Gujarat High Court
Gujarat Ambuja Exports Ltd vs Govt Of India & on 13 August, 2013
Author: Rajesh H.Shukla
Bench: Rajesh H.Shukla
GUJARAT AMBUJA EXPORTS LTDV/SGOVT OF INDIA C/SCA/5035/2003 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 5035 of 2003 With SPECIAL CIVIL APPLICATION NO. 11286 of 2002 With SPECIAL CIVIL APPLICATION NO. 3180 of 2003 With SPECIAL CIVIL APPLICATION NO. 3024 of 2003 With SPECIAL CIVIL APPLICATION NO. 11967 of 2003 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE RAJESH H.SHUKLA ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ GUJARAT AMBUJA EXPORTS LTD & 1....Petitioner(s) Versus GOVT OF INDIA & 3....Respondent(s) ================================================================ Appearance: MR PARESH M DAVE, ADVOCATE for the Petitioner(s) No. 1 - 2 MR MG NAGARKAR, ADVOCATE for the Respondent(s) No. 2 MR PS CHAMPANERI, ADVOCATE for the Respondent(s) No. 2 MS ARCHANA U AMIN, ADVOCATE for the Respondent(s) No. 1 RULE SERVED for the Respondent(s) No. 3 - 4 ================================================================ CORAM: HONOURABLE MR.JUSTICE RAJESH H.SHUKLA Date : 13/08/2013 ORAL JUDGMENT
The present group of petitions have been filed by the petitioners under Articles 14, 19 and 226 of the Constitution of India for the prayer that the Respondents may be restrained from taking action against the petitioners on the basis of the letter dated 1.10.2002 for the purchase and procurement of Luster lost Wheat allotted to the petitioners, on the grounds stated in the petitions.
The petitioners in SCA NOs. 5035/2003, 11286/2002 and 11967/2003 -
M/s Gujarat Ambuja Exports Limited is a public limited company engaged in the business of exporting commodities like wheat, wheat flour and also having other activities, and;
the petitioners in SCA No. 3024/2003 -
Moon Coronation Agro Industries Limited and SCA3180/2003
-
Moon Agro Foods (P) Ltd. is a Company registered under the Companies Act, 1956 and is engaged in the business of exporting commodities like wheat product and also other business activities like manufacturing various goods.
The facts of the case briefly summarized are that the petitioners as stated above, are the Public / Private Limited Companies engaged in the business of exporting commodities like wheat, wheat flour and also having other activities.
It is case of the petitioners that the Government of India long back decided a policy of permitting the Food Corporation of India ( FCI ) to offer wheat from Central Pool to various parties for the purpose of exporting such wheat and wheat flour made from such wheat. The parties procuring the wheat from FCI could export the product, which may be obtained from such wheat like wheat flour under the scheme of FCI. The terms and conditions for regulating such a sale of wheat by FCI for the purpose of export were laid down by way of circular dated 20.12.2001 produced at Annexure-B. As it transpires, post delivery expenses and inland transport expenses @ Rs.1750/- PMT of wheat were declared to be reimbursed along with inland transport expenses @ Rs.450/- PMT. Thus, the wheat purchased by anyone from the FCI was promised reimbursement of the amount towards the transport expenses. It is the case of the petitioners that they arrange for export contracts with buyers from Indonesia, Malaysia, Philippines and agree to supply the wheat on an agreed price as stated in the petition. The petitioner and similarly situated others were allotted wheat as per terms and conditions of the circular as stated above. The petitioners and others also executed a bank guarantee for the requisite amount being the total amount of post delivery expenses and inland transport expenses for the total quantity of Luster lost wheat. As per the terms of the policy of the circular, subsequently, the FCI, on completion of the export, issued the cheques of the equal amount of the bank guarantee towards the reimbursement of the amount of expenses. However, as the goods were exported by the petitioner company from Inland Container Depot at Sabarmati, Ahmedabad and shipping bills as contemplated under the Customs Act, 1962 also were submitted to the petitioner company and the customs authorities. Thus, the petitioner company exported the entire quantity of wheat flour which has been purchased by it from the FCI subject to the provisions of Exim Policy, which provide for some quantities to be exported considering the factors like wastage etc. However, there is no dispute that the export of wheat flour has been made by the petitioner company, the petitioner company was required to submit the document like Bill of Lading, Bank Realization Certificate etc. to the concerned FCI to establish the actual export of wheat and wheat products and the sale proceed receipts from such exports. However, after the export, the petitioner company submited the required documents requesting for release of the bank guarantee and returning the documents. However, it was informed by letter dated 7.3.2003 served upon the petitioners by FCI informing that the rates have been revised, and accordingly, the amount which has been paid in excess towards the post delivery expenses during such period of export, was recoverable from the petitioners, and the amount of Rs.11,55,000/- was claimed, which has lead to filing of the present petition. It is also made clear on an inquiry by the petitioners that in view of the letter of the Government of India (Ministry of Consumer Affairs, Food & Public Distribution Department of Food and Public Distribution) had informed the FCI that it was decided to allow the sale of Luster lost wheat for the past period on such a rate, and therefore, as per the price fixed, the sale price of the wheat stand revised.
