GOKULDAS EXPORTS Vs. JAIN EXPORTS PRIVATE LIMITED

JUDGEMENT

(1.) This appeal is directed against the judgment of the High Court dated 24th January, 1996 confirming the decree passed by the trial Court in a suit for recovery of money filed by the respondent against the appellant. By the impugned judgment a decree for payment of Rs. 5,47,740/- with interest at the rate of 18% per annum from the date of suit till realisation was passed in favour of the respondent and against the appellant.

(2.) Briefly, the facts are : both the parties to the suit are in import-export business. The appellant obtained an import licence of the value of Rs. 1,91,28,382/- which was split into two licences, one for Rs. 1,00,00.000/-(Rupees One Crore) only and the other for Rs. 91,28,382/- (Rupees Ninety One lakhs twenty eight thousand three hundred eighty two) only. The licences were issued on 16-1-1982. The parties entered into an agreement on 15th February, 1982 as per which the respondent purchased the licences from the appellant. Some of the relevant terms of the agreement are as under:

(3.) In pursuance of the above agreement, appellant issued requisite Letter of Authority in favour of respondent. Respondent paid a sum of Rs. 7,65,135.28 (Rupees Seven Lakh Sixty Five Thousand One Hundred Thirty Five and Paise twenty eight only) to appellant being 4% of the licence amount mentioned in Clause (1) of the agreement. The validity period of licences was one year. Respondent was unable to utilise the licence during that period and therefore, requested the appellant to seek revalidation of the licence and to sign necessary papers in this behalf. Accordingly appellant sought revalidation of the licence from the Licensing Authority. The validity of the licence was extended for six months. The licence ultimately expired on 1st October, 1983. During the validity period of the licence respondent was able to import goods worth Rs. 54,34,897.10 (Rupees Fifty Four Lakhs Thirty Four Thousand Fight Hundred Ninety Seven and Paise ten) only. By its letter dated 25th October. 1983, respondent requested appellant to sign an application for second revalidation of the licence. Alongwith the said letter respondent sent some papers with a request to appellant to sign the same for purposes of applying for revalidation. A pro forma of the application was sent because the application had to be on the letter-pad of the appellant. The appellant replied to the said letter of the respondent on 11th July, 1983 stating that they had discussed the matter with the Joint Chief Controller of Imports and Exports and they were informed that Letter of Authority facility had been withdrawn under the new Policy. Appellant was further advised that it will not be in order for appellant to approach the Chief Controller of Imports and Exports for any further extension. In view of this appellant expressed regret in applying for second revalidation. Respondent sent a letter dated 24th November, 1983 in reply to appellants letter of 7th November. 1983, disagreeing with the stand of appellant. It was stated that the new Policy was relating to discontinuance of Letter of Authority and it would not apply to old cases where such letters had already been issued. The respondent accordingly requested the appellant to apply for second revalidation of the licences. In the alternative it was communicated to the appellant that if they did not wish to apply, they should refund the proportionate amount of margin money received by them already from the respondent. The respondent further threatened to take recourse to legal remedy against the appellant if the appellant failed to accede to either of their requests. The appellant responded to the above vide their letter dated 8th December, 1983. Attention was drawn to the respondents failure to utilize licences during the validity period including the period of first invalidation for six months. The appellant further informed the respondent that they had again approached the Joint Chief Controller of Imports and Exports, Bangalore and as per the discussion held with him, second revalidation was not possible. The respondent was requested to obtain a written confirmation from the Licensing Authority on the question of second revalidation and based on the written confirmation, if available, the appellant promised to consider doing the needful. The respondent replied to the said letter of the appellant vide their letter dated 26th December, 1983. They enclosed with their reply a copy of IPC circular No. 14/92 dated 3rd May, l982 issued by the Office of Chief Controller of Imports and Exports and again requested for making the application for second revalidation. The said circular only clarifies that the change in the policy regarding Letters of Authority in the Policy relating to 1982-1983 was not applicable to Letters of Authority issued prior to 5th April. 1982 in respect of licences issued prior to 1st April, 1982. The appellant claims that on 7th June, 1984 it again consulted the Joint Chief Controller of Imports and Exports, Bangalore with reference to the circular sent by respondent to the appellant. As per the said consultation the stand of the appellant is that second revalidation was not possible and, therefore, the appellant stated that it was not in a position to apply for further revalidation. However, the appellant offered to do so in case written confirmation was available in this behalf from the office of Chief Controller of Imports and Exports, New Delhi.