Lmj International Ltd. vs Dankuni Steels Limited

There is some litigation pending between the appellant herein and respondent Nos. 1 to 4. Though, it is not necessary to state in detail the nature of dispute between them, some aspects thereof which are relevant for this case shall be taken note of at the appropriate stage. At this juncture, it is pertinent to note that the Division Bench of the High Court in those proceedings between the appellant and respondent Nos. 1 to 4 had passed direction for sale of 10000 Metric Tons (MT) of Metallurgical Coke (Met Coke) by public auction. The Special Officer was appointed Digitally signed by NIDHI AHUJA Date: 2017.12.14 for this purpose who conducted the sale. Four bids were 17:29:44 IST Reason:

2 was given instructions to clear the consignment on his behalf. The appellant herein, which is an export house, claimed that it had a title over 10000 MT of the aforesaid consignment of Met Coke out of the entire consignment. Goods were cleared by respondent No. 2 and the cargo was stored at the custom bonded warehouse. However, respondent No. 2 turned down the request of the appellant to keep separate stock of 10000 MT of Coke over which it was making his claim. This led to filing of application by respondent No. 2 under Section 9 of the Arbitration and Conciliation Act, 1996 in which certain orders were passed. Respondent No. 1 also filed Civil Suit No. 17 of 2013 seeking Civil Appeal No. 20902 OF 2017 Page 2 of 14 decree for delivery of entire consignment. These proceedings travelled upto the High Court wherein order dated July 29, 2015 was passed giving directions to sell 10000 MT of Met Coke out of the aforesaid stock. The High Court in that order noted that the issue as to whether the appellant had justified claim over 10000 MT of Met Coke or not is to be decided by the Court after trial. Since no definite conclusion could be arrived at this stage on the basis of affidavits alone, the High Court deemed it proper that the said quantity, namely, 10000 MT of Coke be sold and the proceedings thereof be kept apart so that this money is ultimately handed over to the parties succeeding in the suit. The relevant portion of the directions contained in the order dated July 29, 2015 is as under:

3) Pursuant thereto, the Special Officer got public notice published in the daily newspapers ‘The Hindu’ and ‘Andhra Jyoti’ for sale of 10000 MT of coke fixing reserved/base price of Rs.13000 per MT. Four offers were received along with 10% of earnest money. All these four bids were submitted by the Special Officer with his report to the High Court on April 3, 2017. Offer of respondent No.5 herein at Rs.14000 per MT was the highest.

4) Before the High Court could consider these offers, one M/s. Suyati Impex Pvt. Ltd. intervened and requested the High Court that it should be permitted to bid. The Court vide order dated April 24, 2017 permitted him to participate and deposit the earnest money by April 28, 2017 by extending the time of submission of bids upto April 30, 2017. However, said Suyati Impex Pvt. Ltd. failed to give earnest money. In these circumstances, report was given by the Special Officer that M/s. Suyati Impex Pvt. Ltd. did not participate in the bidding process. Civil Appeal No. 20902 OF 2017 Page 4 of 14 In the aforesaid backdrop, bid of respondent No. 5 remained the highest bid. However, the appellant opposed the acceptance of the said bid with the contention that one Siona Enterprise had appeared before the Court in the meantime and offered price of Rs.14500 per MT inclusive of taxes, custom duty, Value Added Tax, port charges etc. Objection to the bid made by respondent No. 5 was also raised on the ground that the paid amount of Rs.14000 per MT was, in fact, less than the reserve price inasmuch as the aforesaid amount offered by respondent No. 5 was inclusive of all taxes etc. and once those taxes are reduced from the said amount, it was much less than Rs.13000 per MT which was the reserved price.

In this backdrop, we are of the opinion that a Special Officer be appointed to inspect the aforesaid godowns and make an inventory of the goods lying therein and thereafter to take steps for sale of 10000 MTs of coke out of the stock lying at R-5 and Ripley godown. The sale price of the aforesaid consignment after clearance of customs duty and port charges thereon shall be deposited by the special officer with the Registrar, Original Side, who shall keep the same in an interest Civil Appeal No. 20902 OF 2017 Page 3 of 14 bearing fixed deposit account in a nationalized bank subject to the result of the suit. The appellant and/or R-4 (Concast) shall be at liberty to take delivery of remainder of the stock lying in the godowns after clearing the customs duty and port charges thereon, if any, in accordance with law. This order shall not preclude R-1 (Sarat) from taking steps for recovery of its handling and other service charges in accordance with law, if so advised.”

There shall, however, be no order as to costs.

DECEMBER 14, 2017.

Civil Appeal No. 20902 OF 2017 Page 14 of 14