w w w . L a w y e r S e r v i c e s . i n

Union of India v/s South India Hosiery Manufacturers Association

Company & Directors' Information:- J G HOSIERY PRIVATE LIMITED [Active] CIN = U18101TZ2001PTC009707

Company & Directors' Information:- A. S. INDIA LIMITED [Active] CIN = U70100MP2009PLC022300

Company & Directors' Information:- K D S HOSIERY PRIVATE LIMITED [Active] CIN = U18101PB2001FTC024327

Company & Directors' Information:- R M H HOSIERY PRIVATE LIMITED [Active] CIN = U17125DL2007PTC167271

Company & Directors' Information:- P T M HOSIERY PVT LTD [Active] CIN = U52322WB1994PTC062394

Company & Directors' Information:- M G HOSIERY PRIVATE LIMITED [Active] CIN = U17124TZ2002PTC010195

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- D D HOSIERY PVT LTD [Active] CIN = U18101WB1973PTC028694

Company & Directors' Information:- M. B. HOSIERY PRIVATE LIMITED [Active] CIN = U18101WB2008PTC125110

Company & Directors' Information:- R R HOSIERY PRIVATE LIMITED [Active] CIN = U18101MH1984PTC034394

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- K K HOSIERY PRIVATE LIMITED [Active] CIN = U18204MH2014PTC251777

Company & Directors' Information:- B B HOSIERY PRIVATE LIMITED [Strike Off] CIN = U74999MH2015PTC267158

Company & Directors' Information:- M C S HOSIERY PRIVATE LIMITED [Strike Off] CIN = U51311WB2001PTC093781

Company & Directors' Information:- S P HOSIERY PVT LTD [Strike Off] CIN = U51311PB1985PTC006113

    W.A. Nos. 1246, 504, 1245 & 548 of 2000 and C.M.P. Nos. 10985, 10984, 4407 & 4749 of 2000

    Decided On, 29 August 2000

    At, High Court of Judicature at Madras


    J. Madanagopal Rao, V.T. Gopalan, R.G. Narendhiran, P.S. Raman, Advocates.

Judgment Text


These Writ Appeals have been filed against the order of the learned single Judge wherein the interim order granted on 1-2-2000 in relation to the Amended Electronic Transfer Scheme dated 27-12-1999 was made absolute on 11-2-2000.

2.The brief facts that are necessary are that the petitioners-concerned (Respondents 1 to 4 herein) in W.A. Nos. 504 of 2000 & 548 of 2000 are alleged to be a registered body under the Societies Registration Act, and they have challenged the introduction of quota transfer system, namely, Electronic Transfer System (hereinafter referred to as ETS).

3.The appellant Apparel Export Promotion Council is an independent body sponsored by Government of India. Learned Central Government Senior Standing Counsel submitted that the Government is always competent to frame a policy as per the requirements and exigencies of public, considering national, international and bilateral agreements. He also submitted that the Government is regulating PPE, NGE and NIE transfers through the AEPC and its Regional Offices with the help of on line computer network, including the quantity and offer prices and the intending transferees, so as to check the malpractices and loss and the interest of the nation can be saved. He further submitted that the scheme, being a policy of the Government, cannot be the subject matter of judicial review. But the learned single Judge, without considering the fact situation, has granted absolute stay not to effect the ETS scheme. Learned Counsel further submitted that the exporters have no right and every right comes within the purview of the policy itself. So the entire approach of the learned single Judge that the export entitlement is a right of an exporter, and that on earlier occasion the scheme was withdrawn by the Government itself, are based on the wrong assumption. Therefore, the interlocutory order is liable to be set aside, and the appellant may be allowed to implement the policy which was framed in December, 1999 for the period upto September, 2000. He relied on the decision of the Supreme Court inKanishka Tradingv.Union of Indiareported in wherein the withdrawal of exemption was challenged on the ground of promissory estoppel and their Lordships held that when exemption is granted in exercise of statutory powers, it is implicit that it can also be rescinded or modified at any time in exercise of the same power, and there will be no estoppel unless it is necessary to prevent fraud or manifest injustice. He also relied on a decision inP.T.R. Exports (Madras) Pvt. Ltd. and Othersv.Union of India and Others. While considering the matter, the Supreme Court held that the applicant has no vested right to have export import licences, and if licence is granted, it shall be in terms of the policy in force at the date of his making an application, and as per the policy, he will be entitled for incentive for the previous period. Reliance was placed on the decision of the Supreme Court inS.B. International Ltd. and Othersv.Asstt. Director General of Foreign Trade and Others wherein their Lordships have repelled the contention that vested right accrues to an applicant for issuance of advance licence. Learned Counsel further relied on the decision ofShri Sitaram Sugar Company Limited and Anotherv.Union of India and Others wherein, while considering the scope of judicial review, it was observed that the Court cannot interfere with the economic policy which is the function of State.

