Delhi High Court

Asia Brown Boveri Ltd. And Anr. And ... vs Union Of India (Uoi) And Ors. on 15 March, 2002

Author: S Sinha

Bench: S Sinha, A Sikri

JUDGMENT

S.B. Sinha, C.J.

1. The Government of India (Ministry of Foreign Trade) dated 7th January 1970 made a scheme for encouraging supply of indigenously manufactured electrical goods to the State Electricity Boards to enable them to obtain indigenously goods like switch gears and communication equipment at an international comparable price. The heads of the assistance under the scheme inter alia are:

"(a) Import replenishment as per Volume II of the Red Book.

(b) Cash assistance at the rates mentioned in various instructions issued by Government.

(d) Rebate of central excise duties on the finished products.

(e) Concessional supplies of steel as otherwise permissible on exports (which has been agreed to in principle and further details of which will be communicated separately).

Procedure for claiming such cash assistance was:

"1. Suppliers should be registered with the Engineering Export Promotion Council, under the Scheme of registration.

2. For cash assistance the Certificate will have to be produced from the Customs or Central Excise authorities as indicated in the application along with treasury challan of Rs. 50/-.

2. The petitioners in this case are concerned with the tender covered by Credit No. IN 377 which was floated together with Credit No. IN 242 and In

604. The tender did not stipulate any price variation clause. However, at a later stage i.e. in March 1974, a price variation clause was introduced in bidding documents issued in relation to the following equipments in the tender in question:

Maximum Ceiling.

1. Power Transformer 15%

2. Switchgear including Control Panels 15%

3. Transmission Line towers 10%

4. Power Conductors 15%

5. Power Cables 15%

6. Shunt Capacitors/ Reactors 10%

7. Synchronous condensers 10%

8. PLCC, Telemetering and Load dispatch

equipment 15%

3. It was stated therein that the tender opening dates in the above cases should be extended so that at least 21 days would be available with the bidders for submission of bids. On 24th May 1971, a meeting was held under the Chairmanship of the then Secretary of Ministry of Industrial Development and Internal Trade for the purpose to discuss and elaborate the salient features of the said scheme. The petitioner submitted tenders for electrical controlgear, switchgear as well as power line carrier communications equipment between December 1973 and February 1975. The said contracts were registered with the bankers. A contract was concluded in relation to IN 377 credit. Except one contract, according to the petitioner, all contracts were 'firm' since the tender was submitted prior to March 1974 which contained price variation clause at the time when they were concluded. It is not in dispute that cash assistance was to be allowed to the extent of 25% of the FOR destination value. After the supply commenced, the petitioner and various State Electricity Boards agreed to price variation clause pursuant to or in furtherance of price variation formula contained in the said contract. The petitioner applied to the Central Electricity Authority (CEA) for the issuance of the said pro forma from time to time which was allowed. The details of the contracts entered into by the petitioners would appear from the following:

STATEMENT RELATING TO PARTICULARS OF - 377 CONTRACTS ENTERED INTO BY PETITIONERS

Client (Switch-gear)

Tender date

Contract date

Contract Value

Madhya Pradesh Electricity Board

3.5.1974

23/24.9.1974

2319944

Kerala State Electricity Board

16.5.1974

26/27.9. 1974

8417500

Tamilnadu Electricity Board

15.5.1974

5/8.10. 1974

5540490

Karnataka Electricity Board

12.5.1974

27/2/20.3.1975

11515740

Delhi Electric Supply Undertaking

4.5.1974

8/9.10.1974

3984164

Delhi Electric Supply Undertaking

4.5.1974

29/30.10.1974

1841250

Orissa State Electricity Board

14.6.1974

29.1/22.3.1975

4816644

Orissa State Electricity Board

14.6.1974

27.2/11.3.1975

1458000

(PLCC)

Southern Regional Electricity Board

6.12.1973

5.4.1974

4570832

Assam State Electricity Board

10.9.1974

26.3.1975

461192

Orissa State Electricity Board

14.12.1974

22.5.1975

11113205

Orissa State Electricity Board

14.12.1974

6.5.1975

591250

Karnataka Electricity Board

27.2.1975

15.7.1975

2484486

4. The Ministry of Commerce on or about 27th January 1976 issued a letter of deficiency indicating their further requirements which were required to be complied with by the manufacturer in order to have his claim considered and granted.

