M/S Eveline International vs Union Of India & Ors
2014 Latest Caselaw 4937 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                     Date of decision: 30th September, 2014.

+                                LPA 185/2010

       M/S EVELINE INTERNATIONAL                              ..... Appellant
                     Through: Mr. Adeel, Adv.

                                 Versus

       UNION OF INDIA & ORS                             ..... Respondents
                    Through:             Dr. Ashwani Bhardwaj and Mr.
                                         Mohammad Ali Chaudhary, Advs.
                                         for R-1/UOI.
                                         Mr. Rajesh Rawal, Adv. for R-
                                         2/AEPC.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

CM No.16114/2014 (for exemption)

1. Allowed, subject to all just exceptions.

2. The application is disposed of.

LPA 185/2010, CMs No.4784/2010 (for stay), 4785/2010 (for condonation of 74 days delay in re-filing) & 16113/2014 (for filing additional documents)

3. This intra court appeal impugns the order dated 11th August, 2008 of

the learned Single Judge of this Court of dismissal of W.P.(C)

No.1813/2007 preferred by the appellant. The said writ petition was filed

impugning the order dated 30th November, 2006 of the Second Appellate

Committee, Government of India, Ministry of Textiles (IT Section)

dismissing the appeal of the appellant against the order dated 19 th October,

2006 of the First Appellate Committee, Government of India, Office of the

Textiles Commissioner dismissing the appeal of the appellant against the

speaking order dated 15th September, 2005 of the Joint Commissioner of the

respondent No.2 Apparel Export Promotion Council (AEPC) imposing

penalty of Rs.11,14,424/- on the appellant for non-performance / non-

compliance of Past Performance Entitlement quota applied for and allocated

to the appellant by the respondent No.2 AEPC for the year 2004.

4. The appeal came up first before this Court on 16 th March, 2010 when

the same was admitted for hearing and it was directed that the Bank

Guarantee furnished by the appellant will be kept alive till the disposal of

the appeal, if not already encashed. The appeal was on 10 th May, 2013

dismissed in default of appearance of the appellant but upon the appellant

filing an application, restored vide order dated 5th July, 2013. The appellant

has filed CM No.16113/2014 for permission to file additional document i.e.

the statement of objections filed by the respondent No.2 AEPC in W.P.

No.43683/2004 (GM-RES) titled M/s. Personality Limited Vs. Union of

India and Ors. of the High Court of Karnataka at Bangalore.

5. We have heard the counsel for the parties.

6. We may notice that the appeal was accompanied with CM

No.4785/2010 for condonation of 74 days delay in re-filing thereof. Though

there is no formal order till date condoning the said delay but the appeal

having been admitted for hearing and having remained pending since then

and the counsels also having not drawn attention thereto, we do not feel the

need to go into the said question at this stage and accordingly condone the

delay, if any in filing of the appeal and in re-filing of the appeal.

7. We have at the outset enquired from the counsel for the appellant that

there being concurrent finding of fact of the three statutory authorities as

well as of the learned Single Judge, of the appellant being in non-

performance / non-compliance of Past Performance Entitlement quota

allocated to it for exports in the year 2004, how is it open to the appellant in

this LPA to agitate the said factual controversy. We may notice that it is not

the argument of the appellant that the authorities which have imposed the

said penalty on the appellant were not competent or empowered to do so.

There is no dispute as to the quantum of the penalty imposed also.

8. The counsel for the appellant though unable to controvert so, has

based his argument on the additional document for filing whereof

permission is sought. It is contended that the respondent No.2 AEPC in the

said counter affidavit in a proceeding in the High Court of Karnataka has

taken a stand that owing to sudden increase in the demand in the second half

of the year 2004, 100% of the quota allocated had been achieved as on 2 nd

November, 2004 and owing whereto the respondent No.2 AEPC by Circular

dated 27th October, 2004 had stopped export of garments in the category 340

/ 640 to the United States (US). It is argued that the respondent No.2 AEPC

having so admitted in another legal proceeding that it had stopped the

exports, cannot be allowed to impose penalty on the appellant for non

fulfilment of the quota allocated to the appellant on the basis of its Past

Performance Entitlement.

