IN THE HON’BLE HIGH COURT OF DELHI, AT NEW DELHI

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO. ____________ OF 2024

IN THE MATTER OF:

A.R. Sales Pvt.Ltd. .... Petitioner

Versus
Union of India & Ors. .... Respondent

Briefing Notes
ISSUE: The issue in this case revolves around the arbitrary invocation of catch-all
provisions under Para 10.05 of the Foreign Trade Policy 2023 (FTP) against the
petitioner, M/s A.R. Sales Private Ltd., resulting in the abrupt halt of their export
process. The petitioner argues that this action has led to significant financial and
reputational losses, as well as discrimination in comparison to other exporters in
similar situations. The primary contention is whether the respondent, DGFT
(Directorate General of Foreign Trade), had the authority to issue the impugned
letter/order and if it was contrary to the provisions of the Foreign Trade
(Development and Regulations) Act, 1992 (FTDR) and FTP 2023.

Origin of the Suit: The origin of the case lies in the impugned letter/order dated
02.02.2024, issued by the respondent No.3, DGFT, which invoked catch-all
provisions under Para 10.05 of FTP 2023 against the petitioner, thereby halting
their export of Civil/Commercial Aircraft Engines/Parts/Components. This action
led to the petitioner filing a writ petition seeking redressal under Article 226 &
227.

Briefs of the case: The petitioner M/s A.R. Sales Private Ltd. is a company
incorporated under the Companies Act, 1956 having its registered office at 1009,
Prakashdeep Building, 7 Tolstoy Marg, New Delhi, inter-alia engaged in the
business of import-export and is having IEC Code No. AAECA5464F. The
petitioner company has been importing Civil /Commercial Aircrafts Engine /
Parts/Components etc. from various countries and exporting the same to Russia
and CIS Countries November 2022. All these items have been directly sold to Civil
and Commercial Airlines, which are public registered companies, engaged in
domestic and international passenger transportation, falling under the Civil
Aviation as per Aircrafts Operating Certificate. The Respondent No.3, vide its
impugned the letter / order dated 02.02.2024 has invoked the Catch-all provisions
under Para 10.05 of FTP 2023 against the petitioner and in between stopped the
process of the export, which greatly prejudice and caused irreparable huge
financial and reputational loss to the petitioner.

However, upon examination of the case's factual background, it is revealed that the
addresses listed on the IEC certificate and GST certificate belong to the residential
premises of two directors, Mr. Mahendar Prakash Agarwal and Mr. Alok Prakash,
where no business activities were conducted. Furthered perusal revealed that all
three directors of A.R Sales Private Limited, namely Mr. Mahendar Prakash
Agarwal, Mr. Alok Prakash, and Ms. Aswany Kumar Sharma, are Dummy
Directors incorporated by Manish Prakash Aggarwal (Chartered Accountant), and
have no knowledge of the company's operations. Additionally, it is discovered that
AR Sales Private Ltd does not possess a DGFT license.
It has come to light that Dr. Naveen Rao from M/s Sentro Group offered Mr.
Mahendar Prakash Agarwal a consideration of 1-2 lakhs per company in exchange
for providing IEC certificates to serve as dummy/proxy IEC firms for import and
export activities, with Mr. Manan Datta (an employee of Naveen’s) overseeing
customs-related tasks. M/s Delmos Aviation Company owned by Naveen Rao,
who provide unsecured loan to M/s AR Sales Pvt. Ltd. for effecting imports of
Aircraft engine/parts. A.R Sales Private Ltd is identified as a dummy/proxy IEC
firm managed by Dr. Naveen Rao. Dr. Naveen Rao had admitted receiving the
letter dated 02.02.2024 via Whatsapp from Manish Prakash Agarwal.
Moreover, export restrictions on aircraft parts from the USA and Europe to Russia,
owing to sanctions, are noted. To bypass these restrictions, goods are routed
through India before being exported to Russia.
It is also stated that the goods exported by M/s AR Sales Pvt. Ltd have the
potential of being used for non-civilian purposes and as the end use or end user of
these items exported is not certain, these items may potentially be falling under
SCOMET list.

Hence, in the light of the factual setting of this instant case, the writ petition is
prayed to be dismissed with cost.
 LIST OF DATES & EVENTS

Seria Date Events Reference

l No.
1 21.11.2022 That the petitioner company was Annexure P3
allotted Export Import Code No. (Colly)
AAECA5464F. (pg:39)
2 Nov 2022- The petitioner has made all the exports Annexure P10
Jan 2024 of Civil / Commercial Aircraft (Colly)
Engine/Parts /Components etc. to (pg: 359-371)
Russia and CIS Countries.
3 03.11.2023 The petitioner company entered into a Annexure P4
Letter of Intent (LOI) (Colly)
with Siberian Airlines for export of (pg:45)
Aircraft Engine.
4 14.11.2023 The petitioner company accordingly
entered into a proposal
of sale / LOI with Soma Capital FZCO
for Importing of
Aircraft Engines
5 29.01.2024 Bill of entry filed at IGI Airport New
Delhi for the Import the aforesaid
Engine(s).
Bond issued for transfer of goods from
Airport Warehouse to Custom Bonded
 Warehouse in the town.
Aircraft Engines transferred from
Airport Warehouse to Custom Bonded
Warehouse in the town.
Export Process started with application
to transfer Aircraft Engine to Custom
Bonded Warehouse in town to Airport
Warehouse.
6 02.02.2024 The letter / order F. NO. Annexure-P1
01/77/171/D86/AMQ24/EC(S), dated (pg:37)
02.02.2024, issued by Shri Ranjeet
Kumar Roy, Deputy Director,
Directorate General Foreign Trade
Export Cell (SCOMET), New Delhi
whereby Catch-all provisions for
export of “Aircraft Engine / Parts /
Components” under Para 10.05 of FTP
2023 against the petitioner was
invoked.
6 05.02.2024 Petitioner issued invoice to Siberian
Airlines for the aforesaid export of
aircraft engine.
7 06.02.2024 The petitioner received the impugned
letter / order F. NO.
01/77/171/D86/AMQ24/EC(S),dated
02.02.2024, issued by Shri Ranjeet
Kumar Roy, Deputy Director,
 Directorate General Foreign Trade
Export Cell (SCOMET), New Delhi.
8 15.02.2024 Aircraft Engines under Airway bill No.
7552481was transferred to Airport
Warehouse from Custom Bonded
Warehouse in town.
9 16.02.2024 LEO (Let Export Order) to export
Aircraft Engines under shipping bill
No. 7552481was denied to the Custom
House Agent on pretext of DRI alert on
the shipment.
10 17.02.2024 On inquiry the petitioner was informed
that due to the DRI Alert, LEO (Let
Export Order) was denied and ail the
shipments of the petitioner were
withheld.
11 20.02.2024 The petitioner made representation Annexure P8
dated 20.02.2024 to the JT Director, (Colly)
DGFT, New Delhi in response / reply (pg: 358)
to the impugned letter / order dated
02.02.2024, issued by Deputy Director,
DGFT Export Cell (SCOMET), New
Delhi, and Custom’s Commissioner
and requesting for the release of LEO
and to relieve the four shipments lying
at Airport.
12 21.02.2024 DRI initiated search and seizure at the
premises of Petitioner, its Director and
its official and seized various
documents, phones and laptops; and
also summoned to the Directors and
officials of the petitioner company for
inquiry / statement.
13 28.02.2024 The Writ Petition was filed.