Full Judgment Text
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PETITIONER:
UNION OF INDIA & ORS.
Vs.
RESPONDENT:
SUKSHA INTERNATIONAL AND NUTAN GEMS & ANR.
DATE OF JUDGMENT02/01/1989
BENCH:
VENKATACHALLIAH, M.N. (J)
BENCH:
VENKATACHALLIAH, M.N. (J)
PATHAK, R.S. (CJ)
CITATION:
1989 AIR 690 1989 SCR (1) 1
1989 SCC Supl. (1) 422 JT 1989 (1) 10
1989 SCALE (1)4
ACT:
Imports and Exports (Control) Act 1947 Section 3.
Import Export Policy 1983. Paragraph 185(4) and
(7)--Interpretation of--Export Houses--Having imprest Li-
cences--To import goods from abroad with corresponding
obligation attached to export goods--Fulfilling conditions
and applying for revalidation and endorsement of
licence--Held clauses (4) and (7) form an integrated policy
scheme and to be read together.
Constitution of India. Article 226--Writ
petition--Plea of unexplained delay in filing of writ peti-
tion raised--Held--High Court should specifically deal with
such plea.
Statutory Interpretation. Beneficial provision of stat-
ute--Not to be interpreted so as to unduly restrict the
beneficial scope of the policy of the law.
HEADNOTE:
The respondents in the appeals were recognised Export
Houses which had been granted Imprest licences for the
import of ’uncut’ and ’unset’ diamonds with certain export
obligations attached to them. After the due discharge of the
export obligations, the respondents became entitled to
revalidation and endorsement of the said Imprestlicence for
import of OGL items.
The said Export Houses applied under paragraph 185(4) of
AM83 policy for revalidation and endorsement of the Imprest
Licences. The appellant No. 3, the Chief Controller of
Imports and Exports, rejected this claim of the respondents.
Being aggrieved by the aforesaid order of rejection,
respondents filed writ petitions in the High Court assailing
the legality of the orders
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rejecting their claims, and seeking a mandamus to the appel-
lants to endorse the Imprest Licences.
Single Judge of the High Court allowed the writ peti-
tions, and the order was affirmed in appeal by the Division
Bench.
In the appeals by the Union of India to this Court, it
was contended on behalf of the appellants that: (a) in the
Import-Export Policy 1982-83, the entitlement of Registered
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Export Houses to the facility of revalidation and endorse-
ment of OGL items under paragraph 184 is subject to and
conditioned upon the express limitations contained in clause
(7) of paragraph 185 of the Policy, and that the High Court
was in error in directing revalidation and endorsement
without reference to the mandatory prescription provided in
the said clause, and (b) that the High Court was in error in
ignoring the contentions of the appellants that the respond-
ents had rendered themselves disentitled to relief on the
ground of the inordinate and unexplained delay of one and a
half years in the filing of the writ petitions.
Disposing of the Appeals, the Court,
HELD: l(a) Para 185(4) was intended to provide certain
incentives to the Export Houses which, upon grant of Im-
prest-Licences, fulfil their countervailing obligations in
the matter of export commitments. The provision is a benefi-
cial one. [8H; 9A]
1(b) Clauses (4) and (7), no doubt, on their plain
wording present certain constructional difficulties, and it
is possible to take the view that the said clauses are part
of an integrated policy scheme, providing for certain incen-
tives to export houses and have to be read together. This
view, however, will unduly restrict the scope of the benefi-
cial provision. [9A, C]
1(c) That the conditions in para 185(4) of the Policy
would not be attracted to the case of Export Houses which
are granted Imprest Licences, would be a harmonious con-
struction of clauses (4) and (7) which appears to advance
and promote the objects of the policy in Paragraph 185(4)
and is, at all events, not an unreasonable view to take of
the matter. [9B]
1(d) An interpretation which would unduly restrict the
beneficial scope of the policy in para 185(4), would take
away with one hand what the policy of the law gives with the
other. [9C]
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2(a) If appellants had raised a specific plea of delay
as a bar to the grant of relief--and the delays in the
present cases, having regard to the nature of the subject-
matter, were not inconsiderable--it was perhaps necessary
for the High Court to have specifically dealt with the
plea.. The aspect of delay adverted to by the Single Judge
was a different one viz. the delay in seeking revalidation
and endorsement after the issue of the redemption certifi-
cate and not the delay in the filing of the writ petitions.
