:1: bgp IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.975 OF 1992 1. Maharashtra Fur Fabrics Ltd. a Company incorporated under the Companies Act,1956, and having its registered office at Podar Chambers, S.A.Brelvi Road, Fort, Bombay – 400 001. 2. Shri.M.S.Deokule of Bombay, Indian Inhabitant, residing at B-1/33, Technocrat Society Veer Savarkar Marg, Prabhadevi, Bombay – 400 025. ..Petitioners Vs. 1. Union of India 2. The Chief Controller of Imports and Exports, Government of India, Ministry of Commerce, Udyog Bhavan, New Delhi, 3. The Joint Chief Controller of Imports & Exports, Government of India, Ministry of Commerce, having his office at New Central Government Office Building, New Marine Lines, Churchgate, Bombay – 400 020. ..Respondents :2: Mr.H.Daruwalla a/w. Mr.Parag Sawant i/b. Crawford Baley & Co.for petitioners. Mr.M.I.Sethna, Senior Advocate with Mr.H.V.Mehta for respondents. CORAM :- V.C.DAGA & K.K.TATED,JJ. JUDGMENT RESERVED ON : 24TH FEBRUARY, 2010 JUDGMENT DELIVERED ON : 12TH MARCH, 2010 JUDGMENT (PER : V.C.DAGA,J.) 1. This petition is directed against the various orders passed from time to time by the respondent incorporated at Exhibit-I,N,O and R1 to R7, whereby and whereunder, the Ministry of Commerce, Government of India, New Delhi denied cash incentive known as Cash Compensatory Support (“CCS” for short) to the petitioners. THE BACKGROUND FACTS : 2. The background facts lie in a narrow compass. First petitioner carries on business of manufacturing High ‘Pile Fur Fabrics’. They have a factory in a Government notified backward area outside Bombay. The second petitioner is the shareholder of the first petitioner and a citizen of India. 3. The Government of India in order to save foreign exchange and promote exports by indigenous manufacturers had introduced the Duty Exemption Scheme in the Import Export Policy AM-1985-88. The said Scheme was also introduced with some changes in the Import-Export Policies for the year April/March,1988/91 and April/March-1990-93. Chapter XIX thereof dealt with the aforesaid Duty Exemption Scheme. As per paragraph 219(1) of the 1988-91 Policy and paragraph 229 of the 1990-93 respectively, laid down :3: the objectives of the Duty Exemption Scheme, which was to make available to the Registered Exports, the necessary inputs for export production at International prices without payment of customs duty so as to make the exports competitive in the International markets. The Scheme covered 3 categories of licenses; viz; (1) Advance Licenses (2) Intermediate Advance Licenses (3) Special Imprest Licenses. The definitions of these licenses have been set out in paragraphs 220 and 231 of the aforesaid two policies respectively. The deemed exporter was defined in the policies as “supplies made in India of Intermediate products to holders of Advance Licenses under the Scheme for supply of intermediate products contained in Chapter XIX. 4. In order to avail the benefits under the Duty Exemption Scheme, the exporters and deemed exporters were required to register themselves with appropriate registering authority, which in the case of 1st petitioner was the “Synthetic and Rayon Textile Export Promotion Council”, Bombay. The first petitioner was registered with the said Promotion Council as far back as 1986 as a registered Manufacturer. 5. By virtue of various Circulars issued from time to time prior to 30th March, 1988, the ultimate exporter was entitled to receive from the Central Government CCS. This Scheme has been in operation since 1966 and has undergone modifications from time to time. Such benefits of CCS and Supplementary Cash Assistance in lieu of excise duty were also available to other types of “Deemed Exports” against supplies made by Indian firms to projects financed by IDA/IBRD/UN Organizations as also against supplies of some products to Oil and Natural Gas Commission (“ONGC” for short). In other words, “deemed exports” i.e. supplies made by an indigenous manufacturer against intermediate advance licenses prior to 30th March,1988 were not entitled to any CCS. :4: 6. However, on 30th March, 1988, the Commerce Ministry issued a circular bearing No.1(17)/87-EAC stating therein that the Government had now decided to extend CCS benefits to the deemed exports i.e. to the supplies made against the intermediate advance licences. Such supplies were made admissible for the following benefits: (a) CCS at 75% of what is admissible to physical exports; (b) Supplementary Cash Assistance in lieu of duty draw back wherever admissible; and (c) Additional CCS in lieu of terminal excise duty wherever admissible. 