Holding

SAIL is a separate corporate entity, not a department of the Union, and the price applicable is the revised price because the importer was not an eligible licence holder at the time of the financial arrangement.

Summary

The Steel Authority of India Ltd. (SAIL) supplied hot rolled steel strips to Ambica Mills Ltd. under an Import‑Export Policy scheme that required the importer to hold a valid advance licence, duty exemption certificate, export bond and an irrevocable Letter of Credit. The importer submitted a licence on 20‑Aug‑1983 that was defective and later corrected on 26‑Aug‑1983, after SAIL had revised its price effective 25‑Aug‑1983. The importer sought a writ directing that the pre‑revised price be applied and a refund of the difference. The Gujarat High Court, mistakenly treating SAIL as a department of the Union, held the defective licence to be deemed presented on 20‑Aug‑1983 and ordered the refund. The Supreme Court allowed SAIL’s appeal, held that SAIL is a separate corporate entity, not a government department, and that the price applicable is the revised price because the importer was not an eligible licence holder when the financial arrangement was made. The High Court’s judgment was set aside and the matter remitted to decide the right to fix price and the issue of unjust enrichment.

Issues considered

The legal status of SAIL – whether it is a department of the Union of India or a separate corporate entity.
Whether the price of raw material can be revised from time to time under the scheme.
Whether the importer is entitled to the pre‑revised price when the licence was defective but the Letter of Credit was presented earlier.
The adequacy of the High Court’s jurisdiction to grant relief in a writ petition.
The possibility of raising a claim of unjust enrichment.

Legislation cited

Companies Act, 1956

Subjects

price fixationimport licencegovernment-owned corporationprice revisionraw material supplyunjust enrichmentwrit jurisdictioncorporate personality

Judgment

STEEL AUTHORITY OF INDIA LTD. A
v.
SHRI AMBICA MILLS LTD. AND ORS.

OCTOBER 17, 1997

[M.M. PUNCHHI AND K. VENKATASWAMI, JJ.] B

Import & Export Policy-Scheme under-Import licence holder to have
certain conditions fulfilled in order to get supply ofraw material-Application
furnished on a particular date for supply of raw material defective and not C
accompanied by requisite documents-Corrected documents filed only after
_the price of the raw material enhanced -Held, the sale price chargeable is
price ruling on the date on which acceptable and operative financial
arrangements are made in favour ofsupplier by import licence holder eligible
to get supplies under the Scheme.
D
Companies Act, 1956 :

Appellant company-Incorporated under the Companies Act-Entirely
owned by Government of India-Held, a separate entity and not a department
of the Union of India.
E
The first-respondent (importer) was manufacturer of steel tubes for
which hot rolled strips in coils were required as raw material. This raw
material was being supplied by the appellant. For supply of the raw material,
the importer was required to have import licence and have to carry out certain
export obligations for the period in question under the Scheme published
under the Import & Export Policy. The importer becomes eligible for supply F
of raw materials on compliance of the conditions fixed in the Scheme in
particular, the conditions of procuring advance licence, duty exemption
entitlement certificate, legal undertaking/execution of export bond and
furnishing of irrevocable letter of credit. The appellant as an indigenous
supplier made an announcement of the prices at which the raw material will G
be supplied against valid import licences. Pursuant to this announcement, the
importer submitted licences requiring raw material. However in the licence
submitted by the importer, there was no mention that it was an advance import
licence nor was it accompanied by duty exemption entitlement certificate and
the bond. The letter of credit submitted by the importer (on 20.8.1983)
~1 H
502 SUPREME COURT REPORTS [1997) SUPP. 4 S.C.R.

A contained certain infirmities and when the same was pointed out the same
were rectified and submitted before 25.8.1983. In the meantime the appellant
enhanced the price of the raw material w.e.f. 25.8.1983. The importer
furnished the relevant documents after corrections with necessary enclosures
only on 26.8.1983, and was required to pay the price for the release of the
B raw materials at an enhanced price. The importer moved the High Court for
quashing the announcement and the refund of difference between the pre-
revised and the revised prices. Though the main question before the High
Court was the challenge to the right of the appellant to fix the price of the
raw material from time to time, however, the High Col!rt on a wrong premise
that the appellant was a department of the Union of India, held that the licence
C though defective must be deemed to have been presented on 20.8.1983 long
before the price was revised. Hence this appeal.

