D.P. Wadhwa, J.
(1) The petitioner, an export house, filed this petition to issue a writ or direction to respondents to refund to the petitioner an amount of Rs. 18,48,000, it being the difference between the original price and actual price which the petitioner paid for Polyester Filament Yarn (PFY) goods which had been imported by the second respondent State Trading Corporation of India Limited (STC) as the Canalising Agency. In the alternative, 'the petitioner seeks issuance of a writ directing the respondents to refund' to it the amount of difference of price of Pfy calculated on the baas of Rs. 125 per kg. charged to other parties and Rs. 139.25 (approximately) charged to the.. petitioner and paid by it. The petitioner also wants interest on this amount at the rate of 12 per cent per annum. There are three respondents. Respondent No. 2, as noted' above, is the Stc and respondent No.. 3, is the State Chemicals and Pharmaceuticals Corporation of India Ltd. This. respondent No. 3 has since been amalgamated with the STC. It is Stc which has, thereforee, filed the return.
(2) Under the Import Policy for the period 1977-78. Stc was the canalising agency for the import of Pfy and the allotment of imported material to actual users was to be made by release orders. As per para 90 of the Policy, canalising agencies have been mentioned empowered to allocate certain selected imported raw materials directly to actual users to meet Their requirements without the necessity obtaining release orders from the licensing authorities and for this purpose the actual users were required to make direct applications for allotment to the canalising agency concerned in the form prescribed. The Policy also prescribed procedure for registration of release orders. As per para 98, the sale price for distribution of canalised items to actual users was to be determined by the Pricing Committee presided over by the Chief Controller of Imports and Exports and consisting of Economic Adviser in the Ministry of Industry, Development Commissioner (Small Scale Industries), and representatives of Directorate General of Technical Development, Department of Economic Affairs, and Ministry of Commerce, as members. Representatives of public sector agencies concerned were to be invited to participate in the discussions on items concerning them. As per para 109, a Monitoring Committee was also constituted in order to entire smooth working of the scheme of direct allotment of imported items by can alising agencies respecting each canalised item. This Committee was to review and advise the canalising agencies about the manner of distribution of imported raw materials under the scheme. In its meeting held on 15 November, 1977 to fix the price of Pfy, the Pricing Committee fixed the following prices after taking into consideration various factors as set out in the minutes but exclusive of clearance, forwarding and other post shipment expenses :
40 deniers = Rs 140.00 per kg. 50 deniers = Rs. 130.00 per kg. 75 deniers = Rs. 120.00 per kg. 150 deniers = Rs. 100.00 per kg.
(3) It was also mentioned that above prices would form the basis for high sea sales which the Stc wished to follow invariably in the instant context. After the Union Budget which was presented in the Parliament on February 28, 1978 when the customs duty and countervailing duly (reference to section 3 of the Customs Tariff Act, 1975, relating to levy of additional duty equal to excise duty) on the imported Pfy was hiked, the Pricing Committee again met on March 4, 1978 and approved the following revised prices of Pfy :
30 deniers = Rs. 175.00 per kg. 40 deniers = Rs 160,00 per kg. 50 deniers = Rs. 150.00 per kg. 75 deniers = Rs. 125.00 per kg. 150 deniers = Rs. 105.00 per kg.
(4) We are concerned with price of Pfy of 75 deniers and 150 deniers and to understand the rival contentions we may only refer to the price of 75 deniers. One glance at the price charged prior to and after the Union Budget of 28 February, 1978 may show that price has increased by Rs. 5. That is not quite the controversy as we will presently see.
(5) Pre budget price of Rs. 120 per kg. for Pfy of 75 deniers consisted of element of customs duty as well as countervailing duty. It also contained service charges at the rate of 7 per cent on the Cif value and the mopping up element. This price also included whatever the adjustment may be on account of exchange rate fluctuations. Thus, the price of Rs. 120 per kg. comprised of the following elements':
(1) Cif value (per kg.) : Rs. 18.83 (2) Customs duty : Rs. 22.61 (3) Countervailing duty : Rs. 63.00 (4) Service charges @ 7% on Cif Value : Rs. 1.31 (5) Mopping up element : Rs. 14.25 Total : Rs.120.00
(6) When actually the invoice was presented by the Stc to the petitioner (petitioner says it is only a provisional invoice) it included an amount of Rs. 2.29 due to exchange rate fluctuations reducing, thus, the mopping up element to about Rs. 12 per kg. The customs duty and countervailing duty was to be paid by the petitioner directly at the time of clearance of he goods as per the provisions of the Customs Act and Customs Tariff and after making up the adjustment due to exchange rate fluctuations of Rs. 2.29 per kg. the provisional invoice indicated the pries per kg. at Rs. 32.10 which the Stc was to charge from the petitioner.
