2003 Supreme(Del) 830
High Court Of Delhi
PRAKASH TEXTILES - Appellant
Versus
UNION OF INDIA - Respondent
CIV.WRIT 7177 of 2002
Decided On : 09/04/2003
A.MAITRI, KULJIT RAVAL
The main legal point established is that the Second Appellate Committee must properly consider the evidence presented by the petitioner and cannot summarily dismiss an appeal without due consideration.
Headnote:
Force Majeure - Export Obligation - The court considered the utilization of export obligation under the Garment Export Entitlement Policy and the invocation of force majeure conditions by the petitioner to avoid forfeiture of the bank guarantee. The court found that the Second Appellate Committee had summarily dismissed the appeal without proper consideration of the evidence presented, and therefore set aside the impugned order and remanded the matter for fresh consideration.
Fact of the Case:
The petitioner failed to meet its export obligation by the specified date and sought to invoke force majeure conditions due to fog and bad weather, and initially the Y2k problem. The Second Appellate Committee dismissed the appeal based on the petitioner's failure to furnish evidence, despite the petitioner providing a Meteorological Department certificate as evidence.
Finding of the Court:
The court found that the Second Appellate Committee had not properly considered the evidence presented by the petitioner and had summarily dismissed the appeal on incorrect premises. The court set aside the impugned order and remanded the matter for fresh consideration, directing the petitioner to keep the bank guarantee alive until a final decision is reached.
Issues: Utilization of export obligation, invocation of force majeure conditions, dismissal of appeal based on evidence
Ratio Decidendi: The court held that the Second Appellate Committee had not properly considered the evidence presented by the petitioner and had summarily dismissed the appeal on incorrect premises, leading to a non-application of mind. The court set aside the impugned order and remanded the matter for fresh consideration.
Final Decision: The writ petition and the CM stand disposed of, with the court setting aside the impugned order and remanding the matter to the Second Appellate Committee for a fresh consideration, while directing the petitioner to keep the bank guarantee alive until a final decision is reached.
( 1 ) THE petitioner is aggrieved by the order of the Second Appellate Committee of the government of India, Ministry of Textiles passed on 14. 09. 2002. The question in this petition relates to the utilisation of the export obligation of the petitioner under the Garment export Entitlement Policy.
( 2 ) IN this particular case, the relevant year is 1999. The revaliation of export quota which was granted to the petitioner was under the condition that the petitioner would provide a bank Guarantee to ensure that it met its export obligation by 31. 12. 1999. The admitted position is that the petitioner could not meet the export obligation by 31. 12. 1999. However, the petitioner sought to invoke the force Majeure condition in order to submit that invocation of the Bank Guarantee and forfeiture of the amount of the Bank guarantee ought not to be done under the policy itself as the petitioner was prevented from meeting its export obligation because of the Force Majeure conditions.
( 3 ) IN this case, the petitioner initially pleaded that it was prevented from meeting its export obligations due to fog and bad weather as well as the Y2k problem at Mumbai Port. However, at the Second Appeal stage, the petitioner gave up its ground with regard to the Y2k problem. Learned counsel for the petitioner has pointed out from the First appellate order dated 04. 04. 2002 passed by the Textile Commissioner that the petitioner had, in point of fact, submitted evidence in the form of a Meteorological Department certificate dated 07. 03. 2001 indicating the fog and bad weather conditions prevailing during the period 20. 12. 1999 to 31. 12. 1999. This was not accepted as a valid reason constituting a Force Majeure condition by the First Appellate Committee. In Second appeal, however, the same was dismissed by the Second Appellate Committee on the following reason:-
"the firm pleaded that for the shortfall in utilisation was due to fog and bad weather. The same reason was pleaded before the Ist Appellate Committee which dismissed the same for not furnishing any evidence. "
( 4 ) ACCORDING to the learned counsel for the petitioner, this statement is ex facie wrong inasmuch as the petitioner had submitted the evidence by way of the certificate of the meteorological Department which had also been noticed by the First Appellate committee. Apart from this, learned counsel for the petitioner submits that no other considerations prevailed with the Second appellate Committee and, therefore, there was a complete non-application of mind on the part of the Second Appellate Committee.
( 5 ) MR. Kuljeet Rawal, appearing on behalf of the respondent no. 4, sought to justify the orders on the basis of the factual position and in particular the very contentions of the petitioner before the Second Appellate committee which constituted the grounds of appeal which are at pages 30-32 of the Paper book. According to Mr Kuljeet Rawal, one of the most important considerations was that the petitioner had submitted, in the grounds of Appeal itself, that because of weather conditions, it could not complete the manufacture of xl items in the said category no. 342. Therefore, the question of claiming force Majeure conditions between 20. 12. 1999 and 31. 12. 1999 preventing the shipment of the goods from the Air Cargo terminal was not a valid ground at all. Unfortunately, although there may be some merit in what Mr Rawal contends, the same has not found any mention in the impugned order of the Second Appellate Committee. The Second Appellate Committee has summarily dismissed the appeal on the ex facie incorrect premise that the First Appellate committee had dismissed the same for non- furnishing of any evidence. Non-production of any evidence is one thing and production of evidence which is not credible or germane to the issues is quite another.
( 6 ) IN these circumstances, it would be appropriate that the impugned order is set aside and the matter is reman