The transferee of a transferable R.E.P. license cannot be made to suffer for any lapse or negligence on the part of the original exporter.

( 1 ) IN this writ application, the petitioners challenged the validity of the order suspending the import licence as well as the action of the respondents 3 and 4 in refusing to clear the goods already imported on the basis of the Import Licence issued in this behalf. The petitioner 1 is a partnership firm and the petitioner 2 is a partner of the petitioner 1. The case of the petitioners is that on or about 24th September, 1984, the petitioners purchased from one M/s. Hindusthan Trading Company of Bombay one R. E. P. Licence No. P/k/3033988 dated 21st June, 1984 of Rs. 4,07,400/ -. The said licence was valid for importation of various items mentioned therein and on the basis of an endorsement on the reverse of the said licence valid for import of (a) Cerbaryl, (b) Methyl Pabathion, (c) Phorate, (d) Dephenylumine and (e) Pentaerythritol. The said R. E. P. License was issued to registered exporters under the Import Policy of the Government of India. Some percentage of import replenishment and materials was allowed for import against each product as well as other conditions relating thereto. The conditions under which the said R. E. P. Licence is issued, are provided in Appendix 17 (Import Policy for Registered Exporters ). The original Import Licence was issued in favour of Hindusthan Trading Company, Bombay by the respondent 2, the Deputy Controller of Imports and Exports, Bombay. The said Import Licence was transferable as per provision of paragraph 141 of Import Policy Book for the year 1984-1985. The petitioner's case is that the said R. E. P. Licence was purchased by the petitioners for valuable consideration in accordance with the provision of Paras 140-141 of the Import Policy for the year 1984-85 and that the petitioners duly paid the consideration money in respect thereof to the original licence holder in whose favour the licence was issued, namely Hindustan Trading Company and that on or about 29th, September, 1984, M/s. Hindusthan Trading Company addressed a letter to the Joint Chief Controller, Imports and Exports, Bombay intimating the transfer of the said R. E. P. licence in favour of the petitioners. It was further stated that the said Hindusthan Trading Company is a government recognised export house and that when the petitioners purchased the said R. E. P. licence, the petitioners acted bona fide, without having any doubt as to the validity of the aforesaid licence. After the purchase of the said R. E. P. licence, the petitioners, it appears, entered into an agreement with one M/s. Hoei Sangyo Company Limited, Tokyo, Japan for supply of 17. 5 M. T. of Pentaerythritol. Another contract was entered into with one M/s. Nampo Trading Company of Tokyo, Japan for supply of 17. 5 metric ton of the same commodity. In accordance with the said contracts, the petitioners opened two irrecoverable letters of credit with the Punjab and Sind Bank, Calcutta on 28th September, 1984 and 29th September, 1984 respectively. It further appeared that on the basis of the said R. E. P. licence, the aforesaid goods were purchased by the petitioners from the said company of Japan and the goods had arrived in Calcutta Port on 20th November, 1984 and 11th December, 1984 respectively by two different vessels. After the said goods arrived at the Calcutta Port, the petitioners duly paid Customs Duties assessed in respect of the goods arrived as per Vessel Lanka Srimani which arrived at the Calcutta Port on 20th November, 1984. But in so far as the duty assessed in respect of the consignment arrived by vessel S. S. Lanka Srimati on 11th December, 1984, the petitioners offered to pay the entire Customs duty but the same was not accepted. In the meantime by the letter dated 5-12-1984, the Assistant Collector of Customs for Appearing Group-I, Customs House, Calcutta informed the petitioners 1 that the Import Licence on the basis of which the said consignment of Pentaerythritol was made, had been suspended and the oper