(7) On account of the Union Budget the customs duty was increased from prevailing 120 per cent to 200 per cent and further an additional 5 per cent countervailing duty was also levied. The net effect of this hike was the Pfy of 75 deniers quoted which was priced at Rs. 120 pet kg. (inclusive of everything) was now available at Rs. 139.25 per kg.
(8) It was submitted before us that the idea of levying mopping up charges was to bring the price of the Pfy at par with the indigenous product and 'to protect the indigenous industry. It was, thereforee, pointed' out that this component in the invoice increases or reduces depending on the price of (the similar goods available indigenously and depending upon other policy considerations. It was further submitted that in the present case on accoun)t of the increase in customs duty the price of the imported Pfy had shot up much above the price of the indigenously made Pfy and that was the reason that the Pricing Committee met after the post budget price rise and brought down the price from 139.25 to Rs. 125 removing altogether the moping up element of Rs. 14.25 per kg. as noticed above.
(9) At this stage we may refer to the deliberations of the Pricing Committee as recorded in its minutes of two meetings dated 15 November, 1977 and 4 March, 1978. In the minutes, or the first meetings the Chief Controller of Imports and Exports, the Chairman of the Meeting, had stated that protection of indigenous industry was only one of the factors which was taken into account while fixing the sale prices of canalised articles. He said this point was relevant in principle even to non-canalised items whose imports had been liberalised in the current year on general economic considerations. He referred to the recent decision of the Textiles Department/ Ministry of Petroleum to decanals base quality nylon filament yarn, whereby no protection was left even quantity wise to the indigenous spinners. Besides, he pointed out that the users and consumers had also to be protected, in the sense that the canalising agency was not allowed to make profits unreasonably. The Pricing Committee endorsed these views. The question of making up optimum arrangement for ensuring utilisation of indigenously made yarn in proportion to imported material was also considered. After taken into account various factors the prices were fixed. Paras 2, 3 and 4 of the second meeting are relevant and are reproduced as under :
'2.The data furnished by the Stc in their letter dated 2, 3, 78 were gone into by the members. In the discussions that followed it was noted that the Stc had been effect ing only high sea sales i.e. the indenter had to bear the port charges, the clearance and other part c.i.f. charges/cost as his responsibility, in addition to the payment of duty, while clearing the relative consignments, for which the shipping documents had been got prepared from the suppliers and handed over to him. In other words, the Stc ceased to have responsibility for the goods once the sale. was thus completed, with the connected documents made over to the indenter concerned.
3.In the above circumstances the Committee decided that the new prices that it had been called upon to determine would be applicable only to those consignments of Pfv where sales had. not already been effected by the STC. The Committee has no other jurisdiction to exercise to this regard. It was considered that the duty levy should be passed on in full to the indenter.
4.Mrs. Lalita Singh of Min. of Petroleum suggested that the price of the imported Pfy of 75 deniers may be fixed at Rs. 130.00 per kg., in keeping with their Ministry's consistent stand in this regard. However other members considered that : the S.T.C. had been making only high sea sales & hence the ultimate price to the buyers had to allow also for port charges, port clearance charges, minimum transportation cost etc., the open market prices prior to the budget had been around Rs. 123.00 only and the customs hike ought to protect the indigenous industry sufficiently.
