JUDGMENT
C.K. Mahajan, J.
1. The petitioner seeks a writ of mandamus against the respondents to reimburse them to the extent of Rs. 83,08,894.02 paid by them towards Customs duty with interest calculated @ 21 % per annum from 22nd March, 1996, that is, the date of payment by the petitioner, till the date of its realisation.
2. The respondent No. 2, Doordarshan is the sole Government agency for production and telecasting of television programmes in India.
3. According to the petitioner, the petitioner and Doordarshan, respondent No. 2, jointly agreed for the direct telecast of the Challengers Cup Cricket Tournament which was being held in Calcutta in March, 1995. It was a four days tournament to be held from 18th March to 21st March, 1995. The telecast of the Tournament was to be a Doordarshan production by the Doordarshan staff with technical assistance provided by the petitioners. Doordarshan undertook to provide entire crew personnel for the coverage of the Tournament at no charge. The petitioner was required to provide two engineers and a director/producer and all the technical equipments including uplink for Doordarshan to use for the coverage. The petitioner agreed to produce the programme on the understanding and assurance that the respondent No. 2 would provide to the petitioner with “all necessary Government of dia permits and clearances and required permission for uplink of the programme”. In this regard the petitioner would advise respondent No.2 to obtain all the permits and provide all relevant documentation. The petitioner was to provide access for the signal for transmission on respondent No.2’s network at no charge. In short this was to be a Doordarshan Production and technical assistance was to be provided by World Tel.
4. The petitioner requested the respondents for exemption of Customs duty and in this regard the Ministry of Information and Broadcasting was requested to have a letter issued to the Customs Authorities so that the Government permission for exemption of Customs duty for temporary import was issued at the earliest. The equipment temporarily imported into India would be used by respondent No. 2 only for the event of telecasting the Cricket Tournament and the same was to be re-exported immediately after the event. The respondent No. 2 undertook to obtain exemption of Customs duty for temporary import of the technical equipments by the petitioner for the Cricket Tournament. It was only on such an understanding and agreement that respondent No. 2 and the petitioner agreed to jointly telecast such programme for which the temporary import of the uplink equipments from England was essential. Respondent No. 2 failed to obtain 100% exemption from payment of customs duty and thus failed to keep its commitment. When the Customs Authority demanded 15%, of the total leviable customs duty amounting to Rs. 83,08,894.02, the respondent No. 2 gave an undertaking to the Customs Authority that respondent No. 2 would remit the said amount within the reasonable period. It was on such an undertaking being given by respondent No. 2 that the Customs Authority allowed temporary import of the equipments. Respondent No. 2, however, failed to make payment and as a result whereof the entire Customs duty was recovered from the petitioners by detaining their equipments which was subsequently temporarily imported one year later for another Tournament. It was in order to secure the release of that equipment which was detained by the Customs Authority that the petitioner made payment of Rs. 83,08,894.82 in March, 1996 under protest. Thereafter correspondence was exchanged between the petitioner and respondent No. 2 followed by discussions. Since the respondent No. 2 denied its liability to make such payment, the petitioner moved the High Court by way of the present writ petition under Article 226 of the Constitution for reimbursement of the entire amount paid towards Customs duty alongwith interest as well as the rental charges, demurrage charges etc. on account of respondent No. 2 failing to honour their undertaking and commitment.
5. Respondent No. 2 contested the claim of the petitioner and raised a preliminary objection that the claim of the petitioner was a money claim and could not be agitated by way of writ petition and payment of custom duty was neither a contractual nor a statutory liability of respondent No. 2 and the petition was liable to be dismissed.
