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1997 (10) TMI 321 - SC - Companies LawWhether mere presentation of an irrevocable letter of credit covering the value of requirement of raw materials is sufficient for registering the indent? Held that - Appeal allowed. Mere production of the 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 the pre-revised one. The High Court has not decided but has left open the question relating to the right of the appellant to fix the price from time to time even though that was the main issue raised in the writ petition before the High Court. As we are not in agreement with the view expressed by the High Court on other issues, it is now necessary for the High Court to consider the issue relating to the right of the appellant to fix the price from time to time. It is open to the appellant to raise the question of unjust enrichment when the matter is taken up by the High Court pursuant to this remit order. The parties can place before the High Court necessary material in support of their respective contentions on the issue of unjust enrichment.
Issues Involved:
1. Whether SAIL was a department of the Union of India. 2. Whether the importer (Ambica Tubes) was entitled to the pre-revised price for steel materials. 3. The right of SAIL to fix prices from time to time. 4. The issue of unjust enrichment. Issue-wise Detailed Analysis: 1. Whether SAIL was a department of the Union of India: The High Court erroneously assumed that SAIL was a department of the Union of India. The Supreme Court clarified that SAIL is a company incorporated under the Companies Act and is a separate entity, distinct from the Government of India, despite being entirely owned by the government. This distinction is supported by precedents such as Dr. S.L. Agarwal v. General Manager, Hindustan Steel Ltd. and Western Coalfields Ltd. v. Special Area Development Authority. Therefore, the High Court's premise was incorrect, and SAIL cannot be considered a department of the Union of India. 2. Whether the importer (Ambica Tubes) was entitled to the pre-revised price for steel materials: The importer submitted defective documents on 20-8-1983, which were rectified and resubmitted on 26-8-1983. The High Court held that the importer should not be penalized for the defects caused by the licensing authority and deemed the documents as submitted on 20-8-1983. However, the Supreme Court disagreed, stating that the importer, being experienced, should have known the requirements for registering the indent. The appellant (SAIL) was justified in not registering the indent until the defects were rectified. Therefore, the importer was not entitled to the pre-revised price as the documents were only complete on 26-8-1983. 3. The right of SAIL to fix prices from time to time: The High Court did not decide on the right of SAIL to fix prices periodically, which was a crucial issue in the writ petition. The Supreme Court remitted this issue back to the High Court for consideration. The High Court is to determine whether SAIL had the authority to revise prices from time to time as per the scheme announced on 10-6-1983. 4. The issue of unjust enrichment: The Supreme Court allowed the appellant (SAIL) to raise the issue of unjust enrichment when the case is reconsidered by the High Court. Both parties are permitted to present evidence and arguments regarding whether the importer unjustly benefited from the price difference between the pre-revised and revised rates. Conclusion: The Supreme Court allowed the appeal, set aside the High Court's judgment, and remitted the matter to the High Court to decide on SAIL's right to fix prices periodically and the issue of unjust enrichment. The observations condemning SAIL for not registering the indent on the initial date were expunged as uncalled for. The case was remanded for further proceedings consistent with the Supreme Court's findings.
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