7. The petitioners state that the CCS benefits for physical or direct exports of textile products like Fur Fabric, had been fixed by Government at 10% of the FOB value under a Circular No.12/21/89-EAC dated 31 issued by the Commerce Ministry. Therefore, for deemed export of fur fabrics, CCS was available at 75% of the CCS on physical exports which came to 7.5% of FOB value. Under the aforesaid circular, deemed exporters were not only entitled to receive CCS benefits but they were also entitled to receive additional CCS in lieu of the terminal Excise Duty being the deemed exporters. As deemed exports not being direct exports, such exporter had to first pay excise duty. The additional CCS was, therefore, made refundable in lieu of the excise duty paid to compensate the deemed exporter to the extent of the excise duty paid. 8. On the basis of the aforesaid circular, the first petitioner was approached by several ultimate exporters who had advance licenses for purchase of synthetic fur lining. Such ultimate exporters surrendered their advance licences to that extent and the 1st petitioner was issued intermediate advance licenses, on the basis of which the 1st petitioner imported duty free required raw materials. The 1st petitioner manufactured fur lining from such raw materials and sold the same to the ultimate exporters. As there was deemed export and such exports being entitled to CCS under the aforesaid :5: circular, the 1st petitioner filed 22 applications to claim CCS benefits quantified in the sum of Rs.14,66,509.29 and additional CCS amounting to Rs.11,84,920.90 respectively for the period 1st April, 1989 to May, 1990 annexing all the supporting documents including the additional documents required to be furnished in terms of circular dated 24th July, 1989. 9. The Joint Chief Controller of Imports and Exports allowed the CCS claim of the 1st petitioner to the extent of Rs.14,57,648.02 and Rs.1015.63 by way of additional CCS claim for the aforesaid period. The petitioners, thereafter, claimed to have submitted 14 applications claiming additional amount on account of CCS quantified at Rs.9,84,680.71 and Rs.11,00,118.69 by way of additional CCS. A statement of the claims made, compiled in the form of schedule for the aforesaid period is annexed to the petition at Exhibit”H”. 10. The petitioners, from time to time, entered into correspondence to claim the aforesaid amount. However, their claims were repeatedly rejected by the respondent. With reference to the claim filed on 19th November, 1990, covering the CCS and additional CCS claims for the month of July, 1990, third respondent vide letter dated 14th December, 1990 on behalf of 2nd respondent informed the 1st petitioner that as they had supplied intermediate products to advance license holders and ultimate exporters who may have claimed CCS and other benefits against supplies made by them, as such, not entitled to CCS claims. That is how claim of the 1st petitioner was denied. 11. Aggrieved by the aforesaid orders of repeated rejections, the petitioners have preferred this writ a petition with prayer to quash and set aside the orders at Exhibit – I,N.O. and R-1 to R-7 annexed to the petition and prayed for directions directing the respondents to consider the CCS claim of 1st petitioner with further prayer to grant CCS benefits applicable to them together with the refund of terminal excise duty paid on intermediate exports. :6: 12. This petition was filed by the petitioners as back as in the year 1992. Rule was issued on 20th June, 1992. The respondents, at the time of hearing on admission, were present through their Advocates. In other words the respondents were aware of this petition right in the year 1992. The respondent did not care to file any reply/return/counter affidavit almost for a period of 17 years. For the first time, in the month of September, 2009 filed another affidavit contending that the petitioners are required to give concrete evidence that the original advance license holders have not taken CCS benefits and went to the extent of making a statement that the entire record with respect to the claim of the petitioners have been destroyed by the respondents as such, they are not in a position to consider the claim of the petitioners or to effectively deal with the grievance of the petitioners made in the petition. The respondents have also filed an affidavit to justify destruction of record in spite of pendency of the writ petition and expressed their helplessness to justify rejection of CCS claim for want of record. 13. With the aforesaid rival pleadings, this petition was taken up for hearing. THE ISSUE: 14. The core issue involved in this petition is whether the petitioners are entitled to the benefits of the CCS at 75%, with refund of terminal excise duty paid on intermediate exports? RIVAL SUBMISSIONS: 15. Mr.Daruwalla, Learned Counsel for the petitioners submits that the Government of India, for the first time, by issuing a circular dated 15th July, 1991 (annexure-”P”) suspended the scheme of CCS w.e.f. 3rd July, 1991. It was clarified by the said circular that “.........all exports effected upto and including 2nd July, 1991 would remain available for their respective rates of CCS”. He, thus, submits that the refusal and/or denial and/or rejection of the claim of :7: the petitioners by the respondents are contrary and inconsistent with the said circular of the Commerce Ministry dated 3rd July, 1991. In his submission, respondents are required to honour and follow the said circular dated 3rd July, 1991 issued by the Ministry of Commerce, Government of India, New Delhi. 