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PETITIONER: UNION OF INDIA & ORS.

       Vs.

RESPONDENT: M/S. INDO-AFGHAN AGENCIES LTD.

DATE OF JUDGMENT: 22/11/1967

BENCH: SHAH, J.C. BENCH: SHAH, J.C. SIKRI, S.M. SHELAT, J.M.

CITATION:  1968 AIR  718            1968 SCR  (2) 366  CITATOR INFO :  R          1971 SC1021  (11)  D          1971 SC1997  (8)  D          1971 SC2399  (13)  D          1972 SC1126  (5)  R          1972 SC1311  (24)  R          1972 SC2112  (18)  RF         1973 SC 106  (145)  R          1973 SC 303  (10)  RF         1973 SC 381  (16)  RF         1973 SC2232  (15)  RF         1976 SC 386  (15)  RF         1977 SC1496  (13)  D          1977 SC2149  (14)  R          1978 SC 803  (11)  E&R        1979 SC 621  (20,21,22,24,25,26,29,30,31)  RF         1980 SC1285  (13,20,26,36,37,41,42,44)  F          1985 SC 941  (4)  RF         1986 SC 806  (10)  RF         1986 SC 872  (179,180)  RF         1986 SC1021  (13,21)  RF         1988 SC1247  (3)  E&F        1991 SC  14  (11)  RF         1992 SC1075  (3)

ACT: Imports and Exports (Control) Act (18 of 1947), s. 3--Import Trade     Policy--Notifications     under--If      executive instructions--Whether     enforceable--Representation     to exporters  that they will be given  certificates  to  import material  equal  to 100% of the value of  the  exports--When quantum  in  import certificate  can  be  reduced--Claim  of exporters if founded on equity.

HEADNOTE: Section  3 of the Imports and Exports (Control)  Act,  1947, authorises  the  Central  Government  to  make,  by   order, provisions   for   prohibiting,  restricting  or   otherwise controlling  import,  export,  carriage  etc.  of  goods  of specified  description.   In  exercise of  this  power,  the Central Government issued the Imports (Control) Order, 1955, and other orders setting out the policy governing the  grant

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of import and export licences.  The Central Government  also evolved  an Import Trade Policy to facilitate the  mechanism of  the  Act and the orders issued thereunder.  and  it  was modified  from  time  to time by issuing  fresh  Schemes  in respect of new commodities.  In 1962, the Central Government promulgated the Export Promotion Scheme providing incentives to exporters of woolen textiles and goods.  It provided  for the  grant  to  an  exporter,  certificates  to  import  raw materials  of  a total amount equal to 100%  of  the  F.O.B. value of his exports.  Clause 10 of the Scheme provided that the  Textile Commissioner could grant an import  certificate for  a  lesser amount if he is satisfied, after  holding  an enquiry,  that the declared value of the goods  exported  is higher  than  the real value of the goods.  The  Scheme  was ex.tended  to  exports  of  woolen  textiles  and  goods  to Afghanistan. The  respondents  exported woolen goods to  Afghanistan  and were issued an Import Entitlement Certificate by the Textile Commissioner  not  for the full F.O.B. value of  t,he  goods exported,   but  for  a  reduced amount.  In doing  so,  the Textile   Commissioner   collected  evidence  ex  parte  and acting upon the report  of  a  Committee  appointed  by  him passed  orders without informing the respondents or   giving them   an opportunity to explain the materials on the  basis of  which  the ’import entitlement’ of the  respondents  was reduced.   Some  of the exporters had  appeared  before  the Committee and explained the circumstances in which they made the  exports, but the report of the Committee was  not  made available to them.  The respondents made representations  to the  Central  Government but the Government   confirmed  the orders.   The  respondents then filed writ petitions in  the High  Court.   The High Court set aside the  orders  of  the Textile  Commissioner  and  Government, and  held  that  the respondents  were  entitled  under  the  Scheme  to   obtain import  licences for an amount equal to 100% of  the  F.O.B. value of their exports, unless it was found on enquiry  duly made under el. 10 of the Scheme that the respondents had  by ’over-invoicing’  the  goods disentitled themselves  to  the import  licences  of the full value; and  that  the  Textile Commissioner  without  making any  such  enquiry.  proceeded upon  his subjective satisfaction’ that the respondents  had ’over   invoiced’  the goods exported; and  that  Government also  acted  in  a  similar  manner  in  dealing  with   the representation of the respondents. 367 In appeal to this Court, it was contended:  (1 )  that   the Export  Promotion  Scheme was administrative  in  character, that it contained mere executive instructions issued by  the Central Government to the  Textile Commissioner. and created no  enforceable rights in the exporters who  exported  their goods  in  pursuance of the Scheme and that  it  imposed  no obligations   upon   the   Government   to   issue    import certificates, (2) that the textile Commissioner was the sole judge  of the reasons for reducing the  import  entitlement, that  the Scheme did not require him to set out the  reasons for   reducing  the  import  entitlement,  or  to  give   an opportunity to the respondents because, the exercise of  the power  to reduce, conferred upon the  Textile  Commissioner, was  not limited by the terms of el. 10 of the  Scheme,  and was  not,  except on proof of mala fide  exercise,  open  to judicial  review;  (3)  that the Government  on  grounds  of ’executive necessity’ was the sole judge of the validity  of its action in matters relating to import and export  policy, because  the policy depended upon the economic  climate  and other  related  matters  and had to be in  its  very  nature

