Messrs HAJI DOSSA LIMITED VS FEDERATION OF PAKISTAN
2004 P T D 1919
[Karachi High Court]
Before Saiyed Saeed Ashhad, C.J. and Ghulam Rabbani, J
Messrs HAJI DOSSA LIMITED
Versus
FEDERATION OF PAKISTAN and others
Constitution Petition No.D‑1546 of 1991, decided on /01/.
th
September, 2003. (a) Import and Export (Control) Act (XXXIX of 1950)‑‑‑
‑‑‑‑S.3‑‑‑Constitution of ‑ Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Export of cotton‑‑‑Conditions and requirements for‑‑‑Principle of approbate and reprobate‑‑‑Federal Government decided to allow Private Sector Exporters to export raw cotton which was within the exclusive domain of Cotton Export Corporation and laid down certain conditions' and procedure which was to be followed by Private Sector Exporters for exporting cotton‑‑petitioners, without any protest or objection or reservation, agreed to abide by said conditions and to follow the procedure laid down for exporting cotton‑‑‑Effect‑‑‑Once petitioners had submitted themselves to and had Agreed to abide by conditions as well as the procedure laid down for exporting cotton, they would be precluded from challenging the vires,‑ legality or reasonableness of various Notifications and public notices issued by Government relating to control of export of cotton by Private Sector Exporters‑‑‑Petitioners by submitting to the provisions of the Notifications and public notices, had waived all their rights .which they might have possessed to challenge the vires legality and reasonableness of Notifications and public notices‑‑‑Petitioners, who had entered into contracts fully knowing the requirements which they were called upon to fulfill, could not challenge Notifications issued in that respect‑‑‑Law did not permit a person to approbate and reprobate; meaning thereby that a person could not be allowed to change his stand or take wavering positions in respect of transactions which had been entered into by him and he would be compelled by law to stick to one stand‑‑ Petitioners having agree' with the conditions and having chosen to follow , the procedure laid down for regulating export, had made their intentions clear in accepting the conditions and the procedure‑‑ Subsequently, on account of any loss or adverse circumstances they could not be permitted to take a different stand and challenge the vires, legality or the reasonableness of the conditions and procedure.
(b) Constitution of Pakistan (1973)‑‑‑
‑‑‑‑Art.199‑‑‑Constitutional jurisdiction of 'High Court‑‑‑Scope‑‑‑High Court in exercise of its Constitutional jurisdiction, would not enter into investigation or making an inquiry with regard to disputed, controversial and complicated questions of fact which required determination by means of a full‑fledged inquiry requiring recording of evidence of the parties and other concerned witnesses.
Rasheeda M.H. Patel for Petitioner.
Sajjad Ali Shah, Standing Counsel and S. Mamnoon Hasan for Respondents.
Date of hearing: 8th August, 2003.
JUDGMENT
SAIYED SAEED ASHHAD, C.J.‑‑‑In both the above Constitutional petitions, the petitioners have sought the following reliefs:‑‑
(1)An order holding and declaring the Notification S.R.O. 550(I)/87, dated 29‑6‑1987, S.R.O. 553(I)/88, dated 30‑6‑1988 and S.R.O. 710(I)/89, dated 5th July, 1989 are repugnant to the Constitution of Pakistan and otherwise without lawful authority.
(2)That the public notice, dated 29th October, 1990, issued on behalf of the Chief Controller of Imports and Exports and all actions taken or required to be taken thereunder are against the Constitution and otherwise without lawful authority and of no legal effect.
(3)To hold and to declare that the encashment of the Bank Guarantee listed in Annexures `E2 and F2' to this petition by the second respondent as per Bank Advice Annexure `G' is illegal and without lawful authority and to order and direct the said respondents to refund to the petitioners the total amount of the said guarantees with 15 % mark‑up.
(4)Such other alternate or additional relief which to this Hon'ble Court may appear in the circumstances of the case just, equitable and proper.
(5)Cost of this petition.