5. A consolidated application was filed by the petitioner on 10th September 1976 stating:

is this connection, we wish to inform you that we have made our above application on the basis of payment received (i.e. 90 per cent and 100 per cent) by us from I.D.A. project authorities during the export quarter January/March 1976.

However, in respect of the following:

PLCC EQUIPMENT

ANDHRA PRADESH STATE ELECTRICITY

BOARD, HYDERABAD

INVOICE NO. & DATE

F.O.B. VALUE

GB/AS/IDA/658 6.8.1976 Rs. 8,935.10

In spite of our best efforts, we have still not been able to get all supporting documents required to be submitted for claiming cash subsidy. We are trying our best to get hold of these balance documents from the above clients and shall submit the same to your good self as soon as we receive the same.

We, therefore, request your goodself to consider cash assistance on the f.o.r. value of Rs. 12,680,975.00 minus Rs. 8935.10 = Rs. 12,672,039.93 and release your cheque for Rs. 31,68,010.00 being 25% each subsidy at the earliest, pending receipt of the balance documents by you in respect of the above cited bill.

Our WF import application dated 20th August, 1976 in duplicate under a separate covering letter REF IC. 2000.01.76 dated 10.09.1976 is also being submitted along with this.

We also would like to mention here that the application for duty draw back towards supply of POWER LINE CARRIER COMMUNICATION EQUIPMENTS AND ELECTRICAL CONTROLGEAR & SWITCHGEAR made during January/March period would be submitted to you by our Goregaon Work and Baroda works respectively.

Thanking you and looking forward to your cheque for cash subsidy claimed, we remain,

Your faithfully,

For HINDUSTAN BROWN BOVERI LTD.

Sd/-

(H.N. JIHANGIRAI)

MATERIALS MANAGER

Encls:

1) List of enclosures 23 sheets

2) Documents 536 sheets

Total :559 sheets

Through & cc: HBB/New Delhi (Co-ordination)

cc HO CA&E (Mr. N.M. Bhatt)

cc GOREGAON SALES-Mr. Y.N. Keshava Murthy

cc BARODA (WA) Mr. S.K. Nagpal

cc BOMBAY (CA&F) Mr. J.K. Rawal

cc BARODA (SPS) Mr. U.V. Rao"

6. The authorities of Central Licensing Area by letter dated 23rd October 1976 asked them to file further documents whereto the petitioner replied by letter dated 14th January 1977 stating:

"Sub: Consolidated Cash Assistance/REP Import application for export quarter January/March 1976 against export of Engineering Goods to IDA/IBRD Aided Projects in India.

Ref: Your file No. A. 264/JM. 76/SC1/CLA

Dear Sir,

With further reference to our letter No. IC, 2000.01.76 dated 22nd December, 1976, we have pleasure in enclosing herewith one photostat copy each of CLA's letters registering the under mentioned PLCC and Switchgear contracts:

Name of Elecy. Board

Item

CLA's letter reference

1.

Maharashtra State Electricity Board

PLCC

EG/H-21/AM-77/SC.VI/CLA/1742 dated 12.10.1976

2.

South Regional Electricity Board

PLCC

EG/H-23/AM-77/SC.VI/CLA/1748 dated 12.10.1976

3.

Rajasthan State Electricity Board

PLCC

EG/H-22/AM-77/SC.VI/CLA/1745 dated 12.10.1976

4.

Karnataka Electricity Board

Switchgear

EG/H. 28/AM-77/SC.VI/CLA/2064 dated 15.11.1976

5.

Orissa State Electricity Board

Switchgear

EG/H.27/AM-77/SC.VI/CLA/2070 dated 15.11.1976.

We trust that while processing our case cited above, you will take into account the registration by your office of the above five contracts and let us have the cash assistance at 25% prevailing on the dates of the above contracts.

Thanking You, we are,

Yours faithfully,

For HINDUSTAN BROWN BOVERI LIMITED,

Sd/-

(S. SUNDARAJAN)"

7. The Office of the Joint Chief Controller of Imports and Exports (Central Licensing Area) again called upon the petitioner for additional declaration on or about 10th February 1977 and further directed that the claim be settled at 15% or 17.5% instead of 25%.

8. The Ministry of Commerce by letter dated 13th June 1977 addressed to the Joint Chief Controller of Imports and Exports, CLA stated:

"GOVERNMENT OF INDIA

MINISTRY OF COMMERCE

OFFICE OF THE CHIEF CONTROLLER OF

IMPORTS & EXPORTS

No. 13/72/76-ETC

New Delhi, the 13th June, 1977.

