High CourtDivision Bench1986-09-12Interim order refused; petitions disposed; no o...

Star Diamond Co. India v. Union of India & Ors.

Case / Petition Number:Civil Appeal No. 2924 of 1984; Civil Misc. Petitions Nos. 20021-22 of 1986

Neutral Citation:(1986) 3 SCR 782

Case Details & Bench

Court: High Court
Hon'ble Judges: R.S. Pathak
Sabyasachi Mukharji
Judgment Date: 1986-09-12
Court Decision / Holding: The interim order prayed for in these applications is refused. The applications are disposed of without costs.
Final Disposition: Interim order refused; petitions disposed; no order as to costs.

Parties to the Case

Appellants / Petitioners

Star Diamond Company India

Respondents

Union of India
Ors

Legal Representation & Advocates

Counsels for Petitioners

• S.N. Kacker
• P.M. Amin
• Atul
• B. Munim
• Ashok Grover

Counsels for Respondents

• A.K. Ganguli
• Miss Sushma tlelan
• Miss A. Subhashini

Case Synopsis & Summary

This judgment deals with import policy 1985-88 and the entitlement of holders of additional licences for 1978-79 to import canalised as well as non-canalised items, in light of the Supreme Court's earlier directions. The Court recalls its order dated 18 April 1985 in Union of India v. Rajnikant Bros., which directed that, save for items specifically banned under the policy, merchants would be entitled to import all other items in accordance with relevant rules, and that both canalised and uncanalised items could be imported within those rules. The Government subsequently clarified its position in a June 18, 1986 letter, indicating that holders of additional licences for 1978-79 would be entitled to import only goods listed in Appendix 6 Part II of AM 85-88. The applicant (Star Diamond Company India) argued it was neither a party to nor served with notice of the earlier proceedings, and contended it was not bound by those directions, relying on Raj Prakash’s Chemicals Ltd. v. Union of India (1986) 2 SCC 297 and Indo Afghan Chamber of Commerce & Ors. v. Union of India (AIR 1986 SC 1567). The respondents contended that the law laid down by this Court is binding on all and that the earlier directions applied. The Court emphasizes that decisions laying down the position in law are binding on all, clarifies that the 1985 order’s language included canalised items, and holds that the June 1986 letter cannot estop enforcement. The interim relief sought is refused, and the petitions are disposed of without costs.

Provisions of Law Cited

Article 141 of the Constitution of India

Legal Doctrines & Maxims

Estoppel

Submissions & Arguments

Contentions of Appellants / Petitioners

The applicant contends it was neither a party nor served with notice of the proceedings leading to the earlier judgments and, accordingly, not bound by those directions. It submits that the 18 April 1985 order did not specifically decide whether canalised items were covered by the directive; the phrase "whether canalised or not" should be read to include both canalised and non-canalised items under the policy. It relies on Raj Prakash Chemicals Ltd. v. Union of India and Indo Afghan Chamber of Commerce & Ors. to argue that its import rights were not foreclosed. The applicant asserts that the Government’s 23 June 1986 letter cannot create estoppel against the position established by the Court, and that the policy permitting import under applicable rules should be honoured for 1978-79 licence holders, with no prejudice to those who did not diversify exports.“

Contentions of Respondents

The respondents contend that the decisions of this Court laying down the position in law are binding on all, regardless of party status. They argue that the 18 April 1985 order was intended to cover both canalised and non-canalised items within the policy and that subsequent communications, including the 23 June 1986 letter, clarify the position rather than negate it. They maintain that the Import Policy 1985-88 and the government’s instructions govern, and that the petitioners were bound by the earlier directives. They submit that estoppel cannot arise against the State on the basis of a letter, and that the interim order should be refused."},

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
Raj Prakash Chemicals Ltd. v. Union of India	2 SCC 297	Positive	The Court treats this and related cases as binding law clarifying the scope of the 18 April 1985 order and its applicability to canalised and non-canalised items.
Indo Afghan Chamber of Commerce & Ors. v. Union of India	AIR 1986 SC 1567	Positive	The decision is cited and relied upon to explain the law position and its binding effect.
Union of India v. Godrej Soaps Pvt. Ltd.	SLP (Civil) No. 8144 of 1986; Civil Appeal No. 3418/86	Positive	Acknowledged as explaining the true purport of the earlier decision; relied upon for interpretation of the directive.
Mis Godrej Soaps Pvt. Ltd. v. Union of India	Civil Appeal No. 3418/86	Positive	Helped clarify the true purport of the court’s prior decisions as applied to the present matter.

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Extracted Judgment Text

Exact text extracted from official judgment records.