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flexible with power in the Government to modify or adjust it as  the altered circumstances necessitate; and (4)  that  if the Government is held bound by every representation made by it  regarding its intentions, the Government would  be  held bound  by  a contractual obligation even  though  no  formal contract  in  the  manner  required  by  Art.  299  of   the Constitution was executed. HELD:  The Government is not exempt from liability to  carry out  the representation made by it as to its future  conduct and  it cannot on some undefined and undisclosed  ground  of necessity  or  expediency  fail to  carry  out  the  promise solemnly  made by it, nor claim to be the judge of  its  own obligation  to the citizen on an ex parte   appraisement  of the  circumstances in which the obligation had arisen.  [385 E-F]     (1)  Whether  the Schemes for  implementing  the  Import Trade   Policy  are  merely  executive   or   administrative instructions,  or   are   legislative  directions  as  well, depends  not on their form, or the method of publication  or the  source  of their authority. but it is  their  substance that determines their true character.  It cannot be  assumed merely because the policy is general in terms and deals with the  grant  of  licences for import  of  goods  and  related matters, that it is statutory in character.  But even if  it is  only  executive or administrative in  character,  courts have power in appropriate cases to compel performance of the obligations  imposed  by the Schemes upon  the  departmental authorities. [376 H; 377 B--C, F--G]     (2)  The Textile Commissioner was not the sole judge  of the  quantum of import licence to be granted to an  exporter and  courts  are  competent in appropriate  cases  to  grant relief,  if, contrary to the Scheme, the Government and  its officers at their mere whim ignore the promises made by  the Government  and  arbitrarily decline to grant  the  promised import licence to an exporter who has acted to his prejudice relying upon the representation r381 C--D]     Where a person has acted upon representations made in an Export  Promotion Scheme that import licence upto the  value of  the  goods  exported will be issued,  and  had  exported goods,  his  claim for the import licence  for  the  maximum value  permissible  by  the  Scheme  cannot  be  arbitrarily rejected.  In such a case reduction in the amount of  import certificate may be justified on the ground of misconduct  of the exporter in relation to the goods exported or on special considerations such as difficult foreign exchange  position, or  other matters having a bearing on the general  interests of  the  State.  But, where, as in the present   case,   the Scheme  provided for the  rant of import entitlement of  the value and not 368 up  to  the  value,  of  the  goods  exported,  the  Textile Commissioner  should  in the ordinary course,  grant  import certificate for the full value of the goods exported: he may reduce that mount only after the enquiry contemplated by cl. 10  of  the Scheme, that is, enquiry made  after  giving  an opportunity  to  the  respondents  and  held  in  a   manner consistent  with the rules of natural justice and the  basic concepts of justice and fair-play. [379 H: 380 A--C]     Ramchand Jagadish Chand v. Union of India & Ors.  [1962] 3 S.C.R. 72, Probhudas Morarjee Rajkotia & Ors. v. Union  of India  &  Ors.  A.I.R.  1966  S.C.  1044-  and  Joint  Cheil Controller of Imports and Exports, Madras v. M/s.Amin  Chand Mutha, [1966] 1 S.C.R. 262, followed.     (3)  Executive necessity, if any, does not  release  the Government  from  honoring its solemn  promises  relying  on

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which citizens have acted to their detriment especially when the  representation  in the Scheme was not’ subject  to  any implied term that the Government will not be bound to  grant the  import  certificate  for the full value  of  the  goods exported if they deem it inexpedient [376 A--C]     Rederiaktiebolaget Amphitrite v. The King, [1921] 3 K.B. 500  and  Robertson v. Minister of Pensions, [1949]  1  K.B. 227, referred to.     (4)  The respondents were not seeking to   enforce   any contractual  right: they are seeking to  enforce  compliance with   the  obligation  which  is  laid  upon  the   Textile Commissioner  by the terms of the Scheme.  The claim of  the respondents  was  rounded  upon the equity  which  arose  in their  favour  as  a result of the  representation  made  on behalf of the Government in the Export Promotion Scheme, and the  action  taken  by  the  respondents  acting  upon   the representation.   Even though the case did not  fall  within the  terms of s. 115 of the Evidence Act, it was still  open to  a  party who had acted on a representation made  by  the Government  to claim that the Government should be hound  to carry out the promise made by it, though not recorded in the form  of a formal contract as required by the  Constitution. [382 D-G, 383 H]     Ahmad Far Khan & Ors. v. Secretary of State for India in Council and Anr. L.R. 28 I.A. 211, The Municipal Corporation of  the City of Bombay, v. The Secretary of State for  India in   Council,   I.L.R.  29  Born.  580    and   The   Ganges Manufacturing Co. v. Surujmull, I.L.R. 5 Cat. 669, applied.     Collector of Bombay v. Municipal Corporation of the City of Bombay & Ors. [1952] S.C.R. 43. referred to.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos. 885893  of 1967.     Appeals from the judgment and order dated  February   2, 1967  of  the Punjab and Haryana High Court in  Civil  Writs Nos. 1947, 1921 to 1927 and 1949 of 1965. AND Civil Appeals Nos. 973 to 975 of 1967.     Appeals from the judgment and order dated April 26, 1967 of  the Punjab High Court in Letters Patent Appeal Nos.  127 to 129 of 1967. 369     B.R.L.  lyengar, R.N. Sachthey and S.P. Nayar,  for  the appellants (in all the appeals).     Bhagirath Dass, Sobhag Mal Jain and B.P. Maheshwari, for the respondents (in C.As. Nos. 885 and 893 of/967).     O.P.  Varma, for the respondents (in C.As. Nos.  886  to 890 and 892 of 1967).     A.K.  Sen and O.P. Varma, for the respondent  (in   C.A. No. 891 of 1967).     K.L. Arora and H.K. Puri, for the respondents  (in C.As. Nos. 973 and 974 of 1967).     A.K. Sen, H.L. Anand and K.B. Mehta, for the  respondent (in C.A. No. 975 of 1967). The Judgment of the Court was delivered by     Shah, J.  The facts which give rise to Appeal No. 885 of are these: The Textile Commissioner published on October 10, 1962, a scheme called the Export Promotion Scheme  providing incentives  to exporters of woollen goods.  The  scheme  was extended by a Trade Notice dated January 1, 1963, to exports of   wooden  goods  to  Afghanistan.   Messrs.   Indo-Afghan Agencies-hereinafter called the respondents--a firm  dealing