[11D]
2(b) It would therefore he appropriate that the appel-
lants’ appeals before the High Court are remitted to the
Appellate Bench of the High Court. If the Appellate Bench is
persuaded to view that the delay is satisfactorily explained
it may proceed to confirm the orders of the Single Judge
subject to the question that the permissibility of the
importable items be determined in the light of the pro-
nouncements of this Court in Rajprakash Chemicals Ltd. v.
Union of India, AIR 1986 SC 1621 and D. Navinchandra & Co.
v. Union of India, AIR 1987 SC 1794. If the delay is held by
the Appellate Bench to be such as to disentitle the respond-
ents to relief, it will proceed to allow the appeals and
dismiss the writ petitions. [11F-H]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 8 & 9 of
1989.
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From the Judgment and Order dated 17.2.1987 of the
Bombay High Court in Appeal No. 179 and 149 of 1987.
T.U. Mehta, A. Subba Rao, P. Parmeshwaran, Harish N.
Salve, N.D. Garg, Rajiv K. Garg, P.H. Parekh, Ms. Ayesha
Misra and M.N. Shroff for the appearing parties.
The Judgment of the Court was delivered by
VENKATACHALIAH. J. By these two special leave petitions
under Article 136 of the Constitution, the Union of India
and the Chief and the Joint Chief Controllers of Imports and
Exports seek special leave to appeal from two appellate
Judgments of the Division Bench of the High Court of Judica-
ture at Bombay--Both dated 17.2.1987 in appeal Nos. 179 of
1987 and 149 of 1987 affirming in appeal orders of learned
Single Judges dated 5.9.1985 in W.P. 1125 of 1985 and dated
19.9.1985 in W.P. 1918 of 1986, respectively, by which the
writ petitions filed by M/s. Suksha International and M/s.
Nutan Gems, respondents in these appeals, were allowed and
appellants directed to revalidate
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the imprest licences of the respondents and endorse them for
import of OGL items, under paragraph 185[4] of the Import-
Export Policy of 1982-83 [AM 1983.]
2. Special leave, in both the-petitions, is granted and
the appeals taken-up for final hearing, heard and disposed
of by this common judgment. We have heard Shri Subbarao,
learned counsel for the appellants and Shri Harish Salve,
learned counsel for the respondents who were the writ peti-
tioners before the High Court.
3. M/s. Suksha International, respondent in SLP 2579 of
1987, is a diamond exporter and is a registered Export House
for the purposes of the Import Export Policy. The said
export house was granted an Imprest Licence No. 0451365
dated 15.6.1981 of a value of (Rs. 1,53,80,000) for import
of ’uncut’ and ’unset’ diamonds with corresponding export
obligations.
Respondent claimed that upon the due fulfilment by it of
its export-obligations it became entitled to revalidation
and endorsement for export of OCM items of the imprest,
Accordingly, on 3.8.1983 the said Export-House applied under
paragraph 185(4) of AM/83 policy, for such revalidation and
endorsement of its imprest licence. Appellant No. 3 by his
decision dated 21.9.1983, rejected this claim of the re-
spondent. Aggrieved by this rejection, respondent filed in
the High Court under Article 226 of the Constitution a
writ-petition assailing the legality of the order dated
21.9.1983 and seeking a mandamus to the appellants to en-
dorse the Imprest-Licence. Learned Single Judge of the High
Court by his order dated 5.9. 1986 allowed the writ petition
and issued the direction preyed for. This order was carried
up in appeal before the Division Bench of the High Court in
appeal No. 179 of 1987. The appeal came to be dismissed on
17.2. 1987.
