M/S. Nicolian Bros. vs Union Of India & Others
2013 Latest Caselaw 3661 Del

*IN THE HIGH COURT OF DELHI AT NEW DELHI

%            Judgment reserved on :  1 s t August,2013
             Judgment pronounced on: 22 nd August,2013

+                         W.P.(C) 497/1996

M/S. NICOLIAN BRO S.                                     ...Petitioner

                          Through      Mr. Ankur Mittal, Advocate

                          Versus

UNIO N OF INDIA & OTHERS.                       ..... Respondents
                   Through             Ms.Meera Bhatia,
                                       Advocate for R-1.
                                       Mr. Kamal Nijhawan & Mr.
                                       Sumit Gaur, Advocates for
                                       other respondents.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE SANJEEV SACHDEVA

SANJEEV SACHDEVA, J.

1. The petitioner has filed the present petition seeking setting aside of letter/order dated 2 4.03.1993 passed by the Respondent No. 2 and the letters/order dat ed 15.09.1991 passed by Respondent No. 3.

2. The petitioner on 09.02.1990 procured orders for export of 40 units of ultrasound scanners from a company in Moscow. On 14.02.1990 petitioner procured pro forma invoice for import of components re quired for

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assembly/manufacturing of ultrasound scanners from a company in Austria. On 2 9.05.1990 the petitioner obtained duty-free advance licence for import of scanner components. On 13.08.1990 the petitioner imported the first lot of components. The second lot of components were im ported by the petitioner on 10.09.1990. On 22.10.1990 the petitioner paid customs duty of Rs. 7,77,033/-. The petitioner claims to have paid the custom duty under protest. On 24.10.1990 the petitioner exported the ultrasound scanners and fully utilised the imported components in the manufacture and export of the said ultrasound sca nners.

3. On account of the export of the ultrasound scanners on 24.10.1990 the petitioner claims to have become entitled to the duty drawback of Rs. 7,77,033/-. On 27.02.1991 the petitioner filed a claim for refund/drawback of the said duty along with the relevant documents with the Assistant Collector of Customs (drawback), New Delhi.

4. On 15.09.1991 the Assistant Collector of C ustom (drawback) intimated the petitioner that the claim of the petitioner was not covered under section 74 or 75 of the Customs Act, 1962. Vide the said letter the assistant collector of customs informed the petitioner that the claim of the petitioner could not be considered for payment and the claim was being filed.

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5. On 20.03.1992 the petitioner referring to the letter dated 15.09.1991 of the Assistant Collector of Customs wrote to the Collector of Custom s requesting for consideration of the claim for refund favourably.

6. On 04.06.1992 the Senior Analyst (drawback), Government of India, Ministry of Finance, Department of revenue while referring to the letter of the petitioner dated 20.03.1992 informed the petitioner that as the petitioner had not filed any application in the prescribed format with the necessary details in the time period provided under the Drawback Rules, 1972 for fixation of drawback rate on Wobbler Transducers, it was not possible to grant duty drawback under section 75 of the Customs act, 1962. The said letter further informed the petitioner that for claiming drawback on export aga inst DEB C, requirement of Para 251(1) of Import Export Policy 1990 - 93 was required to be fulfilled.

7. On 20.11.1992 the petitioner made a representation to the director (drawback) and requested for re -examination of the claim for drawback and for refund of the customs duty.

8. On 24.03.1993 the Senior Analyst (DBK) referring to the letter of the petitioner dated 20.11.1992 informed the petitioner that its case had been reconsidered and found that the petitioner had not filed any application in the

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prescribed pro forma enclosing the DBK statements an d the export documents for fixation of brand rate within the time period prescribed under Rule 6(1) of Drawback Rules, 1971. Accordingly the petitioner was informed that the case had been once again rejected as time-barred.

9. The petitioner thereafter represented to the Senior Analyst wide letter dated 25.0 9.1993 and 16.06.1994 and to the Collector of Custom s on 25.04.1995.

10. Being aggrieved by the rejection of the claim for refund of duty or drawback the petitioner filed the present writ petition on 18.01.1996 impugning the letters/orders dated 15.09.1991 and 24.03.1993.

