ivil Appeal Nos
3741 42 of 1982
From the Judgment and Order dated the 22nd October 1982 of the Delhi High Court in CW Nos 3577 and 3575 of 1982
VM Tarkunde KK Venugopal FS Nariman Rajiv Datta and AN Bhanot for the Appellants
MK Banerjee Additional Solicitor General and Miss A Subhashini for the Respondent
3 MC Bhandare and section Bhandare for the Respondent
The Order of the Court was delivered by CHINNAPPA REDDY J It transpires from the facts which we shall presently set out that the National Agricultural Cooperative Marketing Federation of India NAFED for short is a law unto itself and its officers are not unduly concerned either about carrying out the Export Trade Instructions issued by the Government of India or about filing truthful affidavits in the Supreme Court of India
On June 23 1982 the Chief Controller of Imports and Exports Ministry of Commerce Government of India issued Export Instruction No 59 of 1982 on the subject of Export Policy of Niger Seeds during 1982 83
Paragraphs 2 and 3 of the Instruction are important and may be fully set out
They are as follows On a review of the position it has been decided to allow export of Niger Seeds within an overall ceiling of 10000 Ten thousand tonnes through the canalising agency viz
The National Agricultural Cooperative Marketing Federation of India Ltd NAFED subject to minimum export price of Rs8500 Rupees eight thousand five hundred per metric tonne
While the NAFED can continue to undertake exports themselves private parties will also be allowed to export Niger Seeds as Associates of NAFED against firm commitments backed by irrevocable Letter of Credit subject to availability of ceiling
Export by private parties will be allowed on first come first served basis
For this purpose the exporters should register their contracts with the NAFED
The NAFED will stop registration of contracts as soon as the ceiling is exhausted
The NAFED will be responsible to monitor the ceiling and ensure that export of Niger Seeds not exceeding the overall quantity of 10000 MT during 1982 83
In other words the export will be allowed only against the balance quantity left unutilised out of the ceiling of 10000 tonnes released vide Export Instruction No 1582 dated 741982
 3 Pursuant to the Trade Instruction a Trade Notice was published by the Joint Chief Controller of Imports and Exports on the same lines
We may mention here that out of the 10000 tonnes export of which was to be allowed the NAFED reserved to itself the right to export 5000 tonnes and decided to allow its associates to export the remaining 5000 tonnes
On the faith of the Trade Notice the petitioner in Special Leave Petition No 10230 of 1982 entered into a contract with Ms Curtis Confirmers Limited of London on 7782 for the sale and export of 1000 metric tonnes of Indian Niger Seeds at the price of Rs 8560 per metric tonne fob
at any Indian Port
Shipment of 200 metric tonne was to be by October 1982 300 metric tonnes by February 1983 and 500 metric tonnes by March 1983 at buyer s option with one month s clear notice
The payment was to be by firm irrevocable credit to be opened through first class bank for 10 value now and for balance 90 to be opened 15 days prior to shipment 
The petitioner forwarded the contract to NAFED on 22782 with a request that the contract may be registered and promising to send the letter of credit in two or three days
An Irrevocable Documentary Letter of Credit was duly opened by the Banque Nationale de Paris on behalf of the foreign buyer in favour of the petitioner for the amount of Rs856000 being 10 of the total value of the goods
The letter of credit also stipulated that within 15 days before each shipment the credit value was to be increased to cover the amount of each shipment and that would be advised as an amendment to the credit 
Letter of Credit was forwarded to the NAFED by the petitioner on 26782 with a request that the quantity of one thousand metric tonnes might be reserved for him for export
The NAFED sent a reply on 6882
We will revert in the matter shortly
On 3982 the petitioner reminded the NAFED both by letter and telegram about his request for allotment of quota
The petitioner also sent a telegram to the Government of India that matters were unduly delayed though he had completed all the formalities
It appears that meanwhile the NAFED wrote to the Ministry of Commerce Government of India on 17982 informing the Government of India that it was for the NAFED and its Board of Directors to formulate guidelines regarding release and modalities of export
A copy of the guidelines formulated by the NAFED on 16982 was enclosed
Two statements containing the names of the applicants for quotas 5 and other particulars were also enclosed
The first statement showed the names of 22 applicants whose requests for allotment of quotas were said to be backed by Letters of Credit
The appellants in the appeals before us are included in this list though this was denied in the counter affidavit filed on behalf of the NAFED
More about it later
The second statement contained a list of 34 names of applicants whose contracts were not backed by any Letters of Credit
On receipt of this letter the Government of India by their letter dated 30982 objected to the guidelines said to have been approved by the NAFED as they were contrary to the guidelines issued by the Government of India