(10) Taking into consideration various factors, prices of Pfy of different qualities were fixed. In the present writ petition there is no challenge to the price fixation by the Pricing Committee or to the collecting of mopping up charges by the STC. There is no denial to the averment of the petitioner that mopping up charges have been levied in order to bring the prices of the imported Pfy almost at par with the indigenous product. For that one would have thought that customs duty and countervailing duty would have served the purpose, that appeared to be the reason for increase in these duties in the Union Budget presented on 28 February, 1978. It is, thereforee, undeniable that apart from levying service charges the Stc has been making profit at the cost of the importers to the extent of depriving them of the profit which they otherwise would have made. hut which at the same time would have adversely affected the indigenous industry. If the idea of mopping up charges was to bring the prices of the imported Pfy to the level of indigenous market, the difference in getting clearance of their goods before or after the presentation of the Union Budget docs not appear to us to be of any material. The question whether the property in the goods had passed to the petitioner or not, is again to our mind not material. We do not think it can be suggested that once the property in the goods has passed, the purchaser cannot sue the seller for return of that much of the price which the seller could not have charged. The controversy whether the invoice were provisional or not, is also of no significance, and so also the fact that the petitioner availed of the Bill Marketing Scheme is of any significance. The fact that when the petitioner was issued invoices beginning with 31 January, 1978 in respect of goods belonging to petitioner and some of the invoices we're of large amounts and on the request of the petitioner split up invoice's were issued on or after 6 March, 1978, is again to our mind of no significance, in the circumstances of the present case.
(11) Some of the facts of the case may now be noted. In the Import Policy for the period April 1977 to March 1978, Ministry of Commerce in the Government of India had formulated a scheme of imports of Pfy through the Stc with a view to containing and stabilising the prices of these goods and to secure reasonable requirements conveniently. In terms of the scheme the actual users were to register their requirements with the Stc, the canalising agency. The petitioner did register its release order along with its specific requirements with Stc as provided in the relevant public notice. The petitioner completed all the formalities. The petitioner confirmed the acceptance of the price of 75 deniers quality of Pfy at the rate of Rs. 120.00 per kg. and that of 150 deniers quality at the rate of 100.00 per kg. as quoted by the STC. The imports were effected by the STC. The margin of profit available to the petitioner was the difference that existed between the sale price and the cost price. The goods ordered by the petitioner and others similarly situated arrived by means of various ships in the months of February and March 1978. Two ships which carried the goods of the petitioner were S.S. Viswa Anurag and S.S. State of Manipur. It is stated that the ship Vishwa Anurag berthed at Bombay Port on 14 February, 1978 and the general landing date was announced as 21 February, 1978. The customs duty could only be paid after the general landowning date was announced. Documents were presented by Stc to the petitioner and others between 31 January, 1978 and 20 February, 1978. While the consignees were in the process of retiring the documents through their bankers, it is stated that a fire broke out in the vessel S.S. Vishwa Anurag on two dates. 20 February, 1978 and 22 February, 1978. Petitioner says that it was reported that some of the Pfy goods were destroyed in the fire and till the allottees could verily whether their good? had in fact been destroyed or saved. They could not pay the customs duty and clear the goods. It is stated that off-loading from the vessel remained suspended between 20 February, 1978 to 26 February, 1978, the last being a Sunday. Then in the case of vessel S.S. Manipur, petitioner says provisional invoices were given to the allottees between 17 February, 1978 and 28 February, 1978 and the ship berthed only on 20 March, 1978 and the general landing date was announced as 26 March, 1978. Then, as noted above, the Union Budget was presented in the Parliament on 28 February 1978 resulting in the increase in the customs and countervailing duties. Petitioner says on this account it had to pay an additional sum of Rs. 18,48,0001- (approximately) for the import of 96 tonnage of Pfy Yarn at the rate of Rs. 139.25 per kg. instead of Rs. 120.00 per kg. On account of this increase the petitioner and other allottees represented to the Stc as well as to the Government for reduction In prices of the PFY. A great deal of correspondence was also exchanged. The Stc on 2 November 1978 passed a resolution recommending to the Government to refund the excess amount paid by the allottees. The Government, it appears, stuck to the price fixed by the Pricing Committee in its meeting of 4 March, 1978 which fixed the revised prices effective from that date. A letter dated 28 May 1979 was received by the petitioner from the Stc telling the petitioner that the Government did not agree to the refund of the amount claimed by the- petitioner. This letter is as under: 'Dear Sirs, We draw your attention to the correspondence relating to refund on import of Polyester Filament Yarn. We had referred the above matter to the Government. who after careful examination have found that the request for refund of the amount claimed by you, cannot be accepted as particularly there was no evidence of your having suffered any overall loss. Thanking you, Yours faithfully, for the Stc of India Ltd., Sd]- (DHARAMVIR) Dy. Marketing Manager.'
