Holding

The respondents must release the CCS amount of Rs.4,19,916 with interest at 9% per annum because the forfeiture order was uncalled for and the SIL had been converted into a Project Import Licence, making the bond unenforceable.

Summary

The appellant, a partnership firm, was awarded a government contract and obtained a Special Imprest Licence (SIL) to import raw materials duty‑free, subject to a bond and an export obligation. After fulfilling the export obligation, the licensing authority issued a forfeiture order, enforced a bond and denied cash compensatory support (CCS). The High Court held the forfeiture order was unwarranted, directed conversion of the SIL into a Project Import Licence and rejected the CCS claim. On appeal, the Supreme Court observed that the conversion and the High Court’s finding rendered the bond unenforceable and that the respondents had no authority to retain the CCS amount. Consequently, the Court ordered the release of the approved CCS amount of Rs.4,19,916 with interest at 9% per annum from the date of the High Court’s order, while denying further CCS relief.

Issues considered

Whether the forfeiture order and enforcement of the bond were valid after the SIL was converted into a Project Import Licence.
Whether the appellant is entitled to cash compensatory support (CCS) under the SIL after its conversion.
Whether the respondents were justified in retaining the CCS amount without legal authority.
Whether interest is payable on the CCS amount due to the appellant.
Effect of the reduction of the debarment period on the appellant's liability.

Legislation cited

Customs Act

Subjects

Cash Compensatory SupportSpecial Imprest LicenceForfeiture OrderCustoms DutyExport ObligationLicence ConversionInterestDebarmentForeign Trade

Judgment

[2008] 12 S.C.R. 544
r
GENERAL INSTRUMENTS COMPANY ~-
A
v.
UNION OF INDIA & ORS.
(Civil Appeal No. 5222 of 2008)
AUGUST 25, 2008
B
[C.K. THAKKER AND D.K. JAIN, JJ.]
-f'
Export-Import.- Cash Compensatory Support (CCS) -
Claim of - Global tender floated by Government Undertaking
c Import ofraw material by supplier Firm - Application for Im-
-
port licence at concessional rate of duty - However, issuance
of Special Imprest Licence (SIL) subject to execution of bond
- Thereafter, forfeiture order against Firm as it failed to fulfil
export obligation - Directions to remit Bond amount and pay
customs duty - Subsequently, denial of CCS by Authorities -
D
Custom Authorities seeking recovery of custom duty - Sev-
era/ rounds of litigation - Representation by Firm seeking con- ~·

version of SIL into licence for imports, rejected - Order of High
Court that forfeiture order not called for; that Licensing Authori-
"""
ties erred in issuing SIL, thus Bond not enforceable; and that
E the Authorities would convert SIL into licence for imports, but
rejected claim of CCS - On appeal, held: During the course
of hearing, Authorities allowed substantial claim for CCS, how-
ever, rejected the balance claim for want of documentary evl-
dence - Since SIL was converted into Project Import Licence,
F claim for balance CCS cannot be granted - However, since
the period of debarment was reduced and High Court. held
_._
that forfeiture order was not called for, there was no justifiable
reason for not releasing CCS claim - Respondents retained
the CCS amount due to Firm .without authority of law and is
G liable for it- Thus, respondents directed to release CCS claim
with interest @ 9% p.a. from date of impugned judgment till
)-~
date of actual payment.
RCF-a Government of India Undertaking floated a

