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1984 Supreme(Cal) 348
High Court Of Calcutta
M. M. DUTT, PARITOSH KUMAR MUKHERJEE
RAM NIWAS CHAUDHARY - Appellant
Versus
METAL SCRAP TRADE CORPORATION LTD., AND ORS - Respondent
C. O. T 16 Of 1984
Decided On : 09/26/1984
Important Points
Subject
Administrative Law - Delegated Legislation
Act Referred
CUSTOMS ACT : S.2(27), S.2, S.2(23)
MERCHANT SHIPPING ACT : S.42(1)
Headnote
MERCHANT SHIPPING ACT, 1958 - SECTION 42(1) - IMPORT AND EXPORT POLICY, 1984-85 - IMPORT OF OLD SHIPS FOR BREAKING UP - CANALISING AGENCY - MSTC - APPROVAL OF CENTRAL GOVERNMENT - CONDITIONS - GUIDELINES OF MSTC - APPLICABILITY - JURISDICTION OF COURT - LOCUS STANDI OF SHIP-BREAKER TO FILE WRIT PETITION AND APPEAL.
Fact of the Case:
The appellant, Ramniwas Chaudhary, a ship-breaker, offered to purchase two old ships, M.V. Jaltaranga and M.V. Jalagirija, from Scindia Steam Navigation Company Limited (the Company) for scrapping. The Company sought approval from the Director-General of Shipping (DGS) for the sale of the vessels under Section 42(1) of the Merchant Shipping Act, 1958. The DGS granted approval in principle, subject to certain conditions, including obtaining a 'no objection certificate' from the Metal Scraps Trade Corporation (MSTC). MSTC, a canalising agency for the import of old ships for breaking up, refused to issue the certificate. The appellant filed writ petitions challenging the requirement of a 'no objection certificate' from MSTC and seeking directions for the sale of the vessels.
Finding of the Court:
The court held that MSTC was not the canalising agency for the import of the two ships in question, which were imported in 1968, and therefore, the Central Government could not insist on the production of 'no objection certificates' from MSTC for the purpose of granting approval under Section 42(1) of the Merchant Shipping Act. The court also held that the guidelines prescribed by MSTC for the disposal of old ships for scrapping were not applicable to the appellant as the ships were not imported through MSTC. The court further held that it had no jurisdiction to impose conditions on the fulfillment of which approval would be granted under Section 42(1) of the Merchant Shipping Act, and set aside the directions given by the trial court for the publication of fresh advertisements inviting offers for the sale of the ships.
Issues: 1. Whether MSTC was the canalising agency for the import of the two ships in question, which were imported in 1968. 2. Whether the Central Government could insist on the production of 'no objection certificates' from MSTC for the purpose of granting approval under Section 42(1) of the Merchant Shipping Act. 3. Whether the guidelines prescribed by MSTC for the disposal of old ships for scrapping were applicable to the appellant. 4. Whether the court had jurisdiction to impose conditions on the fulfillment of which approval would be granted under Section 42(1) of the Merchant Shipping Act.
Ratio Decidendi: 1. The court interpreted the definition of 'import' under Section 2(23) of the Customs Act, 1962, and held that a ship or vessel is imported into India when it is brought into the territorial waters of India. 2. The court held that MSTC was not the canalising agency for the import of the two ships in question, which were imported in 1968, and therefore, the Central Government could not insist on the production of 'no objection certificates' from MSTC for the purpose of granting approval under Section 42(1) of the Merchant Shipping Act. 3. The court held that the guidelines prescribed by MSTC for the disposal of old ships for scrapping were not applicable to the appellant as the ships were not imported through MSTC. 4. The court held that it had no jurisdiction to impose conditions on the fulfillment of which approval would be granted under Section 42(1) of the Merchant Shipping Act, as such conditions were to be determined by the Central Government or the Director-General of Shipping.