16. Mr.Daruwalla further submits that the intention of the Government of India to grant CCS and certain benefits to deemed exports is evident from the circular dated 3rd March, 1988 (Exhibit “A”) and another circular dated 19th April, 1989 and 24th July, 1989 (Exhibit “E” and “F”). According to him all these circulars were never modified and/or withdrawn until the scheme was withdrawn w.e.f. 3rd July, 1991 vide circular dated 3rd July, 1991, as stated hereinabove. 17. Mr.Daruwala submits that from the aforesaid facts, the emerging position is that the benefits were available to the petitioners for the period prior to 3rd July, 1991 and that the very fact is reiterated and re-affirmed by the circular dated 3rd July, 1991. In his submission, petitioners have complied with every provision of law and required procedure with regard to its claim for CCS and additional CCS. In fact, according to him, lot many such applications of the petitioners claiming such benefits have been allowed by the respondents in the past. In support of his submission, he has produced Exhibit “B”, “C”, and “G” annexed to the petition wherein the grant of CCS amounting to Rs.14,57,648.02 and additional CCS in the sum of Rs.1015.63 in favour of the petitioners is spelt out. 18. Mr.Daruwala further submits that even today, there are no allegations that the applications of the petitioners are lacking in material facts and/or particulars so as to dis-entitle them for grant of benefits. He further submits that the impugned orders refusing to grant CCS benefits are also in violation of principles of natural justice inasmuch as no personal hearing was ever granted to the first petitioner. No grounds and/or reasons are specified while rejecting :8: their claims. The orders are not speaking orders. In his submission, the action of the respondents or the orders impugned in the petition are void-ab- initio. 19. Mr.Daruwala further submits that on the principle of Promissory Estoppel, the respondents cannot be denied their rightful claim. He submits that the submissions made in the petition by the petitioners are deemed to have been accepted including the factual averments made therein for want of specific denial. He placed reliance on the judgment of this Court in the case of Sheshrao Nagorao Umap (Dr.) Vs. State of Maharashtra 1985(1) BCR 30 and the Apex Court judgment in the case of Sushil Kumar Vs. Rakesh Kumar AIR 2004 SC 230. 20. Mr.Daruwala further submits that the first petitioners are entitled to succeed in the petition and that the first petitioner cannot be deprived of huge monetary benefits to the extent of Rs.58,63,621.14 to which it is entitled since June, 1991. He is also claiming interest on the said amount @ 12% p.a., since the claim of the first petitioner was illegally and erroneously rejected by the respondents. 21. Per contra, Mr.Sethna, learned Senior Counsel appearing for the petitioners reiterated and tried to justify the orders refusing to grant CCS and additional CCS benefits to the petitioners contending that the petitioners supplied intermediate product to the advance license holders. According to him, the ultimate exporters must have availed the CCS and other benefits for the supplies made by the petitioners. He, thus, submits that the respondents were justified in denying benefits to the petitioners. According to him, the petitioners are required to give concrete evidence that the original license holders have not taken CCS benefits. In his submission, the petition is silent on this count. :9: 22. Mr.Sethna reiterates that the petitioners are not entitled to the CCS against the intermediate exports as such respondents were not liable to entertain claim of the petitioners. He further submits that the since, the scheme itself has been abolished in the year 1991 as such as on date neither funds are available nor cheque books are available for making payment to the petitioners. 