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PETITIONER: TESTEELS LTD.

       Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT06/02/1989

BENCH: SAIKIA, K.N. (J) BENCH: SAIKIA, K.N. (J) OZA, G.L. (J)

CITATION:  1989 AIR  857            1989 SCR  (1) 502  1989 SCC  (2) 274        JT 1989 (1)   204  1989 SCALE  (1)273

ACT:     Imports  and Exports--Import Trade Control Policy  1972- 1973Export    of   Transmission   Towers--Cash    Assistance Scheme--Subsequent  amended  scheme  prescribing  time-bound period--making exports ineligible for cash assistance beyond that period--Validity of.

HEADNOTE:     In  1969, the Govt. of India announced,  through  public notice  a  scheme for registration  of  contracts  involving deliveries  extending  over  a period of not  less  than  12 months for cash assistance m respect of certain exports. The scope  of  the scheme was extended in  1970,  allowing  cash assistance  at the same percentage as was prevailing on  the date of the firm contract so registered provided the invoice was  attested by the Banks concerned. It was  also  provided that even if the rate of cash assistance is reduced by Govt. the  higher rate that existed on the date of the  Firm  con- tract  would be admissible. And in case of increase  in  the rate,  exports  made during the contract would  normally  be eligible for the benefit of the increased rate. It was  also made clear that if the rate is likely to affect an  exporter adversely, Govt. would consider its matter on merits.     In  1972 the cash assistance scheme on export  of  engi- neering goods was modified allowing additional cash  assist- ance  of  5%  of the f.o.b. value on  all  exports  effected during  1.4.72 to 30.9.72 to certain countries. It was  fur- ther  announced that in respect of transmission  towers  ex- ported from Ist Oct. 1972 till 31st March, 1973 cash assist- ance would be at the rate of 25% of the f.o.b. value.     The  appellant company entered into contracts  with  the National  Electricity  Board of Malaysia and in  respect  of some  of the exports of transmission towers,  the  appellant received  cash assistance and in respect of others,  it  was denied  on the ground that the exports made during  the  ex- tended  delivery  period of the contract  were  not  covered under  the Import Trade Control Policy and as such  no  cash assistance  could  be granted on exports made  after  March, 1974. The  appeal preferred by the appellant was rejected  by  the Deputy

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502 503 Chief  Controller of Imports and Exports on the ground  that the  benefit of registration on export in execution  of  the supplementary contract was additional quantity at  increased rates  and  could  not be allowed under  Govt.  policy.  The second  appeal was rejected by the Chief Controller  of  Im- ports & Exports, stating that after execution of the supple- mentary order there was increase in quantity of goods to  be supplied  as  also  price on the date of  execution  of  the supplementary  order and the import policy did  not  provide for  protection of benefits where there was increase in  the value  of contract. The review petition filed by the  appel- lant was also rejected.     Thereafter  the  appellant moved the  High  Court  under Article  226  of  the Constitution. The  High  Court  partly allowed  the petition restraining the respondents  from  en- forcing  the  demand for the refund of the  cash  assistance already  paid and rejected the appellant’s claim in  respect of contracts, entered into in the context of the offers made subsequent to April 1972, since the cash assistance declared as on April 1, 1972 and thereafter was in terms made  avail- able upto a specific date. This  appeal  by special leave is against the  High  Court’s judgment.     On  behalf  of the appellant, it was contended  that  at different stages, the respondents gave different reasons for refusing to pay cash assistance. Dismissing the appeal,     HELD: 1.1 There could arise no question of granting cash assistance  to different exports under the  original  scheme and the prevalent amended scheme at the same time. [508E]     1.2 Paragraph 10 in the 1970 scheme made it quite  clear that exports effected after the specified date would not  be eligible  for cash assistance. Consistently with this  para- graph,  in  the  subsequent schemes the  periods  were  pre- scribed.  The  amended scheme dated 20th  April,  1972  pre- scribed  the period from 1.4.72 to 30.9.72 and  the  amended scheme  dated 16th June 1973 applicable to this  case,  pre- scribed the period from 1st October 1972 upto and  including 31st  March  1973. In other words, exports  of  Transmission Towers made after the prescribed period would not be  eligi- ble  to  assistance  under the prevalent  scheme.  The  word ’amendment’ would imply that the scheme of 1969 stood amend- ed. [508C-E] 504     1.3 In view of the unequivocal language of paragraph  10 of. the 1970 scheme and clear prescription of the  different periods during the subsequent amended schemes and the admit- ted facts that the export in respect of these two  contracts were made only after July 1974, there is no reason to  allow the  appellant’s claim. Whether the Government’s policy  was conducive  to maximisation of exports and  foreign  exchange earning is entirely a different matter. [508F-G]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3482  of 1987.     From the Judgment and Order dated 10.3.1983 of the  High Court  of Gujarat in Special Civil Application No.  1294  of 1977 S.K. Dholakia, P.C. Kapur and R.C. Bhatia for the Appellant.     A.  Subba Rao, C.V. Subba Rao and Mrs. Sushma  Suri  for