Heard learned Advocate Shri Paresh M. Dave for the petitioners and learned Advocate Shri M.G.Nagarkar for Respondent No.2-Food Corporation of India and learned Assistant Solicitor General Shri P.S.Champaneri for Respondent Respondent No.1 Government of India.
Learned Advocate Shri Paresh M. Dave for the petitioners has submitted that after the completion of the export, for which the petitioners have not only proceeded to export to the foreign buyers based on such rates, the Respondent No.1 - Government of India cannot be permitted to change unilaterally the rates after the actual export. He submitted that on the basis of the promise with regard to the rate as well as the other charges like transport charges, the price costing was made by the persons like the petitioners for the purpose of negotiation with the foreign buyers at the time of export. Therefore, as the entire transaction has now been over and completed, the same cannot be reviewed or revised after the actual export and distribution of the said wheat or the wheat flour Luster lost Wheat on any count including even the policy. Learned Advocate Shri Dave has also referred to the communication of the GoI dated 14.12.2001 with regard to the export of wheat products addressed to FCI and submitted that as stated in this letter, the GoI had decided to permit FCI to offer wheat from the Central Pool to Roller Flour Mills for the purpose of export of wheat. He therefore submitted that this was permitted in December 2001 and after everything was over, subsequently, as per the impugned letter / communication dated 1.10.2002 at Annexure-H, the price has been revised. There is no reply by the GoI and the reply has been filed by the Respondent No.3 FCI. It has been contended that the GoI, Ministry of Consumer Affairs, Food and Public Distribution, Department of Food and Public Distribution, New Delhi issued instructions dated 1.10.2002, by which the GoI fixed the rates, post delivery expenses and inland transport expenses for the export of luster lost wheat for the period from 1.2.2002 to 30.9.2002. However, it was kept in abeyance as there was a request by the Joint Secretary of the Roller Flour Mills Federation of India. It was stated that the export and sale of wheat or luster lost wheat was not allowed by GoI / FCI during the period 1.2.2002 to 30.9.2002. However, some of the regions like Gujarat region of FCI had sold such Luster lost wheat in absence of any specific instructions or clarification. Therefore, it is sought to be contended that under the policy Sound Wheat the reimbursement of the post delivery expenses or the inland transport expenses was made to the petitioners and others at the higher rate. It is stated that the sale of Luster lost wheat was regularized by the GoI by letter dated 1.10.2002 and the expenses for such export and sale of Luster lost wheat was fixed by the GoI. It is therefore submitted that it is misleading the Hon'ble Court by stating that the GoI has retrospectively revised the full PDE / ITE affecting the transaction retrospectively. It is stated that it is fresh fixation of rates and not the case of revision of the rates. It is contended that therefore as it is a policy matter, GoI is the competent authority to review such rates as well as expenses from time to time, and therefore, the present petition may not be entertained. It is also contended that it is a policy matter. The Respondent No.2 FCI has to act in accordance with the instructions issued under the policy of GoI and accordingly, when the rates have been revised by the GoI in view of the public interest at large, there cannot be any grievance.
Learned Advocate Shri Dave has also referred to and relied upon the judgment of the Gauhati High Court in case of Assam Roller Flour Mills v. State of Assam and ors. and submitted that in similar circumstances, challenging such a circular issued by the GoI fixing the rates of the wheat retrospectively, the court had not approved and the petition was allowed. It has been specifically observed:
That price cannot be increased or decreased artificially by the Government by issuing orders fixing price from a retrospective date. In the similar nature of orders issued by the Government in the year 1982 batch of writ petitions registered as Civil Rule Nos. 1008, 1009, 1010, 1011, 1013 and 1014 of 1982 were filed challenging the validity of the orders and a Division Bench of this Court allowed the writ petition by quashing the orders where under demands were made for differences between the price and the revised price.
The Affidavit-in-sur-Rejoinder has also been filed by the Area Manager, D.O. Ahmedabad with the Respondent No.3. It is reiterated that it is not the revision of rate retrospectively and the GoI has issued the instructions / letter dated 1.10.2002, by which it has sought to fix the rate of Luster lost wheat for a period from 1.2.2002 to 30.9.2002.