11. The case of the petitioner is that the petitioner paid the customs duty under protest and the petitioner had on 24.10.1990 fulfilled the export obligations and as such was entitled to the drawb ack. The petitioner filed a claim for drawback on 27.02.1991 however the same was rejected on 15.09.1991 erroneously and in violation of the principles of Natural Justice. The petitioner on 20.03. 1992 approach ed the Collector of Custom s and sought a refund however, vide letter dated 04.06.1992 the petitioner was informed that drawback could not be granted as the application had not been moved within the prescribed time period. The petitioner vide letter dated 24.03.1993 was once again

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informed that the claim had been rejected as being time - barred and for non -compliance of filing the requisite application and documents.

12. In contrast to the stand of the petitioner, the respondents have contended that the petitioner had not exhausted the alternative remedy of fi ling an appeal with the CEGAT. The respondents have further contended that the petitioner had not applied for the claim to the proper authorities in proper form as per the rules within time despite being so informed vide the letter s dated 15.09.1991 and 24.03.1993. The respondents have even on merits contested the entitlement of the petitioner for claiming the drawback. The respondents have contended that the petitioner has not filed any appropriate application for refund with the proper officer (i.e. refun d section) for processing of the claim on merits. Learned counsel for the respondent s has contended that the claim of the petitioner was belated and even the present writ petition has been filed after a lapse of nearly five years from the first rejection o f the claim of the petitioner.

13. On consideration of the respective contentions of the parties we are of the considered view that the petitioner has forgone the right to the discretionary relief under A rticle 226 of the Constitution on account of gross dela y and laches.

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14. In the present case, the petitioner claims to have become entitled to drawback on fulfilling the export obligation on 24.10.1990. T he respondents on 15.09.1991 rejected the claim of the petitioner and once again reiterated the rejection vide letters dated 04.06.1992 and 24.03.1993. The rejection of the case of the petitioner has been on the ground that the petitioner has not filed the requisite applications within the requisite time with the concerned authorities. Despite the fact that the petitioner was made aware as far back as on 15.09.1991 the petitioners did not choose to approach either the higher forum or this court. All that the petitioner continued to do was to write letters and representation to the respondents. Even if assuming that the respondents had not passed an appropriate order and had merely rejected the claim of the petitioner by way of a mere letter or the order was erroneous, the remedy of the petitioner was to promptly assail the letter or the order before an appropriate forum or by way of a petition to this court and not sleep over the matter and let the matter lie for years.

15. The petitioner filed the present petition after a lapse of over 5 years from the alleged entitlement on 24.10.1990 and nearly five years from the first rejection of the claim of the petitioner on 15.09.1991 .

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16. Clearly the petitioner let the time to run by without availing of the appropriate remedies available to the petitioner. No doubt, no time limit has been prescribed for filing a petition under Article 226 of the Constitution of India , but still judicial discipline demands that a party seeking to avail remedies under Article 226 should not be permitted to sleepover the matter and be permitted to rake up issues long after the said issues have been clo sed by the authorities.

17. In the present case the claim for the petitioner was rejected and filed on 15.09.91 by the respondents and the petitioner chose to sleepover the matter till the filing of the present petition in January 1996. No doubt the petitione r made representations during this period for about five years but the law is no longer re s Integra on this issue that mere filing of the representations would not be an adequate explanation for the inordinate delay .

18. The Supreme Court in the case of Delhi Admn. v. Kaushilya Thakur, (2012) 5 SCC 412 , has laid down as under:

10...... In our view, the impugned order as also the one passed by the learned Single Judge are liable to be set aside because while granting relief to the husband of Respondent 1, the learned Single Judge overlooked the fact that the writ petition had been filed after almost 4 years of the rejection of an application for allotment of

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1000 sq yd plot made by Ranjodh Kumar Thakur. The fact that the writ petitioner made further representations could not be made a ground for ignoring the delay of more than 3 years, more so because in the subsequent communication the authorities concerned had merely indicated that the decision contained in the first letter would stand.

11. It is trite to say that in exercise of the power under Article 226 of the Constitution, the High Court cannot entertain belated claims unless the petitioner offers tangible explanation (State of M.P. v. Bhailal Bhai).

