, (hereinafter, referred to as 'the Old Policy') the export houses which exported items not specified in Appendix 12 were entitled for an additional licence in the succeeding year. Under this policy, processed minerals and ores were specified in Appendix 12. Thus, the processed iron ore was an admissible export for grant of an additional licence. This policy was changed from the year 1990-91, i.e. from April, 1990 to 31st March, 1991 (A.M. 91) (hereinafter, referred to as 'the New Policy') Under the new policy, all mineral ores were specified in Appendix 12. Thus, the export of mineral ores became inadmissible for the purpose of an additional licence.
4. When the old policy was in force upto end of March, 1990 (A.M. 90), the petitioners entered into a contract on 7.2.1990 for export of processed iron ore. They did not actually export any processed iron ore till March, 1990. They, however, exported the processed iron ores after the new policy came into force in April, 1990 when export of any mineral ore was not admissible export because mineral ore was specified in Appendix 12. The question, therefore, is whether the petitioners are entitled to claim any additional licence only on the basis of their having entered into a contract for export when the old policy was in force even though they actually exported the processed iron ores when the new policy came into force ?
5. Paragraph 215 of the policy provides for eligibility to an additional licence. It reads as follows:
215 (1). The Export Houses/Trading Houses will be eligible to Additional Licences on the basis of the admissible exports made in the preceding licensing year. The value of these licences will be calculated at 10 % of the N.F.E. earnings on the total eligible exports made in the preceding licensing year. This percentage shall be 12 % in cases where an Export/Trading House is able to achieve a minimum growth of 10 % in terms of N.F.E. realisation in the previous year, over and above the year preceding the same. The N.F.E. earnings for this purpose, would have the same meaning as defined in the Note below Para 212(2) (a) above.
The meaning of the term 'admissible exports' may be understood from paragraph 212, which reads as follows:
212 (1). The eligibility for the grant of Export House/Trading House Certificate shall be determined on the basis of the Net Foreign Exchange Earnings (N.F.E. earnings) from the exports actually made in the preceding three licensing years termed as 'the Base Period'. The earnings from (i) the exports of products specified in Appendix 12, (ii) re-exports as defined in para 174(1) of this Policy, (iii) 'Deemed Export' as defined in Chapter XVI, and (iv) exports from Free Trade/Export Processing Zones and 100 per cent E.O.Us, shall not qualify for this purpose.
This paragraph provides that earnings from the exports of the products specified in Appendix 12 shall not qualify for the purpose of grant of an Export House/Trading House Certificate on the basis of which additional licences can be claimed. Thus, the export of certain items are made inadmissible for eligibility to Export House Licences and Additional Licences.
6. Thus, when the old policy was in force, export of unprocessed iron ores exported by the petitioners was admissible export for the purpose of grant of an additional licence. But, there is no export of that product by the petitioners in the period of the old policy. They only entered into a contract for export on 7.2.90. However, when the new policy which treated the export of all mineral ores as inadmissible exports for grant of an additional licence, the petitioners exported the unprocessed iron ore during the year 1990-91.
7. Thus, what needs to be determined is what is the act or event which entitles a party for grant of an additional licence. It is clear from the scheme of the policy, vide paragraph 215, that an export house is eligible to an additional licence on the basis of admissible exports made in the preceding licensing year. This clearly means that the event which entitles a party to an additional licence is the actual export and the earnings therefrom and not a mere agreement to export. There is, therefore, no merit in the contention of the petitioners that because they entered into the contract for export of unprocessed iron ore when the old policy was in force, they are entitled to grant of an additional licence even though they exported the unprocessed iron ore, the product which was not an admissible export by reason of its insertion in Appendix 12 under the new policy.
8. We are, thus, clearly of the view that the entitlement of an additional licence depends on an export house having exported an item which was admissible i.e. not specified in Appendix 12 at the time of its export. The petitioners having exported the processed iron ore during the year 1990-91 when mineral ore was not admissible, (having been included in Appendix 12), such export would not entitle them to grant of an additional licence even though the contract for exporting the ore is said to have been made when the product was an item of admissible export. In the present case, the representation by the Union Government in the old policy was only that the export houses would be eligible for grant of an additional export licence if they had made admissible exports i.e. export of items not included in Appendix 12.