H 544
GENERAL INSTRUMENTS COMPANY v. UNION 545
OF INDIA & ORS.
y'"
global tender for supply of capital goods for its project. A
Appellant-partnership firm submitted its quotation for
supply of cables. RCF accepted the tender and agreed to
purchase cables worth Rs. 17,49,000/- from the appellant
by a purchase order. Appellant applied to Joint Chief Con-
troller of Imports & Exports for import licence with duty B
I
exemption entitlement certificate etc. for import of raw
"" materials. Thereafter, appellant obtained the essentiality
certificate from RCF and forwarded it to JCCI. Though the
project was fully financed by the Government of India,
--t
JCCI issued a Special Imprest Licence (SIL) to the appel- c
lant under AM 84 policy, permitting the appellant to im-
port listed raw materials for Rs.5,78,300/-without payment
of customs duty, subject to certain conditions. In pursu-
ance thereof, Bond was executed. Appellant imported raw
materials and utilised them in the manufacture of result-
D
ant products, valued at Rs.17,59,382/-; supplied to RCF
against the export obligation of Rs.17,49,000/-. Thereat-
ter, appellant approached RCF for requisite endorsement
~
on Duty Exemption Entitlement Certificate. RCF made the
requisite endorsement on the DEEC book that the appel-
~ lant had supplied goods valued at Rs.17,59,382/- from E
27 .07 .1983 to 10.05.1984. Meanwhile, JCCI issued show
cause notice to appellant calling them to enforce Bond
for Rs.12,14,623/- furnished by them as they violated the
Licence and the Bond. The Controller of Imports and Ex-
ports held that the appellant failed to fulfil the export obli- F
...... gation as also to furnish the prescribed documents in time.
It directed the appellant to remit the Bond amount of
Rs.12, 14,623/-; to surrender the valid R.E.P. licence remain-
ing unutilised and to pay customs duty with interest @
18% p.a. Consequent to the forfeiture order, Controller of G
~ ,( Imports & Exports, denied cash assistance to the appel ..
'
lant.
Appellant filed appeal against the forfeiture order
which was rejected. Appellant then filed second appeal .. H
546 SUPREME COURT REPORTS [2008] 12 S.C.R.

A During the pendency, the Customs Authorities sought
recovery of customs duty amounting ~o Rs.3,71,614.82
from the appellant in respect of raw materials imported
and cleared without payment of duty under SIL. Appel-
lant filed writ petition which was disposed of as the ap-
8 pellant volunteered to deposit the customs duty de-
I
manded. Thereafter, by order dated 21.02.03, the second -f
appeal was also dismissed. The licensing authority initi-
.... ated Departmental proceedings against the appellant.
Appeal thereagainst was dismissed. However, the second
c appeal was partly allowed by reducing the period of de-
' barment upto 31.03.1989.
The appellant then filed Writ Petition against order
dated 23.02.03. During the pendency thereof, appellant
made ·representation to the Ministry, seeking conversion
D of SIL into Project Import Licence. However, the represen-
tation was rejected. In appeal, High Court held that forfei-
ture order against the appellant was uncalled for; that
even though the second appellate. authority held that
there is no financial implication on account of the forfei-
E ture order, yet on account thereof, the appellant was made l
liable to pay entire customs duty with interest and pen- ,t
alty; that once it is accepted that it was a mistake to issue
SIL to the appellant and the conditions attached to the
Bond and the licence were wholly impossible to perform,c
F the licensing authorities ought. to have taken remedial
steps. High Court disposed of the Writ Petition directing -~

that the Bond/bank guarantee executed by the appellant
would not be enforced and that JCCI shall amend the SIL
into a licence ..for imports. However, High Court rejected
the prayer for Cash Compensatory Support. Hence the
G
present appeal.
. >- _..,
Partly allowing the appeal, the Court
HELD: 1. No man should suffer a wrong by techrii-
cal procedure of irregularities. The Rules or procedures
H
GENERAL INSTRUMENTS COMPANY v. UNION 547
OF INDIA & ORS.
y are the handmaids of justice and not the mistress of the A
justice. Ex debito justitiae, justice should be done to him.
[Para 22] [559-F]
A.R. Antulay Vs. R.S. Nayak 1988 (2) SCC 602 - relied
on.
B
i 2.1 In the instant case, although the appellant has
~
suffered on account of confusion in the nature of the Ii-
cence to be issued to it but appellant's main prayer for
conversion of Special Imprest Licence into a Project Im-
port Licence having been granted by the High Court, the . c
wrong caused stands remedied to a large extent. [Para
22] [559-G]
2.2 During the course of hearing, the office of the
Zonal Joint Director General of Foreign Trade examined
the ~epresentation made by the appellant on 14.03.2008, D
-< in view of the observations of High Court. By order dated
8.04.2008, the Foreign Trade Development Officer in-
~
formed the appellant that out of CCS claim of
Rs.5,52,032.92, they have been found to be eligible for
claim of Rs.4,19,916/-, and the department was ready to E
pay the said amount. However, the balance CCS claim and
interest thereon was disallowed. It is clear from the com-
munication that a substantial claim for CCS stands al-
lowed and the balance claim of Rs.1,31,953/- has been
disallowed for want of documentary evidence to show that F
the project was funded by bilateral or multilateral exter'."
--\
nal assistance. It is pertinent to note that in the said letter
· there is no indication as to why in the first instance CCS
claim for Rs.4, 19,916/- had been denied to appellant.
[Paras 18 and 19] [556-G-H, 557-A, 558-D-E]
G
2.3 Having considered the matter in the light of the
.... ~
subsequent intervening events, the conversion of SIL into
Project Import Licence, in terms of direction by the High
Court, no further relief can be granted to the appellant as
regards CCS claim. In that view of the matter, the certifi· H
548 SUPREME COURT REPORTS [2008] 12 S.C.R.