19. Further in the case of Shankara Coop. Housing Society Ltd. v. M. Prabhakar, (2011) 5 SCC 607 the Supreme Court after examining various judicial pronouncements laid down as under:

"Re: Delay and laches

46. Delay and laches is one of the factors that requires to be borne in mind by the High Courts when they exercise their discretionary power under Article 226 of the Constitution of India. In an appropriate case, the High Court may refuse to invoke its extraordinary powers if there is such negligence or omission on the part of the applicant to assert his rights taken i n conjunction with the lapse of time and other circumstances.

47. The Privy Council in Lindsay Petroleum Co. v. Hurd, which was approved by this Court in Moon Mills Ltd. v.

Industrial Court and Maharashtra SRTC v. Balwant Regular Motor Service, has stated: (Lindsay Petroleum Co. case, LR pp. 239-40)

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"Now the doctrine of laches in courts of equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect eit her party and cause a balance of justice or injustice in taking the one course or the other, so far as it relates to the remedy."

48. In Amrit Lal Berry v. CCE, this Court took the view that: (SCC p. 726, para 16)

"16. ... if a petitioner has been so remiss or negligent as to approach the Court for relief after an inordinate and unexplained delay, he certainly jeopardises his claims as it may become inequitable, with circumstances altered by lapse of time and other facts, to enforce a fundamental right to the detriment of the similar claims of innocent third persons."

49. In State of Maharashtra v. Digambar, this Court observed that: (SCC p. 683d)

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Unless the facts and circumstances of the case at hand clearly justify the laches or undue delay, writ petitioners are not entitled to any relief against anybody including the State.

50. In Shiv Dass v. Union of India, this Court opined that: (SCC p. 277, para 8)

"8. ... The High Court does not ordinarily permit a belated resort to the extraordinary remedy because it is likely to cause confusion and public inconvenience and bring in its train new injustices, and if writ jurisdiction is exercised after unreasonable delay, it may have the effect of inflicting not only hardship and inconvenience but also injustice on third parties. It was pointed out that when writ jurisdiction is invoked, unexplained delay coupled with the creation of third-party rights in the meantime is an important factor which also weighs with the High Court in deciding whether or not to exercise such jurisdiction."

51. In City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala, this Court held: (SCC p. 174, para 26)

"26. It is well settled and needs no restatement at our hands that under Article 226 of the Constitution, the jurisdiction of a High Court to issue appropriate writs particularly a writ of mandamus is highly discretionary. The relief cannot be claimed as of right. One of the grounds for refusing relief is that the person approaching the High Court is guilty of unexplained delay and the laches. Inordinate delay in moving the court for a writ is an adequate ground for refusing a writ. The principle is that the courts exercising public law jurisdiction do not encourage agitation of stale

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claims and exhuming matters where the rights of third parties may have accrued in the interregnum."

52. Shri Ranjit Kumar, learned Senior Counsel for contesting respondents, invites our attention to the observations made by this Court in St ate of M.P. v. Nandlal Jaiswal, wherein this Court has stated: (SCC p. 595, para 24)

"24. ... this rule of laches or delay is not a rigid rule which can be cast in a straitjacket formula, for there may be cases where despite delay and creation of third-party rights the High Court may still in the exercise of its discretion interfere and grant relief to the petitioner. But, such cases where the demand of justice is so compelling that the High Court would be inclined to interfere in spite of delay or creation of third-party rights would by their very nature be few and far between.

Ultimately it would be a matter within the discretion of the Court; ex hypothesi every discretion must be exercised fairly and justly so as to promote justice and not to defeat it."

53. Reliance is also placed on the observations made by this Court in Dehri Rohtas Light Railway Co. Ltd. v. District Board, Bhojpur, wherein it is observed: (SCC pp. 602-03, para 13)

"13. The rule which says that the Court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief to the party on the

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grounds of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not as to physical running of time. Where the circumstances justifying the conduct exist, the illegality which is manifest cannot be sustained on the sole ground of laches."

54. The relevant considerations, in determining whether delay or laches should be put against a person who approaches the writ court under Artic le 226 of the Constitution is now well settled. They are:

(1) There is no inviolable rule of law that whenever there is a delay, the Court must necessarily refuse to entertain the petition; it is a rule of practice based on sound and proper exercise of discretion, and each case must be dealt with on its own facts.