The brief facts required for the purpose of disposal of the aforesaid two Constitutional petitions are that the Federal Government, vide Notification S.R.O. 55(1)/87, dated 29‑6‑1987 permitted the private sector exporters to import raw cotton which prior to this Notification was the sole prerogative of the Government/Cotton Export Corporation. The said Notification was amended by Notification S.R.O. 553(I)/88, dated 30‑6‑1988: A further amendment was made by Notification S.R.O. 701(I)/89, dated 5‑7‑1989. In pursuance of the aforesaid Notification, the Chief Controller of Imports and Exports published a notice on 15‑10‑1989 laying down the procedure for export by the private sector in respect of 1989‑90 crop. The contents of the public notice, dated 15‑10‑1989 prescribing the conditions/procedure for export to be followed by private sector exporters are reproduced hereinunder:
GOVERNMENT OF PAKISTAN
OFFICE OF THE CHIEF CONTROLLER OF IMPORTS &
EXPORTS
Islamabad; the 15th October, 1989
(PUBLIC NOTICE)
(EXPORT TRADE CONTROL)
SUB: EXPORT OF COTTON BY PRIVATE SECTOR 1989‑90 CROP
No. 9(89)/Exp‑I. It is notified for the information of all concerned that export of cotton of 1989‑90 crop by private sector registered exporters shall be governed by the following procedure with immediate effect:‑‑
(i)All exports of cotton will be made on standard types prescribed by the Cotton Export Corporation of Pakistan (Pvt.) Limited.
(ii)Exporters will procure cotton from ginneries/open market excluding SGS ginneries of Cotton Export Corporation.
(iii)Minimum Export Price of cotton will be fixed by the Inter Agency Committee of the Cotton Board on daily basis and communicated to the State Bank of Pakistan. It will be announced by the State Bank of Pakistan and will be valid for 24 hours‑ The State Bank of Pakistan will be obliged to indicate the MEP to the private sector exporters.
(iv)All export contracts of cotton exporters shall be registered with the State Bank of Pakistan and exports‑ shall be allowed only against such registered contracts.
(v)Exporters will export cotton at a price not less than the Minimum Export Price announced by the State Bank of Pakistan.
(vi)Exporters of cotton will be eligible to switch to higher types of cotton of 1989‑90 crop from the lower types of the same crop at the differential prevalent on the date of registration of EPC of the day of switch.
(vii)Cotton exporters shall deposit a Security equivalent to 3% of FOB value of the contract in the shape of Bank Guarantee with the State Bank of Pakistan at the time of registration of export contracts: In case of default or non‑performance of contract, security deposit shall be forfeited by the State Bank of Pakistan.
(viii)Exporters shall report their export commitments and actual shipment of cotton showing quantities, destination and schedule of shipment to the Cotton Board on daily basis.
(ix)Karachi Cotton Association may publish the Minimum Export Price announced by the State Bank of Pakistan in its bulletin.
(x)In their own interest the exporters may ensure that for export contracts of 1989‑90 crop, cotton is physically available with them at scheduled time of shipment and situation of having to switch over to the new crop does not arise.
(xi)Exports shall be subject to pre‑shipment inspection by cotton classers to be nominated by the Cotton Board. Till nomination of such classers pre‑shipment inspection as per existing procedure shall continue.
(xii)A grace period of seven days will be allowed for shipment without carrying charges to cover genuine difficulties like shipment delays, holidays, port strikes etc. This concession will not be applicable in, the case of EPCs extended for other consideration.
(2)Any malpractices in the cotton trade by private sector will be dealt with under the Imports and Exports (Control) Act, 1950 and Orders and Rules made thereunder.
(Sd.)
(M. Jalaluddin Khan)
Deputy Controller
for Chief Controller of Imports and Exports.
