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1980 Supreme(Bom) 37
Bombay High Court
KANIA,KANADE
Union of India - Appellant
Versus
Alok Exports - Respondent
Decided On : 02/04/1980
In Appeal No. 338 of 1979 :D.R. Dhanuka with V.N. Lokur and R.L. Mukerjee, for Appellants; A.P. Rana with M.O. Chinoy, for Respondents; In Appeal No. 339, of 1979:D.R. Dhanuka with M.I. Sethna and R.L. Mukerjee, for Appellants; J.C. Bhatt with V.J. Taraporwala, T.R. Andhyarujina and D.R. Podar, for Respondents.
Headnote:
The issue before the court was whether the export of Argenti Nitrus, a drug, was covered under the Export Control Order, 1977, and whether the doctrine of promissory estoppel applied to allow the export of the drug despite a change in export policy. The court held that Argenti Nitrus was covered under Item 55 of Part 'A' of Schedule I to the Export Control Order, 1977, as it was a silver salt, silver chemical, or compound with more than 50% silver content. The court found that there was no reliable evidence to show that the words "silver salts, silver chemicals and compounds" had any trade meaning that excluded drugs, and that the words were used in their wider or dictionary sense. The court also held that the doctrine of promissory estoppel did not apply to allow the export of Argenti Nitrus without a license. The court found that there was no promise or representation on the part of the Government that would compel it to permit the export of Argenti Nitrus without a license, and that the respondents could not have reasonably relied on any such promise or representation given the fact that the Export Policy was subject to change from year to year. The court allowed the appeals and set aside the judgment and orders of the trial court, dismissing the petitions filed by the respondents.
Fact of the Case:
The respondents, a partnership firm registered under the Indian Partnership Act, 1932, carry on business as exporters of drugs and chemicals. They are registered with the Basic Chemicals and Pharmaceutical Export Promotion Council (hereinafter referred to as "the said Council"). Appellant No. 1 is the Union of India and the other appellants are the officers appointed by appellant No. 1 and exercise their powers and functions under the Imports and Exports Control Act, 1947 (XVIII of 1947), (hereinafter referred to as "the said Act"). On 23rd March 1979 a contract was entered into between the respondents and one Compagine Des Metaux Precious, Paris, a firm dealing in precious metals (hereinafter referred to as "the said French firm") whereby the respondents sold to the said French firm one metric ton of Argenti Nitrus of International Pharmaceutical specifications at 154.60 dollars per kg. C.I.F., the total value being 154600.00 dollars. The delivery was to begin in April 1979 and to be completed by Mar. 1980, or as mutually settled. By another contract dated 28th March, 1979 the respondents agreed to sell to Pinstripe Limited, Manchester, 15 metric tons of Argenti Nitrus (Ag NO.3) conforming with the specifications laid down in the latest British Pharmacopoeia Codex or International Pharmacopoeia at 161.00 dollars per kg. C.I.F. The delivery was to begin in April 1979 and to be completed by March 1980 or as mutually settled.
Finding of the Court:
The court found that Argenti Nitrus was covered under Item 55 of Part 'A' of Schedule I to the Export Control Order, 1977, as it was a silver salt, silver chemical, or compound with more than 50% silver content. The court found that there was no reliable evidence to show that the words "silver salts, silver chemicals and compounds" had any trade meaning that excluded drugs, and that the words were used in their wider or dictionary sense. The court also held that the doctrine of promissory estoppel did not apply to allow the export of Argenti Nitrus without a license. The court found that there was no promise or representation on the part of the Government that would compel it to permit the export of Argenti Nitrus without a license, and that the respondents could not have reasonably relied on any such promise or representation given the fact that the Export Policy was subject to change from year to year.
Issues: 1. Whether Argenti Nitrus was covered under Item 55 of Part 'A' of Schedule I to the Export Control Order, 1977? 2. Whether the doctrine of promissory estoppel applied to allow the export of Argenti Nitrus without a license?
