Sachi Kanta Hazari, J. - (1.)This is an application under Article 226 of the Constitution of India filed by M/s. Jain Shudh Vanaspati Ltd. and Sri Niranjan Lal Jain against the Collector of Customs and the Union of India, inter alia, praying for an order for the following : (a) a writ and/or order and/or direction in the nature of Certiorari commanding the respondents to transmit the records relating to the said order dated December 20, 1983 in so far as it imposes the penalty and/or puts conditions on the re-export of the consignment of 10495.408 metric tonnes of beef tallow belonging to the petitioner company and all proceedings relating thereto so that the same may be set aside and/or quashed and conscionable justice might be rendered; (b) a writ and/or order and/or direction in the nature of Mandamus commanding the respondents to allow the petitioner company: (i) to re-export 3,000 metric tonnes 1-5% beef tallow per vessel M.T. JULIND in terms of Public Notice dated September 1, 1983 at a price of US $ 410 F.O.B. Bombay port against Letters of Credit dated 18th November, 1983 and 9th December, 1983 of Belgolaise Brussel to Bank of Baroda for amounts of US $ 820,000 and US $ 410,000 respectively and consequently immediately release revenue deposit in respect thereof. (ii) to re-export the balance quantity against confirmed Letter of Credit issued in favour of the petitioner company at a price of US $ 410 F.O.B. Bombay Port and consequently release revenue deposit in respect thereof immediately. (c) Rule Nisi in terms of prayers (a) and (b) above; (d) Stay of the operation of the said order dated December 20, 1983 in so far as it imposes penalty and/or puts conditions on the re-export of the consignment of 10945.408 metric tonnes of beef tallow belonging to the petitioner company. (e) An order be issued and/or direction be made commanding the respondents to forthwith permit the petitioner company; (i) to re-export 3,000 metric tonnes 1-5% beef tallow per vessel M.T. JULIND or any other vessel in terms of Public Notice dated September 1983 at a price of US $ 410 F.O.B. Bombay Port against the Letters of Credit dated 18th November 1983 and 9th December 1983 of Belgolaise Brussels to Bank of Baroda for amounts of US $ 820,000 and US $ 410,000 respectively and consequently release within 24 hours the revenue deposit in respect thereof; (ii) to re-export the balance quantity against confirmed Letter of Credit in favour of the petitioner company at the US $ 410 F.O.B. Bombay Port and consequently release the revenue deposit in respect thereof immediately.
(2.)The case of the petitioner is that the petitioner entered into a contract on 2nd June, 1981 to import 25 thousand metric tonnes of inedible beef tallow from a Singapore Party. The import of the said inedible beef tallow was governed by open general licence. Inedible beef tallow is a raw material which is used in the manufacture of soap and import of the said inedible beef tallow was governed by the O.G.L. Order by Order No. 1/81 dated 3rd April, 1981. From and after 5th June, 1981 under the import policy for the year 1980-81 inedible beef tallow of animal origin, was covered by appended Item No. 44 Appendix-10 of Import Policy for the year 1980-81 enumerated a list of items the import of which was governed by O.G.L.
(3.)As per contract dated 2nd June, 1981 the petitioners were required to pay to the foreign supplier for supply of inedible beef tallow @ US $ 485/- per metric tonne (C.I.F.). Pursuant to the said contract, the petitioner company requested New Bank of India to open a Letter of Credit for US $ 122,46,250/- for import of 25 thousand metric tonnes inedible beef tallow by letter dated 3rd June, 1981. New Bank of India on the said date, i.e., 3rd June, 1981 wrote back to the petitioner company that the Letter of Credit cannot be opened until a copy of the contract is submitted to them. On 6th June, 1983 the petitioner company received the contract in writing from the foreign supplier and got the same duly notarised from a Notary Public, Delhi and forwarded a copy of the same to the bank on 8th June, 1981. The said bank wrote back to the petitioner company on 11th June, 1981 stating that since the item has been canalized, Letter of Credit could not be opened. On 5th August, 1981 the petitioner company received a letter dated 28th July, 1981 reminding the petitioner company of the said contract and asking the petitioner company to open the Letter of Credit. Thereafter, the foreign supplier sent a letter dated 10th February, 1982 informing that the foreign buyer is liable to pay damages to his supplier, the same would be the responsibility of the petitioner company. Ultimately, the foreign supplier wrote a letter dated 2nd July, 1982 to the petitioner company mentioning therein that as a special case he was giving time upto 31st October, 1982 to the petitioner company to open the Letter of Credit failing which the foreign supplier would refer the matter to the Federation of Oilseeds and Fats Association, London as Arbitrator. By letter dated 6th January, 1982 the petitioner company tried to persuade the foreign supplier to drop the matter to Federation of Oilseeds and Fats Association and treat the contract as cancelled due to the Government restrictions. The petitioner company received a notice dated 3rd February, 1983 from the Advocates and Solicitors of the foreign supplier.