(2) The principle on which the Court refuses relief on the ground of laches or delay is that the rights accrued to others by the delay in filing the petition should not be disturbed, unless there is a reasonable explanation for the delay, because Court should not harm innocent parties if their rights had emerged by the delay on the part of the petitioners.

(3) The satisfactory way of explaining delay in making an application under Article 226 is fo r the petitioner to show that he had been seeking relief

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elsewhere in a manner provided by law. If he runs after a remedy not provided in the statute or the statutory rules, it is not desirable for the High Court to condone the delay. It is immaterial what the petitioner chooses to believe in regard to the remedy.

(4) No hard-and-fast rule, can be laid down in this regard. Every case shall have to be decided on its own facts.

(5) That representations would not be adequate explanation to take care of the delay.

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67. It is now well settled that the power of the High Court under Article 226 of the Constitution to issue an appropriate writ, order or direction is discretionary. One of the grounds to refuse relief by a writ court i s that the petitioner is guilty of delay and laches. Inordinate and unexplained delay in approaching the Court in a writ is indeed an adequate ground for refusing to exercise discretion in favour of the petitioners therein. The unexplained delay on the part of the petitioner in approaching the High Court for redressal of their grievances under Article 226 of the Constitution was sufficient to justify rejection of the petition."

20. The Supreme Court has thus laid down that High Court cannot entertain belated cl aims unless the petitioner offers tangible explanation for approaching the court belatedly. Delay and laches is one of the factors that is

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required to be borne in mind by the High Court while exercising the discretionary power under A rticle 226 of the Constitution of India.

21. Where, by his conduct or neglect, a party has permitted time to lapse , such default may even tantamount to a waiver of the rights of the party. The jurisdiction of a High Court to issue an appropriate writ is discretionary. Relief cannot be claimed as of a due course . One of the grounds for refusing relief is unexplained delay and laches on behalf of the party in approaching the court. It has consistently been held that inordinate delay in moving the court for a writ is an adequate ground for refusing a writ. The rule that a High Court may not enquire into belated and stale claims is not a Rule of Law but a Rule of P ractice based on sound and proper exercise of discretion.

22. No doubt, the Rule of Law is not that whenever there is delay the court must necessarily refuse to entertain the petition but the principle is that a court would refuse to entertain a petition which is highly belated unless there is a reasonable explanation for the delay. One of the satisfactory way of explaining delay, as laid down by the Supreme Court in the case of Shankara co-operative housing Society Ltd (supra), is for the petitioner to show that he has been seeking relief elsewhere in a manner provided by law. If he runs after a remedy not provided in the statute

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or the statutory rules, it is not desirable for the High Court to condone the delay. It is im material what the petitioner chooses to believe in regard to the remedy. It has been further held that representations would not be adequate explanation to take car e of delay.

23. In the present case there is no explanation forthcoming from the petitioner for the inordinate delay of about five years in approaching this court. The only explanation is that the petitioners had been writing letters/representations.

24. The petitioner as far back as on 15.09.1991 was informed about the rejection of the claim of the petitioner which was then reiterated vide letter s dated 04.06.1992 and 24.03.1993. Despite the rejection of the case of the petitioner, then chose to sit over the matter and let considerable time run by. T he explanation that the petitioner was making representation is not an explanation which can be considered as a sufficient explanation for this inordinate delay of about five years in approaching this court. In the normal course of things limitation to file a suit for recovery or to agitate a claim against the government for refund of any amount wrongfully claimed or paid would -be three years. The petitioner in the present case is claiming drawback or refund of duty wron gly denied to them by the respondents. If the petitioner were to file a suit for recovery , the suit should

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have been filed within three years from the date the cause of action arose i.e. the date when the petitioner became entitled to the refund of duty dr awback which in the present case would be when the petitioner met the export obligations on 24.10.1990 or their claim was rejected vide letter/order dated 15.9.91 . The petitioner, by permitting considerable time to lapse , cannot be permitted to now agitate and question order/letter dated 15.09.91 by way of the present petition.

25. In view of the above, we are thus not inclined to exercise our discretion under article 226 of the Constitution of India in favour of a petitioner who has permitted over five years to lapse before approaching this court. The writ petition is accordingly dismissed, leaving the parties to bear their own cost.

SANJEEV SACHDEVA, J.

SANJIV KHANNA, J.

22nd AUGUST , 2013

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