Full Judgment Text & Judicial Ruling

2002 C L D 17

2002 C L D 17

[Supreme Court of Pakistan]

Present: Iftikhar Muhammad Chaudhry, Mian Muhammad Ajmal and Hamid Ali Mirza, JJ

FEDERATION OF PAKISTAN and others‑‑‑Appellants

versus

AMMAR TEXTILE MILLS (PVT.) LIMITED and others‑‑‑Respondents

Civil Appeals Nos.44 to 46 of 2001 and 1205 of 1997, decided on 29th August, 2001.

(On appeal from the judgment dated 2‑10‑2000 and 17‑12‑1996 in I.C.As. Nos.758, 759, 760 of 1999 and C.P. No. 1384 of 1994).

(a) Textile Export Quota‑‑‑

‑‑‑‑ Textile Export Quota for the year 1994‑‑‑Notification S.R.O. No.166(1)/92, dated 7‑3‑1992‑‑‑Notification S.R.O. ~No.228(1)/94, dated 8‑3‑1994‑‑‑Procedure for allocation of textile export quota‑‑‑Two Notifications infield‑‑‑Notification S.R.O: No.228(I)/94, dated 8‑3‑1994, was issued in super‑. session of the earlier Notification S.R.O. No.166(I)/92, dated 7‑3‑1992, for determining entitlement for allocation of Textile Export Quota for the year 1994, the Notification dated 7‑3‑1992 was not in existence with effect from 8‑3‑1994, thus the procedure for the allocation of the quota for the year 1994 had to be followed as per later Notification dated 8‑3‑1994.

(b) Interpretation of statutes‑‑‑

‑‑‑‑ Words employed in a statute‑‑‑Interpretation of such words‑‑‑Each word employed in a statute has to be read and understood in its ordinary meaning without assigning special meaning to any part thereof to avoid inconsistency in its different parts and also to ensure harmony therein.

(c) Notification‑‑‑

‑‑‑‑Time bound Notification‑‑‑Rescinding of such Notification by Competent Authority‑‑‑In time bound Notification, no doubt, at times becomes difficult for the Competent Authority to rescind before the expiry of such period particularly when claim of vested right is pleaded but the Government can overcome such hurdle by exercising authority of review of the Policy if the same has been retained by it in the same Notification simultaneously caring for the rights of the beneficiaries.

(d) Textile Export quota‑‑‑

‑‑‑‑ Textile Export Quota for the year 1994‑‑‑Notification S.R.O. No.166(I)/92, dated 7‑3‑1992‑‑‑Notification S.R.O. No.228(I)/94, dated 8‑3‑1994‑‑‑Procedure for allocation of textile export quota‑‑‑Changing the procedure on the recommendation of Pakistan Readymade Garments Manufacturers and Exporters Association‑‑‑Plea raised by the appellants was that the policy was against the doctrine of Promissory Estoppel ‑‑‑Validity‑‑‑Where in changing the procedure for allocating Textile Quota, Federal Government exercised jurisdiction under S.13 of Notification S.R.O. No.166(I)/92, dated 7‑3‑1992, such action of the Government could not be annulled by invoking doctrine of Promissory Estoppel ‑‑‑Change in the procedure for allocating Textile Quota could not be questioned by individuals because they had no right to direct the Government to adopt a procedure which suited them‑‑‑Appellants, in the present case, had not challenged the vires of the subsequent Notification S.R.O. No.228(I)/94, dated 8‑3‑1994, which had been issued in supersession of the earlier Notification S.R.O. No.166(I)/92, dated 7‑3‑1992, therefore, Supreme Court declined to declare the subsequent Notification as illegal or without lawful authority and the individual exporters could not attach legitimate expectancy that Textile Quota for the year 1994 must be allocated to them in view of the formula envisaged in Notification dated 7‑3‑1992.

