JUDGMENT MALIK MUHAMMAD QAYYUM, J.- This judgment shall dispose of W.P. No. 13445/99 and W.P. No. 13446/99 in both of which common question is involved.
2. The facts giving rise to this petition are that the petitioner company is engaged in import and export of various goods from Pakistan to India, itentered into a contract with the Indian importers tor the export of 1500 metric tons of poppy seeds valuing 10,50,000 US$. Out of aforesaid 231 metric tons were supplied by the petitioner in consignments the price whereof was remitted by the importer to Pakistan through Prime Commercial Bank Ltd. Jodia Bazar, Karachi. According to the averments made in this petition when the goods arrived in India there was a problem regarding the Clarence of the exports and the importer had to invoke the constitutional jurisdiction of High Court of Punjab and Haryans at Chandigarh by filing Writ Petition No. 18471/98 which was allowed by the said Court primarily on the ground that the rights vesting in an individual cannot be taken away by issuing a Notification which cannot operate retrospectively.
3. It is common ground between the parties that in the Import and Export Order 1998-99 there was no prohibition on export of poppy seeds as it did not fall under any three of the schedules to the Export Policy Order 1998-99 issued in exercise of the power conferred by Section 3 of the Import and Export (Central) Act, 1950. However, the aforesaid order was seeds by the Government through Notification No. SRO 28(i)99 dated 14.1.1999 whereby poppy seeds were included in schedule 1 of the Export Policy Order with the result that export of poppy seeds was completely banned.
4. As, already noted the petitioner had before 14.1.1999, entered into a contract for export of 1500 metric tons of poppy seeds out of which 231 metric tons of poppy seeds has already been supplied.
When the petitioner wanted to export other consignment of the poppy seeds respondents No. 2 and 3 refused to allow the shipment on the basis of Notification No. SRO 28(i) 99 dated 14.1.1999. The petitioner represented against this action of the respondents pointing out that the petitioner had entered into a binding contract with the importer and the rights vested in the petitioner could not be denied by giving retrospective effect to the Notification dated 14.1.1999. On the representation of the petitioner the case was sent to Narcotics Control Division for issuance of no objection certificate for the export of poppy seeds, ithas been averred in this petition that the matter was referred to the opinion to the Law and Justice Division which opined that no retrospective operation could be given to the Notification dated 14.1.1999 and therefore, the rights following therefrom could not be impaired or taken away. Notwithstanding the aforesaid the respondent did not allowed the petitioner to export of remaining of the contracted goods. This action of the respondents has been challenged by the petitioner by filing this petition.
5. It is contended by the petitioner's learned counsel that the export of poppy seeds was freely allowed under the Export Policy Order, 1998 under Section 3(1) of Import and Export (Control) Act, 1950 at the time when the petitioner had entered into a contract with the Indian Importer on 8.9.1998 and also established a letter of credit on 23.9.1998 and further that the petitioner had exported a part of the poppy seeds. His claim is that vested rights had come to secure to the petitioner on the basis of the contract entered into between him and the importer at the time when there was no restriction on the export, itis claimed that the amendment made in the Schedule- 1 of Export Policy Order 1998- 99 through Notification dated 14.1.1999 has no retrospective operation so as to interfere with the rights of the petitioners or the contracts entered into prior to the issuance of said Notification.
6. In the report submitted by the respondents almost all the facts have been admitted, ithas, however, been stated that till September, 1997 there was no restriction on export of poppy seeds from Pakistan. However, . On the initiative of Pakistan Narcotics Central Division export of poppy seeds was banned vide Ministry of Commerce SRO 32(i)97 issued on 22.9.97, while issuing the Export Policy Order, 1988 the poppy seeds could not be inadvertently included in the list of items export of which was banned and this defect was rectified on 14,1.1999 by the Ministry by issuing the impugned notification.
7. Import to and export from Pakistan is governed by the Import and Export (Control) Act, 1950 under which in consonance with the trade policy the Government issues export policy order almost every year in terms of Section 3 of the Import and Export (Control) Act, 1950. It is not disputed that Schedule 1 of the Export Policy Order, 1998. The poppy seeds do not figure anywhere in the list of goods export of which was banned. Consequently at the time when the petitioner entered into a contract for the export of goods there was no ban on the export of poppy seeds. Export of a partial shipment was also allowed by the respondents themselves on 8.9.98. It was much later on 14.9.19999 that the Export Policy Order was amended by Notification No. SRO 28(i)99 dated 14.1.1999 and export of poppy seeds was banned.
8. It is a settled position in the law that a notification cannot have any retrospective affects and operates prospectively unless there is a clear provision to that effect in the legislation itself. The other settled proposition in law is that right which secure to or vested in a person on account of his having taken some action on the basis of a contract or a policy cannot be taken away by issuing a Notification. The Supreme Court of Pakistan in Federation of Pakistan v. Chaudhry Muhammad Asim (1986 SCM R 916) which was a case relating to import of buses was pleased to observe that though the department possess untrammeled powers and could prospectively prohibit or control the imports all the same even such an extensive power has its limits. Vested . Rights cannot be allowed to be overridden unless it takes place by unequivocal words by an organ or authority competent to impair or override the vested rights, itwas further observed as under:- "If contracts had been bona fide and legally entered into. And had given rise to rights and liabilities enforceable at law then certainly vested rights had come into existence which could not be overridden even in the matter of import and export, except on express words of an authority competent to legislate retrospectively, competent to override or impair such vested rights. An agency or authority not empowered to override or impair vested rights cannot achieve that the simply be giving its dispensation in therefrom of declaration.
