Direct import relief under Import-Export Policy where canalising agency's full-balance letter of credit demand was inconsistent with supply rules

The Import-Export Policy required the canalising agency to scrutinise the registration and, within 60 days, indicate the supply arrangement it could make, while paragraph 69 confined financial cover to not more than the sale value of three months' quantity at a time. A demand for a letter of credit for the entire balance quantity was contrary to that framework and therefore was not a valid offer under the policy. On that basis, paragraph 155(1) entitled the actual user to seek direct import of the balance quantity when the canalising agency failed to make the required arrangement, and no objection certificate was not required.

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Issues: Whether the canalising agency's demand for opening a letter of credit for the full balance value, instead of arranging supplies in the manner contemplated by the Import-Export Policy, amounted to failure to supply the registered demand so as to entitle the petitioner to a direct import licence for the balance quantity and dispense with a no objection certificate.

Analysis: The policy required the canalising agency to scrutinise the registration and indicate within 60 days the arrangement it could make for effecting supplies. Paragraph 69 limited financial cover to not more than the sale value of three months' quantity at a time, while paragraph 155(1) permitted the actual user to seek relief by direct import where the canalising agency failed to give the required indication or failed to effect deliveries as registered. The communication insisting on a letter of credit for the entire balance quantity was held to be contrary to paragraph 69 and therefore not a valid offer within the policy framework. On that basis, the petitioner's request for direct import of the balance quantity was treated as justified.

Conclusion: The petitioner was entitled to a mandamus directing issuance of the necessary import licence for the balance quantity of the two items, and no objection certificate from the canalising agency was not required.

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