Allowing the appeal, this Court

HELD : 1.1. The High Court erred in thinking that SAIL was a
D department of the Union of India and most of the reasons given in the judgment
are based on this wrong premise.

1.2. A company though fully owned by Union of India when incorporated
takes its own entity/identity and cannot be considered as department of the
Union of India. [511-GJ
E
Dr. S.L. Agarwal v. The General Manager, Hindustan Steel, Ltd., AIR
(1970) SC 1150 and Western Coalfields Ltd. v. Special Area Development
Authority, Korba & Anr., AIR (1982) SC 697, relied on.

2.LThe importer in this case is not a new entrant to plead ignorance
F though that may not be an excuse. Importer has presented application for
registration before and after the application in question and, therefore, it
must be taken that the importer knew fully well the requirements for
registering the indent. It is also relevant to note that the appellant on receipt <
of the application for registration expressly and in writing replied not only
G pointing out the defects but also stated that they are not taking any action on
the Letter of Credit enclosed along with the licence. It is also an admitted
fact that the indent was registered only on 28.8,1983 when all the relevant
documents after curing the defects was presented on that date. Under these
circumstances and in the light of the Scheme published by the appellant, it
was held that the importer cannot claim as of right that its order must be
H deemed to have been registered for supply of raw materials on 20.8.1983 when
STEEL AUTHORITY OF INDIA LTD. v. AMBICA MILLS LTD. [K. VENKATASWAMI, I.) 503
the documents with all defects were presented. 1511-H; 512-A-C) A
2.2. Mere production of Letter of Credit will not be sufficient to
determine the price ruling on the date. It must be given by an import licence
holder eligible to get the supplies under the Scheme. In this case, it is seen
that the importer will not fall under the category of 'import licence holder
eligible to get the supplies under the Scheme, as on the date when the Letter B
of Credit was presented, the licence/release order was defective. Therefore,
this Court cannot agree that the importer having produced the Letter of Credit
well before 25.8.1983, the price payable for the supplies must be pre-revised
one. (512-FJ

3. The High Court has not decided but left open the question relating to
c
the right of the appellant to fix the price from time to time even though that
was the main issue raised in the writ petition before the High Court.(512-HJ

4. It is open to the appellant to raise the question of unjust enrichment
when the matter is taken up by the High Court pursuant to this remit order. D
The parties can place before the High Court necessary material in support of
their respective contention on the issue of unjust enrichment. [513-8)

Suganmal v. State of Madhya Pradesh & Ors., AIR (1965) SC 1740;
•
Har Shankar & Ors. v. The Dy. Excise & Taxation, Commissioner & Ors.,
[1975) l SCC 737; Mis Radhakrishna Agarwal & Ors. v. State of Bihar & E
Ors., AIR (1977) SC 1496; State ofOrissa & Ors. v. Narain Prasad & Ors.,
(1996) 5 SCC 740 and Assistant Excise Commissioner & Ors. v. Issac Peter &
Ors., [1994)4 SCC 104, referred to.

·CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2889of1985. F
From the Judgment and Order dated 7.2.85 of the Gujarat High Court
in S.C.A. No. 3752of1985.

Dhruv Mehta and Ms. Monica Mehta for S.K. Mehta for the Appellant.

P.H. Parekh and Amit Dhingra for the Respondent Nos. 1-2. G

C.V. Siibba Rao for the Respondent Nos. 4-6.

The Judgment of the Court was delivered by

K. VENKAT ASWAMI, J. This appeal by special leave is directed against H
504 SUPREME COURT REPORTS [1997] SUPP. 4 S.C.R.

A the Division Bench judgment of the Gujarat High Court dated 7.2.1985. Brief
facts concerning the case are given below.

