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High Court Of Delhi
OLD VILLAGE INDUSTRIES LIMITED - Appellant
Versus
UNION OF INDIA - Respondent
Civil 290 of 1982
Decided On : 04/30/1993
2. Administrative law — promissory estoppel — discussed.
The challenge in the writ petition was to the withdrawal of the Cash Compensatory Support Scheme in respect of exports effected by the petitioner.
It was contended, inter alia, that the petitioner had acted on the assurances given by the Respondents and that the withdrawal of the Cash Compensatory Support Scheme was not permissible.
Allowing the writ petition, the Court
Held:
1. The rule which says that the Court may not enquire into belated and stale claims is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how the delay arose. The principle on which relief to the party on the grounds of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is reasonable Explanationn for the delay. The real test to determine delay in such cases is that the petitioner should come to the Writ Court before a parallel right is created and that the lapse of time is not attributable to any latches or regligence. The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which is manifest cannot be sustained on the sole ground of laches. It has not been shown what rights have been created in favor of respondents by lapse of time.
The petitioner had filed the writ petition and the respondents have been assuring that the petitioner will be paid its dues without going to the Court. The said allegations have not been controverter by filing counter affidavit. Further considering the nature of the disputes one does not expect the aggrieved person to immediately rush to court. Having regard to the facts and circumstances of the case it cannot be held that the Petitioner is guilty of such delay which may justify refusal of relief to it.
2. It is not disputed that the Government of India had to place at the disposal of respondent No. 3 the funds and on the basis of the policy announced, the cash incentive had to be disbursed by respondent No. 3. It has also not been disputed that but for the withdrawal of the Scheme, Petitioner would have been entitled to the cash compensatory incentive. In this view the submission, that there is no legal relationship between the petitioner and respondents 1 and 2 is misconceived. The submission that the Petitioner has not shown to have altered the position in relying upon the promises is again misconceived as the petitioner has specifically pleaded that relying upon the Scheme they had priced the goods to be supplied to the foreign buyers.
The withdrawal of Cash Compensatory Support by circular dated 6th January, 1979 w.e.f. 1st January, 1979 so as to effect already confirmed contracts is illegal and in violation of the doctrine of promissory estoppel. Circular dated 6th January, 1979 insofar as it effects the petitioner in respect of contracts entered into under the scheme prior to 1st January, 1979 is quashed.
( 1 ). The petitioner has challenged the action of the respondents in withdrawing the Cash Compensatory Support in respect of exports effected pursuant to the policy of Government of India announced on 29th March, 1978. The petitioner is exporter engaged in exporting readymade garments to various countries. Respondent No. 1 is Union of India. Respondent No. 2 is Textile Commissioner, Ministry of Commerce and Industries. Respondent No. 2, from year to year, announces various export incentives to which exporters are entitled on the exports made by them. Respondent No. 3 is Indian Cotton Mills Federation. It entertains and examines the applications of the exporters in the prescribed manner for cash assistance and distributes the various export incentives to which the exporters are entitled. Respondent No. 4 is Apparels Export Promotion Council, which inter alia has function of implementing the Government s policy as regards the exports.
( 2 ). On 29th March, 1978, respondent No. 2 intimated to respondent No. 3 that the Government of India has decided to contribute to the export promotion fund of Indian Cotton Mills Federation from 1st April, 1978 to 31st March, 1979, the cash incentives at the rates mentioned in the said communication on the expon of cotton textile to be made during 1978-79 i. e. 1st April, 1978 to 31st March, 1979.
( 3 ). The case of the petitioner is that relying on the promise held by Government of India that cash assistance will be available to the exporters on the export of readymade garments that would be exported by them in pursuance of the policy laid down by Govern- ment of India, it priced its goods for export taking into consideration the cash assistance which would be paid and entered into firm contract with various foreign buyers. A circular dated 6th January, 1979 was issued to dis-continue the existing Cash Compensatory Export Scheme, w. e. f. 1st January, 1979. The effect of the circular was that the Cash Compensatory Support to the exporters, on the export of all the items of cotton garments mentioned in the said circular, was to dis-continue from 1st January, 1979. According to petitioner the discontinuance of the Cash Compensatory Support w. e. f 1st January, 1979 is in violation of the promise held by respondents I and 2 for granting cash assistance for export of readymade garments for the period 1st April, 1978 to 31st March, 1979. The petitioner claims that it was induced to enter into firm contracts with foreign buyers on account of the policy held out by Government of India at the time when it entered into contracts with foreign buyers and which was in force on the date of entering into such contracts and the petitioner had entered into those contracts and the prices were fixed taking into consideration the Cash Compensatory Support that would be available as per the policy. The petitioner says that respondents 1 and 2 have no right to withdraw the Cash Compensatory Support and divest the petitioner from right which had vested in it on account of promise held by respondents. In the words of the petitioner the impugned circular dated 6th January, 1979 had the following consequences on its export: "the petitioner could either commit breach of the contract with the foreign buyers and not to supply goods to the foreign buyers because of withdrawal of the Cash Compensatory Support by Government of India which, in turn, would have resulted invocation with their bank guarantee already given by the petitioner for the benefit of the foreign buyers and face heavy losses on account of the purchase of raw material and also on account of having entered into contracts with the suppliers of raw- material, fabricators, processors and dyers, employed staff as well as to bring bad reputation to its business and to the country and suffer incalculable loss of goodwill with its foreign buyers which would have been a national loss. The other consequences of this illegal c54ircular was
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