9911796707
TMI Blog1995 (8) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... t of US $ 8190 from Kobin Singapore (P.) Ltd. of Singapore. Further, penalties of Rs. 40,000 each have been imposed on the second, third and fourth appellants in their capacity of being Directors of the first appellant, by invoking the provisions of section 68(1) of the Act. 2. It appears that the memorandum of appeal as initially filed was not in proper form and was not accompanied either with the evidence of pre- deposit as required under section 52(2) of the Act or any petition for waiver in accordance with rule 6A of the Adjudication Proceedings and Appeal Rules, 1974. The appellants merely made a prayer under the communication accompanying the memorandum of appeal that their appeal may be accepted without deposit of penalties imposed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of inferior quality and were actually sold out without any loss ; that unless there was any evidence of actual loss suffered by the appellants on account of any deficiency in the quality of the goods, no right to claim damages would accrue to the appellants, much less a right in respect of a specific amount. She contended that the impugned order, on face of it, suffers from this illegality and is liable to be set-aside on this ground alone. She further submitted that on merits also she would impugn the adjudication order on this ground alone as there is no dispute about the facts relied on by the learned Adjudicating Officer and the appeals could be disposed of straightaway as the legal position regarding the award of damages in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts in obtaining the legal opinion much later, after the receipt of the SCN, had naturally created an impression that the appellants were trying to cover-up and justify their inaction to pursue the claim by producing the legal opinion. He submitted that the claim made by the appellant against the foreign supplier involve certain legal issues of civil law, which were neither identified by the appellant nor adequately raised by him so as to enable the learned Adjudicating Officer to appreciate the implications thereof. He submitted that since the claim preferred by the appellants was not denied by the foreign supplier, the learned Adjudicating Officer was justified in concluding that the amount claimed was due against the foreign supplier and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the foreign suppler. In this letter, the appellants complained that the supplies of white peas made under invoice Nos. IC-4156-87/8 and IC-4157-87/8 of 15-1-1988 were of inferior quality on account of which an amount of US $ 8190 has been debited in the accounts of the foreign supplier towards the claim for the inferior quality of the supplies. A copy of the debit note was enclosed with this letter. There is no evidence as to whether the foreign buyer acknowledged the receipt and accepted or disputed the claim. The amount claimed, admittedly, was not received by the appellant. In reply to the SCN, the appellant stated that the debit note was based on visual inspection of the material supplied, but the foreign supplier did not respond t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legally due to him. Unless a claim is founded on a right, it is not legally enforceable against another party. Moreover, section 16(1) refers to a 'right to receive any foreign exchange', therefore, the right has to be 'in respect of foreign exchange'. 8. The claim raised by the appellants obviously related to purported breach of their contract with the foreign supplier. In order to establish that the appellant had a legally enforceable claim against the foreign supplier, it was necessary for him to establish that he had a legally enforceable agreement with the foreign supplier, that the agreement had specific stipulation about the quality of white peas to be supplied, that it was the foreign supplier's obligation under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termination. It is only then that one could have said that the appellant had a right to receive the said foreign exchange. 9. It would be pertinent to observe here that a right to receive foreign exchange is only a situation to which section 16(1) applies; the contravention of that section lies in doing or refraining from doing anything, or taking or refraining from taking any action by a person, which has the effect of securing that the receipt by him of the whole or part of that foreign exchange is delayed. Thus, even if a right to receive the foreign exchange would have accrued to the appellants, it would not have amounted to contravention of section 16(1) on his part if he had taken effective legal action to enforce that right. 10. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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