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in   woollen  goods at Amritsar exported to  Afghanistan  in September,  1963, woollen goods of the f.o.b. value  of  Rs. 5,03,471-73  nP.  The Deputy Director in the office of   the Textile  Commissioner, Bombay issued to the  respondents  an Import   Entitlement  Certificate for Rs.  1,99,459  only/-. Representations  made   by  the respondents  to  the  Deputy Director  and to the Union Government that they  be  granted Import Entitlement Certificate for the full f.o.b value-  of the goods exported failed to produce any response.     But  in  a petition under Art. 226 of  the  Constitution moved before the High Court of Punjab by the respondents for a  writ  or  an  order directing the  Union  of  India,  the Textile   Commissioner  and the Joint  Chief  Controller  of Imports and  Exports, Bombay, to issue a licence "permitting import   of   wool-tops, raw wool,  waste and  rags  of  the value  of  Rs. 3,04,012-73 nP", the orders  of  the  Textile Commissioner  and  the  Central Government were  set  aside. The  High  Court  held  that  the  Export  Promotion  Scheme specifically  provided for granting certificates  to  import materials of the "value equal to 100% of the f.o.b. value of the  goods exported", and the respondents  were entitled  to obtain  import licences for an amount equal to 100%  of  the f.o.b. value, unless it was found on enquiry duly made under el.  10  of the Scheme that the respondents  had  by  "over- invoicing"  the goods disentitled themselves to  the  import licences 370 of  the  full value; that no such enquiry was  made  by  the Textile Commissioner and that officer merely proceeded  upon his  "subjective  satisfaction"  that  the  respondents  had ’over-invoiced"  the  goods  exported; and  that  the  Union Government acted on irrelevant grounds.  The Union of India, the  Textile Commissioner and the Joint Chief Controller  of Imports  and  Exports  have  appealed  to  this  Court  with certificate granted by the High Court. The  genesis  of  the export control  scheme  may  first  be noticed.  The Imports and Exports (Control) Act 18  of  1947 was  enacted on March 24, 1947 with the object  of  enabling the Central Government to continue to exercise the power  to prohibit, restrict or otherwise control imports and  exports which  had  till then been controlled by  orders  issued  in exercise of the powers conferred by r. 84 of the Defence  of India  Rules, 1939, as extended by the Emergency  Provisions (Continuance) Ordinance 20 of 1946.  By s. 3 of that Act  it was provided:     "(1)  The  Central  Government may  by  order  published in  the Official Gazette, make provisions  for  prohibiting, restricting  or  otherwise controlling in all  cases  or  in specified classes of cases, and  subject  to such exceptions if any, as may be made by or under the order :--     (a)  the import, export, carriage coastwise or  shipment as ships stores of goods of any specified description;     (b)  the  bringing into any port or place  in  India  of goods of any specified description intended to be taken  out of  India without being removed from the ship or  conveyance in which they are being carried. (2).................... (3)..................... By  s.  4  the orders made under r. 84 of  the  Defence   of India Rules, 1939, or under that rule as continued in  force by  the Emergency Provisions (Continuance) Ordinance,  1946, and in force immediately before the commencement  of the Act were,  insofar  as  they  were  not  inconsistent  with  the provisions of the Act, to continue to remain in force and to be deemed to have been made under the Act.

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   In  exercise  of  the powers conferred  on  the  Central Government  by  s.  3, the  Central  Government  issued  the Imports (Control) Order, 1955.  By paragraph-3 of the  Order it was enacted that: 371                    "(1)  Save as otherwise provided in  this               Order, no person shall import any goods of the               description  specified in Schedule  I,  except               under, and  in  accordance with, a licence  or               a  customs  clearance permit  granted  by  the               Central Government or by any officer specified               in                     (2)  If, in any case, it is  found  that               the  goods  imported under a  licence  do  not               conform  to  the  description  given  in   the               licence  or were shipped prior to the date  of               issue  of  the licence under  which  they  are               claimed  to have been imported, then,  without               prejudice  to  any action that  may  be  taken               against   the  licence under the Customs  Act,               1962  (52  of 1962), in respect  of  the  said               importation,  the  licence may be  treated  as               having  been utilised for importing  the  said               goods." The Central Government also issued periodical  orders  which were published in biannual official publications setting out the  policy  governing  the  grant  of  import  and   export licences.  By paragraph 52 of the notification published  in the  Gazette Extraordinary dated December 29, 1954,  it  was declared   that   in  certain items there  was  "direct  and intimate"   inter-relationship between imports and  exports, and  since the ability to export some of those  manufactured goods  depended  largely  on the  facility  with  which  the exporter  or  the manufacturer could procure the  basic  raw materials  required  in the manufacture, a scheme  had  been devised with a view to promote export of such goods for  the grant  of special import licences to replace  the   imported raw  material  content  of the exported  product,   and   to provide   an inducement for larger exports.  The details  of the Scheme were set out in Appendix-23 to the  Notification. The Scheme covered a number of commodities of which   export was  permitted. From time to time this Appendix was modified and fresh schemes were issued in respect of new commodities.     On October 10, 1962, the Government of India promulgated the Export Promotion Scheme for woollen textiles and woollen goods.   Clause 2 of that Scheme  provided,  insofar  as  it is material:                     "It     has    been     decided     that               manufacturers--exporters                   and               merchants--exporters  of  the  above   woollen               textiles and woollen goods will be entitled to               import  raw materials, namely, raw wool,  wool               tops,   shoddy,  man-made  fibres  and   tops,               permissible  types of dyes and  chemicals  and               machinery and machinery parts and spare  parts               for woollen industry for a total amount  equal               to 100% of the f.o.b. value of the exports." 372               Clause 4 provided:                     "Only  such  exporters who  satisfy  the               Textile Commissioner that they are  interested               in  export (either by past performance  or  by               showing  proof of action taken to obtain  firm               order  etc.)  will  be   registered   by   the               Textile Commissioner."

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Clause  6  imposed certain obligations upon  the  registered exporters, such as adherence to the code of conduct  as  and when  evolved; adoption of the standard contract form   with suitable clauses for arbitration and settlement of disputes; abiding  by the decision of the Textile Commissioner in  the matter   of  dispute between the exporter and  his   foreign customers;   forwarding figures of exports of woollen  goods made  by  him every month to the  Textile  Commissioner  and abiding by such quality control and pre-shipment  inspection procedures  as  may  be  evolved Clause 7 provided  for  the application   for  grant  of import licences against  actual exports  effected  on a monthly or  on  a  quarterly  basis. Clause 9 provided:                     "After scrutiny of the applications, the               Textile    Commissioner   shall    issue    an               entitlement  certificate indicating the  items                             and  value for which  licence should i ssued  to               the applicant.  On receipt of the  application               and  entitlement certificate, the Joint  Chief               Controller  of Imports and  Exports,   Bombay,               shall issue  the license."               Clause 10 provided:                     "In case where the Textile  Commissioner               considers that the declared value of the goods               exported is higher than the real value of  the               goods, the matter may  be investigated further               by   calling   for   further  evidence,   e.g.               purchase     vouchers    and    any      other               corroborative evidence to facilitate scrutiny.               It  shall  be  the  duty  of  the   registered               exporter  to  furnish  such  evidence  as   is               called for in this connection.  On the   basis               of  his enquiry, the Textile Commissioner  may               assess the correct value of the goods exported               and  issue an entitlement certificate  on  the               basis of such assessed value." By  notification  dated  January 1,  1963,  the  Scheme  was extended to exports of woollen textiles and woollen goods to Afghanistan with effect from October 1, 1962.     It  was urged on behalf of the Union of India  that  the Export  Promotion  Scheme was administrative  in   character and  the recital therein that the exporters will be entitled to import certificates equal to 100% of the f.o.b. value  of the exports was a 373 mere  instruction  issued  by the Union  Government  to  the Textile.Commissioner:  it  created no rights in  the  public generally or in the exporters who exported their  goods   in pursuance of  the Scheme and imposed no obligations upon the Government  to issue the import certificates.  On behalf  of the  respondents  it  was  contended  that  the  Scheme  was statutory in character and obliged the Textile Commissioner, unless the exporter was after due investigation under cl. 10 of  the  Scheme,  shown to have   "overinvoiced"  the  goods exported, to issue import certificates of the full value  of the  exports, and a person exporting goods in  pursuance  of the Scheme who was denied an import certificate  of the full f.o.b. value could seek the assistance of the High Court  by a  petition  for the issue of a writ under Art. 226  of  the Constitution,   for   an  order   compelling   the   Textile Commissioner  to carry out the obligations imposed upon  him by the Scheme.     The  Textile Commissioner in the present case  made  his order  without informing the respondents and giving them  an

