LEE KUN HEE Vs. STATE OF UTTAR PRADESH

JUDGEMENT

(1.) Leave granted.

(2.) Sky Impex Limited (as buyer) entered into an agreement with JCE Consultancy (as seller) on 1.12.2001. The sale consideration for the products to be supplied by JCE Consultancy was determined at US$13,70,000 (approximately Rs.9 crores). The product was to be delivered no later than 30.1.2002. The buyer was to confirm receipt and certify quality and quantity. As per the agreement, the product was to be further transferred by the buyer (Sky Impex Limited) to Samsung Gulf Electronics, Dubai (hereafter referred to as "Samsung, Dubai"), a wholly owned subsidiary of Samsung Corporation, South Korea (hereinafter referred to as "Samsung, South Korea). Consequent upon supply of the product under the contract/agreement dated 1.12.2001, Samsung Dubai was to issue a bill of exchange valued at US$14,32,000, in favour of the buyer Sky Impex Limited. Sky Impex Limited was to further endorse the bill of exchange in favour of the seller (JCE Consultancy). Within 72 hours wherefrom the seller was required to transfer to Sky Impex Limited US$62,000 as commission. Alternatively, the buyer (Sky Impex Limited) could transfer, upon delivery, a sum of US$13,70,000, as sale consideration for the product. It was also provided in the agreement, that after endorsement of bill of exchange, the liability of the buyer towards the seller would stand exhausted. Thereupon, the seller would hold the bill of exchange, in due course, and get vested with the authority under the Negotiable Instrument Act, to claim value, directly from Samsung, Dubai. Importantly, the agreement dated 1.12.2001 provided that the contract would be governed by the laws of India. The agreement dated 1.12.2001 being of substantial relevance in the present controversy, is being extracted hereinunder:-

(3.) Through a delivery receipt dated 28.1.2002, Sky Impex Limited confirmed having received the product valued at US$13,70,000 under the contract/agreement dated 1.12.2001. The buyer neither complained about quality nor quantity. There was also no protest that the goods/product was not received in time. The aforesaid receipt of goods implies the delivery of the product by JCE Consultancy to Sky Impex Limited. On 1.2.2002, Samsung, Dubai executed a bill of exchange valued at US$14,32,745 in favour of the buyer Sky Impex Limited. This implies further delivery of goods/product from Sky Impex Limited to Samsung, Dubai. The said bill of exchange was then endorsed in favour of the seller JCE Consultancy, in terms of agreement dated 1.12.2001.