A similar public notice was issued on 29‑10‑1990 regulating/ laying down the procedure for export of cotton by private sector for 1990‑91 cotton crop. Both the public notices contained clauses which also required private sector exporters to furnish a security equivalent to 3 per cent of FOB value of the contract in the form of a bank guarantee with the right given to the State Bank of Pakistan to forfeit the security in case of default or non‑performance of the contract. The petitioners in pursuance of the aforesaid Notifications got themselves registered as exporters of cotton and entered into contracts for exporting the same. The petitioners could not export cotton within the date as required by the contracts. The petitioners submitted that their failure to effect the export of cotton was not on account of negligence, laxity or inability on their part as such State Bank of Pakistan was not justified in issuing notices for forfeiture of the bank guarantees /encashment of bank guarantees. They further submitted that they had applied to the competent authority for extension in the date of shipment as well as requested for cancellation of the EPC and refund of the bank guarantees and in spite of the recommendations of the Secretary to cancel the EPC and refund the bank guarantees, respondent No.2 encashed the bank guarantees illegally and without lawful authority.
Mr. Mamnoon Hasan, Advocate for respondent No.4 in reply to the facts and allegations made in the memorandums of petitions admitted that conditions/procedure was laid down for exporting cotton by the private sector exporters relating to registration and subsequent shipment of cotton. He, however, submitted that the petitioners of their freewill entered into contracts prescribing shipment schedule up to certain periods for which the petitioners executed bank guarantees in favour of State Bank of Pakistan. He further submitted that shipment schedules were fixed by Interaction Committee of Cotton Board of which Karachi Cotton Association was a member and the petitioners were members of Karachi Cotton Association. He admitted that the Cotton Export Corporation was not required to furnish a bank guarantee because it could not sell cotton below minimum export price at any time for any reasons whereas the purpose of obtaining bank guarantees from private sector exporters was by way of precaution to prevent non‑performance of the contracts and subsequent unexpected loss of foreign exchange. He also admitted that no performance guarantee bond was required from private sector exporters for other goods such as rice, cotton yarn, textile goods, etc., as well as registration of contracts and shipment schedules within which the shipment was to be made but this could not be taken as a ground for not imposing certain conditions and laying down procedure for export of raw cotton as the same being a sensitive commodity, its prices were subject to a number of global influences which made it necessary that the shipment of cotton should be made as early as possible after its procurement. He denied that the exporters were allowed indefinite extension in the shipment schedules without payment of carrying charges and further that extension in shipment schedules could not be demanded as a right, He also denied the claim of the petitioners that no extension was provided in the shipment schedules within which they were required to ship the consignment cotton. He also denied that the Government did not have the power to place restrictions or prohibition on the export and it could exercise such power under the Import and Export (Control) Act, 1950 (hereinafter referred to as the Act of 1950). He submitted that the public notices prescribing the export procedure for export of cotton by the private sector exporters; were legal, authoritative and had sanction of the competent authority. He further submitted that the petitioners were prohibited from challenging the Notifications permitting export of raw cotton by private sector exporters public notices issued from time to time laying down the procedure regulating the registration, procurement and shipment of raw cotton for export; and provision for furnishing bank guarantee. It was further submitted that the‑petitioners by having opted to get themselves registered as exporters of cotton in accordance with the conditions/ procedure laid down in the public notices of their freewill were prohibited/debarred from challenging the legality of the three Notifications referred to hereinabove as well as the public notices. It was further submitted that the petitioners have failed to make out a case for interference by this Court and the Constitutional petitions warranted dismissal.
We have heard Mrs. Rasheeda M.H. Patel, Advocate for the petitioners, Mr. Sajjad Ali Shah, learned Standing Counsel for Federation and Mr. S. Mamnoon Hasan, Advocate for respondent No.4.
Mrs. Rasheeda M.H. Patel in support of the petitions advanced the following arguments:‑‑
(i)That by issuing the Notifications in question and the public notices, the Federal Government had put restraints on the rights of the petitioners to export cotton, thereby meeting out a different treatment to them as compared to respondent‑Cotton Export Corporation on whom no such stringent conditions as were required to be observed by the petitioners were placed, thus violating the provisions of Articles 18 and 25 of the Constitution of the Islamic Republic of Pakistan.
