UNION OF INDIA Vs. RIZWAN INTERNATIONAL

JUDGEMENT

(1.) This Writ Appeal has been filed against the order in W.P. 10444 of 1992, issuing a Writ of Mandamus directing the appellants herein to issue a licence for the export of the goads to the value of U.S. Dollars 75,000/- against the letter of credit No. 41-2432445-031.

(2.) The respondent, a partnership firm, is recognised exporter. The main products of export is musical instruments parts made out of red sanders wood. The respondent has installed the necessary infrastructures for carrying on its export business by setting up a production facility at No. 1, Riswan Madhavaram. Red sanders wood is widely used by Japaness for making the musical instrument known as "Shamisen". Export of Red sanders musical instruments and chips, powder and koto-parts had been taking place in the past several years from Tamil Nadu as per the exports and imports policy prevailing up to 31-3-1992. The export of the said products was on the basis of the licence issued by the Chief Controller of Imports and Exports, New Delhi. As a matter of fact, the export and import policy was announced for the period from April 1990 to March 1993. But, however, in March 1992, the export import policy was suddenly changed and a new policy was framed for 5 years commencing from 1-4-1992 and ending with 31-3-1997. Under the export import policy for the period from 1-4-1992 to 31-3-1997, (hereinafter referred to as new policy) a prohibition is introduced against export of red sanders in any form. The respondent made a representation to the authorities and wanted to know from them as to whether musical instruments and other chips made out of red sanders wood, which was being exported by the respondent, could be exported, even after the coming into force of the new policy. The second appellant sent a reply dated 14-5-1992 stating that the export of red sanders wood in any form is prohibited under the new policy and that the respondent will not be entitled to continue export. Aggrieved by the reply dated 14-5-1992 sent by the second appellant, the respondent filed W.P. 10444 of 1992 for quashing the said communication dated 14-5-1992 and for the issue of Writ of Mandamus directing the appellants herein to grant a licence for the value of U.S. Dollars 75,000/- against the letter of credit No. 41-2,432445-031. According to the respondent, on the basis of the earlier export and import policy, the respondent had been entering into contract with various buyers for sale of musical instruments parts. Under one such contract, latter of credit was opened on 21-2-1992 by Sanwa Bank Limited, Osaka, in favour of Indian Overseas Bank, Madras. It is a open irrevocable letter of credit and the amount mentioned is U.S. Dollars 1,00,000/-. The date of expiry for negotiation was mentioned as 31-7-1992. The period was subsequently extended up to the end of December, 1992. The said letter of credit covers the musical instrument parts made of red sanders as approved by the buyer.

(3.) The genuineness of the letter of credit of the correctness of the claim made by the respondents that it had entered into contract with a foreign buyer prior t the introduction of the new policy is not in dispute. Section 3(1) of the Imports and Exports (Control) Act, 1947 (hereinafter referred to as the Act) empowers the Central Government to make provisions by publishing an order in the Official Gazette prohibiting, restricting or otherwise controlling in all cases or in specified classes of cases the import, export carriage cost wise or shipment as ships stores of goods of any specified description. Subsection (2) of Section 3 of the Act refers to Section 11 of the Customs Act and declares that all goods to which any order under Sub-Section (1) applies shall be deemed to be goods of which the import or export has been prohibited under Section 11 of the Customs Act and all the provisions of that Act shall have effect accordingly. Sub-section (3) of Section 3 reads thus;