RAMESH ENTERPRISES ETCversusCOFFEE BOARD

                  RAMESH ENTERPRISES ETC.
                                                                          A
                                   v.
                          COFFEE BOARD

                        DECEMBER 7, 1990

       [RANGANATH MISRA, CJ, P.B. SAWANT AND                              B
                K. RAMASWAMY, JJ.]

     Coffee Act, 1942/Coffee Rules, 1955: Auction sale-Terms and
conditions-Clause JO-Increase or reduction in duty within 45 days
from date of auction-Equally shared by purchasers and Coffee
Board-Date of auction-Whether includible within the 45 days.
                                                                          c
      The appellants, exporters under the provisions of the Coffee Act,
1942 and Coffee Rules, 1955 used to participate in the auction con-
ducted by Respondent Board and purchase coffee for export. The terms
and conditions of the auction sale are fixed by the Board. In respect of
an auction held on 18.5.1977, some dispute arose on the interpretation D
of clause 10 of the terms and conditions. As per this clause, any increase
or reduction in duty effected within 45 days from the date of the auction
inclusive of that date was to be shared equally between the Respondent
Board and the anction pnrcbasers, with a view to fixing the reserve
price below which the specific lot of coffee was not to be sold at the
auctiom                                                                    E

      When the anction was held on 18.5.1977, the Respondent Board
took into consideration the dnty which existed till 17.5.1977. However,
on 18.5.1977, the date on which the anction was held, there was a
reduction in duty. thereafter, the Respondent-Board sent a circular to
all the registered exporters demanding refund of the proportionate F
amount of reduced duty as per clause 10 of the terms and conditions.
Accordingly, the exporters including the appellants refunded 50% of
the reduction in the duty. After making the payment, the appellants
wrote to the Respondent-Board asking for the return of the amount so
paid on the ground that since there was already a reduction in duty on
the date of the auction, it cannot be said that there was a reduction in G
duty within 45 days from the date of auction. The Respondent-Board
refused to refund the amount, as according to it, the reduction in duty
was effected on 18.5.1977 by the authorities and neither the Respon-
dent-Board nor the purchasers were aware of the same at the time of the
auction, and that the date of auction was includible within the period of
45 days mentioned in clause 10.                                           H

                                  495
    496         SUPREME COURT REPORTS                [1990] Supp. 3 S.C.R.

A         The appellants filed Writ Petitions in the High Court seeking
    direction to the Respondent-Board to repay the amount paid by them.
    The Writ Petitions were dismissed by a Single Judge on the ground of
    maintainability. He also held that since 45 days were to be counted
    including 'the day of auction, the Respondent-Board was entitled to
    proportionate reduction in duty. The Division Bench confirmed the
B   same.

          Aggrieved. the appellants preferred appeals by special leave.

          Dismissing the appeals, this Court,

          HELD: 1. An increase or reduction in duty made on the day of
C   auction is also shareable between the parties. The purpose of including
    the day of auction in the period of 45 days, contrary to the manner of
    computation of time in the General Clauses Act, is obvious and is
    brought home more prominently by the present instance itself. [501B-D]

D        2. Clause IO of the Terms and Conditions categorically states that
  any increase or reduction in taxes, duties etc. within 45 days of the
  auction (inclusive of the day of the auction) shall be shared between the
  auction purchasers and the Respondent-Board. Neither the Board nor
  any of the auction purchasers was aware of the reduction in ex~rt duty
  for which a communication was issued on 18th May, 1977 the date of
E auction itself. The board had fixed the reserve price on the basis of the
  export-duty which was prevalent till 17th May, 1977, the day prior to
  the date of auction. The imposts keep on changing and none of the
  parties has a control either over their variation or over the time of their
  variation. The dates of auction have necessarily to be fixed in advance.       '.~I
  It is to obviate the hardship or to grant the necessary benefit, as the case
F may be, that purposely the period of 45 days laid down In clause 10 is
  stipulated to include the day of the auction as well. [500E-H; 501A]


    CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 5965-66
    of 1990.

G        From the Judgment and order dated 3.11.1989 of the Karnataka
    High Court in W.A. Nos. 1917 and 2028 of 1984 respectively.

          Shanti Bhushan and Prashant Bhushan for the Appellants.

          G. Ramaswamy, M. Karanjawala, R.J. Babu, Ms. Rekha and
H
       RAMESH ENTERPRISES v. COFFEE BOARD [MISRA, CJ.I                497

Ms. Aditi Pratap for the Respondent.
                                                                              A
     The Judgment of the Court was delivered by

      RANGANATH MISRA, J. Special Leave is granted.