4. M/s. Nutan Gems, respondent in SLP 2580 of 1987 is a
recognised Export-House which had, similarly, been granted
an Imprest Licence dated 24.2. 1983 for the import of uncut
and unset diamonds with certain export obligations attached
to it and that after the due discharge of the export obliga-
tions, Respondent became entitled to a revalidation and
endorsement of the Imprest-Licence for import of DGL items.
The application dated 19.1.1984 made in this behalf by the
respondent was rejected by appellant No. 6 by his order
dated 19.3. 1984. M/s. Nutan Gems filed writ petition No.
1813 of 1985 in the High Court for issue of an appropriate
writ quashing the said order of rejection and directing
appellants to revalidate and endorse the
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Imprest Licence. On 19.9.1985. Learned Single Judge allowed
the writ petition. This Order was affirmed in appeal No. 149
of 1985 by the Division Bench on 17.2. 1987.
5. These appellate-judgments of the High Court are
assailed in these appeals. Though a number of contentions
are raised in the Memorandum of Special Leave Petition, the
points, however, pressed at the hearing admit of being
formulated thus:
(a) that in the Import-Export Policy, 1982-83
the entitlement of Registered Export Houses to
the facility of revalidation and endorsement
of OGL items under paragraph 185(4) is subject
to and conditioned upon the express limitation
in clause (7) of paragraph 185 of the Policy
and that the High Court was in error in di-
recting revalidation and endorsement without
reference to the mandatory prescription in
clause (7).
(b) that the High Court was in error
in ignoring the contention of the appellants
that respondents had rendered themselves
disentitled to relief on ground of the inordi-
nate and unexplained delay in filing the
writ-petitions.
In W.P. 1125 of 1985 (from which SLP
2579 of 1987 arises) the rejection of the
prayer for revalidation was on 21.9. 1983 and
the writ petition was filed in April, 1985;
and in WP 1813 of 1985 (from which SLP 2580 of
1987 arises) the rejection of the prayer was
on 18.3.1984 and the writ petition was filed
on 10.9.1986, after a lapse of one and a half
years in each case.
(c) that, at all events, the direc-
tions issued for the endorsement must be
limited only to items as limited by the pro-
nouncement of this Court in Rajprakash Chemi-
cals Ltd. v. Union of India, AIR 1986 SC 1021
and D. Navinchandra & Co. v. Union of India,
AIR 1987 SC 1794 and other cases bearing on
the question; and not in terms now directed by
the High Court.
6. We may first dispose of contention (c) on which there
does not appear to be much controversy. Shri Subba Rao
submitted that the High Court was in clear error in brushing
aside this argument and affirming the learned Single Judge
on the basis that the S.L.P. filed by
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the appellants in Ripal Kumar & Co.’s case had been rejected
by this Court. Shri Harish Salve, however, submitted that
the decisions of this Court in Indo-Afgan Chamber of Com-
merce v. Union of India, AIR 1986 SC 1567; Rajprakash Chemi-
cals Ltd. v. Union of India, AIR 1986 SC 1021; Union of
India v. Godrej Soaps (Pvt.) Ltd., AIR 1987 SC 175 and D.
Navinchandra & Co. v. Union of India, AIR 1987 SC 1794. etc
do not have any direct beating on the question of the enti-
tlement of the Export Houses to revalidation and endorsement
for OCL items under para 185(4) of A-M 1983 Policy but
relate to the question as to the limitations on the permis-
sibility of the items of import, consequent upon the changes
in the policy. This question becomes relevant, says Shri
Salve, at a stage which is subsequent to the revalidation
and endorsement of the Imprest-Licence and that the position
in the present cases has not yet reached that stage. Howev-
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er, he submitted that as to the choice of items permissible
for import, the matter would of course, have to be deter-
mined the guided by these pronouncements. As Contention (c)
is not in controversy it is not necessary to dwell on it any
further. What, however, remain to be considered are the
contentions (a) and (b).