The first respondent-company is engaged in the manufacture of steel
tubes through its Ambica Tubes Division. For the purpose of manufacture of
steel tubes, hot rolled strips in coils are required as raw material. These hot
B rolled strips were being supplied at the relevant time to the manufacturers of
steel tubes like Ambica Tubes (hereinafter referred to as the importer) through
the appellant subject to certain conditions. The manufacturers who are given
raw materials must possess the import licence and have to carry out certain
export obligations. The obligations concerning this for the period in question,
C namely, April 1983 to March, 1984 were given in the import and export policy
for that period. Previously a public notice in respect of scheme for supply of
raw material by Steel Authority of India Ltd. (hereinafter called the "SAIL")
against advance import licence was issued on 11.12.1982. For the period 1983-
84, it was announced, the Scheme published on 11.12.1982 would be continued.
According to that, the importer becomes eligible for supply of goods on
D compliance of the conditions fixed in the scheme in particular, the conditions
of producing advance licenses, duty exemption entitlement certificate, legal
undertaking/execution of export bond and furnishing of irrevocable letter of
credit. The appellant as an indigenous supplier under the aforesaid import and
export policy for 1983-84 made an announcement of the prices at which the
E raw material will be supplied. That announcement was published in the
Economic Times on 10.6.1983 under the caption "Scheme for supply of Certain
Categories of Indigenously Produced Steel Materials at Competitive Prices
against Valid Import Licenses''.

Pursuant to the above said announcement, the importer submitted
F licenses requiring supply of about 3768 tonnes of hot rolled strips in coils.
It was found that the licence submitted by the importer (Ambica Tubes) did
not mention that it was an advance import licence nor was it accompanied by
Duty Exemption Entitlement <;:ertification and the bond. In addition to the
submission of licence, the said Ambica Tubes however submitted Letter of
G Credit dated 19.8.1983 on the same date, namely, 20.8.1983. In the Letter of
Credit also there were certain infirmities and when the same was pointed out,
it was rectified and submitted before 25.8.1983.

On receipt of the licence and the Letter of Credit, the appellant by a telex
message dated 23.8.1983 pointed out the defects in the licence/release order
H and also stated that in view of the defects, the appellant are not taking any
STEEL AUTHORITY OF INDIA LTD. v. AMBICAMILLS LTD. [K. VENKATASWAMI,J.J 505
action on the Letter of Credit for the present. A
In reply to the telex message, Ambica Tubes sent a letter on the same
date (23.8.1983) informing the appellant that the original release order in
duplicate and the Duty Exemption Entitlement Certificate booklet had been
submitted to the Joint Controller at Ahmedabad and would be sent to the
Bombay SAIL office on receipt of the same. The relevant documents after B
carrying out the corrections were factually furnished to the appellant by
Ambica Tubes only on 26.8.1983. In the meanwhile the appellant enhanced/
revised the price of their supplies (steel materials) from Rs. 2460 to 2750 per
M.T. on and from 25.8.1983. Since the relevant documents after carrying out
the corrections with necessary enclosures were received by the appellant C
only on 26.8.1983, the importer (Ambica Tubes) was required to pay the price
for the release of steel materials at the revised rate, namely. Rs. 2750 per M.T.

Ambica Tubes made representations that they having submitt~d Letter
of Credit and the necessary documents, though defective, well before 25.8.1983,
the revised charges should not have been applied. The appellant gave a D
detailed reply to the representation of the importer. The importer moved the
Gujarat High Court on 18.6.1984 for quashing the announcement made by
SAIL revising the price and for direction that the supplies must have been
made at the pre-revised price and for consequential refund of difference
between the pre-revised and revised prices. The appellant resisted the writ E
petition by filing a detailed reply to the affidavit filed in support of the writ
petition.

The High Court proceeding on a wrong premise, namely, that SAIL
(appellant) was a department of Union of India but its administration is run
separately in the interest of efficiency; held that the importer (Ambica Tubes) F
was not responsible for the defects pointed out in the license/release order
and it was the office of Joint Chief Controller of Imports and Exports alone
responsible for the defects for which the importer should not be punished.
In other words, the High Court was of the view that the license though
defective must be deemed to have been presented on 20.8.1983 long before G
the revised price was announced. Therefore, the appellant was not entitled
to charge for the supply of raw materials at the revised rate. The High Court
also directed the refund of the difference between the pre-revised and the
revised rates. The High Court further observed that the action of the appellant
'in not registering the petitioners' indent' No. 7of1988 dated 19.8.1983 latest
on 24.8.1983 was an action bad at law, arbitrary and unreasonable'. H
506 SUPREME COURT REPORTS [1997] SUPP. 4 S.C.R.