A cate issued by RCF to the appellant, and annexed with
the written submissions dated 03.06.2008, is of no avail
to the appellant. Nevertheless, in view of the fact that the
second Appellate Authority had reduced the period of de-
barment, pursuant to order dated 04.05.1987 passed on
B account of forfeiture order, only upto 31.03.1989 and the
fact that the High Court by its order dated 07 .04.2006 held
that forfeiture order against the appellant was uncalled
for, there was no justifiable reason for the Director General
of Foreign Trade for not releasing CCS amount at least on
c the passing of the order by the High Court. It was only dur-
ing the course of hearing of this appeal that counsel for
the said respondents offered to get the claim re-examined '
and as such now by order dated 08.04.2008, the appellant's
claim to the extent of Rs.4, 19,916/- has been found to be in
order. In the premises, it is manifest that the respondents
0
retained the amount due to the appellant as CCS without
the authority of law and are liable to pay the same forth-
with. Thus, the respondents are directed to release the CCS
claim which has been determined to be due to the appel-
lant within four weeks from today alongwith interest at the
E rate of 9% per annum from 07.04.2006 till the date of actual
payment. [Para 23-24] [560-A-F]
Case Law Reference
1988 (2) sec 602 Relied on. Para 22
F
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 5222
. of 2008
From the final Judgment and Order dated 7.04.2006 of
the High Court of Judicature at Bombay in Writ Petition No. 1174
G of 2003 .
M.M. Kulkarni Appellant-in-Person.
V. Shekhar, Sanjeev K. Bhardwaj, Kiran Bhardwaj, B.
Krishna Prasad, Gaurav Agrawal, Anil Katiyar and D.S. Mahra
H for the Respondents.
GENERAL INSTRUMENTS COMPANY v. UNION 549
OF INDIA & ORS. [D.K. JAIN, J.]

The Judgment of the Court was delivered by A
D.K. JAIN, J.: 1. Leave granted.
2. This appeal, by special leave, arises out of the judg-
ment and order dated 7th April, 2006 passed by the High Court
of Judicature at Bombay in Writ Petition No. 1174 of 2003. B
3. Material facts leading to these proceedings are as fol-
lows:
In the year 1982, M/s Rashtriya Chemicals & Fertilizers
Limited (hereinafter referred to as 'RCF'), a Government of In- c
dia Undertaking, floated a global tender for supply of various
types of capital goods required for its Thal project. Responding
to the said tender notice, the appellant, a partnership firm,
through its managing partner, Mr. Manohar M. Kulkarni, an ex-
army man, submitted its quotation for supply of thermocouple
0
compensating cables and extension cables. The tender was
accepted by RCF and by a purchase order dated 13th Octo-
ber, 1982, they agreed to purchase cables worth Rs. 17,49.000/ 1

- from the appellant.
4. In order to avail of customs duty exemption on the import of E
certain raw materials required in the manufacture of capital goods
to be supplied to RCF, on 22nd November, 1982, the appellant
applied to the Joint Chief Controller of Imports &Exports (for short
'JCCI'), Bombay, for issuance of an import licence with duty ex-
emption entitlement certificate etc. for import of raw materials free F
of duty or at a concessional rate of duty in terms of Import Policy
Book for AM 83. According to the appellant, as they were not clear
about the form on which they had to make the application, on the
covering letter filed with the applications, with copies to the Ad-
vance Licensing Committee as well as to the Special Imprest Li- G
censing Committee at New Delhi, a request was made to forward
the said applications to the concerned cell so that an appropriate
licence is issued for the aforesaid purpose.
5. On processing of the application, the office of JCCI,
Bombay, vide their letter dated 30th November, 1982, called H
550 SUPREME COURT REPORTS [2008] 12 S.C.R.
~
y
A upon the appellant to furnish the essentiality certificate from RCF. :,,

