Prem G'S International vs Union Of India (Uoi) And Anr.
2006 Latest Caselaw 1731 Del

JUDGMENT

Anil Kumar, J.

1. The petitioner has prayed for issuance of Writ of mandamus, certiorari or any other writ or order quashing the impugned order dated 11.10.1993 passed by the Textile Commissioner, Bombay and issuing directions for the release of forfeited 40% amount of Bank Guarantee equivalent to Rs. 1,25,039/- furnished by bank guarantee by the petitioner with respondent No. 2, AEPC, Delhi.

2. Brief facts to comprehend the controversies are that petitioner contended that it is a export company and is engaged in the business of exporting readymade garments and other items to the foreign countries having its registered office at A-4, Nizammudin West, New Delhi and factory at A-18, sector VI, Noida Complex, District Gaziabad, U.P.

3. Respondent No. 2, AEPC, is an Undertaking of Ministry of Textiles and regulates the export of garments especially Knitwear from India to foreign countries.

4. It is the case of the Petitioner that the Ministry of Textiles through its Joint Secretary issued a notification bearing No. 1/4/90-EP(T&J)I(Apparels) dated 31.8.1990 laying down the guidelines under OGL-3 for Export of garments and Knitwear from India for the calendar year 1992-93.

5. The petitioner applied and obtained Quota with the respondents under the FCFS category for exporting readymade garments. On 22.1.1991 the petitioner was allocated the quota vide allocation No. 501657 US/ 336 for 3000 pcs and No. 501658 US/ 336 for 6000 pieces and the said quota was valid up to 10.3.1991.

6. On 19.3.1991 the petitioner applied for change of category from 336 to 636/USA because the importer changed the fabric from cotton to rayon and the permission for the same was granted by the respondent No. 2. Subsequently, the petitioner obtained an extension of 30 days on the validity of quota from AEPC on production of 15% additional Bank Guarantee as a result of which the quota was revalidated up to 10.4.1991.

7. The petitioner again obtained a 30 days extension up to 10.5.1991 from the AEPC by furnishing another additional 15% Bank Guarantee. Thus in total 30% additional Bank guarantee was furnished by the petitioner for utilizing the entitlement certificate. Since the production could not be completed by 10.5.91, as the production of the material was not complete in all sizes and colours therefore, the petitioner again sought a further extension of 20 days.

8. In the meanwhile the Government vide its Inter Office memo dated 13.05.1991 granted a general extension to the validity of certified shipping bills of 1991 FCFS first period quota up to 31.5.1991 for which the exporters had already furnished net additional Bank Guarantee of 30%. The petitioner therefore claimed that he was entitled to get the general extension of time up to 31.5.1991 as he had already deposited the additional bank guarantee of 30%.

9. However the extension of time on the shipping bills beyond 10.5.91 till 31.5.1991 was not granted to the petitioner by the AEPC, Madras on the ground of non receipt of clarification regarding submission of 30% of the Bank guarantee by the petitioner to the Delhi office.

10. The petitioner brought the said facts to the notice of the respondent No. 2 vide telex-dated 21.5.91 but to no avail and the ship sailed on 24.5.1991 from the Madras port which was the last date of acceptance of cargo by the importer. The petitioner brought the said facts to the notice of the respondent No. 2 vide letter dated 25.5.1991 and thereafter surrendered all the shipping documents in respect to allocation vide letter dated 19.6.1991

11. On 24.10.1991 the petitioner wrote a letter to Chairman, AEPC for release of 30% additional bank guarantee which the petitioner furnished towards allotment of quota in respect of allocation No. 11N-501657 dated 21.1.91 category 636 under FCFS. Thereafter a show cause notice was issued to the petitioner by respondent No. 2, calling upon him to show as to why the bank guarantee should not be forfeited which was duly replied by the petitioner by a reply dated 1.9.1992 contending the facts as detailed hereinabove.

