Karnataka High Court
Gokaldas Images Private Limited vs Union Of India on 2 May, 2023
Author: N.S.Sanjay Gowda
Bench: N.S.Sanjay Gowda
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 02nd DAY OF MAY, 2023
BEFORE
THE HON'BLE MR.JUSTICE N.S.SANJAY GOWDA
W.P.No.390/2013 (GM-RES)
C/w.
W.P.No.38857/2015, W.P.No.38858/2015,
W.P.No.38859/2015, W.P.No.38860/2015,
W.P.No.38861/2015 (GM-RES)
IN W.P.No.390/2013:
BETWEEN:
GOKALDAS IMAGES PRIVATE LIMITED,
7 & 12 INDUSTRIAL SUBURB 2ND STAGE,
YESHWANTPUR, TUMKUR ROAD,
BANGALORE-560 022.
REPRESENTED BY ITS MANAGING DIRECTOR
SRI.SUMIR J HINDUJA.
... PETITIONER
(BY SRI.K.S.HARISH, ADVOCATE)
AND:
1. UNION OF INDIA,
REPRESENTED BY IT SECRETARY,
MINISTRY OF TEXTILES,
UDYOG BHAVAN,
NEW DELHI 110 011.
2. SENIOR OFFICERS' APPELLATE COMMITTEE,
2
OFFICE OF THE TEXTILE COMMISSIONER,
NEW C.G.O.BUILDING,
48 NEW MARINE LINES,
MUMBAI 400 020
REPRESENTED BY
ADDL. TEXTILE COMMISSIONER.
3. SECOND APPELLATE COMMITTEE,
GOVERNMENT OF INDIA,
MINISTRY OF TEXTILES,
EXPORTS III SECTION,
UDYOG BHAVAN, NEW DELHI-110 011.
REPRESENTED BY ADDITIONAL JOINT
SECRETARY AND CHAIRMAN.
4. APPAREL EXPORT PROMOTION COUNCIL,
10, RAHEJA CHAMBERS,
12 MUSEUM ROAD,
BANGALORE 560 001.
REPRESENTED BY
ITS DEPUTY DIRECTOR
... RESPONDENTS
(BY SMT.A.D.VIJAYA HAVANUR, ADVOCATE FOR R-1 TO R-3;
SRI. K.SACHINDRA KARANATH, ADVOCATE FOR R-4)
THIS PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH
THE ORDER DATED: 26.07.2012 PASSED BY THE R-3 AS PER
ANNEXURE-N, ETC.
IN W.P.No.38857/2015:
BETWEEN:
GOKALDAS IMAGES PRIVATE LIMITED,
7 & 12 INDUSTRIAL SUBURB 2ND STAGE,
YESHWANTPUR, TUMKUR ROAD,
BANGALORE-560 022.
REPRESENTED BY
3
ITS DIRECTOR/SIGNATORY
SRI.SUMIR J HINDUJA.
... PETITIONER
(BY SRI.K.S.HARISH, ADVOCATE)
AND:
1. UNION OF INDIA,
REPRESENTED BY IT SECRETARY,
MINISTRY OF TEXTILES, UDYOG BHAVAN,
NEW DELHI 110 011.
2. SENIOR OFFICERS' APPELLATE COMMITTEE,
OFFICE OF THE TEXTILE COMMISSIONER,
NEW C.G.O.BUILDING,
48 NEW MARINE LINES, MUMBAI 400 020
REPRESENTED BY
ITS JOINT TEXTILE COMMISSIONER.
3. SECOND APPELLATE COMMITTEE,
GOVERNMENT OF INDIA,
MINISTRY OF TEXTILES,
EXPORTS III SECTION,
UDYOG BHAVAN, NEW DELHI-110 011.
REPRESENTED BY ITS JOINT SECRETARY.
4. APPAREL EXPORT PROMOTION COUNCIL,
HAVING ITS REGIONAL OFFICE AT
10, RAHEJA CHAMBERS,
12 MUSEUM ROAD,
BANGALORE 560 001.
ALSO HAVING ITS HEAD OFFICE AT
APPAREL HOUSE, INDUSTRIAL AREA,
SECTOR-44, GURGAON-122 003
HARYANA.
