1984 (9) TMI 64 - HC - Customs

Court rules MSTC guidelines not applicable pre-import. No MSTC certs needed for ship sales. Jurisdiction lacking in tender conditions.

RAM NIWAS CHAUDHARY Versus METAL SCRAP TRADE CORPORATION LTD., AND OTHERS

RAM NIWAS CHAUDHARY Versus METAL SCRAP TRADE CORPORATION LTD., AND OTHERS - 1986 (23) E.L.T. 321 (Cal.) Issues Involved:1. Applicability of MSTC guidelines for the sale of old ships imported before MSTC was a canalising agency.2. Requirement of 'no objection certificates' from MSTC for the sale of ships.3. Jurisdiction of the court in directing advertisement for fresh tenders.4. Locus standi of the appellant to file the writ petition and appeal.Detailed Analysis:1. Applicability of MSTC Guidelines:The primary issue was whether the guidelines laid down by the Metal Scraps Trade Corporation (MSTC) were applicable to the sale of the ships M.V. Jaltaranga and M.V. Jalagirija, which were imported in 1968, before MSTC was constituted as a canalising agency. The court held that MSTC was not the canalising agent at the time of the ships' importation in 1968. Therefore, the guidelines of MSTC, which were framed later, were not applicable to the company or the appellant in respect of these two vessels. The court stated, 'MSTC was not the canalising agency of the Government in regard to the two ships in question which were imported in 1968.'2. Requirement of 'No Objection Certificates':The court examined whether the Central Government could insist on the production of 'no objection certificates' from MSTC as a condition for granting approval under Section 42(1) of the Merchant Shipping Act. It was found that the requirement for 'no objection certificates' was not one of the conditions mentioned in the Director General of Shipping's letter dated April 10, 1984. The court concluded that the Central Government could not insist on such certificates, stating, 'the Central Government cannot insist on the production of 'no objection certificates' from MSTC for the purpose of grant of approval under Section 42(1) of the Merchant Shipping Act.'3. Jurisdiction of the Court in Directing Advertisement for Fresh Tenders:The court reviewed the learned single Judge's direction for the company to issue fresh advertisements inviting tenders for the sale of the ships. It was held that the court did not have the jurisdiction to lay down the conditions for the sale or to impose conditions for the approval under Section 42(1) of the Merchant Shipping Act. The court stated, 'This Court, in our opinion, has no jurisdiction to lay down the conditions on the basis of which sanction or approval would be granted by the Central Government or the Director General of Shipping.'4. Locus Standi of the Appellant:MSTC challenged the appellant's locus standi to file the writ petition and appeal, arguing that there was no concluded contract between the appellant and the company. The court rejected this contention, noting that the appellant had made offers for the purchase of the ships and would be prejudiced by any fresh advertisement. The court affirmed, 'the appellant has locus standi to file the writ applications and to prefer the appeals.'Conclusion:The court set aside the judgment and order of the learned single Judge in so far as it directed the company to issue a fresh advertisement inviting tenders for the sale of the two vessels. It directed the Director General of Shipping to consider the grant of approval for the sale under Section 42(1) of the Merchant Shipping Act without insisting on 'no objection certificates' from MSTC. The appeals filed by the appellant were allowed to the extent indicated, and those filed by MSTC were dismissed. There was no order as to costs in any of these appeals.