Accordingly, the appellant obtained the essentiality certificate
from the project authority i.e. RCF, to the effect that they have
agreed to purchase goods valued at Rs. 17,49,000/-, from the
appellant for their Thal project.under the global tendering pro-
B cedure and that the Thal project is fully financed by the Govern-
I
ment of India. In the certificate issued by RCF, it was also stated
-f
that the appellant was eligible for availing concessional rate of
import duty on the raw materials imported by them for manufac-
ture of cables in terms of para 14 of Import Policy 1981-82.
c The appellant forwarded the said certificate to JCCI, Bombay.
In spite of clear knowledge that the Thal project of RCF was fully
financed by the Government of India, the Controller of Imports &
Exports, Bombay issued a Special Imprest Licence (SIL), to
.the appellant on 30th May, 1983, under AM 84 policy, permit-
ting the appellant to import listed raw materials, for approxi-
D
mate value of Rs.5, 78,300/-; without payment of customs duty. ',---
However, the licence was subject to the following conditions:
"(a) The appellant shall supply.to RCF export items as per
list attached thereto for an f.o.b value of Rs.17,49,000/
E ·- within 6 months from the date of clearance of the first
consignment against the said licence.
(b) To ensure fulfilment of the export obligation under the ~

said licence, the appellant shall execute a bond with
100% bank guarantee as per the proforma given in
F Appendix-38 of the Handbook of Import Export
!--
Procedure 1981-82 for a sum of Rs.12,14,623.
(c) Goods imported against the said advance licence
shall be utilised in accordance with the provisions of
Customs Notification No.11 /F- No.602/14/8/DBK
G
dated 09.06.78, as amended from time to time.
>- . . .
(d) Cash assistance, if any, will be as per the instructions
issued by the Ministry of Commerce from time to time.

(e) In the event of failure to fulfil the export obligation
H
GENERAL INSTRUMENTS COMPANY v. UNION 551
OF. INDIA & ORS. [D.K. JAIN, J.]

within the time stipulated, the bond will be enforced A
and the licence holder shall pay customs duty on the
proportionate quantity of the material corresponding
to the products not exported."
6. The requisite Bond in terms of the aforementioned con-
dition (b) was accordingly, executed on 17th June, 1983. The B
I
:+ appellant imported raw materials from time to time, aggregat-
ing to C.l.F. value of Rs.3,01,439/-, and cleared the same with-
out payment of duty in terms of the Bond. It is not in dispute that
the appellant has utilised entire quantity of the imported raw
materials in the manufacture of resultant products, valued at c
Rs.17,59,382/-; supplied to RCF in order to fulfil export obliga-
tion, as stipulated in the licence, against the export obligation
of Rs.17,49,000/-.
7. Having thus, fulfilled the export obligation, the appellant
D
approached the project authority, viz. RCF, for requisite endorse-
ment on Duty Exemption Entitlement Certificate (for short
'DEEC'). Initially RCF declined to make the endorsement, on
7' the ground that the Thal Project was financed by the Govern,-
ment of India and not by organisations like the World Bank,
..... OECF, ADB, etc. as contemplated under the Exemption Notifi- E
cation No.210/82 dated 10th September, 1982. However, later
on, RCF made the requisite endorsement on the DEEC book
on 2nd February, 1988 to the effect that the appellant had sup-
plied goods valued at Rs.17,59,382/- during the period from
27th July, 1983 to 10th May, 1984 . F
.....
8. It appears that in the meanwhile, a show-cause notice
dated 5/6th September, 1985, had been issued by the JCCI,
Bombay, calling upon the appellant to show cause as to why
Bond, in the sum of Rs.12, 14,623/-, furnished by them, should
G
not be enforced as the appellant had violated clause 1 of the
,. -"'\ Licence and Clause 5 of the Bond. The appellant was required
to appear before Mr. G.R. Nair, Deputy Chief Controller of Im-
ports & Exports on 20th September, 1985, at 3:15 p.m. for a
personal hearing, which, in fact, was granted on 29th Septem-
H
-- ·~- ~ ... '
552 SUPREME COURT REPORTS [200~] 12 S.C.R.