Such a vested right was protected 'and preserved by invoking in aid the' principle of promissory estoppel.
Similarly in Al-Samrez Enterprise v. The Federation of Pakistan (1996 SCMR 1917) the Supreme Court of Pakistan held the following:- "If a binding contract was concluded between the appellants and the Export or steps were taken by the appellants creating a vested right to the then existing notification granting exemption, the same could not be taken away and destroyed in modification of the earlier one, on the ground that on the ground that under Section 21 of the General Clauses Act the Government could exercise the power of modification.
It will be inequitable and unjust to deprive a person who acts upon such assurance of the right to exemption and expose him to unforeseen loss in the business transaction by suddenly withdrawing the exemption after he has made legal commitments, itis in this perspective that a right is created in his favour and a subsequent withdrawal of exemption cannot be given retrospective operation by an executive act to destroy this right.
Vested right was created and the transaction /vas not open to doubt as fraudulent and no attempt to evade the payment of duty was made.
Retrospective operation cannot be given to executive orders so to destroy contractual rights and obligations already accused."
Reference may also be made to Taj Mahal Hotel Ltd. Etc. v. Karachi Water and Sewerage Board, etc. (1997 SCM R 503) in which it was observed that a Notification or an administrative order could not operate retrospectively to the disadvantage of a person effected by^it. In Hashwani Hotel Ltd. v.
Federation of Pakistan and others (PLD 1997 SC 315) it was laid down that the Notification and/or an executive order can only operate prospectively and not retrospectively, itwas further held that:- "Reverting to the question, whether such a direction can affect the loan agreements which wee already concluded prior to such direction, it may be observed that it is a well-settled principle of interpretation of notification and/or an executive order that the same can operate prospectively and not retrospectively. This principle is equally applicable to a statute in the absence of any express or implied intendment contrary to it."
Reference may also be made to Messrs Army Welfare Sugar Mills Ltd. And others V. Federation of Pakistan and others (1992 SCM R 1652) in which it was laid down that a notification which purports to impair an existing or vested right or imposes new liability or obligation cannot operate retrospectively in the absence of legal sanction. If an authority is competent to make an order it has the power to under it but the order cannot be withdrawn and rescinded once it has taken legal effect and certain rights are created in favour of any individual, itwas further held that the doctrine of promissory estoppel was applicable in Pakistan against Government and its functionaries subject to following exemptions:-
(i) The doctrine or promissory estoppel cannot be invoked against the legislature or the laws framed by it because the legislature cannot make representation; (ii)Promissory estoppel cannot be invoked for directing the doing of the thing which was against the law when the representation was made or the promise held out;
(iii) No agency or authority can be held bound by a promise or representation not lawfully extended or given;
(iv) The doctine of promissory estoppel will not apply where no steps have been taken consequent to the representation or inducement so as to irrevocable commit the property or the reputation of the party invoking it; and
(v) The party which has indulged in fraud or collusion for obtaining some benefits under the representation cannot be rewarded by the enforcement of the promise.
In the present case there is no averment by the respondent that the petitioner has acted fraudulently nor the fact that he had entered into a contract within importer and opened a letter of credit prior to coming into force of the Notification been disputed.
It follows from the above that the Government in the exercise of its powers under the Import and Export (Control) Act, 1950, can allow or prohibit the import and export of any goods subject however to the rider that the notification issued by it in this behalf would operate prospectively and cannot affect the rights vesting in a person on the basis of the contracts entered into or the other steps taken for export and import, both on the principle of promissory estoppel and theory or vested rights.
10. In the present case it is not denied that at the time when the petitioner had entered into the contract and had opened the letters of credit there was no prohibition in any law for the export of poppy seeds from Pakistan, ithas been contended by the respondents that it was due to an accidental omission. Even if that be so, a third person like the petitioner cannot be made to suffer for the fault of the respondent department, itis also interesting to notice that the import of poppy seeds in Pakistan is not banned. Further more, under the Narcotics Control Act, 1997 there is no bar for dealing with or being in possession of poppy seeds.
Narcotic drug has been defined in Section 2 to mean coca leaf, cannabis, heroin, opium, poppy straw and all manufactured drugs, however, poppy straw means all the parts, except seeds, of the opium poppy after mowing. Reading the two definitions together it becomes clear that poppy seeds do not fall within the definition of narcotic drug.
11. Before concluding this discussion it may be stated that the importer to whom, the goods were sent by the petitioner faced a similar difficulty which resulted in filing of a constitutional petition bearing No 18876/98 before the High Court of Punjab and Haryans at Chandigarh, In that case too importer had been issued a licence for import of poppy seeds from Pakistan and certain other countries. Subsequently, however, notifications were issued by virtue of which the import of poppy seeds from Pakistan were banned. This was done by amending para-8 of the Foreign Trade Regulation Rules 1993. The High Court was pleased to hold that valuable rights of the importer cannot be defeated on the basis of a notification which could not' materially vary the terms and conditions of the licence to the disadvantage of the importer in that case.
12. As a result of what has been stated above, this petition is allowed. The notification bearing No. SRO 28(1)99 dated 14.1.1999 is held to be only of prospective operation and would be ineffective against the rights of the petitioner who shall be allowed to export the poppy seeds of the quantities mentioned in the contract/letter of credit.
13. No order as to costs.