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the Respondents. The Judgment of the Court was delivered by     K.N. SAIKIA, J. This appeal by special leave is from the judgment  of  the  High Court of Gujarat  in  Special  Civil Application  No. 1294 of 1977 under Article 226 of the  Con- stitution of India.     The  Government of India Ministry of Foreign  Trade  an- nounced  through public notice No. 196-ITC(PN)/69 dated  8th December,  1969 a scheme for registration of  contracts  in- volving deliveries extending over a period of not less  than 12  months for cash assistance, hereinafter referred  to  as ’the scheme’. The Government decided to extend the scope  of the  scheme  as was announced by letter  No.  12  (22/67EAC) dated  4th February, 1970, hereinafter referred to  as  ’the 1970  scheme’, stating inter-alia, in paragraph 3  that  the registered  exporter  of export products  under  a  contract involving  deliveries  extending over a period of  not  less than  12 months, registered by the banks in terms  of  para- graph  3 of the public notice dated 8th December, 1969  will be  eligible for claiming cash assistance at the  same  per- centage  as was prevailing on the date of the Firm  contract so registered provided that the bank attested invoice  which is  normally  produced  for the purpose  ’of  claiming  cash assistance, bears a further attestation from the negotiating bank to the effect that exports effected in this invoice  is against a contract registered with them giving the Registra- tion  number and date. If during the currency of the  regis- tered contract the rate of 505 cash assistance is reduced by Government, the higher rate of cash  assistance existing on the date of the  Firm  contract would be admissible on exports under the said contract.  If, on  the other hand there is an increase in the rate of  cash assistance percentage during the currency of the  registered contract, exports made during the contract would not normal- ly  be  eligible for the benefit of the increased  rate;  in special cases where the operation of this rule is likely  to affect  an exporter adversely, Government would be  prepared to  consider  the matter on merits. It was  also  stated  in paragraph  5 that the registered exporter would be  entitled to  claim cash assistance as and when the exports  are  made against  the registered contracts and the application  would be submitted to the disbursing authority in accordance  with the policy and procedure announced from time to time by that Ministry.  By letter No. 12(4)72-EAC dated 20th April,  1972 on  the  subject  of Amendment No. 53  the  cash  assistance scheme  on export of engineering goods was modified  to  the effect  that  an  additional cash assistance of  5%  of  the f.o.b.  value will be allowed on all exports made  to  North American and South American countries and to New Zealand and these  facilities of normal cash assistance  and  additional cash  assistance will be allowed on exports effected  during the  period from 1.4.1972 to 30.9.72, the later  date  being included. By letter No. 12(13)/73-EAC dated 16th June,  1973 referring  to  Amendment No. 59 it was announced  that  cash assistance on transmission towers will be made admissible on exports thereof made during the period from Ist October 1974 upto  and including 31st March, 1973 at the rate of  25%  of the f.o.b. value.     The  appellant is a company registered or deemed  to  be registered under the Companies Act, 1956 for exporting  Line Towers  Galvanised;  Mild Steel Towers,  hereinafter  called ’Transmission  Towers’, (Item No. A. 27.1) by entering  into contracts  with the National Electricity Board of the  State of  Malaysia, a public utility service of Malaysian  Govern-