To,

The Joint Chief Controller of

Imports and Exports, CLA,

New Delhi.

(Shri K.R. Dheer, Dy, CCI&E)

Subject: Grant of replenishment license and cash assistance against supplies made in India under IBRD/IDA aided contracts.

Sir,

In terms of minutes of the meetings of M.D.A. Committee held in the room of Commerce Secretary, on 7th January and on 1st March, 1977, on the above subject, REP benefits may be made available on such supplies made to various State Electricity Boards, notwithstanding whether the contract was registered with the bank or not or it was registered after the expiry of period prescribed for registration. For this purpose the Central Electricity Authority will certify the material particulars viz. dates of tender and contract and variation between the tender and its acceptance. The Central Electricity Authority would certainly these particulars on a proforma to be prescribed by the CCI&E.

Accordingly, a proforma, as per specimen enclosed, has been prescribed. The Central Electricity Authority will certify the particulars as per the enclosed proforma. This proforma shall be used in all cases whether such contracts have been registered or not or registered after the expiry of the period prescribed for registration, and the registered Exporters have claimed benefits admissible under the scheme of registration of export contracts.

Your are requested to ask the parties concerned to fill in the particulars in the proforma and present it to the Central Electricity Authority. The Central Authority will verify the particulars, record their certification on the proforma and sent it to Joint Chief Controller of Imports and Exports, CLA, so that claims of suppliers for benefits admissible under the scheme of registration of Export contracts can be considered in accordance with rules on the subject and decision of the M.D.A. Main Committee."

9. The third respondent herein by a communication dated 2nd June 1980 addressed to the first petitioner stated that a sum of Rs. 18,35,317.21P. had been paid in excess towards cash assistance in respect of quarters October- December 1975, January-March 1976, April-June 1976 and October-December 1976. The Joint Chief Controller of Imports and Exports (CLA) by letter dated 1st July 1980 stated that the petitioners had not furnished the declaration to the effect that they had neither claimed nor would claim price escalation from the project authorities at a later date against supplies made under IN 377 and the excess payment of Rs. 7,40,470 will be adjusted from pending claims. In July 1980, CLA sent settlement letters to the petitioner in respect of its subsequent claims for cash assistance in lieu of duty drawback and supplementary cash assistance upon adjusting the same towards alleged over-payment of Rs. 18,35,317.21P. The petitioner in terms of their letters dated 18th & 19th July 1980 stated that the scheme whereby and whereunder he deemed exports were effected did not contemplate that they were required to submit affidavits of the nature mentioned in the said communication. The petitioner thereafter were advised to seek remedy in the first appeal. By a communication dated 8th October 1980, the Engineering Export Promotion Council addressed to the petitioners stated that while claiming cash assistance, one of the most important questions was the rate at which cash assistance would be claimed. It was said that the rate of cash assistance in respect of switchgears and PLCC equipment which were the two items in issue would be 25% up to March 1975 whereas the same would be 15% from 1st April 1975 up to 31st March 1976 where after from 1st April 1976 up to March 1979 the rate of cash assistance for switchgears was 17.5% whereas for PLCC equipment it was 15%. Yet again from 1st April 1979 up to 24th November 1979, the rate in respect of both would be 15%.

10. By a letter dated 2nd June 1980, from the Officer of JCC of Import and Exports (CLA) to the petitioner, it was stated:

"Sub: Grant of Cash Assistance claimed under benefit of contract against the supply made under IDA/IBRD/UNICIF etc. during OD 176 quarter.

Gentlemen,

With reference to your letter/Application No. S. 825/SS:RV dated 16.3.1979 on the above subject, I write to say that your claim for cash Assistance under the benefit of contract scheme has been considered on the strength of extension letter furnished from the different project Authorities/CEA certificates. In this connection, I may inform you that you have been allowed on over payment of Rs. 4,35,760-46 against supplies made under 377-In which contain price variation clause and for which you have not furnished required affidavit to show that you have not claimed and will not claim price escalation at a later date from the Project Authority. The excess payment will be adjusted from your pending claim with this office.

In case the above deficiencies are not removed/documents not furnished within 30 days the case will be closed finally without any further reference to you."