9. Mr. Kakodkar, learned Senior Counsel has relied on the principle of promissory estoppel as stated by the Supreme Court in {The Union of India and Ors. v. Anglo Afghan Agencies etc.) reported in 1967 DGLS 344 : A.I.R. 1968 S.C. 718. We are of the view that the circumstances of the present case are quite different from that case. Apparently, in that case, under the Export Promotion Scheme, the respondents had exported certain goods and made a claim for an import licence for the maximum value permissible by the scheme. That amount was sought to be arbitrarily reduced even though there was no change in the scheme or position in law. The Supreme Court held that the claim of the respondents is appropriately founded upon equity which arises in their favour, as a result of the representation made on behalf of the Union of India in the Export Promotion Scheme and the action taken by the respondents acting upon that representation under the belief that the Government may carry out the representation made by it. The Supreme Court further held that the Government is not exempted from its liability to carry out the representation made by it as to its future conduct and it cannot be some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen. Their Lordships, therefore, set aside the order of the Textile Commissioner imposing cut in the import entitlement by the respondents and directed the Textile Commissioner and the Joint Chief Controller of Imports and Exports to issue to the respondents import certificates for the total amount equal to 100 per cent of the f.o.b. value of the goods exported by them. We are unable to apply the ratio of that judgment to the present case.
10. As observed earlier, the event that entitles a party to grant of an additional licence is the actual export. Admittedly, there is no export made by the petitioners during the subsistence of the old policy till March, 1990 i.e. A.M.-.90. There is no estoppel which bars the respondents from changing the items of admissible exports. There is no doubt that the petitioners entitlement to an additional licence even after the new policy came into force could have been considered had the petitioners actually exported admissible items when the old policy was in force. But as seen above, that is not the case. The petitioners have consciously exported the products during the A.M. 91 i.e. after the products were notified as inadmissible exports for the purposes of an additional licence by its inclusion in Appendix 12. It can't be said that because under the old policy the export of an admissible item make an exporter eligible to an additional licence, the exporter had the liberty to export the same even after the new policy, specifying it as inadmissible item, was brought into force.
11. Mr. Kakodkar, learned Senior Counsel for the petitioners relied on a letter dated 22.5.1990, by which the Government forwarded a Trading House Certificate dated 18.5.90 which was valid for a period of three years from 1.4.89 till 31.3.91. We are of the view that the letter does not confer any special right on the petitioners nor does it result in imposing any additional obligation on the respondents since the letter clearly states that the Trading House Certificate shall be subject to the condition as contained in the import policy and subject to such changes as may be made from time to time.
12. The learned Counsel for the petitioners relying on {Union of India and Ors. v. Chowgule & Co. Ltd. and Ors.) reported in : 2003(85)ECC726 , submitted that in that case the Supreme Court considered the question whether the respondents therein who are admittedly entitled to the grant of an additional licence under the old policy stand debarred from claiming the said additional licence because of the new Import and Export Policy which came into force from 1.4.1990. It may be noted that the case arises out of the same policy with which we are concerned here. However, in that case there was no doubt about the fact that the respondents had exported processed iron ore during the period from 1.4.89 to 31.3.1990 i.e. when the old policy was in force and when the processed iron ore, an admissible export, was not specified in Appendix 12. We see no similarity to the present situation where, admittedly, the processed iron ore has been exported in the year 1990- 91 when it was an item which was specified in Appendix 12. We have taken note of the contention on behalf of the petitioners that the contract to export processed iron ore was made before the new policy came into force. But, as held above, it is the actual export that would determine the eligibility and not the contract to export.
13. Lastly, it was pointed out on behalf of the petitioners that the respondents have granted additional licences to other exporters and Trading House in the State of Goa which are in the position of the petitioners. In fact, the petitioners have given details of all such exporters which have received the benefit of additional licences from the respondents in para 7 of the petition. Though the benefits of an additional licence are of considerable value in monetary terms and the respondents have not taken care to traverse the petitioners' pleadings, the absence of specific denial in the return filed by the respondents must be taken as an admission. It appears that before the Supreme Court the respondents pleaded that the grant of an additional licence to other similarly situated was a mistake. We find that the petitioners have almost been singled out by the respondents by denying these benefits. It, however, appears that the respondents have taken a correct view in law in the petitioners' case. We cannot, however, be oblivious of the fact that the additional licences worth crores of rupees have been unjustly granted to others though they were not entitled. We, therefore, consider it appropriate to direct the respondents to hold an inquiry into the matter and take appropriate action, if called for.
14. In this view of the matter, there is no merit in this petition which is, hereby, dismissed. Rule discharged. In view of the dismissal of the petition, the respondents shall be entitled to encash the Bank Guarantee furnished by the petitioners.
15. At this stage, Mr. Kakodkar, learned Senior Counsel for the petitioners prays for stay of the judgment for a period of 8 weeks so that the Bank Guarantee furnished by the petitioners may not be encashed. Having regard to the circumstances of the case, there shall be stay for a period of 8 weeks.