12. On 5.10.92, respondent No. 2, passed an order for total penalty/ forfeiture of Rs. 3,12,599/-. Aggrieved by the order dated 5.10.92 petitioner filed an appeal before the Textile Commissioner, Export promotion Branch, Bombay who vide letter dated 7.12.92 granted interim stay against the enforcement of the terms of the bank guarantee by AEPC and issued direction for extension of bank guarantee for a period of one year from the date of its expiry and also directed the submission of the same to AEPC within a period of 15 days from receipt of the order. The textile commissioner eventually on 11.10.93 passed an order thereby allowing the AEPC to retain only 40% of the amount forfeited by them and release the balance to the petitioner. The petitioner being aggrieved by the aforesaid order filed a 2nd appeal before the joint secretary which was rejected on the ground that the government notification dated 31.8.1990 does not provide for second appeal against the textile commissioner's order for the quota year 1991 and 1992.

13. The petitioner has sought quashing of the order dated 11.10.1993 on account of non utilization of quota as it was beyond the control of the petitioner since he was not allowed to execute the order and utilize the quota by the AEPC, Madras for want of clarification of furnishing of 30% additional Bank Guarantee with the AEPC Delhi and that he was always entitled to get general extension up to 31.5.91 like other exporters and the deprivation of the same to the petitioner is infringement of his right of equality under Article 14 of the Constitution. The other reason for non-utilization of quota being that the printer failed to supply the printed fabric in time due to some dyeing defect developed in the fabric during printing process. Reliance has been placed by the petitioner on the force majeure guidelines as provided in the Garment export entitlement policy. The force majeure guidelines are as under:

9. FORCE MAJEURE GUIDELINES:

Following are the guidelines for force-majeure cases:

a. STRIKE/LOCK-OUT:

If there is a strike or lock-out for 7 days or more in the garment factory of the entitlement holder which started after his obtaining certifications, the entitlement holder could apply for revalidation of the certification to the extent of the period covered by the strike/lock-out plus 10 days.

b. POWER-CUT:

If there has been a power-cut/load-shedding in the area in which factory of entitlement holder is situated continuously for a period of 4 hours or more per day between 8.00 A.M. & 8.00 P.M. consecutively for a period of 7 days or more, after an entitlement holder has obtained certification, revalidation may be granted to the extent of the period covered by the power-cut plus 10 days.

c. TRANSPORT STRIKE/DOCK STRIKE:

If a transport strike or dock strike has affected export of goods which have been manufactured and kept ready for shipment, revalidation to the extent of period covered by the transport strike or dock strike plus 7 days will be given. However, if the strike has been for seven days or less, revalidation will be restricted to the actual period of strike.

d. FIRE/NATURAL CALAMITIES:

In cases, where garments factory of the exporter gets affected by fire after obtaining certification, revalidation of the certification to the extent of the period required for manufacturing garments or fabrics destroyed by fire may be granted. For this purpose, the extent of damage to fabrics or garments will be assessed on the basis of documents such as insurance payments. The period of extension will be worked out on pro-rata basis, i.e., quantity damaged as a percentage of quantity allotted will be assessed and the same percentage of original validity will be given as additional validity.

e. NON-AVAILABILITY OF CARGO SPACE:

Revalidaition for non-availability of cargo space will be on the following basis:

i) If the certification had been taken for a vessel which was scheduled to sail within the validity period for which certification had originally been obtained but subsequently departure of vessel got delayed, revalidation will be given to the extent of the actual date of departure of the vessel.

ii) If the consignment has been booked for a particular vessel which was scheduled to leave within the validity period of original certification but the vessel could not accommodate the consignment because of shutting out of cargo arising from excess booking, revalidation will be given until the departure of the next vessel for the same destination from that port.

iii) If the vessel which was originally scheduled to sail during the validity period of certification, sails before the due date, revalidation will be given up to the date of departure of the next vessel to the same destination from that port.

iv) If the vessel which was originally scheduled to sail within the validity period of certification got cancelled, revalidation will be given up to the date of departure of the next vessel to the same destination from that port.

v) Revalidation of certification taken for air shipment will also be covered by guidelines contained in sub-para (i) to (iv). In cases covered by (a) to (e) above, documentary proof relating to the contention should be produced from the Official Agencies empowered to certify these conditions such as District Administration, Labour Deptt., Electricity Board, Port Trust, Airlines, Insurance Companies, etc. In addition the Council may also check-up the facts to satisfy itself with the genuineness of the claims.

14. The petitioner has relied upon 1994(54) ECR 533(SC) Gajaanan Visheshwar v. UOI and to contend that non grant of time extension to the petitioner is in violation of Article 14 of the Constitution of India and is also in violation of the principle of promissory estoppel.

