Gujarat Metal Rolling Mills vs Union of India

This petition under Article 226 of the Constitution takes exception to the demand contained in Exhibits B&C to the petition compilation.

The 2nd respondent, hereinafter referred to as ''MMTC'', is a Government of India undertaking and has been designated as a canalising agency for carrying out a policy outlined in the Import and Export Policy for the year 1982-83 under the Imports and Exports (Control) Act, 1947. Import of one of the items which had to be canalised though the 2nd respondent was Aluminium Ingots. Petitioner No. 1 required the said Ingots as an Actual User for the manufacture of utensils. It applied for and obtained an allotment as set out in the delivery note at Exh. A. The quantity allocable to the 1st petitioner was 56.385 metric tonne for a price of Rs. 18,679/- per metric tonne. A clause appearing in the sale note reads thus :-

"For quantities indicated in clauses 2(b) and (c) above, price will be notified latter. The buyers shall accept the price to be notified for quantities indicated under clauses 2(b) and (c) and make financial arrangements accordingly. The seller reserves the right to revise the prices mentioned at (a) and for quantities, indicated against (b) and (c) from time to time. Price as ruling on the date of dispatch/delivery shall apply."

After obtaining the delivery note the petitioner took delivery of two different lots in May 1984 leaving a balance of 11.282 metric tons. When the petitioner sought to take delivery thereof, the MMTC issued Exh. B wherein appears the following recitals :-

"Since the Government has increased the price of aluminium to Rs. 21,847/- per metric tonne with effect from 9th May 1984, you are requested to kindly make good the price differential or confirm in writing to us that you are agreeable to have reduced quantity which can be accommodated within the payment made by you. In case payment has been made through L/C, you will appreciate the L/C has got to be amended suitably for price clause, value and the validity date."

Petitioner made a representation pointing out that all the necessary documentation at the rate mentioned in the delivery note had been gone through and it was unfair to now demand a higher price from it. The MMTC was not to be dissuaded and maintained the stand taken in Exh. B vide Exh. C.

Petitioner contends that the MMTC acted arbitrarily in trying to get the benefit of the increase in the price of aluminium ingot. The contract between it and the MMTC was concluded on 1st March 1984 when the delivery note was drawn up. The payments were already made as required and it was not open to the MMTC to take advantage of the subsequent revision in the price. The object of the petition is to get Exhibits ''B'' & ''C'' quashed. Petitioner had obtained interim relief in terms of prayer (e)(ii) which is to the effect that it be allowed to clear the balance of the ingots without payment of the enhanced price.

Respondents inclusive of MMTC have not filed a return. Learned counsel representing the MMTC contends that the clause from to delivery note reproduced above entitled his client to claim the benefit of the enhancement in the price. This question came up for consideration before Pendse J. in writ Petition No. 520 of 1981 decided on 21st September 1983. Negative the contention similar of that raised here by Mr. Jain, the learned Judge said thus :-

"Shri Kapadia then submitted that the contract provides that the price which the buyers is liable to pay is one prevailing on the date of the delivery and as the respondent No. 1 had not made delivery till March 26, 1981, the Petitioners cannot claim advantage of the price prevailing earlier. The submission proceeds on the assumption that the handing over of the delivery note does not amount to delivery of the goods. It was urged that the expression "delivery" must be construed as the actual delivery of the goods and not handing over of the delivery note. The submission is totally misconceived. The delivery note is handed over merely out of convenience and authorities the petitioners to take actual delivery from the godown of Respondent No. 1. The moment the delivery note is handed over not only the right to take delivery accrued to the petitioners, but the delivery of the note itself amounts to handling over of the goods to the petitioners. In my judgment, by handling over delivery note, the respondent No. 1 had effected delivery and carried out their obligation under the contract and what was left was merely to take actual possession of the goods from the godown."

Mr. Jain draws my attention to the another portion of the judgment which reads as follows :-

"As the respondent No. 1 had handed over the delivery note to the petitioners and the petitioners have actually sought delivery of the goods long prior to the date on which the retention prices were increased, it is not permissible for respondent No. 1 to demand increased price for their own fault in not handling over delivery. It is not in dispute that the delivery was not made for no other reason but because of the instructions received from Delhi that the prices are likely to be increased in a short period."

Learned Counsel contends that in the instant case it cannot be said that the petitioner though willing to take delivery was refused the same, and this, on account of any instructions received from the head quarters of the MMTC. In the petition there is an averment which speaks of petitioners having sought delivery of the entire goods, but the same having been refused though the petitioner had shown the delivery note. This averment in the petition has not been refuted and we cannot go mere speculation assumes that the petitioners were not refused delivery though they had sought for it before the date on which the retention price was enhanced. This enhancement took place on 9th May 1984. After this date, the consignment was delivered in two lots on 17th May and 29th May 1984. Consequently, while delivering these two lots, the MMTC did not say that it was entitled to the benefit of the enhancement in the price though the delivery in both the lots was effected after the date on which the attention price had been increased. Therefore, I see no reason to not to give the petitioner the benefit of the first portion quoted for Pendse J''s decision. Hence the order :-

ORDER :

Exhibits ''B'' & ''C'' are quashed. The goods figuring in this petition shall be charged at the price quoted in Exh. A and adjustments made accordingly if the same be necessary. Rule in these is made absolute, with parties being left to bear their own costs.