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TMI Blog1987 (9) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... overs in its preview structurals, plate cutting, billet cutting etc. Since the raw material is not normally available indigenously, the Central Government has been making policy from time to time so as to permit the Actual Users like the petitioner to import such raw materials through the canalising agent and use the same as raw materials for its manufacturing activities. For the purpose of assessment of the requirements, the Central Government appointed assessment committee known as Technical committee and the said technical committee was to assess the requirements of each of the units including the petitioners whose capacity was assessed to the time of 16,700 MTs per annum. The petitioner No. 1 applied to the respondent No. 2 - Metal Scrap Trade Corporation Ltd. for allotment of imported carbon steel re-rollable scrap. In order to appreciate the facts of this case, it is necessary to set out the relevant provisions laying down the procedures in this behalf. Para 223(1 )(a) of the Hand Book of the Import Export Procedure 1985-88 provides that Actual Users should send their requirements to the canalising agencies concerned by registered post. The canalising agencies will scrut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear, we would like to know whether you have taken any decision upto the date of this letter or any decision will be taken of the near future to enable us to import raw-materials as per demand registered. Since we have been already in the 2nd quarter of the year and no import is arranged so far, the very spirit of the canalised policy of the Government of India have not been implemented. The Rolling Mills in the southern region are already suffering a lot without getting adequate raw materials comparing the other regions due to various regions like to non-availability mini/ major Steel Plant, ship breaking facilities etc." 4. It was further stated in the said letter if M.S.T.C. have no idea of importing Carbon Steel Re-rolling Scrap for the actual users for the present year i.e. 1985-86, we may kindly be released N.O.C. at the earliest so that we can approach the concerned authority for obtaining the licence for direct import. You know very well that as per Para 223(1 )(a) of the Hand Book of Import Export Procedure for the year 1985-88, the N.O.C. has to be issued to the Actual Users within 30 days from the date of the registration of demand in case the canalising agents ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in touch with the General Manager, C.M.O. SAIL, Calcutta in this regard." Thereafter, the petitioner approached the Steel Authority of India and the Steel Authority of India by letter dated 8th July, 1987 informed the petitioner that since SAIL is not doing any canalising for the above materials, you are approach M/s. Metal Scrap Trade Corporation, Calcutta for the same. However, we are endorsing a copy of the letter along with a letter in original to them for doing the needful. You are, therefore, requested to contact M/s. Metal Scrap Trade Corporation, Calcutta for this. It may be mentioned that import in this case, was for the period from 1st April, 1986 to 31st of March, 1987. The learned Counsel appearing on behalf of the petitioner contended that if the respondent No. 2, Corporation had no plan to import of the material in question during the year 1986-87, when the petitioner duly made application before such canalising agents and that under such circumstances, there were two alternative course left open to the said canalising agent, namely respondent No. 2 herein, one is to scrutinise the application and register the demand and ask for deposit of the earnest money within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the provision of para 223 would come into plea namely the canalising agents have not been able to make supplies and as such there were no statutory duty to issue No Objection Certificate for the purpose of obtaining an import licence or importing goods directly. It was further submitted that when the said Hand Book for procedure laid down various procedures the said respondent No. 2 cannot act at its sweet will in its absolute discretion devoid of the procedure. In this case when the said canalising agencies failed to discharge its duty in not registering the demand and asking for deposit of earnest money within 30 days, the petitioner made an application with the prayer for dispensing with the deposit for earnest money but the respondent No. 2 was silent in this matter. The respondent No. 2 also did not disclose that the registered requirements of the petitioner could be met from indigenous sources. It is submitted that because of arbitrary action on the part of the respondent No. 2 the petitioner had suffered huge loss and injury and in the facts and circumstances of this case the respondent No. 2 was bound to issue No Objection Certificate , so that the petitioner coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, the question of issuing No Objection Certificate did not and could not also arise at all in this case. It was also pointed out by the respondents that earlier the petitioners moved this Court another writ application wherein this Court recorded that the petitioners should approach the suppliers of such materials from indigenous sources and the petitioners failed to do so and on the contrary the petitioners asked the Steel Authority of India to import the same which was highly malafide and it was treated the same only to made out a case in the matter. It was further stated that the petitioners were required to register the demand by making financial arrangement with the respondent No. 2 and it was stated that as the petitioners did not make any financial arrangement with the respondent No. 2, the respondent No. 2 was not under any obligation to take any steps in the matter whatsoever. It was further stated that the monitoring committee as provided under the said policy had not taken any decision in the matter for importation of the said goods through the canalising agent and as such there was no obligation on the part of the respondent No. 2 but on mere asking by