REPRESENTED BY ITS DIRECTOR.
... RESPONDENTS
(BY SMT.A.D.VIJAYA HAVANUR, ADVOCATE FOR R-1 TO R-3;
SRI. K.SACHINDRA KARANATH, ADVOCATE FOR R-4)
4
THIS PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH
THE ORDER DATED: 08.05.2013, ISSUED BY THE R-4 VIDE
ANNEXURE-J, ETC.
IN W.P.No.38858/2015:
BETWEEN:
GOKALDAS IMAGES PRIVATE LIMITED,
7 & 12 INDUSTRIAL SUBURB 2ND STAGE,
YESHWANTPUR, TUMKUR ROAD,
BANGALORE-560 022.
REPRESENTED BY ITS MANAGING DIRECTOR
SRI.SUMIR J HINDUJA. ... PETITIONER
(BY SRI.K.S.HARISH, ADVOCATE)
AND:
1. UNION OF INDIA,
REPRESENTED BY IT SECRETARY,
MINISTRY OF TEXTILES, UDYOG BHAVAN,
NEW DELHI 110 011.
2. SENIOR OFFICERS' APPELLATE COMMITTEE,
OFFICE OF THE TEXTILE COMMISSIONER,
NEW C.G.O.BUILDING,
48 NEW MARINE LINES,
MUMBAI 400 020
REPRESENTED BY
ITS JOINT TEXTILE COMMISSIONER.
3. SECOND APPELLATE COMMITTEE,
GOVERNMENT OF INDIA,
MINISTRY OF TEXTILES,
EXPORTS III SECTION,
UDYOG BHAVAN, NEW DELHI-110 011.
REPRESENTED BY ITS JOINT SECRETARY.
5
4. APPAREL EXPORT PROMOTION COUNCIL,
HAVING ITS REGIONAL OFFICE AT
10, RAHEJA CHAMBERS,
12 MUSEUM ROAD, BANGALORE 560 001.
ALSO HAVING ITS HEAD OFFICE AT
APPAREL HOUSE, INDUSTRIAL AREA,
SECTOR-44, GURGAON-122 003
HARYANA.
REPRESENTED BY
ITS DIRECTOR.
... RESPONDENTS
(BY SMT.A.D.VIJAYA HAVANUR, ADVOCATE FOR R-1 TO R-3;
SRI. K.SACHINDRA KARANATH, ADVOCATE FOR R-4)
THIS PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH
BY A WRIT OF CERTIORARI, OR ANY OTHER APPROPRIATE
WRIT, OR ORDER OR DIRECTION IN THE NATURE OF A WRIT
THE SHOW CAUSE NOTICE DATED:8.5.2013, ISSUED BY THE
R-4 AS PER ANNEXURE-J, ETC.
IN W.P.No.38859/2015:
BETWEEN:
GOKALDAS IMAGES PRIVATE LIMITED,
7 & 12 INDUSTRIAL SUBURB 2ND STAGE,
YESHWANTPUR,
TUMKUR ROAD,
BANGALORE-560 022.
REPRESENTED BY
ITS MANAGING DIRECTOR
SRI.SUMIR J HINDUJA.
... PETITIONER
(BY SRI.K.S.HARISH, ADVOCATE)
6
AND:
1. UNION OF INDIA,
REPRESENTED BY IT SECRETARY,
MINISTRY OF TEXTILES,
UDYOG BHAVAN,
NEW DELHI 110 011.
2. SENIOR OFFICERS' APPELLATE COMMITTEE,
OFFICE OF THE TEXTILE COMMISSIONER,
NEW C.G.O.BUILDING,
48 NEW MARINE LINES,
MUMBAI 400 020
REPRESENTED BY
ITS JOINT TEXTILE COMMISSIONER.
3. SECOND APPELLATE COMMITTEE,
GOVERNMENT OF INDIA,
MINISTRY OF TEXTILES,
EXPORTS III SECTION,
UDYOG BHAVAN,
NEW DELHI-110 011.
REPRESENTED BY
ITS JOINT SECRETARY.
