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2006 DIGILAW 468 (CAL)

EMPIRE JUTE CO. LTD. v. JUTE CORPORATION OF INDIA

2006-07-28

PRANAB KUMAR CHATTOPADHYAY

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PRANAB KUMAR CHATTOPADHYAY, J. ( 1 ) ALL the writ petitions were heard analogously as the same have been filed on similar facts and identical grounds. It appears that the disputes raised in the aforesaid writ petitions have been largely resolved except that certain questions remain to be decided in view of the interim order granted earlier by this court on the applications filed in connection with the aforesaid writ petitions. ( 2 ) AFTER issuance of the interim order by this court on the writ petitions, the respondent no. 1 issued a letter dated 6th July, 2004 to each one of the writ petitioners demanding carrying cost as per Clause 5. 0 of the sale Contracts. The respondents demanded the payment of carrying charges at the rate of Rs. 25/- per quintal per month. The text of the said letter dated 6th July, 2004 issued by the Marketing Manager of the Jute Corporation of India Limited is quoted here under : "dear Sirs, With reference to your letter nos. oil dated 30/6/2004 and 2/7/2004 on the above subject we would like to advise you to make payment arrangement of the 1/6 (one sixth) quantity of pending contracts along with the carrying cost within 7 (seven) days from the date of receipt of this tetter , as per Clause 5. O of the Safe Contracts which has already been intimated to you vide our letters dated 7/1/2003, 17/11/2003, 8/10/2003, 4/12/2003, 16/12/2003, 26/12/2003, 13/1/2004, 16/1/2004, 26/12/2003, 13/1/2004, 16/1/2004, 16/1/2004, 16/1/2004, 6/2/2004, 19/2/2004, 4/3/2004, 19/3/2004, 22/3/2004 and 12/4/2003. It may please be noted that since the relevant Sale Contracts have already been sent to you, the question of issuance of fresh Contract does not arise. You are, therefore, advised to make payment arrangement along with carrying cost enabling us to take further action in tihis regard. Thanking you, Yours faithfully, (S. P. Bakshi )Marketing Manager. " Challenging the said direction of the respondent Jute Corporation of India limited, the writ petitioners filed further application in connection with each of the aforesaid writ petitions and prayed for an interim order in the said application restraining the respondents from demanding and/or realising any carrying cost from the petitioners in terms of the said letter dated 6th July, 2004. All the aforesaid applications filed in connection with the aforesaid writ petitions were ultimately disposed of by Pinaki Chandra. All the aforesaid applications filed in connection with the aforesaid writ petitions were ultimately disposed of by Pinaki Chandra. Ghose, J. when His Lordship specifically passed an order on 19/7/2004 to the following effect: "in so far as the imposition of carrying cost by the respondent corporation on the petitioners is concerned, at this stage, it would be proper for me to direct the petitioners to keep the same in a separate account in respect of carrying cost only with the advocate-on-Record until the writ petition is being disposed of and the Advocate-on-Record of the petitioner shall keep the same in a separate fixed deposit account with an nationalised bank and shall keep on renewing the same and intimation to that effect be give both to the Advocate-on-Record of the Jute corporation of India and the Union of. India. I make it clear that the petitioners shall first deposit the said amount and then and then only the goods will be delivered to them. " ( 3 ) THE writ petitioners thereafter lifted the arrear quantity of raw jute supplied to them in six istalments upon depositing the carrying cast with their Advocate-on-record in compliance with the directions of this Hon'ble court. Subsequently further applications were filed by the respondent Jute corporation of India in connection with all the aforesaid writ petitions for modification of the earlier order dated 19th July, 2004 passed by this court. In the said applications respondent Jute Cot potation of India prayed for a specific direction upon the Advocate-on-record of the writ petitioners to withdraw the money deposited earlier on account of carrying cost from the respective Fixed Deposit Account and to hand over the same along with accrued interest to the respondent Jute Corporation of india. The aforesaid applciations were also taken up for hearing along with the main writ petitions. ( 4 ) AFTER supply of entire arrear quantity of raw jute to the respective petitioners and after the petitioners lifted the same, all the main disputes raised in the writ petitions have virtually been resolved but the most important issue regarding the validity of the claim towards the carrying costs as demanded by the respondent Jute Corporation of India authorities and deposited with the Advocate-on-record of the writ petitioners is still required to be decided in view of the interim order passed earlier by this court. ( 5 ) THE writ petitioners herein are now claiming that the carrying costs lying with the Advocate-on-record of the said petitioners under order of this, court should be permitted to be withdrawn by them whereas the respondent authorities are claiming that the said carrying costs should be handed over to the respondent authorities as the petitioners are bound to pay the said carrying costs. ( 6 ) IN the aforesaid circumstances, it is now require a to be decided whether the respondent authorities herein were justified in demanding carrying costs from the writ petitioners in terms of Clause 5. 