ESCORTS LIMITED Vs. FOREIGN EXCHANGE REGULATION APPELLATE BOARD
HIGH COURT OF DELHI
FOREIGN EXCHANGE REGULATION APPELLATE BOARD
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G.C.Jain, J.- -
(1.)This judgment shall also dispose of Cr. A. 252/79 (H. P. Nanda & others v. Foreign Exchange Regulation Appellate Board & Another) as both these appeals arise out of a common order.
(2.)There is no dispute so far as the facts of the case are concerned. S/Shri H. P. Nanda, G. K. Hazari, Rajan Nanda and Surjit Singh appellants in the other appeal are managing director, joint director, vice-president respectively of M/s. Escorts Limited (for short the company), appellant in this appeal. Besides various other activities the appellant company is also carrying on the export business in readymade garments. In the year 1971 it exported readymade garments goods worth Rs. l4,55,770.00 to Raja Rani Corporation, New York (for short 'the buyer'). By letter dated February 10, 1972 the buyer raised disputes regarding the quality of the goods exported and the late supply. It proposed to pay 50^, of the price without prejudice to its rights or a reference of the disputes to the arbitrator or appointment of an independent investigator such as Consul General of India in New York for checking its records and verifying the accuracy of the statements made by it. This followed another letter dated March 2, 1973 in which the buyer indicated that it had suffered loss in excess of $1 lac 50 thousands, it was not possible for it to bear the burden of such a huge amount and it was always ready and willing to get the matter investigated. A cheque for $5000 was enclosed as the first payment against the settlement proposed in the first letter. The company wrote a letter on April II, 1972 to the Consul General of India, Embassy of India, Washington requesting them to obtain the financial standing of the buyer and to ascertaain the quantity and the invoice value of the goods said to be lying in stock with the buyer and to use their good officers in pressurising the buyer to make payments in full in order to avoid legal complications. After some correspondence the buyer agreed to pay 50% of the price with condition that for the balance of the amount the company would have to seek arbitration. The permission of the Reserve Bank of India was sought in this behalf, and was accorded vide their letter dated January 3, 1973. A sum of Rs. 8.98 lacs was received leaving a balance of 5.57 lacs.
(3.)On April 28,1973, the Reserve Bank of India accorded the approval for the appointment of Consul General of India, Washington to arbitrate the dispute regarding the recovery of the remaining amount. On May 14, 1973 the comany wrote a letter to the Consul General, Embassy of India, New York to arbitrate in the matter. On July 16,1973 the company was informed by the Consul General of India that they were not in a position to function as arbirrator in the said dispute. The company was further informed that the matter regarding the arbitration of the dispute was under consideration. After certain reminders Consul General ultimately informed the company vide its letter dated January 21, 1974 that the matter had been referred to the Ministry of Commerce for consideration and the comany would hear from them shoitly. 'The Deputy Secretary, Ministry of Commerce, Government of India vide letter dated February II, 1974 advised the company to pursue the matter further under the auspices of the American Arbitration Association, New York. A copy of this letter was sent to the Reserve Bank of India by lhe company vide its letter dated February 16,1974.
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