9911796707
TMI Blog1983 (5) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... int director and vice-president, respectively, of M/s. Escorts Ltd. (for short "the company"), appellant in this appeal. Besides various other activities, the appellant company is also carrying on an export business in readymade garments. In the year 1971, it exported readymade garments goods worth Rs. 14,55,770 to Raja Rani Corporation, New York (for short "the buyer'). By letter dated February 10, 1972, the buyer raised disputes regarding the quality of the goods exported and the late supply. It proposed to pay 50% of the price without prejudice to its rights or a reference of the disputes to the arbitrator or appointment of an independent investigator such as Consul General of India in New York for checking its records and verifying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the matter. On July 16, 1973, the company was informed by the Consul-General of India that they were not in a position to function as arbitrator in the said dispute. The company was further informed that the matter regarding the arbitration of the dispute was under consideration. After certain reminders, the Consul-General ultimately informed the company, vide its letter dated January 21, 1974, that the matter had been referred to the Ministry of Commerce for consideration and the company would hear from them shortly. The Deputy Secretary, Ministry of Commerce, Government of India, vide letter dated February 11, 1974, advised the company to pursue the matter further under the auspices of the American Arbitration Association, New York. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. The company then wrote a letter dated September 13,1974, to the Reserve Bank of India seeking its approval for accepting the said offer. The Reserve Bank of India granted the necessary approval, vide its letter dated October 4, 1974. This approval, however, was without prejudice to the action, if any, that may be taken against the company for non-realisation of the full export proceeds. Admittedly, a sum of Rs. 494 lakhs was realised in accordance with the said offer leaving a balance of Rs. 63,456 as unrealised. The appellants were served with notices dated June 22, 1977, and August 23, 1977, to show cause why action should not be taken against them for contravening the provisions of section 10(1) and 12(2) of the Foreign Exchange R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t out of the bargain. It would have been disastrous if they were to rampart the goods. There was no mens rea. With these observations, the order of the learned special director was confirmed. The amount of penalty was, however, reduced from Rs. 30,000 to Rs. 3,000. Feeling aggrieved, the appellants filed these appeals under section 23EE of the Act. Mr. K.K. Jain, learned counsel for the appellants, contended that in view of the findings recorded by the learned member of the Board, the appellants could not be held guilty of contravening the provisions of sections 10(1) and 12(2) of the Act and the impugned order was illegal. On the other hand, the contention of the learned counsel for the respondent is that there was admittedly short r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t because the appellants did not want it but because on making enquiries it was found that it would result in loss of much more foreign exchange. The fee of the counsel which the appellants were required to engage would have been much more than the amount short realised. Besides, the appellants were required to pay fee to the American Arbitration Association and to spend a lot of money on other expenses noticed earlier. Learned member of the Board himself has observed: " it appears to me that they have followed the best possible course and realised more than 95% of the value of the consignment. It would have been disastrous if the appellants were to rampart the goods or go in for arbitration and even the Reserve Bank of India at one tim ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
