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Writ Petition No. 462 of 1967, decided on 21st December 1967.
‑Foreign Exchange allocation‑Import authorisation from Chief Controller of Imparts and Exports forwarded to State Bank for registration ‑ Registration refused by State Bank, entire foreign exchange allocation jar shipping period being exhausted --Refusal of registration, held, legally justified.
When the Import authorisation was returned unregis tered the Foreign Exchange allocation for the period in question had been already exhausted ; nay, the ceiling of the particular allocation had been exceeded by lacs of rupees, and therefore, there was legal justification for the refusal of the registration.
Import authorisation‑Registration refused to plaintiff and several others for want of foreign exchange allocation‑Plaintiff, held, not victim of discrimination.
The authorisation in favour of the petitioner was not the only one that had been returned unregistered. There were several others also belonging to different parties that had been refused registration. The Court did not accept the contention that the petitioner had been the victim of discrimination.
Syed Ishtiaq Ahmed, Samad Meah and Delwar Hussain for Petitioner.
Ruhul Islam and M. R. Khan for Respondents Nos. 2 and 3.
Dates of hearing : 14th and 28th November 1967.
.‑This Rule nisi is directed against an order of tire Assistant Controller, State Bank of Pakistan, Foreign Exchange Control Department, Dacca (respondent No. 2) returning unregistered certain authorisation for raw rubber.
The petitioner is a company incorporated under the Companies Act, 1913 having its registered office in East Pakistan and it carries on business, among others, of the manufacture of rubber products. Its project for setting up rubber industries in East Pakistan has been approved by the Government of Pakistan, Ministry of Industries. Although its requirements of raw rubber for its project was much higher as is evidenced by its Category Pass Book (Category Pass Book is issued to recognised Industrial consumers and the amounts stated therein form the entitlement of every industrial consumer for import of the goods stated therein) it was allowed letter of authorisation for an amount much lower than it was entitled to. The present authorisation is in respect of Rs. 1,02,375'00 and this was in respect of the shipping period from July 1966 to June 1967 and it was validated up to 4‑12‑67. It has not been disputed that the authorisation issued in favour of the petitioner has been duly done. Under direction issued by the State Bank of Pakistan it was required that such authorisation should be registered with the State Bank of Pakistan before a Letter of Credit could be opened. Pursuant to this direction the petitioner's authorisation along with the authorisa tions of some other parties were forwarded on 5‑7‑67 by the United Bank Limited, Chittagong to the State Bank of Pakistan, Dacca for the requisite registration. The Assistant Controller of Foreign Exchange Control Department State Bank of Pakistan, however, on the 25‑7‑67 returned unregistered the petitioner's authorisation along with some others to the United Bank Limited without specifying any reason for such action. It is against this action of the Assistant Controller of Foreign Exchange Control Department that the petitioner approached this Court and obtained the present Rule.
In the affidavit‑in‑opposition sworn by Mr. Muhammad Iqbal, Assistant Controller of Foreign Exchange Control Depart ment, State Bank of Pakistan, Dacca, and filed on behalf of the respondents it has been stated that the petitioner's authorisation was refused registration because it was found that the entire alloca tion of the Foreign Exchange for the Chief Controller of Imports and Exports for the shipping period July 1966 to June 1967 had been exhausted by that time and because the Dacca Office bad been advised to return unregistered all free list authorisations which had, been received and were pending with the Dacca Office.
Mr. Ishtiaq Ahmed, learned Advocate appearing on behalf of the petitioner, has contended that the impugned order of refusal to register the petitioner's authorisation is illegal and without any justification. He has argued that the petitioner having complied with all the formalities of law and having succeeded in obtaining the said authorisation in respect of raw rubber had acquired a vested right to open the necessary Letter of Credit for the importation of raw rubber essentially needed for its rubber industries set up with full approval of the Government.
On behalf of the respondents it has been contended, on the contrary, that the refusal was legal and justified in view of the fact that the entire allocation of Foreign Exchange allotted to the Chief Controller of Imports and Exports for the said shipping period had been exhausted and as the Dacca office of the State Bank of Pakistan, which worked under the direction and control of the Central Directorate of the State Bank at Karachi, had been advised to return unregistered all Free List authorisations which had been received and pending with the Dacca Office.
On the contention of the two parties the only question that calls for consideration by us is whether on the relevant date, namely, the 25‑7‑67 the State Bank of Pakistan, Dacca was legally justified in refusing registration of the said authorisa tion.