A We are not concerned with the other relief granted against Union of
India in this appeal.

Though the main relief in the writ petition was the challenge to the right
of SAIL to fix the price from time to time, the High Court left open that issue
without deciding the same. The entire reasonirig of the High Court is found
B in paragraph 16 of its judgment which reads as follows :

"16. We have analysed the facts above very clearly and held that the .
petitioners had done whatever was required to be done by them. They
had procured the release order in time. One hand of the Government
c acting in the Joint Controller's office committed some blunders because
of the lackadaisical fashion in which the things are handled there. It
forgot to mention about the Duty Exemption Entitlement Certificate. It
forget to mention that it is an advance release order, though the
covering letter did mention it. The petitioners no doubt got these
things rectified, but because of the communication difficulties, there
D was a delay of a day or two. How can that fortuitous circumstance
be exploited by SAIL by seeking a pound of flesh? They should have
seen reason and should not have chastised this petitioner-company
for the faults of the employees of the very Union of India, their
masters. Such amendments required to be made later on because of
the negligence and carelessness of the employees of the Union of
E
India are to be legitimately treated as having been effected retroactively.
This is the only. reasonable and rational way of looking at the things.
Negligence of one branch of the Union of India cannot be capitalized
by another branch of the very Union of India. This action is per se
arbitrary, capricious and whimsical. Such an illegal action is taken by
F the Ahmedabad office or Bombay office. Another reasonable office of
this very SAIL say at Madras or Bangalore would not do such things
and citizen like the petitioners there would be favourably treated. In
this sense of the term, it could be said that possibly inconsistent
stand, and therefore, discriminatory stand, can be there in the action
of the respondent no. I . On this short ground, the petition of the
G
petitioners can be allowed, because we hold that this executive power
has been exercised by the SAIL absolutely unreasonably and
capriciously. There was not an iota of justification for them to sit tight
on that date 24.8.1983 and all that was required to be done was done
by these petitioners. If such things are allowed to go, it would set
H a very bad example in the working of rule of law in practical and final
STEEL AUTHORITY OF INDIA LTD. v. AMBJCAMILLSLTD. [K. VENKATASWAMl,l.J 507

analysis. It is because of this necessity of striking out the action of A
the public authority, namely, the SAIL, that we are inclined to entertain
this petition and decide it and if for that purpose we have to strike
a departure from the normal rule of the not entc:rtaining even money
claims, we would very willingly do so, so that such actions would not
be repeated in future. We, however, add that here essentially the
challenge was to the right of fixation of price at any capricious time B
and that was the subject matter of the petition, but we are not required
to go into it and, therefore, we do not go into it. Otherwise, much
could be said in favour of the petitioners when they contend that the
prices are required to be fixed quarterly. The term quarterly would
mean every three months and the SAIL has fixed the price on 11.12.82, C
14.3.83, 7.6.83, 25.3.83 and had we been required to decide this question,
we would have in all probability interpreted clause 6 read with clause
10 to mean that the prices are to be fixed for the period of three
months and they are to remain operative for that period, but we are
not to be understood to have expressed any final opinion on that
point because the ultimate relief of the petitioners can be granted D
without deciding the point."

