LAWS(DLH)-1990-9-37

UNION OF INDIA Vs. JYOTSNA HOLDINGS PRIVATE LIMITED

Decided On September 28, 1990
UNION OF INDIA Appellant
V/S
JYOTSNA HOLDINGS PRIVATE LIMITED Respondents

JUDGEMENT

(1.) In this application seeking condonation of delay in filing the appeal, this court is not concerned with the merits of the case except for the limited purpose of deciding the plea of public interest put forth by the government. Briefly the facts are :

(2.) Respondent, M/s. Jyotsana Holding Pvt. Ltd. (hereinafter referred to as 'JH') had been appointed to offer consultancy services to M/s. Somitomo Corporation, Japan (hereinafter referred to as 'SC') in the matter of supplies contemplated to be made by SC M/s. Oil and Natural Gas Commission/Gas Authority of India Ltd. Two agreements dated 30th August 1984 and 5th November 1984 were executed between JH and SC. JH was entitled to receive consultancy fee from the SC. The agreement dated 30th August 1984, inter alia, provided that the consultant fee would be remitted in Japanese yens to the account of Bank of Credit and Commerce International (for short 'BCCI') London on account of Eljay Consultants Incorporated (for short 'Eljay')'. The agreement also provides that in case the contract is cancelled partially or totally due to reason other than the fault of SC, the consultant fee paid by SC to JH corresponding to the cancelled amount will be paid -back by JH to SC. One of the terms of the agreement provides. . "The Consultant fee hereunder constitutes full and' sole compensation for all assistance, advise and other services to be rendered by JH and also for all costs and expenses which JH may incur in performing this agreement (including but no limited to communication or travel expenses, compensation for Local correspondent etc. Accordingly, SC will not be required to make any further payment of commission, fee or compensation, whatsoever. JH further agrees that it will not be entitled to any fee or compensation, if the firm contract for total quantity of Pipes as mentioned in page 1. of this agreement is not awarded to SC for any reason.

(3.) Eljay was holding a major stake in JH. Between 3rd December 1984 and 24th October 1986 Japanese Yen 906,043,915 and US Dollars 6,69,367.84 were deposited in the aforesaid account of Eljay. A directive under section 33(2) of the Foreign Exchange Regulation Act, 1973 (for short FERA') was issued on 12th July 1988 to JH requiring it to furnish certain information/documents considered relevant for investigation under FERA. JH furnished certain information/documents by letter dated 26 July 1988. 'Certain information appears to have been also furnished by the Income Tax Department showing that JH had in its returns for the assessment years 1985- 86, 1986-87 and 1987-88 disclosed income approximately to the tune of Rs 6.35 crores earned by it by way of consultancy fees from SC; that this amount accrued to JH vide to agreements dated 5th November 1984 and 30th August- 1984; that SC had remitted money in US dollars to BCCI for being credited in account of Eljay and that these amounts were repatriated to India through banking channels in September 1987. By another reply dated 12th Agust 1988 JH appears to have been furnished, inter-alia, information/documents relating to their dealings with SC besides detail of remittances worth Rs. 5,75,35,870.40 and Rs. 86.64,955.85 received during September 1987 from SC being consultants fee in respect of agreements dated 30th August 1984 and 5th November 1984 respectively.