6. Respondent No. 2 admits having entered into a memorandum of understanding with the petitioner in March, 1995 for coverage of the Challengers Cup Cricket Tournament. They also admit having agreed that all necessary Government permissions, clearances and required permission for uplink of the programme would be arranged for the petitioner by respondent No. 2. The respondent No. 2 had taken up the issue with the Ministry of Information and Broadcasting. However the Department of Revenue, Ministry of Finance, Government of India, did not agree to accord complete exemption to the petitioner for payment of customs duty under Section 25(2) of the Customs Act. In the circumstances respondent No. 2 denied its liability to pay Customs duty on import of the equipments by the petitioner. The respondent No. 2 also denied having given any undertaking for grant of Custom duty exemption. The stand taken up by resondent No. 2 is that Customs duty is the statutory liability of the person who imports the equipments and since the petitioner imported the equipments it is their liability to pay Customs duty. Any internal correspondence between the respondent No. 2 and the Custom Department could not confer any right on the petitioner to get exemption from payment of Custom duty. Payment of duty being a statutory liability could not be passed on to respondent No. 2 and in the circumstances the petitioner cannot claim any right for refund of custom duty from respondent No. 2.
7. From a perusal of the record and in particular the bill of entry for home consumption the name of the importer is given as J. Dalmia, President, Cricket Association of Bengal, Eden Garden, Calcutta. The Fax dated 19.3.1996 from Mr. K.S. Sarma, Director General, Doordarshan to Mr. S.L. Shankar, Collector of Customs, Calcutta, contains an indication that in the event of the Revenue Department not according to the request for tax exemption Doordarshan would undertake to pay the amount due to the Revenue Department. The equipment that was held up by the Customs Authority was the equipment that was used in connection with the Wills World Cup, 1996. The production of the telecast of this Tournament was also conducted by the petitioner and the technical equipments required for the production of the said event was again temporarily imported by the petitioner in the same manner as it had done for the Challengers Cup Cricket Tournament,1995. The said equipment was detained by the Custom Authority for the reason of non payment of 15% duty amounting to Rs. 83,08894.02 in connection with the equipments imported for the 1995 Tournament and which had not been paid either by the petitioner or the Doordarshan. The Customs Authority decided to recover the same from the petitioner by impounding their equipments. The duty amounting to Rs. 83,08894.02 was paid by the petitioner under protest and without then right to claim the said amount from the Doordarshan. Respondent No. 2 denied its liability or responsibility for any payment towards Customs duty.
8. The petitioner contended that the respondent No. 2 was bound to carry out its promise and undertaking to pay the Customs duty pursuant to the agreement entered into between petitioner and the respondent No. 2 for joint production of the Challengers Cup Cricket Tournament, 1995. The respondent No. 2 expressly undertook to obtain complete exemption from payment of custom duty and has now resiled from its commitment. Respondent No. 2 had given an undertaking to the Custom Department vide letter(Fax) dated 19.3.1996 to pay the duty within the reasonable time. The respondent No. 2 has taken unfair advantage of the vulnerable Position of the petitioner and the petitioner is aggrieved by the arbitrary and high handed action and respondent No. 2 is stopped from going back on their contractual obligations.
9. Shri Arun Jaitley, the learned Senior Counsel for the petitioners submitted that the relief is sought for on three grounds:
(1) Under the agreement entered into between the petitioners and
the respondents;
(2) By enforcing the undertaking given by the respondents acting whereupon the petitioners have acted to their detriment;
(3) Under the law, the respondents being “Importers” and hence liable to pay the customs duty, must reimburse the petitioners for the payment made by them under duress.
10. The first question that has to be considered is as to what were the contractual obligations between the petitioner and respondent No. 2 the terms and conditions settled between the parties.
11. The terms settled between the parties are spelled out by the agreement dated 7th March, 1995 which is in the shape of a letter.
12. Terms No. 1 to 5 thereof are as under :
(1) Doordarshan (“DD” ) will provide the entire crew personnel for the coverage of the above named tournament at no charge. A list of the crew requirements will be faxed to you in the next few days. The crew will be required to report to Eden Gardens at 9 a.m. on Thursday, March 16, 1995.