Pakistan through Secretary, Ministry of Commerce and 2 others v. Salahuddin and 3 others PLD 1991 SC 546; Messrs Army Welfare Sugar Mills Limited and others v. Federation of Pakistan 1992 SCMR 1652; Messrs Gadoon Textile Mills Limited and $14 others v . WAPDA and others 1997 SCMR 641; Messrs M.Y. Electronics Industries (Pvt.) Limited through Manager v. Government of Pakistan through Secretary Finance and 2 others 1998 SCMR 1404; Collector of Customs and others v. Rapi Shipping Limited and others 1999 SCMR 412; Government of Pakistan through Ministry of Finance and Economic Affairs and another v. Fecto Belarus Tractors Limited 2000 SCMR 112; 2001 PTD 1829; PLD 1970 SC 439; 1992 SCMR 1652; 1997 SCMR 641 and 1998 SCMR 1404 ref.

(e) Notification‑‑‑

‑‑‑‑Retrospective operation of notification‑‑ ‑Notification altering procedure of doing certain thing would operate retrospectively.

Malik Gul Hassan Khan v. Allied Bank of Pakistan 1996 SCMR 237 ref.

(f) General Clauses Act (X of 1897)‑‑‑

‑‑‑‑S.21‑‑‑Authority of Government to amend, vary or rescind a Notification cannot be denied in view of S,21 of General Clauses Act, 1897. (p. 34) F

(g) Companies Ordinance (XLVII of 1944)‑‑‑

‑‑‑‑S. 160(l)(b)‑‑‑Notification S.R.O. No. 166(1)/92, dated 7‑3‑1992‑‑‑ Notification S. R. O. No. 228(1)/94, dated 8‑3‑1994‑‑‑Textile Export Quota for the year 1994‑‑‑Special meeting‑‑‑Failure to convene such meeting to discuss New Textile Quota Management Policy‑‑‑Notice for convening special meeting to discuss the details 4f the Policy and two other items was duly received by the appellants‑‑‑Meeting so held was attended by the appellants and the other members and through balloting procedure for allocation of the quota was adopted ‑‑‑Validity‑‑‑Provisions of S.160(l)(b) of the Companies Ordinance, 1984, were not contravened in circumstances.

(h) Estoppel‑‑‑

‑‑‑‑Promissory estoppel, doctrine of ‑‑Invoking of the doctrine‑‑‑Conditions necessary for invocation of doctrine of promissory estoppel stated.

Pakistan through Secretary, Ministry of Commerce and 2 others v. Salahuddin and 3 others PLD 1991 SC 546 rel.

Khalid Anwar, Senior Advocate Supreme Court and M.A. Zaidi, Advocate‑on‑Record for Appellants.

Sheikh Abdul Manan, Advocate Supreme Court and Mehr Khan Malik, Advocate‑on‑Record for Respondents.

Haider Ali Pirzada, Senior Advocate Supreme Court and Abdul Aziz Khan, Advocate‑on‑Record (absent) for Appellants (in C.A. No. 1205 of 1997).

M. Nawaz Bhatti, Deputy A.‑G., Ch. Akhtar Ali, Advocate‑on‑Record and Ahmed Ullah Farooqi, Advocate ?on‑Record (absent) for Respondents (in‑ C.A. No. 1205 of 1997).

Date of hearing: 14th June, 2001.

JUDGMENT

IFTIKHAR MUHAMMAD CHAUDHRY, J.‑‑‑Civil Appeals Nos.44 to 46 of 2001 have been instituted by leave granting order dated 18th January, 2001 against the judgment of Lahore High Court whereby I.C.As. Nos.758 to 760 of 1999 filed by appellants were dismissed maintaining common judgment of a learned Single Judge of the High Court dated 7th July, 1999 passed in writ petitions instituted by respondents. Whereas Civil Appeal No. 1205 of 1999 is dir6cted against judgment dated 17th December, 1996 passed by High Court of Sindh, Karachi whereby C.P. No.D‑1384 of 1994 of appellant Rajwani Apparel (Pvt.) Limited has been dismissed.