7. Re: Contention (a):
Clauses (3), (4), (5) and (7) of para 185 of
the policy provide:
(3) Where REP licence has been issued
to the Export House on its own exports, the
facility of importing OGL items under sub-
para(1) above will be allowed without debit to
the value of such REP licence, provided the
value of such imports does not exceed the
value of the REP licence.
(4) The facility for import of OGL
items available in sub-para (3) above, may
also be allowed, on merits, to Export Houses
against their advance/imprest licences on
account of which they are rendered ineligible
to obtain REP licence. In such cases, however,
the value upto which the OGL import may be
allowed, will not exceed the value to which
the Export House would have been eligible to
the REP licence, had he not obtained
advance/imprest licence in question. This
facility will be available to the Export House
after he has discharged the export obligation
imposed on the advance/imprest licence. There-
fore, if by the time, the Export House becomes
eligible to this facility,
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the advance/imprest licence has expired, or,
if the original validity left unused by that
time is less than six months, the licensing
authority will revalidate the licence simulta-
neously so as to give to the licence-holder a
time of six months for the purpose of import-
ing OGL item under this facility.
(5) Export Houses who wish to take
advantage of this facility of import of OGL
items should get the licences concerned en-
dorsed by the licensing authority as under:
"This licence will also be valid for
import of OGL items under para 125 of Import-
Export Policy, 1982-83, subject to the condi-
tions laid down, and shall be
nontransferable."
(7) Import of OGL items by Export
Houses under these provisions shall be subject
to the condition, inter alia that the shipment
of goods shall take place within the validity
of the OGL i.e. 31st March, 1983. or within
the validity period of the import licence
itself (without any grace period), whichever
date is earlier. This restriction will also
apply to licences issued before 1.4.1982 in
respect of items which continue to be on OGL
in 1982-83 policy. (The restriction regarding
grace period will not, however, apply in cases
where shipment can be made within the permis-
sible grace period on or before 31.3.1981).
Appellants’ contention is that clauses (4) and (7) of para
135 are part of an integrated policy-scheme, providing for
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certain incentives to export-houses and have to be read
together and that the import of OGL items is strictly sub-
ject to the specific condition that the shipment of goods
shall take place within the validity of the OGL i.e.
31.3.1983 or within the validity period of the licence
itself which ever date is earlier. If this condition is held
to be attracted to the case of an Imprest-Licence also,
then, quite obviously, the claim in the writ petitions would
have to fail, as the application for revalidation is beyond
the outer-most time limit set for the import itself. Indeed,
this question was left open by this Court while dismissing
SLP 7389 of 1985 (Union of India v. Messrs H. Patel & Co.).
In its order dated 19.7.1985 this Court said:
" ....... We, however, make it very
clear that we express
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no opinion on the validity of the above said
contention based on paragraph 185(7) referred
to above. The true effect of the said provi-
sion is left open to be considered in an
appropriate case when an occasion arises to do
so."
8. Sri Salve, submitted that in the very nature of the
procedures and exercises inherent in the effectuation of an
imprest-licence, as distinguished from Replenishment Li-
cence, the Export-House has first to import the uncut and
unset diamonds and thereafter fulfill its export obligations
of cut and polished diamonds as a necessary antecedent for
the effectuation of its entitlement to a revalidation and
endorsement for OGL items. The very nature of the time
consuming transactions that are required to be gone through
preceding the very creation of the right to revalidation and
endorsement are inconsistent with the feasibility of compli-
ance with the time-schedule in para 185(7). Learned Counsel
says that the view that should commend itself, both on
construction and in equity, is that having regard to the
innate differences in the nature of the obligations and
conditions to be fulfilled between the holders of imprest-
licences on the one hand and the replenishment-licences on
the other and having regard, further, to the circumstances
that export-houses, which, under Imprest Licences, have
first to import uncut and unset diamonds and thereafter
fulfill their export obligations before becoming entitled to
the import of OGL items, it would be a wholly unreasonable
exercise in construction to import the condition in clause
(7) into clause (4) and that clause (4) should, therefore,
be treated on its true construction, as a special provision
constituting an exception to the generality of the provision
in clause (7). Otherwise, says counsel, the resulting posi-
tion would be that the satisfaction of the cumulative condi-
tions in clauses (4) and (7) by an Export-House under an
Imprest Licence would well nigh be impossible.
