Full Judgment Text
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PETITIONER:
AJOOMAL LILARAM AND ANOTHER
Vs.
RESPONDENT:
UNION OF INDIA AND OTHERS
DATE OF JUDGMENT13/12/1982
BENCH:
REDDY, O. CHINNAPPA (J)
BENCH:
REDDY, O. CHINNAPPA (J)
ERADI, V. BALAKRISHNA (J)
CITATION:
1983 AIR 278 1983 SCR (2) 1
1983 SCC (1) 119 1982 SCALE (2)1366
ACT:
Constitution of India-Art. 136-Public sector
undertaking-Wrong statements made in affidavits filed-
Government’s instructions disregarded-Relief granted to
petitioners.
HEADNOTE:
In June 1982 the Chief Controller of Imports and
Exports issued export instructions on the subject of Export
Policy of Niger Seeds during 1982-83. Paragraphs 2 and 3 of
the instructions stated that the Government had decided to
allow export of Niger Seeds within an overall ceiling of
10,000 metric tonnes through the National Agricultural
Cooperative Marketing Federation of India (NAFED) subject to
a minimum export price of Rs. 8,500 per metric tonne. In
addition to NAFED, private exporters who registered their
contracts with NAFED were also allowed to export the seeds
on the basis of first come first served, against firm
commitments backed by irrevocable letters of credit, subject
to availability of ceiling. It was also stated that the
NAFED would be responsible to monitor the ceiling and ensure
that export of the seeds did not exceed the overall quantity
of 10,000 metric tonnes during the year. A Trade Notice on
these lines was issued by the Joint Chief Controller of
Imports and Exports.
On the faith of the trade notice the petitioner entered
into contract with a foreign buyer who opened a firm
irrevocable letter of credit in favour of the petitioner.
The petitioner thereupon requested the NAFED to register the
contract and that one thousand tonnes of seed might be
reserved for him for export. About six weeks later the
petitioner reminded the NAFED by letter and telegram about
his request for allotment of the quota.
In the meanwhile the NAFED wrote to the Government of
India, Ministry of Commerce that it was for NAFED and its
Board of Directors to formulate guidelines regarding the
release and modalities of export of the seeds and it
forwarded two statements-one showing names of 22 applicants
whose requests for allotment of quotas were said to be
backed by letters of credit and the other containing list of
34 names of applicants whose contracts were not backed by
letters of credit. The petitioner’s name was included in the
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first list.
Reiterating the earlier instructions the Government
wrote to the NAFED that the allotment of quotas should be in
conformity with the instructions and the Trade Notice and
that it was not for the NAFED to issue another Trade Notice.
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In disregard of the instructions the NAFED selected
certain applicants and gave time to them to produce letters
of credit. The petitioners were not in this list.
The Delhi High Court dismissed in limine the
petitioners’ petition under Art. 226 of the Constitution.
The petitioners thereupon filed their petition under
Art. 136 of the Constitution.
Allowing the petition,
^
HELD: While the petitioners satisfy all the
requirements of the Trade Notice some of the applicants
chosen by the NAFED for allotment of quota did not furnish
the letters of credit and the NAFED’s action in giving them
time for their production was not in accordance with the
terms stipulated by the Trade Notice. [6H]
The file produced by the Government of India exposed
the statement made in the NAFED’s affidavit that the
petitioners were not in the list of 22 as false. Its counsel
was misled and wrongly instructed to argue that the
petitioners were not included in that list. But the
petitioners in fact figured in the statement entitled
"enquiries received from private parties backed by letters
of credit for export of Niger seeds" prepared by the NAFED
and sent to the Government of India. [7 E]
Even if the claim of NAFED that the selected applicants
had secured a higher price and that would help to earn more
foreign exchange is correct, they were not eligible for
registration firstly because their contracts were not backed
by letter of credit in terms of the Trade Notice and
secondly because the ceiling had already been reached. [7 G]
The counter-affidavit filed by the Government of India
fully substantiates the claim of the petitioners that the
NAFED had disregarded the trade instructions issued by the
Government of India as well as the Trade Notice which was
issued pursuant to the trade instructions. [8 A]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3741-42
of 1982.
From the Judgment and Order dated the 22nd October,
1982 of the Delhi High Court in C.W. Nos. 3577 and 3575 of
1982.
V.M. Tarkunde, K.K. Venugopal, F.S. Nariman, Rajiv
Datta and A.N. Bhanot for the Appellants.
M.K. Banerjee, Additional Solicitor General and Miss A,
Subhashini for the Respondent.
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M.C. Bhandare and S. Bhandare for the Respondent.
The Order of the Court was delivered by
CHINNAPPA REDDY, J. It transpires from the facts which
we shall presently set out that the National Agricultural
Cooperative Marketing Federation of India, NAFED for short,
is a law unto itself and its officers are not unduly
concerned either about carrying out the Export Trade
Instructions issued by the Government of India or about
filing truthful affidavits in the Supreme Court of India.