4. APPAREL EXPORT PROMOTION COUNCIL,
HAVING ITS REGIONAL OFFICE AT
10, RAHEJA CHAMBERS,
12 MUSEUM ROAD,
BANGALORE 560 001.
ALSO HAVING ITS HEAD OFFICE AT
APPAREL HOUSE, INDUSTRIAL AREA,
SECTOR-44, GURGAON-122 003
HARYANA.
REPRESENTED BY ITS DIRECTOR.
... RESPONDENTS
(BY SMT.A.D.VIJAYA HAVANUR, ADVOCATE FOR R-1 TO R-3;
SRI. K.SACHINDRA KARANATH, ADVOCATE FOR R-4)
7
THIS PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH
BY A WRIT OF CERTIORARI, OR ANY OTHER APPROPRIATE
WRIT, OR ORDER OR DIRECTION IN THE NATURE OF A WRIT
THE SHOW CAUSE NOTICE DATED:8.5.2013, ISSUED BY THE
R-4 AS PER ANNEXURE-H, ETC.
IN W.P.No.38860/2015:
BETWEEN:
GOKALDAS IMAGES PRIVATE LIMITED,
7 & 12 INDUSTRIAL SUBURB 2ND STAGE,
YESHWANTPUR, TUMKUR ROAD,
BANGALORE-560 022.
REPRESENTED BY
ITS MANAGING DIRECTOR
SRI.SUMIR J HINDUJA. ... PETITIONER
(BY SRI.K.S.HARISH, ADVOCATE)
AND:
1. UNION OF INDIA,
REPRESENTED BY IT SECRETARY,
MINISTRY OF TEXTILES, UDYOG BHAVAN,
NEW DELHI 110 011.
2. SENIOR OFFICERS' APPELLATE COMMITTEE,
OFFICE OF THE TEXTILE COMMISSIONER,
NEW C.G.O.BUILDING,
48 NEW MARINE LINES,
MUMBAI 400 020
REPRESENTED BY
ITS JOINT TEXTILE COMMISSIONER.
3. SECOND APPELLATE COMMITTEE,
GOVERNMENT OF INDIA,
MINISTRY OF TEXTILES,
EXPORTS III SECTION,
8
UDYOG BHAVAN, NEW DELHI-110 011.
REPRESENTED BY
ITS JOINT SECRETARY.
4. APPAREL EXPORT PROMOTION COUNCIL,
HAVING ITS REGIONAL OFFICE AT
10, RAHEJA CHAMBERS,
12 MUSEUM ROAD,
BANGALORE 560 001.
ALSO HAVING ITS HEAD OFFICE AT
APPAREL HOUSE, INDUSTRIAL AREA,
SECTOR-44, GURGAON-122 003
HARYANA.
REPRESENTED BY ITS DIRECTOR.
... RESPONDENTS
(BY SMT.A.D.VIJAYA HAVANUR, ADVOCATE FOR R-1 TO R-3;
SRI. K.SACHINDRA KARANATH, ADVOCATE FOR R-4)
THIS PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH
IN THE NATURE OF A WRIT THE SHOW CAUSE NOTICE
DATED: 8.5.2013 ISSUED BY THE R-4 AS PER ANNEXURE-H,
ETC.
IN W.P.No.38861/2015:
BETWEEN:
GOKALDAS IMAGES PRIVATE LIMITED,
7 & 12 INDUSTRIAL SUBURB 2ND STAGE,
YESHWANTPUR, TUMKUR ROAD,
BANGALORE-560 022.
REPRESENTED BY
ITS MANAGING DIRECTOR
SRI.SUMIR J HINDUJA.
... PETITIONER
(BY SRI.K.S.HARISH, ADVOCATE)
9
AND:
1. UNION OF INDIA,
REPRESENTED BY IT SECRETARY,
MINISTRY OF TEXTILES,
UDYOG BHAVAN,
NEW DELHI 110 011.
2. SENIOR OFFICERS' APPELLATE COMMITTEE,
OFFICE OF THE TEXTILE COMMISSIONER,
NEW C.G.O.BUILDING,
48 NEW MARINE LINES,
MUMBAI 400 020
REPRESENTED BY
ITS JOINT TEXTILE COMMISSIONER.
