MUKTA SONS Vs. UNION OF INDIA

JUDGEMENT

(1.) Under the provisions of Foreign Trade (Development and Regulation) Act, 1992 (for short `the Act'), respondent No.1 notified the Export and Import Policy for the period 1992-97 (hereinafter referred to as `the EXIM Policy), under the provisions of para 88 C of this EXIM Policy a total quantity of 3 kgs. of gold from the Minerals & Metals Trading Corporation (MMTC) on 1st July, 1994 vide contract No.L-0963 dated 30th June, 1994. It may be mentioned that in para 88 various schemes for export of gold/silver jewellery and articles are stipulated. Para 88 C deals with

(2.) In terms of the aforesaid scheme, after getting the gold from the MMTC, the petitioner was required to export the gold jewellery made from the said supply of gold, within a period of 120 days, i.e., from 1st July, 1994 to 27th October, 1994. For fulfillment of its obligation, the petitioner furnished a bank guarantee of Rs.12 lacs which was the actual cost of gold prevailing on the date of advance as fixed by the MMTC. Another bank guarantee in the sum of Rs.2,70,000/- was also furnished for difference between domestic and international price of gold and other Government duties/levies and customs duty leviable on that quantity which is not exported. Clause 152 (1) of the Hand Book of Procedures- Volume-1 states the procedures which is to be followed for exporting gold jewellery under the Scheme specified in para 88 C of Export Promotion. As per clause 152 (1), export against an export order shall pertain to a single buyer overseas. This export was allowed by air freight and Foreign Post Office through the Customs House at Bombay, Calcutta, Madras, Delhi, Jaipur, Bangalore and Kochi as mentioned in para 152 (7).

(3.) It is the case of the petitioner that it manufactured in time the gold jewellery articles for exports to a single buyer in United Arab Emirates(UAE) in terms of clause 152 (1) of the Hand Book of Procedure- Volume-I as per scheme stipulated in para 88 C. It is further alleged that when the petitioner was in the process of export of the manufactured plain jewellery out of the gold supplied by the MMTC to the single buyer in UAE , the epidemic of plague in India in September, 1994 spread like wild fire resulting in banning of air flights to India by a number of foreign countries. This unprecedented crisis due to spread of killer disease created considerable anxiety worldwide, while also exacting a heavy economic toll in India. In financial terms the plague's toll was much greater, costing the Indian economy excess of $ 600 million. Many countries stopped air and ship traffic to and from India. The foreign buyer was from UAE where the air flights from India were not permitted to land. Due to chaos prevalent and adverse publicity, the foreign buyer over telephone to petitioner conveyed that he was not interested to receive any export consignment from the petitioner and the contract was rescinded by him. The petitioner thus alleges that because of aforesaid reason it could not export within the stipulated period solely due to spread of epidemic of plague over which it had no control. The petitioner accordingly made request to respondent no.2 on 27th October, 1994 for extension of period for export obligation to enable it to find out another buyer. Pending this extension it also located a buyer and finalised the terms and conditions with him on the condition that supplies would be received by it well in advance before Christmas i.e., before 25th December, 1994. However, extension was received by it from respondent no.2 only on 16th January, 1995 by which time Christmas was already over and therefore this new buyer also backed out and refused to purchase the jewellery. The petitioner, in these circumstances, made further request for extensions on 23rd January, 12th and 13th February, 1995. However, in the meantime, the MMTC invoked both the bank guarantees in November, 1994 thus cost of full amount of gold as well as national and international price difference.