Karnataka High Court
Gstaad Hotels Private Limited vs Union Of India on 27 June, 2018
Author: Aravind Kumar
Bench: Aravind Kumar
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27th DAY OF JUNE 2018
BEFORE
THE HON'BLE MR. JUSTICE ARAVIND KUMAR
WRIT PETITION No.9556 OF 2018 (GM-RES)
BETWEEN :
Gstaad Hotels Private Limited,
A Company incorporated under
the Companies Act, 1956
Having its Registered Office at
4th floor, Raheja Chamber,
Main Avenue
Linking Road, Santacruz west,
Mumbai-400049.
Represented by its Director-
Mr.Aditya Raheja
... Petitioner
(By Sri. Ajesh Kumar.S, Advocate)
AND:
1. Union of India
Represented by
The Joint Secretary,
Ministry of Commerce
having its office at
Udyog Bhavan,
New Delhi-710107.
2. Director General of Foreign Trade
Having its Office at
Directorate General of Foreign Trade,
2
Udyog Bhawan,
New Delhi-110107.
3. Additional Director General
of Foreign Trade
Having its Office at
"CGO Office, New Building, SE Wing
New Marine lines,
Churchgate, Mumbai-400020.
...Respondents
(By Sri Aditya Singh, Central Government Standing Counsel)
This writ petition is filed under Article 226 and 227 of
the Constitution of India praying to calling for the records of
the present case and after going through the legality and
validity thereof be pleased to quash and set aside the
recovery notice No.0375300324AM issued by the R-1 dated
31.10.2014 (Annexure-A) and minutes of PIC dated
27.12.2011 (Annexure-C) and etc.,
This writ petition, coming on for preliminary hearing,
this day, the Court made the following:
ORDER
Petitioner being aggrieved by notice dated 31.10.2014 (Annexure-A) is before this Court.
2. The sum and substance of grievances raised by the petitioner in the petition is that a scheme was introduced by the Government of India in exercise of its 3 power vested under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 and Foreign Trade Policy (for short 'FTP') a scheme known and called as "Served From India Scheme" (for short 'SFIS') which provided for benefits in the form of duty credit scrip certificates equitant to an amount of 10% of such foreign exchange earnings, to Indian "Service Providers"
engaged in exporting certain services and who had a total free foreign exchange earnings of atleast `10,00,000/- (Rupees Ten Lakhs) in a financial year. It is the contention of the petitioner that such scrips obtained by the Indian "Service Providers" under the SFIS scheme could be used for import of any capital goods, spares, professional equipment, office equipment, office furniture and consumables.
3. It is further stated that petitioner having applied under the said scheme from time to time obtained the duty credit scrips in the prescribed form by 4 appending all the requisite documents and upon examination of the applications, 2nd respondent has consistently granted the duty credit scrips in terms of the policy of the SFIS under the FTP without raising any objection, at any point of time and now by impugned notice dated 31.10.2014. Annexure-A same is sought to be recovered from petitioner.
4. It is contended by Sri.Ajesh Kumar learned Counsel appearing for the petitioner that Additional Director General of Foreign Trade has now issued a recovery notice dated 31.10.2014 to recover the entire value of the duty credit scrips which was granted to the petitioner Hotel irrespective of the quantum of utilization by the petitioner, by following pick- and- choose policy and erroneously interpreting the law.
5. Learned counsel for the petitioner by elaborating his submissions would contend that a 5 meeting of the Policy Interpretation Committee (for short PIC) under the Chairmanship of 2nd respondent Director General of Foreign Trade came to be held on 27.12.2011 at 12.30 and said Committee have sought to interprete the term "All India Service Providers" at para 3, 12.2 of FTP 2009-14 for grant of duty credit scrip under "SFIS" scheme and it came to be clarified against the interest of petitioner. Hence, learned counsel for the petitioner seeks for quashing of the notice.
6. Per contra Central Government Standing Counsel Sri. Aditya Singh appearing for respondents has raised preliminary objection with regard to maintainability of the petition contending inter-alia under Section 5 of the FTDR Act or under Article 226(2) of the Constitution of India, this Court has no territorial jurisdiction to entertain the petition since no part of cause of action has arisen within the territorial jurisdiction of this Court and he would draw the 6 attention of this Court that the registered office of the petitioner is also at Mumbai and the show cause notice impugned in the petition is also issued by the Additional Director General of Foreign Trade, Ministry of Commerce, Mumbai and as such this Court has no territorial jurisdiction.
