Prakash Textiles vs Union Of India (Uoi) And Ors.
2003 Latest Caselaw 949 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. The petitioner is aggrieved by the order of the Second Appellate Committee of the Government of India, Ministry of Textiles passed on 14.09.2002. The question in this petition relates to the utilisation of the export obligation of the petitioner under the Garment Export Entitlement Policy.

2. In this particular case, the relevant year is 1999. The revalidation of export quota which was granted to the petitioner was under the condition that the petitioner would provide a Bank Guarantee to ensure that it met its export obligation by 31.12.1999. The admitted position is that the petitioner could not meet the export obligation by 31.12.1999. However, the petitioner sought to invoke the Force Majeure condition in order to submit that invocation of the Bank Guarantee and forfeiture of the amount of the Bank Guarantee ought not to be done under the Policy itself as the petitioner was prevented from meeting its export obligation because of the Force Majeure conditions.

3. In this case, the petitioner initially pleaded that it was prevented from meeting its export obligations due to fog and bad weather as well as the Y2K problem at Mumbai Port. However, at the Second Appeal stage, the petitioner gave up its ground with regard to the Y2K problem. Learned counsel for the petitioner has pointed out from the First Appellate order dated 04.04.2002 passed by the Textile Commissioner that the petitioner had, in point of fact, submitted evidence in the form of a Meteorologica Department Certificate dated 07.03.2001 indicating the fog and bad weather conditions prevailing during the period 20.12.1999 to 31.12.1999. This was not accepted as a valid reason constituting a Force Majeure condition by the First Appellate Committee In Second Appeal, however, the same was dismissed by the Second Appellate Committee on the following reason:-

''The firm pleaded that for the shortfall in utilisation was due to fog and bad weather. The same reason was pleaded before the 1st Appellate Committee which dismissed the same for not furnishing any evidence.''

4. According to the learned counsel for the petitioner, this statement is ex facie wrong inasmuch as the petitioner had submitted the evidence by way of the certificate of the Meteorological Department which had also been noticed by the First Appellate Committee. Apart from this, learned counsel for the petitioner submits that no other considerations prevailed with the Second Appellate Committee and, therefore, there was a complete non-application of mind on the part of the Second Appellate Committee.

5. Mr Kuljeet Rawal, appearing on behalf of the respondent No. 4, sought to justify the orders on the basis of the factual position and in particular the very contentions of the petitioner before the Second Appellate Committee which constituted the grounds of Appeal which are at pages 30-32 of the Paper Book. According to Mr Kuljeet Rawal, one of the most important considerations was that the petitioner had submitted, in the grounds of Appeal itself, that because of weather conditions, it could not complete the manufacture of 'XL' items in the said category No. 342. Therefore, the question of claiming Force Majeure conditions between 20.12.1999 and 31.12.1999 preventing the shipment of the goods from the Air Cargo Terminal was not a valid ground at all.

Unfortunately, although there may be some merit in what Mr Rawal contends, the same has not found any mention in the impugned order of the Second Appellate Committee. The Second Appellate Committee has summarily dismissed the appeal on the ex facie incorrect premise that the First Appellate Committee had dismissed the same for non-furnishing of any evidence. Non-production of any evidence is one thing and production of evidence which is not credible or germane to the issues is quite another.

6. In these circumstances, it would be appropriate that the impugned order is set aside and the matter is remanded to the Second Appellate committee for a fresh consideration after giving the petitioner another opportunity of hearing. However, the petitioner is directed to keep the Bank Guarantee alive till the matter is finally disposed of by the Second Appellate Committee. It is expected that the Second Appellate Committee will act as expeditiously as possible in this matter and would, in any event, conclude hearings and come to a decision within two months of this order.

7. Accordingly, the writ petition as well as the CM stand disposed of.

Copy of this order be given dusty to both the parties.