      Common questions of law and fact are involved in these two              B
appeals and they are being disposed of by this common judgment, The
appellants are registered exporters under the provisions of the Coffee
Act 1942 and the Coffee Rules. 1955. The repondent-Coffee Board
conducts auctions of coffee for the purpose of effecting export. The
registered exporters participate in the auction and purchase coffee for
export. The rerms and conditions of the auction-sale are fixed by the
Board. The auction on account of which the dispute involved in these
                                                                              c
appeals arose was held on 18th may, 1977. The dispute relates to the
interpretation of clause 10 of the terms and conditions of the said
auction. The clause reads as follows:

           "10. Tender of Bids: The Bid tendered shall be exclusive           D
           of Sales Tax, Central Excise duty, Customs duties, octroi
           duty and every other imposts and shall be on the basis of
           delivery of coffee ex-bags, excuring works.

                 However, should there be any change in the rates,
           taxes, duties and imposts mentioned above between the              E
           date of auction at which the exporter purchased the coffee
           and the expiry of a period of 45 days from the date of such
           auction, including the date of the auction, the consequent
           enhancement of the liability of the exporter for the pay-
           ment of any or all of such levies in respect of the coffees
           purchased at such auction and shipped within the above             F
           said period shall be to the account of the Board to the
           extent of 50 per cent of the increase in the rates of any or all
           such levies.

                  Provided, however, the extent of such enhanced
           liability which will be to the account of the Board shall be       G
           75 per cent of the increase in the rates of any or all such
           levies, if the coffees purchased at the auction are shipped
           within a period of 30 days from the date of the auction.

                Any increase ih the rates of any or all of such levies
           on coffee attracting the increased rates and not shipped           H
    498         SUPREME COURT REPORTS               (1990] Supp. 3 S.C.R.

               within a period of 45 days from the date of the auction at
A              which the coffees were purchased shall be entirely to the
               account of the exporter.

                      In case of any reduction of the liability of the
               exporters on account of any reduction in the rates of any or
B              all the taxes, duties and imposts within a period of 45 days
               from the date of the auction on c'Offees attracting such
               reduced rates of levies such reduction of liability shall
               accure to the Board to the extent of:

                     (a) 50 per cent of the reduction in the rates of any or
               all of such taxes, duties and imposts on coffees attracting
c              such reduced rates of levies and shipped within a period of
               30 days from the date of auction.

                     (b) 75 per cent of the reduction in the rates of any or
               all of such taxes, duties and imposts on coffees attracting
0              such reduced rates of levies and shipped beyond a period of
               30 days from the date of auction.

                     The additional sums that may become payable by the
               exporter to the Board as a consequence of such reduction
               in the rates of taxes, duties and other imposts shall be paid
E              within seven days from the date of shipment".

         2. Before were proceed fllrther, it is necessary to note two facts.
  The first is, as has been stated clearly in the above clause, that the
  period of 45 days is to be calculated from the date of the auction
  inclusive of that date. Secondly, the provision in the clause for sharing
F the excess or reduction in the rates, taxes, duties, imposts etc. is made
  for the express purpose of fixing the reserve price below which the
  specific lot of coffee is not to be sold at the auction. For fixing such
  upset price, the Board takes into account, among other things, the
  existing rates of taxes and duties. Admittedly, when the auction was
                                                                               I
  held on 18th May, 1977, the Board had taken into consideration,
G among other things, the export duty which existed till 17th May, 1977,
  i.e., the day prior to the date of the auction, and had fixed the reserve
  price accordingly. Since export duty is a component factor for the
  fixation of the upset price, the quantum thereof depends upon what
  the export duty at a given point of time is.

H         3. It appears that till 17th, May 1977 the export duty on coffee
            RAMESH ENTERPRISES v. COFFEE BOARD [MISRA, CJ.]              499

    was Rs.2,200 per quintal. However, on the 18th May, 1977, i.e., the
    date gn which the auction was held, it was reduced to Rs.1,600 per          A
    quintal. Admittedly, at the time the auction was held no communica-
    tion of the reduction of the duty issued at New Delhi had been
    received by the. Board, and the reserve price, therefore, was not
    altered by the Board to reflect it. There is no dispute that if the Board
    had received the said communication, the reserve price would have           B
    been fixed at a different level.

           4. In view of the reduction in the export duty made on and from
    18th May, 1977, the Board by its Circular of June 2, 1977 addressed to
    all registered exporters demanded refund of the proportionate amount
    of reduced duty in terms of the aforesaid clause 10. All the exporters
    including the present appellants refunded 50% of the reduction in the C
    duty. However, thereafter the appellants wrote to the Board asking
    for the return of the amount so paid contending that there was already
    a reduction in duty on the date of the auction, namely, on 18th May,
    1977 and, therefore, it cannot be said that there was a reduction in
    duty within-45 days from the date of the auction. The Board pointed D
    out that the reduction in duty was effected on 18th May, 1977 by the
    authorities at Delhi and, admittedly, neither the. Board nor the auction
    purchasers were aware of the said reduction at the time. the auction
    was held on that day. The Board also stated that the aforesaid clause
    ( 10) stipulated that the increase or reduction in duty effected within 45
    days from the date of auction inclusive of the said date, was to be E
    shared equally between the board and the auction purchasers. Since
    the reduction in duty was effected on the date of auction, the said day
    was includible within the period of 45 days mentioned in the said
    clause. The Board, therefore, refused to refund the amount.