the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g agent did not scrutinise such application and did not register the demand and ask for deposit of the earnest money within the time specified in this behalf. It may further be mentioned that in terms of para 218 of the said Procedure the canalising agent was required to try to meet the registered requirements of such actual users from indigenous supplies partly or wholly instead of imports. The respondent No. 2 being the canalising agency did not make any whisper by the letter in question that the said items were produced indigenously and were available in the market. Further the said canalising agent informed the petitioners anything about its availability indigenously and admittedly the said canalising agent did not try to meet the registered requirements of the petitioners from indigenous sources. It is also an admitted position that the said canalising agent did not try to meet the demand from indigenous sources but at the same time did not make any communication to the petitioners that as because the said materials were available indigenously and with regard to the question whether the said items were available indigenously, the respondent No. 2 remained totally silent. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring in this case and from the conduct it is crystal clear that the respondent No. 2 did not act either in terms of para 218 or in terms of para 223 of the Hand Book of Import Export Procedure for the year 1985-88. Inasmuch as if the stand taken by the respondents are accepted that the items were produced indigenously and available in home market and as such there was no question of import, in that event, according to the para 218, such canalising agent was under statutory obligation and/or duty to try to meet their registered requirements from indigenous sources partly or wholly instead of imports. The admitted fact is that such an affort was (not?) made by the respondent No. 2 which is a clear contravention of the provision of para 218. On the contrary in para 223 the respondent No. 2 has registered the requirements following the procedure laid down in para 223(1 )(a) of the Hand Book of the said Procedure under which the canalising agent has to register the demand after scrutinising the application and ask for deposit of the earnest money within 30 days. This was also not done and further in this case the canalising agent was not in a position to make supplies, they had to is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2 being the canalising agent to try to meet the registered requirements of the petitioners from the indigenous sources partly or wholly instead of imports. But unfortunately there was no whisper in any of the letter and/or in the affidavit-in-opposition that the respondent No. 2 being the canalising agent had ever made any attempt and/or tried to meet the requirements from indigenous sources and as such the respondent cannot be allowed to take the stand that it had no statutory liability and/or obligation in this matter. If it was available from indigenous sources, the respondent No. 2 should have followed the Procedure laid down in para 218 and that the respondent No. 2 cannot be allowed to contain (contend?) that it has no liability under para 218 or para 223. In this case there were two alternative courses left open to the respondents either to follow para 218 or 223. It is firmly established principle that where a party dealing with another party being at liberty to adopt either of the two mutual exclusive steps, proceedings, courses of action or attitude in relation to the other party, must elect either of the two courses of action. But the said authority cannot remain sil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said item during the year 1986-87. The respondents cannot avoid its statutory duty and/or responsibility in such a manner which is on the face of unreasonable and contrary to law and that an actual user like that of the petitioner cannot be made because of the whims and caprice and/or inaction on their part. Public authorities are required to act reasonably and they had no unfettered discretion like private/individual. But in the instant case it appears that the respondents has shifted its stand from time to time which cannot be supported. Further, I do not find any bona fide reasons and/or grounds for communicating the petitioners for No Objection Certificate for direct import of Re-Rollable Scrap could be issued by the petitioners as because the petitioners failed to make financial arrangement within 28th February, 1986. This stand is wholly mis-conceived, inasmuch as, the question of financial arrangement is only given in case the application of the petitioners was registered upon scrutiny in terms of para 223 and only after registering the demand after scrutinising such application, the demand for deposit of earnest money can be done within 30 days. In this case such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cating that the said items were produced indigenously and available in the market and at least the Steel Authority of India completely demolished the stand taken by the respondent in this behalf. Accordingly, the respondent No. 2 in the instant case was under a duty to issue No Objection Certificate as admittedly the said respondent failed to supply the same. In accordance with para 223, it is true that the question of No Objection Certificate on proper construction of the said para would only arise in case the requirements of the actual users are scrutinised the application made therefor are registered and demand is made for deposit of earnest money. But in the instant case the application was not registered and demand for earnest money was not made. If in the instant case, the petitioners are not granted any relief on this literal construction at para 223, in that event, in my view, it will lead to an anomalous situation and that would lead to an absurd situation and if the plain and literal meaning of para 223 is given, in that event, that would be a very purpose of incorporation of the rights to get No Objection Certificate would be completely frustrated and nugatory. 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