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Judgment
The appeal is directed against an order disposing of a writ petition without calling for affidavits and directing an exception to be made out for the Appellant to complete the unexecuted part of an export order.
The Union says that the Union should have been invited to use an affidavit to express its version of things. The Union says that the writ petition could not have been disposed of by directly permitting the exporter to complete the alleged export obligations without assessing the facts.
The writ Petitioners claim to have obtained orders of export of maize from foreign buyers that had been partly executed prior to a ban on export of maize being imposed till October 15, 2008 by the Appellant. The writ Petitioners say that the export orders have to be executed expeditiously and tons of maize remain stocked and ready for export. The writ Petitioners submit that upon a temporary restriction being imposed by the Government, transitional arrangements have been contemplated both under Clause 1.5 of Foreign Trade Policy of 2004-2009 and under Clause 2.5 thereof. The writ Petitioners contend that Clause 2.5, which provides for exemption from the policy or procedure, empowers the Director General of Foreign Trade (DGFT) to pass such orders or grant such relaxation or relief as the Director may deem fit on grounds of genuine hardship and adverse impact on trade.
It is such argument that found favour with the learned Single Judge as will appear from the order impugned in this appeal.
The writ Petitioners had instituted earlier proceedings under Article 226 of the Constitution on which an order was made on July 21, 2008, the operative portion whereof is as follows:
Having heard learned Advocates for the parties and regard being had to the urgency involved, this writ petition stands disposed of with a direction upon the Director General of Foreign Trade to consider the prayer made by the Petitioner vide representation dated 11-7-2008 (Annexure P-10 to the petition) as early as possible but positively within three days from date of receipt of a copy of this order in accordance with law and particularly in the light of Clause 2.5 contained in Chapter 2 of the Foreign Trade Policy, 2004 to 2009 titled General Provisions regarding Imports and Exports and the relaxation granted earlier vide letters dated 5th July, 2008 (Annexure P-7 to the petition) and 10th July, 2008 (Annexure P-9 to the petition). In the event the prayer of the Petitioner is rejected, the order must be supported by reasons.
In compliance with such order the DGFT considered the writ Petitioners'' representation and declined permission on the reasoning primarily found at paragraph 4 of the order dated July 25, 2008 which was assailed in the subsequent petition under Article 226 of the Constitution that culminated in the order under appeal. The DGFT has expressed a view that unless an exporter cites payment terms under the export contract which provide for payment through irrevocable letter of credit, it is possible that the export contracts may be antedated by an exporter to bypass the ban temporarily imposed. The DGFT was of the view that the clause relating to transitional arrangements during the period covered by an ban of exports of certain goods, would be the only relevant provision and any relaxation beyond the powers available under Clause 1.5 would not be available.
There is substance in the apprehension expressed by the DGFT in the order of July 25, 2008 but, as learned Counsel for the Union fairly concedes, there is; no specific finding that the writ Petitioners had indulged in any malpractice or had produced antedated documents to seek relaxation during the currency of the ban.
Clause 2.5 of the Foreign Trade Policy does not preclude the exercise of the powers thereunder to consider a representation made by a person on the grounds of genuine hardship. Though Clause 1.5 specifically deals with a request for relaxation to permit export or import during a period covered by a ban, nothing in Clause 1.5 makes it exhaustive so that the more general power available to the DGFT under Clause 2.5 may not be exercised in such a case.
The order dated July 25, 2008 insofar as it restricts the operation of Clause 2.5 of the Foreign Trade Policy and makes it inapplicable to a matter of the present nature and insofar as such order does not specifically deal with the: writ Petitioners'' export orders or the authenticity thereof, cannot be sustained and we are in agreement with the learned Single Judge on such count. It is, however, entirely different matter to find that the order did not take into account relevant considerations and to directly accord permission to the exporter to continue to execute the export orders without assessing the quality of the documents produced in support of the prayer for relaxation.
It is, in such circumstances, that we set aside that part of the order of the learned Single Judge by which the Writ Petitioners were allowed to export the consignment mentioned at Annexure ''P-2'' (page 73) of the writ petition.
The Appropriate Authority, being Director General of Foreign Trade is directed to re-consider the entire issue in the light of the observations made above by passing a speaking order. Let the necessary order be passed on or before September 25, 2008.
Both the appeal and the application are disposed of accordingly.
Urgent certified Photostat copy of this order be made available to the parties, upon compliance of usual formalities.