(2) World Tel will provide an the necessary technical equipment including an uplink for DD to use for the coverage. World Tel will also provide two engineers and a director/producer, who will assist DD as required.
(3) DD will provide World Tel with all necessary Government of India permits and clearances and required permissions for the uplink of the programme. World Tel will advise DD of the permits to be obtained and provide all relevant documentation.
(4) World Tel will provide access to the signal for transmission on DD’s network at no charge. As soon as the transmission sched-ule has been finalised, DD will advise World Tel of its planned transmission of the event.
(5) The event will be a “Doordarshan Production”, technical assistance provided by World Tel.”
13. It is contended by petitioner that respondents had undertaken either to persuade the Government of India to issue a notification exempting the import of equipments from payment of Customs duty or else to bear the same.
14. The main question that requires to be considered is whether the respondent No. 2 had undertaken to pay the Customs duty for the temporary import of the equipment. The terms of the agreement provide that the petitioner will provide all the necessary technical equipment including an uplink for the Doordarshan and the respondent No. 2 will provide to the petitioner with all “necessary Government of India permits and clearances and required permission for uplinking of the programme.” The Counsel for the petitioner has placed reliance on term (3) of the agreement. He contends that undertaking to persuade the Government to issue a notification exempting the import of equipment from payment of Customs duty or to bear the same is to be read in the said term. He further contends that the Fax dated 19.3.1996 reiterates the undertaking of respondent No. 2.
15. The relevant portion of the said Fax reads as under :
“In case the Revenue Department does not accede to the reiteration of our request for tax exemption in respect of the matter under discussion Doordarshan would undertake to pay the amount due to the Revenue Department.”
16. Upon receipt of the Fax by Mr. R. Basu, Director General, Doordarshan the equipment was released by the Customs Department and shifted back to England on 30th March, 1995. From a perusal of the correspondence available on the record we are unable to find any undertaking given by the Doordarshan to the petitioner for payment of Customs duty. The bill of entry for home consumption clearly shows the name of importer as J. Dalmia, President, Cricket Association of Bengal. However there is ink noting in the said bill of entry to the fact (Ministry of Information and Broadcasting): in C 601/1/195/TV (P-3). It is sought to be contended that the import was made in the name of Ministry of information and Broadcasting and therefore respondent No. 2 was liable to pay the import duty. Customs duty is the statutory liability of a person who imports the equipment. The equipment was imported by the petitioner.
17. We are unable to read in the terms of the agreement that defendant No.
2 had undertaken to pay the Customs duty. There is also nothing in the agreement to suggest that respondent No. 2 took the responsibility for procedural formalities relating to import and export of the equipments. The correspondence exchanged between the petitioner and the respondents and the Department of Revenue amply illustrate that respondent No. 2 had agreed to take up the issue of exemption of tax for import of the equipment with the Customs Authorities/Revenue Deptt. or had undertaken to pay the Customs duty. Respondent No. 2 did take up the matter with the Revenue Deptt/Customs Authority who in turn after examining the matter informed respondent No. 2 on 28th March, 1995 that it would not be possible to completely waive the Customs duty on the temporary import of the equipment. The exemption order called for 150%. duty on the import of the equipment. It is contended by the Counsel for the petitioner that Mr. R. Basu, the then Director General of the Doordarshan had issued an undertaking directly to the Customs Deptt. accepting the responsibility for payment of this 15% tax. The said undertaking has not been produced by the petitioner nor it is to be found on the record. The affidavit further categorically states that no undertaking, as alleged to have been given, is available on record and that respondent No. 2 was responsible for obtaining necessary clearances/permissions from the concerned agencies for up linking of programmes only and not for any payments towards Customs duties. There is nothing on the record to substantiate the contention of the petitioner. In fact the petition raises disputed questions of fact and for determination of these disputed questions of fact evidence has to be led. It is not appropriate or proper to go into the disputed questions of facts in exercise of jurisdiction under Art. 226 of the Constitution.
