TaxTMI 
TaxTMI 
2003 (9) TMI 79
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.... licences were issued on 16-1-1982. The parties entered into an agreement on 15th February, 1982 as per which the respondent purchased the licences from the appellant. Some of the relevant terms of the agreement are as under : "(1) JEPL guarantees a minimum margin of 4% (four per cent) amounting to Rs. 7,65,135.28 (Rupees Seven Lakhs Sixty Five Thousand One Hundred Thirty Five and Paise Twenty Eight only) of the value of the licence for the imports to be made under the said licence. JEPL shall arrange to pay the full amount immediately to GE. The said payment will be made to GE by means of an account payee Demand Draft payable at Bangalore. (2) JEPL will act as the Letter of Authority holder of GE as allowed in the Import Policy, 1981-82. (3) JEPL will place the necessary indents on the overseas suppliers from whom they wish to import the goods after satisfying that goods are allowed to be imported under Para 186 of ITC Policy for 1981-82, and subject to any amendments announced by the Government from time to time. (4) &nbs....
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....llant to sign an application for second revalidation of the licence. Along with the said letter respondent sent some papers with a request to appellant to sign the same for purposes of applying for revalidation. A proforma of the application was sent because the application had to be on the letter-pad of the appellant. The appellant replied to the said letter of the respondent on 11th July, 1983 stating that they had discussed the matter with the Joint Chief Controller of Imports and Exports and they were informed that Letter of Authority facility had been withdrawn under the new Policy. Appellant was further advised that it will not be in order for appellant to approach the Chief Controller of Imports and Exports for any further extension. In view of this, appellant expressed regret in applying for second revalidation. Respondent sent a letter dated 24th November, 1983 in reply to appellant's letter of 7th November, 1983 disagreeing with the stand of appellant. It was stated that the new Policy was relating to discontinuance of Letter of Authority and it would not apply to old cases where such letters had already been issued. The respondent accordingly requested the appellant to a....
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....Rupees Eight Lakhs Fifty Three Thousand Six Hundred Forty only) besides interest from the date of suit till realisation at the rate of 18% per annum against the appellant in the City Civil Court at Bangalore. The break-up of the suit amount is Rs. 5,47,740/- (Rupees Five Lakhs Forty Seven Thousand Seven Hundred Forty only) proportionate amount out of margin money already received by the appellant (defendant) and Rs. 2,85,900/- (Rupees Two Lakhs Eighty Five Thousand Nine Hundred only) as interest at the rate of 18% per annum up to the date of institution of the suit. The trial Court decreed the suit vide its judgment dated 22-6-1993 holding that appellant had committed breach of contract in not applying for second revalidation of the licences, and therefore, it was liable to refund the proportionate amount out of the total amount of Rs. 7,55,132.35 (Rupees Seven Lakhs Fifty Five Thousand One Hundred Thirty Two and Paise Thirty Five only) received by the appellant as margin money. The onus to prove that second revalidation was not possible was placed on the defendant-appellant and it was held that the defendant had failed to prove the same. The suit was decreed in the sum of Rs. 5,47....
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....ade to the relevant provisions contained in the Export-Import Policy for the relevant period i.e. 1981-82. Para 211 requires that all enquiries emanating from Export Houses are to be addressed to the Chief Controller of Imports and Exports, New Delhi for necessary advice. Any Interpretation of the Policy given in any other manner by any other person is binding on the C.C.I. & E. Besides the Policy there is another publication called a Handbook of Import and Export Procedures, 1981-82. Para 198 thereof deals with the question of revalidation of licences. It provides that no request for extension of the period of validity of REP licences issued against exports made on or after 1st April, 1978 will normally be entertained. "(1) In hard cases, however, revalidation may be allowed by the Licensing Authority concerned with the prior approval of the Chief Controller of Imports and Exports, New Delhi subject to such conditions as may be imposed. (2) Requests for extension of the period of validity of the advance and impressed licences issued under the Import Policy for registered exporters may be considered by th....
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....ix months or more and that is the end of the matter. The above provisions do not mean or suggest that there can be two requests for revalidation and the second request is to be made after the expiry of initial period of revalidation of six months. The respondent's interpretation of the relevant provisions in our view is not tenable. The view of the Chief Controller of Imports and Exports, New Delhi as expressed in IPC Circular No. 10/04, dated 11th May, 1984 on this issue is the same. It is stated in the said circular in Para 3(3) : "the extension period of validity in such cases will be allowed only up to a period of six months, so that the total period of validity of the licence including the grace period of this does not exceed eighteen months from the date of issue of the licence." 10.The said circular was issued in view of representation received from representatives of the trade asking for clarification as to whether licences issued prior to 1st April, 1984 with twelve months validity will be automatically treated as valid for eighteen months and whether requests for grant of extension in validity period of such licence will be considered. From this it is clear that even t....
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....uld not have ordered refund. 12.Again, the High Court was wrong in observing that clause of the agreement requiring defendant to facilitate operation of the licence does not mean that it is to be facilitated only during validity of the licence. This is misreading of the clause by the High Court. Facilitating operation of the licence means operation of the licence during its validity period. If the validity period expires, the question of operation of a licence does not arise. An expired licence is no licence. It cannot be operated. The High Court has also erred in believing that it was for the defendant to prove that second revalidation was not possible. The plaintiff had requested for second revalidation and it was for the plaintiff to establish that second revalidation was permissible under the rules. The onus was wrongly placed by the High Court on the defendant which led to an adverse inference against the defendant. A party which asserts a fact has to establish it. In this case it was the plaintiff who asserted that second revalidation was permissible. It was for the plaintiff to establish it. The plaintiff failed to do so. At least this much was known to the plaintiff that....
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....gally not permissible the defendant should have applied for second revalidation. This again shows that the High Court had adopted a totally perverse approach in the present case. Such a step could be at the risk of incurring disqualification for the future. Why should such a risk be undertaken? 13.It is not the case of the plaintiff that in the first instance itself, it had desired that revalidation of licence for a period longer than six months be sought. Moreover, for making out such a case the plaintiff would have had to disclose special reasons because a case for hardship has to be made out for request for revalidation for a longer period and the plaintiff never spelled out any hardship either in the correspondence or even in the plaint. Thus, we hold that defendant-appellant was not obliged to apply for second revalidation of the licence and its failure to do so does not amount to breach of agreement on its part. Question No. 2 : 14.Was the defendant liable to refund to the plaintiff proportionate amount of margin money received by it from the respondent? On this issue first a reference has to be made to the relevant clause in the agreement which has already been q....