Writ petition involving a consequential relief of monetary claim is also maintainable

(Writ Appeals filed under Clause 15 of the Letters of Patent against the common order of the learned Judge Mr. Justice K. Govindarajan, dated 10.03.1999 made in W.P.Nos.4799 and 4800 of 1998.)

Common Judgment (P. Sathasivam, J.)

Export Credit Guarantee Corporation of India Limited, aggrieved by the common order dated 10.3.1999 in W.P.Nos.4799 & 4800 of 1998 quashing the circular dated 6.5.1994 in so far as it relates to the inclusion of the writ petitioners in the Specific Approval List, has filed the above writ appeals.

2. Mr.Jayakumar and Mr.Vimalkumar are sons of P.Anthony who is the proprietor of M/s.Annai Cashew Industries, Kanyakumari District. Aggrieved by the Circular No.859 dated 6.5.1994 of the Export Credit Guarantee Corporation of India Limited, (a Government of India Enterprises), Bombay-21 including both the writ petitioners, viz., Jayakumar and Vimalkumar in the "Specific Approval List" filed W.P.Nos.4799 of 1998 and 4800 of 1998 respectively. Since the facts and the questions raised in both the petitions are similar and one and the same, we shall dispose of both the appeals by this common judgment.

3. For convenience, we shall refer the case of the petitioner in W.P.No.4799 of 1998.

(a) According to the petitioner A.Jayakumar, his father P.Anthony is the Proprietor of Annai Cashew Industries in Nellikaivilai, Thirukurichi Post, Vilvancode Taluk, Kanyakumari District. The said industry was started in the year 1984 by his father. M/s.Export Credit Guarantee Corporation of India (ECGC) is a company, wholly owned by the Government of India. Besides other duties, it is expected to provide financial guarantee to banks in India to protect them from risks of loss involved in their extending financial support to exporters and in the event of an exporter committing default, ECGC would make good a major portion of the loss. In the event of any such default, the defaulters' names would be included in the Specific Approval List and thereafter no bank can grant credit facilities to such persons or defaulters without the approval of ECGC. In such cases, the Guarantors/partners/Directors of the defaulters and their sister concerns are also included in the Specific Approval List.

(b) All the cashew industries buy cashew nuts locally and also import cashew nuts from Africa and produce cashew kernels. The product is mainly exported to foreign countries. Hence, cashew related industries require the services and assistance of ECGC and nationalised banks like the second respondent. The second respondent bank offered to extend credit facilities to the petitioner for the purpose of export and without the guarantee to be extended by ECGC, the bank cannot advance any loan or undertake an obligation to negotiate the documents on behalf of the exporter. While so, the second respondent had addressed a letter to ECGC seeking necessary guarantee for extending export credit facilities to the writ petitioner. By Circular No.859 dated 6.5.1994, ECGC informed the second respondent bank that Jaya Cashew Industries, a sister concern of Annai Cashew Industries had been included in the Specific Approval List. The implication of this circular is that no bank in India can grant export credit facilities to the petitioner or their concern without the approval of ECGC. Though his father is the proprietor of Annai Cashew Industries, he does not have any interest financially or otherwise in the said industry. In such circumstances, ECGC is not justified in including the petitioner concern, namely, Jaya Cashew industries in the Specific Approval List. Having no other effective remedy, the petitioner filed the writ petition on various grounds.

4. W.P.4800 of 1998 is filed by his brother A.Vimalkumar raising similar contentions.

5. ECGC, first respondent in both the writ petitions filed a separate, but identical counter affidavits. The stand of ECGC is briefly stated hereunder:

ECGC is engaged in providing financial guarantee to the banks and other instit