TaxTMI 
TaxTMI 
1993 (3) TMI 373
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....87. Jagannath Dutta challenged the validity of the notice by way of a writ petition under Article 226 of the Constitution of India before the Calcutta High Court. A Division Bench of the High Court by its judgment dated May 31, 1989 allowed the writ petition and set aside the notice dated June 25, 1987. This appeal by way of special leave is against the judgment of the High Court. Clause 37 of the agreement dated August 14, 1967 is as under : Notwithstanding anything herein contained, either party may be at liberty without assigning any reason to terminate this agreement on giving two months' prior notice in writing so to terminate this agreement. 2. The operative part of the notice dated June 25, 1987 terminating the agr....
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....e FCI. The High Court held that the impugned notice having been issued apparently as a result of a policy decision by the FCI and there being no such decision on the record the impugned notice was liable to be quashed. We reproduce the High Court reasoning hereunder : From the foregoing facts, it appears that the desirability of abolishing the system was raised by the Managing Director and the entire correspondence shows that it was an issue which was pending at the Headquarters's level and the decision was expected to be taken at the level of the Managing Director. The Zonal Manager (East) or the Zonal Office did not and could not take any decision in the matter. The issue always remained pending for decision at the level of t....
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....rder staying the order of termination, no further steps have been taken by the F.C.I. In one of the cases we have referred to hereinbefore, would show that termination was kept in abeyance on a consideration that the concerned storing agent would provide the FCI with a godown. Therefore, the termination of this particular agreement by invoking Clause 37 has to be justified by the F.C.I. on the basis of policy decision and implementation on the policy uniformly in cases of the storing agents. Such termination cannot be justified with reference to other extraneous considerations. 4. We are of the view that the High Court was not justified in quashing the impugned notice especially when the terms and conditions of the contract permitted the....
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....ing was held in the chamber of the Zonal Manager in the first week of March, 1985 which was attended by five senior zonal officers including the Zonal Manager. In the said meeting the report of the Committee was accepted and the final decision to abolish the storage agency was taken. The Zonal Manager by his letter dated March 14, 1985 communicated the decision to the Senior Regional Manager for compliance. The said letter is reproduced hereunder: MIAGE NO. 1 Sub : Abolition of Storing Agency in West Bengal Region, FCI Sir, Please refer to the correspondence resting with your letter No. E/25/(17)/82-Stg. (c)/74 dated 21st January, 1985 regarding abolition or otherwise of Storing Agency System....
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.... Dy. Zonal Manager For Zonal Manager (East). 6. Further the letter dated March 30, 1985 by Chief Commercial Manager (in the Head Office) to the Zonal Manager shows that the decision of the Zonal Manager to abolish the Storage agency was approved by the Head Office. 7. The sequence of proceedings narrated by us leaves no manner of doubt that a policy decision was taken at the level of the Zonal Manager to abolish the storage agencies and the said decision was approved by the Head Office of the FCI. We are, therefore of the view that the High Court was not justified in reaching the conclusion that there was no policy decision by the FCI 8. The High Court, without noticing any specific instance, made general observatio....