11. Mr. Haksar, the learned counsel appearing on behalf of the petitioners would contend that in terms of the afore-mentioned scheme, the cash assistance was to be made available from the date of supply and not on the date of tender. The learned counsel would contend that the scheme in question was benevolent in nature and having been formulated by a statutory and/or government authority, the benefit arising there from cannot be taken away. According to the learned counsel, the petitioners having submitted their tenders pursuant to or in furtherance of the said scheme and/or policy decision as was obtained at the relevant point of time, the cash assistance was to be paid as the same was binding upon the respondents.

12. The learned counsel would contend that the stand of the respondent in their counter affidavit to the effect that the rate of cash assistance varied from time to time cannot, however be accepted having regard to the doctrine of promissory estoppel. The learned counsel would contend that the expression "firm price" would mean that there has been no difference in price between the date of tender and the date of contract. In any event, contends the learned counsel, even such cash assistance was payable at a reduced rate.

13. Mr. Sanjay Jain, learned counsel appearing on behalf of the respondent, however, would contend that rationale for introducing such policy must be found out from the object thereof. The learned counsel would contend that the object of this scheme is merely to see that the tenderers are not in a disadvantageous position vis-a-vis the foreign tenderers. The learned counsel pointed out that for the purpose of understanding the said policy, a meeting was held wherein the petitioner also participated where after the scheme was floated and accepted by all concerned. According to the learned counsel, the bindings were on independent transaction and cash benefits which were to be granted were also based on independent transactions and the two cannot be merged. The learned counsel would contend that having regard to the fact that there has been an escalation in price, they were not entitled to the said cash assistance wherefor they had given notice to the effect that deductions would be made from the excess payment made in their favor. The learned counsel would contend that the declaration in the affidavit filed by the petitioners was vague as the same should have been more elaborate to state that they had not claimed the escalated price. According to the learned counsel, the reduction in the rate of cash assistance was permissible having regard to the budget as provided for every year and different policy decisions that are taken having regard to the budgetary provisions.

14. The scheme dated 7th January 1970, as noticed hereinbefore, is not of a fixed duration. The said scheme was floated having regard to the fact that there would be no physical export and as such custom drawback would not be available. Cash benefit was paid only in lieu of such cash assistance.

15. It is thus possible, as has been contended by Mr. Jain that different rates of cash assistance may be provided having regard to the different rates of customs drawback which were to be paid in different years.

16. A bare of the impugned order dated 2nd June 1980 would clearly show that the same does not contain any reason.

17. Before us a chart has been produced from a perusal whereof it appears that all contracts in relation to INN 377 except one had been entered into before 31st March 1975. There cannot, thus, be any doubt whatsoever that the said policy decision was applicable in case of the petitioner.

18. The Handbook in respect of the year 1976-77 containing Import Credit Policy is as follows:

"(2) If there is a change in the value of goods covered by a registered contract due to a price escalation clause or a specific provision in the contract itself to allow re-negotiation of price/value in order to cover a rise in freight and insurance, exchange variation or a change in the specification of the product to be exported, the exporter may not, on this account, be held ineligible to the benefits accruing in respect of the registered contract under these provisions. This facility will be available only in those cases where there is no variation in the quantity of the goods as originally covered by the contract and the change in the price/value is duly registered with the bank concerned within 45 days of such change in continuation of the main contract already registered."

19. The said policy decision does not state the rate at which such cash assistance would be payable. However, what would be a firm contract, can be found out from the handbook of 1975-76, which is in the following terms:

"(5) Only such contracts will be acceptable for registration which are firm contracts (final offer and acceptance) between the overseas buyer and the registered exporter, and clearly indicate all the relevant particulars such as overseas buyers' name and address, descriptions of the products to be exported, total value of the contract, details of delivery scheme, terms of payment and other relevant particulars. For the purpose of determining the date of contract, the date on which all the terms and conditions have been finally settled. Will be taken as the crucial date of contract."

20. It, therefore, appears that 'firm contracts' in terms thereof denote final offer and acceptance. So far as a contract which an Indian may enter into with a foreign buyer, at the time of filing of the tender, such contracts may not be finalised. Only in a case where there had been an escalation of price between the said two dates, the Central Government could refuse to exercise their power to grant of cash assistance. Policy of grant of cash assistance, as is well known, being a benevolent legislation, the same in case of two possible interpretations should be construed which would fulfilll the object rather than frustrate the same. Such a policy decision should be construed liberally.