2. Facts of the case are that respondents instituted Writ Petition No.7692 of 1999 against the appellant and others in the Lahore High Court, Lahore seeking declaration that Notification S.R.O. No.228(I)/94 dated 8th March, 1994 is void ab initio and of no legal effect and the respondents (appellants) be directed to act strictly in accordance with Notification S.R.O. No.166(I)/92, dated 7th March, 1992 for the entire term of the said Notification which expired on 31‑12‑1996. It was further prayed that without prejudice to the above prayers quoted hereinabove the said Notification be declared to be without lawful effect in respect of the export authorization already allocated to the petitioner for the year 1994.

As per the terms of Notification dated 7th March, 1992 allocation of Export Quota to performance holders was to be made in the ratio of 50:50 on the basis of quantity and value. Initially this Notification was issued for implementation of bilateral Textile Agreement from 1‑1‑1992 to 31‑12‑1996. The detailed procedure and Rules were provided thereunder including the Authority of the Federal Government to review the Policy of Textile and Export Authorisation and make suitable changes therein as may be necessary. Later on exercise of such Authority the Federal Government in exercise of power conferred upon it by subsection (1) of section 33 of Import and Export (Control) Act, 1950 (hereinafter referred to as the "Act") and in suppression of earlier S.R.O. No.166(I)/92 changed the procedure (basis) of entitlement and allocation of Textile Quota vide impugned Notification S.R.O. No.228(I)/94 in the following terms‑‑‑

"2. Basis of entitlement and allocation. ‑‑‑(l) The performance holders will receive allocation of Quotas on the basis of performance holder's quantity exported under each category during the preceding year to specific Quota country:

Provided that the entitlements for the year 1994 will be determined either on the basis of provisions contained in S.R.O. 166(1)/92; dated 7th March,1992 or on the basis of quantity exported by the performance holders in 1993 if the association "l concerned with a category so opt:

Provided further that where non‑Quota Textile product(s) is brought under restraint, the entire ceiling will be allocated to the performance holders on the basis of the quantities (with no premium for value) exported by them in the twelve months preceding the date of issuance of the consultation call:

Provided further that in respect of the categories the performance of which‑is much less than the. Quota ceiling, necessary amount of Quota may be allocated through auction.

(2) to (8)??"

3. The respondents Messrs Ammar Textile Mills (Pvt.) Limited challenged latter S.R.O. in Writ Petition No.8251 ‑of 1994. This petition remained pending up to 2nd April, 1999 when it was declared to have become infructuous by lapse of time. However, in the order an observation was made that the petitioner can file a fresh petition in case any action is taken. It appears that subsequent thereto Civil Miscellaneous No. 1 of 1999 was filed in the Lahore High Court which was disposed of by means of following order:‑‑

"The Notification in question has since long expired and as such this petition has become infructuous. Learned counsel for the petitioner, however, says that the petitioner has acquired certain rights under the lapsed Notification' which are enforceable even now. That aspect of the petitioner files a fresh petition for which it has already been granted permission. Disposed of accordingly."

It seems that petition bearing No.7692 of 1999 was filed on 28th' April, 1999 wherein following explanation was offered for instituting fresh petition:‑‑

"11.That the impugned Notification was challenged in Writ Petition No.8252 of 1994 which came up for hearing on 18‑ 7 ‑1994 when status quo was granted to the petitioner. This was later on confirmed on 25‑7‑.1994 (orders were passed in Writ Petition No.8251 of 1994 in which the orders were passed). That without notice to the undersigned counsel the earlier petition came up for hearing when the titled case was disposed of as having become infructuous. This Hon'ble Court, it is 'submitted with respect, was not properly assisted on the said date of hearing. The entitlement of the petitioner for the years 1994 to 1996 was under challenge in the titled petition. Lapse of the impugned Notification did not affect the entitlement of the petitioner for the years 1994 to 1996. Had the petition been allowed the increase in Quota would accrue to the petitioner and would become a part of its entitlement for years to come. Therefore, the grievance of the petitioner is still alive, hence the titled petition in the light of the orders dated 2‑4‑1999 and 19‑4‑1999 passed in earlier writ petition."