3. SECOND APPELLATE COMMITTEE,
GOVERNMENT OF INDIA,
MINISTRY OF TEXTILES,
EXPORTS III SECTION,
UDYOG BHAVAN,
NEW DELHI-110 011.
REPRESENTED BY
ITS JOINT SECRETARY.
4. APPAREL EXPORT PROMOTION COUNCIL,
HAVING ITS REGIONAL OFFICE AT
10, RAHEJA CHAMBERS,
12 MUSEUM ROAD, BANGALORE 560 001.
ALSO HAVING ITS HEAD OFFICE AT
APPAREL HOUSE, INDUSTRIAL AREA,
SECTOR-44, GURGAON-122 003
HARYANA.
REPRESENTED BY ITS DIRECTOR.
... RESPONDENTS
(BY SMT.A.D.VIJAYA HAVANUR, ADVOCATE FOR R-1 TO R-3;
SRI. K.SACHINDRA KARANATH, ADVOCATE FOR R-4)
10
THIS PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH
THE SHOW CAUSE NOTICE DATED: 8.5.2013 ISSUED BY THE
R-4 AS PER ANNEXURE-J, ETC.
THESE PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 10.04.2022, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE
FOLLOWING
ORDER
1. In all these writ petitions, the petitioner is challenging the penalty imposed on it for not meeting the quota for exports.
2. The background leading to the litigations would have to be stated in order to appreciate the contentions advanced by the petitioner.
3. Export of garments to various countries is regulated by quotas and as a consequence, as provided under the Export and Import Policy (1992-1997), the Policy for Allotment of Entitlements ("Allotment Policy"
for short) was notified. These quotas are segregated and allotted to exporters, registered with the competent registering authorities as per Import-Export Policy, under 11 various categories. The petitioner herein was awarded quotas under the Past Performance Entitlement (PPE) apart from Manufacture Exporter Entitlement (MEE) and First-Come-First-Served (FCFS) system.
4. Some of the salient features of the Allotment Policy are that the Director General of the Apparel Export Promotion Council (AEPC), New Delhi, is the Authority to allocate export entitlements and also certify all the exports made.
5. There are various systems of the export entitlements and one such system is the PPE system, FCFS (First Come First Serve) with which we are mainly concerned in this bunch of petitions. This Entitlement is allocated on the basis of the past performance of the exporter and on quantities that become available from time to time on account of surrenders, flexibilities, etc.,
6. According to the petitioner, in these cases, based on the performance of the petitioner in the previous 12 years and on availability of quantities due to surrenders, the petitioner had been allocated Entitlements.
7. The Entitlements allotted to the petitioner was required to be utilised between the period 01st January and 30th September. If the entitlements were not utilised by 30th September, an extension could be sought for till 31st December of the same year against the furnishing of Earnest Money Deposit or a Bank Guarantee.
8. If the exporter exported not less than 90% of his Export Entitlement, the Earnest Money Deposit or the Bank Guarantee was to be released in full. If, however, the exporter exported only up to 75% of his entitlement in case of fast moving items and up to 50% in case of slow moving items, the forfeiture was to be proportionate to the shortfall in utilisation. If the exporter exported less than the above percentages of his entitlement, the entire Earnest Money Deposit or the Bank Guarantee was to be forfeited.
13
9. As against the order of forfeiture, an appeal and second appeal were also provided for.
10. In the cases on hand, the orders of forfeiture have been passed against the petitioner on the ground that it did not export 90% of its Entitlement and these orders of forfeiture have been confirmed in first appeal as well as in the second appeal.