(12) Having, thus, failed in its attempt to get the refund, the petitioner, it seems, served a notice upon the Stc which was replied to by letter dated 3 April 1981 by the STC. It said that the matter was still being examined and detailed reply would be sent to the petitioner in due course. It was also mentioned that since the mater related to the period 1977-78 it was likely to take some more time, and at the same time it was pointed out that this might not be taken as any admission on the part of the Stc respecting the allegations and claims made in the notice of the petitioner. This petition was filed on 9th July 1981.
(13) The petitioner has also said that a number of invoices were also issued to other allotees of Pfy during the period February, 1978 and in respect of some of them these were issued in March 1978. The petitioner says that Stc adopted a system by which in respect of those invoices which were issued prior to 28 February 1978 the price payable would be Rs.139.25, in respect of the provisional invoices issued after the date of the Budget the price payable would be Rs. 125.00 In three such instances the said Revised Post Budget prices have been charged for the goods indented and purchased simultaneously, arrived on the same two ships but invoiced after 1 March 1978.
(14) The respondent. Union of India has not come forward to file any return and it has been left to the Stc to defend the petition We have not been shown as to what considerations prevailed with the respondent Union of India in rejecting the request of the petitioner for refund except to say that there was no evidence of the petitioner suffering any overall loss. We do not know if the first respondent ever asked the petitioner to file any statement showing overall loss if there was any such policy for rejecting the request of the petitioner. This respondent Stc in our opinion in defending this petition is in strange and rather queer position. The Stc is now towing the line of the Central Government when it itself thinks otherwise and had recommended the case of the petitioner for refund. We are unable to understand such an attitude of a corporate body. It should stick to its stand unless for some reason it finds that stand to be wrong. It cannot consider itself as the department of the Government. It had always recommended the case of the petitioner and others similarly situated for refund. The Stc though bound by the direction of the Union of India regarding price fixation by the Pricing Committee informed the concerned Ministry (Ministry of Commerce) that various affected allottees had been individually and through the Federation of Indian Art Silk Weavers Industry had been representing for the refund of difference between the landed cost and the then release price fixed by Pricing Committee. The Stc also informed the Ministry concerned as to how the announcement of duty on 28 February 1978 resulted in the allottees paying both the mopping up element as well as higher rate of duty for the quantities of Pfy carried by the two vessels, namely, Vishwa Anurag and State of Manipur in view of the Stc having already effected high seas sales before the arrival of the vessels. In a letter dated 15 December 1978 of the Stc to the Joint Secretary, Ministry of Commerce, a copy of which was placed on record during the, course of arguments, there is a mention that for every vessel carrying a consignment of Pfy specific clearance of the Monitoring Committee of the CCI&E; was required before Stc presenting the documents to the allottees. We have not been shown the proceedings or the report of the Monitoring Committee. Nothing has also been said about this in the return filed by the STC. The fact remains that due to various reasons normal customs examination was not possible till the end of February 1978 in the case of vessel Vishwa Anurag and in the case of vessel State of Manipur no clearance of goods before 28 February 1978 could take place as the vessel itself arrived on 20 March 1978 and general landing date was announced as 26 March 1978. The aforesaid letter further mentions that the matter was discussed in the Board of STC'S meeting held on 2 November 1978 and the Board had resolved that the proposal to refund the amount equivalent to the mopping up element denier wise be recommended to the Government for clearance. The Stc, thereforee, requested the Ministry of Commerce to consider the proposal for the refund of mopping up element to the different allottees. In the petition there is a mention that on 2 November 1978 the Board of Directors of the Stc passed a resolution recommending to the Government to refund the excess amount paid by the allottees. This fact is admitted by the Stc in its return.
(15) It was strenuously argued by Mr. Joshi, learned counsel for the Stc, that since the subject dispute was in the realm of contractual obligation this court should stay its hand and not interfere in the matter. He said the petition was barred by laches and in any case if the petitioner had brought a suit on the same cause of action, it would have been barred by limitation. Mr. Joshi said three suits by some parties on the same cause of action were filed in the courts in Gujarat and by order of the Supreme Court were transferred to this Court for decision and are pending on the Original Side of this Court. Mr. Joshi also said that the classification was reasonable and that there was equality and uniformity within each class and same could not be condemned as discriminating though due to some fortuitous circumstances arising out of peculiar situation some might have been included in a class and at some advantage over the other, but then there was no special treatment given to the petitioner within that class. He said the classification, if any, was due to the Union Budget intervening. Mr. Joshi lastly said that the petitioner having availed of the Bill Market Scheme could not say that sale was not complete or that the property in the goods had not passed to it. We find ourselves unable to agree to any of these contentions.