It was pointed out that according to the instructions of the Government of India the allotment had to be made on first come first served basis whereas according to the guidelines prepared by the NAFED the quotas were to be allotted by a committee consisting of the Chairman and officials of the NAFED the Government and the trade after considering all the applications received within a certain specified period
In fact the guidelines issued by the Government of India required that registration of applications should be stopped as soon as the ceiling limit was reached on a first come first served basis
Further the guidelines prepared by the NAFED provided that Letters of Credit would have to be submitted within three weeks after allotment and this was again contrary to the guidelines issued by the Government of India which required that the Letters of Credit should be made available for registration of the requests for allotment of quotas
The letter of the Government again and again emphasised that quotas should be allotted on first come first served basis to exporters against firm commitments backed by irrevocable Letters of Credit subject to availability of ceiling
The Government asked the NAFED to refer to the fact that the letter of the NAFED itself showed that there were 22 parties who had registered their contracts for export whose requests for allotment were backed by Letters of Credit and that the total of their requests came to 4859 tonnes
On the other hand it was pointed out the requests of the other 34 parties for quotas were not backed by Letters of Credit
The Government of India finally instructed the NAFED to ensure that exports of Niger Seeds were undertaken in conformity with the instructions issued by the Government of India in EINo 5982 dated 23682
The NAFED was reminded that while the NAFED 6 was only a canalising agency for export of Niger Seeds the export would have to be undertaken by them only within the policy as laid
down by the Government
The NAFED was further told that a Trade Notice had already been issued by the Joint Controller of Imports and Exports and that it was not for the NAFED to issue another Trade Notice as proposed by it
The instructions of the Government of India reiterated by their letter dated 30982 fell on deaf ears
The NAFED ignored the instructions of the Government of India and persisted in the error of its ways
At a meeting held on 161082 the NAFED purported to select applicants for export quotas neither on a first come first served basis as originally announced in the Trade Notice nor only from among applicants whose contracts were backed by Letters of Credit
They proposed to give time to the selected applicants to produce Letters of Credit
The petitioners moved the Delhi High Court under Article 226 of the Constitution for redress but their Writ Petitions were dismissed in limine
They have come to this Court under Article 136 of the Constitution
As we were told that the applicants who had been selected for allotment of quotas had been able to secure a higher price from their buyers and therefore allotment of quotas to the petitioners would result in considerable loss of foreign exchange we were anxious to know the present attitude of the Government of India in the matter
The Government of India has now appeared before us through the learned Additional Solicitor General and a counter affidavit has been filed on their behalf by a Deputy Secretary in the Ministry of Commerce
The NAFED has no clear or definite answer to the petitioners  claim
First it was said that the letter of Credit furnished by the petitioner did not conform to the requirement of the Trade Notice but the argument was not pursued as it was seen from the file produced by the Government of India that the Letters of Credit furnished by such of the selected applicants for quotas as did furnish Letters of Credit were all similar to those produced by the petitioners
In fact some of the chosen ones furnished no Letters of Credit and it was proposed to give them time for the production of Letters of Credit
This of course was not in accordance with the terms stipulated by the Trade Notice
It is also clear from the letters which the NAFED addressed to the Govern 7 ment of India that it was never for a moment doubted by anyone that the Letters of Credit produced by the petitioners conformed to the requirements of the Trade Notice
The present stand is a clear after thought and a pretence
In the counter affidavit filed on behalf of the NAFED it was stated that 22 applicants for allotment claimed that they had firm contracts backed by Letters of Credit for full value
The total quantity covered by these applications was 4859 tonnes
It was asserted that the petitioners did not fall in this category
It was stated that the petitioners came in the category of those who had secured a price of Rs 8600 per tonne but whose contracts were not backed by Letters of contract
The Learned Counsel who appeared for the NAFED also submitted before us on instructions that the petitioners were not among the 22 applicants whose contracts were considered by the NAFED as backed by Letters of Credit
But a perusal of the file produced by the Government of India exposed the statement made in the affidavit filed on behalf of the NAFED as false
The NAFED had itself prepared a statement showing Enquiries received from private parties backed by Letters of Credit for export of Niger Seeds
This statement was sent to the Government of India along with its letter dated 17982 and it contains a list of twenty two names
Both the appellants in the appeals figure in it
It is clear to us that the statement in the counter affidavit is false