A ber, 1985. Not being satisfied with the cause shown, a
cyclostyled order dated 4th December, 1985, was passed by
·Smt. R. Johny, Controller of Imports and Exports, holding that
the appellant had failed to fulfil the export obligation in time and
had failed to furnish prescribed documents within the prescribed
B period, and thus, violating condition No.5 of the Bond. Accord-
ingly, the appellant was directed to remit the Bond amount of
Rs.12, 14,623/-; to surrender the valid R.E.P. licence remaining
unutilised and to pay forthwith the customs duty with interest@
18% on proportionate quantity of the exempt materials. In other
c words, the supplies made by the appellant to RCF were not
treated as discharge of export obligation in terms of condition
(a) of the Licence. The appellant was declared to be a defaulter
thereby debarring it from getting any licence under the duty ex-
emption scheme or under any other provisions of the Import
Export Policy announced from time to time.
0
9. Consequent upon the forfeiture order dated 4th Decem- ·
ber, 1985, the Controller of Imports & Exports, vide letter dated
20th December, 1985, denied cash assistance to the appel-
lant. The appeal preferred by the appellant against the forfei-
E ture order dated 4th De~ember, 1985 was rejected vide order
dated 21st May, 1986 issued by Smt. R. Johny, Controller of
Imports & Exports on the grounds that: (i) part 'F' of DEEC book
duly certified by the project authority had not been submitted
and (ii) certificate of exports in original nor the original export
F documents were furnished by the appellant. Incidentally, the for-
feiture order as well as the appellate order was passed by the
same officer, namely, Smt. R. Johny, though the appellate order
is purported to have been issued with the approval of JCCI.
10. Aggrieved thereby, the appellant preferred second
G appeal before a Committee of Joint Director General of For-
eign Trade, New Delhi. )- -'-,
. '

• 11. During the pendency of the second appeal, the cus-
toms authorities sought to recover customs duty amounting to
H Rs.3,71,614.82 from the appellant in respect of the raw materials
GENERAL INSTRUMENTS COMPANY v. UNION 553
OF !NOIA & ORS. [D.K. JAIN, J.]

imported and cleared without payment of duty under the Special A
Imprest Licence (SIL) dated 30th May, 1983. The proposed action
was challenged by the appellant by preferring Writ Petition No.2038
of 1988. However, when the petition was taken up for final hearing
on 21st October, 2002, counsel for the appellant volunteered to
deposit the customs duty as demanded. Thereupon, counsel for
the revenue made a statement that within two weeks of the de-
posit of the said amount, a proper show-cause notice shall be is..:
sued and the same would be adjudicated in accordance with· law.
The Writ Petition was, thus, disposed of on the same day. How-
ever, while disposing of the Writ Petition, it was ordered that ap- e
peal filed by the appellant against the order dated 21st May, 1986
shall be disposed of within a period of six months.
12. The Appellate Committee, comprising of two Joint
Director Generals of Foreign Trade, New Delhi, while observ-
ing that the second appeal filed by the appellant was not main- 0
tainable as in the current Hand Book of Procedure of Export- ,
Import Policy, there was no provision for second appeal against
the forfeiture order, in deference to the directions given by the
High Court, heard the appeal on merits. Vide order dated 21st
February, 2003, the Committee held that although the forfeiture E
order and the order passed in the first appeal were in accor~
dance with the policy yet in view of the fact that the forfeiture
order had not been actually implemented at ·the Bank's level
and practically no amount had been transferred out of the
appellant's account to the Government's account, the forfeiture F'
order, did not have any financial effect on the appellant and hence
no relief was required to be given in the second appeal. Ac-
cordingly, the second appeal was also dismissed.
13. At this juncture, it may also be noted that in the light of
the forfeiture order dated 4th December, 1985, the licensing G
authority had initiated departmental proceedings against the
appellant and vide an order dated 4th May, 1987, the Deputy
Chief Controller of Imports & Exports, Bombay debarred the
appellant and its partners from receiving any import licences,
customs clearance permits, allotment of imported goods from
554 SUPREME COURT REPORTS [2008] 12 S.C.R.
'
-

y
A any canalising agency, and from importing any goods from AM I
88 to AM 90. The first appeal preferred by the appellant against I
the departmental order was dismissed by the Joint Chief Con:. I
troller of Imports & Exports on 28th July, 1987. However, the
second appeal filed by the appellant was partly allowed by the
I
B .Additional. Chief Controller of Imports & Exports on 18th June,
1992 by reducing the period of debarment upto 31st March,
+
I ~
I
1989. While allowing the appeal partly, the appellate authority,
inter alia, observed that then~ was no mis-utilisation of imported
goods, and at no point of time the appellant had concealed any
c information. But they had not been able to identify and choose tt
a correct scheme of im-port licence to execute the order. The
~
appellate authority finally concluded thus: !
"The appellants may have mis-comprehended the policy I-
~

