1. By this petition under Article 226 of the Constitution of India, the National Oil and Chemical Industries, the petitioners herein, have challenged the validity of the order dated 21st March 1978 of the respondent No. 2 and prayed for issuing a writ of mandamus with a direction the respondents to grant the replacement licenses against the three import licenses for the import of crude palm oil granted on 28th November 1977.
2. The relevant facts are these. The petitioners entered into a contract with M/s. B. S. Ahuja Company Pvt. Ltd., Singapore for purchase of 1100 metric tonnes of palm oil. The petitioners were granted three import licenses bearing Nos. P/A 1413329, P/A 1413330 and P/A 141331 on 28th November 1977 for the import of 1100 metric tonnes of palm oil. The contracted grade palm oil was dispatched by M/s. B. S. Ahuja Company by the vessel 'S. S. Katrina'. Unfortunately, the aforesaid vessel 'S. S. Katrina' sank in the Bay of Bengal on 6th February 1978. All the goods on board on the said vessel were lost.
3. On 9th March 1978 the petitioners informed the Joint Chief Controller of Imports and Exports regarding the loss of the crude palm oil imported under the aforementioned licenses. The petitioners requested respondent No. 2 to issue new import licenses in lieu of the licenses issued on 28th November 1977. The Joint Chief Controller of Imports and Exports vide communication dated 21st March 1978 informed the petitioners that no fresh licenses could be issued against the same application and that they should settle the claim with the concerned insurance company directly. The claim of the petitioners with the insurance company was settled on 24th August 1978 and the petitioners were paid a sum of Rs. 50,26,490.66 against the their claim under the insurance policy. On 24th February 1979 the petitioners wrote to respondent No. 2 (annexure P-9) asking for confirmation that they could import the goods originally shipped and lost under the Open General license No. 4 as provided in paras 351 and 352 (chapter 14 of the Hand Book on Import & Export Procedure, 1978-79). The petitioners did not receive any reply. They sent a reminder on 9th March 1979 followed by another reminder on 16th April 1979. The petitioners did not receive any reply to their aforesaid reminders. On 14th June 1979 the Deputy Chief Controller of Imports & Exports wrote to the petitioners that the import policy for the year 1979-80 does not cover import of replacement goods in cases where goods were lost before import and further that since the insurance claim covering the goods has already been settled there is no case for the fresh import of the item. The petitioners were also informed that the import of crude palm oil under import policy 1979-80 is being canalised through S.T.C.
4. The respondents in their counter have stated that the Hand Book on Import Trade Control Rules and Procedure provides detailed procedure for issue of replacement licenses and that the particular never applied for replacement licenses in accordance with the rules. The respondents further stated that replacement licenses have to be issued in accordance with the policy laid down and procedures prescribed by the respondents.
5. Chapter X in the Hand Book on Import Trade Control Rules and Procedure for the year 1977-78 deal with replacement licenses. The relevant paras are 243, 244 and 249. The relevant portions of the said paras read as under :
'243. Where the import of goods would have been covered by a valid license if they had in fact arrived, but are short supplied, short landed or lost in transit prior to actual import, and are detected as much at the time of clearance through Customs, no fresh license would be issued to cover the goods supplied in replacement thereof, if the original license is available for their import. If the original license has expired, it may be revel dated to facilitate the import of such goods.
244. (1) In cases where goods are lost or damaged after import, replacement licenses may be issued by the licensing authority, but this provision will be applicable only when the loss or damage is caused on the docks after landing provided that goods in question were covered by insurance policy at the time of such loss or damage. In such cases, the application for replacement license may be considered on production of the following documents :-
xx xx xx xx 249. (i) Application for replacement licenses or Customs Clearance Permit should be made, complete in all respects, in the prescribed form (Form 'M') and should be sent to the licensing authority who had issued the license against which the goods were originally imported. The application should be accompanied by -
(i) bank receipt showing the amount of application fee paid on the value applied for; and
(ii) documentary evidence considered necessary or required in terms of provisions of this book; or the relevant Import Trade Control Policy Book; or any Public Notice/Trade Notice, issued in this regard.
(2) The application for license/revalidation of original license should be made with a period of 60 days, after the short-shipment, short-landing, loss in transit or the defect in the imported goods is noticed; or within 60 days from the date the foreign supplier accepts to replace the goods free of charge, whichever date is later. In cases, where the importer has made a claim for the cost of such goods on the insurance company, he should make an application for replacement license/revalidation of original license within a period of 60 days after the claim has been accepted or settled and the payment made by the insurance company.
(3) Application received after the prescribed period of 60 days will be liable to be rejected. But, in deserving cases, the licensing authority may consider such application, if received within 90 days instead of 690 days'.
6. A reading of paras 243 and 244 would show that para 243 deals with short-shipment or short-landing or loss in transit before import and para 244 deals with loss or damage after import. Para 243 provides that in case of loss in transit before import no fresh license would be issued to cover the goods supplied in replacement thereof, if the original license is available for their import and if the original license has expired it may be revalidated to facilitate the import of such goods.
