``We are afraid that in the event Tata Steel is permitted and allowed to enjoy the benefits in terms of the IPRS, the situation would not only be unjust enrichment but also amount to entertainment of a totally wrong claim,'' a Bench comprising Justice MJ Rao and Justice UC Banerjee said.

The government had introduced IPRS in 1981 to provide some protection to exporters of engineering goods manufactured using domestic steel, which has always been priced higher than international steel due to inclusion of Joint Plant Committee (JPC) price elements.

Tata Steel, while exporting engineering goods, manufactured using its own steel without involving any of the price elements declared by the JPC, had claimed benefits under the IPRS.

The Enginnering Export Promotion Council (EEPC) by its letter dated November 23, 1992, refused to recognise Tata Steel's entitlement to avail of the benefit of the scheme and said a sum of Rs 10.37 crore was paid in excess to the company under a bonafide mistake.

However, Tata Steel maintained that the scheme for price reimbursement from the time of its introduction was applicable universally to all exporters since the export would not have been viable without the benefits under the scheme.

Justice Banerjee, writing the judgement for the Bench, said the intention of the government while framing the IPRS was to protect the interest of exporters of the engineering goods where the JPC or the domestic price, which included a number of levies, was more than the international pricing.

He said ``the appellant Tata Steel admittedly has not paid the JPC price, which includes various levies of the raw materials used for the product.``As a matter of fact, they cannot have any reimbursement for expenses which they have never incurred,'' he added.

As per the calculations made by the government, an amount of Rs 10,37,96,604 was recoverable from Tata Steel on account of over-payment of which a sum of Rs 6,75,00,298 stands adjusted by the government against the payments respectively and a balance amount of Rs 3,62,96,306 was to be recovered.

Upholding the government contention, Justice Banerjee said, ``On a true reading of the scheme and various clauses thereunder together with the available meaning on the basis of the language used, the IPRS cannot possibly cover a situation as is in the present context.''

Tata Steel further contended as an alternative submission that as the government had continued to confer the IPRS benefits to the company at a later stage, it could not withdraw the same retrospectively as it was hit by the doctrine of estoppel. Justice Banerjee said the issue of an estoppel by conduct could only be said to be available in the event of there being a precise and unambiguous representation and on that score a further question arises as to whether there was any unequivocal assurance prompting the assured to alter his position or status.

In the IPRS, all the exporters gave an undertaking to the government that if at a later date it was found that they have got more than what was due to them due to oversight or wrong calculations, they would refund the same within 10 days of a notice given by the licensing authority.

``It is on this score it may be noted that in the event of there being a specific undertaking to refund for any amount erroneously paid in excess, question of there being any estoppel in our view would not arise,'' the Bench said.

The court said the correspondence unmistakably divulge an obligation to pay certain compensation in the event there was a payment of certain levy by the Tata Steel. ``Tata Steel admittedly has not made the payment; doctrine of unreasonableness is opposed to doctrine of fairness and reasonableness will have its play, if allowed,'' Justice Banerjee said. ``The happening of an event (payment of the JPC price elements) has not taken place, can it be said irrespective of such an event reimbursement is to be allowed? the answer, however, cannot but be in the negative,'' he said.

(PTI)