M/S Anand Auto Craft Centre vs The Regional Manager, ...
2011 Latest Caselaw 95 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI


                                 W.P.(C) 9987/2006


                                        Reserved on: December 14, 2010
                                        Date of decision: January 7, 2011


        M/S ANAND AUTO CRAFT CENTRE              ..... Petitioner
                     Through : Mr. Ashok Anand, Managing
                     Director of Chakradar Auto Udyog Pvt Ltd.
                     in person.


                        versus


        THE REGIONAL MANAGER
        ENGINEERING EXPORT PROMOTION
        COUNCIL                                ..... Respondent
                     Through : Mr. Amit S. Chadha, Senior
                     Advocate with Mr. Sandeep Mahapatra and
                     Mr. Mirza Kayesh Begg, Advocates.

                                        And

                                 W.P.(C) 8248/2007


        CHAKRADAR AUTO UDYOG PVT LTD &
        ANR                                   ..... Petitioners
                    Through : Mr. Ashok Anand, Managing
                    Director in person.


                        versus


        THE REGIONAL MANAGER
        ENGINEERING EXPORT PROMOTION
        COUNCIL                              ..... Respondent
                     Through : Mr. Amit Chadha, Senior
                     Advocate with Mr. Sandeep Mahapatra and
                     Mr. Mirza Kayesh Begg, Advocates.


        CORAM: JUSTICE S. MURALIDHAR

        1. Whether reporters of local paper may be allowed
           to see the judgment?                                             No
WP (Civil) Nos. 9987/2006 & 8248/2007                           Page 1 of 11
         2. To be referred to the report or not?                          No

        3. Whether the judgment should be referred in the digest? No


                                JUDGMENT

07.01.2011

1. Both petitions involved more or less similar issues and are

consequently being disposed of by a common judgment.

2. The facts in WP (C) 9987 of 2006 are that the Petitioner, a

proprietary concern and a merchant exporter exported various

automotive components during the year 1992-94. It is stated that by

virtue of the said export, the Petitioner became entitled to claim

benefit under the International Price Reimbursement Scheme („IPR

Scheme‟) formulated by the Government of India in 1981 to

compensate manufacturers and exporters of automotive components

with respect to the differential in price of various raw materials like

steel, alloy steel, etc as they existed internationally and in India.

Under the IPR Scheme, a merchant exporter was eligible to claim

price reimbursement against consumption of specified raw material in

the engineering goods exported from India. A claim had to be

submitted by the merchant exporter in the manner prescribed by the

Hand Book issued by the Respondent Engineering Export Promotion

Council („EEPC‟). The Petitioner submitted claims amounting to Rs.

25,88,304 to the EEPC during the year February 1992 to February

1994.

3. It is stated that in 1994, the Central Bureau of Investigation („CBI‟)

registered a criminal case against Mr. Yashpal Anand, the late

husband of Mrs. Usha Anand who is the present proprietor of the

Petitioner firm M/s. Anand Auto Craft Centre. Although the

impugned claims did not relate to the years for which the CBI sought

to prosecute Mr. Yashpal Anand, the EEPC did not disburse the

amount under the IPR Scheme to the Petitioner on account of the

pendency of the said criminal case. It is stated that despite

representations made thereafter, the amount was not released to the

Petitioner.

4. The facts in WP (C) 8248 of 2007 are more or less similar.

Petitioner No. 1 is a company duly registered with the EEPC. It

lodged claims under the IPR Scheme for the export of automotive

components made by it. Petitioner No. 2, Ashok Anand, is the

Managing Director of Petitioner No.1 and proprietor of M/s. Ashoka

Overseas. He is the brother of Mr. Yashpal Anand. The claims of the

Petitioners, as of other similarly placed claimants, were not cleared by

the EEPC on account of the pendency of the criminal case instituted

against them by the CBI.

5. By a judgment dated 22nd June 2001, the Petitioners in WP (C)

No.8248 of 2007 as well as other similarly situated merchant

exporters were acquitted in criminal cases registered against them. In

the case of Mr. Yashpal Anand, he had filed a criminal miscellaneous

application in this Court in which a stay was granted of the

proceedings in the trial court. Later, Mr. Yashpal Anand withdrew the

criminal miscellaneous application. However, since his case had been

delinked from the cases of other merchant exporters, no formal order

of acquittal was passed in his case. On 8th February 2003, Mr. Yashpal

Anand expired and the criminal trial against him abated. A

consequential order to that effect was passed by the trial court on 18 th

February 2003.

6. It is stated that pursuant to their acquittal, one of the merchant

exporters Mr. Satish Anand filed a Civil Writ No. 6895 of 2001

praying for appropriate directions to the EEPC to verify the claims

under the IPR Scheme. Chakradar Auto Udyog Pvt. Limited and Mr.

