cpc

Case Analysis: Union of India & Ors Vs. M/s. Indo-Afghan Agencies Ltd


Court :

Brief :
Under the constitutional set-up, no person may be deprived of his right or liberty except in due course of and by authority of law: if a member of the executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law – common or statute – the Courts will be competent to, and indeed would be bound to, protect the rights of the aggrieved citizen

Citation :
1968 AIR 718, 1968 SCR (2) 366 Appellant: Union Of India & Ors Respondent: M/S. Indo-Afghan Agencies Ltd

Bench: HON'BLE Shah, HON’BLE J.C.

Facts:

  • The Textile Commissioner published a scheme called the Export Promotion Scheme providing incentives to exporters of woollen goods on October 10, 1962. It was extended by a Trade Notice dated January 1, 1963 to exports of woollen goods to Afghanistan. M/S Indo-Afghan Agencies -hereinafter called the respondents- a firm dealing in woollen goods at Amritsar exported to Afghanistan in September, 1963, woollen goods
  • The Deputy Director in the office of the Textile Commissioner Bombay issued to the respondents an Import Entitlement Certificate. Representations made by the respondents to the Deputy Director and to the Union Government that they be granted Import Entitlement Certificate for the full f. o. b value of the goods exported failed to produce any response.
  • In a petition under Art. 226 of the Constitution before the Punjab HC by the respondents for a writ or the Union of India, the Textile Commissioner and the Joint Chief Controller of Imports and Exports, Bombay, to issue a license “permitting import of wool-tops, raw wool, wool waste and rags of the value of Rs. 3,04,012.73 nP”, the orders of the Textile Commissioner and the Central Government were set aside.
  • The High Court held that the Expert Promotion Scheme specifically provided for granting certificates to import materials of the “value equal to 100 per cent of the f.o. . value of the goods exported”, and the respondents were entitled to obtain import licenses for an amount equal to 100 per cent of the f. o. b. value, unless it was found on enquiry duly made under Cl. 10 of the Scheme that the respondents had by “over- involving” the goods disentitled themselves to the import licenses of the full value: that no such enquiry was made by the Textile Commissioner and that officer merely
  • proceeded upon his “subjective satisfaction” that-the respondents had “over-invoiced” the goods exported: and that the Union Government acted on irrelevant grounds.
  • The Union of India, the Textile Commissioner and the Joint Chief Controller of Imports and Exports have appealed to this Court with certificate granted by the High Court.
  • The genesis of the export control scheme may first be noticed.

Issue:

  • Whether the Export Promotion Scheme was administrative in character
  • Whether the Textile Commissioner in the present case made his order without informing the respondents

Contentions of the Respondent:

  • On behalf of the respondents it was contended that the Scheme was statutory in character and obliged the Textile Commissioner, unless the exporter was after due investigation under Clause 10 of the Scheme shown to have “over invoiced” the goods exported,
  • To issue import certificates of the full value of the exports, and a person exporting goods in pursuance of the Scheme who was denied an import certificate of the full f.o. b. value could seek the assistance of the High Court by a petition for the issue of a writ under Article 226 of the Constitution, for an order compelling the Textile Commissioner to carry out the obligations imposed upon him by the Scheme.

Contentions of the Appellant:

  • It was urged on behalf of the Union of India that the Export Promotion Scheme was administrative in character and the recital therein that the exporters will be entitled to import certificates equal to 100 per cent of the f. o. b. value of the exports was a mere instruction issued by the Union Government to the Textile Commissioner.
  • It created no rights in the public generally or in the exporters who exported their goods in pursuance of the Scheme and imposed no obligations upon the Government to issue the import certificates
  • It was also urged that the import and export policy of the Government is based on availability of foreign exchange, requirement of goods of foreign origin for internal consumption, economic climate in the country, and other related matters, and has in its very nature to be flexible, and on that account the power of the Government to modify or adjust it as the altered circumstances necessitate, cannot be restricted on the ground that promises made by the Government in different situations are not carried out.

Background:

  • Union of India v. Indo Afghan Agencies, A.I.R. 1968 S.C. 718 is the first notable case in India which has heralded the installation of the doctrine of promissory estoppel on the pedestal of law. It was once again declared in emphatic terms that no person may be deprived of his right or liberty except in due course of a course of and by authority of law.
  • If a member of the executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from law, common or statute, the Courts will be competent to and indeed would be bound to protect the rights of the aggrieved citizen.
  • The Government is bound to honour the promise made by it and if the citizen acting in reliance on the promise has altered his position, the doctrine of promissory estoppel would be applicable against the Government and Government cannot be released from its obligation either on the ground of executive necessity or of the absence of a formal contract executed after due compliance of statutory formalities.

Judgment:

  • The defence of executive necessity was not relied upon in the present case in the affidavit filed on behalf of the Union of India.
  • It was also not pleaded that the representation in the Scheme was subject to an implied term that the Union of India will not be bound to grant the import certificate for the full value of the goods exported if they deem it inexpedient to grant the certificate.
  • The Bench are unable to accede to the contention that the executive necessity releases the Government from honouring its solemn promises relying on which citizens have acted to their detriment.
  • Under the constitutional set-up, no person may be deprived of his right or liberty except in due course of and by authority of law: if a member of the executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law – common or statute – the Courts will be competent to, and indeed would be bound to, protect the rights of the aggrieved citizen
 

Meghna Mishra
on 07 August 2020
Published in Taxation
Views : 501


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