MATHUR, J. - (1.) THIS petition for writ is directed to challenge initiation of proceedings under Section 4-I of the Imports and Exports (Control) Act, 1947 (hereinafter referred to as "the Act of 1947") against the petitioner under a notice to show cause dated 26. 2. 1993 issued by the Additional Director General of Foreign Trade, Government of India under Section 4 L of the said Act.
(2.) THE Act of 1947 has already been repealed but in view of Section 20 (2) of the Foreign Trade (Development & Regulation) Act, 1992 (hereinafter referred to as "the Act of 1992") such repeal is having no effect on institution of proceedings for imposing penalty. The office of the Chief Controller of Imports and Exports, Government of India granted a CG Licence dated 20. 10. 1980 for Rs. 28,68,122/- to the petitioner with a condition to earn foreign exchange by exporting annually not less than 25% of the total production viz. marble slabs/blocks and other cladding material for a period of five years from the 18 months after commissioning of the plant and equipment and commencement of production. The petitioner, a company incorporated under Companies Act, started production w. e. f. January, 1982 and was required to earn foreign exchange by exporting 25% of its products annually from the month of July, 1983 but for various reasons it failed to do so. The Additional Director General of Foreign Trade, by the impugned notice dated 26. 2. 1993, therefore, prima facie believing that the goods imported by the petitioner company under the licence dated 20. 10. 1980 were used and utilised otherwise then in accordance with the conditions of licence, initiated proceedings under Section 4-I (1) (a) of the Act of 1947. The petitioner acknowledged receipt of notice to show cause dated 26. 2. 1993 and submitted a detailed reply to the Additional Director General of Foreign Trade on 28. 9. 1993. The petitioner company while explaining the circumstances in which it failed to earn required foreign exchange also urged that no proceeding under Section 4-I (1) (a) of the Act of 1947 could be initiated as the petitioner never failed to discharge any user obligation under the licence dated 20. 10. 1980. The explanation submitted by the petitioner was not favourably considered, hence the instant petition for writ is preferred under Article 226 of the Constitution of India. While giving challenge to the notice impugned dated 26. 2. 1993 issued for taking action under Section 4-I of the said Act it is urged by counsel for the petitioner that the liability for penalty under Section 4-I could be determined only in the event a person use or utilise goods or materials imported under a licence otherwise then in accordance with the conditions of such licence or letter of authority. The petitioner never used or utilised such goods or materials otherwise then in accordance with the conditions of licence dated 20. 10. 1980, as such initiation of proceedings under impugned notice for taking action under Section 4-I of the Act of 1947, according to the petitioner, lacks competence.
(3.) A reply to the writ petition has been filed on behalf of the respondents stating therein that the petitioner company was issued with notice dated 26. 2. 1993 as the petitioner failed to fulfil its export obligation for the plant, machinery and equipment imported under the import licence. The relevant portion of the reply to provide cradle to the notice impugned, reads as under:- " That as regards averments made in paras No. 5 and 6 of the writ petition the petitioner firm had obtained a CG licence No. P/cg/2081773 dated 20. 10. 1980 for Rs. 26,68,122/- from the then o/o CCI & E, New Delhi with one of the conditions that they shall earn foreign exchange by exporting annually not less than 25% of their products namely marble slabs blocks and other cladding material for a period of 5 years from 18th month after the commissioning of the plant and equipment and commencement of production. The petitioner started production January, 1982 as admitted by the petitioner but they did not furnish any documentary evidence for fulfilment of export obligation. In the event of firm's failure to fulfil the conditions of CG licence, they were issued a show case notice No. 9/114/hq/92-93/eca. 1 dated 16. 6. 1993 calling upon them to show cause why action should not be taken against them for their default. " From perusal of the averments contained in reply to the writ petition and as stated by learned counsel for the respondents it is apparent that the respondents initiated proceedings against the petitioner under Section 4- (i) (a) of the Act of 1947 as the petitioner failed to furnish documentary evidence for fulfilment of export obligation. The counsel for the petitioner fairly accepted the failure to fulfil the export obligation, however, with all vehemence he urged that the proceedings so initiated under Section 4-I (1) (a) of the Act of 1947 could not be resorted for non-fulfilment of export obligation. ;