Union of India & Ors Vs. Suksha
International and Nutan Gems & Anr  INSC 2 (2 January 1989)
M.N. (J) Venkatachalliah, M.N. (J) Pathak, R.S. (Cj)
1989 AIR 690 1989 SCR (1) 1 1989 SCC Supl. (1) 422 JT 1989 (1) 10 1989 SCALE
and Exports (Control) Act 1947 Section 3.
Export Policy 1983. Paragraph 185(4) and (7)--Interpretation of--Export
Houses--Having imprest Li- cences--To import goods from abroad with
corresponding obligation attached to export goods--Fulfilling conditions and
applying for revalidation and endorsement of licence--Held clauses (4) and (7)
form an integrated policy scheme and to be read together.
of India. Article 226--Writ petition--Plea
of unexplained delay in filing of writ peti- tion raised--Held--High Court
should specifically deal with such plea.
Interpretation. Beneficial provision of stat- ute--Not to be interpreted so as
to unduly restrict the beneficial scope of the policy of the law.
respondents in the appeals were recognised Export Houses which had been granted
Imprest licences for the import of 'uncut' and 'unset' diamonds with certain
export obligations attached to them. After the due discharge of the export
obligations, the respondents became entitled to revalidation and endorsement of
the said Imprestlicence for import of OGL items.
said Export Houses applied under paragraph 185(4) of AM83 policy for
revalidation and endorsement of the Imprest Licences. The appellant No. 3, the
Chief Controller of Imports and Exports, rejected this claim of the
aggrieved by the aforesaid order of rejection, respondents filed writ petitions
in the High Court assailing the legality of the orders 2 rejecting their
claims, and seeking a mandamus to the appel- lants to endorse the Imprest Licences.
Judge of the High Court allowed the writ peti- tions, and the order was
affirmed in appeal by the Division Bench.
appeals by the Union of India to this Court, it was contended on behalf of the
appellants that: (a) in the Import-Export Policy 1982-83, the entitlement of
Registered Export Houses to the facility of revalidation and endorse- ment of
OGL items under paragraph 184 is subject to and conditioned upon the express
limitations contained in clause (7) of paragraph 185 of the Policy, and that
the High Court was in error in directing revalidation and endorsement without
reference to the mandatory prescription provided in the said clause, and (b)
that the High Court was in error in ignoring the contentions of the appellants
that the respond- ents had rendered themselves disentitled to relief on the
ground of the inordinate and unexplained delay of one and a half years in the
filing of the writ petitions.
of the Appeals, the Court,
Para 185(4) was intended to provide certain incentives to the Export Houses
which, upon grant of Im- prest-Licences, fulfil their countervailing
obligations in the matter of export commitments. The provision is a benefi- cial
one. [8H; 9A] 1(b) Clauses (4) and (7), no doubt, on their plain wording
present certain constructional difficulties, and it is possible to take the
view that the said clauses are part of an integrated policy scheme, providing
for certain incen- tives to export houses and have to be read together. This
view, however, will unduly restrict the scope of the benefi- cial provision.
[9A, C] 1(c) That the conditions in para 185(4) of the Policy would not be
attracted to the case of Export Houses which are granted Imprest Licences,
would be a harmonious con- struction of clauses (4) and (7) which appears to
advance and promote the objects of the policy in Paragraph 185(4) and is, at
all events, not an unreasonable view to take of the matter. [9B] 1(d) An interpretation
which would unduly restrict the beneficial scope of the policy in para 185(4),
would take away with one hand what the policy of the law gives with the other.
[9C] 3 2(a) If appellants had raised a specific plea of delay as a bar to the
grant of relief--and the delays in the present cases, having regard to the
nature of the subject- matter, were not inconsiderable--it was perhaps
necessary for the High Court to have specifically dealt with the plea.. The
aspect of delay adverted to by the Single Judge was a different one viz. the
delay in seeking revalidation and endorsement after the issue of the redemption
certifi- cate and not the delay in the filing of the writ petitions.
2(b) It would therefore he appropriate that the appel- lants' appeals before
the High Court are remitted to the Appellate Bench of the High Court. If the
Appellate Bench is persuaded to view that the delay is satisfactorily explained
it may proceed to confirm the orders of the Single Judge subject to the
question that the permissibility of the importable items be determined in the
light of the pro- nouncements of this Court in Rajprakash Chemicals Ltd. v. Union of India, AIR
1986 SC 1621 and D. Navinchandra & Co. v. Union of India, AIR 1987 SC 1794. If the delay is
held by the Appellate Bench to be such as to disentitle the respond- ents to
relief, it will proceed to allow the appeals and dismiss the writ petitions.