4. Learned High Court allowed the Writ Petition alongwith similar petitions which has given rise to Civil Appeals Nos.45 and 46 of 2001 vide order dated 7th July, 1999. Being dissatisfied from this order appellant preferred ICA on 31st August, 1999 which has been dismissed vide impugned order dated 22nd October, 2000.

5. At this juncture it is to be noted that on identical issue C.P. No.D‑1384 of 1994 was instituted before High Court of Sindh on behalf of Rajwani (Pvt.) Limited v. Government of Pakistan and others which was also dismissed on 16th December, 1996. This order has been challenged in Civil Appeal No. 1205 of 1997, which is being disposed of by means of instant judgment as well because identical questions of facts and law are involved in all these cases.

6. Mr. Khalid Anwar, learned Senior Advocate Supreme Court appeared on behalf of appellants in Civil Appeals Nos.44 to 46 of 2001 whereas Sheikh Abdul Marian, Advocate Supreme Court and Mr. Mehr Khan Malik represented respondents. Mr. Haider Ali Pirzada learned Advocate Supreme Court appeared for appellant in C.A. No. 1205 of 1997 and Ch. Akhtar Ali Advocate‑on‑Record and Mr. Muhammad Nawaz Bhatti, D.A.‑G. represented respondents.

7. Learned counsel for appellants contended that no vested right had accrued to respondents to claim Export Quota for the year 1994 under S.R.O. 166(1)/92 dated 7th March, 1992 because the Government of Pakistan by issuing SRO No.228(I)/94 dated 8th March, 1994 had only modified the procedure for allocating Export Quota in exercise of the powers conferred upon it under para. 13 of SRO dated 7th March, 1992. He further submitted that Export Quota was to be allocated on the basis of criteria laid down in clause 2(1) of S.R.O. dated 8th March, 1994, through association concerned. Therefore, individual exporters had no authority to adopt a different mode (procedure) for allocation of Export Quota other than what was provided in this para.

According to him respondents with the connivance of subordinate staff of Director Textile Quota Management Directorate arranged entry dated 31st March, 1994 in the Pass Books on the basis of 50:50 of value of the goods on the basis of quantity fully knowing that Notification/S.R.O, 166(1)/92 has been superseded by S.R.O. No.228(I)/ 1994 with effect from 8th March, 1994. He further stated that by getting such entries made in Pass Book the respondents did not acquire any vested legal right to derive any benefit from such entries because such allocation has been shown as of provisional nature therein. He further argued that in terms of para.No.13 of S.R.O. 166(0/92 the Federal Government had the authority to make suitable changes in Policy of Export Quota as such the principle of Promissory Estoppel will also not be applicable in the instant cases.

8. On the other hand Sh. Abdul Manan, learned Advocate Supreme Court contended that according to first proviso to para.2(1) of S.R.O. 228(1)/94 dated 8th March, 1994 the exporters individually had a choice to exercise option for getting Textile Quota for the year 1994 either under S.R.O. 166(1)/92 dated 7‑3‑1992 or to wait till the decision of the Association concerned to opt for allocation of Textile Quota collectively on behalf of the members of the Association in view of the new dispensation under S.R.O. 228(1)/94 dated 8th March, 1994. To elaborate his arguments he contended that respondents exercised their right for the allocation of Textile Quota on 31st March, 1994 whereas resolution was passed by the Association on 2nd April, 1994, as such even if viewed from this angle the respondents had opted for allocation of Quota prior to passing of the resolution by the Association for the year of 1994 under Notification dated 7th March, 1992 and this fact has not been denied by appellant No.2 in the counter? affidavit filed before the High Court wherein in unequivocal terms department maintained that export authorization on the basis of 50:50 quantity and value as laid down in S.R.O. 166(1)/92 dated 7th March, 1992 was provisionally allowed to all the performance holders including the petitioners (respondents) subject to any change in the light of Policy and necessary endorsement made in this behalf in all Quota Pass Books was acknowledged, therefore appellant department is estopped by its conduct to argue that allocation of Textile Quota to the respondents for the year 1994 was subject to exercise of option by the Association collectively either to avail such Quota under S.R.O. of 1992 or S.R.O. of 1994. Learned counsel emphasized that as respondents have shown remarkable performance in the export in 1993, therefore, they were entitled for authorization of Textile Export Quota on the basis of formula provided in S.R.O. dated 7th March, 1992 because it has created a vested right in their favour. According to him even otherwise respondents are doing the business independently and their rights and obligations cannot be subject to the approval of the Association and they cannot be deprived from the benefits for which they are otherwise entitled.