Ashok Anand [the Petitioners in Writ Petition (Civil) No. 8248 of

2007] filed Writ Petition (Civil) No. 6680 of 2001 in this Court

claiming similar relief. By separate but identical orders dated 21st

April 2003, a learned Single Judge of this Court disposed of the

petitions and directed that the EEPC should verify the claims in

accordance with the schemes framed under the Exim policy within

two months and pay the amounts to which they may be found entitled

on such verification.

7. Subsequent to the judgment dated 21st April 2003, the EEPC wrote

a letter dated 17th June 2003 to the Directorate General of Foreign

Trade („DGFT‟), seeking clarification whether the payment claims

pending with the EEPC could be given effect to and the amounts

released to the claimants. The EEPC also filed CM No. 7106 of 2003

in the disposed of W.P. (C) No. 6680 of 2001 seeking extension of

time to comply with the order dated 21st April 2003. The said

application was disposed of by an order dated 25 th June 2003 by the

learned Single Judge of this Court extending the time for verification

of the claims by another two months.

8. The further application being CM/RA No. 8357 of 2003 filed by

the EEPC before the learned Single Judge stated that since the

Petitioners had not furnished requisite information for their claims,

they could not be verified and, therefore, further extension was sought

to comply with the order dated 21st April 2003. The said application

was disposed of by the learned Single Judge by an order dated 21 st

November 2003. The operative portion of the order reads as under:

"The claims have already been verified by Respondent No. 1 as is evident from the letters appearing from pages 12 to 44 of the paper book. The Respondent cannot now deny the benefits to the Petitioner on the ground that certain other documents which are required under a policy framed in the year 1996 or any time thereafter are required for purposes of verification of the claims of the Petitioner. Prima facie it appears to the Court that the Respondent cannot deny the benefits to the Petitioners on the basis of a policy which had been framed after the Petitioners had become entitled to the benefits under the then existing policy and the policy framed in 1996 cannot have any retrospective effect. I am, therefore, not inclined to agree with the Respondent that any document for purposes of verification of the Petitioner‟s claim is required to be submitted by the Petitioner. I accordingly direct the Respondents to verify the claim of the Petitioner on the basis of the documents available with

them within four weeks from the date of this order. With these observations, the application stands dismissed."

9. Aggrieved by the orders dated 21st April 2003 and 21st November

2003, the EEPC filed Writ Appeal Nos. 23 of 2004 and 48 of 2004

before the Division Bench of this Court. By an order dated 27th

February 2004, the Division Bench directed the EEPC to deposit a

sum of Rs. 23,97,930/- with the Registrar General as far as the claim

of Chakradhar Auto Udyog Pvt. Limited was concerned. The amount

was directed to be invested in a short term fixed deposit with a

nationalised bank. Other similar appeals were filed in the cases of the

other merchant exporters.

10. Meanwhile, Mrs. Usha Anand filed Writ Petition (Civil) No. 4992

of 2003 claiming that the case of Mr. Yashpal Anand is no different

from that of the other merchant exporters and that consequently she

was entitled to the sum of Rs. 25,88,304/- from the EEPC under the

IPR Scheme. This petition and the above appeals came up for hearing

on 28th January 2005 before the Division Bench. By separate orders,

the Division Bench dismissed the appeals and allowed W. P. (C) 4992

of 2003. The Division Bench directed the EEPC to take necessary

decision after verifying the claims of the Petitioner within three

months. In para 4 of the said order, it was observed as under:

"Learned Single Judge has specifically observed that the claims will be settled on verification. It goes without saying that verification has to be in accordance with law and would include a right to the appellant to seek clarification from the writ Petitioners."

11. By a letter dated 6th April 2005, the EEPC required the Petitioners

to submit the following documents:

(a) Customs Certified Invoices;

(b) Bank Realization Certificate;

(c) Customs Certified Packing List, and;

(d) Test Certificate

12. The above letter was replied to by the Petitioners on 11th April

2005 stating that "we have no documents other than the documents

that were submitted to you as required under the IPR Scheme." A

further demand for the said documents was made by the EEPC by its

letter dated 18th April 2005. The Petitioners again replied on 21st April

2005 maintaining that the High Court had not directed the Petitioners

to submit any document and that it was for the EEPC to take a

decision on their claims.

13. On 25th April 2005, the EEPC wrote a detailed letter rejecting the

claims of the Petitioners. Inter alia, it was pointed out that only 6 of

33 Custom Certified Invoices were available. As regards the Bank

Realisation Certificate, only 21 certificates had been received whereas

the total claim was for 33 invoices. Even as regards the available 6

Customs Certified Invoices, only 4 Bank Realization Certificates had

been received. Without the Customs Certified Packing List, the actual

weight of each article in the claim application form could not be

verified and in the absence of such documents, the EEPC could not

make the payments. Finally, in the absence of Test Certificates, which

were required for cross-verification of the export documents, the

claims could not be processed.