Ratio Decidendi: 1. The court found that Argenti Nitrus was covered under Item 55 of Part 'A' of Schedule I to the Export Control Order, 1977, as it was a silver salt, silver chemical, or compound with more than 50% silver content. The court found that there was no reliable evidence to show that the words "silver salts, silver chemicals and compounds" had any trade meaning that excluded drugs, and that the words were used in their wider or dictionary sense. 2. The court held that the doctrine of promissory estoppel did not apply to allow the export of Argenti Nitrus without a license. The court found that there was no promise or representation on the part of the Government that would compel it to permit the export of Argenti Nitrus without a license, and that the respondents could not have reasonably relied on any such promise or representation given the fact that the Export Policy was subject to change from year to year.
Final Decision: The court allowed the appeals and set aside the judgment and orders of the trial court, dismissing the petitions filed by the respondents.
KANIA, J. :- These two appeals are directed against the judgements delivered by Pendse, J. in Misc. Petn. No. 1479 of 1979 (1980 Cen. Cus. 32-D) and Misc. Petn. No. 1114 of 1979 respectively. Appeal No. 338 of 1979 arises from the judgement in Misc. Petn. No. 1479 of 1979 and Appeal No. 339 of 1979 arises from the judgement in Misc. Petn. No. 1114 of 1979. Both the appeals raise common questions of law and the difference in the facts is not material from the point of view of the questions involved for decision. We, therefore, propose to dispose of both these appeals by this common judgement.
2. As the main judgement has been delivered by Pendse, J. in Misc. Petn. No. 1114 of 1979, it will be more convenient to first deal with the facts in Appeal No. 339 of 1979. The respondents herein, who were the petitioners in the said petition, are a partnership firm registered under the Indian Partnership Act, 1932, and carry, on business as exporters of drugs and chemicals. They are registered with the Basic Chemicals and Pharmaceutical Export Promotion Council (hereinafter referred to as "the said Council"). Appellant No. 1 is the Union of India and the other appellants are the officers appointed by appellant No. 1 and exercise their powers and functions under the Imports and Exports Control Act, 1947 (XVIII of 1947), (hereinafter referred to as "the said Act"). On 23rd March 1979 a contract was entered into between the respondents and one Compagine Des Metaux Precious, Paris, a firm dealing in precious metals (hereinafter referred to as "the said French firm") whereby the respondents sold to the said French firm one metric ton of Argenti Nitrus of International Pharmaceutical specifications at 154.60 dollars per kg. C.I.F., the total value being 154600.00 dollars. The delivery was to begin in April 1979 and to be completed by Mar. 1980, or as mutually settled, By another contract dated 28th March, 1979 the respondents agreed to sell to Pinstripe Limited, Manchester, 15 metric tons of Argenti Nitrus (Ag NO.3) conforming with the specifications laid down in the latest British Pharmacopoeia Codex or International Pharmacopoeia at 161.00 dollars per kg. C.I.F. The delivery was to begin in April 1979 and to be completed by March 1980 or as mutually settled. There is a special condition in this contract which provides that parties are deemed to counter provisions to cover the contractual obligations and that any default in the execution of obligations under the contract in the present form would be construed to be a dispute which would entitle the aggrieved party to liquidated damages at 10% of the uncompleted contract without going into actual details of the losses or damages of the party concerned or the grounds thereof. The contract dated 23rd March 1979, was registered with Corporation Bank Limited on 26th March 1979 and the contract dated 28th March, 1979 was registered by the respondents with the Corporation Bank Limited on 30th March, 1979.
3. At this stage, some material facts in Appeal No. 338 of 1979, which arises from the decision in Miscellaneous Petition No. 1479 of 1979 may also be noted. On 29th March, 1979, the respondents in that appeal entered into a contract with Pinstripe Limited, Manchester, whereby the said respondents agreed to sell to Pinstripe Limited, Manchester, 121/2 metric tons of Argenti Nitrus of the specifications contained in the latest British Pharmacopoeia Codex or International Pharmacopoeia at the rate of 161.00 dollars per kg. C.I.F. The delivery was to begin in April 1979 and to be completed by March 1980, or as mutually settled. There was a similar provision regarding liquidated damages as was contained in the contract dated 28th March 1979, set out earlier. The said contract dated 29th March 1979, was registered with Joint Chief Controller of Imports and Exports, Bombay, on 30th March, 1979 and was also registered with the Corporation Bank Limited on the same date. It may be mentioned here th