18. The liability to pay Customs duty cannot be inferred from the facts and circumstances of the present case. There can be no implied contract between respondent No. 2 and the petitioner. Three conditions have to be satisfied before a binding contract against the Doordarshan could arise: (a) the contract must be expressed to be made by the President; (b) it must be executed in writing; (c) and the execution should be by such person and in such manner as the President may direct or authorise. The intention of the Parliament/Legislature in enacting Article 299 is that the State should not be burdened with the liability based on unauthorised acts. So long as the requirements of Art. 299 are fulfillled and are clear from the correspondence exchanged between the parties a binding contract comes into existence, between the parties. The contract has to be in full compliance with Art. 299(1) otherwise it would be no contract at all and could not be enforced either by the Government or by any other person as a contract. In the present case the terms of the agreement do not show that there was a binding contract between the petitioner and respondent No. 2 with regard to the payment of Customs duty. No implied contract can be spelled out which provides for liability of respondent No. 2 to pay Customs duty for the equipment temporary imported into India by the petitioner. There can thus be no question of recovery of any money.
19. Article 299(1) of the Constitution of India provides that all contracts made in the exercise of the executive power of the Union shall be expressed to be made by the President and shall be executed on behalf of the President by such person and in such a manner as he may direct or authorise. It has been held in Bihar Eastern Gangetic Fishermen Co-operation Ltd. Vs. Sipahi Singh, :
The provisions of Article 299 of the Constitution which are mandatory in character require that a contract made in the exercise of the executive power of the Union or of a State must atisfy three conditions, viz.
(i) It must be expressed to be made by the President or by the Governor of the State as the case may be;
(ii) it must be executed on behalf of the President or the Gover nor, as the case may be; and
(iii) its execution must be by such person and in such manner as the President or Governor may direct or authorise.
Failure to comply with these conditions nullifies the contract and renders it void and unenforceable. There is no question of estoppel or ratification in a case where there is contravention of the provisions of Art. 299(1) of the Constitution".
20. The provisions of Art. 299(1) of the Constitution are mandatory in director and any contravention of these provisions nullifies the contracts ant1 makes them void. There is no question of estoppel or ratification in such a case.
21. The agreement between the parties is clear and unambiguous. The respondent No. 2’s obligation was to persuade the Customs Authorities to release the equipments but were unsuccessful and accordingly advised the petitioner to take such course of action as they thought fit. As per the agreement signed between the defendant No. 2 and petitioner for coverage of the Challengers Cup, defendant No. 2 had agreed that all necessary Government permits and clearances and required permissions for the uplink of the programme will be arranged for the petitioner. In the circumstances respondent No. 2 was not liable to pay any Customs duty on the import of equipment by World Tel . The petitioner cannot thus claim any refund of Customs duty from respondent No. 2. Since the respondents are not liable under the provisions of Customs Act to pay the Customs duty in question, any assurance given by the respondent No. 2 in respect of any matter pertaining to Customs duty cannot amount to an undertaking or contract between the parties. Unless the exemption is granted by the Government of India, Ministry of Finance in exercise of powers conferred under Section 25(2) of the Customs Act, no such exemption can be allowed to the petitioner. Statutory liability arising under the provisions of the Customs Act under no circumstances can be the liability of respondent No. 2, who had only agreed to assist the petitioner in obtaining the Customs exemption. The exemption had been granted in favour of the petitioner earlier by the Ministry of Finance, Government of India on 18.10.1994 and the petitioner was aware of the fact that such an exemption is necessary from the Deptt. of Revenue, Ministry of Finance under Section 25(2) of the Customs Act. In our opinion the claim of the petitioner for refund of the amount from the Doordarshan is not tenale in law on any of the three grounds urged by the petitioners and is liable to be rejected.
22. The petition is accordingly dismissed. No order as to costs.