Court orders payment of Rs. 8,83,400 with interest. Upholds rights under promissory estoppel & rejects set-off claim.

The court allowed the writ petition, directing the third respondent to pay Rs. 8,83,400/- with interest at 6% from the date of submission of the license till the date of payment within eight weeks. No costs were awarded, and the connected miscellaneous petition was closed. The court upheld the petitioner's right to payment based on the doctrine of promissory estoppel and previous court orders securing rights regarding the legitimacy of exim scrips. The respondents' attempt to withhold payment and make a set-off claim without legal basis was rejected.

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Issues Involved:
1. Legitimacy of the exim scrips and the corresponding payment claims.
2. Application of the doctrine of promissory estoppel.
3. Authority of the second respondent to withhold payment.
4. Legal basis for the set-off claim by the respondents.

Issue-wise Detailed Analysis:

1. Legitimacy of the exim scrips and the corresponding payment claims:
The petitioner sought to set aside the order dated 23-6-2006 by the second respondent and directed the third respondent to pay Rs. 8,83,400/- with interest at 18% from the date of submission of the license. The petitioner had purchased 20 exim scrips and presented them for encashment, but the second respondent instructed the third respondent not to pay due to some scrips being found bogus. The vendor of the exim scrips was prosecuted for submitting forged documents, and the petitioner was a witness in the case. The petitioner had previously filed W.P. No. 18382 of 1992, which was allowed, stating that payments for genuine exim scrips could not be withheld. The Division Bench upheld this, stating payments for genuine scrips must be made upon furnishing adequate security.

2. Application of the doctrine of promissory estoppel:
The petitioner argued that the respondents were bound to make the payment based on the principle of equitable estoppel. The court referenced the Supreme Court judgment in Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector & ETIO, which elaborated on the doctrine of promissory estoppel, stating it creates a right and acts on equity. The court held that the respondents were estopped from denying the petitioner's right to payment, as the exim scrips were deemed genuine by earlier court orders, giving the petitioner an automatic right to claim the premium.

3. Authority of the second respondent to withhold payment:
The second respondent had directed the third respondent not to make payments against the cancelled scrips and to recover any amounts already paid. The court found this action to be without legal basis, as no provision of law was cited for making a counter-claim. The court emphasized that the respondents could not go behind the earlier court orders, which had secured the petitioner's rights regarding the genuine exim scrips.

4. Legal basis for the set-off claim by the respondents:
The respondents argued that the petitioner could not realize the sum of Rs. 8,83,400/- unless he paid Rs. 14,11,200/- with interest, which was obtained through fraudulent means. The court rejected this argument, stating that the respondents had not provided any legal basis for such a set-off claim. The court held that the petitioner's rights were secured by earlier orders, and the respondents were bound to honor the promise held out by the earlier circular issued.

Judgment:
The writ petition was allowed. The third respondent was directed to pay Rs. 8,83,400/- with interest at 6% from the date of submission of the license till the date of payment within eight weeks. No order as to costs was made, and the connected miscellaneous petition was closed.

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