On June 23, 1982, the Chief Controller of Imports and
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Exports, Ministry of Commerce, Government of India, issued
Export Instruction No. 59 of 1982 on the subject of Export
Policy of Niger Seeds during 1982-83. Paragraphs 2 and 3 of
the Instruction are important and may be fully set out. They
are as follows:-
"On a review of the position it has been decided
to allow export of Niger Seeds within an overall
ceiling of 10,000 (Ten thousand) tonnes through the
canalising agency, viz. The National Agricultural
Cooperative Marketing Federation of India Ltd. (NAFED)
subject to minimum export price of Rs.8,500/- (Rupees
eight thousand five hundred) per metric tonne. While
the NAFED can continue to undertake exports themselves,
private parties will also be allowed to export Niger
Seeds as Associates of NAFED against firm commitments
backed by irrevocable Letter of Credit subject to
availability of ceiling. Export by private parties will
be allowed on first come, first-served basis. For this
purpose, the exporters should register their contracts
with the NAFED. The NAFED will stop registration of
contracts as soon as the ceiling is exhausted.
The NAFED will be responsible to monitor the
ceiling and ensure that export of Niger Seeds not
exceeding the overall quantity of 10,000 M.T. during
1982-83. In other words, the export will be allowed
only against the balance quantity left unutilised out
of the ceiling of 10,000 tonnes released vide Export
Instruction No. 15/82 dated 7.4.1982."
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Pursuant to the Trade Instruction, a Trade Notice was
published by the Joint Chief Controller of Imports and
Exports on the same lines. We may mention here that out of
the 10,000 tonnes, export of which was to be allowed, the
NAFED reserved to itself the right to export 5,000 tonnes
and decided to allow its associates to export the remaining
5,000 tonnes.
On the faith of the Trade Notice, the petitioner in
Special Leave Petition No. 10230 of 1982 entered into a
contract with M/s Curtis (Confirmers) Limited of London on
7.7.82 for the sale and export of 1,000 metric tonnes of
Indian Niger Seeds at the price of Rs. 8,560 per metric
tonne, f.o.b. at any Indian Port. Shipment of 200 metric
tonne was to be by October, 1982, 300 metric tonnes by
February, 1983 and 500 metric tonnes by March, 1983 at
buyer’s option with one month’s clear notice. The payment
was to be by ’firm, irrevocable credit, to be opened through
first class bank for 10% value now and for balance 90% to be
opened 15 days prior to shipment’. The petitioner forwarded
the contract to NAFED on 22.7.82 with a request that the
contract may be registered and promising to send the letter
of credit in two or three days. An Irrevocable Documentary
Letter of Credit was duly opened by the Banque Nationale de
Paris on behalf of the foreign buyer in favour of the
petitioner for the amount of Rs.8,56,000 being 10% of the
total value of the goods. The letter of credit also
stipulated that within 15 days before each shipment, ’the
credit value was to be increased to cover the amount of each
shipment and that would be advised as an amendment to the
credit’. Letter of Credit was forwarded to the NAFED by the
petitioner on 26.7.82 with a request that the quantity of
one thousand metric tonnes might be reserved for him for
export. The NAFED sent a reply on 6.8.82. "We will revert in
the matter shortly". On 3.9.82 the petitioner reminded the
NAFED both by letter and telegram about his request for
allotment of quota. The petitioner also sent a telegram to
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the Government of India that matters were unduly delayed
though he had completed all the formalities. It appears that
meanwhile, the NAFED wrote to the Ministry of Commerce,
Government of India, on 17.9.82 informing the Government of
India that it was for the NAFED and its Board of Directors
to formulate guidelines regarding release and modalities of
export. A copy of the guidelines formulated by the NAFED on
16.9.82 was enclosed. Two statements containing the names of
the applicants for quotas
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and other particulars were also enclosed. The first
statement showed the names of 22 applicants whose requests
for allotment of quotas were said to be backed by Letters of
Credit. The appellants in the appeals before us are included
in this list though this was denied in the counter affidavit
filed on behalf of the NAFED. More about it later. The
second statement contained a list of 34 names of applicants
whose contracts were not backed by any Letters of Credit. On
receipt of this letter the Government of India by their
letter dated 30.9.82 objected to the guidelines said to have
been approved by the NAFED as they were contrary to the
guidelines issued by the Government of India. It was pointed
out that according to the instructions of the Government of
India the allotment had to be made on first come first
served basis whereas according to the guidelines prepared by
the NAFED the quotas were to be allotted by a committee
consisting of the Chairman and officials of the NAFED, the
Government and the trade, after considering all the
applications received within a certain specified period. In
fact the guidelines issued by the Government of India
required that registration of applications should be stopped
as soon as the ceiling limit was reached on a first come
first served basis. Further, the guidelines prepared by the
NAFED provided that Letters of Credit would have to be
submitted within three weeks after allotment and this was
again contrary to the guidelines issued by the Government of
India which required that the Letters of Credit should be
made available for registration of the requests for
allotment of quotas. The letter of the Government again and
again emphasised that quotas should be allotted on first
come first served basis to exporters against firm
commitments, backed by irrevocable Letters of Credit,
subject to availability of ceiling. The Government asked the
NAFED to refer to the fact that the letter of the NAFED
itself showed that there were 22 parties who had registered
their contracts for export, whose requests for allotment
were backed by Letters of Credit and that the total of their
requests came to 4,859 tonnes. On the other hand, it was
pointed out, the requests of the other 34 parties for quotas
were not backed by Letters of Credit. The Government of
India finally instructed the NAFED to ensure that exports of
Niger Seeds were undertaken in conformity with the
instructions issued by the Government of India in E.I.No.
