1997 Supreme(SC) 1346

1997(9) Supreme 158
SUPREME COURT OF INDIA
(From Gujarat High Court)
M.M. Punchhi and K. Venkataswami, JJ.
Steel Authority of India Ltd. -Appellant
versus
Shri Ambica Mills Ltd. & Ors. -Respondents
Civil Appeal No. 2889 of 1985
Decided on 17-10-1997
Counsel for the Parties :
For the Appellant : Dhruv Mehta, Ms. Monica Mehta, Advocates for S.K. Mehta, Advocate.
For the Respondent Nos. 1-2 : P.H. Parekh and Amit Dhingra, Advocates.
For the Respondent Nos. 4-6 : C.V. Subba Rao, Advocate (NP).

Headnote:(i) COMPANY LAW-Steel Authority of India-Not a department of Union of India-Company has its own identity. (Para 6)

       (ii) Constitution of India-Appeal -Scheme of supply of raw materials from appellant against import licences-Respondent-company engaged in manufacture of steel tubes submitted licences requiring supply of hot rolled strips in coils-Documents produced lacked in material particulars and relevant enclosures-Mistake was committed by licensing authority-Whether appellant was justified in declining to register the indent of the importer?-(Yes)- Mere presentation of an irrevocable letter of credit covering value of requirement of raw material not sufficient order must be deemed to have been registered for supply of raw materials on the date when documents with all defects were presented-Observations of High Court condemning appellant for not registering order-Expunged.

       Held that the licence did not mention that it was an Advance Licence and no Duty Exemption Entitlement Certificate was enclosed and legal undertaking/exemption of export bond was also not enclosed. It was on this admitted position, the appellant declined to register the indent of the importer. No doubt, the mistake was committed by the licensing authority. Does that mean that the appellant can ignore the lacuna in the documents and register the indent placed by the importer in contravention of the requirements of the Scheme? The High Court held that the licensing authority and the appellant being two different wings/departments of Union of India, the appellant on receipt of rectified documents on 26.8.1983 must register the indent as if it was presented on 20.8.1983. We are afraid, we cannot accept the above reasoning of the High Court as we have pointed out that the basic error committed by the High Court was in assuming that the appellant was a Department of Union of India. We have already noticed that there are number of judgments of this Court taking the view that a company though fully owned by Union of India when incorporated takes its own entity/identity and cannot be considered as department of the Union of India. Further, it is seen from the records that the importer in this case is not a new entrant to plead ignorance though that may not be an excuse. He has presented applications for registration before and after the application in question and, therefore, it must be taken that the importer new fully well about the requirements for registering the indent. It is also relevant to note that the appellant on receipt of the application for registration expressly and in writing replied not only pointing out the defects but also stated that they are not taking any action on the Letter of Credit enclosed along with the licence. It is also an admitted fact that the indent was registered only on 26.8.1983 when all the relevant documents after curing the defects was presented on that date. Under these circumstances and in the light of the Scheme published by the appellant, we hold that the importer (Ambica Tubes) cannot claim as of right that its order must be deemed to have been registered for supply of raw materials on 20.8.1983 when the documents with all defects were presented. (Para 20)

       Further held : Mere production of Letter of Credit will not be sufficient to determine the price ruling on the date. It must be given by an import licence holder eligible to get the supplies under the Scheme. In this case, we have seen that the importer will not fall under the category of import licence holder eligible to get supplies under the Scheme as on the date when the Letter of Credit was presented, the licence/release order was defective. Therefore, we cannot agree with Mr. Parekh that the importer having produced the Letter of Credit well before 25.8.1983, the price payable for the supplies must be pre-revised one. (Para 21)

       (iii) Constitution of India-Article 32-Writ petition-Scheme of supply of raw materials for manufacture of steel pipes-Right of appellant to fix price-Challenged-High Court left open the question-Remit order-Appellant can raise the question of unjust enrichment when matter is taken up by High Court pursuant to this remit order. (Paras 23, 26)