Discretionary import entitlement under an export promotion scheme is not automatic; refusal based on relevant material withstands challenge.
A discretionary import entitlement under an export promotion scheme is not automatic up to the maximum stated amount; the Licensing Authority may reduce it on relevant material, and a decision based on complaints about the quality and condition of exported machinery was not arbitrary. Allegations of mala fides based on an alleged loan-related extraneous consideration were not established on the record, so the refusal was not shown to be tainted by improper motive. An Article 14 challenge also failed because no similarly situated comparators or supporting particulars were pleaded. The petition for a mandamus directing grant of the remaining import licence was dismissed with costs.
Issues: (i) whether the refusal to grant the balance import entitlement under the export promotion scheme was arbitrary; (ii) whether the refusal was vitiated by mala fides on account of an alleged extraneous consideration; (iii) whether the denial of the remaining licence amounted to discrimination offending Article 14.
Issue (i): whether the refusal to grant the balance import entitlement under the export promotion scheme was arbitrary.
Analysis: The scheme conferred a discretion on the Licensing Authority to grant import licences upto the monetary extent mentioned in the annexure, but not an absolute right to the maximum amount. That discretion was required to be exercised reasonably. On the materials placed, the authority relied upon complaints regarding the quality and condition of the exported machinery and an engineer's report showing that the goods were damaged, incomplete and defective. The reduction in entitlement was therefore based on relevant considerations and not on an arbitrary exercise of power.
Conclusion: The challenge on the ground of arbitrariness failed.
Issue (ii): whether the refusal was vitiated by mala fides on account of an alleged extraneous consideration.
Analysis: The allegation was that the refusal to issue the remaining licence was linked to the petitioners' refusal to advance a loan to the foreign purchaser. The respondents denied any such connection and stated that the officer said to have made the request was not directly concerned with import entitlement. It was also noted that part of the entitlement had already been granted before the alleged loan request. The record did not establish that the refusal was motivated by the alleged extraneous circumstance.
Conclusion: The plea of mala fides failed.
Issue (iii): whether the denial of the remaining licence amounted to discrimination offending Article 14.
Analysis: A plea under Article 14 requires more than a bare assertion of differential treatment. The petition did not identify similarly situated persons who had been treated more favourably, nor did it furnish particulars showing unjustified discrimination. Without such foundational facts, no valid case of denial of equal protection could be made out.
Conclusion: The Article 14 challenge failed.
Final Conclusion: The petitioners failed to establish any constitutional or legal ground for a mandamus directing grant of the remaining import licence, and the petition was dismissed with costs.
Ratio Decidendi: A discretionary licensing decision under an export promotion scheme is not arbitrary if it rests on relevant material, and a challenge under Article 14 requires specific pleading and proof of treatment of similarly situated persons without reasonable basis.
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