It appears that although at the time the authorisations were returned unregistered by the State Bank of Pakistan, Dacca to the United Bank Limited no reason whatsoever was given for the refusal in their affidavit‑in‑opposition dated 10‑11‑67 it has been categorically asserted in paragraph 7 thereof that the authorisa tions were returned unregistered because it was found that the entire allocation of Foreign Exchange allotted to the Chief Con troller of Imports and Exports for the shipping period in question had been exhausted. The petitioner in its reply was not in a position to deny this assertion obviously because it had no materials to do so. The petitioner, however, submitted that having regard to the fact that the Chief Controller of Imports and Exports received Foreign Exchange allocation for every shipping period from the Ministry of Finance, Government of Pakistan for import to Pakistan all the free list items, it cannot be said that he made the authorisation in favour of the petitioner oblivious of‑the particular allocation, and therefore, the presumption is that the Chief Controller performed the official act, namely, the authorisa tion in favour of the petitioner regularly, and the onus, therefore, lay heavily upon the respondents to show the contrary. Having been confronted with this position we asked Mr. Ruhul Islam, learned Advocate appearing on behalf of the respondents to produce before us facts and figures to substantiate the aforesaid statements made on behalf of the respondents in paragraph 7 of the said affidavit.
In pursuance of this direction a supplementary affidavit dated the 22‑11‑67 sworn by the said Mr. Muhammad Iqbal, Assistant Controller of Exchange Control Department, State Bank of Pakistan, Dacca was put in on behalf of the respondents. It has been stated in this supplementary affidavit that the State Bank of Pakistan, Dacca had returned the said authorisation unregistered in obedience to the directions given by the Central Directorate to the State Bank of Pakistan, Dacca, received on the 10‑6‑67. It is further stated that the State Bank had received two telegrams one dated the 23‑6‑67 and the other dated the 18‑7‑67. By the telegram dated 23‑6‑67 the Central Directorate of the State Bank of Pakistan, Karachi instructed the Dacca Branch of the Bank to allow registration of import license and free list authorisation against cash in the private sector for some specific items which did not include raw rubber. The telegram dated 18‑7‑67 sent by the said Central Directorate advised the Dacca office to return unregistered all free list authorisations pending for registration in the Bang. In pursuance of these instructions contained in the telegram of the 18‑7‑67 the Dacca Office of the Bank returned the authorisation' of the petitioner unregistered. Furthermore it has been stated that the different Branches of the State Bank of Pakistan are neither apprised of the quantum of allocation for the Chief Controller of Imports and Exports (private sector) for a particular shipping period nor are they informed as to when the said allocation is exhausted. It has been stated in paragraph 4 of the supplementary affidavit that the Branches act on specific instructions received from time to time from the Central Directorate which keep a watch over the allocation and expenditure of the Chief Controller of Imports and Exports. The petitioner has replied to the supplementary affidavit but was obviously not in a position to categorically deny the assertions made in the supplementary affidavit. In support of the statements made in paragraph 3 of the Supplementary Affidavit Mr. Ruhul Islam has produced before us the aforesaid two telegrams and they have been shown to the learned Advocate appearing on behalf of the petitioner. Mr. Ruhul Islam has further produced before us a statement showing the total over‑all allocation made to the Chief Controller of Imports and Exports by the Ministry of Finance during the shipping period from 1‑7‑66 to 30‑6‑67 and also a statement showing the commitments registered during the said period against the allocation made to the Chief Controller of Imports and Exports. These two state ments have also been shown to the learned Advocate appearing on behalf of the petitioner and are reproduced blow:‑
"Statement showing the total over‑all allocation made to the Chief Controller of Imports and Exports by the Ministry of Finance during the shipping period from 1st July 1966 to 30th June 1967.
| | | | | |
| 1 | Ministry of Finance Office Memorandum No. 4 (1)‑EF(B)/66. | 22‑2‑67 | Revised and final cash foreign exchange allocation for imports under Private Sector. | 90,00,00,000 |
| 2 | Telex No. 4(48)‑EF (B)/66. | 12‑6‑67 | Additional allocation in respect of imports. | 54,50,000 |
| 3 | Office Memorandum No. 3866‑EF(B)/66. | 16‑8‑66 | Special foreign exchange allocation to C. C. I. & E. to meet 2 % cost of the extra long. | 60,000 |
| 4 | Telex No. 4(64) EF (B)/63. | 29‑12‑66 | For revalidation of licenses for import of Broad Looms. | 75,00,000 |
| 5 | Letter No. P‑I(1) (20)/67. | 15‑3‑67 | For licencing to duty free shop. | 4,45,000 |
| 6 | Credit given to C. C. I. & E. on account of overseas payment licences. |
| Rs. 3,23,00,000
Rs. 2,93,00,000 | 6,16,00,000 |
| Total Foreign Ex change Allocation 97,50,55,000 | ||||
Certified to be true copy.