APPELLATE JURISDICTION: Civil Appeal Nos. 8 & 9 of 1989.
the Judgment and Order dated 17.2.1987 of the Bombay High Court in Appeal No.
179 and 149 of 1987.
Mehta, A. Subba Rao, P. Parmeshwaran, Harish N. Salve, N.D. Garg, Rajiv K. Garg,
P.H. Parekh, Ms. Ayesha Misra and M.N. Shroff for the appearing parties.
Judgment of the Court was delivered by VENKATACHALIAH. J. By these two special
leave petitions under Article 136 of the Constitution, the Union of India and
the Chief and the Joint Chief Controllers of Imports and Exports seek special
leave to appeal from two appellate Judgments of the Division Bench of the High
Court of Judica- ture at Bombay--Both dated 17.2.1987 in appeal Nos. 179 of
1987 and 149 of 1987 affirming in appeal orders of learned Single Judges dated
5.9.1985 in W.P. 1125 of 1985 and dated 19.9.1985 in W.P. 1918 of 1986,
respectively, by which the writ petitions filed by M/s. Suksha International
and M/s. Nutan Gems, respondents in these appeals, were allowed and appellants
directed to revalidate 4 the imprest licences of the respondents and endorse
them for import of OGL items, under paragraph 185 of the Import- Export
Policy of 1982-83 [AM 1983.]
Special leave, in both the-petitions, is granted and the appeals taken-up for
final hearing, heard and disposed of by this common judgment. We have heard Shri
Subbarao, learned counsel for the appellants and Shri Harish Salve, learned
counsel for the respondents who were the writ peti- tioners before the High
M/s. Suksha International, respondent in SLP 2579 of 1987, is a diamond
exporter and is a registered Export House for the purposes of the Import Export
Policy. The said export house was granted an Imprest Licence No. 0451365 dated
15.6.1981 of a value of (Rs. 1,53,80,000) for import of 'uncut' and 'unset'
diamonds with corresponding export obligations.
claimed that upon the due fulfilment by it of its export-obligations it became
entitled to revalidation and endorsement for export of OCM items of the imprest,
Accordingly, on 3.8.1983 the said Export-House applied under paragraph 185(4)
of AM/83 policy, for such revalidation and endorsement of its imprest licence.
Appellant No. 3 by his decision dated 21.9.1983, rejected this claim of the re-
spondent. Aggrieved by this rejection, respondent filed in the High Court under
Article 226 of the Constitution a writ-petition assailing the legality of the
order dated 21.9.1983 and seeking a mandamus to the appellants to en- dorse the
Imprest-Licence. Learned Single Judge of the High Court by his order dated 5.9.
1986 allowed the writ petition and issued the direction preyed for. This order
was carried up in appeal before the Division Bench of the High Court in appeal
No. 179 of 1987. The appeal came to be dismissed on 17.2. 1987.
M/s. Nutan Gems, respondent in SLP 2580 of 1987 is a recognised Export-House
which had, similarly, been granted an Imprest Licence dated 24.2. 1983 for the
import of uncut and unset diamonds with certain export obligations attached to
it and that after the due discharge of the export obliga- tions, Respondent
became entitled to a revalidation and endorsement of the Imprest-Licence for
import of DGL items.
application dated 19.1.1984 made in this behalf by the respondent was rejected
by appellant No. 6 by his order dated 19.3. 1984. M/s. Nutan Gems filed writ
petition No. 1813 of 1985 in the High Court for issue of an appropriate writ
quashing the said order of rejection and directing appellants to revalidate and
endorse the 5 Imprest Licence. On 19.9.1985. Learned Single Judge allowed the
writ petition. This Order was affirmed in appeal No. 149 of 1985 by the
Division Bench on 17.2. 1987.
These appellate-judgments of the High Court are assailed in these appeals.
Though a number of contentions are raised in the Memorandum of Special Leave
Petition, the points, however, pressed at the hearing admit of being formulated
that in the Import-Export Policy, 1982-83 the entitlement of Registered Export
Houses to the facility of revalidation and endorsement of OGL items under
paragraph 185(4) is subject to and conditioned upon the express limitation in
clause (7) of paragraph 185 of the Policy and that the High Court was in error
in di- recting revalidation and endorsement without reference to the mandatory
prescription in clause (7).
that the High Court was in error in ignoring the contention of the appellants
that respondents had rendered themselves disentitled to relief on ground of the
inordi- nate and unexplained delay in filing the writ-petitions.