This way of hormonising clauses (4) and (7) of para 185,
it is submitted, has commended itself to the High Court in
several other writ-petitions involving the interpretation of
clauses (4) and (7) of paragraph 185 of the AM 1983 policy.
Sri Salve submits that it is reasonable to exclude imprest
licences from the requirement of clause (7).
9. We have considered the rival contentions on the
point. Para 185(4) was intended to provide certain incen-
tives to the Export Houses which, upon grant of Imprest-
Licences, fulfill their countervailing obligations in the
matter of export commitments. The provision
9
is a beneficial one. Clauses (4) and (7), no doubt, on their
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plain wording present certain constructional difficulties
and the view sought to be put across by Shri Subba Rao for
the appellant, on the plain language of clause (7), is not
without possibilities. However, the basis of a harmonious
construction which commended itself to the High Court in
other similar cases appears to us to advance and promote the
objects of the policy in paragraph 185(4) and is, at all
events, not an unreasonable view to take of the matter. In
some of these cases this Court has declined to interfere
with this interpretation by rejecting petitions for special
leave. Acceptance of the interpretation suggested by Shri
Subba Rao would, in our opinion, unduly restrict the scope
of the beneficial provision and, in many instances which
would otherwise fall within the beneficial scope of the
policy in para 185(4), take away with one hand what the
policy gives with the other. We think we should accept the
submissions of Shri Harish Salve which is consistent with
the view taken of the matter by the High Court in other
cases and hold that the conditions in para 185(4) of the
policy would not be attracted to the case of Export Houses
which are granted Imprest Licences.
Accordingly we hold and answer contention (a) against
the appellants.
(10) Re: Contention (b):
This pertains to appellants’ plea of delay as a bar to
relief. Appellants have aired a serious grievance over this
aspect. Shri Subba Rao streneously contended that the re-
spondents had approached the High Court after an inordinate
and unexplained delay of over one and a half years in each
of these cases and that appellants’ objection as to the
disentitlement of the respondents to relief on the ground of
delay was not even so much as adverted to by the learned
Single Judge or the Division Bench. Learned counsel submit-
ted that promptitude and vigilant pursuit of legal remedies
with diligence is basic to the entitlement to relief in the
jurisdiction under Article 226, which is both extraordinary
and discretionary and that in the present cases the delay of
one and a half years in moving the Court should have been
held crucial particularly where grant of import licence is
cancelled.
The pleadings in the writ petitions are not before us.
We will proceed on the assumption that appellants had taken
this objection before the learned Single Judge of the High
Court and raised the plea as to the bar of delay in their
appeals before the Division Bench of the High Court. If this
point had been taken, we are afraid the High Court
10
was not justified in ignoring it or brushing it aside.
Indeed the learned Single Judge of the High Court allowed
the writ petitions in both these cases by short orders in
similar terms, relying upon an earlier decision dated
19/20th August, 1985, in writ petition No. 2477 of 1984. The
relevant part of the order reads:
"Relevant facts and circumstances of
this petition are similar to the relevant
facts and circumstances in Writ Petition No.
2477 of 1984 decided by this Court on 19/20th
August, 1985. Besides, as in the said Writ
Petition No. 2477 of 1984, in the present case
also there is no such delay as to preclude the
petitioners from the relief claimed. In all
the circumstances and for reasons stated in
Writ Petition No. 2477 of 1984 the following
order is passed on this Writ Petition.
