{"id":108464,"date":"1998-11-11T00:00:00","date_gmt":"1998-11-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/world-tel-inc-anr-vs-union-of-india-anr-on-11-november-1998"},"modified":"2016-12-01T03:39:45","modified_gmt":"2016-11-30T22:09:45","slug":"world-tel-inc-anr-vs-union-of-india-anr-on-11-november-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/world-tel-inc-anr-vs-union-of-india-anr-on-11-november-1998","title":{"rendered":"World Tel Inc. & Anr. vs Union Of India & Anr. on 11 November, 1998"},"content":{"rendered":"
Delhi High Court<\/div>\n
World Tel Inc. & Anr. vs Union Of India & Anr. on 11 November, 1998<\/div>\n
Equivalent citations: 1999 IIAD Delhi 28, 77 (1999) DLT 127<\/div>\n
Author: C Mahajan<\/div>\n
Bench: R Lahoti, C Mahajan<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT <\/p>\n
C.K. Mahajan, J. <\/p>\n
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.\n<\/p>\n
 2.   The  respondent No. 2, Doordarshan is the sole Government  agency  for production and telecasting of television programmes in India.\n<\/p>\n
 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.\n<\/p>\n
 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.\n<\/p>\n
 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.\n<\/p>\n
 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.\n<\/p>\n
 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.\n<\/p>\n
 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.\n<\/p>\n
 9.   Shri  Arun  Jaitley, the learned Senior Counsel  for  the  petitioners submitted that the relief is sought for on three grounds:\n<\/p>\n
     (1) Under the agreement entered into between the petitioners  and
\n     the respondents;\n<\/p><\/blockquote>\n
      (2) By enforcing the undertaking given by the respondents  acting whereupon the petitioners have acted to their detriment;\n<\/p><\/blockquote>\n
      (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.\n<\/p><\/blockquote>\n
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.\n<\/p>\n
 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.\n<\/p>\n
 12.  Terms No. 1 to 5 thereof are as under :\n<\/p>\n
  (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.\n<\/p>\n
      (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.\n<\/p>\n
      (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.\n<\/p>\n
      (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.\n<\/p>\n
      (5)  The  event  will be a  “Doordarshan  Production”,  technical assistance provided by World Tel.”\n<\/p>\n
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.\n<\/p>\n
 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.\n<\/p>\n
 15.  The relevant portion of the said Fax reads as under :\n<\/p>\n
       “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.”\n<\/p>\n
 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.\n<\/p>\n
 17.  We are unable to read in the terms of the agreement that defendant No.
\n2  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.\n<\/p>\n
 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.\n<\/p>\n
 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, :\n<\/p>\n
 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.\n<\/p>\n
      (i)  It must be expressed to be made by the President or  by  the Governor of the State as the case may be;\n<\/p>\n
      (ii) it must be executed on behalf of the President or the Gover     nor, as the case may be; and\n \n\n      (iii) its execution must be by such person and in such manner  as the President or Governor may direct or authorise.\n \n\n      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\".  \n \n\n 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. \n \n\n<\/pre>\n
 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.\n<\/p>\n
 22.  The petition is accordingly dismissed. No order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court World Tel Inc. & Anr. vs Union Of India & Anr. on 11 November, 1998 Equivalent citations: 1999 IIAD Delhi 28, 77 (1999) DLT 127 Author: C Mahajan Bench: R Lahoti, C Mahajan JUDGMENT C.K. Mahajan, J. 1. The petitioner seeks a writ of mandamus against the respondents to reimburse them to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-108464","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nWorld Tel Inc. & Anr. vs Union Of India & Anr. on 11 November, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/world-tel-inc-anr-vs-union-of-india-anr-on-11-november-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"World Tel Inc. & Anr. vs Union Of India & Anr. on 11 November, 1998 - 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