Mansingka Industries Ltd. vs Union of India

Bharucha J.

We have heard Mr. Desai for the appellants. We have heard Mr. Pochkhanawala for the 2nd respondent. No one has at any stage of the hearing of this appeal today appeared on behalf of the 1st respondent, which is the principal respondent. We are told that Mr. Bulchandani is briefed for the 1st respondent but is on his legs in another court. No explanation, however, unacceptable is vouchsafed for the favour of the 1st respondent''s advocate on record to appear.

The appeal is directed against the order passed by the learned judge on the notice of motion taken out by the appellants. The learned judge refused relief on the notice of motion.

The appellants entered into an agreement with the 2nd respondent for the purchase of edible oils imported by the 2nd respondent on the basis of allocations made by the 1st respondent for the purposes of manufacturing vanaspati at their factory at Pachora in the State of Maharashtra. On 30th June 1986, the 2nd respondent informed the appellants that, under instructions from the Directorate of Vanaspati, all deliveries of oil to the appellants were suspended with the immediate effect. On 1st July 1986 the 2nd respondent informed the appellants that it has been brought to its notice that the appellants had sold oil contained in 72 lorries to different parties in the Bombay market in contravention of the terms and conditions of the agreement and the Import Trade Control Policy. The appellants controverted the allegations and referred to documents in order to establish that this oil had, in fact, reached their factory at Pachora. In July 1986 officers of the Directorate of Vanaspati, Oil and Fats made inquiries with the appellants. On 1st August 1986 an order was issued by the 1st respondent in respect of the allocation of imported oil to the vanaspati industry for the month of August 1986. Thereunder, an allocation of 911 metric tones of oil was made to the appellants. However, the delivery of this allotment was not made to the appellants.

The appellants filed a writ petition challenging the actions of the 1st and 2nd respondents. And affidavit was filed on behalf of the 1st respondent stating that an order of abeyance had been passed against the appellants under clause 8B of Appendix 2 of the Imports Control Order, 1955. On 1st December 1986 the learned single judge held that since the action had been taken under clause 8B and not under clause 8A as alleged the writ petition should be rejected.

The appellants preferred an appeal against the order of summary rejection. The appeal court directed the 1st respondent to put on affidavit all orders passed against the appellants under clauses 8, 8A and 8B and orders for extension thereof. An affidavit was filed but was not in accordance with the directions of the appeal court. By its order dated 19th February 1987 the appeal court recorded the statement made on behalf of the 1st respondent by counsel that these orders had been passed under clause 8B. The appeal court, prima facie, was of the view that in the matter of these orders there had not been proper or full compliance with the requirements prescribed by the Supreme Court in Liberty Oil Mills and Others Vs. Union of India (UOI) and Others, . Accordingly, the appeal court at aside the order of summary rejection and admitted the appellant''s appeal. The appeal court declined to grant interim relief itself but directed the appellants to apply for interim relief before the single judge.

Upon the appellant''s notice of motion for interim relief an affidavit was filed on behalf of the 2nd respondent referring to a subsequent abeyance order issued under clause 8B on 10th March 1987 for a period of 6 months therefrom.

On 10th April 1987 the learned single judge passed the order on the notice of motion which is assailed in this appeal. The learned judge noted that the order under clause 8B had been passed on 10th March, 1987. The learned judge was of the view that since the action of the respondents was the subject-matter of challenge in the writ petition, granting allocations of oil would amount to granting to the appellants relief in the petition itself. Clause 8B provided that ordinarily an allotment should not be kept in abeyance for more than 6 months. It postulated speedy conclusion of the inquiry so that the party against whom inquiry was being held did not suffer undue hardship. The inquiry against the appellants had been going on at least since June 1986, if not earlier, and had still not concluded. Mr. Bulchandani, appearing for the 1st respondent, stated to the learned judge that the inquiry against the appellants would be completed within a period of 3 months from 10th April 1987. In view of this statement, the learned judge said, "no further directions are necessary at this stage" and made no order on the notice of motion.

Mr. Pochkhanawala, learned counsel for the 2nd respondent, stated that the order of abeyance dated 10th March 1987 had been extended from time to time and was lastly extended on 22nd December 1987 to operate till 9th March, 1988.

There are several factors to be noted. First, there was reliance upon three orders which were the subject-matter of prima facie comment by the earlier Division Bench. Thereafter, another order of abeyance under clause 8B was passed on 10th March 1987, to operate for a period of 6 months. Then counsel for the 1st respondent solemnly assured the learned judge that the enquiry against the appellants would be completed within 3 months from 10th April, 1987 and, expressly, by reason of that statement the learned judge gave no interim relief. The inquiry was not completed within that period within 3 months. It was not even completed within the period of 6 months that was allowed by the order dated 10th March, 1987. No affidavit is made on behalf of the respondents to explain why the statement to the single judge has not been honoured and what has caused the inordinate delay. Counsel for the 2nd respondent says, rightly, that the matter is not within his...... and for the 1st respondent no one appears.

The appellants cannot be kept dangling in this fashion. They have a business to run and the court cannot but, in the circumstances, take that into account. We think that the appellants are now entitled to interim relief.

The appeal is allowed. The order in appeal is set aside and is substituted by the following :

The 2nd respondent shall supply to the appellants the quantity of edible of that was allocated in their favour by the order dated 1st August 1986. For months subsequent to August 1986 the 1st respondent shall forthwith make orders of allocation in favour of the appellants and shall intimate the same to the appellants and to the 2nd respondent and the 2nd respondent shall make supplied in accordance therewith.

On Mr. Vahanvati''s application, the 2nd respondent shall have a period of 4 weeks for supplying the edible oil allocated for August 1986.

No order as to costs.