Andhra HC (Pre-Telangana)
Ibiza Industries Ltd. And Anr vs Union Of India And Ors. on 21 August, 1998
Equivalent citations: 1998(5)ALD565, 1998(5)ALT259
Author: Umesh Chandra Banerjee
Bench: Umesh Chandra Banerjee
ORDER Umesh Chandra Banerjee, C.J.
1. This writ petition under Article 226 of the Constitution of India has to be rejected solely on the ground of total suppression of material facts. The petitioner herein imported certain machines on Actual User's Licence under the Export Promotion Capital Goods Scheme (for short 'EPCG'), in particular, paragraph 38 of the Export Import (EXIM) Policy 1992-97. Though the petitioner was granted EPCG licence under para 38 of the EXIM Policy 1992-97, under the licence, there was existing an export obligation in respect of Polyster Woolen and Polyster Viscose Fabrics worth US $ 14,347,353 to be exported within 5 years from the date of issue of the licence. The export proceeds are required to be in freely convertible currency and in terms of condition No.5 of the import licence, prior to clearance of the first consignment, the Company was required to execute a legal undertaking and a bank guarantee for the full duty saved amount. The contextual facts depict that the licence was issued in respect of import of 32 Sulzer Looms as early as 6th June, 1995 and under three Bills of Entry, import of permitted capital goods were made at concessional rate of duty of 15% advalorem under the EPCG scheme read with exemption Notification No. 110 of 95. The machines were thereafter installed at the manufacturing premises of the Company at Hyderabad within a period of six months.
2. The contextual facts further depict that without, however, fulfilling the requirements of the licence, as noted above, the writ petitioner did in fact requested for permission to shift 24 Looms, out of 32, to the premises of M/s. Mafatlal Industries as also an extension of time in export obligation period and it is by reason of the rejection of such a prayer the writ petitioners thought it fit to move this Court Article 226 of the Constitution, inter alia, for issuance of a Writ of Mandamus directing the respondents to withdraw the communication or rejection and to specifically grant the request made by the Company. The petitioners further prayed for issuance of a further Writ of Mandamus directing the respondents not to initiate any action by way of a recovery of duty/interest or any other coercive action by way of seizure, stoppage of production etc.
3. During the course of hearing, Mr. Adinarayana Rao, learned advocate appearing in support of the Central Government, contended, however, that the petitioner No. 1 has in fact sold 16 of the 32 Sulzer Looms to M/s. Mafatlal Industries-petitioner No.2. There has been, however, no denial of the factum of such a sale but, this aspect of the matter has been totally suppressed. In our view, this is a material fact which ought not to have been suppressed.
4. Be it noted that a Prerogative Writ is not to be issued as a matter of course. The applicant must come in the manner prescribed and adopt a method which is otherwise in accordance with law and must be perfectly frank and open with the Court. There is an obligation on the part of applicant in an application under Article 226 to be candid and be otherwise fair to Court so as not to mislead the Court. The Doctrine of Uberrima Fides has its fullest application in a petition under Article 226. The Court is not to use a discretion in the event of there being any attempt on the part of the petitioner to mislead the Court.
5. Adverting to the factual back-drop by reason of the suppression of the sale of Looms, which this Court ascribes to be neither fair nor reasonable, this Court feels it expedient to note that by reason of the suppression of the facts the petitioners have disentitled themselves for any consideration of the matter.
The factum of the subsequent seizure of Looms by the Customs authority goes to depict that the Looms are still at the mill premises at Nadiad.
6. The application of the Doctrine of Uberrima Fides in a writ petition praying, inter alia, for issuance of a high prerogative writ has been recognised since the decision of the Court of Appeal in the King's Bench Division (KBD) in the case of Rex v. Kensington Income Tax Commissioners, Princess Edmond De Polignac, ex parte 1917 (1) King's Bench 486, the case of a Russian Princess.
7. As noted above, invocation of the power under Article 226 of the Constitution by the High Court is discretionary and the question invariably before the Court is whether, in fact, it should exercise its discretion in favour of the party or not ? And it is on this context that the conduct of the party has a definite and an important bearing in the exercise of discretionary power and invoking the jurisdiction under Article 226 of the Constitution. We do deem it fit to record that the High-Court would always refuse to exercise its discretion in favour of an applicant if he (the applicant) makes a statement which cannot be termed to be correct or suppressed facts or being desirous of gaining an undue and unfair advantage or misleads the Court in any way. In this context reference may be made to a Full Bench decision of the Allahabad High Court in the case of Asiatic Engineering Co. v. Acchree Ram, (FB) as also the Full Bench decision of the Kerala High Court in the case of Ananthun Pillai v. State of Kerala, (FB) and the Division Bench judgment of Calcutta High Court in the case of Jiban Krishna Karmakar v. State of West Bengal, 1992 CWN 226 (DB) and the observations made therein do lend concurrence to the views expressed above.
8. In the premises, the writ petition is dismissed. This order is passed, however without prejudice to the rights and contentions of the parties. No order as to costs.