14. The Petitioners then filed Contempt Petitions Cont. Cas. (C) Nos.

394-395 of 2005 which, however, came to be dismissed on 16th

November 2005 with liberty to the Petitioners to seek appropriate

remedies for any substantive grievance. The Special Leave Petition

No. 7351 of 2006 against the above order was dismissed by the

Supreme Court on 5th May 2006. Thereafter the present petitions were

filed.

15. Mr. Ashok Anand, the Managing Director of Chakradar Auto

Udyog Pvt. Limited appeared in person representing both sets of

petitioners. According to him, their claims had already been verified

by the EEPC and passed for payment. The only reason for not

releasing the amounts was the pendency of the criminal case. With the

Petitioners being acquitted by the criminal court, there remained no

impediment in the release of the payments. Mr. Anand submitted that

the EEPC was deliberately misconstruing the order passed by the

learned Single Judge of this Court on 21st April 2003 which had

attained finality. Even the subsequent order dated 21 st November 2003

did not permit the EEPC to keep asking for further documents. The

EEPC had only been permitted to verify the documents already

submitted to it by the Petitioners. It is submitted that by repeatedly

asking for documents the EEPC was frustrating the order dated 21st

April 2003. The Petitioners had been waiting for several years for the

release of amounts. The documents which were in the possession of

the Petitioners had been taken away by the CBI and, therefore, they

could not be expected to produce any further documents. It is

submitted that the EEPC was not even prepared to release the pro-rata

payment for the six Customs Certified Invoices available with it. It

was submitted that the EEPC was acting arbitrarily in declining to

make payments despite the Petitioners having submitted all the

documents.

16. Appearing for the EEPC, Mr. Amit S. Chadha, learned Senior

counsel submitted that the requirements under the IPR Scheme read

with the Handbook were specific and unambiguous. It was mandatory

for the claimant to give a whole set of documentation including the

Customs Certified Invoices, Test Certificates, Customs Certified

Packing Lists and the Bank Realisation Certificates. Admittedly, the

Petitioners could not produce the above documents despite repeated

requests made by the EEPC. Even as regards the available six

Customs Certified Invoices, payments could not be made till such

time the corresponding Bank Realisation Certificates, Customs

Certified Packing Lists and Test Certificates were not produced.

17. The above submissions have been considered by this Court. A

perusal of the IPR Scheme together with the Handbook makes it

abundantly clear that without a claimant producing the required

documentation, it would not be possible for the EEPC to process the

claim. It appears to this Court that the further application CM/RA No.

8357 of 2003 filed by the EEPC, which led to the order dated 21st

November 2003 passed by the learned Single Judge, was necessitated

by the fact that as on that date, the complete documentation for

processing the claims in each of the cases had not been furnished to

the EEPC. The order dated 21st November 2003 indicates that the

learned Single Judge did not accept this position. However, while

dismissing the appeals, the Division Bench, in para 4 of its order dated

28th January 2005, observed that verification had to be done by the

EEPC in accordance with law and that this "would include a right to

the Appellant [i.e. EEPC] to seek clarification from the writ

Petitioners." Thereafter by its letters dated 6th April 2005 and 18th

April 2005, the EEPC sought clarification on whether any other

documents were available with the Petitioners. The Petitioners

clarified that they did not have any further documentation.

18. It is not possible for this Court to agree with the contention of the

Petitioners that since the EEPC had already found the claims to be in

order, it had to necessarily issue orders releasing the payment. There

cannot be any estoppel against the EEPC in respect of its letter dated

17th June 2003 to the DGFT seeking clarification on whether amounts

could be released to the claimants. Ultimately, what is required to be

seen is whether on the basis of the documents made available to it the

EEPC, it could clear the claims of the Petitioners for payment. As

already noticed, the order passed by the Division Bench on 28th

January 2005 while dismissing the appeals of the EEPC permitted it to

seek further clarification while verifying the claims of the Petitioners

on the basis of the documentation available with it. The Petitioners

were repeatedly asked by this Court as to whether any of them had the

complete documentation in respect of their claims as required by the

EEPC and in particular, whether in respect of each of the claims, the

Customs Certified Packing Lists, the Test Certificates, the Bank

Realization Certificates and the Customs Certified Invoices were

available. While the Customs Certified Invoices were stated to be

available for six of the transactions, there were no Customs Certified

Packing Lists available for any of them. Likewise, the Bank

Realization Certificates were available for only a few of them. In

other words, not even one of the claims contained the complete set of

the above four documents.

19. In the circumstances, this Court is of the view that the refusal by

the EEPC to clear the Petitioners‟ claims for payment in terms of the

IPR Scheme cannot be said to be either arbitrary or unreasonable.

Unless the complete documentation in terms of the IPR Scheme was

made available to the EEPC by the Petitioners, they could not expect

the EEPC to clear their claims.

20. Consequently, this Court finds no merit in either of the petitions

and they are dismissed as such with no order as to costs.

S. MURALIDHAR, J.

JANUARY 7, 2011 rk