7. Learned counsel for the respondents would also submit that even otherwise on merits also, the petitioner is not entitled to the relief in as mush as the PIC-Policy Interpretation Committee, which is a duly constituted Committee under the Foreign Trade (Development and Regulation) Act has interpreted extant policy of 2004-2009 and there is no new clause which has been introduced into the policy and the existing clause in the policy alone has been interpreted by the said Committee in order to accelerate the growth in export of services, so as to create a powerful and unique 'Served from India' brand. He would also draw 7 the attention of the Court to the minutes of PIC- Policy Interpretation Committee, where under it has been clarified that said object of the policy is to encourage essentially Indian brands abroad and globally, so as to make India so unique and easily recognizable and create a distinct identity for itself both domestically and internationally, so as to enhance the Indian image and it is because of these precise reasons, the words that is coined as 'Serve from India' brand. Hence, he would also submit that petition is liable to be dismissed on merits as well as on delay and latches. On these grounds, learned counsel for respondents seeks for dismissal of the petition.
8. At the outset it requires to be noticed that petition is premature in as much as even before the show cause notice has been adjudicated, petitioner has rushed to this Court. Show cause notice is of the year 2014 and after a lapse of 4 years from the date of issue 8 of said notice. Petitioner has approached this Court. No grounds or reasons has been assigned for such inordinate delay.
9. As could be seen from the records, the show cause notice has been issued in the year 2014, the Policy Interpretation Committee under the Chairmanship of Director General of Foreign Trade has interpreted the policy on 27.12.2011 itself and on the premise that the proceedings are pending, petitioner claims to have approached the Court and this would not be a good ground to entertain the present writ petition, which has been filed belatedly. A litigant who seeks to invoke extraordinary jurisdiction of this Court cannot be heard to contend that representations or memorials were being submitted to the authorities and same was not disposed of and thereby a dead cause of action was alive and then, approach this Court belatedly. This view is fortified by the authoritative pronouncement of the 9 Hon'ble Apex Court in the case of KARNATAKA POWER CORPORATION LIMITED AND ANOTHER vs K THANGAPPAN AND ANOTHER reported in AIR 2006 SC 1581.
10. That apart, sub-article (2) of Article 226 of the Constitution of India would indicate that power conferred under sub article (1) to issue directions, orders or writs to any Government, authority or person can be exercised by any High Court exercising jurisdiction in relation to the territories within which cause of action, wholly or in part, arises. In other words, such power can be examined by this Court, notwithstanding that seat of such Government or authority or the residence of such person is not within those territories and this Court can exercise the jurisdiction under Article 226(1), if the cause of action wholly or in part would arise within its jurisdiction. Even in the event of where cause of action would arise 10 within the jurisdiction of more than one High Court, under the doctrine of "Forum of Convenience" the litigant can choose his forum. In fact the phraseology used under Section 20(c) of Code of Civil Procedure and Article 226(2) of the Constitution of India are in pari materia and as such if the cause of action arises wholly or in part, within the jurisdiction of more than one High Court, petitioner would be entitled to approach either of the Courts, where such cause of action arose.
11. In the instant case undisputedly the registered office of the petitioner is located at Mumbai. The show cause notice impugned in the writ petition has been issued by the Assistant Director General of Foreign Trade at Mumbai. Duty draw backs have been drawn at Mumbai Port. Thus, the entire cause of action having arisen within the territory of High Court of Mumbai. Hence, petitioner cannot be heard to contend that this Court has jurisdiction to entertain this writ 11 petition under Article 226(1). Merely because petitioner is also having a hotel at Bengaluru amongst being run by it chain of hotels across the country would not give rise for cause of action within the territorial jurisdiction of this Court to exercise the power vested under Article 226(1). This view is fortified by the judgment by Hon'ble Apex Court in Oil and Natural Gas Commission vs Utpal Kumar Basu and others reported in (1994) 4 SCC 711 vide paragraphs 5, 6 and 12. Thus, even on the second ground of want of territorial jurisdiction this writ petition is not maintainable.
12. Though learned counsel for petitioner has canvassed arguments with regard to the merits of the case, this Court would not embark upon conducting or examining such plea, in as much as reply to the show cause notice (Annexure-A), which is said to have been submitted by the petitioner on 17.07.2015 is yet to be examined by the respondent/authorities if not already 12 considered and as such if any opinion is expressed in that regard it is likely to prejudice petitioner case.
13. It is made clear that in the event of any adverse orders being passed against the petitioner, petitioner would be at liberty to challenge the same in the manner known to law before the jurisdictional Court.
14. With these observations, writ petition stands dismissed.
SD/-
JUDGE RR/rv