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ment, briefly called ’the N.E.B.’ which had invited a global tender in October 1971 for design, fabrication and supply of Transmission Towers, and the appellant’s tender submitted on January 29, 1972 was accepted by them, and pursuance thereto a  contract was entered into on May 17, 1972. The said  con- tract  was duly registered with the Central Bank  of  India, Lal  Darwaza,  Ahemdabad on May 30, 1972  and  was  allotted registration No. 50/1. Subsequently, the NE.B. having needed more Transmission Towers more contracts entered into and the same were registered as follows: 506 S.  No.  Date of Offer   Date of acceptance  Date of  regis- tration                         of the offer        of the contract                                             with the bank. 1            2               3                 4 1.    29.1.1972      17.5.1972          30.5.1972 2A.   29.1.1972      20.6.1972          26.7.1972 2B.   31.8.1972      27.10.1972         13.11.1972 3.    28.4.1973      5.6.1973           15.6.1973                      (Telex 31.5.1973) In respect of the exports made pursuant to two of the afore- said contracts, namely No. 1 and 2(A), the respondents  paid to  the  appellants  a cash assistance  of  Rs.3,48,555  but refused  to  pay the claimed amount  of  Rs.4,10,784.93p  in respect  of the exports made pursuant to the other two  con- tracts and instead demanded refund of aforesaid  Rs.3,48,555 already received by the appellant. By letter dated 10.3.1975 to  the  appellant  the Controller of  Imports  and  Exports informed that the exports made during the extended  delivery period of the contract were not covered under the provisions of  paras  56-64 of Part B of Import  Trade  Control  Policy Volume-II, April 1972-March 1973 and as such no cash assist- ance could be granted on exports made after March, 1974.     The  Deputy  Chief  Controller of  Imports  and  Exports rejecting  the  appellant’s  appeal vide  his  letter  dated 30.6.1976 informed the appellant that the benefit of  regis- tration on export in execution of the supplementary contract was additional quantity at increased rates and could not  be allowed  under  Government Policy.  The  appellant’s  second appeal was also rejected by the Chief Controller of  Imports and Exports vide his letter dated 8th January, 1977  stating that  after execution of the supplementary order  there  was increase  in  quantity of goods to be supplied  as  well  as price  as  on  the date of execution  of  the  supplementary order, and the import policy did not provide for  protection of  benefits under the scheme for registration of  contracts on  the cases where there was increase in the value of  con- tract. The appellant’s review petition was also rejected  by letter dated 19th July 1977 stating that as per provision of the  policy contained in the relevant Policy Book, if  there was an increase in the value of contract on account of price escalation clause or renegotiation on the ground of increase in  prices of raw-materials, protection to  registered  con- tract was not available. 507     The  appellants  thereafter moved an  application  under Article 226 of the Constitution of India in the Gujarat High Court  which  partly allowed the  petition  restraining  the respondents from enforcing the demand for the refund of  the amount already paid by way of cash assistance and  rejecting the  appellant’s  claim in so far as the  contracts  entered into  in the context of the offers made subsequent to  April 1972  because  the cash assistance declared as on  April  1, 1972  and  thereafter  was in terms made  available  upto  a