W.P. 1125 of 1985 (from which SLP 2579 of 1987 arises) the rejection of the
prayer for revalidation was on 21.9. 1983 and the writ petition was filed in
April, 1985; and in WP 1813 of 1985 (from which SLP 2580 of 1987 arises) the
rejection of the prayer was on 18.3.1984 and the writ petition was filed on
10.9.1986, after a lapse of one and a half years in each case.
that, at all events, the direc- tions issued for the endorsement must be
limited only to items as limited by the pro- nouncement of this Court in Rajprakash
Chemi- cals Ltd. v. Union of India, AIR 1986 SC 1021 and D. Navinchandra &
Co. v. Union of India, AIR 1987 SC 1794 and other cases bearing on the
question; and not in terms now directed by the High Court.
may first dispose of contention (c) on which there does not appear to be much
controversy. Shri Subba Rao submitted that the High Court was in clear error in
brushing aside this argument and affirming the learned Single Judge on the
basis that the S.L.P. filed by 6 the appellants in Ripal Kumar & Co.'s case
had been rejected by this Court. Shri Harish Salve, however, submitted that the
decisions of this Court in Indo-Afgan Chamber of Com- merce v. Union of India,
AIR 1986 SC 1567; Rajprakash Chemi- cals Ltd. v. Union of India, AIR 1986 SC
1021; Union of India v. Godrej Soaps (Pvt.) Ltd., AIR 1987 SC 175 and D. Navinchandra
& Co. v. Union of India, AIR 1987 SC 1794. etc do not have any direct beating on
the question of the enti- tlement of the Export Houses to revalidation and
endorsement for OCL items under para 185(4) of A-M 1983 Policy but relate to
the question as to the limitations on the permis- sibility of the items of
import, consequent upon the changes in the policy. This question becomes
relevant, says Shri Salve, at a stage which is subsequent to the revalidation
and endorsement of the Imprest-Licence and that the position in the present
cases has not yet reached that stage. Howev- er, he submitted that as to the
choice of items permissible for import, the matter would of course, have to be deter-
mined the guided by these pronouncements. As Contention (c) is not in
controversy it is not necessary to dwell on it any further. What, however,
remain to be considered are the contentions (a) and (b).
(3), (4), (5) and (7) of para 185 of the policy provide:
Where REP licence has been issued to the Export House on its own exports, the
facility of importing OGL items under sub- para(1) above will be allowed
without debit to the value of such REP licence, provided the value of such
imports does not exceed the value of the REP licence.
The facility for import of OGL items available in sub-para (3) above, may also
be allowed, on merits, to Export Houses against their advance/imprest licences
on account of which they are rendered ineligible to obtain REP licence. In such
cases, however, the value upto which the OGL import may be allowed, will not
exceed the value to which the Export House would have been eligible to the REP licence,
had he not obtained advance/imprest licence in question. This facility will be
available to the Export House after he has discharged the export obligation
imposed on the advance/imprest licence. There- fore, if by the time, the Export
House becomes eligible to this facility, 7 the advance/imprest licence has
expired, or, if the original validity left unused by that time is less than six
months, the licensing authority will revalidate the licence simulta- neously so
as to give to the licence-holder a time of six months for the purpose of
import- ing OGL item under this facility.
Export Houses who wish to take advantage of this facility of import of OGL
items should get the licences concerned en- dorsed by the licensing authority
licence will also be valid for import of OGL items under para 125 of Import-
Export Policy, 1982-83, subject to the condi- tions laid down, and shall be
nontransferable." (7) Import of OGL items by Export Houses under these
provisions shall be subject to the condition, inter alia that the shipment of
goods shall take place within the validity of the OGL i.e. 31st March, 1983. or within the validity period of
the import licence itself (without any grace period), whichever date is
earlier. This restriction will also apply to licences issued before 1.4.1982 in
respect of items which continue to be on OGL in 1982-83 policy. (The
restriction regarding grace period will not, however, apply in cases where
shipment can be made within the permis- sible grace period on or before
contention is that clauses (4) and (7) of para 135 are part of an integrated
policy-scheme, providing for certain incentives to export-houses and have to be
read together and that the import of OGL items is strictly sub- ject to the
specific condition that the shipment of goods shall take place within the
validity of the OGL i.e. 31.3.1983 or within the validity period of the licence
itself which ever date is earlier. If this condition is held to be attracted to
the case of an Imprest-Licence also, then, quite obviously, the claim in the
writ petitions would have to fail, as the application for revalidation is
beyond the outer-most time limit set for the import itself. Indeed, this
question was left open by this Court while dismissing SLP 7389 of 1985 (Union
of India v. Messrs H. Patel & Co.).
order dated 19.7.1985 this Court said:
....... We, however, make it very clear that we express 8 no opinion on the
validity of the above said contention based on paragraph 185(7) referred to
above. The true effect of the said provi- sion is left open to be considered in
an appropriate case when an occasion arises to do so."