2. The petition succeeds and the same is
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allowed."
Thereafter, the learned judge proceeded to issue specific
directions.
11. Shri Subba Rao would say that the reference in the
order by learned Single Judge to the contention on the point
of delay as bar to relief had nothing to do with the specif-
ic contention of the appellants’ that there was inordinate
and unexplained delay in approaching the Court. This,
learned counsel submits, would be clear, by a reference to
the aspect of the delay dealt with and considered in WP 2477
of 1984, on which the learned Single Judge relied. The order
of the same learned Single Judge in WP 2477 of 1984, in
which the particular aspect of delay is considered is at
para 8 of that order. That para in the order in WP 2477 of
1984 reads:
"Mr. Joshi, learned counsel for the
respondents, submitted that the petitioners
were not entitled to relief because of delay.
It is not possible to agree. After the redemp-
tion certificate on 16th November, 1983,
application for revalidation and OGL endorse-
ment was made within four months therefrom on
12th March, 1984. There is, in the circum-
stances, no such delay as to warrant its
ejection on that ground. The contention thus
fails and is rejected."
Shri Subba Rao submits that the delay referred to in the
above paragraph is the delay in seeking revalidation and
endorsement after
11
the issue of redemption certificate and not the delay in
filing the writ petition and that in both the present cases
the plea of delay in filing the writ petitions has not
received due consideration by the High Court. Shri Subba Rao
referred to a number of pronouncements of this Court, to
substantiate that such unexplained delay particularly in
matters dealing with import licences would bar relief and
that un-explained delay, by itself and without more, is a
factor disentitling a person to relief. He submitted that
absence of prejudice to the opposite party, by itself, would
not justify delay and that in the context of grant of import
licences passage of time brings with it, as here, problems
of conflicting policy considerations. Where change of policy
would impart crucial significance to the delays, Courts,
learned counsel says, should insist upon even a higher
degree of promptitude. He, accordingly, submitted that the
writ petitions should be dismissed on the ground alone of
delay in filing them.
This contention of the appellant cannot be brushed
aside. If appellants had raised a specific plea of delay as
a bar to the grant of relief--and the delays in the present
cases, having regard to the nature of the subject-matter,
were not inconsiderable--it was perhaps necessary for the
High Court to have specifically dealt with the plea. The
aspect of delay adverted to by the learned Single Judge in
the course of the order was a different one.
However, we think it would be somewhat unfair for the
respondents, who have succeeded in the High Court, to decide
this question without an opportunity to them to satisfy the
Court as to the reasons, if any, for the delay and as to the
sufficiency of such reasons. We assume that the plea had
been taken before the High Court by the appellants as this
submission of the learned counsel for the appellant was not
controverted. We think it would be appropriate that the
appellants’ appeals before the High Court are remitted to
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the High Court for such consideration as the Appellate Bench
may now bestow on this contention of the appellants. If the
appellate bench is persuaded to view that the delay is
satisfactorily explained it may proceed to confirm the
orders of the learned Single Judge, subject, of course, to
the question of permissibility of the importable items to be
determined in the light of the pronouncements of this Court
referred to at contention (c). If, on the contrary, the
delay is held by the Division Bench to be such as to disen-
title respondents to relief, the Division Bench may proceed
to allow the appeals and dismiss the writ-petitions. All
other controversies in the appeal shall be held to have been
concluded in favour of the respondents.
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Accordingly, the appellate-judgments of the High Court
under appeal are set aside and the appeals 149 of 1987 and
179 of 1987 before the High Court are remitted for a fresh
disposal as indicated above. The High Court might also
consider the desirability of a very early disposal of the
appeals. These appeals are disposed of accordingly. There
will, however, be no order as to costs in these appeals.
N.V.K. Appeals disposed of.
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