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opportunity  to explain the materials on the basis of  which the "import entitlement" of the respondents was proposed  to be  reduced. It was stated in the affidavit of the Union  of India that it was not a necessary requirement of the  Scheme to   set   out  the  reasons  for  reducing    the    import entitlement:    that  under  paragraph 20(d) to Appendix  23 of  the Import Trade Control Policy for the year April  1962 to  March  1963 the licensing authority  was  authorised  to refuse the issue of a licence or "to reduce the value of the licence  to such amount as he deemed fit" in cases where  he considered  the  value  of  the  goods  exported  was  over- invoiced,  and  the  Trade Notice having  been   issued   in exercise of  the executive power of the State, attack by the respondents  on the ground set up was "completely  misplaced and  without     any.foundation in law".   In  passing  the  orders impugned   by   the  respondents, the Textile Commissioner did not hold an enquiry  consistent with  the rules of natural justice.  Counsel for  the  Union of   India  submitted  that for good reasons  of  which  the Textile Commissioner was the sole judge, it was open to that Officer  to reduce the import entitlement below  the  f.o.b. value  of  the  goods exported, and exercise  of  the  power conferred upon him is not limited by the terms of cl. 10  of the  Scheme,  and  is  not, except on  proof  of  mala  fide exercise open to judicial review.  This exalted claim  about the  nature of the authority conferred  upon   the   Textile Commissioner  as representative of the Government may  first be examined. Counsel for the Union said that the import and export policy of  the  Government  is based  on  availability  of  foreign exchange.requirement of goods of foreign origin for internal consumption, 374 economic climate in the country, and other related  matters, and  has  in  its very nature to be flexible,  and  on  that account  the power of the Government to modify or adjust  it as   the   altered  circumstances  necessitate,  cannot   be restricted  on   the   ground  that  promises  made  by  the Government  in  different situations are  not  carried  out, however  amoral that claim  may appear to  be  According  to Counsel the Government is the sole judge of the validity  of its  actions  in  matters relating  to  Import   and  Export Policy,   and   the   citizens  who  have   acted   on   the representations  of the Government have only such rights  as the Government in its wisdom chooses to recognise or  accept at  any given time.  He relied in support of his  submission upon the doctrine of "executive necessity" on which  Rowlatt J,  relied in Rederiaktiebolaget Amphitrite v. The  King.(1) In  that  case during the First World  War  certain  neutral shipowners   obtained  an  undertaking  from   the   British Government that if the shipowners sent a particular ship  to the United Kingdom with a specified cargo, she shall not  be detained.  On the faith of that undertaking, the owners sent the  ship to a British port with that specified cargo.   The British   Government   withdrew   their   undertaking    and refused  her clearance.  On a petition of right for  damages for  breach  of contract it was held that  the  Government’s undertaking  was  not enforceable in a Court of law, it  not being within the competence of the Crown to make a  contract which  would  have  the  effect of  limiting  its  power  of executive action in the future. Rowlatt, J., observed at  p. 503:                      "   ......  what I have to consider  is               whether   this was a contract at all.  I  have               not to consider whether there was anything  of

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             which complaint might be made outside a Court,               whether that is to say what the Government did               was  morally wrong or arbitrary that would  be               altogether outside my province."               He then proceeded to state:                     "No doubt the Government can bind itself               through its officers by a commercial contract,               and  if  it does so it must  perform  it  like               anybody else  or  pay  damages for the breach.               But   this  was  not  a  commercial  contract,               it  was an arrangement whereby the  Government               purported to give an assurance as to what  its               executive  action  would be in the  future  in               relation to a particular ship in the event  of               her  coming to this country with a  particular               kind of cargo.  And that is, to  my mind,  not               a contract for the breach of which damages can               be sued for in a Court of law.  It was  merely               an  expression  of  intention  to  act  in   a               particular way m a (1) [1921] 3 K.B. 500. 375               certain event.  My main reason for so thinking               is that it is not competent for the Government               to  fetter its future executive action,  which               must necessarily be determined by the needs of               the  community when the question  arises.   It               cannot  by  contract  hamper  its  freedom  of               action in matters which concern the welfare of               the State." This observation is, "clearly very wide and it is  difficult to  determine  its proper scope": Anson’s  "English  Law  of Contract",  22nd Ed., p. 174.  It may also be  noticed  that before Rowlatt, J., the applicants Claimed enforcement of  a contract  against the Crown, and the learned Judge  came  to the  conclusion  that there was no contract and  no  damages could be awarded.  In Robertson v. Minister of  Pensions(1), Denning, J. observed at p. 231:                     "The Crown cannot escape by saying  that               estoppels  ’do  not bind the  Crown  for  that               doctrine has long been exploded.  Nor can  the               Crown  escape by praying in aid  the  doctrine               of   executive   necessity,   that   is,   the               doctrine that the Crown cannot bind itself so.               as  to  fetter its  future  executive  action.               That   doctrine was propounded by Rowlatt  J.,               in  Rederiaktiebolaget Amphitrite v. The  King               but  it  was  unnecessary  for   the  decision               because the statement there was not a  promise               which  was intended to be binding but only  an               expression  of intention.  Rowlatt, J.,  seems               to  have been influenced by the cases  on  the               right of the Crown to dismiss its servants  at               pleasure, but those cases must now all be read               in the light of the judgment of Lord Atkin  in               Reilly v. The King--(1954) A.C. 176, 179)..                In  my  opinion  the  defence  of   executive               necessity  is  of  limited  scope.   It   only               avails  the  Crown where there is  an  implied               term  to  that  effect or  that  is  the  true               meaning of the contract." Denning,  I  was  dealing with a case  of  a  serving   army officer, who wrote to the War Office regarding a  disability and  received a reply that his disability had been  accepted as  attributable   to "military service".  Relying  on  that

