Allowed

Callibre Exports Rep by Its v. T.N. Forest Plantation Corpn

Madras HC12 Dec 2017WP/38448/2002

Case brief

AI extract

What is this about?

Petitioner participated in a tender for Sandalwood export but could not obtain required Government permission due to export bans. Court dismissed mandamus for export but directed refund of encashed Earnest Money Deposit with interest from the merged respondent.

What did the court decide?

Petitioner entitled to return of EMD with 12% interest payable by Respondent 2 within two months.

Callibre Exports Rep by Its Vs T.N. Forest… — Contract and Commercial Disputes | Madras HC (2017)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED:12.12.2017

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CORAM:

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THE HONOURABLE MR. JUSTICE R.SURESH KUMAR

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W.P.No.38448 of 2002

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Callibre Exports ..Petitioner

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Tamil Nadu Forest Plantation, Corporation Limited, AA/26, Anna Nagar, Tennur, Tiruchirapaali-620 017.

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The State of Tamil Nadu, Rep.by its Secretary to Government, Ministry of Environment and Forest, Fort St.George, Chennai.

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Union of India, Rep.by Secretary, Ministry of Environment and Forest, Paryawaran Bhavan, CGO Complex, New Delhi-110 003.

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Director General of Foreign Trade, New Delhi.

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.. Respondents

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Prayer :- Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of Mandamus directing the 2^nd , 3^rd , and 4^th respondents to grant permission to the 1^st respondent to ship the 10,000 kgs and 5,000 kgs of Jaipokal I Class Sandal Wood Billets to the Mikuni & Co Ltd. and Koyu Trading Co.Ltd respectively.

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For Petitioner : Mrs.C.Uma for Silambanan For Respondents: Mr.Manokaran, AGP for R1

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Mr.J.Madhana Gopal Rao for R2 to R4

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ORDER

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The prayer sought for in this writ petition is for a writ of mandamus directing the respondents 2 to 4 to grant permission to the 1^st respondent to ship the 10,000 kgs and 5,000 kgs of Jaipokal I Class Sandal Wood Billets to the Mikuni & Co Ltd. and

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Koyu Trading Co.Ltd respectively.

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The short facts which are required to be noted for the disposal of this writ petition are as follows:

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[a] The 1^st respondent by proceedings dated 28.09.2000 issued Global Tender Notice for export of Sandal Wood Oil, Sandalwood Heartwood chips etc., inviting the sealed tender from Foreign buyers or their agents for export of Sandal Wood products. As per the conditions of the Tender, the Earnest Money Deposit equal to 1% of tendered value should be enclosed in the shape of Demand Draft.

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[b] By letter dated 04.10.2000, the 1^st respondent sent a Tender notice for export to the petitioner, requesting the petitioner to participate in the Tender for taking Sandal Wood for export. Since the buyer from Japan had accepted 10 metric tonnes of Sandal Wood logs to be imported directly from the 1^st respondent, the said Company had remitted 2000 US Dollars to the petitioner, in two equal instalments, both amount being 1% each of the total consignment value for the Global Tender.

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[c] On participating in the Global Tender, the petitioner had submitted a Demand Draft for the sum of Rs.43,700/- and Rs.87,400/- on 02.11.2000 and 07.11.2000 respectively, being 1% of the value of the goods to be exported and on receipt of the confirmation of the Tender, 2 Letter of Credits would be established for 100% value.

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[d] As per the procedure, which was in a vogue, that, for export of Sandalwood items, express permission from the Government of India through the respondents 3 and 4 have to be obtained. Only on obtaining such permission, the 1^st respondent can permit the export of the Sandalwood. Though 1% of Earnest Money Deposit had been deposited as stated above and the petitioner had sent so many requests in the years 2001 and 2002 on various days, to expedite the process of getting permission from the respondents 3 and 4, no such permission was obtained from the 3^rd and 4^th respondents. Only in the circumstances, the petitioner had approached this Court by filing this writ petition with the above said prayer.

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I have heard the submission of Mrs.C.Uma, learned counsel appearing for the petitioner and Mr.Manokaran, learned Additional Government Pleader for the 1^st respondent and Mr.J.Madhana Gopal Rao, learned Senior Central Government Panel Counsel appearing for respondents 2 and 4.

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The learned counsel appearing for the 1^st respondent would submit that the Global Tender was floated for export of Sandalwood items only on the expectation that the permission would be given by the 3^rd and 4^th respondents and that is the

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reason why the Bid was not confirmed in favour of the petitioner or their principal buyer (Foreign buyer). In this regard, the learned counsel appearing for the 1^st and 2^nd respondents relied upon the following averments in the counter affidavit filed by them. Paragraph No.9 of the counter affidavit reads as follows:

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9.This respondent submits that the contention, that the Corporation has failed to comply with the tender condition, is wrong, as the Corporation has not issued any confirmed orders/sale orders due to non receipt of export licence from the Government of India and approval from the Government of Tamil Nadu. There is no conclusion of sale as such and there is a specific condition in the tender condition that the quoted price would be valid upto 90 days only after the issue of order. The Corporation has not issued any confirmation due to non receipt of export license from the Government of India and as such there is no concluded contract between the parties. The Government of India have declined permission vide their Ref.No.5-4/99-SU (Vol.II) dated 20.11.2002 stating that “After, detailed examination it has been decided not to accede to your request for export of 15 M.T. of sandalwood in the form of logs.”

