UNION OF INDIA Vs. COSMIQUE INERNATIONAL

JUDGEMENT

(1.) The respondents (writ petitioners) are engaged in exporting ready-made garments to various countries. The Textile Commissioner, appellant No. 2, <PG>555</PG> announced various incentives for the exporters from time to time. On 27th March 1978 the Textile Commissioner decided to contribute to the Export Promotion Fund of the Indian Cotton Mills Federation (respondent No. 3) from 1st April, 1978 to 31st March, 1979 the cash incentives at the rates mentioned in the said communication on the export of cotton textiles to be made during the year 1st April, 1978 to 31st March, 1979. The case of the petitioners is that relying on the said communication that cash assistance will be available to the exporters on the export of ready-made garments during the aforesaid period they priced their goods for export taking into consideration the cash assistance which would be available to them from the Govt. On 6.1.1979 another circular was issued discontinuing the said cash assistance with effect from 1.1.1979. The effect of the circular was that the cash assistance (Cash Compensatory Support) to the exporters on the export of all the items of the garments mentioned in the said circular was to be discontinued from 1.1.1979. According to the petitioners the discontinuance of the Cash Compensatory Support with effect from 1.1.1979 is in violation of the terms held out by the appellants (respondents I and 2 tn the writ petition) for granting cash assistance for export of ready-made garments. The petitioners claim that they were induced to enter into firm contracts with various buyers at prices lower than which they would have otherwise charged taking into consideration the cash compensatory allowances offered by the Govt. under the said Scheme. The Scheme itself wag meant to support the price to be quoted by Indian Exporters in International market. The support was necessary because the international price was lower as compared to prices in India. Withdrawal of the Cash Compensatory Support during the currency of the period for which it had been announced would result in losses to the petitioners qua the firm contracts entered into by them with various buyers prior to the date of withdrawal of the Cash Compensatory Support. If the petitioners did not supply the goods to various buyers, they would be committing sreach of contracts which would in turn result in invocation of bank guarantees already furnished by them to various buyers, causing heavy losses to the petitioners. On the basis of the firm commitments the petitioner had also entered into arrangements with supplies of raw materials to them and the fabricators of garments in order to make the goods ready for export. They had employed staff for this purpose, if contacts were not to be executed this would all result in losses. Secondly, it was submitted that this would result in spoiling the reputation and goodwill of the country in the international market.

(2.) The learned Single Judge held that if on the basis of the circular offering cash compulsory benefits, the petitioners entered into firm commitments with foreign buyers,theycannotbedenied the benefits under the Scheme. Relying on principles of promissory estoppel it was held that the petitioners altered their position by entering into firm contracts at reduced prices keeping in view the cash incentives receivable from the Govt. under the Scheme. The Govt. is, therefore, bound to honour the policy to the extent of all such firm contracts.

(3.) The learned Counsel for the appellant has urged the following points to challenge the judgment under appeal:- <PG>556</PG>