RUBY MILLS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is a suit to recover from the defendants a certain sum of money which, according to the plaintiffs, was excess payment due to incorrect conversion rate of Belgium Francs into Rupee equivalent.

(2.) THE plaintiffs held import licence dated 27th May, 1977 for import from Belgium certain machinery under Belgium credit subject to the conditions contained in Public Notice No. 186-ITC (PN) 74 dated 9th December 1974. The plaintiffs furnished a Bank Guarantee from Bank of India, Bombay for depositing an amount of Rs. 48,70,000/- towards the price of the machinery which the plaintiffs desired to import from their Belgium Suppliers. On 22nd February 1978 the defendants issued a letter of authority for the import of machinery of the value of Belgium Francs (B. F.) 19,387,701. On or about 20th July 1978 the plaintiffs imported machinery of the value of Belgium Francs 18,381. 864. The Bank of India deposited with the defendant a sum of Rs. 50,42,648. 89 which was calculated as follows : <FRM>JUDGEMENT_610_BCR1_1991Html1.htm</FRM> According to the plaintiffs the exact equivalent of 1 Belgium Franc was Rs. 0. 2609 at the relevant date and the calculation should be done accordingly and not by rounding off 0. 2609 to 0. 27. The rupee equivalent of Belgium Francs 18,381. 864 at the conversion rate of 1 Belgium Franc = Re. 0. 2609 works out to Rs. 47,96,734. 80. Thus there is a difference of Rs. 1,66,368. 48 (Rs. 49,63,103. 23 inus Rs. 47,96,734. 80) which the plaintiffs are seeking to recover. There was correspondence exchanged in this regard between the plaintiffs and the defendants but the defendants refused to refund the difference to the plaintiffs. The defendants subsequently issued Public Notice being Public Notice No. 26-ITC/ (PN)80 dated 10th July 1980 for calculation of the rupee equivalent of the Belgium Franc to 4 decimal places and then rounding off at the 3rd decimal place to the next higher integer. The plaintiffs therefore, asked for calculating the conversion according to this notice but the defendants refused to do so stating that the notice did not have any retrospective effect. The plaintiffs then served a notice under section 80 of the Civil Procedure Code dated 8th July 1981 and have filed the present suit for recovering the amount of Rs. 2,45,393. 50 consisting of the abovesaid difference of Rs. 1,66,368. 48 plus interest of Rs. 79,025. 02 upto the date of filing of the suit.

(3.) THE defence of the defendants is as follows : he conversion rate of 1 Belgium Franc = Re. 0. 27 is the proper rate applicable in the case of the suit transaction. The Public Notice dated 10th July 1970 does not have any retrospective effect.