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assurance  he   forbore  to obtain  an  independent  medical opinion.  The  Minister of Pensions later decided  that  the appellant’s  disability  could  not  be  attributed  to  war service.   It  was held that as between subjects   such   an assurance  would be enforceable because it was intended   to be binding intended to be acted upon, and was in fact  acted upon;  and  the  assurance was also binding  on  the   Crown because  no  term  could be implied that the  Crown  was  at liberty to revoke it. (1) [1949] 1 K,B- 227. 376     The  defence of executive necessity was not relied  upon in the present case in the affidavit filed on behalf of  the Union   of  India.  It  was  also  not  pleaded   that   the representation in the Scheme was subject to an implied  term that  the  Union of India will  not be bound  to  grant  the import certificate for the full value of the goods  exported if  they deem it inexpedient to grant the  certificate.   We are  unable to accede to the contention that  the  executive necessity releases the Government from honouring its  solemn promises  relying  on  which citizens have  acted  to  their detriment.  Under our constitutional set-up no person may be deprived of his fight or liberty except in due course of and by  authority of law: if a member of the executive seeks  to deprive  a citizen of his  right  or liberty otherwise  than in  exercise  of  power  derived  from  the  law-common   or statute--the Courts will be competent to and indeed would be bound to, protect the rights of the aggrieved citizen.     The  orders  which the Central Government may  issue  in exercise  of the power conferred by s. 3 of the Imports  and Exports  Control  Act may be executive or  legislative.   In exercise of that power, the Order was issued on December  7, 1955,   that  was  clearly  legislative  in  character.   It appears  ’that  prior to  the issuance of this  notification several  orders had been issued under the Defence  of  India Rules and under the Imports and Exports Act dealing with the grant of licences to import certain classes of goods.  Those orders  which are set out in the IVth Schedule to the  Order were  repealed  by  cl.  12 of the  Order  of   1955,   and. machinery  for  granting licences was set up  by  the  Order dated  December  7,  1955.   Counsel  for  the   respondents submitted  that the Export Promotion Schemes  published   by the   Government  under paragraph-52   of   the   Government Notification  dated December 29, 1954, must be deemed to  be issued  under s. 3 of the Imports and Exports  Control  Act, 1947,  since the Schemes have been published in the  Gazette of  India,  and contain general provisions relating  to  the grant of licences and impose restrictions upon the rights of citizens to carry on business in certain commodities.  Being general  provisions, restricting the rights of  citizens  to carry on business in certain commodities, the Schemes  were, it  was said, legislative in character, and the  obligations imposed  or  the sanctions prescribed thereby must  on  that account be deemed to be enforceable by command of the Court.     cannot be assumed merely because the Import Trade Policy is general in terms and deals with the grant of licences for import  of  goods and related matters, it  is  statutory  in character.   The  Imports and Exports (Control)  Act,  1947, authorises   the  Central  Government  to  make   provisions prohibiting,  restricting or otherwise  controlling  import, export,  carriage  etc.  of the goods  and  by  the  Imports (Control) Order, 1955, dated December 7, 1955, 377 and  by  the  provisions which were sought  W,  be  repealed restrictions were already imposed.  The order  was   clearly

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legislative   in  character.  The Import  Trade  Policy  was evolved  to  facilitate  the mechanism of the  Act  and  the orders  issued  thereunder.  Even granting that  the  Import Trade  Policy notifications were issued in exercise  of  the power  under  s. 3 of  the  Imports  and  Exports  (Control) Act,  1947,  the Order as already  observed  authorised  the making  of executive or administrative instructions as  well as  legislative  directions.    It is not the  form  of  the order,  the method of its publication or the source  of  its authority,  but  its substance, which determines  its   true character.   A   large  majority of the  paragraphs  of  the Import  & Export Schemes are in the form of instructions  to departmental officers and advice  to persons engaged in  the export   and   import    business    with    their   foreign counterparts.   It  may be possible to pick  out  paragraphs from  the Scheme which appear in isolation to  be  addressed generally  and  have  direct  impact  upon  the  rights  and liberties of the citizens.  But a large number of paragraphs of the Scheme refer to matters of procedure. of departmental officers  and heterogeneous material: it sets out  forms  of applications,  the  designations of  licensing  authorities, amounts  of application and licensing fees, last  dates  for applications,     intermixed     with     definitions     of ’Established/reporters’,  ’Actual users’, ’New comers’,  and others   and  details  of different schemes  such  as  Quota Registration  Schemes, Export Promotion Schemes etc.   There is  no  pattern of order or logical sequence in  the  policy statement:  it  is a jumble of  executive  instructions  and matters which impose  several  restrictions upon the  rights of   citizens.    Some  of  the  provisions   which   impose restrictions upon citizens in the exercise of their right to carry  on  trade  without statutory limits may  be  open  to serious objection, but we do not find it necessary to embark upon  an  enquiry whether the provision which authorises the issue of import entitlement certificate for the full  f.o.b. value  of  the goods exported is legislative  in  character. Granting  that it is executive in character, this Court  has held  that Courts have the power  in  appropriate  cases  to compel  performance  of  the  obligations  imposed  by   the Schemes upon the departmental authorities.     The   question  whether  the  Import  Trade  Policy   is legislative  in character has not been expressly dealt  with in  any  decision of this Court.  It appears to  have  ’been assumed   in  certain  eases,  that  it  is.  executive   in character,  but  even so it has been held that  when  it  is declared  under  an export policy that a  citizen  exporting goods  shall  be entitled to certain import  facilities,  in appropriate  cases the Courts have the power to  direct  the concerned  authority to make that facility available to  the citizen  who  has  acted to his prejudice  acting  upon  the representation  in  the policy,  and has  been  denied  that facility.  In M/s Ramchand Jagadish Chand v. 378 Union  of  India and Ors.(1) this Court was called  upon  to decide   whether   a   person  who  had,   pursuant   to   a representation    in   the  Export  Promotion  Scheme   that exporters  will  be awarded import licences upto  a  certain percentage of the export value of the goods was entitled  to call   upon  the  Union  to  issue  in  his  favour   import entitlement  of the value of the goods exported.  Under  the ’Export  Promotion  Scheme"  relating  to  artificial   silk fabrics  it  was represented that with a view  to  stimulate exports of  Indian  "artsilk fabrics" etc. it was decided to grant   import  licences  for  the  import  of   permissible varieties.  of artsilk yarn upto the percentages  specilied.