23. Mr.Sethna, during the course of hearing, has relied upon the statement made on oath vide affidavit dated 29th September, 2009 affirmed by Mr.Vijaykumar Shewale, Joint Director General of Foreign Trade-respondent No.2 stating therein that the respondent could not locate old files for the period 1990-92 despite diligent searches made. The files concerning subject matter could have enabled the respondents to deal with the petitioners’ contentions but, since these files are not available and/or missing and/or destroyed in the year 2003 as per O & M instructions No.5 dated 22nd June, 2001, as such, respondents are not in a position to deal with the claim of the petitioners on merits. He further submits that the office of respondent No.2 is a huge office and having lacs of files as such old files are required to be therefore destroyed periodically. Hence, no record is available with respect to the claim set up by the petitioners. He further submits that it is a bonafide error on the part of the respondents to destroy records in spite of pendency of the writ petition. However, at any rate, for want of records, it is not possible to give fresh comments on merits of the matter at this stage. He tried to justify the destruction of record based on practice followed in the office of respondents. 24. Mr.Sethna further submits that the petitioners were asked to make record available to the respondents so as to enable them to re-construct record and files to which the petitioners did not agree. Mr. Sethna, thus, submits that the petitioners be put to the strict proof in support of their claim if at all they have to succeed before this Court. :10: 25. In order to counter the aforesaid submissions based on two counter affidavits filed by the respondents, petitioners have also filed affidavit in rejoinder and advanced their submission in consonance thereof. 26. Mr.Daruwala, in rejoinder urged that all the original documents were submitted by the first petitioner along with their applications. That the first petitioner does not have any record so as to help the respondent to reconstruct their files. He further submits that it was open for the respondents to consider the claim of the petitioners in the year 1992 itself when the petition was filed and official record was available. He further submits that during the pendency of the petition, the respondents could not have destroyed the record. He, indirectly tried to suggest that the destruction of record is an attempt to deny the legitimate claim of the petitioners. He further urged that so far as the status of the petitioners as deemed exporter is concerned, it was never disputed by the petitioners. In support of this claim, he placed reliance on the statement filed on record demonstrating grant of their claim with regard to 22 applications involving grant of CCS claim to the tune of Rs.14,69,509/- and additional CCS to the extent of Rs.1015.00. In his submission, this grant in favour of the petitioners has also not been denied by the respondents. In these circumstances, he submits that the claim of the petitioners is liable to be upheld. 27. Mr.Daruwala further submits that at no point of time, any notice to produce the documents was given by the respondents to the first petitioner well within time. He further reiterates that none of the orders rejecting claim of the petitioners give any reason in support of the denial. He further submits that in absence of reasons it cannot be justified. In his submission, it is not open for the respondents to supplement the grounds of rejection through their affidavit. Though factually, no reasons are disclosed even in the affidavit filed in reply to the petition. He placed reliance on the judgment of the apex Court in the case of Mohinder Singh Gill and Anr. Vs. The Chief Election :11: Commissioner, AIR 1978 SC 851 in support of his submission. CONSIDERATION: 28. Having heard rival parties, this petition is required to be decided on the basis of rival pleadings available on record. The respondents filed an affidavit on record to show that they have destroyed entire record relating to the CCS benefits available to the deemed exporters. Petitioners are contending that they have submitted all original documents and papers to the respondents. To this assertion, there is no denial. In none of the orders rejecting claim of the petitioners any reason leading to incomplete submissions of the application or non submission of relevant documents is to be found. All the orders rejecting claim of the petitioners passed from time to time are without any reasons. By one line order, all claims are rejected. Specimen of one of such orders is as under: SPECIMEN ORDER “..................................................................I am directed to refer to your letter dated 28th February, 1991 on the above subject and to say that the question of grant of CCS benefits on supplies or intermediate goods under the Intermediate Advance Licensing Scheme to the holders of duty-free Licences has been considered and it has not been possible to accede to your request. ............................................................................ (Emphasis supplied) 29. A reading of the aforesaid order of rejection unequivocally goes to show that no reasons were given in the rejection order as to why the petitioners were held not entitled for CCS claim. All these seven letters are more or less identical and similar. It is not in dispute that 22 applications of the petitioners were granted and their claim with respect of 22 applications were entertained treating them as deemed exporters. The petitioners have specifically pleaded and reiterated in the petition that 11 applications of the petitioners which were rejected by the respondents were identical arising out of identical transactions for which there is no denial. The claim of the petitioners on merits are not denied by the respondents. The grant of 22 applications entertaining CCS :12: claim of the petitioners is also not in dispute. It is is also not denied that the petitioners are not deemed exporters. It is also not denied that the CCS benefits were not available to the deemed exporters. While rejecting the application, no personal hearing was given to the petitioners. No reasons are to be found in the impugned order. Needless to mention that from time to time this Court as well as the Apex Court has been reiterating that the orders must always be self contained orders and must indicate reasons so as to enable the Higher Court to read the mind of the adjudicating authority. The settled principles of law has not been followed by the respondents while rejecting claim of the petitioners. 30. The petitioners are perfectly justified in contending that in absence of specific denial, the claim of the petitioners is required to be treated as having been admitted by the respondents. The Apex Court in the case of Sushil Kumar Vs. Rakesh Kumar (Supra), has ruled that if allegations are not specifically denied in the written statement or that the statements made by the petitioners is challenged as incorrect and if the denial is evasive and not categorical, then Court has to treat it as admissions made in the petition. It is no doubt true that the Apex Court in the said referred case was dealing with the Election Petition while making the aforesaid observations, however, the said observations are based on the provisions of Order VIII Rule 3 of the CPC. The principles thereof are very much applicable to the pleading in Writ Petitions. The Division Bench of this Court in the case of Sheshrao Nagorao Umap (Dr.) Vs. State of Maharashtra (Supra) while dealing with the Writ Petition has specifically observed that the specific allegations made in the petition, not denied by the respondents should be treated as admitted by the respondent. The law in this behalf is well settled. In absence of specific denial on the part of the respondents with regard to the merits of the claim of the petitioners, we have no hesitation to hold that the respondents have admitted their claim. :13: 31. At this stage, it is relevant to deal with one more contention raised by Mr.Sethna relating to the reconstruction of record. The submissions made by the petitioners in this behalf is required to be considered in the light of the case made out by the petitioners, wherein the petitioners have submitted that they had submitted all original documents along with their applications in the year 1991 itself. Again there is denial to this assertion. One can take judicial note of the fact that the facility of photo copy was not prevalent as is found today. There is no denial to the statement made by the petitioners that all original documents were submitted by them to the respondents, if that be so, then case of the petitioners will have to be accepted. No specific notice to produce documents was given to the petitioners. The request to supply documents was orally made in the Court to contest petition. No judicial directions were ever sought by the Revenue. In this scenario, reliance placed on the judgment of the Apex Court in the case of State of U.P. Vs. Abhai Raj Singh and Anr. 2004(4) SCC 6 by Mr.Sethna is misplaced. 32. It needs to be clarified at this juncture to make the record straight that when the request was made by the petitioners through Mr.Sethna to supply documents, it was categorically stated before this Court by Mr.Sethna that he did not require documents to consider the claim of the petitioners but documents were required to defeat the claim of the petitioners i.e. to contest the petition. On the top of it, no judicial directions were sought at any time to get the documents produced. In this backdrop, the request for reconstruction of record at this belated stage, that too after 18 years, can not be justified as bonafide. 33. Having said so, it is necessary for this Court to consider as to what extent the claim of the petitioners can be entertained. The petitioners have annexed the statement giving details of 14 applications in respect of which the petitioners are claiming CCS and additional CCS benefits. Both parties are handicapped for want of documents. The petition is pending in this Court :14: since 1992. Almost 18 years have passed.