4.To this, Mr. R. Gandhi, learned Senior Counsel appearing for the respondent in W.A. No. 1246 of 2000 submits that on earlier occasion in 1997, this ETS quota scheme was sought to be regularized with the help of an online network, but the scheme could not be implemented on account of stay and ultimately, the scheme was withdrawn. Again, in December, 1999 transfers were effected through this ETS scheme which will come to an end in September, 2000. He submits that the scheme is bad for so many reasons, that the purchaser has to pay service charges to pay the maximum price along with the remittance of 25% advance, comprehensive procedure which causes delay and also to display on monitor, and this offer quantity has to be finalised in three working days. Mr. P.S. Raman, learned Counsel for respondents in W.A. No. 1245 of 2000 reiterated the arguments and submitted that the Government has now filed these appeals after 8 months when the scheme is going to end in September, 2000 and, therefore, no interference is called for in the appeals filed against the interlocutory order.

5.In rejoinder to this, Mr. V.T. Gopalan, Additional Solicitor General submitted that with a view to check the malpractices and loss to the country, and in the interest of public and nation, the Government has declared a policy on the basis of relevant facts and report. The policy can be declared by the Government every year or as the case may be. So the appellant cannot argue, taking advantage, that on earlier occasion, the policy was withdrawn. He submitted that there can be no estoppel as every year the Government can frame scheme or even change the policy subject to the requirements. He further submitted that this policy is only for 8 months and this will be helpful to avoid the seller keeping it with him and try to sell at the last moment at a higher market rate, which will be difficult for the purchaser to export the quota and the same will lapse causing loss to the country. Therefore, this policy is only for matching the transferees, and if the offer is acceptable, they are free to sell, otherwise mutual transfer is available. In any case, the policy cannot be bad. That apart, the same cannot be gone into.

6.Learned Counsel also submitted that in a writ petition filed in Karnataka High Court, it was directed that the scheme should have been given effect to and see its workability. He further submitted that the case relied on by the learned single Judge is not helpful, rather no writ lies in view of the policy of the Government, and the decision of the Supreme Court inP.T.R. Exports (Madras) Pvt. Ltd. and Othersv.Union of India and Othersreported in is fully applicable to the facts of the present case.

7.We have heard the learned Counsel on both sides and perused the materials on record and the case laws. As the law is well-settled, it is not necessary to deal with the individual case law. Generally, this Court does not interefere with interlocutory order when the matter is pending adjudication and not finally decided. But at the same time, this Court can interfere with the interlocutory order if the same has been passed without any exceptional circumstances. It is also settled that this court cannot interefere with the policy decision of the Government. It is also true that in appropriate case, a judicial review can be made by this Court if the order so passed is tainted withmala fidewhich results in grave miscarriage or flagrant violation of law. In the instant case, the ETS scheme framed by the Government is under challenge. To our mind, the observation of the learned Single Judge that the export entitlement is a right of an exporter is not acceptable. That apart, no specific allegation ofmala fideis available on record. So no Judicial review is permissible in the facts of the given case. Under the circumstances, the order granting absolute stay is not sustainable.

8.The only contention is that the scheme is improper and it will not be in the interest of small exporters. This allegation has been denied by the Senior Standing Counsel. It is submitted that it is valid only for three days so that instead of buyer and seller, the whole body of exporters will come to know the price. It is more transparent due to display in online computer network with a view not to deprive the ultimate sale, and to get foreign exchange. It is also submitted that even if they are not able to find purchaser and match the price within three days, the exporters are free for mutual transfer. So no pre-justice is caused. Otherwise, they are misusing by not selling them till they get higher market rate. On consideration, we find that merely for some inconvenience or alleged complication, the policy cannot be gone into by this Court. The argument of the learned Senior Standing Counsel is plausible. The scheme can be framed considering all the relevant facts relating to productivity, modernization and in the interest of nati

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on as a whole. On consideration, this Court will go into this since the matter involved is a question of fact and it needs investigation. Nor the Court can put its own reasons or conclusion in a matter like this. Under the circumstances, on this count, this Court cannot stay the scheme. As stated, the scheme is going to end in September, 2000 and it will be appropriate for the Government to consider all the relevant materials while making a scheme for future, in the interest of all concerned, in accordance with law. Since the period is going to end in September, 2000, they are free for mutual transfer till the scheme is over without making a precedent. But this concession will not give any right for schemes to be made in future for which the Government is competent, as discussed above. 9.With the above observation, all the writ appeals are disposed of. Consequently, C.M.P. Nos. 4407, 4749, 10984 and 10985 of 2000 are closed.