          5. The appellants, therefore, filed separate writ petitions in the F
    High Court for a direction to the Board to repay the amount paid by
    them. It is not necessary to go into the other disputes between the
    auction purchasers and the Board which related to either the adjust-

I   ment of the amount paid against the other amounts due to the Board
    as in the case of the appellants M.S.P. Exports (P) Ltd. or the claim
    for additional amount of refund made by the Board against the other G
    appellants, namely, Ramesh Enterprises.

          6. The learned single Judge of the High Court dismissed the writ
    petitions both on the ground that the petitions were not maintainable
    under Article 226 being related to claims arising out of a purely com-
    mercial contract whether statutory or '!on-statutoty, and also on merits    H

             •
     500        SUPREME COURT REPORTS               (1990) Supp. 3 S.C.R.

  holding that since 45 days were to be counted including the day of
A ;!Cution, the Board was entitled to the proportionate reduction in duty.
  This decision was confirmed in appeal by the Division Bench on both
  the counts by the impugned judgment.

         7, Shri Ramaswamy, the learned counsel appearing for the
B  respondent )3oard raised a preliminary contention that in the first
   instance the contract out of which the present dispute arises was not
   statutory. Even if it was statutory, the dispute related to a purely
   commercial contract and no writ could lie to enforce either the terms
   of such contract or the claims arising out of it. The High Court had
   given clear finding on the said point and hence, the present appeal
   should be dismissed on that ground alone. Shri Shanti Bhushan, the
c ]earned counsel, appearing for the appellants submitted that assuming
   that the finding of the High Court was correct on that point, since the
   learned single Judge as well as the Division Bench had also decided the
   matter on merits, the appellants cannot now be asked to file suits since
   the said findings would come in their way if such suits are filed. Since
I) the High Court has decided the disputes between the parties on merits
   as well, we do not think it necessary to go into the question whether
   the contract between the parties was statutory or non-statutory and
   whether further assuming that the contract was statutory, writ peti-
   tions would lie for enforcing the terms of such contracts and the claims
   arising out of them. We propose to dispose of these appeals purely on
E  the interpretation of clause 10 of the contract.                     ·r

        8. We have already reproduced at the outset clause 10. The
  clause in terms states that any increase or reduction ru."taxes, duties
  etc. within 45 days of the auction (inclusive of the day of the auction)
  shall be shared between the auction purchasers and the Board. It is not
f disputed before us that neither the Board nor the auction purshasers
  was aware of the reduction in export duty for which a communication
  was issued at Delhi on 18th May, 1977 itself, It is also, therefore, not
  disputed that the )3oard had fixed the reserve price on the basis of the
  export-duty which was prevalent till 17th May, 1977. Shri Shanti
  Bhushan, the learned counsel, however, contended that when the
                                                                              1
G Change was effected in the export-duty on 18th May, 1977, the change
  Should be deemed to have come into operation with effect from the
  mid night of the 17th May, 1977 and before the commencement of the
  18th. Hence, it should be held that the rate of duty, namely, Rs.1600
  per quintal was in. operation at the time the auction was held on the
  18th May, 1977. There was, therefore, no change in duty at the time of
H the auction or any time within 45 days thereafter. This contention
            RAMESH ENTERPRISES v. COFFEE BOARD [MISRA, CL!                501

    though apparently attractive ignores the very vital provision in the said     A
    clause 10; namely, that the period of 45 days includes the day of the
    auction as well. Hence, an increase or reduction in duty ma.de on ihe
    day of auction is also shareable between the parties. The purpose of
    including the day of auction in the period of 45 days; contra.ty to the
    manner of computation of time in the General clauses Act; is obvious
    and is brought home more prominently by the present instance itself.
    As has been stated earlier; the reserve price is fixed on the basi~ of the
    rates, taxes; duties, etc. which are in existence till ihe day prior to the
    date of auction. These imposts keep changing and none of the parties
    has a control either over their variation or over the time of their
    variation. The dates of auction have necessarily to be fixed in advance.
    1t is 4o obviate the hardship ot to gtani the necessary benefit. as the       c
    case rntiy be, that putposeiy the _period of 45 days ·laid down in clause
     10 is stipulated to fndude the day of the auction as well. It is for this
    reason that we ate Utiable to accept the contention advanced by Shri
    Shanti Bhiishan and are in complete agreement with the impugned
    decision of the High Coutt on lherits.

           9, In the circumstances, we dismiss both the appeals with costs.

    G.N.                                                   Appeals dismissed.




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