A.H. Joshi, J.@mdashBy order dated 7th January, 2010, this Court had issued notice for final disposal.
2. Hearing of writ petition was adjourned from time to time at the request of learned Asstt. Solicitor General Mr. S.K. Mishra, on the ground that the respondent Nos. 3 and 4 desire that present Writ Petition be transferred to Hon''ble Supreme Court.
Same prayer is again reiterated today. This prayer is strongly opposed on the ground including challenging bona fides and real need of such postponement. Petitioner has then stressed on the financial repercussions which cannot be compensated.
As to whether hearing should be stayed?
3. The question as to whether hearing of Writ Petition be postponed needs to be decided first, as if a Preliminary Objection.
4. On the point of need of postponement and intended application for transfer to Hon''ble Supreme Court, learned Asstt. Solicitor General Mr. Mishra has pointed out as follows:
(a) Two Writ Petitions have been referred by writ petitioner in para 16 of the present Writ Petition. These are Writ Petition Nos. 5779 of 2007 and 8455 of 2008, which are already the subject-matter of application for transfer.
(b) In the group of petitions pending before various High Courts and sought to be transferred to Hon''ble Supreme Court, the common issue involved is relating to export of rice. Only distinction made is that such of the traders, who had already procured rice and kept in the godown of respondent No. 2 � P.E.C. Ltd., were allowed to export.
5. In reply, learned Senior Adv. Mr. S.P. Dharmadhikari for the petitioner submitted that:
(a) In so far as the export of product is concerned, there exists similarity.
(b) The earlier group of petitions, which has been transferred to Hon''ble Supreme Court, pertains to claim of traders to export the rice, when the Govt., had introduced ban on export of rice.
(c) Present case stands on totally different footing, since the very foundation of petition is not for challenging anything such as the ban.
(d) The challenge in present petition is against indirect retrospective application of executive directions introducing new modalities as regards export, while export is very well permitted.
6. Learned Asstt. Solicitor General Mr. Mishra is not able to dispute the distinction on facts demonstrated by learned Sr. Advocate for the petitioner Mr. Dharmadhikari.
7. In the result, it is seen that there is no ground made out by the Respondents to stay the proceedings of present writ petition awaiting an intended application for transfer. This Court does not see any reason or impediment, whatsoever, in hearing and disposing of this petition.
8. Moreover, a long rope of about eleven weeks was given to these respondents to apply to Hon''ble Supreme Court for filing application for transfer, which they have so far failed to do.
9. Therefore, this Court rejects oral prayer for stay of hearing, and proceeds to hear the Writ Petition furtherance to notice of final disposal.
In the premises of nature of challenge, present case is fit for taking up for final disposal as per notice put to parties.
On Merit
10. Learned Senior Advocate Mr. S.P. Dharmadhikari prays for leave to amend to correct typographical errors. Leave to amend is granted.
11. Rule. Rule is made returnable forthwith. Learned Asstt. Solicitor General Mr. S.K.
Mishra waives service for respondent Nos. 1, 4 and 5, and learned Adv. Mrs. Ketki Joshi, for respondent Nos. 2 and 3.
12. Respondent No. 2 has filed Affidavit. No relief is sought against rest of the respondents. Thus, the pleadings are complete.
13. Stand of the respondents is not of opposing the export. Admittedly, the policy of export of non-Basmati rice is still open, subject to permission. Dispute that exists is as regards the modalities. Therefore, this Court is required to scrutinize a very limited question.
14. Brief background of petition:
Admitted facts
[a] u/s 5 read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992, and furtherance to Foreign Trade Policy, 2004-09, Union of India has permitted export of boiled Non-Basmati rice to South Africa.
[b] The Union of India has appointed the respondent No. 2 - P.E.C. Ltd., by Notification [Annex.A] dated 18th June, 2009, a copy whereof is at page 28, as the authorized agency, through whom export is to be done.
[c] Perusal of Annex.A [page 28] reveals that 25000 metric tons of rice [Non-Basmati] is to be exported to South Africa through respondent No. 2 � P.E.C. Ltd.