in force. But, they did not object when the special imprest '
D licence under reference was granted to them under the ~
I
deemed export category with specific export obligation ,....
with reference to 100% duty free imports. Since they
accepted the conditions of the licence, and also executed !--
~ I
a bond to abide by the conditions of the licence which
E carried an export obligation, it was incumbent on them to
complete formalities in support of their contention of having
discharged exp'ort obligation notwithstanding that the
imported goods were utilised for the execution of the
project. The project they executed or supplied they made
F towards the execution of the RCF, Thal Project was not a
project falling under the category of deemed exports. This ~-
project was not aided by IDA/IBRD. Their request for
conversion of their supplies to RCF, Thal Project in the ;i.,
~

deemed category of exports was duly considered by the
competent authority in the Import Trade Control
G
Organization. Under letter dated 30.10.1985, their request
was not considered as the supplies .made by them to )--- ....
RCF, Thal Project were not covered under the category of
de~med exports. They were advised to convert the special
import licence into project import licence by paying th·e
H
GENERAL INSTRUMENTS COMPANY v. UNION 555
OF INDIA & ORS. [D.K. JAIN, J.]

cl.Jstoms duty with penal interest thereon with the consent A
of Ministry of Finance. But they did not do so considering
the fact that the appellants mis-understood the provisions
of the policy in force and that there was no malafides on
their part, I am inclined to take a lenient view."
14. Being dissatisfied with order dated 22nd February, 8
I

+ 2003, the appellant preferred a fresh Writ Petition in the Bombay
High Court. During the pendency of the Writ Petition, the appel-
lant sought leave of the Court to make a fresh representation
to the concerned Ministry, seeking conversion of Special Imprest
Licence (SIL) dated 30th May, 1983 into a Project Import Li- C
cence. However, the said representation was rejected on 22nd
August, 2003 on the ground that there was nothing like "Project
Import Licence" and as the imports were made in the year 1983
when the Project Import Regulations of 1965 were in force, it
was not possible to verify the conditions after twenty years. D
15. In the judgment under appeal, after elaborate discus-
sion and particularly having regard to the afore-extracted ob-
servations of second appellate authority in its order dated 18th
June, 1992, the High Court came to the conclusion that: (i) for-
feiture order against the appellant was uncalled for; (ii) even E
though the second appellate authority has held that there is no
financial implication on account of the forfeiture order, yet on
account of the said order, the appellant was made liable to pay
entire customs duty with interest and penalty; (iii) the lapse on
the part of licensing authorities in issuing a licence with Bond F
conditions which were impossible to perform had serious ·
financial implications on the appellant; (iv) once it is accepted
that it was a mistake to issue Special Imprest licence to the
appellant and the conditions attached to the Bond and the li-
cence were wholly impossible to perform, the licensing authori- G
... ~- ties ought to have taken remedial steps immediately, particu-
larly when Rule 8 of the Foreign Trade (Regulation) Rules, 1963,
empowered JCCI to rectify the error by amending the licence.
Finally, the High Court disposed of the Writ Petition with the
directions that : (a) in the light of order dated 21st February, H
556 SUPREME COURT REPORTS [2008] 12 S.C.R.

A 2003, the Bond/bank guarantee executed by the appellant on
17th June, 1983 shall not be enforced; and (b) within six weeks
from the date of its order, JCCI, Bombay shall amend the Spe-
cial Imprest Licence (SIL) into a licence which may entitle the
appellant to seek regularisation of the imports already made
B under the said licence at concessional rate of duty, if permis-
sible under the Customs Act. However, the High Court declined
to grant appellant's prayer for Cash Compensatory Support, +'
hereinafter referred to as CCS, permissible under the Special
Imprest Licence (SIL). It is this part of the order which is im-
c pugned in the present appeal.
16. Mr. M.M. Kulkarni, a partner of the appellant-firm, sought
permission to argue the case on behalf of the appellant on the
ground that on account of several rounds of litigation, spanning
over two decades, because of erroneous licence issued by the
D licensing authorities, the firm had closed down and, therefore,
did not have the financial capacity to engage the services of a y
lawyer. We granted the permission and heard him at some length.
17. At this juncture, it will be relevant to note that during the
course of hearing on 23rd January, .2008, learned senior coun-
E sel appearing on behalf of the Director General of Foreign Trade
fairly stated that in view of the aforenoted observations of the
High Court, he would discuss the case with the officers of the
concerned department and possibly the appellant might get
some relief, particularly in the matters relating to 13 indepen-
F dent orders/import licences, confiscated/forfeited by the licens-
--f .•
ing authority by virtue of order of forfeiture dated 4th December,
1985. Further hearing in the matter was, thus, deferred.
18. Pursuant to and in furtherance of the said offer, the
office of the Zonal Joint Director General of Foreign Trade ex-
G
amined the representation made by the appellant on 14th
March, 2008. A personal hearing was also granted.to the repre- .'1-:-
.>--
sentative of the firm. Vide order dated 8th April, 2008, the For-
eign Trade Development Officer informed the appellant that out
of CCS claim of Rs.5,52,032.92, they have been found to be
H
GENERAL INSTRUMENTS COMPANY v. UNION 557
OF INDIA & ORS. [D.K. JAIN, J.]