9. Learned counsel Mr. Haider Ali Pirzada subscribed to the view‑point advanced by Sh. Abdul Manan learned Advocate Supreme Court and further added that earlier S.R.O. No.166(I)/92 dated 7th March, 1992 was a time bound Notification as it has to remain in field from 1st January, 1992 to 31st January, 1996 and appellant had acquired a vested right to claim allocation of Textile Quota on the basis of 50:50 of quality and value for the year 1993 under this Notification and Notification S.R.O. 228(1)/94 dated 8th March, 1994 which impinges legal rights of the parties cannot operate retrospectively. However, competent authority should have applied it after the expiry of year 1994. In this behalf in 1993 appellant made remarkable progress in the export for 1993 resultantly as per final attestation in the Pass Book (issued by Pakistan Readymade Garments Manufacturers and Exporters Association) appellant was finally held entitled for 14262 units of export on 12‑4‑1994 but on account of issuance of subsequent Notification S.R.O. No.228(I)/94 dated 8th March, 1994 Quota of the appellant was reduced to 11282 units on account of which appellant had sustained serious setback in the business because it has made adequate arrangement to show increased production for the year of 1994, as such Notification dated 8th March, 1994 may be declared inapplicable to the extent of Textile Export Quota for the year 1994. He further stated that the General Body of the Association passed resolution on 26th April, 1994 contrary to section 159 read with section 160 of the Companies Ordinance, 1984 which lays down procedure for holding special meetings of the members etc.

10. We have heard parties' counsel at length and have considered their arguments and examined implication of para.No.13 of S.R.O. No..166(I)/92, dated 7th March, 1992 as well as relevant parts of S.R.O. 228(1)/94 dated 8th March, 1994. It may be noted that impugned Notification has introduced procedure for management and allocation of Textile Quota in suppression of the former S.R.O. No.166(I)/94 dated 7th March, 1992. Thus it would mean that on issuance of latter Notification earlier Notification stand repealed. Now question is as to whether the Federal Government was empowered to do so or otherwise. In this behalf Reference to para. No.13 of the Notification dated 7th March, 1992 would reveal that the Federal Government had retained the authority to review the Policy of Textile and clothing export authorization and make suitable changes there in as may be necessary. Perhaps respondents in Appeals Nos. 44 to 46 of 2001 were fully aware about this provision in the Notification and due to this reason before learned Single Bench and I.C.A. Bench of the High Court they did not object on the implementation of the Notification S.R.O. 228(1)/94 dated 8th March, 1994 and accepted without any reservations following findings of learned ICA Bench of Lahore High Court:

"From the record it is apparent that so far as the respondents are concerned the Quota for the year 1994 was allocated to them on 31‑3‑1993 before the association opted to be governed by the new dispensation. This allocation was in consonance of para.2 of the Notification dated 8‑3‑1994 which itself provided that so far as the entitlement for the year 1994 was concerned it would be determined either on the basis of the Notification, dated 7‑3‑1992 or on the basis of quantity exported by the performance holders in 1993 if the association concerned with the category so opted. Before the option could be exercised by the Association the Quota for the year 1994 was allocated by the Export Promotion Bureau and necessary endorsement was made in the Pass Book maintained for the purpose."