Learned Advocate Shri M.G.Nagarkar for the Respondent FCI has stated that as a Government of India undertaking they have to implement the policy by the Respondent No.1-GoI. However, learned Advocate Shri Nagarkar referred to the affidavit filed by Respondent No.3 as stated above and pointedly referred to the fact that it is not the retrospective revision of the rates but it is a fixation of the rates as per the policy. Learned Advocate Shri Nagarkar therefore submitted that fixation of price is a policy matter, and therefore, the court may not interfere when the policy has been fixed for fixation of the rates in larger public interest. Learned Advocate Mr. Nagarkar has also submitted that since it is a matter of contract and the remuneration or the rates under the contract regarding procurement of food grains or the wheat, the court may not, in exercise of discretion of Article 226, entertain the present petition.
In view of this rival submissions, it is required to be considered whether the present petition can be entertained or not.
The first submission which has been made with regard to the aspect of maintainability of the petition and the scope of Article 226 is required to be considered. Though a feeble attempt has been made by learned Advocate Mr. M.G.Nagarkar that the petition under Article 226 may not be entertained and the policy matter regarding fixation of price of the commodity under the policy fixed by the GoI for the export like in the present case Luster lost wheat. Though the submission has been made, there are two aspects, which are required to be considered. It is not the fixation of the price or the policy where the court is required to call upon to examine. The issue involved in the present case is the proprietary or the jurisdiction of the Respondent No.1-GoI to either revise or fix the price in respect of the transaction, which has already been over. In other words, as per the policy as stated above, the export of wheat or the wheat flour (Luster lost wheat) has been permitted by the GoI through FCI, thereupon the parties like the petitioners have made the export keeping in mind the price and the expenses for the purpose of export to foreign buyers. Based on such price fixation they have proceeded further and actual exports have been made on completion of transaction of the export on submission and scrutiny of the entire record, which satisfy the Respondents about the actual export of wheat Luster lost wheat, the amount has been claimed including the amount of bank guarantee. It it at that stage, now it is sought to be said that the price in respect of Luster lost wheat are now to be fixed at a particular rate, meaning thereby either under the policy, the price was fixed or it was given to understand to the parties with regard to the price, based on which, the whole transaction of the export has been completed by the persons like petitioners. Therefore at a belated stage, either revision of the rates or the price, or now the so called fixing of the price by the GoI, cannot be accepted that it is a matter of price fixation under a policy. In fact it is a revision of price with retrospective effect, which is not permissible. It is required to be mentioned that the price was given, based on that, on the basis of completion of all the formalities of exports like shipping bills etc., the parties like the petitioners have proceeded further, negotiated with the buyers based on such a calculation of price as well as the expenses, including the transport cost and have completed the transaction of export. Thereafter at subsequent stage, the rates are to be revised, which is not permissible. The principle of promissory estoppel will come into play inasmuch as the persons like the petitioners have altered their position based on the promise held out and have acted upon that. In fact, even if such submission that initially the price was not fixed and it is now the price is sought to be fixed, even then this principle of promissory estoppel would apply. It is on the basis of some price, which has been indicated and fixed, the persons like petitioners have proceeded further and have completed the transaction of export. On the other hand if the price was already fixed, which is now sought to be changed, it is the revision at a subsequent stage, which is also not permissible.
The law as to promissory estoppel is required to be considered. Even though the price fixation may be a matter of policy, it has to stand the scrutiny of Article 14 with a concept of fair play. Merely because it is stated that it is a matter of policy or a matter of contract, does not absolve from any such scrutiny or judicial review. The law as to the principle of promissory estoppel as well as the concept of equality and fair play even in the contractual matters, where the State is involved, is well accepted. The Hon'ble Apex Court in a judgment in case of Mahabir Auto Store v. Indian Oil Corporation
- AIR 1990 SC 1031 has observed:
Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination.
Thus, though it could be a matter of policy or a contract, the controversy or the issue involved is having the public law element where the parties have voluntarily agreed to abide by the terms and conditions of the policy for the purpose of export of wheat Luster lost wheat, have also acted upon by actual export of such goods, then it is not permissible for Respondents to have any second thought or change of policy or even revision of rates, which would have a bearing on the rights of the persons like the petitioners, and therefore, the principle of promissory estoppel would be attracted.
A useful reference can also be made to the judgment of the Hon'ble Apex Court in case of Venkata Subbarao v. State of A.P. Reported in AIR 1965 SC 1773 in a similar matter regarding procurement of the rice and the revision or fixation of the price and the difference which was sought to be recovered.
In the circumstances, the present petitions deserve to be allowed and accordingly stands allowed. The impugned decisions / communications dated 1.10.2010 regarding the revision of the price are hereby quashed and set aside. As a necessary corollary subsequent communications in respective petitions regarding recovery of the amounts also stands quashed and set aside. Rule is made absolute.
(RAJESH H.SHUKLA, J.) Further Order:
After the order was pronounced, learned Advocate Ms. Archana Amin appearing for Respondent No.1 has requested for stay of the operation of the order.
The request is refused.
(RAJESH H.SHUKLA, J.) jnw Page 13 of 13