Rajiv Kumar Damani vs M.M.T.C. Ltd.

Rajiv Sahai Endlaw, J.

CM No. 13084/2013 (of the appellant for restoration of the appeal dismissed in default on 22.01.2013), CM No. 13086/2013 (of the appellant for condonation of 43 days delay in applying for restoration) & CM No. 13084/2013 (of the appellant for condonation of 69 days delay in refiling the application).

Though no cause for non appearance when the appeal was dismissed in default and no ground for delay in applying for restoration was found but since the appeal had been admitted for hearing and had remained pending for long in this Court, it was felt that it should be considered on merits, subject of course of the appellant depositing the balance decretal amount in this Court and being at least now ready to argue the appeal. Though on the last date, the balance decretal amount had been deposited but the counsel was even then not ready to argue the appeal. The matter was accordingly adjourned for today.

The counsel for the appellant today states that he is ready to argue the appeal.

However during the hearing, it has been found that with respect to the crucial document, the counsel for the appellant cannot tell where they are and the same are not on his file also.

Another vital error, as would be reflected herein below, is found in the proceedings.

Be that as it may, so as not to keep this appeal of the year 2002 pending and since on an earlier occasion the counsel was informed that subject to deposit of the balance decretal amount and being ready to argue the appeal, these applications will be allowed, the applications are allowed.

The delay in applying for restoration and the delay in re-filing the application therefor are condoned and the appeal restored to its original position. The applications are disposed of.

RFA No. 674/2002

The appeal impugns the judgment and decree dated 16.09.2002 of the Court of Additional District Judge (ADJ), Delhi in suit No. 98/1998 of dismissal of suit filed by the appellant for recovery of Rs. 4,79,628/- and of allowing the counterclaim filed by the respondent/defendant/counterclaimant for recovery of Rs. 3,63,072/- with interest from the appellant.

Though technically two appeals should have been filed and/or permission for challenging both in this proceeding should have been obtained but the same was not obtained. Rather, the opening sheet of the appeal shows the appeal only to be against the order of dismissal of the suit filed by the appellant and not against the decree in the counterclaim filed by the respondent/defendant and the court fees also has not been paid on the challenge to the decree in the counterclaim of the respondent/defendant.

Upon the same being pointed out to the counsel for the appellant, he states that if he succeeds in this appeal against the dismissal of his suit, the substratum of the decree in the counterclaim would axiomatically disappear.

However without the appellant challenging the decree in the counterclaim, the same would not become unenforceable. The only remedy of the appellant would be to, in execution, seek set off.

Faced therewith, the counsel for the appellant seeks adjournment by two weeks to enable him to obtain instructions.

This being an old matter, it is not deemed appropriate to adjourn the same especially when this Court has now applied its mind. Moreover, the respondent/defendant also in all these years when the appeal has remained pending did not take any such objection; yet further, direction for deposit of decretal amount was made in this appeal under the impression that the same is an appeal against the decree against the appellant in the counterclaim as well.

Thus the counsel for the appellant has been heard with the directions for payment of court fees on the counterclaim within 15 days.

If the court fees are not so paid, the same be recovered by the Registry from the appellant.

The dispute between the parties is as to the rate at which premium was to be paid by the appellant to the respondent for replacement of the Special Import Licences (SIL) for import of Silver purchased by the appellant from one Mr. Amar Nath Arora and which licences were discovered to be forged. Though the appellant lodged an FIR against the said Mr. Amar Nath Arora but arrived at some compromise with the said Mr. Amar Nath Arora and the FIR is stated to have been quashed. The counsel for the appellant further states that since the respondent had agreed to replace the SIL subject to payment of premium, the appellant did not chose to pursue the FIR further.

The case of the appellant is that the respondent had agreed to a premium at the rate of 8.1% of the value of the licences. On the contrary, the respondent levied premium at the rate of 13% and in part recovery of the amount so due for premium withheld the amounts of the appellant already lying with the respondent and made the counterclaim for the balance amount. The suit of the appellant was for recovery of the excess amount withheld by the respondent over and above the amount due towards premium at the rate of 8.1% per annum.

Though the counsel for the appellant today has also sought to argue that the respondent has no right to levy such premium inasmuch as the respondent did not purchase the SIL from the market for effecting replacement to the appellant but the appellant in the suit is not found to have raised such a case. On the contrary, the appellant proceeded on the premise that the premium was to be charged at the rate of 8.1% only and not at the rate of 13% as was being done by the respondent.

Without the appellant challenging the action of the respondent of levying the premium and without any pleadings or issue thereon, the appellant cannot be permitted to do so in this appeal. The counsel for the appellant though contends that the witness of the appellant in his evidence had deposed so. However, no evidence beyond pleadings can be looked at.