Aggrieved by the judgment of the High Court, the present appeal is
filed by the SAIL. ·
E
Mr. Dhruv Mehta, learned counsel appearing for the appellants submitted
that the High Court erred in assuming that the appellant was a department
of the Union of India forgetting totally that it is a company incorporated
under the Companies Act and it is a separate entity, notwithstanding the fact
that the company is entirely owned by the Government· of India. It will not
be a wing/department of the Government. In support of his contention, he F
placed reliance on the judgments of this court in Dr. S.L Agarwal v. The
General Manager, Hindustan Steel Ltd., AIR (1970) SC 1150; Western
Coalfields Ltd. v. Special Area Development Authority, Karba & Anr., AIR
. (1982) SC 697. He also submitted that in the absence of a decision regarding
the power of SAIL to revise the price list from time to time, the relief given G
by the High court would amount to refund of money by exercising the
jurisdiction under Article 226 which is against the ruling of this court in
Suganmal v. State of Madhya Pradesh & Ors., AIR (1965) SC 1740. He also
submitted that the importer being a party to the contract and having paid the
price as revised and taken delivery of the goods cannot now turn around and
challenge the action of the SAIL by invoking the writ jurisdiction under H
508 SUPREME COURT REPORTS [1997] SUPP. 4 S.C.R.

A Article 226 of the Constitution of India. In support of this submission, he
placed reliance on a judgment of this court in Har Shankar & Ors. v. The Dy.
Excise & Taxation Commissioner & Ors., [1975] I SCC 737.

He also placed reliance on other judgments of this court in Mis.
Radhakrishna Agarwal & Ors. v. State of Bihar & Ors., AIR (1977) SC 1496,
B State of Orissa & Ors. v. Narain Prasad & Ors., [1996] 5 SCC 740 and
Assistant Excise Commissioner& Ors. v. lssac Peter & Ors.. (1994] 4 SCC 104.

On facts, Shri Dhruv Mehta, learned counsel for appellant submitted
that on the admitted position that the documents, namely, licence/release
C order after rectification having been furnished only on 26.8.1983, the importer
cannot claim the application of pre-revised price on the ground that the
mistake, if at all, was on the part of the office of the Joint Chief controller of
Imports and Exports and, therefore, it should not be penalised. According to
the learned counsel, the conditions of Scheme published enable the appellant
to insist upon all the documents to be furnished before release of the raw
D material. The SAIL was not concerned with the party responsible for the
defect in the document. Therefore, the High Court was not justified in making
certain observations against the appellant. According to Mr. Dhruv Mehta,
the appeal should be allowed.

Mr. Parekh, learned counsel appearing for the first respondent, placing
E reliance on para 2.3 of the scheme announced on 10.6.1983 submitted that the
Letter of Credit having been furnished after rectifying the defects before
25.8.1983, the importer is entitled to get the supplies at the pre-revised rate
notwithstanding the defects in the licence/release order as the importer was
not responsible for the defects. He also submitted that the High Court was
F well within its jurisdiction in entertaining the writ petition and granting the
relief. According to the learned counsel, the judgment under appeal does not
call for any interference by this court.

Before considering the rival submissions, it is necessary to set out the
relevant paragraphs in the scheme announced on 10.6.1983.
G
"2.2. When a valid and eligible import license is surrendered by an
Import Licence holder to the concerned office of SAIL for supply of
materials under this scheme, the approximate quantity of the material
which can be supplied against the import licence will first be determined
keeping in view (a) the utilised value available on the licence, (b) the
H price of the concerned item as announced by SAIL for supply under
""'7- STEEL AUTHORITY OF INDIA LTD. v. AMBICA MILLS LT[). [K. VENKATASWAMl,J.I 509

this scheme. Thereafter, the Import Licence holder will be requested A
by the concerned office of SAIL to make appropriate financial
arrangements taking into account, besides (a) and (b) mentioned above,
the approximate amount of duties/taxes/levies, etc. chargeable on such
supplies. The actual supply will be restricted to the quantity which
can be supplied against the surrendered import licence provided the B
amount for which financial arrangements are made permits the same."

Para 2.3 reads ad follows :

"2.3 The price as announced for supply of materials under this Scheme
shall be subject to periodic revisions. The prices chargeable shall be C
the prices ruling on the date of delivery which shall be the date of the
Railway Receipt in the case of direct dispatches by rail and the date
of the Delivery Challan of SAIL's stockyard in the case of ex-yard
delivery, except in the following cases where the chargeable prices
shall be the prices ruling on the date on which acceptable and operative
financial arrangements are made in favo~r of SAIL by import licence D
holders eligible to get supplies under this scheme.