Final Decision: The appeals filed by the appellant, Ramniwas Chaudhary, were allowed to the extent of setting aside the directions given by the trial court for the publication of fresh advertisements inviting offers for the sale of the ships. The appeals filed by MSTC were dismissed. The Director-General of Shipping was directed to consider the question of granting approval to the Company for the sale of the two vessels under Section 42(1) of the Merchant Shipping Act.
ASHOK SEN, B.N.SEN, D.PAL, FARUK M.RAZAK, R.C.DEBNATH, RAMNATH DAS, SAMARJIT GUPTA, SOMNATH CHATTERJI, SWAPAN KUMAR DUTTA, T.K.SEN GUPTA
( 1 ) THESE four appeals, two by the writ petitioner Ramniwas Chaudhary and the remaining two by the Metal Scraps Trade Corporation, hereinafter referred to as MSTC have been preferred against the judgment and order dated July 17, 1984 of a learned single Judge of this Court disposing of the writ petitions filed by the appellant, Ramniwas Chaudhary.
( 2 ) SHORN of all details, it may be stated that Scindia Steam Navigation Company Limited, hereinafter referred to as the Company, advertised for the sale of two old ships named M. V. Jaltaranga and M. V. Jalagirija for the purpose of plying. As there was no response for the purchase of the vessels for plying, the appellant, Ramniwas Chaudhary, a ship breaker, offered to purchase the same for breaking up and converting the same into scraps at a price of Rs. 80 lakhs and Rs. 70 lakhs respectively. The company by two letters both dated March 15, 1984, asked for the approval of the Director-General of Shipping for the sale of the said two vessels for the purpose of scrapping as required under Section 42 (1) of the Merchant Shipping Act, 1958, as both the vessels had lost their sea-worthiness. The Assistant Director-General of Shipping by two separate letters dated April 10, 1984 replied to the company in identical terms. One of such letters is set out below : Government of India Ministry of Shipping and Transport Directorate General of Shipping 'jahar Bhavan' Walchand Hirachand Marg no. 7-SDB (11)/84 April, 1984. The Scindia Steam Navigation Co. Ltd. , Bombay. Subject : Permission for sale of M. V. Jalatarang for scrapping. Dear Sirs, i am to refer to your letter No. OP/tech/4240, dated 15th March, 1984 on the above subject and to convey the approval of the Director General, in principle, for the sale of your vessel 'jalatarang' for scrapping in India subject to the following conditions : (i) Formal sanction as required under Section 42 (1) of the M. S. Act, 1958 will be issued on hearing from you the name of the buyer and sale price; (ii) The vessel should be free from all encumbrances at the time of sale, including satisfactory settlement of wages of officers/crew of the vessel and loans from any financial institutions etc. (iii) The sale proceeds should be remitted to the SDFC for adjustments against your dues, if any, to them ; (iv) All documents including Naval should be returned to the authorities concerned before delivering the vessel to scrappers. You may as usual approach the MSTC for getting their clearance before acting on the sanction. Yours faithfully, sd/-A. P. Ramakrishnan asstt. Director General of Shipping for Dy. Director General of Shipping. "
( 3 ) APART from the four conditions mentioned in the letter, the company was asked to approach the MSTC for getting the clearance before acting on the sanction. The Company accepted the said offer of the appellant on condition that the appellant was to obtain 'no objection certificates' from MSTC. The appellant tried to get 'no objection certificates' from the MSTC, but the latter did not grant any such certificates. Although in the letter dt. April 10, 1984, the obtaining of 'no objection certificates' from the MSTC was not one of the conditions to be fulfilled by the company for the grant of sanction of the Central Government, yet the company and the appellant were under the belief that unless such certificates were granted by the MSTC, the Central Government would not grant approval to the transfer of the said vessels by the company to the appellant for scrapping purpose. Accordingly, the appellant filed two writ applications in respect of the said two vessels M. V. Jaltaranga and M. V. Jalagirija.
( 4 ) AT this stage, it may be noticed that one M/s S. S. Jain and Co. a ship breaker, filed applications for being added a party to the writ applications of the appellant. He also filed two writ applications, inter alia, praying for restraining the MSTC from issuing 'no objection certificates' to the company
