INJECTO P LTD Vs. CONTROLLER OF AID ACCOUNTS

JUDGEMENT

(1.) In 1964, the Ministry of Commerce (Government of India), Import Trade Control, New Delhi, issued a public notice inviting applications for licences for import of machinery, components thereof, equipment, other commodities and raw materials from the U.S. under AID Loan 103. The licences were to be valid for import of goods having their source and origin in and procured from the United States. The goods were considered to be of U.S. source and origin, inter alia, if such goods were shipped from a U.S. port or from a free port or bonded warehouse, if shipped from said free port or bonded warehouse in the form In which received when shipped from U.S. port and if such goods were mined, grown or produced through manufacturing, processing or assembly in the U.S. It was necessary that the importer shall ensure that the U.S. Supplier attaches to or endorses on each Invoice presented for payment a certificate on source and origin as In the form prescribed by the said public notice. The certificate was required to be signed by the supplier or his authorised representative. The invoice with the certificate so endorsed was to be submitted by the importer along with other documents-mentioned in the said public notice. The importer was also required to stipulate in his contract a condition that the payment when due in accordance with the terms of the contract would be made only on the presentation to the bank concerned of all the documents mentioned In the public notice

(2.) A licence was issued to the petitioners against the said DLF Loan No. 103. The petitioners placed an order for supply of galvanised steel strips. The petitioners reimbursed to the State Bank of India U.S. Dollars 11640 on account of the shipment. The goods purchased by the petitioners were part of the cargo on s.s. Olga, which was seized at Karachi by Government of Pakistan in the conflict between India and Pakistan in 1965. The petitioners preferred a claim with the Custodian of Enemy Property, Bombay, claiming compensation for the loss along with the other importers similarly situate. The petitioners claimed that in the letter dated 2-9-1966 the Government of India clearly admitted that the petitioners' goods should be released being "AID Cargo". The petitioners did not receive the goods back nor the compensation. In 1968 the office of the U.S. AID authorised the Government of India to utilise the funds provided by AID as compensation for the losses of "AID-financed goods" incurred in 1965. The petitioners' contention in this petition is that their goods were "Aid-financed goods" and they were, therefore, entitled to claim compensation from the Government of India against the said AID Fund.

(3.) The submission of the respondents is that the assumption of the petitioners that their goods were "AID-financed cargo" was incorrect. It was further submitted that the import becomes AID-financed (to be eligible for compensation out of the lump sum amount received from AID Authorities) only when the amount paid to the supplier for the import is reimbursed by AID Authorities with reference to a claim submitted by Government of India, duly supported by required documents to be furnished by the importer. As, of the documents, documents namely, supplier's certificate and invoice and contract abstract required for lodging reimbursement claim with U.S. were not made available by the importer, the Government of India could not obtain reimbursement from U.S. Aid. The cargo imported by the petitioners was thus not "AID Financed". The petitioners rely upon the letter of the Deputy Director (Export Promotion) dated 2-9-1966. In the said letter the Deputy Director had informed the petitioners that the information had been received "that your AID cargo, particulars of which are given in the enclosure to this letter, had been released by the Pakistan Government". This letter is apparently a letter in response to the claim made by the petitioners. The petitioners claimed that the goods were "AID cargo" and, therefore, the reply referred to them as an "AID cargo". However, the Question whether the cargo in question was "AID cargo" or not is to be decided in terms of the public notice dated 24th June, 1964 under which the petitioners got the licence. For qualifying the goods to be called AID cargo the petitioners were required to furnish the suppliers certificate and invoice and contract abstract. This was necessary to ensure that the goods were of U.S. source and origin and were produced and manufactured in the U.S. The respondents have produced a telegram from Indian Embassy in Washington stating that the invoice with the certificate of the supplier as required under the scheme was not filed by the petitioners along with the application. The record was produced by the respondents and a supplementary affidavit filed to state the correct position in this matter. It is thus clear that the petitioners did not comply with the mandatory requirements of the said public notice under which the licence was given. Therefore, the goods imported by them cannot be described as "AID cargo. A general letter of the Deputy Director referring to the petitioners' goods as "AID cargo" cannot, therefore, be accepted as any admission by the respondents in the face of the evidence produced by them and particularly the telegram from the Indian Embassy in U.S.