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The Scheme empowered the Controller of  Imports  and Exports to  issue  a licence upto 66  2/3 per cent.  of  the  export value  in the case of Indian "artsilk sarees" and  upto  100 per  cent  in the case of other Indian  "artsilk   fabrics". M/s   Ramchand Jagadish Chand, a firm of  exporters  relying upon  the  Scheme exported Indian "artsilk" goods and earned foreign   exchange  and  applied  for  an   import   licence equivalent to the value of the goods it had exported.   They were, however, not given an import licence for the value  of the  goods exported.  They thereafter filed a writ  petition in  this Court for an order that the import certificate  had been  arbitrarily reduced and thereby the fundamental  right of the exporter to carry on trade in artsilk was  infringed. The Court held in that case that the State had the right  to impose control in the larger interest of the general  public on  imports  and to make orders in exercise  of  the  powers conferred  by  the   Imports   and  Exports  (Control)   Act providing  for  imposition  of  restrictions  by  permitting import of certain goods only in accordance with the licences or customs permits granted by the Central Government.  Since in  that case the power granted to the  licensing  authority was  to grant licences only upto the maximum  specified   in cl. 2 of Appendix. 42, the restriction imposed was held  not to  be unreasonable.  It was also observed that it  did  not impose an obligation upon the controller enforceable at  the instance of the exporter, to issue a licence for the  amount (subject to the maximum prescribed) claimed by the exporter, and  since  the order of the Controller granting  a  licence only for 45% of the value of goods exported did not infringe the fundamental right of the exporter under Art. 19(1)(g) of the  Constitution,  the petition filed by the  exporter  was liable to be dismissed.  But the Court observed:                     "The licensing authority would  normally               issue an import licence for 100% of the  value               of  the goods exported, but having  regard  to               special   considerations  such  as   difficult               foreign  exchange  position or  other  matters               which  have a bearing on the general  interest               of  the State, import licences for  a  smaller               percentage  may be granted to  the  exporters.               But by the use of the expression ’up- (1) [1962] 3 S.C.R. 72. 379               to  the  following percentage  of  the   rupee               equivalent’   power  to  fix   arbitrarily   a               percentage of the value of the goods  exported               for   awarding  an  import  licence   is   not               granted." Opinion was therefore expressed that if the power granted to the  Controller  was arbitrarily exercised, it was  open  to judicial  review.  In Ramchand Jagadish  Chand’s  case(1)  a Committee was appointed to determine the value of the  goods exported  by the exporter and the Committee scrutinised  the claim of  the  exporter  and found that the rates of some of the   items  could  not  be  accepted  as  reasonable,   and recommended an import licence approximately of the value  of 45 per cent. of the goods exported.  The exporter was  given a right to make a representation and to be heard before  the order  was passed to his prejudice.  In Probhudas   Morarjee Rajkotia  and  others v.   Union  of  India and   others(2), a  Special Exports Promotion Scheme for  Engineering   goods was  promulgated  by  the  Government  of  India.   To  give incentives  to  the manufacturers of  engineering  goods  in India  to  export  their  products  outside  India,  it  was declared by the Scheme that import licences will be  granted

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to exporters for materials upto the specified percentage  of the f.o.b. value of the goods exported.  An exporter claimed that he had exported goods of the f.o.b. value exceeding Rs. 9.44  lakhs and demanded import licence of the value of  Rs. 4.39  lakhs  odd.  The licensing authorities issued  to  the firm  import licences for Rs. 3.77 lakhs odd.  The  exporter then  moved  this Court by a petition under Art. 32  of  the Constitution  for the issue of a writ against the  Union  of India  granting  an import licence for the  balance  of  Rs. 62,337/-  in accordance with the provisions of  the  Special Exports  Promotion Scheme,  and  this Court held  that  even though there was no absolute right to the grant of an import licence  for the maximum amount prescribed,  the  Controller could impose restrictions if special considerations such  as ’difficult foreign exchange position or other matters  which have  a  bearing  on  the  general  interest  of  the  State warranted, but the discretion to be exercised by him was  to be reasonable and not arbitrary.  On a consideration of  the affidavit  filed, and the power given to the  Controller  to grant  licences  upto  and not of the  value  of  the  goods exported, it was held that no case of arbitrary exercise  of the power to reduce the import entitlement was made out.     In these cases it was clearly ruled that where a  person has  acted upon representations made in an Export  Promotion Scheme  that  import licences upto the value  of  the  goods exported  will be issued, and had exported goods, his  claim for import licence for the maximum value permissible by  the Scheme   could   not  be  arbit(1)  [1962]  3   S.C.R.   72. (2) A.I.R. 1966 S.C. 1044. 380 rarily   rejected.  Reduction  in  the  amount   of   import certificate may be justified on the ground of misconduct  of the  exporter  in  relation to the  goods  exported,  or  on special  considerations such as difficult  foreign  exchange position,  or  other  matters which have a  bearing  on  the general  interests  of the State. In the present  case,  the Scheme  provides  for grant of import  entitlement  of.  the value,  and not upto the value, of the goods exported.   The Textile Commissioner was, therefore, in the ordinary  course required  to grant import certificate for the full value  of the goods exported:  he could only reduce that amount  after enquiry contemplated by el. 10 of the Scheme.     The judgment of this Court in Joint Chief Controller  of Ira,ports  and  Exports,  Madras v.  M/s  Amin  Chand  Mutha etc.(1)  may  also be usefully referred to.  In  that  case, after  the  dissolution of a firm which was  the  holder  of quota fight as an established importer, one of the  partners applied  to the Chief Controller to make a division  of  the quota  rights between the partners.  He also applied to  the Joint  Chief Controller who was the licensing authority  for grant of a licence for the period January  to June 1957  but in  the  application he could not mention his share  in  the quota right because the Chief Controller had not before  the date  of  the application approved of the  division  of  the quota   right.  After  expiry of the period  for  which  the licence was to be issued, the Chief Controller informed  the applicant  that  instructions had been issued to  the  Joint Chief Controller about the division of the quota right.  But the  Joint Chief Controller declined to grant a  licence  to the  applicant  on the ground that the order  of  the  Chief Controller  had no retrospective operation.   The  applicant succeeded  in  obtaining  an order from the  High  Court  of Madras  directing  the Joint Chief Controller to   grant   a licence.   This  Court  confirmed the  order  of  the   High Court.   It  was  held that the licensing authority  had  to