(16) The case does not squarely fall within the realm of contract. A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. A contract of sale is made by an offer to buy of sell goods for a price and the acceptance of such offer. The contract may provide for the immediate delivery of the goods or immediate payment of the price or both, or for the delivery or payment by Installments, or that the delivery or payment or both shall be postponed (Sections 4 and 5 of the Sale of Goods Act, 1930). Here the Stc is a canalising agency under the Import Policy and prices are fixed by the Pricing Committee headed by CCI&E; and goods could be imported on the basis of release orders. The buyer has no choice to negotiate the price as Stc is bound by the price fixed by the Pricing Committee. Element of a free contract is lacking in such a case and we do not think we should bind the petitioner to the law of contract as understood normally under the Contract Act and the Sale of Goods Act and deprive it the relief. In this connection principles laid down by the Supreme Court in Central Inland Water Transport Corporation Ltd. and another v. Brozo Nath Ganguly and another : (1986)IILLJ171SC may be referred to Yet another factor which weighed with us is that we would not non suit the petitioner after 10 years since when this petition is pending. The argument of enforcement of contractual obligations in writ jurisdiction must have been taken note of at the time of admission of this petition which was only after notice to the respondents. Moreover the case of the petitioner is no:t based merely on the breach of any contract. The petitioner is complaining discrimination and arbitrariness in the action of the respondents. It had been approaching the authorities to consider its case for refund and it was only by a letter of 28 May 1979 that the case of the petitioner was rejected. This petition was filed on 9 July 1981 well within the period of three years. We also find that the petitioner has been taking various steps and approaching the authorities individually and through its association for consideration of its case and it cannot be said that there are any laches on the part of the petitioner in coming to the court. Even by letter dated 3 April 1981 the petitioner was informed that the matter was being examined in detail. The question of passing of the property in the goods might be relevant only if the goods had been destroyed in fire or lost otherwise. Reference to Bill Market Scheme is of no relevance on this question inasmuch as this scheme was formulated as Reserve Bank of India had introduced certain measures to contain credit expansion in the economy and consequently most banks had freezed the credit limits of their customers but the facilities under Bill Market Scheme had been exempted from the purview of the credit squeeze.
(17) We have seen above why the mopping up charges were being levied. After the Union Budget when the prices of the imported Pfy rose above those of indigenous Pfy, the mopping up charges could not have been levied even for the goods though arrived earlier to 28 February 1978 but got released from the customs after that date. Mopping up charges are not levied to earn extra profit for the Stc and these are also not in the nature of a tax. We are of the view that the petitioner had been discriminated against and action of the respondents in denying the refund to the petitioner smacks of arbitrariness, there being no guidelines.
(18) During the course of hearing the petitioner filed a detailed affidavit giving full particulars of the amounts claimed by it. Though notice of this was given to the respondents they have not filed any counter-affidavit thereto. The statement annexed with this affidavit shows that the petitioner would be entitled to refund of Rs. 17,36,437.43 calculated on the basis of difference between the contract price and that paid by the petitioner on account of hike in customs duty and countervailing duty. The statement also shows that the petitioner paid an amount of Rs. 12,33,507.03 in excess which amount had been calculated on the basis of difference between the contracted price and the price charged by Stc in case of other importers similarly placed to whom invoices had been presented after I March 1978. It is stated, that price charged after I March 1978 by the Stc had beep determined by adjusting the hike in the customs duty and countervailing duty against mopping up element which was self contained in the original contract price. We are of the opinion that the petitioner to be similarly placed with those importers to whom invoices had been presented after 1 March 1978 by the STC.
(19) The petition is, thereforee, allowed. A mandamus is, thus, issued to the respondents to refund to the petitioners an amount of Rs. 12,33,507.03 which the petitioners have calculated on the basis of the difference of the price calculated at the rate of Rs. 125 per kg. charged to other parties and Rs. 139,25 per kg. paid by the petitioners in respect of quantity of Pfy imported by the petitioners. In the circumstances of the case, we are not inclined to award any interest to the petitioners as, firstly, there is no document on record to show that the petitioners ever claimed interest; secondly, the Stc itself was bound by the price fixed by the Pricing Committee and so not in a position to refund the amount claimed by the petitioners; and thirdly, the peculiar circumstances of the case. We leave the parties to bear their own costs. Rule is made assolute.