21. Mr. Jain has very fairly stated that the documents whereupon such policy decision was based, are not available.

22. It is a case where the purported price escalation clause came into being at a later stage namely, after the contract had been entered into. Had the petitioners been informed that they would not be entitled to the cash assistance in future, if the price escalation clause in the contract is acted upon, they might have adjusted their tenders accordingly. They proceeded on the basis that the firm contract would mean, although in legal parlance it may not be so, that the price would be the same.

23. By reason of the said policy decision, evidently a representation was made to the petitioners. They altered their position pursuant to or in known, is a principle of equity to avoid injustice. It is one thing to say that the principles of promissory estoppel shall not apply in a case where it contravenes statute but it is another thing to say that the said doctrine will have no application only because the respondents interpret a benevolent scheme differently.

The parties discussed the matter in a meeting.

24. It is accepted that the global tender under ILD Credit 377 comes within the purview of the announcement for grant of export benefits subject to the relevant rules and conditions. The respondents themselves contended:

"According to this provision/scheme "only such contracts will be acceptable for registration which are firm contracts (final offer & acceptance) between the buyer and the seller, and clearly indicate all the relevant particulars such as buyer's name & address, description of the goods, total value of the contract, details of delivery schedule, terms of payment and other relevant particulars. It is true that the rate of Cash Assistance on the products contracted and supplied by the party was 25% up to 31.3.75 and this rate has been reduced by a Govt. notification to 15% w.e.f. 1.4.75 and again increased to 171/2% w.e.f. 1.4.76. As per normal Govt. policy the petitioner would be eligible for Cash Assistance on the products supplied at the rate prevailing on the date of supply. However, in order to provide greater stability for the growth of exports, a separate scheme had been introduced by the Govt. for registration of firm contracts as per rules and conditions prescribed in the relevant Imports & Export Control Policy. Subject to the rules & conditions of this scheme, the exports made in the execution of such registered contracts, will be eligible for the same levels of support in respect of Cash Assistance and other Rep. Benefit as were permissible on the date of the tender or contract. According to those rules the contract must be a firm contract between the buyer and the seller and must set down the date of offer and acceptance of offer. The description of the goods, the unit price & value of the goods contracted, delivery schedule, terms of payment etc. and such contracts should be registered with the authorized Bank within a prescribed time limit and the copy of such registered contract should be forwarded by the Bank to the licensing authority concerned within a prescribed time limit."

25. If the definition of the firm price, as noticed hereinbefore, is given effect to, admittedly 'cash assistance' would be admissible if prices were firm and no escalation in price had taken place at the relevant point of time as per the clause in the contract or clause in the contract.

26. In a situation of this nature, doctrine of promissory estoppel, in our opinion, would apply. With a view to avoid multiplicity in references, suffice it to state that recently in Sharma Transport v. Govt. of AP and Ors., I (2002) ACC 85, the law has been stated thus:

"14. Next plea is the oft-repeated one of promissory estoppel. It has to be noted that even though a concession is extended for a fixed period, the same can be withdrawn in public interest. In Sales Tax Officer and Anr. v. Shree Durga Oil Mils and Anr., 1997(7) SCALE 726, it has been held by this Court that a notification granting exemption of tax can be withdrawn by any point of time. There cannot be estoppel against any statute. Where it is in public interest, the Court will not interfere because public interest must override any consideration of private loss or gain, see Kasinka Trading and Anr. v. Union of India and Anr., . In Shrijee Sales Corporation and Anr. v.

Union of India, , it was observed that where there was supervening public interest, the Government is free to change its stand and withdraw the exemption already granted. One such reason for changing its policy decision can be resource crunch and the loss of public revenue. There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel, clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. The principle of promissory estoppel is that where one party has by his word or conduct made to other clear and unequivocal promise or representation which is intended to create legal relations or effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise or representation is made and it is in fact so acted upon by the other party, the promise or representation would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to alow him to do so, having regard to the dealing which have been taken place between the parties. The doctrine of promissory estoppel is now well established one in he field of administrative law. The foundation for the claim based on the principle of promissory estoppel in public law was laid by Lord Denning in 1948 in Robertson v. Minister of Pensions, 1949(1) K.B. 227, Prof. De Smith in his "Judicial Review of Administrative Action" (4th Edition at page 103) observed that "the citizen in entitled to rely on their having the authority that they have asserted".

15. doctrine of 'Promissory Estoppel' has been evolved by the Courts, on the principles of equity, to avoid injustice.