59/82 dated 23.6.82. The NAFED was reminded that while the
NAFED
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was only a canalising agency for export of Niger Seeds, the
export would have to be undertaken by them only within the
policy as laid. down by the Government. The NAFED was
further told that a Trade Notice had already been issued by
the Joint Controller of Imports and Exports and that it was
not for the NAFED to issue another Trade Notice as proposed
by it.
The instructions of the Government of India reiterated
by their letter dated 30.9.82 fell on deaf ears. The NAFED
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ignored the instructions of the Government of India and
persisted in the error of its ways. At a meeting held on
16.10.82 the NAFED purported to select applicants for export
quotas neither on a first come first served basis as
originally announced in the Trade Notice nor only from among
applicants whose contracts were backed by Letters of Credit.
They proposed to give time to the selected applicants to
produce Letters of Credit.
The petitioners moved the Delhi High Court under
Article 226 of the Constitution for redress but their Writ
Petitions were dismissed in limine. They have come to this
Court under Article 136 of the Constitution. As we were told
that the applicants who had been selected for allotment of
quotas had been able to secure a higher price from their
buyers and, therefore, allotment of quotas to the
petitioners would result in considerable loss of foreign
exchange, we were anxious to know the present attitude of
the Government of India in the matter. The Government of
India has now appeared before us through the learned
Additional Solicitor General and a counter affidavit has
been filed on their behalf by a Deputy Secretary in the
Ministry of Commerce.
The NAFED has no clear or definite answer to the
petitioners’ claim. First, it was said that the letter of
Credit furnished by the petitioner did not conform to the
requirement of the Trade Notice, but the argument was not
pursued as it was seen from the file produced by the
Government of India that the Letters of Credit furnished by
such of the selected applicants for quotas as did furnish
Letters of Credit were all similar to those produced by the
petitioners. In fact, some of the chosen ones furnished no
Letters of Credit and it was proposed to give them time for
the production of Letters of Credit. This, of course, was
not in accordance with the terms stipulated by the Trade
Notice. It is also clear from the letters which the NAFED
addressed to the Govern-
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ment of India that it was never for a moment doubted by
anyone that the Letters of Credit produced by the
petitioners conformed to the requirements of the Trade
Notice. The present stand is a clear after-thought and a
pretence. In the counter affidavit filed on behalf of the
NAFED it was stated that 22 applicants for allotment claimed
that they had firm contracts backed by Letters of Credit for
full value. The total quantity covered by these applications
was 4,859 tonnes. It was asserted that the petitioners did
not fall in this category. It was stated that the
petitioners came in the category of those who had secured a
price of Rs. 8,600 per tonne but whose contracts were not
backed by Letters of contract. The Learned Counsel who
appeared for the NAFED also submitted before us, on
instructions, that the petitioners were not among the 22
applicants whose contracts were considered by the NAFED as
backed by Letters of Credit. But a perusal of the file
produced by the Government of India exposed the statement
made in the affidavit filed on behalf of the NAFED as false.
The NAFED had itself prepared a statement showing "Enquiries
received from private parties backed by Letters of Credit
for export of Niger Seeds". This statement was sent to the
Government of India along with its letter dated 17.9.82 and
it contains a list of twenty two names. Both the appellants
in the appeals figure in it. It is clear to us that the
statement in the counter affidavit is false. It is also
clear to us that the Learned Counsel was misled and wrongly
instructed to argue before us that the appellants were not
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included in the list of twenty two.
It appeared to us that a copy of the letter dated
17.9.82 of the NAFED to the Government of India was not made
available even to the Learned Counsel. We repeatedly asked
for it and we could ultimately get it from the file produced
by the Government of India,
One of the submissions made to us was that the selected
applicants had secured a higher price per tonne and that
would help to earn more foreign exchange. In the first place
their contracts are not backed by Letters of Credit as
stipulated by the Trade Notice and they were not eligible
for registration. In the second place the ceiling had
already been reached and for that reason also they could not
be registered.
The counter affidavit filed by the Government of India
fully substantiates the claim of the appellants that the
NAFED had
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disregarded the trade instructions issued by the Government
of India as well as the Trade Notice issued pursuant to the
trade instructions. In paragraph 27 of the counter
affidavit, it is expressly stated "I submit that the
answering respondents have no objection if relief is granted
to the petitioners provided they fulfil the requirements of
the export instructions issued by respondents 1,2 and 4". In
the circumstances we have no option but to allow these
appeals. Necessary directions have already been issued by us
on 29.11.82. The appellants are entitled to get their costs
in each of these appeals from the 6th respondent, the
National Agricultural Co-operative Marketing Federation Ltd.
We fix the costs at Rs. 5.000/- in each appeal.
P.B.R, Petition allowed,
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