0 of the sale contracts for supply of the arrear stocks of raw jutes to the respective writ petitioners. It is not in dispute that the respondent Jute Corporation of India by the letter dated 6th July, 2004 demanded carrying costs in terms of Clause 5. O of the Sale Contract. The said Clause 5. 0 of the sale Contract is quoted hereunder: "5. 0. Payment Term : Through confirmed and irrevocable Letter of Credit and/or Bank Draft/pay Order preferably through a nationalised bank at Kolkata covering the full value of the entire quantity of jute covered by this contract and other incidental costs to be opened by the buyers and furnished to us by 12. 3. 04 at the latest fn case the Letter of Credit furnished by the buyer within the stipulated date as indicated above, was found to be not acceptable to JCI, the same would be returned to the buyer for amendment and for the period taken by the buyer for resubmission of the Letter of Credit after necessary amendment, the buyer shall be liable to pay carrying cost at the rate of Rs. 25/- per quintal per month or part thereof. " ( 7 ) IT is submitted on behalf of the writ petitioners that in the present case no Letters of Credit were opened in favour of the respondents and therefore, no carrying costs can be claimed in terms of Clause 5. 0 of the Sale Contract ( 8 ) MR. Sakti Nath Mukherjee, learned Senior Counsel representing the petitioners submits that in terms of said Clause 5. 0 of the Sale Contract ( 8 ) MR. Sakti Nath Mukherjee, learned Senior Counsel representing the petitioners submits that in terms of said Clause 5. 0 only in case the letters of Credit furnished by the respective buyer within the stipulated date were found to be not acceptable to the Jute Corporation of India and returned to the said buyer for amendment then for the period taken by the respective buyer for resubmission of the said Letters of Credit after necessary amendments, carrying costs at the rate of Rs. 25/- per quintal per month can be demanded. In the present case,since no Letters of Credit were opened in favour of the respondents by the petitioners, question of returning the same to the buyer for any amendment by the buyers and/or resubmission of the same to the Jute Corporation of India could not and did not arise. Mr. Mukherjee therefore, submits that the question of paying carrying costs in terms of Clause 5. 0 does not and cannot arise in the facts of the present case and accordingly, the demand made by the respondent Jute Corporation of India authorities in the letter dated 6th July, 2004 is expressly bad in law and illegal. ( 9 ) MR. BIKASH Ranjan Bhattacharyya, learned Senior Counsel representing the respondents submits that in the instant case, writ petitioners had no right to get the supply of jute under Purchase Control order and only due to the intervention of this Hon'ble Court the said jute was supplied but such supply, however, according to the respondents, cannot be made in violation of the terms of the Purchase Control Order. Mr. Bhattacharyya submits that refusal to lift jute at the time mentioned in the Purchase Control Order amounts to violation of Clause 5. 0 of the sale Contract Mr. Bhattacharyya further submits that by intervention of the court, the agreement cannot be modified. Mr. Bhattacharyya also urged before this court that since the failure to lift from godown justifies the penalty then failure to timely deposit Letter of Credit would also invite penalty as specifically provided in Clause 5. 0 of the Sale Contract. ( 10 ) UNDISPUTEDLY, the respondent Jute Corporation of India claimed carrying costs in terms of Clause 5. 0 of the Sale Contract. On examination of Clause 5. 0 of the Sale Contract. ( 10 ) UNDISPUTEDLY, the respondent Jute Corporation of India claimed carrying costs in terms of Clause 5. 0 of the Sale Contract. On examination of Clause 5. 0 it appears that the buyer should be liable to pay carrying costs at the rate of Rs. 25/- per quintal per month in the event the specific pre-conditions mentioned in the said clause are fulfilled. ( 11 ) IT has been categorically mentioned in Clause 5. 0 that in case the letter of Credit furnished by the buyer within the stipulated date was found to be not acceptable to Jute Corporation of India and therefore, returned to the buyer for amendment, then for the period upto resubmission of the Letter of Credit by the buyer after necessary amendment, Jute Corporation of India would be entitled to demand carrying costs at the rate of Rs. 25/- per quintal per month. In the present case, no Letter of Credit was even furnished by anyone of the aforesaid writ petitioenrs and therefore, question of non-acceptability of the same by the Jute Corporation of India and/or returning the same to the concerned buyer for amendment cannot and does not arise and for the aforementioned reasons, the question of carrying costs in Clause 5. 