11. It is not in dispute that the petitioner was allotted quotas for exports of garments under different categories, and it was able to export only the quantity (pieces) as shown in the table below (as per the documents furnished by the petitioner) and had thereby achieved the corresponding percentage of utilization :
Entitle- Allotted Short- Over all Sl. W.P. Actually ment / Year fall / performa No. Nos. (pieces) Shipped Quota Balance nce (%) 390 of 1 PP/PT 1995 487963 328461 159502 67.3% 2013 38857 2 of FCFS 2002 857271 766921 90350 89.46% 2015 38858 3 of PPE 2002 602080 459542 142538 76.32% 2015 14 38859 4 of FCFS 2003 974759 756506 218253 77.6% 2015 38860 5 of FCFS 2002 83391 50173 38443 60.16% 2015 38861 6 of FCFS 1991 182035 143308 38727 78.73% 2015
12. The penalty of forfeiture of Earnest Money Deposit or the Bank Guarantee imposed on the petitioner by the authorities in all these cases is tabulated hereunder:
BG/EMD forfeited Over By the order of the all Sl. W.P. Apparel perfor First Second No. Nos. Export mance Appellate Appellate Promotion (%) Committee Committee Council 390 of 62,79,760/- 39,23,024/- 39,23,024/- 1 67.3% 2013 (Annex- 'B') (Annex- 'C') (Annex- 'E') 13,16,990/-
(Annex- 'C' & 13,12,240/-
38857
'G') 13,12,240/-
(Annex- 'E' &
2 89.46% (Annex- 'D'
of 2015 'P')
13,12,240/- 'H' & 'M')
(Annex- 'G' &
'K')
13,84,363/-
(Annex- 'B') 13,97,533/-
38858 13,97,533/-
(Annex- 'E' &
3 76.32% (Annex- 'D'
'P')
of 2015 13,97,533/- & 'M' )
(Annex- 'C', 'G'
& 'K ')
22,04,981/- 22,04,981/-
(Annex- 'B') (Annex- 'C')
38859 20,76,731/-
4 77.6% (Annex- 'D' &
of 2015 20,76,731/- 20,76,731/- 'N')
(Annex- 'F' & (Annex- 'G' &
'J') 'L')
15
38860 5,90,841/- 5,90,841/- 5,90,841/-
5 60.16%
of 2015 (Annex- 'B') (Annex- 'C') (Annex- 'D')
38861 2,27,291/- 2,27,291/- 2,27,291/-
6 78.73%
of 2015 (Annex- 'C') (Annex- 'D') (Annex- 'E')
13. As stated above, the fact that the petitioner did not utilise the entitlements allotted to it as mentioned above is not in dispute. However, having regard to the fact that the petitioner has put forth differing reasons for not exporting 90% of its entitlement for different periods to which the petitions relate to, the petitions are dealt with separately.
W.P. No.390 of 2013:
14. An order of forfeiture is made in this case on the ground that the petitioner did not meet the requisite entitlement of 90%.
15. In Appeal, against the order of forfeiture, it was the case of the petitioner that the entitlement could not be met due to :
16
a. non-shipment due to late receipt / defective fabrics;
b. there was transport / port strike;
c. there was major power-cuts and this was one of the force majeure conditions.
16. The Appellate Authority, under the terms of the policy, is required to give a ruling on the appeal by taking into consideration the conditions of forfeiture spelt out in the Notification in addition to force majeure conditions.
17. In the quota policy Circular No.88/1, the force majeure guidelines have been spelled out in five categories, namely:
(i) strike or lockout;
(ii) power cut;
(iii) transport strike / dock strike;
(iv) Fire or natural calamities and
(vi) non-availability of cargo space.17
18. The First Appellate Authority refused to accept the plea of the petitioner that it was unable to meet the entitlement quota for the reasons put forth by it and the Second Appellate Authority has also confirmed the reasoning of the First Appellate Authority.
19. The learned counsel for the petitioner contended that this was the third round of litigation and in the first instance, the appeal was rejected on the ground that the reason put forth for an increase in power consumption in December-1995, could not be a valid ground and this Court had directed the Authorities to reconsider the matter keeping in mind the contention of the petitioner about the force majeure guidelines. He submits that this has not at all been taken into consideration.
20. The learned counsel sought to highlight the fact that the Circular dated 27.10.1995 (produced at Annexure 'M1') indicates that there was a 50% power- cut and there was also load-shedding of two hours in the morning and one hour in the evening and there was a 18 clear stipulation that all the commercial establishments would have to be closed by 07.30 p.m. and this therefore indicated that there was a total power-cut of more than five hours every day.
21. He submitted that this contention has been virtually sidelined by the Authorities on the ground that the load- shedding was a routine practice, and this could not be considered as force majeure condition and thereby levy of penalty was imposed.
