1883 PLP 3233 (CLC)

(a) Original Export liability against Messrs Chaman Rs. Shoe Co. Karachi in respect of advance Import Licence No. 006234 dated 18th October, 1971 for Rs. 2,00,000 issued against Bank Guarantee. 5,72,000 (b) Export liability enhanced @ 13% due to devaln ation of Pak Currency on 12 5‑72 13,21,320 Rs. (c) Export adjusted against export liability 7,48,943 (d) Balance export liability 5,72,37" (e) Balance export liability at "D" above converted to pre‑devaluation rate @ 131. 2,47,782 (f ) Value of licence worked out @ 35 % of the f. o. b. value of exports, the rate on which licence was issued, and, for which the export commit ment has not been fulfilled . 86,724 (g) Double the face of balance value licensed as per conditions of the Bank Guarantee . 1,73,448 (h) Value of Bonus Vounchers at the rate prescribed by the State Bank of Pakistan, i.e. Rs. 100 Rs. 193.67 (Rs. 1,73,448 x 193.67). 3,35,916

6. The plea of respondent No. 3 is that the Advance Import Licence to the extent of Rs. 2,00,003 dated 18‑10‑1971 was issued to the petitioner subject to the condition that the petitioner would export goods worth Rs. 5,72,0000 only within the stipulated period and that the petitioner was bound by the bank guarantee dated 18‑7‑1971 furnished by their banker Muslim Commercial Bank Ltd. Karachi to surrender foreign exchange worth Rs. 4,00,000 equivalent to double the value of import licence in the shape of Bonus Vouchers within a month after the expiry of the stipulated period. It was further alleged that if the petitioner failed to honour its commitment, the guarantee was liable to be encashed without notice to the petitioner. Respondent No. 3 further stated that on the instructions from respondent No. 1, an amount of Rs. 3,35,916 which fell short of the export commitment of the petitioner, were recovered by having recourse to the bank guarantee through Muslim Commercial Bank Ltd. Main Branch, Karachi.

7. The contention of Mr. Khurshid Anwar Shaikh learned counsel for the petitioner is that respondents Nos. 1, 2 and 3 were not entitled to increase unilaterally the export liability of the petitioner from Rs.5,72,000 to Rs. 13,21,

310. It is also stated that the total value of the goods exported by the petitioner by i3‑5‑1976 was Rs. 6,18,981 and thus it had fulfilled its obligation under the bank guarantee and that the respondents had no jurisdic tion to enhance the amount of bank guarantee to Rs. 13,21,310.

8. From perusal of the bank guarantee which is Annexure "P. 2" with the petition, it would transpire that the petitioner was liable to export goods worth Rs. 5,72,000 only within the stipulated period of six months from the date of issue of import licence or within the period extended from time to time. It further appears from the bank guarantee that in case of failure of the petitioner to export goods to the extent of the above amount, it shall surrender to the President of Pakistan foreign exchange worth Rs. 4,00,000, equivalent to double the value of the import licence in the shape of Bonus Vouchers within a month after the expiry of the stipulated period without any notice.

9. From the terms of the guarantee it is quite , clear that the liability to the petitioner was to export goods worth Rs. 5,72,000 in Pakistan currency within the stipulated or the extended period. There is nothing in the guarantee to suggest that the value of the export commitment of the petitioner A was to be calculated in terms of foreign currency. Learned counsel for the respondents have failed to point out any provision in the Import Policy of 1971 or any other law to support their claim that they were entitled enhance the export liability of the petitioner from Rs. 5,72,000 to Rs. 13,21,31:

0. We have, therefore, no hesitation in holding that the action of the respondents in enhancing the liability of the petitioner to the above amount is arbitrary, illegal. and without jurisdiction.

10. Respondent No. 1 has alleged that as a result of devaluation of Pak. currency by 131 per cent. all credits and loans involving foreign exchange were also enchanced by 131 per cent. and consequently the export liability of the petitioner was also enhanced in the same proportion. This plea has no substance. No credit or loan in foreign exchange was involved in the present case. The petitioner had not obtained any loan from the Government, nor the liability of the petitioner to export goods of the value stated in the bank guarantee was to be determined in terms of foreign exchange. From the plain reading of the bank guarantee it would transpire that all that the petitioner was required to do, in consideration of the import licence, was to export goods of the value of Rs. 5,72,000 within the stipulated or the extended period. This liability has been more than fulfilled by the petitioner within the extended period. Consequently we allow this petition and declare that the demand of the respondents that the petitioner should have exported goods worth 13,21,310 as against their original commitment of goods worth Rs. 5,72,000 C is illegal, without jurisdiction and lawful authority. There will be no order as to costs. M. Y. H Petition allowed.