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2003 Supreme(All) 2936
IN THE HIGH COURT OF ALLAHABAD
R.S. TRIPATHI, MARKANDEY KATJU, JJ.
Ginni Filaments Ltd. - Appellant
Versus
Union of India (UOI) and Others - Respondents
C.M.W.P. No. 17685 of 1993
Decided On : 07-08-2003
For the Appellant : S.C. Agarwala, Kavin Gulati and Bharti Sapru.
For the Respondent: U.N. Sharma and S.S.C.
The court emphasized the obligation of exporters to fulfill commitments and the imposition of compensation for non-fulfillment, highlighting the national interest in earning foreign exchange through exports.
Headnote:
TEXPROCIL - Export Quota Allocation - Imports and Exports (Control) Act, 1947, Section 3 - Exports (Control) Order, 1988, Clause 3(2) - Ministry of Textiles notifications - Anti Dumping Duty - Performance bond - Court's analysis of export obligations and imposition of penalty
Fact of the Case:
The petitioner, a 100% export-oriented unit, sought to quash demands for compensation due to failure to fulfill export obligations. The petitioner alleged that external factors, such as Anti Dumping Duty and government bans, hindered its ability to export.
Finding of the Court:
The court found no merit in the petition, upholding the imposition of compensation for non-fulfillment of export obligations. The court emphasized the petitioner's obligation to fulfill commitments and penalized the petitioner for failing to do so.
Issues: The issues revolved around the petitioner's export obligations, the impact of external factors on export performance, and the validity of the imposed compensation.
Ratio Decidendi: The court held that the petitioner's failure to fulfill export commitments warranted compensation, emphasizing the national interest in earning foreign exchange through exports.
Final Decision: The petition was dismissed, and the petitioner was directed to make payments as per the impugned order, including interest at 12% per annum.
M. Katju, J.
This writ petition has been filed praying for a writ of certiorari to quash the impugned demands dated 6.4.1992 Annexure-18 to the writ petition and dated 27.3.1991 Annexure-21 to the writ petition.
2. Heard learned Counsel for the parties.
3. The Petitioner has alleged that it is a 100% export oriented unit engaged in manufacture of fine and super fine cotton yarn. It is alleged in paragraph 2 of the petition that the Petitioner is successfully exporting to the European and Far-East Asian markets and is a recognised export house and it is also a member of Cotton Textiles Export Promotion Council (hereinafter referred to as TEXPROCIL) which is a body constituted under the Imports and Exports Control Act, 1947 and the Exports (Control) Order, 1988. The Petitioner has its factory in Mathura and all the goods which it manufactures are exported. Section 3 of the Imports and Exports (Control) Act, 1947 (hereinafter referred to as an Act) empowers the Central Government to prohibit to restrict the imports and exports by notification in the Gazette. In exercise of that power the Central Government has issued the Exports (Control) Order, 1988. Clause 3 (2) of the said order states that goods specified in Schedule 3 may be exported on the fulfilment of the terms specified therein. The Petitioner is controlled by the provisions of Schedule 3 (Open General Licence) and the concerned entry related to the Petitioner is Entry 47 (III). This entry provides that any person desirous to make exports to the European Economic Council (E.E.C.) countries will have to obtain allocations for export entitlement from TEXPROCIL. It also states that TEXPROCIL will observe the guidelines issued by the Ministry of Textiles, Government of India. The Government of India, Ministry of Textiles issued notifications dated 31.8.1990, 15.10.1990 and 26.10.1990 Annexures-1, 2 and 3 to the petition. A perusal of the same shows that the Executive Director of TEXPROCIL has been authorised to allocate entitlements for export of yarns, fabrics etc. It further states that the Ministry of Textiles, Government of India shall be the final authority regarding interpretation of any of the provisions of the notifications and that the export entitlement will be allotted only to the exporters registered with the competent Registering authority.
4. In paragraph 15 of the writ petition it is stated that under the Contract Reservation Entitlement System, exporters are entitled to allotment of quotas for purposes of export on the basis of the orders which they have to obtain from foreign buyers before they are entitled to any quota for the purposes of exports. In paragraph 19 of the petition it is stated that the Petitioner had applied for quota for export of cotton yarn to Germany which is an E.E.C. country and obtained 4 orders from four buyers against which TEXPROCIL allotted a total quota of 1,39,400 kgs. to the Petitioner for export to Germany to be made between the period 1.7.1991 upto 31.12.1991. Copy of the entitlement certificate dated 14.6.1991 is Annexure-4 to the writ petition.
5. It is alleged in paragraph 20 of the writ petition that soon after this entitlement certificate was obtained the E.E.C. imposed on various countries including India a duty called 'Anti Dumping Duty' to the extent of 15.9% of the export price. 'Anti Dumping Duty' means a duty which is imposed by the E.E.C. countries if the price at which the exports are being made by any exporting country is less than the cut off price fixed by the Commission of the E.E.C. countries. This is done in order to avoid under selling by the third World countries. Copy of the order of the Commission of E.E.C. imposing an 'Anti Dumping Duty' is Annexure-5 to the writ petition. It is alleged in paragraph 21 of the writ petition that soon thereafter the Petitioner received a Telex message dated 11.7.1991 from one of its buyer GOERTZ and Co. stating that no letter of credit could be opened in Petitioner's