9. We have enquired from the counsel for the appellant, whether it was

the plea of the appellant in response to the show cause notice issued to it

before imposition of such penalty that the appellant was unable to fulfil /

perform or comply with its export quota for the reason of the export having

been so stopped by the respondent No.2 AEPC. We may notice that the

learned Single Judge in the impugned order has noted that the appellant /

writ petitioner had neither produced the copy of the reply dated 15 th

September, 2005 stated to have been submitted to the said show cause

notice nor participated in the hearing, opportunity whereof was given to the

appellant / writ petitioner. From a reading of the order dated 15 th

September, 2005 supra also, we do not find the appellant to have taken any

such ground in the reply.

10. Though the appellant even before us has not furnished the copy of the

said reply dated 15th September, 2005 but the counsel for the appellant has

in this regard drawn our attention to the order dated 19 th October, 2006 of

the First Appellate Committee where the plea of the appellant of the short

shipment being due to Embargo Cat. 338 is noticed. We may however note

that the said contention was not accepted by the First Appellate Committee.

We may further notice that even the Second Appellate Committee held that

there is no justification in the said contention of the appellant for short

shipment, because there was a facility for surrendering balance unutilized

quota for the exporter in case of embargo and which was not availed of by

the appellant. The learned Single Judge also, in the impugned judgment

dealing with the said contention of the appellant, has held that the Past

Performance Entitlement export quota allocated to the appellant was not

only under the category of US 338 but in other categories also; that the

appellant did not produce any document before the adjudicatory authority to

show that it was unable to export owing to any such embargo; that the

documents submitted before the First Appellate Committee also showed that

the quota allocated to the appellant was for other countries also; that to

enable the appellant to succeed on the said plea, it was incumbent upon the

appellant to establish that the shortfall was only in quota items of US 338

and not in other quota of different country code but which the appellant had

failed to do and thus the said plea could not be believed.

11. The position remains the same today also. The appellant has still not

produced any document to show that the unfulfilled export allocation was

for export to USA only. The additional document which is sought to be

produced only establishes that there was indeed an embargo as from 2 nd

November, 2004 for export to US. However that was / is not disputed by

the respondent No.2 AEPC. The reason why the said plea has not been

accepted by the two statutory authorities below as well as by the learned

Single Judge, is of the unfulfilled quota being not of export which was

banned and on which aspect nothing has been produced by the appellant

before us also.

12. Be that as it may, the same also as aforesaid, is a question of fact and

which finding we cannot revisit in this jurisdiction after the concurrent

findings in this respect of the two statutory authorities below and the learned

Single Judge of this Court.

13. The counsel for the respondent No.2 AEPC has drawn our attention to

Gokaldas Images Ltd. Vs. Union of India 116 (2005) DLT 47 holding that

when an exporter gets an entitlement, the same is with the conditions

attached to such entitlement and the requirement is to fulfil the export

obligations by 30th of September of the year concerned and if the exporter

fails to fulfil the export obligations, he is required to surrender the

entitlement so that the same can be made available to other exporters, who

may utilise it for the remaining period of the calendar year up to 31st of

December. A copy of the order dated 9th February, 2009 of the Division

Bench of this Court in LPA No.1120/2006 preferred thereagainst is handed

over to show that the view of the learned Single Judge stands affirmed by

the Division Bench.

14. The counsel for the respondent No.2 AEPC has also handed over in

the Court a copy of the judgment dated 18th November, 2013 of a learned

Single Judge of this Court in W.P.(C) No.876/2008 titled Goenka &

Goenka Vs. Union of India and in other connected petitions where also the

aforesaid affidavit filed by the respondent No.2 AEPC before the Karnataka

High Court was considered and notwithstanding the same, the penalty

imposed for non-fulfilment of the quota was upheld. Though the counsel

for the appellant before us was the counsel for the petitioner in the said case

decided vide judgment dated 18th November, 2013 but is unable to state that

whether any appeal was preferred thereagainst or not. The counsel for the

respondent No.2 AEPC states that no notice of any appeal preferred against

the said judgment has been received and the same has thus attained finality.

15. We do not find any reason to take a different view from that as has

been taken in the aforesaid judgments. If the non-fulfilment of the export

quota allocated to the appellant was on account of any ban or embargo put

on exports, the appellant ought to have surrendered the un-fulfilled quota.

The appellant admittedly did not do so and now cannot be permitted to

wriggle out of his liability for penalty on the said ground.

16. There is no merit in the appeal, which is dismissed with costs of

Rs.10,000/- on the appellant payable to the respondent No.2 AEPC within

six weeks hereof.

RAJIV SAHAI ENDLAW, J.

CHIEF JUSTICE SEPTEMBER 30, 2014/'bs'