Salve, submitted that in the very nature of the procedures and exercises
inherent in the effectuation of an imprest-licence, as distinguished from
Replenishment Li- cence, the Export-House has first to import the uncut and
unset diamonds and thereafter fulfill its export obligations of cut and
polished diamonds as a necessary antecedent for the effectuation of its
entitlement to a revalidation and endorsement for OGL items. The very nature of
the time consuming transactions that are required to be gone through preceding
the very creation of the right to revalidation and endorsement are inconsistent
with the feasibility of compli- ance with the time-schedule in para 185(7).
Learned Counsel says that the view that should commend itself, both on
construction and in equity, is that having regard to the innate differences in
the nature of the obligations and conditions to be fulfilled between the
holders of imprest- licences on the one hand and the replenishment-licences on
the other and having regard, further, to the circumstances that export-houses,
which, under Imprest Licences, have first to import uncut and unset diamonds
and thereafter fulfill their export obligations before becoming entitled to the
import of OGL items, it would be a wholly unreasonable exercise in construction
to import the condition in clause (7) into clause (4) and that clause (4)
should, therefore, be treated on its true construction, as a special provision constituting
an exception to the generality of the provision in clause (7). Otherwise, says
counsel, the resulting posi- tion would be that the satisfaction of the
cumulative condi- tions in clauses (4) and (7) by an Export-House under an Imprest
Licence would well nigh be impossible.
way of hormonising clauses (4) and (7) of para 185, it is submitted, has
commended itself to the High Court in several other writ-petitions involving
the interpretation of clauses (4) and (7) of paragraph 185 of the AM 1983
Salve submits that it is reasonable to exclude imprest licences from the
requirement of clause (7).
have considered the rival contentions on the point. Para 185(4) was intended to
provide certain incen- tives to the Export Houses which, upon grant of Imprest-
Licences, fulfill their countervailing obligations in the matter of export
commitments. The provision 9 is a beneficial one. Clauses (4) and (7), no
doubt, on their plain wording present certain constructional difficulties and
the view sought to be put across by Shri Subba Rao for the appellant, on the
plain language of clause (7), is not without possibilities. However, the basis
of a harmonious construction which commended itself to the High Court in other
similar cases appears to us to advance and promote the objects of the policy in
paragraph 185(4) and is, at all events, not an unreasonable view to take of the
matter. In some of these cases this Court has declined to interfere with this
interpretation by rejecting petitions for special leave. Acceptance of the
interpretation suggested by Shri Subba Rao would, in our opinion, unduly
restrict the scope of the beneficial provision and, in many instances which
would otherwise fall within the beneficial scope of the policy in para 185(4),
take away with one hand what the policy gives with the other. We think we
should accept the submissions of Shri Harish Salve which is consistent with the
view taken of the matter by the High Court in other cases and hold that the
conditions in para 185(4) of the policy would not be attracted to the case of
Export Houses which are granted Imprest Licences.
we hold and answer contention (a) against the appellants.
Re: Contention (b):
pertains to appellants' plea of delay as a bar to relief. Appellants have aired
a serious grievance over this aspect. Shri Subba Rao streneously contended that
the re- spondents had approached the High Court after an inordinate and
unexplained delay of over one and a half years in each of these cases and that
appellants' objection as to the disentitlement of the respondents to relief on
the ground of delay was not even so much as adverted to by the learned Single
Judge or the Division Bench. Learned counsel submit- ted that promptitude and
vigilant pursuit of legal remedies with diligence is basic to the entitlement
to relief in the jurisdiction under Article 226, which is both extraordinary
and discretionary and that in the present cases the delay of one and a half
years in moving the Court should have been held crucial particularly where
grant of import licence is cancelled.
pleadings in the writ petitions are not before us.