0 by anyone of the aforesaid writ petitioners does not and cannot arise. ( 12 ) IN my considered opinion, none of the pre-conditions for imposition and/or levy of carrying costs in terms of Clause 5. 0 of the Sale Contract has been satisfied in the present case and therefore, the demands made by the respondent Jute Corporation of India claiming payment towards carrying costs from the writ petitioners herein cannot be sustained in law, the same being totally illegal and therefore, the said demands made by the Jute Corporation of India stand quashed. ( 13 ) IT has been contended by the respondents that the issue of carrying costs is no longer the subject matter of the writ petitions since the applications filed earlier in connection with the writ petitions challenging the demand of carrying costs has already been disposed of by the learned single Judge. ( 13 ) IT has been contended by the respondents that the issue of carrying costs is no longer the subject matter of the writ petitions since the applications filed earlier in connection with the writ petitions challenging the demand of carrying costs has already been disposed of by the learned single Judge. It has also been urged on behalf of the respondents that this court at this stage cannot adjudicate the issue relating to the demand of carrying costs by the Jute Corporation of India since the writ petitioners did not amend the main writ petitions after issuance of the formal demand by the Jute Corporation of India claiming carrying costs from the respective writ petitioners. ( 14 ) IT has further been submitted on behalf of the respondents that the said respondents had to keep available and ready raw jute for the entire period in question which was not lifted by the petitioners and as such the petitioners are liable to make payment of carrying costs if not under Clause 5. 0 then certainly under Clause 2. 1 of the sale contract. The learned advocate of the respondents further submits that the said respondents have already incurred huge expenses on account of godown hire charges amongst others and the petitioners are, therefore, liable to compensate the respondent Jute Corporation of India upon making payment of the aforesaid amount. ( 15 ) THE aforesaid arguments made on behalf of the respondents cannot be accepted as, by the letter dated 6th July, 2004, the respondent Jute corporation of India demanded carrying costs from the respective petitioners specifically in terms of Clause 5. 0 of the Sale Contract and therefore, there is no scope to direct the petitioners to make any payment in terms of Clause 2. 1 of the Sale Contract. ( 16 ) SINCE it has already been held hereinbefore that the respondent jute Corporation of India is not entitled to demand any carrying costs from the petitioners herein on the basis of Clause 5. 0 of the Sale Contracts and the demand of carrying costs mentioned in the letter dated 6th July, 2004 has also been quashed, the amount deposited with the Advocate-on-record of the petitioners in terms of the order dated 19th July, 2004 cannot be handed over to the respondent Jute Corporation of India and the same should be refunded to the petitioners. ( 17 ) ACCORDINGLY, the applications filed on behalf of the respondent Jute corporation of India in connection with the aforesaid writ petitions for modification of the earlier order dated 19th July, 2004 by directing the advocate-on-record of the respective writ petitioners to hand over the deposited amount of carrying costs along with accrued interest to the respondent Jute Corporation of India are liable to be dismissed being devoid of any merit and the same are, therefore, dismissed. The advocate-on-record of the petitioners are directed to refund the deposited amount of carrying costs together with the accrued interest to the concerned writ petitioners immediately. ( 18 ) SINCE the respondent Jute Corporation of India has already supplied the entire quantity of raw jute to the respective writ petitioners and the said petitioners had also lifted the same, there is no scope to issue any further order in these writ petitions. Accordingly, all the aforesaid writ petitions stand disposed of without any further order. ( 19 ) THERE will be, however, no order as to costs. ( 20 ) ALL parties are to act on a xerox signed copy of this judgment and order on the usual undertaking. Later : ( 21 ) THE learned Advocate of the respondent-Jute Corporation of India prays for stay of operation of this judgment and order which is, however, opposed by the learned advocate of the writ petitioners. ( 22 ) CONSIDERED the submissions of the learned advocates appearing on behalf of the respective parties. ( 23 ) LET there be a stay of operation of this judgment and order for a period of 3 weeks from date. ( 24 ) ALL parties concerned are to act on a xerox signed copy of this judgment and order on the usual undertaking. Writ allowed