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deal with the application for a licence on the footing  that the  approved  quota  was  given  to  the  partners  of  the dissolved  firm  from  the  date  of  dissolution  and   the agreement   divide, and could not refuse the licence  solely on the ground that the approval of the Chief Controller  was granted  after the expiry of the import period.   The  Court observed  that the Chief Controller had no power  to  refuse division  of the quota right if he was satisfied  about  the dissolution  of the inn, and it followed that when  he  gave his  approval  it  must take effect from  the  date  of  the agreement,  and on that interpretation of the order  of  the Chief  Controller,  the  application for the  issue  of  the licence should have been granted by the licensing authority. The  Court  proceeded  to observe that as no  order  of  the Central  Government prohibiting the import of  the  articles for  which the licence  was. :applied for was  published  in the Gazette, it  was  open. to. the (1) [1966] 1 S.C.R. 262. 381 licensing  authority  to  issue a  licence  for  the  period January  to  June 1857, even if there was a  change  in  the import  policy  of the Government of India with  respect  to those   articles.  In Amin Chand Mutha’s case(1)  the  Court enforced  compliance  with the provisions  relating  to  the grant  of a licence under the licensing instructions  issued by the Central Government.      In each of the three cases, the Court observed that the Court  was competent to grant relief in  appropriate  cases, if, contrary to the Scheme, the authority declined to  grant a  licence  or import certificate or the   authority   acted arbitrarily.   Therefore even assuming that  the  provisions relating  to the issue of Trade Notices offering  inducement to.  the prospective exporters are in  character  executive, the  Union  Government  and  its  officers   are,   on   the authorities of tiffs Court, not entitled at their mere  whim to  ignore  the promises made by the Government.  We  cannot therefore  accept the plea that the Textile Commissioner  is the  sole  judge  of the quantum of  import  licence  to  be granted to an exporter, and that the Courts are powerless to grant relief, if the promised import licence is not given to an exporter who has acted to his prejudice relying upon  the representation. To. concede to the Departmental  authorities that power would be to. strike at the very root of the  rule of law.      By  the Export Promotion Scheme for woolen textiles  as extended  to  exports  to Afghanistan,  the  exporters  were invited  to  get  themselves  registered  with  the  Textile Commissioner   for  exporting  woolen  goods,  and  it   was represented  that the exporters will be entitled  to  import raw  materials,  of  the  total  amount equal  100%  of  the f.o.b. Value of the exports.  Machinery for scrutiny of  the applications  and  the  issue  of  import  entitlement   was provided by s. 9 of the Scheme, and the Textile Commissioner was invested with the authority to determine whether in  any given  case   the declared value of the goods  exported  was higher   than      the   real value of  the  goods  and  to, assess-the  correct  value  of  the  goods exported  and  to issue  import  certificates on the basis  of  such  assessed value.  Undoubtedly the Textile Commissioner had  authority, if it was found that a fraudulent attempt was made to secure an  import certificate in excess of the  true  value of  the goods  exported, to reduce the import certificate.  But  the authority  vested in the Textile Commissioner by the   rules even   though executive in character was from its nature  an authority  to deal with the matter in manner consonant  with

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the  basic concept of’ justice and fair-play: if he made  an order  which was not consonant with the basic  concept.s  of justice  and fair-play his proceeding was open  to  scrutiny and rectification by the Courts.   The Textile  Commissioner acted upon a report of the Committee  appointed by him,  and before that Committee the respondents had no oppor- (1) [1966] 1 S.C.R. 262. up. C.I/68--10 Sup.C.I/68--10 382 tunity  to  present their case.  He  collected  evidence  ex parte  and  did  not disclose it  to  the  respondents   and without   giving  an opportunity to   them   to    represent their    case    reduced  the   import   certificate.     In dealing  with  a  representation made by the respondent, the Government  of   India  also  acted similarly  and  declined either  to make available the evidence on which the  Textile Commissioner  had  acted  or  to  give  a  hearing  to   the respondents.   The Textile Commissioner and the   Union   of India did not purport to act in exercise of the power  under cl. 10 of the Scheme: they have sought to support the  order on the plea that the subjective satisfaction of the  Textile Commissioner   is determinative of the extent of the  import certificate which may be granted to the respondents.     It was somewhat faintly urged that if the Government  is held bound by every representation made by it regarding  its intention. when the exporters have acted in the manner  they were invited to act, the Government would be held bound by a contractual  obligation eve.n though no formal  contract  in the  manner  required by Art. 299 of  the  Constitution  was executed,  and  the  exporter would  be  entitled  to  claim damages  contrary  to  that  provision  for  breach  of  the contract  even though no formal written  contract  had  been executed  in the manner provided by that Article.   But  the respondents  are  not  seeking to  enforce  any  contractual fight:  they  are  seeking to enforce  compliance  with  the obligation  which is laid upon the Textile  Commissioner  by the terms of the Scheme, and we are of the view that even if the  Scheme is executive  in character, the respondents  who were  aggrieved  because of  the failure to  carry  out  the terms  of  the Scheme were entitled to seek  resort  to  the Court and claim that the obligation imposed upon the Textile Commissioner by the Scheme be ordered to be carried out.     We   hold  that  the  claim  of  the   respondents    is appropriately rounded upon the equity which arises in  their favour  as a result of the representation made on behalf  of the  Union of India in the Export Promotion Scheme, and  the action   taken   by  the  respondents   acting   upon   that representation  under the belief that the  Government  would carry  out  the  representation made by it.   On  the  facts proved in this case, no ground has been suggested before the Court  for exempting the Government from the equity  arising out  of  the acts done by the exporters to  their  prejudice relying  upon the representation.  This principle  has  been recognised   by  the  Courts in India  and  by  the  Judical Committee  of  the Privy Council in several cases.   In  The Municipal Corporation of the City of Bombay v. The Secretary of State for India in Council(1), it was held by the  Bombay High Court that even though there is no formal (1) I.L.R. 29 Bom. 580. 383 contract  as required by the statute. the Government may  be bound  by  a  representation made by it.’ In  that  case  in answer  to  a  requisition  by  the  Government  of   Bombay addressed  to the Municipal Commissioner to  remove  certain fish and vegetable  markets  to facilitate the  construction