(ii)That the conditions and restraints provided by the public notice issued from time to time for regulating the export of cotton by private sector exporters were in violation of the powers of the Federal Government to control the export of goods as provided by section 3 of the Act of 1950;
(iii)That the public notices issued from time to time were in violation of the provisions of section 3 of the Act of 1950 and the same were issued by the Assistant Collector of the Office of the Chief Controller of Import and Export and the same could not be said to have been an order of the Federal Government;
(iv)That the public notices were also defective and without lawful authority as they were not published in the official Gazette; and lastly
(v)That respondent‑State Bank of Pakistan was rot justified in encashing the bank guarantees as the failure of the petitioners to export cotton within the shipment period provided was not on account of any fault, negligence or shortcoming on their part but was on account of circumstances beyond their control for which they could not be penalized.
Both, Mr. Sajjad Ali Shah, the learned Standing Counsel and Mr. S. Mamnoon Hasan, Advocate for respondent No.4 Cotton Export Corporation of Pakistan vehemently challenged the maintainability of the Constitutional petitions on the ground that the petitioners did not have any fight to invoke the Constitutional jurisdiction in respect of the disputes on the following grounds:‑‑
(i)That the Notifications in question and the public notices were issued by the Federal Government in pursuance of the powers vested in it by section 3 of the Act of 1950 and in doing so the Federal Government did not commit any illegality which would warrant interference by this Court in exercise of its Constitutional jurisdiction.
(ii)That in pursuance of the Notifications in question and the public notices issued from time to time, the petitioners had voluntarily without any protest or objection and of their free will agreed to get themselves registered as exporters of cotton on the conditions and in pursuance of the procedure laid down therein, thereby precluding themselves from raising objections with regard to any of the conditions embodied in the public notices or to the procedure mentioned therein; and
(iii)That the failure of the petitioners to export cotton as per contracts was on account of inability, negligence and inaction on the part of the petitioners. which compelled respondent‑State Bank of Pakistan to encah the bank guarantees as per the contents of the bank guarantees and this being a question of fact could not be decided by this Court in exercise of its Constitutional jurisdiction as the matter required inquiry and investigation for determining the liability of the petitioners to ship the consignment of cotton within the stipulated time.
With regard to the arguments raised by Mrs. Rasheeda M.H. Patel, the learned counsel for the petitioners relating to the power of the Federal Government to lay down a conditional policy for export of cotton by private sector exporters, provide condition for security deposit by way of Bank Guarantees and laying down procedure therefor, it is to be observed that in. exercise of the powers vested in it by the Act of 19501 the Federal Government had decided to allow private sector exporters to export raw cotton which was within the exclusive domain of the Cotton Export Corporation. In allowing the private exporters to export raw cotton, the Federal Government in pursuance of the powers, had laid down certain conditions and procedure which was to be followed by the private sector exporters, for exporting cotton. The conditions/procedure was not notified by means of public notices issued for different years, the contents of which have already been reproduced hereinabove. The petitioners without any protest or objection or reservation agreed to abide by the aforesaid conditions and to follow the procedure laid down for exporting cotton. In pursuance of paragraph (vii) of the public notices, they were required to deposit security equivalent to 3 per cent of FOB value of the contract in the shape of bank guarantee with the State Bank of Pakistan at the time of registration of export contacts and the petitioners duly furnished bank guarantees at the tithe of registration or various export contracts entered into by them. Paragraph (vii) further provided that in case of default or non‑performance of contract, security deposit shall be forfeited. Once the petitioners had submitted themselves, and had agreed to abide by the conditions as well as the procedure laid' down for exporting cotton, then they would be precluded and could not be permitted to challenge the vires, legality or reasonableness of the various Notifications and the public notices issued by Government of Pakistan relating to control of export of cotton by private sector exporters. The petitioners by submitting to the provisions of the Notifications and the public notices waived all their rights which they might have to challenge the vires, legality anti reasonableness of the Notification and the public notices. By agreeing to the conditions laid down by the Federal Government and by following the procedure provided for exports of cotton, the petitioners acquiesced in such A conditions and procedure and they cannot be allowed to turn around and claim that the conditions and the procedure was ultra, vires of the Constitution or the Notifications