7. Para 249 lays down the procedure for submission of applications for replacement/revalidation of licenses. Sub-para (2) of para 249 provides that in cases where the importer has made a claim for the cost of such goods on the insurance company, he should make an application for replacement license/revaluation of original license within a period of 60 days after the claim has been accepted or settled and the payment is made by the insurance company. Sub-para (3) of para 249 provides that in deserving cases the licensing authority may consider such applications if received within 90 days instead of 60 days.
8. The claim made by the petitioners on the insurance company was settled on 24th August, 1978 and the petitioners were paid an amount of over Rs. 50 lakhs. The letter dated 24th February, 1979 by the petitioners to respondent No. 2 even if the said letter was treated as an application for revalidation of the license was made long after the expiry of 90 days. The petitioners never made on application in the prescribed form for replacement license and/or revalidation of licenses.
9. Mr. Salve, learned counsel for the petitioners, contended that it is the Import-Export Procedures laid down for the year 1978-79 which will be applicable to the case of the petitioner. The counsel referred to paras 351 and 352 contained in Chapter 14 under the heading 'Miscellaneous' in the Hand Book of Import-Export Procedures 1978-79. The said paras read as follows :
'351. Goods imported in replacement of those previously imported which have been found to be defective or otherwise unfit for use, or have been lost or damaged after import, would be allowed to be cleared under Open General license No. 4 provided the conditions stipulated under the said OGL are fulfillled. In respect of such replacement imports, the shipment should be made within 18 months from the date from which goods were found/reported to be defective or within the guarantee period in the case of machines or parts thereof. Where the replacement import is made on the basis of insurance claim settled, the goods will be allowed under OGL only up to the value settled by the insurance company. Cases, where shipments for replacement have not been made within 18 months will not normally be considered. However, in cases of genuine hardship, for reasons beyond the control of the applicant, the licensing authority may consider such requests on the merit of each case.
352. In cases, where the goods have been found short-shipped, short-handed or lost in transit at the time of clearance through the customs, no fresh license will be issued to cover the goods. In cases where the validity of original license has expired, the same will be revalidated to facilitate the re-import of such goods.'
10. From a reading of para 351 it is clear that it is applicable only to loss or damage to goods after import. The said para would not be applicable to the case. Para 352 deals with cases where the goods have been found short-shipped, short-landed or lost in transit at the time of clearance through the customs; in such a case the para provides that no fresh license will be issued to cover the goods but in cases where the validity of original license will be revalidated to facilitate the import of such goods. It is doubtful even if para 352 will be applicable to the case in hand, for, it is not a case where goods were found to have been lost in transit at the time of clearance through the customs. Assuming, for the sake of argument, that para 352 is applicable no fresh license was to be issued to cover the goods. In case the validity of the original license had expired the petitioners could have applied for revalidation of the licenses to reimport the goods. The petitioners never made a request for revalidation of the licenses.
11. On a consideration of the relevant provisions, I am of the view that it is the rules and procedure laid down for the year 1977-78 which would be applicable to the case. The import licenses were issued on 28th November, 1977. The goods were lost on 6th February, 1978. Out of expired the three licenses issued to the petitioners license No. P/A 1413330 on 31st January, 1978 and the remaining two on 28th February, 1978. The right to have the licenses revalidated accrued to the petitioners on 1st March, 1978 when the import and export procedures in force in 1977-78 were applicable. Even if it be taken that the right to have the licenses revalidated accrued after the claim for the cost of the goods was settled with the insurance company, in my view, the licenses still were governed by the rules and procedure in force in 1977-78.
12. Mr. Salve contended that when the petitioners wrote to respondent No. 2 on 9th March, 1978 for the grant of a fresh license they could have been easily informed by respondent No. 2 that no new license was required and they need only apply for revalidation of the license. The procedure that was to be follows regarding the grant of replacement license and/or revalidation of original licenses is clearly laid down in Chapter X (already reproduced). The petitioners were supposed to make application for the revalidation of original licenses in the prescribed applications form. There was no rule for the grant of a fresh license. In the letter dated 24th February, 1979 also there was no request for revalidation of the license. Moreover, the letter dated 24th February, 1979 was written after more than 90 days of the settlement of the claim with the insurance company.
13. The Deputy Chief Controller of Imports & Exports vide its communication dated 14th June, 1979 wrote to the petitioners as under :
'Please refer to your letter No. NOC.II dated the 16th April, 1979, on the subject mentioned above.
2. It is clarified that OGL No. 4/79 dated the 3rd May, 1979 reproduced in Appendix 16 of the Import Policy, 1979-80 does not cover import of replacement goods in cases where goods has already settled, there is no case for fresh import of the item, import of which is cancelled through STC under the Import Policy 1979-80.'
14. On giving my careful thought to the contentions urged at the bar I am of the view that no case has been made out for interference. The petition is dismissed. I leave the parties to bear their own costs.