16. 'Estoppel' in Black's Law dictionary, is indicated to mean that a party is prevented by his own acts from claiming a right to the detriment of other party who was entitled to rely on such conduct and has acted accordingly. Section 115 of the Indian Evidence Act is also, more or less, couched in a language which conveys the same expression.

17. 'Promissory Estoppel is defined as in Black's Law Dictionary as 'an estoppel which arises when there is a promise which promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of promisee, and which does induce such action or forbearance, and such promise is binding if injustice can be avoided only by enforcement of promise.

18. These definitions in Black's Law Dictionary which are based on decided case, indicae that before the rule of 'Promissory Estoppel' can be invoked, it has to be shown that there was declaration or promise made which induced the party to whom the promise was made to alter its position to is disadvantage.

19. In this backdrop, let us travel a little distance into the past to understand he evolution of the Doctrine of 'Promissory Estoppel'.

20. Dixon, J. as Australian jurist, in Grundt and Ors. v. The Great Boulder Proprietary Gold Mines Ltd., 1938 (59) CLR 641, 6 laid down as under:

"It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to he assumption upon which he former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it."

21. The principle, set out above, was reiterated by Lord Denning in Central London Property Trust ltd. v. High Trees House Ltd., 1947 KB 130, when he stated as under:

"A promise intended to the binding, intended to be acted upon, and in fact acted upon is binding...".

22. Lord Denning approved the decision of Dixon, J. (supra) in Central Newbury Car Auctions Ltd. v. Unity Finance Ltd. and Anr., 1956(3) All ER

905. Apart from propounding the above principle on judicial side, Lord Denning wrote out an article, a classic in legal literature, on "Recent Developments in the Doctrine of Consideration", Modern Law Review, Vol. 15, in which he expressed as under:

"A man should keep his word. All the more so when the promise is not a bare promise but is made with the intention that the other party should act upon it. Just a contract is different from tort and from estoppel so also in the sphere now under discussion promises may give rise to a different equity from other conduct.

The difference may, lie in the necessity of showing 'detriment'. Where one party deliberately promises to waive, modify or discharge his strict legal rights, intending the other party to act on the faith of promise, and the other party actually does act on it, then it is contrary not only to equity but also to good faith, to allow the promisor to go back on his promise. It should not be necessary for the other party to show that he acted to his detriment in reliance on the promise. It should be sufficient that he acted on it."

this principle has been evolved by equity to avoid injustice. It is neither in the realm of contract nor in the realm of estoppel. Its object is to interpose equity shorn of its form to mitigate the rigour of strict law. In Union of India and Ors. v. Anglo Afgan Agencies, Etc., AIR 1968 SC 718, it was inter alia observed as follows:

"We are unable to accede to the contention that the executive necessity releases he Government from honouring its solemn promises relying on which citizens have acted to their detriment. Under our constitutional setup no person may be deprived of his authority of law, if a member of the Executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law common or statute-the Courts will be competent to and indeed would be bound to protect the rights of the aggrieved citizens."

It was further held in its summing up thus:

"Under our Jurisprudence he Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, not 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."

In Century Spinning and Manufacturing Co. Ltd. and Anr. v. The Ulhasnagar Municipal Council and Anr., , this doctrine of promissory estoppel against public authorities was extended thus:

"This Court refused to make distinction between he private individual and a public body so far as the doctrine of promissory estoppel is concerned;"

In Motilal Padampat Sugar Mills Co. (P) Ltd. v. State of Uttar Pradesh and Ors., , the doctrine of promissory estoppel was applied to the executive action of the State Government and also denied to the State of the doctrine of executive necessity as a valid defense. It was held that in a republic governed by the rule of law, no one high or low, is above the law. Every one is subject to the law as fully and completely as any other and the Government is no exception. the Government cannot claim immunity from the doctrine of promissory estoppel. Equity will, in a given case where justice and fairness demands, prevent a person from exercising strict legal rights even where they arise not in contract, but on his own Title deed or in statute. It is not necessary that there should be some pre-existing contractual relationship between the parties. The parties need not be in any kind of legal relationship before the transaction from which the promissory estoppel takes its origin. The doctrine would apply even where there is no pre-existing legal relationship between the parties, but the promise is intended to create legal relations and effect a legal relationship which will arise in future. It was further held that it is indeed pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of law is concerned. The former is equally bound as the latter. Therefore, the Government cannot claim any immunity from he doctrine of promissory estoppel and it cannot say that it is under no obligation to act in a manner, i.e., fair and just or that it is not bound by the considerations of honesty and good faith. In fact, the Government should be held a high standard of rectangular rectitude while dealing with citizens. Since he doctrine of promissory estoppel is an equitable doctrine, it must yield where the equity so requires. If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government or public authority to the promise or representation made by it, the Court would not raise an equity in favor of the promise and enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such a case, because on the facts, equity would not require that the Government must be held bound by the promise made by it. But the Government must be able to show that in view of the fact as have been transpired, public interest would not be prejudiced. Where the Government is required to carry out the promise the Court would have to balance, the public interest in the Government's carrying out the promise made to the citizens, which helps citizen to act upon and alter his position and the public interest likely to suffer if the promises were required to carried out by the Government and determine which way equity lies. It would not be enough just to say that the public interest requires that the Government would not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it. In order to resist its liability the Government would disclose to the Court the various evens insisting its claim to be except from liability and it would be for the Court to decide whether those events are such as to render it equitable and to enforce the liability against the Government."