were in excess of the powers vesting in the Federal Government or that public notices were not issued by the competent authority in the Federal Government. By their conduct, the petitioners intentionally relinquished or waived whatever right they had in challenging the Notifications, conditions, policy. adopted or the procedure laid down by the Federal Government for regulating cotton export by .private sector exporters, thus depriving themselves to assail, or challenge the vires, legality and reasonableness. The petitioners before entering into export contracts had full knowledge of the three Notifications issued by the private sector exporters to export cotton as well as of the conditions and the procedure laid down by the public notices and they could have objected to the existence of certain conditions which, according to them, were detrimental to their interest or to the procedure but no such action or step was taken by the petitioners. They had entered into export contracts fully knowing the requirements Which they were called upon to fulfil. The conduct of the petitioners was such as would warrant an irrefutable inference of relinquishment of all; their rights to challenge the Notifications and the public notices, if any, thus one of the essential ingredients for proving waiver/relinquishment of, a right by a party that it should have full knowledge of the facts and of his rights which would have enabled him to take effectual action have been established but by not resorting to any action or step for challenging the vires, legality and reasonableness of the procedure regulating export trade the petitioners surrendered all their rights and could not be permitted to assail or challenge the same.
It may also be mentioned that law does not permit a person to approbate and reprobate meaning thereby that a person cannot be allowed to change his stand or take waivering positions in respect of transaction which had been entered into by him and he will be compelled by law to stick to one stand. The petitioners having agreed with the conditions and chosen to follow the procedure laid down for regulating cotton export had made their intentions clear in accepting the conditions and the procedure. Subsequently, on account of any loss or adverse circumstances they would not be permitted or allowed to take a different stand and challenge the vires, legality or the reasonableness of the conditions and the procedure.
With regard to issue of encashment of bank guarantees, it is the case of the petitioners that their failure to export raw cotton within the shipment period as per the procedure or export was not on account of any fault, negligence or inaction on their part but it was due to circumstances beyond their control. In this connection, it was submitted that their inability to export the cotton within the stipulated period was on account of long drawn turbulent weather and political conditions prevailing in Bangladesh which had totally disrupted the economic activity in Bangladesh for several weeks, as a result of which no export shipment could be made to Bangladesh. It was also submitted that in view of the above situation prevailing in Bangladesh, buyers refused to purchase cotton on which the petitioners had no control and could not force the buyers to accept the cotton offered by them. Another grievance which was voiced on their behalf was that the period for shipment provided as per the procedure laid down was too short and in spite of request being made by the petitioners, the competent authority did not extend the time of shipment. Mr. Mamhoon Hassan, in reply to above submissions relating to the extension of time for shipment, stated that the petitioners were allowed extension in shipment schedule but they could not export the consignment even after extension of the shipment period and that the petitioners failed to establish letters of credit even after expiry of shipment schedule.
With regard to the contention that it was on account of, political turbulence and bad weather which had resulted in total disruption of economic activity in Bangladesh, which was vehemently denied by the learned counsel for respondent Cotton Export Corporation, it is to be observed that this is a question of fact which requires determination by means of full‑fledged inquiry requiring recording of evidence of the parties and other concerned witnesses. The same is the case with the contention of the buyers refusing or canceling their contracts for purchase of cotton. This Court in exercise of its Constitutional jurisdiction does not enter into investigation or making an inquiry with regard to the disputed, controverted and complicated questions of fact such as are involved in these Constitutional petitions with relation to the jurisdiction of respondent‑State Bank of Pakistan to en cash the bank guarantees furnished by the petitioners on their failure to export cotton as per export contracts entered into by them. In the circumstances, this Court is not the proper forum for determining the legality or justification for encashment of bank guarantees by the State Bank of Pakistan and the petitioners ought to have approached the proper forum for determining this question.
For the foregoing reasons and discussion, we are satisfied that these Constitutional petitions are without any substance and do not merit consideration. Accordingly, both of them stand dismissed with no order as to costs.
H.B.T./H‑8/KPetitions dismissed.