S.K. Works & Ors vs Enforcement Directorate & Anr
2012 Latest Caselaw 3586 Del

         *IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Date of decision: 29th May, 2012
+                              LPA No.419/2012
      HARRY'S CREATIONS & ANR.                ..... Appellants
                  Through:    Mr. Praveen Agrawal, Adv.
                           Versus
      ENFORCEMENT DIRECTORATE & ANR. ..... Respondents
                  Through: Ms. Rajdipa Behura & Mr. Satish
                              Mishra, Advs.
                           AND
+                      LPA No.420/2012
    NILA'S CREATIONS & ANR.                   ..... Appellants
                  Through:    Mr. Praveen Agrawal, Adv.
                           Versus
    ENFORCEMENT DIRECTORATE & ANR. ..... Respondents
                  Through: Ms. Rajdipa Behura & Mr. Satish
                              Mishra, Advs.
                           AND
+                      LPA No.423/2012
    S.K. WORKS & ORS.                         ..... Appellants
                  Through:    Mr. Praveen Agrawal, Adv.
                           Versus
    ENFORCEMENT DIRECTORATE & ANR. ..... Respondents
                  Through: Ms. Rajdipa Behura & Mr. Satish
                              Mishra, Advs.
CORAM :-
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J.

1. These intra-Court appeals impugn orders, all dated 25.04.2012 of the learned Single Judge dismissing W.P.(C) Nos.2429/2012, 2421/2012 & 2428/2012 preferred respectively by the appellants.

2. Each set of appellant had exported goods, export value whereof was not received by them within the prescribed time and they were treated as having contravened the provisions of Section 18(2)&(3) of the then Foreign Exchange Regulation Act, 1973. Penalty proceedings under Section 50 of the said Act were initiated against each of the appellants by the Directorate of Enforcement under the said Act and penalty was imposed by the Adjudicating Authority on each of the appellants. The statutory appeals filed were also dismissed and ultimately the amount of penalty imposed and upheld by the Appellate Authority, was deposited by each set of appellants.

3. It is the case of the appellants that upon non receipt of the export value within the prescribed time, they had applied to the Reserve Bank of India (RBI), initially for extension of the time for realizing the export value and subsequently for waiver, but no decision was taken thereon; that ultimately the RBI on 09.02.2009 allowed each set of appellants to write off the unrealized export bills from their respective books.

4. The appellants after nearly three years therefrom, in or about February, 2012 demanded refund of the penalty amounts so deposited by them. It was their contention that upon the RBI having permitted them to write off the unrealized exports bills, they were no longer liable for penalty already recovered from them. Upon not receiving any response, the writ petitions from which these appeals arise were filed for a direction for refund of the said penalty amounts.

5. The Learned Single Judge dismissed the said writ petitions holding:

(i) that the permission of the RBI to write off the unrealized export bills was "without prejudice to the action that may be taken by Directorate of Enforcement". The contention of the appellants that the said exception did not save action, „which had already been taken‟ and thus the appellants were entitled to refund was rejected and it was held that the use of the expression "may be taken" could not be read to mean future action only but also included the action taken by the Directorate of Enforcement prior to the date of the said permission of the RBI. It was observed that it would be absurd to hold that the RBI while granting permission excepted the future but not the past action of the Directorate of Enforcement;

(ii) that the order imposing penalty was a quasi judicial order which had attained finality and had been implemented and the subsequent permission / waiver by the RBI does not give a right to the appellants to seek re-opening of concluded proceedings;

(iii) that the appellants had demanded the refund after three years of the permission granted by the RBI and the claim of the appellants was barred by delay and laches.

6. The counsel for the appellants has at the outset contended that the learned Single Judge has erred in believing that the claim was made after three years of the permission of the RBI. It is contended that not only was the claim made before the expiry of three years but even the writ petitions were filed within the said period of three years. Else, the contention is the

same, that the permission granted by the RBI invalidated the earlier penalty proceedings and what was saved was only the proceedings which the Directorate of Enforcement may take in future.

7. We are unable to accept the aforesaid contention and are in agreement with the reasoning of the learned Single Judge. It defies logic that while the Directorate of Enforcement could take penalty proceedings against the appellants after the permission granted by the RBI, the proceedings earlier taken by it would stand invalidated. Significantly, no challenge has been made by the appellants to the letter of the RBI making the permission granted subject to the action by the Directorate of Enforcement. If stand of the appellants was that upon the RBI satisfying itself that the appellants were not to blame for non-realization of the export value RBI ought not to have made the permission without prejudice to the action by the Directorate of Enforcement, the appellants ought to have challenged the same. As aforesaid, it has not been done. We are also of the view that the appellants indeed slept over their claims, even if any, after receipt of permission aforesaid from the RBI. They were spurred into action just when the period of three years was expiring. The learned Single Judge is thus correct in holding the claim of the appellants to be bad on account of laches and acquiescence also. The Supreme Court in Shri Vallabh Glass Works Ltd. Vs. Union of India AIR 1984 SC 971 observed that unexplained delay even of period shorter than that prescribed in statute of limitation for filing a suit may be sufficient to refuse relief in a petition under Article 226 of the Constitution. This extraordinary jurisdiction, as per The Municipal Council, Ahmednagar Vs. Shah Hyder Beig (2000) 2 SCC 48 is available

to mitigate the sufferings of the people in general on sound equitable principles and hence the equitable doctrine „delay defeats equity‟ has its fullest application in the matter of grant of relief under Article 226. Equity favours a vigilant rather than an indolent litigant.

8. We, in addition, are also of the view that the writ petitions even otherwise were not maintainable. The Supreme Court recently in Godavari Sugar Mills Ltd. Vs. The State of Maharashtra (2011) 2 SCC 439 after considering of the entire case law has made the legal position clear in this regard. It was held that a petition for issue of writ of mandamus will not normally be entertained for the purpose of merely ordering a refund of money, to the return of which the Petitioner claims a right. The aggrieved party seeking refund has to approach the civil court for claiming the amount, though the High Courts have the power to pass appropriate orders in the exercise of the power conferred under Article 226 for payment of money. A distinction was carved out between cases where a claimant approaches the High Court seeking the relief of obtaining only refund and those where refund is sought as a consequential relief after striking down the order of assessment etc. It was held that while a petition praying for mere issue of a writ of mandamus to the State to refund the money alleged to have been illegally collected is not ordinarily maintainable. It was further held that only where the lis has a public law character, or involves a question arising out of public law functions on the part of the State or its authorities, access to justice by way of a public law remedy will be entertained.

9. It thus follows that the writ petitions from which these appeals arise, being for mere refund, were in any case not maintainable.

10. We may also record that the appellants have not even chosen to place on record the orders of the Adjudicating Authority or the Appellate Authority imposing penalties on the appellants. They have also not filed any document to show that they had applied to the RBI at the contemporaneous time for relieving them of the obligation of realization of the export value. The letters of the RBI granting permission are in response to letters of 30.09.2008 i.e. of a date after the penalty had been imposed. It is also not clear whether the appellants had informed the Adjudicating Authority and the Appellate Authority of the pendency of their applications to the RBI. For all these reasons also we find the case of the appellants to be not fit for consideration by way of the writ petitions.

11. We therefore do not find any merit in these appeals and dismiss the same.

No order as to costs.

RAJIV SAHAI ENDLAW, J

ACTING CHIEF JUSTICE May 29, 2012 „gsr‟ ..