(a) Where the financial arrangement made in favour of SAIL is such
that it enable SAIL to effect dispatches on a continuing basis
without any restrictions about delivery schedule; this will also
E
include an irrevocable confirmed automatic revolving Letter of
....j
credit (L/C) without recourse to the drawer which would enable
SAIL to effect dispatches on a continuing basis without
. quantitative or other restrictions.

(b) Where the financial arrangement made in favour of SAIL is such F
that despatches have to be completed within a period of 3
months from the date on which the fmancial arrangement became
operative but is for a quantity less than the tonnage covered
by the import licence, the despatches shall be restricted to the
quantity covered by the financial arrangement.
G
(c) In all cases, the interpretation and decisions of SAIL as to the
acceptability, adequacy, effectiveness and operativeness of the
i financial arrangement made by eligible import licence holders in
.favour of SAIL for supply of materials under this Scheme shall
be final and binding."
H
='
::::J
1
510 SUPREME COURT REPORTS [1997] SUPP. 4 S.C.R.

A Coming to the merits of the case, we accept the contention of the
learned counsel for the appellant that the High Court went wrong in holding
that SAIL was a department of the Union oflndia. In Agarwal's case (supra),
a Constitution Bench of this court while considering a similar question held
as follows:-

B ·"We must, therefore, hold that the corporation which is Hindustan
Steel Limited in this case is not a department of the Government; nor
are the servants of it holding posts under the State. It has its
independent existence and by law relating to corporations, it is distinct
even from its members."

c In Western Coalfields case (supra), this court held as follows : ·

"It is contended by the Attorney General that since the appellant-
companies are wholly owned by the Government of India, the lands
and buildings owned by the companies cannot be subjected to
property tax. The short answer to this contention is that even though
D the entire share capital of the appellant, companies has been subscribed
by the Government of India, it cannot be predicted that the companies
themselves are owned by the Government of India. The companies
which are incorporated under the companies Act have a corporate
personality of their own, distinct from that of Government of India.
E The lands and buildings are vested in and owned by the companies,
the Government of India only owns share capital.''

In view of the above decisions of this court, we have no hesitation to
hold that the High Court erred in thinking that SAIL was a department of the
Union of India and most of the reasons given in the judgment are based on
F this wrong premise.

the importer in this case, it is an admitted fact, is a register exporter of
steel pipes entitled to priority allotment of steel either through imports or from
indigenous plants like the appellant. The allotment of steel was for manufacture
G of steel pipes for export against Advance Licence granted to the importer from
time to time. During the relevant period, hot rolled strips in coils manufactured
by plants under SAIL were available in sufficient quantity and hence the
direct imports of the raw materials were banned and the manufacturers were
required to obtain the supplies of the raw materials from the appellant against
the import licences with them and /or release orders issued by the licensing
H authority, namely the Chief Controller of Import and Exports.
STEEL AUTHORITY OF INDIA LTD. v, AMBICAMILLSLTD. (K. VENKATASWAMl,J.] 511

Various categories of licences are granted for the purpose of imports to A
the manufacture. One such lipence was Advance Licence. Paragraph 149 of
the import policy provided for grant of Advance Licence/imprest licences and
the relevant part of paragraph 149 reads 'the term Advance Licence refers to
cases where the import is allowed under the Duty Exemptions Scheme whereas
. the term imprest licence will be used where the import is allowed outside the B
Duty Exemption Scheme. The Advance Licences, it is stated, which include
release orders are intended to supply import input or inputs in short supply
for export production. It is also stated that the licensing authority issuin~ the
Advance Licences will simultaneously issue the collected Duty Exemption
Entitlement Certificate. The policy does not provide for issuance of Advance
Licence Duty Exemption.' C

Bearing the above-said facts in mind, let us now consider the issue
raised before us.