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specific date. The exports under the two concerned contracts namely  No. 2-B and 3 were admittedly made after July  1974, though  in  case of contract No. 2-B the date of  offer  was 31.8.1972 and the date of acceptance was 27.10.1972 and  the date of registration 13.11.1972, and in the case of contract No. 3 date of offer was 28.4.1973 and date of acceptance  of 5.6. 1973 and date of registration was 15.6.1973.     Learned  counsel for the appellant, Mr.  S.K.  Dholakia, first,  submits,  that the appellants are entitled  to  cash assistance  in respect of these two contracts also  inasmuch as the scheme of registration of contracts for cash  assist- ance dated 8th December, 1969 as also that of 4th  February, 1970  were not time-bound and did not prescribe  any  period for export to be eligible under the scheme; that it was only the subsequent scheme that prescribed a period; and that the appellant  exported  TransmissiOn  Towers  pursuant  to  the contracts entered into during the earlier period but due  to increased  demand subsequent supplementary contracts had  to be  entered into, and for price escalation and other  diffi- culties actual exports were delayed. He relies on Section 1, Part-B  of Import Control Policy Volume-II  April  1972March 1973, "Import Policy for Registered Exporters,  Registration of Export Contracts," contained in paragraph 56-64  thereof. Secondly,  the learned counsel submits that cash  assistance scheme  of 1969 as well as that of February 1970 were  based on  the Government’s policy of long term assistance  to  ex- porters and it was with that end in view that the scheme  of registration  of  contracts with the banks  was  introduced. Relying  on  paragraph 3 of the 1970 scheme,  he  emphasises that  it was the date of the Firm contract which was  to  be reckoned and not the date of export of the products. Relying on  paragraph 6 of the scheme he submits that  it  envisaged contracts  involving deliveries extending over a  period  of not less than 12 months and contracts for export were to  be registered by the banks in the manner prescribed. As  regard the  Government’s  policy of assisting the exports  for  the purpose  of  augmenting  foreign exchange  earnings  of  the country  he submits that the deprivation of cash  assistance to the exporter who registered their contracts would  defeat the very purpose of the scheme. 508     Mr.  C.V. Subba Rao learned counsel for the  respondents demurs  submitting that it could not be said that  once  the contracts were registered cash assistance would be available irrespective of the date of the exports.     We are inclined to agree with this submission. Paragraph 10 of the scheme dated 4th February, 1970 reads:               "Cash assistance is sometimes announced upto a               specified  date.  Exports effected  after  the               specified  date even though the  contract  has               been got registered in terms of the  provision               of  this letter will not be eligible for  cash               assistance." This  paragraph  made it quite clear that  exports  effected after  the  specified date would not be  eligible  for  cash assistance,  Consistently with this paragraph in the  subse- quent  schemes  the  periods were  prescribed.  The  amended scheme  dated  20th April 1972 prescribed  the  period  from 1.4.1972 to 30.9.1972 and the amended scheme dated 16th June 1973 applicable to this case, prescribed the period from Ist October, 1972 upto and including 3 Ist March, 1973. In other words,  exports of Transmission Towers made after  the  pre- scribed period would not be eligible to assistance under the prevalent scheme. The word ’amendment’ would imply that  the scheme  of  1969 stood amended. If that be so,  there  could

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arise  no question of granting cash assistance to  different exports under the original scheme and the prevalent  amended scheme at the same time.     1n  reply Mr. Dholakia submits that at different  stages the  respondents gave different reasons for refusing to  pay cash  assistance to the appellants. However, in view of  the unequivocal language of paragraph 10 of the 1970 scheme  and clear  prescription  of  the different  periods  during  the subsequent  amended schemes and the admitted facts that  the export  in  respect of these two contracts  were  made  only after  July 1974, we see no reason to allow the  appellant’s claim.  Whether  the Government’s policy was  conductive  to maximisation  of  exports and foreign  exchange  earning  is entirely a different matter.     In the result we find no merits in this appeal and it is accordingly  rejected,  leaving the parties  to  bear  their own-costs. G.N.                                           Appeal   dis- missed., 509