22. As the principal argument advanced being one of force majeure, it would be necessary to extract the force majeure guidelines:
"9. FORCE MAJEURE GUIDELINES:
Following are the guidelines for force majeure cases:
a. STRIKE/LOCK-OUT If there is a strike or lock-out for 7 days or more in the garment factory of the entitlement holder which started after his 19 obtaining certifications, the entitlement holder could apply for revalidation of the certification to the extent of the period covered by the strike/lock-out plus 10 days.
b. POWER CUT:
If there has been a power-cut/load- shedding in the area in which factory of entitlement holder is situated continuously for a period of 4 hours or more per day between 8.00 a.m. and 8.00 p.m. consecutively for a period of 7 days or more, after an entitlement holder has obtained certification, revalidation may be granted to the extent of the period covered by the power-cut plus 10 days.
c. TRANSPORT STRIKE/DOCK STRIKE:
If a transport strike or dock strike has affected export of goods which have been manufactured and kept ready for shipment, revalidation to the extent of period covered by the transport strike or dock strike plus 7 days will be given. However, if the strike has been for seven days or less, revalidation will be restricted to the actual period of strike.20
d. FIRE/NATURAL CALAMITIES:
In cases, where garments factory of the exporter gets affected by fire after obtaining certification, revalidation of the certification to the extent of the period required for manufacturing garments or fabrics destroyed by fire may be granted. For this purpose, the extent of damage to fabrics or garments will be assessed on the basis of documents such as insurance payments. The period of extension will be worked out on pro-rata basis, i.e., quantity damaged as a percentage of quantity allotted will be assessed and the same percentage of original validity will be given as additional validity.
e. NON-AVAILABILITY OF CARGO SPACE:
Revalidation for non-availability of cargo space will be on the following basis:
i) If the certification had been taken for a vessel which was scheduled to sail within the validity period for which certification had originally been obtained but subsequently departure of vessel got delayed, revalidation will be given to 21 the extent of the actual date of departure of the vessel.
ii) If the consignment has been booked for a particular vessel which was scheduled to leave within the validity period of original certification but the vessel could not accommodate the consignment because of shutting out of cargo arising from excess booking, revalidation will be given until the departure of the next vessel for the same destination from that port.
iii) If the vessel which was originally scheduled to sail during the validity period of certification, sails before the due date, revalidation will be given upto the date of departure of the next vessel to the same destination from that port.
iv) If the vessel which was originally scheduled to sail within the validity period of certification got cancelled, revalidation will be given upto the date of departure of the next vessel to the same destination from that port.22
v) Revalidation of certification taken for air shipment will also be covered by guidelines contained in sub-para (i) to
(iv). In cases covered by (a) to (e) above, documentary proof relating to the contention should be produced from the Official Agencies empowered to certify these conditions such as district Administration, Labour Deptt., Electricity Board, Port Trust, Airlines, Insurance Companies, etc. In addition, the Council may also checkup the facts to satisfy itself with the genuineness of the claims."
(Emphasis supplied)
23. As could be seen from the above guidelines, if there is a power-cut continuously for a period of four hours or more per day in the area in which the factory of entitlement holder is situated, between 08.00 a.m. and 08.00 p.m. for a period of seven days or more continuously, after an entitlement holder had obtained certification, he would be entitled for revalidation to the 23 extent and period covered by the power-cut and ten days.
24. In order to establish that the petitioner was entitled for this re-validation and for extension of ten days, the petitioner would have to thus establish that there was a load shedding for a continuous period of four hours per day and for a continuous period of seven days.
25. To put it differently, the load-shedding must have been for a continuous stretch of four hours every day and should have been continuous for a period of seven days. The relevant portion of the Circular dated 27.10.1995, upon which reliance is placed by the petitioner, insofar as it relates to load shedding, reads as under:
" 14. LOAD SHEDDING Load shedding of urban feeders for 2 hours in morning and 1 hour in evening everyday on rotation shall be affected. Load shedding of rural feeders by roastering on 24 alternate days by which power supply shall not be available to IP sets and other 3 phase installations by operating the roastering switches in the Sub-Stns. shall be effected.
