1974 Supreme(All) 3

Allahbad High Court
R.L.GULATI
Khunnoo Lall and Sons - Appellant
Versus
The Union of India - Respondent
Decided On : 01/04/1974

The Union Government and its officers are not entitled at their mere whim to ignore the promises made by the Government.

Headnote:

IMPORTS AND EXPORTS (CONTROL) ACT, 1947 - SECTION 3 - CUSTOMS ACT, 1962 - SECTION 111(D) - SECTION 112 - SECTION 125 - PUBLIC NOTICE NO. 117-ITC (PN)/66 DATED 16TH AUGUST, 1966 - IMPORT LICENCE - ESTOPPEL - CONFISCATION OF GOODS - IMPOSITION OF FINE - JUDICIAL REVIEW - WRIT OF MANDAMUS - The petitioner, a firm carrying on business at Kanpur, was granted an import licence for the import of "spare parts of refrigeration and air conditioning machinery other than domestic refrigerators" under the U.S. Aid Non-Project Loan Scheme. The petitioner imported "open type condensing units run by 1 H.P., 2 H.P., 3 H.P., 4 H.P. and 5 H.P. without motor" considering them to be spare parts. However, the Customs Department of Bombay confiscated the goods and imposed a fine on the ground that the imported items were not covered by the import licence and that the value of the goods imported exceeded the value of the licence. The petitioner challenged the confiscation and fine by filing a writ petition under Article 226 of the Constitution.

Fact of the Case:

The petitioner, a firm carrying on business at Kanpur, was granted an import licence for the import of "spare parts of refrigeration and air conditioning machinery other than domestic refrigerators" under the U.S. Aid Non-Project Loan Scheme. The petitioner imported "open type condensing units run by 1 H.P., 2 H.P., 3 H.P., 4 H.P. and 5 H.P. without motor" considering them to be spare parts. However, the Customs Department of Bombay confiscated the goods and imposed a fine on the ground that the imported items were not covered by the import licence and that the value of the goods imported exceeded the value of the licence. The petitioner challenged the confiscation and fine by filing a writ petition under Article 226 of the Constitution.

Finding of the Court:

The court held that the petitioner was entitled to succeed on the ground of estoppel. The court found that the petitioner had applied for an import licence on the strength of the public notice dated 16th August, 1966 which permitted the import of "spare parts of refrigeration and air conditioning machinery other than domestic refrigerators". The application was made in the prescribed form, clause V whereof requires the particulars to be furnished of the goods intended to be imported. The description of the goods given by the petitioner in the application in the column against clause V is "Open type condensing units run by 1 H.P., 2 H.P., 3 H.P., 4 H.P. and 5 H.P. without motor". The petitioner considered these units as spare parts. That the Deputy Chief Controller of Imports and Exports, Kanpur, also regarded them as spare parts of refrigeration is clear from its covering letter sent along with the licence, a copy whereof is Annexure A-2 to the writ petition and reads : "Subject : Import of spare parts of refrigeration under U..S. Aid Loan No. 386-H-160 under P.N. 117/66 dated 16-8-66. With reference to your application dated 30-7-66 on the above subject, I write to enclose herewith licence No. P/AD/2014953 dated 8-12-66 of Rs. 25,000.Please acknowledge receipt. Yours faithfully, Sd. A.N. Kapuria, Asst. Controller of Imports and Exports for Dy. Chief Controller of Imports and Exports." This letter shows very clearly that Deputy Chief Controller, Imports and Exports, Kanpur, regarded the condensing unit mentioned in the application of the petitioner as spare parts of refrigeration and air conditioning machinery covered by the public notice No. 117-ITC(PN)/66 dated 16th August, 1966 and issued the import licence on that basis. It is also clear that that authority did not issue the import licence under a mistake inasmuch as subsequently also he sought to justify his action in his report submitted to the Chief Controller, New Delhi, a copy whereof is Annexure A-7 to the writ petition. On these facts it is abundantly dear that the had made no misrepresentation whatsoever and the import licence was granted to it with open eyes and after due consideration by the authority concerned. The petitioner acting upon the import licence had imported the items at a huge cost of Rs. 25,000/-. The Union of India had undertaken an obligation to permit the petitioner to import the condensing unites as described in its application and it is bound to carry out that obligation. It cannot avoid the obligation merely because another officer or authority takes a different view and considers that such an obligation should not have been undertaken.

Issues: Whether the imported items were covered by the import licence issued to the petitioner.

Ratio Decidendi: The court held that the petitioner was entitled to succeed on the ground of estoppel. The court found that the petitioner had applied for an import licence on the strength of the public notice dated 16th August, 1966 which permitted the import of "spare parts of refrigeration and air conditioning machinery other than domestic refrigerators". The application was made in the prescribed form, clause V whereof requires the particulars to be furnished of the goods intended to be imported. The description of the goods given by the petitioner in the application in the column against clause V is "Open type condensing units run by 1 H.P., 2 H.P., 3 H.P., 4 H.P. and 5 H.P. without motor". The petitioner considered these units as spare parts. That the Deputy Chief Controller of Imports and Exports, Kanpur, also regarded them as spare parts of refrigeration is clear from its covering letter sent along with the licence, a copy whereof is Annexure A-2 to the writ petition and reads : "Subject : Import of spare parts of refrigeration under U..S. Aid Loan No. 386-H-160 under P.N. 117/66 dated 16-8-66. With reference to your application dated 30-7-66 on the above subject, I write to enclose herewith licence No. P/AD/2014953 dated 8-12-66 of Rs. 25,000.Please acknowledge receipt. Yours faithfully, Sd. A.N. Kapuria, Asst. Controller of Imports and Exports for Dy. Chief Controller of Imports and Exports." This letter shows very clearly that Deputy Chief Controller, Imports and Exports, Kanpur, regarded the condensing unit mentioned in the application of the petitioner as spare parts of refrigeration and air conditioning machinery covered by the public notice No. 117-ITC(PN)/66 dated 16th August, 1966 and issued the import licence on that basis. It is also clear that that authority did not issue the import licence under a mistake inasmuch as subsequently also he sought to justify his action in his report submitted to the Chief Controller, New Delhi, a copy whereof is Annexure A-7 to the writ petition. On these facts it is abundantly dear that the had made no misrepresentation whatsoever and the import licence was granted to it with open eyes and after due consideration by the authority concerned. The petitioner acting upon the import licence had imported the items at a huge cost of Rs. 25,000/-. The Union of India had undertaken an obligation to permit the petitioner to import the condensing unites as described in its application and it is bound to carry out that obligation. It cannot avoid the obligation merely because another officer or authority takes a different view and considers that such an obligation should not have been undertaken.

Final Decision: The court allowed the writ petition and quashed the orders of the opposite parties confiscating the goods and imposing the fine. The respondents were further directed by a writ of mandamus to release the consignment in question forthwith without demanding from the petitioner any fine or penalty.