27. In that case, however, doctrine of promissory estoppel was held to be not applicable as the same was contrary to statute. Such a plea has not been taken in the instant case. We may further notice that in Andhra Industrial works v. Chief Controller of Imports and Ors., , the law has been laid down in following terms:

"12. Herein, it is not contended that the Imports and Exports (Control) Act, 1947 or any Order or rule made there under is ultra vires. Nor is the validity of the Import Control Policy Statement (for the period April-March 1969) known as Red Book impeached. Indeed, this Policy statement is the sheet-anchor of the petitioners' claim. Such a Policy Statement, as distinguished from an Import & Export Control Order issued under Section 3 of the said Act, is not a statutory document. No person can merely on the basis of such a Statement claim a right to the grant of an import license, enforceable at law. Moreover, such a Policy can be changed, rescinded or altered by mere administrative Orders or executive instructions issued at any time."

28. Yet again, in Jain Exports (P) Ltd. v. Union of India and Ors., it has been held

"The following common contentions have been advanced by learned counsel for the appellants:

(1) The import policy of which year would be applicable to the facts of the present case - the period during which the licenses were issued or the time when import actually took place.

(2) Whether "coconut oil" appearing in para 5 of Appendix 9 of the Import Policy of 1980-81 was confined to the edible variety or covered the individual variety.

(3) whether in the face of the decision of the Board and Central Government as the statutory appellate and revisional authorities, it was open to the Collector functioning in lower ties to take a contrary view of the matter in exercise of quasi judicial jurisdiction; and

(4) Whether the order of the Collector was vitiated for breach of rules of natural justice, and collateral considerations in the making of the orders.

It is not in dispute that the relevant import policy to be referred to is of the year 1980-81 as all the licenses were issued during that period. The Collector found and the High Court has not recorded a different fining that when he license was first revalidated on 18.1.1982, such revalidation was subject to paragraph 215 of the Import Policy of 1981-82. Again while revalidating some of the licenses on 25.9.1982, it was stipulated hat during the extended period, items which do not appear in Appendix 5 and 7 of Import Policy of 1982-83 could not be allowed to be imported and items which appear n Appendix 26 of the Import Policy of 1982-83 will also not be allowed to be imported. The Collector turned down the plea that the licenses allowed the import of items appearing in Appendix 5 and 7 of 1979-80 policy and 1982-83 policy in addition to the items appearing in he OGL and Industrial coconut oil. In the instant case, he licenses were of either of 1980 or 1981 and were revalidated from time to time. For convenience we may refer to a sample order of revalidation dated 28.6.1982. Revalidation was subject to the following conditions:

This license is revalidated for a further period of six months from the date of revalidation with the condition that during the extended period of validity he items which do not appear in Appendix 5 and 7 of the Import Policy of 1982-83 will not be imported. This license will also not be valid for the import of items appearing in Appendix 26 of the Import Policy of 1982-83 during the extended period of validity."

The High Court has come to the correct conclusion that the terms of the import policy of 1980-81 would apply to the facts of these cases."

29. However, we may mention that in the instant case the petitioners are not asking for and are not entitled to ash equivalent on escalated price; they are entitled to ash equivalent only on the original firm ;rice and that too, at rates specified from time to time in respect of the subject matter of import. These writ petition are allowed to the afore-mentioned extent but in the facts and circumstances of this case, there shall be no orders as to costs.