Admittedly when the importer wanted to register the indent for supply
of hot rolled strips in coils, the licences/Release Orders produced lacked in I?
material particulars and relevant enclosures. In other words, the licence did
not mention that it was an Advance Licence and no Duty Exemption
Entitlement Certificate was enclosed and legal undertaking/exemption of export
bond was also not exclosed. It was on this admitted position, the appellant
declined to register the indent of the importer. No. doubt, the mistake was E
committed by the licensing authority. Does that mean that the appellant can
ignore the lacuna in the docume.nts and register the indent placed by the
importer in contravention of the requirements of the Scheme? The High Court
held that the licensing authority and the appellant being two different wings/
departments of Union of India, the appellant on receipt of rectified documents
on 26.8.1983 must register the indent as ifit was presented on 20.8.1983. We F
are afraid , we cannot accept the above reasoning of the High Court as we
have pointed out that the basic error committed by the High Court was in
assuming that the appellant was a Department of Union of India. We have
already noticed that there are number of judgments of this Court taking the
view that a company though fully owned by Union oflndia when incorporated G
takes its own entity/identity and cannot be considered as department of the
Union of India.

Further, it is seen from the records that the importer in this case is not
a new entrant to plead ignorance though that may not be an excuse. He has
presented applications for registration before and after the application in H
512 SUPREME COURT REPORTS [1997] SUPP. 4 S.C.R.
-·
A question and, therefore, it must be taken that the importer knew fully well
about the requirements for registering the indent. It is also relevant to note
that the appellant on receipt of the application for registration expressly and
in writing replied not only pointing out the defects but also stated that they
are not taking any action on the Letter of Credit enclosed with the licence.
B It is also an admitted fact that the indent was registered only on 26.8.1983
when all the relevant documents after curing the defects was presented on
that date. Under these circumstances and in the light of the Scheme published
by the appellant, we hold that the importer (Ambka Tubes) cannot claims as
of right that its order must be deemed to have been registered for supply of
raw materials on 20.8.1983 when the documents with all defects were presented.
c We cannot agree with the contention of Mr. Parekh that mere presentation
of an irrevocable Letter of Credit covering the value of requirement of raw
materials is sufficient for registering the indent. We have already set out para
2.3. Paragraph 2.3 of the Scheme announced on 10.6.1983 decides the price
to be paid for the indent. Mr. Parekh placed reliance, on the last part of
D paragraph 2.3 to contend that the date of presentation of irrevocable Letter
of Credit will be relevant for fixing the price. We have seen that it says price
chargeable shall be the ruling on the date on which acceptable and operative,
financial arrangements are made in favour of SAIL by import licence holders
eligible to get supplies under this Scheme. Mr. Parekh wants us to ignore the
E portion underlined above. Mere production of Letter of Credit will not be
sufficient to determine the price ruling on the date. It must be given by an
import licence holder eligible to get the supplies under the Scheme. In this
case, we have seen that the importer will not fall under the category of 'import
licence holder eligible to get supplies under the Scheme' as on the date when
the Letter or Credit was presented, the licence/release order was defective.
F Therefore, we cannot agree with Mr. Parekh that the importer having produced
the Letter of Credit well before 25.8.1983, the price payable for the supp1ies
must be pre-revised one.

In view of our above conclusion, it is not necessary for us to consider
G and decide the other points raised by learned counsel for the appellant.

We have seen that the High Court has not decided but left open the
question relating to the right of the appellant to fix the price from time to time
even though that was the main issue raised in the writ petition before the
High Court. As we are not ia agreement with the view expressed by the High
H Court on other issues, it is now necessary for the High Court to consider the
- STEEL AUTHORITY OF INDIA LTD. v. AMBICAMILLSLTD. [K. VENKATASWAMl,J.J 513
issue relating to the right of the appellant to fix the price from time to time. A
It is open to the appellant to raise the question of unjust enrichment
when the matter is taken up by the High Court pursuant to this remit order.
The parties can place before the High Court necessary material in support of
their respective contention on the issue of unjust enrichment.
B
Before parting with the case, we would like to observe that the
observations of the High Court in the judgment condemning the appellant for
not registering the order placed by the importer on the date when the relevant
documents were presented with defects were totally uncalled for and, therefore,
we expunge all those observations from the judgment.
c
In the result, the appeal is allowed and the judgment of the High Court
is set aside and the matter is remitted be the High Court to decide the right
of the appellant to fix the price from time to time and also the question of
unjust enrichment. No costs.

RK.S. Appeal allowed. D