will proceed on the assumption that appellants had taken this objection before
the learned Single Judge of the High Court and raised the plea as to the bar of
delay in their appeals before the Division Bench of the High Court. If this
point had been taken, we are afraid the High Court 10 was not justified in
ignoring it or brushing it aside.
the learned Single Judge of the High Court allowed the writ petitions in both
these cases by short orders in similar terms, relying upon an earlier decision
dated 19/20th August, 1985, in writ petition No. 2477 of 1984. The relevant
part of the order reads:
facts and circumstances of this petition are similar to the relevant facts and
circumstances in Writ Petition No. 2477 of 1984 decided by this Court on 19/20th August, 1985. Besides, as in the said Writ
Petition No. 2477 of 1984, in the present case also there is no such delay as
to preclude the petitioners from the relief claimed. In all the circumstances
and for reasons stated in Writ Petition No. 2477 of 1984 the following order is
passed on this Writ Petition.
petition succeeds and the same is allowed." Thereafter, the learned judge
proceeded to issue specific directions.
Subba Rao would say that the reference in the order by learned Single Judge to
the contention on the point of delay as bar to relief had nothing to do with
the specif- ic contention of the appellants' that there was inordinate and
unexplained delay in approaching the Court. This, learned counsel submits,
would be clear, by a reference to the aspect of the delay dealt with and
considered in WP 2477 of 1984, on which the learned Single Judge relied. The
order of the same learned Single Judge in WP 2477 of 1984, in which the
particular aspect of delay is considered is at para 8 of that order. That para
in the order in WP 2477 of 1984 reads:
Joshi, learned counsel for the respondents, submitted that the petitioners were
not entitled to relief because of delay.
not possible to agree. After the redemp- tion certificate on 16th November, 1983, application for revalidation and
OGL endorse- ment was made within four months therefrom on 12th March, 1984. There is, in the circum- stances,
no such delay as to warrant its ejection on that ground. The contention thus
fails and is rejected." Shri Subba Rao submits that the delay referred to
in the above paragraph is the delay in seeking revalidation and endorsement
after 11 the issue of redemption certificate and not the delay in filing the
writ petition and that in both the present cases the plea of delay in filing
the writ petitions has not received due consideration by the High Court. Shri Subba
Rao referred to a number of pronouncements of this Court, to substantiate that
such unexplained delay particularly in matters dealing with import licences
would bar relief and that un-explained delay, by itself and without more, is a
factor disentitling a person to relief. He submitted that absence of prejudice
to the opposite party, by itself, would not justify delay and that in the
context of grant of import licences passage of time brings with it, as here,
problems of conflicting policy considerations. Where change of policy would
impart crucial significance to the delays, Courts, learned counsel says, should
insist upon even a higher degree of promptitude. He, accordingly, submitted
that the writ petitions should be dismissed on the ground alone of delay in
contention of the appellant cannot be brushed aside. If appellants had raised a
specific plea of delay as a bar to the grant of relief--and the delays in the
present cases, having regard to the nature of the subject-matter, were not
inconsiderable--it was perhaps necessary for the High Court to have
specifically dealt with the plea. The aspect of delay adverted to by the
learned Single Judge in the course of the order was a different one.
we think it would be somewhat unfair for the respondents, who have succeeded in
the High Court, to decide this question without an opportunity to them to
satisfy the Court as to the reasons, if any, for the delay and as to the
sufficiency of such reasons. We assume that the plea had been taken before the
High Court by the appellants as this submission of the learned counsel for the
appellant was not controverted. We think it would be appropriate that the
appellants' appeals before the High Court are remitted to the High Court for
such consideration as the Appellate Bench may now bestow on this contention of
the appellants. If the appellate bench is persuaded to view that the delay is
satisfactorily explained it may proceed to confirm the orders of the learned
Single Judge, subject, of course, to the question of permissibility of the
importable items to be determined in the light of the pronouncements of this
Court referred to at contention (c). If, on the contrary, the delay is held by
the Division Bench to be such as to disen- title respondents to relief, the
Division Bench may proceed to allow the appeals and dismiss the writ-petitions.
All other controversies in the appeal shall be held to have been concluded in favour
of the respondents.
Accordingly, the appellate-judgments of the High Court under appeal are set
aside and the appeals 149 of 1987 and 179 of 1987 before the High Court are
remitted for a fresh disposal as indicated above. The High Court might also
consider the desirability of a very early disposal of the appeals. These
appeals are disposed of accordingly. There will, however, be no order as to
costs in these appeals.
Appeals disposed of.