[d] The tripartite agreement has been entered between P.E.C. Ltd., petitioner and the importer of South Africa on 10th July, 2009.
[e] Chief Finance Manager of respondent No. 2 issued a letter of authorization addressing it to Asstt. Commissioner of Customs, Nagpur, announcing and communicating authorization in favour of petitioner to export 25000 metric tons of parboiled Non-Basmati rice against Directorate General of Foreign Trade Notification dated 18th June, 2009 [Annex.A], and requested for allowing the export.
[f] On 15th July, 2009, petitioner has procured in all 12,300 metric tons of prescribed rice and issued commercial invoice-cum-packing lists, which are 11 in number.
[g] On 16th July, 2009, the respondent No. 2 communicated appointment of Prathmesh Shipping Pvt. Ltd., Mumbai for shipping of Non-Basmati rice.
[h] On 17th July, 2009, the respondent No. 2 communicated to the petitioner that shipment has been held in abeyance on account of "due to some developments at higher level."
[i] Petitioner called information relating to reasons by its letter dated 22nd July, 2009 and E-mail of the same letter as well another E-mail dated 27th July, 2009, but to no avail.
[j] It is seen that because the Govt. was half way through in the process of finalizing the policy decision, the process of export was held in abeyance.
[k] Ultimately, it has come on record through the affidavit that new guidelines are finalized and, therefore, existing contracts are deferred, though not cancelled.
15. In the process of hearing, learned Asstt. Solicitor General tendered for perusal of Court copy of new guidelines dated 18th February, 2010.
We have perused the guidelines.
16. It is seen that the object of the new guidelines is that the P.E.C., Ltd., should procure the rice only through Public Sector Undertakings and there will not be any associate exporter [any middleman] and procurement may also be done by tendering process etc.
17. The guidelines do not provide as to the manner in which contracts, which are half way through, should be dealt with. The guidelines do not provide if the earlier contract should be terminated, rescinded etc., and the manner in which the rice already procured and received for transportation be dealt with.
Even during oral submissions, either learned Adv., for the respondent No. 2, or learned Asstt. Solicitor General is not in a position to make a statement in this regard.
18. It is seen that the respondents have failed to bring on record any material to support the action of respondents with any sanction and authority of law and power with the respondents to withhold the exports which were in the process of shipment.
19. In support of the relief sought in the petition, learned Senior Adv., for the petitioner Mr. Dharmadhikari has placed reliance on following Judgments:
[1]
[2]
[3]
[4]
20. This Court has perused the Judgments. It is not necessary to consider and discuss these judgments, as no serious question of law is involved in this case.
21. It is admitted that though the exports were banned, the volume of rice, which was already brought into the godowns of the P.E.C., Ltd., was permitted to be exported.
22. Admittedly, export is not banned, it is authorized, and only change is the modality.
23. In any case, the contract which has been already acted upon, cannot be done away otherwise than in the course of law.
In this background, this Court finds that the action of respondent Nos. 2 and 3 in directing holding back all the contracts for some time may have been prudent, however, the holding back cannot be done for indefinite period or in perpetuity. The communication sent by the respondent No. 2 directing withholding the contract or even directing the respondents to take back the rice is without any authority of law or even any support of the changed policy.
24. The relationship � subject matter is not fully contractual between two private parties. Respondent No. 2, who itself is a State within the meaning of Article 12 of the Constitution, is acting as an agency of the Central Govt. It cannot act arbitrarily. Moreover, there is no authority of law for what it is doing is shown.
25. It is further seen that the new policy would always take effect prospectively. In absence of authority of law, any executive decision would be not be capable of being applied retrospectively.
26. Learned Senior Adv., for the petitioner does not press Prayer Clause [d], and seeks liberty to keep the consequential reliefs open in the event of necessity, which request being reasonable, is granted.
27. The result, the petitioner succeeds, and Rule is made absolute in terms of Prayer Clauses [a], [b] and [c].
In the circumstances, the parties are directed to bear own costs.