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of  an arterial road, the Municipal Commissioner offered  to remove the structures if the Government would agree to  rent to the Municipality other land mentioned in his letter at  a nominal  rent.  The Government accepted the  suggestion  and sanctioned the application of the Municipal Commissioner for a  site for tabling and establishing the new  markets.   The Municipal  Commissioner then took possession of the land  so made available and constructed stables, workshops and chawls thereon.   Twenty-four  years thereafter the  Government  of Bombay   served  notices  on  the   Municipal   Commissioner determining the tenancy and requesting the Commissioner  to. deliver possession of the land occupied by the markets,  and to  pay in the meantime rent at  the  rate  of Rs.  12,000/- per  annum.  The Municipality declined to pay the rent,  and the  Secretary of State for India filed a suit  against  the Municipal Commissioner for a declaration that the tenancy of the   Municipality  created  by  Government  Resolution   of December  9. 1865, stood determined and for an order to  pay rent  at the rate of Rs.. 12,000/- per annum.  It was  urged before  the High Court of Bombay that the events  which  had transpired   had  created  an  equity  in  favour   of   the Municipality  which afforded an answer to the claim  of  the Government   to  eject  the  Municipality.  Jenkins,   C.J.. delivering the judgment of the Court observed:                     "The doctrine, involved in this phase of               the  case is often treated as one of estopped,               but I doubt whether this is a correct,  though               it may be a  convenient  name to apply.                     It differs essentially from the doctrine               embodied  in section 115 of the Evidence  Act,               which  is not a rule of equity, but is a  rule               of evidence that was formulated and applied in               Courts of law; while the doctrine. with  which               I  am now dealing, takes its origin  from  the               jurisdiction  assumed by Courts of Equity   to               intervene  in  the  case  of,  or  to  prevent               fraud." After  referring to Ramsclen v. Dyson(1), the learned  Chief Justice  observed that the Crown comes within the  range  of equity   and proceeded to examine whether the facts  of  the case invited  the application of that principle. This case is, in our judgment  a clear authority  that  even though the case, does not fall within the terms of s. 115 of the Evidence Act, it is still open to, a party who has acted on a representation made by the Government to claim that the Government 384 shall  be bound to. carry out the promise made by  it,  even though  the promise is not recorded in the form of a  formal contract as required by the Constitution.     In  Ahmad Yar Khan and others v. Secretary of State  for India  in  Council and another(3),  the  plaintiffs  claimed title to a canal supplied with water from the Sutlej  having been constructed at great expense by their predecessors  for purposes of irrigation, with the sanction and  encouragement of the Government, partly on Government lands and partly  on the  lands of private owners under arrangements  with  them. It was held that  the  plaintiffs became proprietors of  the canal  and  entitled  to’  have the  waters  of  the  Sutlej admitted into it so long as it was used for the purpose  for which it was originally designed.  Similarly in The   Ganges Manufacturing Co. v. Surujmull(2), Garth C.J., observed that a  man  may  be estopped not  only  from  giving  particular evidence.  but  from  doing  any act  or  relying  upon  any particular argument or contention, which the rules of equity

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and  good conscience prevent him from using as  against  his opponent.     Counsel  for  the  Union invited our  attention  to  the observations  made by Patanjali Sastri J., in  Collector  of Bombay  v. Municipal Corporation of the City of  Bombay  and others(3).    The learned Judge observed that equity  cannot be enforced so as to violate an express statutory provision, and  he was therefore unable to share the view expressed  by Jenkins  C.J.  in The Municipal Corporation of the  City  of Bombay  v. The Secretary of State  for India in  Council(1). In Collector of Bombay v. Municipal Corporation of the  City of Bombay and others(a) the facts were these: Acting upon  a representation  made  by  the  Government  of  Bombay,   the Municipal  Commissioner of Bombay had given up  certain  old markets  and  had constructed new markers on   a  site  made available  to  the  Municipality  by  the   Government    at considerable  expense.   The  Resolution  under  which   the Government  had  granted the land stated expressly  that  no rent   should be charged to the Municipality as the  markets will  be like other buildings for the benefit of  the  whole community.  When  the Collector of Bombay sought to  enhance the  land  revenue,  the Corporation sued for a  declaration that the order of assessment was ultra vires and that it was entitled  to hold the land for ever without payment  of  any assessment.   The  High  Court  of  Bombay  held  that   the Government had lost its right to assess the land in question because  of the equity arising on the facts of the  case  in favour of the Municipality and a limitation on the right  of the Government to assess under s. 8 of the Bombay City  Land Revenue  Act arose.  A majority of the Judges of this  Court held that (1) L.R. 28 I.A. 211.      (2) I.L.R. 5 Cal. 669. (3) [1952] S.C.R. 43.      (4) I.L.R. 29 Bom. 385 the Government was not, under the circumstances of the case, entitled  to  assess land revenue on the land  in  question, because  the Corporation had taken possession of the land in terms  of  the Government resolution and  had  continued  in such  possession openly, uninterruptedly and as of right for over 70 years, and had thereby acquired the limited title it had  been  prescribing for during the period, the  right  to hold  the  land in perpetuity free of  rent.  Chandrasekhara Aiyar J., observed that even if it be assumed that there was no representation in fact that the land was rent free at the time  when it was given to the Municipality, if there was  a holding  out of a promise that no rent will ’be  charged  in the   future,   the  Government  must  be  deemed   in   the circumstances  of  the  case to  have  bound  themselves  to fulfill  it,  and  a  Court  of  Enquiry  must  prevent  the perpetration  of  a legal fraud.  Chandrasekhara  Aiyar  J., observed at p. 63:                     "Whether it is the equity recognised  in               Ramsden’s  case, or it is some other  form  of               equity, is not of much importance, Courts must               do  justice  by the promotion of  honesty  and               good  faith,  as  far as  it  lies   in  their               power." Patanjali Sastri J., expressed a contrary view holding  that the  express provisions of the statute could not  be   over- ridden   by considerations of equity.     Under  our  jurisprudence the Government is  not  exempt from  liability to, carry out the representation made by  it as  to its future conduct and it cannot on  some   undefined and   undisclosed ground of necessity or expediency fail  to carry out the promise, solemnly made by it, nor claim to  be

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the  judge  of its own obligation to the citizen  on  an  ex parte  appraisement  of  the  circumstances.  in  which  the obligation  has arisen.  We agree with  the High Court  that the  impugned order passed by the Textile  Commissioner  and confirmed  by  the Central Government imposing  cut  in  the import  entitlement by the respondents should be  set  aside and quashed and that the Textile Commissioner and the  Joint Chief Controller of Imports and Exports be directed to issue to the respondents import certificates for the total  amount equal  to 100% of the f.o.b. value of the goods exported  by them,  unless there is some decision which fails within  cl. 10 of the Scheme in question.     The  facts  which give rise to. the other  appeals   are substantially the same as the facts in Civil Appeal No.  885 of  1967,  except  that in four out  of  those  appeals  the exporters had appeared before the Committee appointed by the Textile Commissioner and had explained the circumstances  in which  the  exports  were made by them.  But  it  is  common ground that the report of the 386 Committee  was  not made available to them and  the  Textile Commissioner, before he passed the orders, did not call  for their explanations.  It must therefore be held that  enquiry in a manner consonant with the rules of justice was not made in the case of those four exporters also.     The appeals therefore fail and are dismissed with costs. One heating fee. V.P.S.                                               Appeals dismissed. 387