SHAH INC Vs. PARADEEP PORT TRUST

JUDGEMENT

(1.) IN this writ application, the petitioner has prayed, inter alia, to quash the letter dated 20.8.2011 issued by the Deputy Manager, Metal and Scrap Trading Corporation Limited (hereinafter referred to as "the MSTC Ltd.") requesting it to make payment on or before 27.8.2011 with 2% penalty and the letter dated 3.9.2011 issued by the MSTC Ltd. forfeiting the pre -bid EMD as per clause no.11 of special terms and conditions of the special e -auction and cancelling the sale acceptance letter, vide Annexures 7 and 9, respectively.

(2.) BEREFT of unnecessary details, the case of the petitioner is that it is a proprietary concern. The opposite parties floated a tender for sale of sludge, debris and dredge materials approximately 35,000 metric tons from the custom bonded area inside the Port prohibited area of Paradip Port Trust (hereinafter referred to as "the PPT"). The opening and closing date and time for the e -auction was fixed at 11.00 hours and 15.00 hours on 29.7.2011. The seller of the goods is PPT. It is indicated in the e -auction notice that the successful bidder would file the bill of entry with the Customs Authorities in two phases before lifting of the materials and obtain custom clearance on payment of applicable custom duty. After removal of the cargo, the parties should file bill of entry for the balance quantity from the other plots. Pursuant to the e -auction notice, the petitioner, eligible in all respects, participated in the e -auction. It deposited an amount of Rs.10 lakhs towards EMD. On 28.7.2011, it sent a letter, vide Annexure -1, proposing amendment in the general terms and conditions and special terms and conditions. The same are quoted hereunder;

(3.) THE opposite parties accepted the letter dated 28.7.2011 and allowed it to participate in the e -auction held on 29.7.2011. In the e -auction, it was the highest bidder with a rate of Rs.1201/ - Per M.T. Though the opposite parties did not issue a letter to it rejecting the terms and conditions, vide Annexure -1, but allowed it to participate in the e -auction by providing password and digital key. It sent a letter on 5.8.2011, vide Annexure -3 series, to the opposite party no.5 stating therein that after getting the tender paper, it came to its knowledge that the delivery period was fixed to be 90 calendar days from the date of issuance of release order, failing which, the ground rent for a maximum of two weeks would be collected from the buyer at the rate fixed. In clause No.14, it is indicated that "90 calendar days" means 24 hours per day. Further, it is contained in clause no.15 of the STC that if the delivery is not completed within the stipulated time, buyer can not have any claim over the goods. At the same time it is stipulated in clause No.20.3 that loading/lifting should be done during the working hours and lifting is permitted only 3 days in a week, i.e., Monday, Wednesday and Thursday. If the goods are to be lifted within 90 calendar days, the buyer would get only 12 days for lifting of the cargo. In clause no.16, it is mentioned that lifting/removal of the materials would be allowed during normal working hours through Gate No.3 only in specific working days. These conditions are unworkable. It is further stated that on 18.8.2011, vide Annexure -4, the Deputy Manager of the MSTC Limited issued a letter to it clarifying that the materials should be released during the office hours i.e. 10 AM to 5 PM. Since it agreed to deposit the ground rent for the extended period of 3 months, the lifting period was extended with ground rent @ 1% per week on the left out quantity till the entire quantity was completely lifted or the extended period of 3 months whichever was earlier. On 19.8.2011, it sent a letter to the opposite parties stating therein that it did not receive any specific reply with regard to the letters sent earlier. While the matter stood thus, the opposite parties issued a letter to levy penalty at the rate of 2% from 27.8.2011. It is further stated that it is ready to deposit all the customs duty, sales tax dues and other statutory dues as applicable. Since the passage of goods through gate No.3 is meant only for payment of custom duty, the opposite parties ought to obviate the condition of gate No.3. During pendency of the writ petition, the opposite parties issued a letter dated 26.8.2011, vide Annexure -8, indicating therein that any letter containing conditions cannot be accepted. The last date for remittance of balance amount was given by 13.8.2011 and the last date with 2% penalty expired on 27.8.2011. The balance payment and the payment beyond 27th August was not acceptable. In case of non -receipt of payment within the stipulated time, the amount paid by it towards pre -bid EMD will stand forfeited automatically as per Clause No.11 of the special terms and conditions of the e -auction. Due to non deposit of the amount within the stipulated time, the opposite parties issued a letter on 3.9.2011 forfeiting the pre -bid EMD amount of Rs.10 lakhs, vide Annexure -9.