eligible for claim of Rs.4, 19,916/-, and the department was ready A
to pay the said amount. However, as regards the balance CCS
claim etc., and interest thereon, the letter reads thus:
"Since balance claim of Rs.1,31,953/-was not supported
by the required documents, vide this office letter dated
26.3.2008 you were advised to furnish documentary 8
evidence showing that the project was funded by bilateral
or multilateral external assistance. Against this letter, you
had replied vide your letter dated 31.3.2008 stating that
the project was funded by OECF Fund. In support of your
contention you have quoted certain information from web c
site of OECF and claimed that project was funded by
OECF, but no documentary evidence from the project
authority i.e. RCF Ltd. (Rashtriya Chemicals & Fertilisers
Ltd.) was furnished by you in support of your claim. In fact,
you have furnished a project authority certificate dated D
~ 18.3.1983 issued by the RCF. Ltd. in support of W.P.
No.1174/03 filed before the Hon'ble Bombay High Court,
...; which was annexed as Exhibit - D to the petition at page
No.31 showing project was funded by Govt. of India Fund.
You had also appeared for personal hearing on 7.4.2008 E
and contended that Part 'F' of DEEG Part II was certified
by the project authority i.e. RCF Ltd., therefore, it is
construed that supplies were funded by the OECF Fund
and requested to give benefit for this amount also. Your
this contention cannot be hold good since Part 'F' of DEEG F
Part II merely bears the information of invoice no. & date,
description of supplied items, quantity and FOR value
thereof. But it has nothing to do with the source of finance
of the project. In fact, the supplies were financed by Govt.
of India Fund; therefore, this supply does not fall under G
~ --(
para 131 of Hand Book of Procedure, as such, not eligible
for CCS benefit to the extent of Rs. 1,31,953/-.
Regarding additional claim of Rs.14,478/- raised by you
vide your letter dated 31.3.08, it is to inform you that this
H
558 SUPREME COURT REPORTS [2008] 12 S.C.R.

~,_
A claim was not originally included in the writ petition
No:1174/03 field before the Hon'ble High Court of Bombay,
which is a subject matter of SLP No.16917/2003 filed
before the Hon'ble Supreme Court of India. Even this claim
is not supported by the required documents, therefore,
B your additional claim of CCS can.not be considered.
!
Regarding payment of interest, it is hereby informed that
the debarring order was in force and maintained by the
+
Appellate Authority vide their Order dated 18.6.1992. It
was in force upto 27.2.2008 i.e. till the date of Order of the
c Hon'ble Supreme Court of India in respect of SLP No.
16917/2003. There was no delay at the part of the deptt.
As such, no interest can be paid against the above claim."
19. It is cle~r from the afore,..extracted communication that a
substantial claim for CCS stands allowed and the balance claim
D
of Rs.1,31,953/- has been disallowed for want of documentary
y
evidence to show that the project was funded by bilateral or mul-
ti lateral external assistance. It is pertinent to note that in the said
letter there is no indication as to why in the first instance CCS
claim for Rs.4, 19,916/- had been denied to the appellant. ---
E
20. It was submitted by Mr. Kulkarni that having come to ~