15. The petition is contested by the respondents contending that the provision for time extension as provided in the Inter Office Memo dated 13.5.1991 of the respondent No. 2 doesn't apply to the present petitioner. The reason being that the certification of the petitioner expired on 10.5.1991 and the inter office memo was released on 13.5.91 meaning thereby that that it was issued after the date of expiry of the certification/entitlement of the petitioner and therefore the time extension could not have been granted to the petitioner.

16. I have heard both the parties in detail and have perused the petition and the documents filed with the petition. The main dispute seems to be the applicability of inter office memo dated 13th May, 1991 in case of the petitioner. The said memo is as under:

Inter office memo dated 13.5.91

Please refer our earlier advertisement released on general extension up to 31.5.91.

Government has decided to grant general extension of validity of all FCFS certifications/Entitlements up to 31.5.91. This will be applicable for all such certification which are expiring on or before 30.5.91 which have already been extended for a period of 60 days on the basis of submission of net additional EMD/BG of 30%.

This General Extension is not subject to submission of any additional EMD/BGs apart from 30% BML/BG already.

In case where 30% EMD/BGs for the first two extensions have not yet been submitted and where certifications have not yet been obtained by the Exporters, they may do so latest by 15th May, 1991. In cases where such EMD/BGs are not submitted and certifications have not been obtained by 15th May, 1991, the General Extension will not be available.

17. From the bare perusal of the inter office memo dated 13.5.91 it is evident that the petitioner is squarely covered by it and meets all the requirements for its applicability. The policy stipulates three conditions for its applicability: - firstly, it is applicable only on FCFS Certifications / Entitlements; secondly it is applicable to all the certifications expiring on or before 30.5.91 ; thirdly that the certifications must have already been extended for a period of 60 days on furnishing additional EMD/BG of 30%. It nowhere provides that the certification which expires after 13.5.91 (the date of issuance of the policy) and before 30.5.91 will only be entitled to general extension till 31.5.1991 nor does it provide that the certification which expires before 13.5.1991 will not be entitled to time extension. Such an explanation is neither provided nor can it be inferred on the plain reading of the policy instruction dated 13.5.1991. The petitioner meets all the three requirements laid down under the policy for time extension as his certification was granted under FCFS category, and was due to expire on 10.5.1991 which is well before 30.5.91 and his certification was extended twice for a total period of 60 days and after furnishing two bank guarantees of 15% each which fact has not been disputed by the respondents and can not be disputed in the facts and circumstances. The explanation given by the respondents for non-grant of time extension to the petitioner is, therefore, unacceptable and it is concluded that but for non-receipt of clarification regarding submission of 30% of the bank guarantee the petitioner was eligible for time extension as per the policy instruction dated 13.5.91.

18. It is nowhere contended by the respondents in the earlier proceedings that the policy instruction dated 13.5.91 is not applicable to the petitioner as it has been issued subsequent to the expiry of the certification of the petitioner and the only reason for forfeiture as given in the order dated 5.10.1992 and 11.10.1993 being non utilization of Quota by the petitioner. Therefore it is evident that there is an error on the part of respondent No. 2, AEPC in not endorsing the shipping document properly because of which extension till 31.5.1991 was not granted to the petitioner for which the petitioner could not be penalized. Once the policy is applicable to a particular individual and the benefits of which are wrongly denied to him, than he cannot be made to suffer/penalized for no fault of his. It is therefore, evident that reason for non-utilization of the quota can be attributed to non-grant of time extension to which the petitioner was otherwise entitled.

19. Consequently, the inevitable inference is that the petitioner is entitled for the relief claimed in the writ petition. Therefore, the rule is made absolute and the writ petition is allowed and the order of the textile commissioner dated 11.10.1993 is quashed and the respondents are directed to release 40% amount which is Rs. 1,25,039 to the petitioner which was furnished to the respondent by way of bank Guarantee. In case the amount is not paid to the petitioner within sixty days the respondents shall be further liable to pay interest on the said amount @ 12 % to the petitioner till the amount shall be paid to the petitioner from the date of this order. However considering the facts and circumstances, the parties are left to bear their own costs.