1991 (10) TMI 129 - HC - Customs

Court rules against petitioner lacking vested rights in license transfer, citing public interest and export obligations.

RICO GEMS CORPORATION Versus CHIEF CONTROLLER OF IMPORTS & EXPORTS

The Court dismissed the writ petition, ruling that the petitioner lacked vested rights in the transferred licenses that could supersede import policy ... Promissory estoppel Issues Involved:1. Promissory Estoppel2. Vested Rights3. Import Policy Changes4. Validity of Public Notices5. Export ObligationsIssue-wise Detailed Analysis:1. Promissory Estoppel:The petitioner, a diamond dealer, argued that the principle of promissory estoppel should apply, claiming a vested right in the transferred licences. The Court, however, found no factual foundation or legal principle supporting this contention. The doctrine of promissory estoppel aims to prevent injustice and further justice, but it is cautiously applied, especially when larger principles of justice or governmental necessity are involved. The Court noted that there was no adequate pleading of an unqualified representation or any alteration of the petitioner's position based on such representation, nor any resultant injustice.2. Vested Rights:The petitioner claimed a vested right to use the transferred licences, arguing that changes in import policy or public notices should not affect these rights. The Court rejected this argument, emphasizing a significant clause in the licence that stated it was subject to any prohibitions or regulations in force at the time of the goods' arrival. Therefore, an absolute and inviolable right could not be claimed. The Court also highlighted that the transferors had cautioned the petitioner to operate the licence in accordance with the import policy in force, indicating awareness of potential changes.3. Import Policy Changes:The Court examined the public notices dated 23-4-1991, 9-5-1991, and 16-5-1991, which introduced additional provisions to ensure that exports, on which the licences were based, had been effected. The petitioner argued that these changes should not affect his rights under the transferred licences. The Court held that the Government had the right to amend policies to plug loopholes and ensure that export obligations were met. The changes were deemed rational, reasonable, and fair, and thus, the Court found no reason to interfere with them.4. Validity of Public Notices:The petitioner sought to declare the public notices invalid, both constitutionally and otherwise. The Court found that the public notices were valid and necessary to ensure that the export performance, which earned valuable foreign exchange for the nation, was genuine. The notices required proof of export and receipt of export proceeds, which was a reasonable requirement to prevent misuse of the licences. The Court emphasized that the Government could act to protect its interests and ensure compliance with export obligations.5. Export Obligations:The Court highlighted that the issuance of REP licences was based on the performance of export obligations, which were crucial for earning foreign exchange for the nation. The petitioner could not disclaim the basic liability of fulfilling these obligations. The public notices merely clarified and enforced these requirements. The Court noted that the petitioner, as a transferee of the licence, stepped into the shoes of the transferor and could not escape the obligations associated with the licence. The Court found that the petitioner's contention lacked both factual and legal basis, and the doctrine of promissory estoppel did not apply in this context.Conclusion:The writ petition was dismissed, with the Court holding that the petitioner had no vested right or crystallized right under the transferred licences that could override the import policy changes and public notices. The Government's actions were deemed rational and necessary to ensure compliance with export obligations and protect national interests. The Court emphasized that promissory estoppel could not be invoked to circumvent these obligations, and the petitioner's claims were unfounded.