By TIOL News Service

MUMBAI, OCT 13, 2016: FACTS of the case: It is the claim of the petitioners that they applied to DGFT for advance authorisation on 17th June 2008, and were issued an advance authorisation dated 14th July 2008, having validity of 24 months and export obligation period of 24 months.

The quantity of inputs that was allowed to be imported has been set out as against which there is an obligation to export a minimum quantity of finished goods.

Another similar authorisation was granted with similar stipulations and validity of the authorisation of March 2009 was till March 2011.

Then the petitioners realised that the Director General of Foreign Trade had issued a public notice whereby the export obligation period of advance authorisation was increased from 24 months to 36 months.

The petitioners, therefore, claim that due to the error on the part of DGFT they were unable to take the benefit of exporting goods under this authorisation for about seven months from April 2011 to October 2011.

The petitioner was unable to fulfill their export obligation by March 2012. Thereafter, the petitioners urged clubbing of the obligations under the advance authorisation which have been issued within 36 months from the date of issue of the earlier authorisation that is sought to be clubbed and they claim that pursuant to such clubbing there would be no shortfall.

The case of the petitioners is that the Committee approved their request in a meeting held on 4th September 2012. However, the information regarding approval was communicated on 7th December 2012. The petitioners were informed that the authorisation was valid till 6th June 2013 and the export obligation period was till 6th June 2013.

The request for clubbing was allowed, but the condition imposed was that exports made within 48 months from the date of the earliest authorisation upto 31st July 2012, shall alone be taken into consideration for export obligation fulfillment. Therefore, the exports made between August 2012 to April 2013 would not be taken into consideration.

The orders have been challenged.

The High Court observed -

+ It is evident from the petition itself that they aware of the defaults and which had occurred. They firstly sought a relaxation from the condition and then made an application for clubbing.

+ On a perusal of this condition, we do not find that the petitioners have been treated unfairly and inequitably. A person who has not been able to fulfill the obligations cannot insist on an unconditional relaxation or exemption.

+ The Committee in the elaborate exercise conducted by it and which resulted in passing of the order dated 3rd September, 2014, by the second respondent, found that the relaxation has to be granted on case to case basis taking into consideration genuine hardship and the likely adverse impact on trade. It is empowered to grant an exemption/relaxation of the conditions. One decision of the Policy Relaxation Committee cannot be quoted as a precedent in another case as the extent and genuineness of hardship may vary from case to case. Policy relaxation by its very nature is for relaxing normal policy / procedural provisions and cannot be claimed as of right. The Policy Relaxation Committee has extensively considered the case of the petitioner.

+ It found that petitioner got 51 months effectively for completing the export obligations, but the commitment made was not honoured. It is in these circumstances that the clubbing applications were considered and the condition was imposed restricting the compliance to 48 months.

+ We do not think that the Committee has failed to apply its mind to the relevant facts and circumstances of the petitioner's case. The petitioners cannot go on improving their version as originally projected by relying on some information available to them after an application made under the Right to Information Act, 2005, was invoked by them. By its very nature, the power to relax is exercised on case to case basis. Once relaxation is not a right and nothing accrues in the petitioners' favour to apply and seek unconditional relaxation, then, all the more we do not think that theexercise undertaken by the experts in the field and in charge of interpretation and implementation of the foreign trade policy should be interfered by us in our equitable and discretionary jurisdiction under Article 226 of the Constitution of India.

+ It is equally well settled that sufficiency and inadequacy of reasons is not a matter in which this Court can interfere in its writ jurisdiction. Eventually matters of the nature considered in the present case and by the authorities under the Foreign Trade Act, 1992, would require them to apply their mind to the germane and relevant factors and consider each case of hardship and non-fulfillment independently.

+ The procedural rules can be relaxed provided the parties have acted bona fide and made genuine and sincere attempts to fulfill their obligations. Even if conditional relaxation is granted, that is permissible to subserve larger public interest. Such being the nature of the power, we do not think that the petitioners' application could have been allowed unconditionally.

+ There is no substance in their grievance that principles of natural justice have not been complied with because the representations in writing were duly considered. They have been rejected by reasoned orders. No personal hearing can be insisted once the nature of the proceedings is noted.

The Writ petition was dismissed.

(See 2016-TIOL-2468-HC-MUM-CUS)