A B ### c D F # I STAR DIAMOND CO. INDIA _v._ UNION OF ·INDIA _$l._ ORS. SEPTEMBER 12, 1986 [R.S PATHAK AND SABYASACHI MUKHARJ!, JJ.] _Import Policy 1985-88: Holders_ _of Additional Licences for_ _1978-_ _79--Whether entitled_ _to_ _import both 'canalised' and 'non-canalised'_ items~Effect _and interpretation of Courts or:der._ _Constitution_ _of India, Art.ic/e_ _141;_ _Court's decision laying down_ _position in law binding on all._ ' _Administrative law._ ### Administrative instructions-Whether create estoppel against • _subsequent directions._ This Court by its order dated 18th April 1985 in _Uninn of India_ v. _Rajnikant Bros._ (Civil Appeal No. 1423 of 1984) directed that save and except items which were specifically banned under the prevalent Import Policy at the time of import, parties would. be entitled to import all ~ther **items whether 'canalised' or 'uncanalised' and** **in** **accordance with** the relevant rules. The effect of this direction came to be considered in _Raj Prakash Chemicals Ltd._ v. _Union_ _of India,_ [1986] 2 sc·c 297, and _M/s. fndo Afghan Chamber_ _of Commerce_ _&_ _Ors._ v. _Union_ _of India,_ (AIR 1986 SC 1567). The effect has also been expl,ained in _Union_ _of_ _India_ v. _M/s. Godrej Soaps Pvt. Ltd.,_ (S.L.P. No. 8144of1986). The applicant was neither a party nor was served with any notice of the aforesaid proceedings. The respondents having not permitted **clearance of its goods in view of the decisions in** _Ra/ Prak ash's_ case **and** _Jndo_ _Afghan Chamber of Commerce's_ case the applicant liled petitions G contending that it was not bound by the directions contained therein. , . Disposing of the petitions, the Court, HELD: Decisions of this Court laying ilown the position in law, are laws binding on all. [782G] H 78 J 782 SUPREME COURT REPORTS [1986] 3 S.C.R. A Whether importation of canalised items would be covered by the order. was not adverted to in the first order dafed 18th April, 1985. Use of the expression "Whether canalised or not" was intended to convey that both canalised and non-canalised items would be covered witliin the ambitofthe order. [783G) B #### c D The position has been clarified by the respondent's letter dated June 18, 1986. The Government of India's letter dated April 23, 1986 which is not in consonance with the subsequent direction, would not in any way affect the position or create any estoppel. Nor can such a letter be used as an argument that that was the Government's understanding of the matter. [783H; 784A-B) CIVIL APPELLATE JURISDICTION: Civil Misc. Petitions Nos. 20021-22 of 1986. _in_ Civil Appeal No. 2924 of 1984. From the Judgment and Order dated 22.7.1983 of the Delhi High Court in W.P. No. 963 of 1982. S.N. Kacker, P.M. Amin, Atul, B. Munim and Ashok Grover E for the Applicant. A.K. Ganguli, Miss Sushma tlelan .and Miss A. Subhashini for the Respondents. F The Judgment of the Court was delivered by . SABYASACHI MUKHARJI, J. These two Civil Misc. Petitions are ~y Star Diamond Company India. The applicant has referred to the judgments of this Court in _Raj Prakash's_ case I 1986) 2 SCC 297 dated 5th March, 1986 and _Jndo Afghan Chamber of Commerce's_ case AIR 1986 SC 1567 dated 15th May, 1986. The applicant states that the G applicant was neither a party nor was served with anynotice of the said proceedings resulting in the said two decisions. According to the applicant, it was not bound by the directions therein. We are unable to accept the said contentions. Such decisions of Court laying down the position in law are laws binding on all. H In the order of this Court dated 18th April, 1985, the question of STAR DIAMOND _v._ U.0.1. {MUKHARJI,J.J 783 **entitlement 'under** **certain circumstances** **came** **up** **for consideration.** The Government had wrongfully refused to allow Export House Certificates to those who had not diversified their exports. It was held by this Court following the decisions of several High Courts that this was wrong. This Court in the order dated 18th April, 1985 in Civil Apeal No. 1423 of 1984, (a) confirmed the orders of the High Court, quashed the impugned orders of the Government and directed the - Government to issue necessary Export House Certificates for the year 197.8-79; (b) It was further directed that Export House Certificates should be granted within 'three months from this date. (c) Save and except items which are 'specifically banned under the prevalent in)port policy at the time of import', the parties-the merchants would be entitled to import all other items whether canalised or uncanalised, and in accordance with the relevant rules. Both canalised and uncanalised items could be imported in accordance with the relevant rules except those which were specifically banned under the prevalent import policy at the time of import.· The effect of this direction came to be considered in _Raj Prakash_ _<;hemicals_ _Ltd._ v. _Union_ _of India_ (supra). We have this date explained the effect of the same in _Union of_ _India_ v. _Mis Godrej Soaps Pvt._ _Ltd_ & _Anr.,_ (Civil Appeal No. 3418186 arising out of SLP (Civil) No. 8144 of 1986). This question further came up for examination in the case of _Mis Jndo Afghan Chamber of_ _Commerce_ & _Ors._ v. _Union_ _of India,_ (Writ Petition No. 199 of 1986) (supra). This day we have also in the judgment in _Mis Godrej Soap's_ case explained the true purport of the said decision. The respondents have not permitted, according to the applicant ##### clearance of the goods in view of the said two decisions referred to hereinbefore. The case of the applicant is that it is not bound as the applicant was neither a party to any of the aforesaid proceedings nor any notice was given. We are unable to accept this position. For what we held in the said two decisions, we crave leave to refer to the said two decisions. We reiterate as we have mentioned in _Mis_ _Godre/ Soaps'_ case whether importation of canalised items would be covered by the order was not adverted to in the first order dated 18th April, 1985. Use of the expression "whether canalised or not" was intended to convey that both canalised and non-canalised items would be covered within the ambit of the order. A B· ### c D. E F G The position has been clarified by the Jetter dated 18th June, 1986 written by the respondent which appears at page 132 of the Paper H A B ## • 784 SUPREl.IE COURT REPORTS 11986] 3 S.C.R. Book. It has been mentioned that the holders of additional licence issued for 1978-79 would be entitled to import only those goods which are included in Appendix 6 Part Il of AM 85-88. The fact that the Additional Secretary to the Government of India, Ministry of Finance (Department of Revenue) on 23rd April, 1986 wrote a letter which is not in consonance with the subsequent direction would not in any way affect the position or create any estoppel. Nor can such a letter be used as an argument that that was the government's understanding of the matter. That is irrelevant. In the premises the i!Jterim order prayed for in these applications is refused. _C_ The applications are thus disposed of. There will be no order as to costs. P.S.S.