Accrued replenishment entitlement cannot be cut down by later import-export policy restrictions where transitional provisions do not permit it.

A replenishment entitlement that had accrued under the earlier import-export policy could not be curtailed by restrictions introduced in a later policy. The exporters had already completed the export obligation when the right to replenishment arose, and the transitional provision in paragraph 254 of Chapter 23 of the 1984 Import Export Policy did not authorise reduction of that accrued entitlement where the imported item remained the same and the overall replenishment due was unchanged. The court held that the impugned ceiling in the replenishment licence was unsustainable, and the licence had to be issued according to the earlier policy without applying the later restriction.

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Issues: Whether the petitioners, having earned replenishment entitlement under the earlier import-export policy, could be denied the full replenishment licence by applying restrictions introduced under the subsequent policy.

Analysis: The petitioners had completed the export obligation under the policy in force when the right to replenishment accrued. Paragraph 254 of Chapter 23 of the Import Export Policy of 1984 governed transitional cases, but it did not authorise curtailment of the replenishment entitlement where the item of import remained the same and there was no change in the overall replenishment due. The later policy could not take away the entitlement already earned under the earlier regime.

Conclusion: The restriction imposed in the replenishment licence was not sustainable, and the petitioners were entitled to have the licence issued on the basis of the earlier policy without the impugned ceiling.

Final Conclusion: The petition succeeded, and the petitioners obtained relief against application of the later policy restrictions to their accrued replenishment entitlement.

Ratio Decidendi: A policy change cannot retrospectively curtail a replenishment entitlement that has already accrued under the earlier policy where the transitional provision does not expressly authorise such restriction.

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