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However, the learned counsel appearing for the petitioner would submit that, only on the Global Tender floated by the 1^st respondent, the petitioner participated in the Tender and as per the condition, 1% of the value of the goods to be exported, had been deposited as Earnest Money Deposit and the 1^st respondent have encashed the sum, given. Now turning around and saying that because a permission had not been given by the 3^rd and 4^th respondents, the Bid cannot be confirmed in favour of the petitioner, is per se unsustainable and therefore, they want to be permitted to export.

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Mr.J.Madhana Gopal Rao, learned Senior Central Government Panel Counsel appearing for the 3^rd and 4^th respondents would also submit that it is the policy of the Government of India called EXIM Policy, by which, the goods and items which are to be exported or not to be exported, will be decided from time to time. Certain goods are prohibited from export as per the policy of the Government of India and since the Sandalwood logs are also the banned items, no permission can be given by the 3^rd and 4^th respondents either permitting the 1^st respondent or any other person including petitioner to export Sandalwood logs to any foreign countries. Therefore by communication dated 20.11.2005, the respondents 3 and 4 have rejected the request for permission for export of Sandalwood logs. Since it is also the decision of the Government of India not to allow export of Sandalwood logs, which is based on the EXIM policy being adopted by the Government of India, one cannot compel the Government to

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give such a permission to export.

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It is a stand of the 1^st respondent that only on the expectation that the 3^rd and 4^th respondents would give permission for such export, Tenders were floated and subsequently, once the Government of India refused to give such permission, the 1^st respondent was not in a position to proceed further. Therefore, no confirmation of the Bid towards the petitioner has been made by the 1^st respondent. At the same time, the 1^st respondent has admitted in paragraph No.12 of the counter about the encashment of the Demand Draft for the Earnest Money Deposit paid by the petitioner. The reason for such encashment, the 1^st respondent states in the counter that, if it is not encashed, it will become invalid and the same will be returned, if the tender would not be accepted. Therefore, this is the procedure of the 1^st respondent/Corporation to encash the Earnest Money Deposit submitted by way of Demand Draft by the Tenderers.

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I have considered the submission made by the learned counsel appearing for the petitioner as well as the respondents and also perused the materials placed before it.

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Since the Government of India is the Authority to grant permission for export of Sandalwood logs, which they have not given for the reason that as per the policy, Sandalwood logs cannot be permitted to export, the prayer sought for by the petitioner to give a mandamus to the respondents 3 and 4 to give such permission to the 1^st respondent cannot be granted.

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However, this is the fact that 1% of Earnest Money Deposit had been deposited by way of Demand Draft by the petitioner which is admittedly been encashed by the 1^st respondent / Corporation and this factor, they have admitted in the very counter affidavit itself.

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Once, the 1^st respondent was not able to get a approval or permission from the Government of India and on that ground, if the 1^st respondent was not in a position to confirm the Bid, it is for the 1^st respondent to immediately give back the Earnest Money Deposit amount paid by the petitioner, since, the 1^st respondent, having encashed the amount, has not come forward either to return the money or get any permission from the Government of India. It is a bad on the part of the 1^st respondent being the Government Organisation to withhold the third parties money which is nothing but an unjust enrichment. It is also submitted during the course of arguments, by the learned counsel for the 1^st respondent that, the 1^st respondent has been merged with the 2^nd respondent / State Government as the 1^st respondent has not independently functioning as of now. At any rate, the EMD amount paid by the petitioner have been

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encashed by the 1^st respondent and the 1^st respondent got merged with the 2^nd respondent / State Government Department and how it is the 2^nd respondent to give back the Earnest Money Deposit deposited by the petitioner.

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In the result, following orders are passed in this writ petition:

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[1] The prayer sought for by the petitioner herein by way of mandamus cannot be granted.

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[2] However, the petitioner shall be entitled to get back the Earnest Money Deposit amount paid by them to the 1^st respondent, being 1% of the value of the goods to be exported.

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[3] Since, the said Earnest Money Deposit amount admittedly had been encashed by the 1^st respondent and it is subsequently been merged with the 2^nd respondent, the 2^nd respondent is directed to pay back the said amount of Earnest Money Deposit paid by the petitioner with 12% interest from the date of deposit till the date of payment. Such exercise shall be made within a period of two months from the date of receipt of a copy of this order.

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With this observation/directions, the writ petition
stands disposed of. No costs.
-s/d-
Assistant Registrar(CCC)
True Copy
Sub-Assistant Registrar
sk
To
1. Tamil Nadu Forest Plantation,
Corporation Limited,
AA/26, Anna Nagar, Tennur,
Tiruchirapaali-620 017.
2. The Secretary to Government,
Ministry of Environment and Forest,
Fort St.George,
Chennai.
+1 CC to Govt. Pleader sr 88375.
+1 CC to Mr.J. Madanagopal, Advocate sr 88313.
+1 CC to Mr.C. Uma, Advocate sr 88462.

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W.P.No.38448 of 2002 SS(CO) SP(08/02/2018)

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Callibre Exports Rep by Its v. T.N. Forest Plantation Corpn

Case brief

What is this about?

What did the court decide?

Callibre Exports Rep by Its v. T.N. Forest Plantation Corpn

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

Parties & counsel

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