The learned ADJ has held that there is no document of the rate at which the premium was to be charged.

The counsel for the appellant contends that the said finding of the learned ADJ is erroneous. Attention is invited to the letter dated 06.11.1996 of the respondent to the appellant (Ex. PW2/7) in which the respondent had informed the appellant that "The applicable premium comes to Rs. 11.34 lacs approximately". The counsel for the appellant contends that Rs. 11.34 lacs constitutes 8.1% of the value of the licences and thus the agreement for payment of premium at 8.1%, even though the rate is not specified in the said letter, is evident therefrom.

Per contra, the counsel for the respondent MMTC has drawn attention to the letters dated 17.10.1997 (Ex. PW2/10) and 11.11.1997 (not proved in evidence) of the respondent to the appellant informing the appellant that since the licences earlier submitted by the appellant for clearance of Silver imported by the respondent on behalf of the appellant were forged and the Customs Authority had imposed penalty and on appeal by the respondent had asked the respondent to surrender fresh SIL in lieu of forged ones and the respondent had accordingly surrendered the fresh SIL to Customs Department for endorsement, the costs towards SIL premium of 13% was to be borne by the appellant.

Finding the two letters relied upon by the respective counsels to be nearly a year apart, it has been enquired from the counsels as to what is to be the relevant date for computation of the rate of premium and which is the document providing for the payment of such premium. It is to this query that neither counsels are able to reply or show the document. The Trial Court of course in its judgment has referred to Clause 5 but the counsel for the appellant is unable to show the document of which Clause 5 has been referred.

The counsel for the respondents invites attention to Para 17 of the impugned judgment where the learned ADJ has opined that the relevant date of liability to pay the premium is the date of the dropping of the proceedings by the Customs Authority on substitution of the licences i.e. of 16.05.1997 when the licences were so replaced. It is further contended that the witnesses of the respondent has categorically deposed and to which there is no cross examination/rebuttal that the said premium is to be determined by the Consortium of Brokers as per the prevalent rate of Silver.

I have gone through the Trial Court file and do not find any document which may be prescribing the leviability of the premium. However the licences issued and which were being replaced, are subject to the Imports and Exports (Control) Act 1947 and the Orders and Yearly Handbook and Import Policy issued from time to time and it appears that the provision for leviability of such premium is in the said Handbook of Import Export Procedure. The representative of the client of the counsel for the appellant who is present in Court, though confirms the said fact but is not carrying the Yearly Handbook for the relevant period.

However it is not deemed apposite to defer the hearing for the said purpose inasmuch as, as aforesaid there is no challenge to the leviability of the premium.

Ordinarily, the relevant date for computing the rate of premium for replacing the licences would be the date of replacement. Again as aforesaid, there is no challenge to the rate of premium on the date of replacement of licences being 13%. The appellant has pegged his case only on the basis of letter dated 06.11.1996 supra. The said letter is in the context of the Customs Authorities having seized the consignment of Silver imported by the respondent as a channelizing agency on behalf of the appellant and licences of which import were subsequently discovered to be forged. The letter further records that the Customs Authority had agreed to allow replacement of licences and had not pressed any further order in confiscation proceeding. By the said letter, the respondent informed the appellant that if the respondent did so, to enable the appellant to have the consignment of Silver released, the same will be subject to payment of premium and which was then communicated to be of Rs. 11.34 lacs approximately. The very next line of the said letter states "However, without prejudice to any claim which may arise on the final order to be passed by the Customs Authorities in the matter."

Obviously, the appellant agreed with the proposal of the respondent contained in the letter dated 06.11.1996, for the respondent to have the consignment of Silver released in favour of the appellant by replacing the licences with new ones and agreed to pay the premium therefor.

In my view, the respondent cannot be bound down by the approximate amount of premium which it had communicated in the said letter. A reading of the entire letter makes it clear that what was mentioned therein was subject to the claim of the respondent on the final orders to be passed by the Customs Authorities upon the substitution of the licences.

Even otherwise, the respondent is a Government of India undertaking and is not to be bound by the ipse dixit of any officer of the respondent.

The conclusion thus reached by the learned ADJ on the principle of preponderance of probabilities, of the version of the respondent of being entitled to premium at the rate of 13% per annum being acceptable and the version of the appellant attempting to bind the respondent to the amount of premium communicated at the time of proposal or discussion cannot be found fault with. There is thus no merit in the appeal which is dismissed. I refrain from imposing any costs on the appellant. However the appellant to make up the deficiency in court fees as aforesaid within 15 days.

Decree sheet be prepared. The amount deposited by the appellant in this Court, with interest if any, accrued thereon be forthwith released to the respondent.