The urban feeders shall be opened on rotation in 2 spells, viz., between 6 am to 8 am, 8 am to 10 am in morning; & between 6 pm to 7 pm, 7 pm to 8 pm in the evening."
(Emphasis supplied)
26. As could be seen from the above, the load- shedding was not for a continuous period of four hours everyday. The load-shedding was for two hours in the morning and one hour in the evening everyday. Thus, if the force majeure guidelines are literally read, this Clause will not apply to the case of the petitioner at all, since there was no load-shedding for a continuous period of four hours every day. To restate this fact, since the load-shedding effected was only for two hours in the morning and one hour in the evening, the stipulation set out in the force majeure guidelines of four hours of continuous load shedding will not be attracted. The 25 petitioner cannot therefore really rely upon this guideline to contend that he would be entitled for waiver of the penalty on the ground of power-cuts as stipulated in the guidelines.
27. However, even assuming that there need be no load-shedding continuously and there was load-shedding which resulted in the petitioner failing to achieve the target of 90%, it is to be noticed here that admittedly the load-shedding was in two batches i.e., two hours in the morning and one hour in the evening. Thus, the sum total number of hours of load-shedding was only three hours every day and the stipulation of four hours of power-cuts laid down in the guidelines would not therefore enure to the benefit of the petitioner. In other words, the contention of the petitioner that he was entitled for application of force majeure guidelines insofar as the load-shedding is concerned, would not really be sustainable.
26
28. The other argument that there was a direction to close the shop by 07.30 p.m., and it was also indicated that the power-cut was between 08.00 a.m. and 08.00 p.m. and thereby the petitioner lost a further 30 minutes towards power-cut, even if accepted, would amount only to a total of 3½ hours power-cut and would not satisfy the stipulated period of four hours in the guidelines.
29. It may also be pertinent to state here that this Circular basically intimated the power-cuts and the load- shedding to the consumers of power and essentially put them on notice.
30. It may also be pertinent to state here that in the State of Karnataka, this event of load-shedding is not uncommon and was routine at that point of time and therefore, the petitioner cannot really put forth the contention that he could not meet the entitlement only due to the power-cuts.
27
31. It may also be pertinent to note here that the entitlement of the petitioner was revalidated till the end of December and despite the revalidation, petitioner was not able to satisfy the entitlement. The shortfall was thus over a period of one year and was not specific to period during which power-cut had been notified.
32. To put it differently, the petitioner could not meet its export entitlement upto September 1995 and as he was given an extension of further three months till 31st December 1995 and yet it could not meet the obligation to export at least 90%. It is therefore clear that it was not like as if the full export entitlement was not met only for this period of three months. The petitioner, basically, did not utilise his full entitlement over the course of the whole calendar year and therefore, the petitioner cannot contend that this was a case where the force majeure condition would stand attracted, more so, when the Circular regarding load-shedding was only issued in the last week of October 1995.
28
33. The Appellate authorities have considered this matter in the proper perspective and have correctly come to the conclusion that the petitioner was not entitled for a waiver on the ground that there was a force majeure condition.
34. The Authorities themselves have also taken into consideration that the other reason put forth by the petitioner for non-shipment due to late receipt / defective fabrics was also not tenable, since the petitioner could have easily secured supplies from alternative suppliers and the strike was only for three days.
35. I am, therefore, of the view that there is no reason to entertain this writ petition in exercise of the power of judicial review under Article 226 of the Constitution of India.
36. The writ petition is therefore dismissed. 29 W.P. No.38857/2015:
37. In this writ petition, the petitioner is challenging the order by which the amount of Rs.13,12,240/- was ordered to be forfeited and which has been confirmed in first appeal and also, in the second appeal.
38. The order of forfeiture was made on the ground that the petitioner had exported only 89.46% and had thus fallen short of the required 90%, as a consequence of which the forfeiture was necessary.
39. In my view, when the petitioner had exported 89.46%, which is 0.54% below the requisite performance, the authorities could not have ordered the forfeiture.
40. It may also be pertinent to state here that the petitioner had pleaded that the short-fall on account of non-shipment / short-shipment was due to delay in getting the fabrics from the suppliers and also because of communal riots in Ahmedabad.