11. Learned counsel for appellants urged that respondents are estopped in view of above observations of learned ICA Bench to set up altogether a new case on the strength of the arguments which have been raised on their behalf namely that their entitlement for export Quota will be determined on the basis of 50:50 quality and value as per Notification dated 7th March. 1992 for the year 1994 and as far as Association is concerned it has no say to control the individual 'desires of the members of the Association by exercising option that entitlement of Textile Export for the year 1994 onwards be determined in view of performance of Exporters for 1993 as per Notification dated 8th March., 1994. It may be noted that Sh. Abdul Manan learned counsel appearing for the respondents in these appeals could not counter this argument effectively and ‑ he kept on impressing his arguments noted hereinabove. Such situation brings us to concentrate on first proviso to sub‑para.(1) of para.2 of S.R.O. No.166(I)/92 dated 7th March. 1992. Its careful reading persuades us to hold that there is no difficulty to interpret or understand it. First of all it may be seen that notification dated 8th March, 1994 was issued in suppression of the earlier Notification dated 7th March, 1992, therefore, in very clear terms it can be said that for determining entitlement for allocation of Textile Export Quota for the year 1994 Notification dated 7th March, A 1992 was not in existence w.e.f. 8‑3‑1994. Thus procedure for the allocation of the Quota for 1994 has to be followed as per latter Notification. In view of such situation task of interpreting first proviso to sub‑para. (1) of para.No.2 has become easier following the principle of interpretation of statutes that each word employed therein has to be read and understood in the ordinary meaning without assigning special meanings to any part thereof to avoid inconsistency B in its different parts and also to ensure harmony therein.

As per procedure laid down in proviso 1, sub‑para. (1) of para.2 of the Notification dated 8th March, 1994 entitlement for Textile Export Quota has to be determined either on formula of 50:50 quality and value as per Notification dated 7th March, 1992 or on the performance of 1993 however subject to exercise of option by the Association collectively on behalf of its members and not by individuals themselves independently. Because by reading this proviso in ordinary manner it can be inferred that competent authority had bestowed the powers of making selection to adopt a procedure for determination of Export Quota to the Association alone and for making such selection between two modes the word used 'or' is not to be read disjunctively but conjunctively qua the Authority of Association in making selection of any of the two methods noted therein. Therefore, after promulgation of latter Notification the authorities of Export Promotion Bureau have no jurisdiction to make entries in the Pass Books of the Textile Exporters regarding their entitlement after 8th March, 1994 in view of the earlier Notification because it was no more holding the field. In this behalf it was incumbent upon them to have waited for collective decision of the Association. Thus it is held that any entry made in the Pass Books of the Textile Exporters after the promulgation of latter Notification dated 8th March, 1994 was without lawful authority and on basis whereof no right is conferred upon those exporters who have managed favourable entries in this behalf. It is also to be noted that in the case of Ammar Textile Mills provisional entry was made in its Pass Book but even if it had been finally entered therein it would have not changed the position in its favour for, its reasons assigned hereinabove that. after 8th March, 1994 the former Notification dated 7th March, 1992 was not holding the field.

12. Now adverting to most important aspect of the case namely whether in terms of clauses 13 and 14 of S.R.O. dated 7th March, 1992 the Federal Government has rightly changed the procedure for allocating Quota by issuing S.R.O. 228(1)/94 dated 8th March, or on account of the Principle of Promissory Estoppel it was debarred to review the earlier Policy because allegedly vested right had created in favour of respondents to claim entitlement on formula of 50:50 quality and value. In respect of this proposition both the parties have advanced pro and contra arguments. However, reliance on the precedents dealing. with the subject was common. As it has been observed in para. supra that under…

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