(Sd.)
MUHAMMAD IQBAL,
Assistant Controller,
Exchange Control Deptt,
State Bank of Pakistan,
Dacca.
Statement showing commitments registered during the period from 1st July 1966 to 30th June 1967 against allocation made,
To C. C. I. & E.
| Month ended | Commitments Registered Licences and Free List | Progressive Total | ||
| 1 | 31st July 1966 | 7,13,34,272 | 7,13,34,272 | |
| 2 | 31st August 1966 | 14,41,02,707 | 21,54,36,979 | |
| 3 | 30th September 1966 | 14,48,94,155 | 36,03,31,134 | |
| 4 | 31st October 1966 | 12,96,23,930 | 48,99,55,064 | |
| 5 | 30th November 1966 | 10,54,47,197 | 59,54,02,261 | |
| 6 | 31st December 1966 | 11,01,70,217 | 70,55,72,478 | |
| 7 | 31st January 1967 | 7,27,88,204 | 77,83,60,682 | |
| 8 | 28th February 1967 | 2,80,65,034 | 80,64,25,716 | |
| 9 | 31st March 1967 | 3,37,33,316 | 84,01,59,032 | |
| 10 | 30th April 1967 | 7,53,22,30) | 91,54,81,341 | |
| 11 | 31st May 1967 | 3,84,16,784 | 95,38,98,125 | |
| 12 | 30th June 1967 | 2,35,46,698 | 2,35,46,698 | |
| Total Commitments: | 97,74,44,823 | |||
| Total Allocation: | 97,50,55,000 | |||
Certified to be true copy.
(Sd.) MUHAMMAD IQBAL,
Assistant Controller,
Exchange Control Deptt.
State Bank of Pakistan,
Dacca".
It is evident from the aforesaid two statements that the total foreign allocation made to the Chief Controller of Imports and Exports for the shipping period in question was Rs. 97,50,55,U00 and the total commitments registered during the chipping period amounted to Rs. 97,74,44,823, that is, the commitments exceeded the allocations by Rs.23,89,823. In these circumstances it is apparent that on the 25‑7‑67 when the hemionur's authorisation was returned unregistered the Foreign Exchange allocation for the period in question had been already exhausted; nay, the ceiling of the particular allocation had been exceeded by more than 23 lacs of rupees, and therefore, there was legal justifiaction for the refusal of the registration. On the materials placed before us we see no reason to disbelieve the statements made on behalf of the respondents in regard to the position of the Foreign Exchange on the relevant date. We, should, however, like to observe that it would have been better if the Dacca Office of the State Bank of Pakistan had acted in a straightaway manner and given reasons for not registering the authorisation in question at the time it was returned undregistered. The failure to supply the reason at the relevant time naturally gave rise to an apprehension in the mind of the petitioner that there was no valid reason for refusing to register or that it was the victim of discrimination. Instead of allaying this apprehension the respondents further aggravated it by failing to furnish the relevant facts and figures in their first affidavit‑in‑opposition dated 10‑11‑67. It was only when we had asked the learned Advocate appearing on behalf of the respondents to substantiate the statements made in paragraph 7 of the said affidavit that at long last the respondents produced the facts and figures contained in the supplementary affidavit of the respondents dated 22‑11‑67, and the two statements quoted above. Admittedly, however, the authorisation in favour of the petitioner was not the only one that had been returned unregistered. There were several others also belonging to 6 different parties that had been refused registration. We, therefore, do not think that the petitioner has been the victim of discrimination.
We should further like to observe that it is indeed unfortunate that the petitioner who had taken the trouble of complying with all the provisions of law for obtaining the authorisation in question and obviously had spent time and labour for the purpose ultimately found that they were all fruitless. We think it is in the interest of everybody concerned that steps should be taken to avoid such frustration and to see that licences and authorisations or their validations are issued strictly in conformity with the availability of the Foreign Exchange allocation.
In the facts and circumstances mentioned already we do not think that the impugned refusal was unjustified.
The Rule is accordingly discharged. Having regard to the facts and circumstances of the case we make no order as to costs.
‑I agree.
A. E.
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