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41. In my view, having regard to the fact that the export performance was a minuscule 0.54% below the requisite performance of 90%, the order of the Authorities forfeiting a sum of Rs.13,12,240/- cannot be sustained and the same is hereby quashed.
42. As a consequence, the respondents will have to take further steps for returning the Bank Guarantee or if the Bank Guarantee has been encashed, reimburse the sum of Rs.13,12,240/- forthwith.
43. The writ petition is accordingly allowed. W.P. Nos.38858, 38859 and 38860 of 2015:
44. In these cases, the order of forfeiture was passed on the ground that the petitioner had exported 76.32%, 78.6% and 60.16% in W.P. Nos.38858, 38859 and 38860 of 2015 respectively.
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45. The petitioner had put forth the following reasons for failure to supply the shipments as prescribed, as under:
Sl. Writ Reasons for
Performance
No. Petition shortfall
The consignment
38858
1 76.32% was struck in
of 2015
Chennai port;
There was a strike
by the textile mills
and garments
38859
2 78.61% manufacturing units;
of 2015
and SARS affected
the importing of
fabrics;
38860 Due to delay in
3 60.16%
of 2015 supplying of fabrics;
W.P. No.38858 of 2015:
46. In W.P. No.38858 of 2015, the First Appellate Authority as well as the Second Appellate Authority have found that there was no evidence produced to show that the shipment could not reach the dock in time which has resulted in cancellation of shipment. 32
47. It is also noticed that the evidence produced was not sufficient to accept the reason of strike, which had lasted only for seven days and there was only sporadic violence and therefore, they could not be considered as valid grounds for waiver of penalty.
48. In my view, the reasoning of the Authorities cannot be found fault with and therefore, the forfeiture is justified. The writ petition is therefore dismissed. W.P. No.38859 of 2015:
49. The Authorities have found that the cause indicated in the reply was that there was a strike by the Textile and Garments manufacturing units due to introduction of Central Excise Registration of Textile Industry, and SARS pandemic had also affected importing of fabrics, could not be considered as sufficient to invoke force majeure conditions. The Authorities have also noticed that the admissible relief due to the SARS pandemic has also 33 been conferred on the petitioner and therefore, there was no justification to waive the penalty.
50. In my view, this reasoning assigned for not considering a waiver cannot be said to be irrational or arbitrary. I find no reason to entertain this petition on that score and consequently, the writ petition is dismissed.
W.P. No.38860 of 2015:
51. As far as this writ petition is concerned, the cause put forth was that there was a delay in procuring the fabrics from Arvind Mills and that was due to the riots at Ahmedabad.
52. The Authorities have found that the petitioner could have ensured that the other suppliers could have supplied the fabrics and there was nothing to show that the petitioner was required to procure fabrics only from Arvind Mills. The Authorities have also found that the 34 petitioner had enough time to make alternative arrangements.
53. In my view, the reason given by the Authorities are just and proper and does not warrant interference. Hence, the writ petition is dismissed. W.P. No.38861 of 2015:
54. In this writ petition, the petitioner had achieved an overall percentage of 78.73%.
55. It is not in dispute that in respect of this period in question, the Government of Karnataka, Textile Industries, has given relief to all exporters who had achieved utilization of 75% and above, due to the riots which took place pursuant to Kaveri River dispute having arisen between the States. Since, relief has been granted to all the exporters who had achieved 75%, the Authorities could not have made a distinction in the case of the petitioner and could not have rejected the petitioner's plea for the waiver.
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56. It is also noticed here that the amount involved here is only Rs.2,27,291/- and in the light of the fact that the Government itself had ordered release of the Bank Guarantees in respect of the exporters who had achieved performance of 75%, the impugned order of the Authorities forfeiting a sum of Rs.2,27,291/- cannot be sustained and the same is hereby quashed.
57. As a consequence, the respondents will have to take further steps for returning the Bank Guarantee or if the Bank Guarantee has been encashed, reimburse the sum of Rs.2,27,291/- forthwith.
58. The writ petition is accordingly allowed.
Sd/-
JUDGE RK/-
CT:SN