It is also clear to us that the Learned Counsel was misled and wrongly instructed to argue before us that the appellants were not included in the list of twenty two
It appeared to us that a copy of the letter dated 17982 of the NAFED to the Government of India was not made available even to the Learned Counsel
We repeatedly asked for it and we could ultimately get it from the file produced by the Government of India One of the submissions made to us was that the selected applicants had secured a higher price per tonne and that would help to earn more foreign exchange
In the first place their contracts are not backed by Letters of Credit as stipulated by the Trade Notice and they were not eligible for registration
In the second place the ceiling had already been reached and for that reason also they could not be registered
The counter affidavit filed by the Government of India fully substantiates the claim of the appellants that the NAFED had 8 disregarded the trade instructions issued by the Government of India as well as the Trade Notice issued pursuant to the trade instructions
In paragraph 27 of the counter affidavit it is expressly stated I submit that the answering respondents have no objection if relief is granted to the petitioners provided they fulfil the requirements of the export instructions issued by respondents 12 and 4
In the circumstances we have no option but to allow these appeals
Necessary directions have already been issued by us on 291182
The appellants are entitled to get their costs in each of these appeals from the 6th respondent the National Agricultural Co operative Marketing Federation Ltd We fix the costs at Rs 5000 in each appeal


Summary:
In June 1982 the Chief Controller of Imports and Exports issued export instructions on the subject of Export Policy of Niger Seeds during 1982 83
Paragraphs 2 and 3 of the instructions stated that the Government had decided to allow export of Niger Seeds within an overall ceiling of 10000 metric tonnes through the National Agricultural Cooperative Marketing Federation of India NAFED subject to a minimum export price of Rs 8500 per metric tonne
In addition to NAFED private exporters who registered their contracts with NAFED were also allowed to export the seeds on the basis of first come first served against firm commitments backed by irrevocable letters of credit subject to availability of ceiling
It was also stated that the NAFED would be responsible to monitor the ceiling and ensure that export of the seeds did not exceed the overall quantity of 10000 metric tonnes during the year
A Trade Notice on these lines was issued by the Joint Chief Controller of Imports and Exports
On the faith of the trade notice the petitioner entered into contract with a foreign buyer who opened a firm irrevocable letter of credit in favour of the petitioner
The petitioner thereupon requested the NAFED to register the contract and that one thousand tonnes of seed might be reserved for him for export
About six weeks later the petitioner reminded the NAFED by letter and telegram about his request for allotment of the quota
In the meanwhile the NAFED wrote to the Government of India Ministry of Commerce that it was for NAFED and its Board of Directors to formulate guidelines regarding the release and modalities of export of the seeds and it forwarded two statements one showing names of 22 applicants whose requests for allotment of quotas were said to be backed by letters of credit and the other containing list of 34 names of applicants whose contracts were not backed by letters of credit
The petitioner s name was included in the first list
Reiterating the earlier instructions the Government wrote to the NAFED that the allotment of quotas should be in conformity with the instructions and the Trade Notice and that it was not for the NAFED to issue another Trade Notice
2 In disregard of the instructions the NAFED selected certain applicants and gave time to them to produce letters of credit
The petitioners were not in this list
The Delhi High Court dismissed in limine the petitioners  petition under article 226 of the Constitution
The petitioners thereupon filed their petition under article 136 of the Constitution
Allowing the petition  HELD While the petitioners satisfy all the requirements of the Trade Notice some of the applicants chosen by the NAFED for allotment of quota did not furnish the letters of credit and the NAFED s action in giving them time for their production was not in accordance with the terms stipulated by the Trade Notice
6H The file produced by the Government of India exposed the statement made in the NAFED s affidavit that the petitioners were not in the list of 22 as false
Its counsel was misled and wrongly instructed to argue that the petitioners were not included in that list
But the petitioners in fact figured in the statement entitled enquiries received from private parties backed by letters of credit for export of Niger seeds prepared by the NAFED and sent to the Government of India
7 E Even if the claim of NAFED that the selected applicants had secured a higher price and that would help to earn more foreign exchange is correct they were not eligible for registration firstly because their contracts were not backed by letter of credit in terms of the Trade Notice and secondly because the ceiling had already been reached
7 G The counter affidavit filed by the Government of India fully substantiates the claim of the petitioners that the NAFED had disregarded the trade instructions issued by the Government of India as well as the Trade Notice which was issued pursuant to the trade instructions