the conclusion that on the facts of the case, order of forfeiture
dated 4th December, 1985 was not warranted, the High Court
erred in not granting the consequential relief viz. the claim for
F CCS, as the same had been denied only on account of the for-
feiture order, declaring the appellant to be a defaulter. It was -~
also cont~nded that, in any case, there was no justification in
respondents' withholding the CCS in respect of other indepen-
dent export orders, when all the conditions specified therein had
been fulfilled. We may also note that in the written submissions
G
filed after the conclusion of the hearing, it is stated that RCF
has now issued a certificate, dated 27th May, 2008, showing )- .
lhat two orders, namely, KC 263 and KT 995 were financed by
Overseas Economic Corporation Fund (for short 'OECF') and
thus, CCS against both these orders are payable. It was, thus,
H
GENERAL INSTRUMENTS COMPANY v. UNION 559
OF INDIA & ORS. [D.K. JAIN, J.]
~
-y
pleaded that the respondents should be directed to forthwith re- A
lease the CCS claim along with interest for the delayed payment.
21. Mr. Gaurav Agrawal, learned counsel appearing on
behalf of the Director General of Foreign Trade, filed written
submissions, opposing the grant of CCS and the· interest
~
thereon. It is pointed out that having got the licence converted B
~• from Special Imprest Licence to Project Import Licence, as per
the directions of the High Court, the appellant cannot, now, con-
tend that RCF-Thal project being a foreign funded project, they
are entitled to the claim for CCS. In support of the submission
that CCS is permissible only in a case of Special Imprest Li- c
cence, our attention was drawn to condition No.4 in the Special
Imprest Licence dated 30th May, 1983. Insofar as the claim for
interest is concerned, it is urged that apart from the fact that
such a claim was made for the first time in April, 2003, when
W.P. No.1174/2003 was filed, the order of forfeiture cannot be D
'( said to be malafide inasmuch as, way back on 30th October,
1985, i.e. prior to the forfeiture order, the appellant was advised
..., to get their import regularised by approaching the Ministry of
Finance by paying customs duty with penal interest but the ap-
pellant did not heed to the advice of the respondents. E
22. It is trite that no man should suffer a wrong by technical
procedure of irregularities. The Rules or procedures are the
handmaids of justice and not the mistress of the justice. Ex
debito justitiae, we must do justice to him. (Vide A.R. Antu/ay
Vs. R.S. Nayak1). However, in the present case, although we F
.\ feel that the appellant has suffered on account of confusion in
the nature of the licence to be issued to it but appellant's main
prayer for conversion of Special Imprest Licence into a Project
Import Licence having been granted by the High Court, the wrong
caused stands remedied to a large extent. G
,_.
~- 23. Having considered the matter in the light of the afore-
noted subsequent intervening events, in particular the conversion
of Special Imprest Licence into Project Import Licence, in terms
of direction (b) by the High Court, we are of the opinion that inso-
H
560 SUPREME COURT REPORTS [2008] 12 S.C.R.

A far as CCS claim is con·cerned, no further relief can be granted
to the appellant. In that view of the matter, the certificate, stated to
have been now issued by RCF to the appellant, and annexed
with the written submissions dated 3rd June, 2008, is of no avail
to the appellant. Nevertheless, in our judgment, in view of the fact
B that the second Appellate Authority had reduced the period of
I
debarment, pursuant to order dated 4th May, 1987 passed on
account of the order of forfeiture dated 4th December, 1985, only +
. upto 31st March, 1989 and the fact that the High Court vide its
order dated 7th April, 2006 has held that order of forfeiture against
c the appellant was uncalled for, there was no justifiable reason for
the Director General of Foreign Trade for not releasing CCS
amount at least on the passing of the order by the High Court. It
was only during the course of hearing of this appeal that iearned
counsel for the said respondents offered to get the claim re-ex-
D amined and as such now by order dated 8th April, 2008, the
appellant's claim to the extent of Rs.4, 19,916/- has been found
to be in order. In the premises, it is manifest that the respondents
retained the amount due to the appellant as CCS without the au-
thority of law and are liable to pay the same forthwith.
E 24. In view of the afore-going discussion, the appeal is partly
allowed; the respondents are directed to release the CCS claim
which has been determined to be due to the appellant within
four weeks from today alongwith interest at the rate of 9% per
annum from 7th April, 2006 till the date of actual payment.
F 25.. We may clarify that we have not expressed any opin-
ion on the merits of appellant's claim for CCS of Rs. 14,478/-
against export order KT-995 as also the rate of customs duty
payable by the appellant on the imports of raw materials as
appeals on both the issues are stated to be pending before the
G concerned appellate forums. As and when the appeals come
up for hearing, these will be decided strictly on their own merits
without being influenced by any observation hereinabove.
26. The appellant will be entitled to the costs of this appeal.
H N.J. Appeal partly allowed.