1999 (2) TMI 83 - HC - Customs

Court permits petitioners to use disputed license area, orders compensation, rejects stay request, allows undertaking filing.

The Court allowed the petitioners to use the disputed part of the licence and directed them to compensate respondent No. 6 based on the outcome of a ... Import licence Issues Involved:1. Quashing of the impugned order dated 28th September 1995.2. Revalidation and return of the advance licence.3. Use of the disputed part of the licence.4. Determination of the transfer of the licence to respondent No. 6.5. Validity of the second transfer letter.6. Payment of consideration for the licence transfer.7. Revalidation of the licence by the Customs Authorities.8. Use of the licence before its expiry date.Detailed Analysis:1. Quashing of the impugned order dated 28th September 1995:The petitioners sought the quashing of the impugned order dated 28th September 1995, passed by respondent No. 5, which canceled the licence due to violation of conditions. The Court noted that the Government decided to reconsider the cases of licence holders whose licences were canceled by the said order.2. Revalidation and return of the advance licence:The Court directed the respondents to hand over the licence to the petitioner for revalidation. The licence was revalidated by the Director General of Foreign Trade with the condition that it should be used before 28th February 1999. The Customs Authorities confirmed that they no longer required the licence.3. Use of the disputed part of the licence:The Court permitted the petitioners to use part of the licence to the extent of US $ 20,70,533. However, there was a dispute regarding the use of the licence to the tune of US $ 6,05,000. The Court directed both parties to submit documents and affidavits to support their claims regarding the transfer of the licence.4. Determination of the transfer of the licence to respondent No. 6:The petitioners claimed they transferred part of the licence to the tune of US $ 10,05,238, while respondent No. 6 claimed the transfer was for US $ 10,05,238 plus US $ 6,05,000. The Court agreed that the disputed question of fact should be decided in a regular suit, not in writ jurisdiction.5. Validity of the second transfer letter:Respondent No. 6 presented two letters purportedly issued by the petitioners for the transfer of the licence. The Court found the second letter dubious and noted that respondent No. 6 failed to provide evidence of payment or submission of the second letter to the Customs Authorities.6. Payment of consideration for the licence transfer:The petitioners argued that respondent No. 6 had not paid the consideration for the transfer of the licence. The Court noted that respondent No. 6 failed to provide proof of payment and had inconsistencies in their affidavits regarding the receipt of the debit note.7. Revalidation of the licence by the Customs Authorities:The Court observed that only the petitioners took steps for revalidation of the licence, and respondent No. 6 did not take any action for revalidation, which indicated that respondent No. 6 might not have a valid claim over the disputed part of the licence.8. Use of the licence before its expiry date:The Court emphasized the urgency of using the licence before its expiry on 28th February 1999, as the value of the licence would become zero post-expiry. The Court allowed the petitioners to use the remaining disputed part of the licence, subject to the decision in a regular suit. The petitioners were required to provide an undertaking to compensate respondent No. 6 based on the suit's outcome.Conclusion:The Court disposed of the writ petition, allowing the petitioners to use the disputed part of the licence while directing them to provide an undertaking to compensate respondent No. 6 as per the decision in the regular suit. The Court rejected the stay of operation of the order sought by respondent No. 6 and allowed the petitioners to file an undertaking in Court.