The District forest OfficerSalem DivisionSalem v. M/s.Laxmi Impex & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:27.04.2009CORAM:THE HON'BLE MR.JUSTICE P.JYOTHIMANIANDTHE HON'BLE MRS.JUSTICE ARUNA JAGADEESANWRIT APPEAL Nos.1212 & 1213 of 2007and connected miscellaneous petitionsThe District forest OfficerSalem DivisionSalem... Appellant inboth the appeals.vs.M/s.Laxmi Impex rep. By itsPartner Vijayendra GuptaNo.19 Tarun EnclavePitampuraDelhi 110 085... Respondent in W.A.No.1212/2007M/s.Surya Vinayak Industries Ltd.,rep. By its Director Sanjay JainNo.201 Mohan Tower1 Community CentreWazirpur Industrial AreaDelhi 110 052... Respondent in W.A.No.1213/2007Writ Appeals are filed against the common order of the learnedsingle Judge made in W.P.Nos.16121 & 16122 of 2002 dated 21.12.2006.Praying to forbear the respondent from demanding any demurrage orpenalty from the petitioner on the 33.000 MT, 32.000 MT of Sandalwoodpurchased by the petitioner on 24.01.2002 pursuant to the saleconfirmation order having reference C.No.1353/02 and C.No.1342/02dated.04.02.2002 respectively passed by the respondent.For appellant: Mr.S.N.Kirubanandam Spl.Govt.Pleader (Forest)For respondent : Ms.C.Uma in WA.1212/07For respondent : No appearancein WA.1213/07 https://hcservices.ecourts.gov.in/hcservices/ COMMON JUDGEMENTP.JYOTHIMANI,J.The above appeals are directed against the common order of thelearned Judge dated 21.12.2006 made in W.P.Nos.16121 and 16122 of2002, by which the learned Judge allowed the writ petitions filed bythe respondents herein to the extent that the demand of demurrage isnot legally payable by the writ petitioner.2. The learned Judge has relied upon the judgment of this Courtin W.P.Nos.17292 of 1993 and 797 of 1994 (Sree Mahalakshmi FlourMills vs. State of Tamil Nadu) dated 15.06.2001, by which the clauseregarding the payment of demurrage in the tender conditions in thatcase, which is identical to the clause in the present case, wasconsidered. The said clause is a follows:" If he fails to take delivery of the wood after allthe amounts due on such wood are paid within the 'voidah',the wood will be kept in double lock or single lock as thecase may be until such time as agreed to take deliverythereof and he shall be liable to pay a demurrage ofRs.30/- per tonne per day for each day the wood so kept indouble lock or single lock beyond 75 days."3. On facts, it is clear as it is submitted by the learnedcounsel for the appellant that the auction for the sale of 2 M.Ts. ofsandalwood took place on 24.01.2002 and as per the clause in thetender conditions, the writ petitioners paid 20% of EMD. The salewas confirmed by order dated 04.02.2002 which was served on the writpetitioners on 09.03.2002. As per the terms of the tender, afterconfirmation, within 15 days, another 30% of the amount had to bepaid and the remaining amount of 50% had to be paid within 45 days,but the respondent/writ petitioners did not pay the said amountwithin the time. The learned counsel for the appellant submitted thatthe respondents paid the entire amount on 08.05.2002 and thereafter,they took delivery on 11.05.2002 and for the period from 08.05.2002to 11.05.2002, the demurrage charge has been imposed on the writpetitioner/respondents.4. A reading of the proceedings of the District Forest Officer,Salem Division in C.No.1353/02-S dated 10.05.2002 makes it clear thatthe said official has permitted the respondent/writ petitioners totake delivery of the materials on 11.05.2002. It is, pursuant to thesaid order, the delivery was taken on 11.05.2002.5. Mr.N.Kirubanandam, learned Special Government Pleaderappearing for the Forest Department would submit that the writpetitioners were permitted to pay the entire amount on 08.05.2002with penal interest and though the amount was due much earlier, the https://hcservices.ecourts.gov.in/hcservices/ petitioner took steps to pay the amount only on 08.05.2002 and tookdelivery on 11.05.2002 and there was delay of 3 days and in respectof those three days demurrage charges were imposed. In support of hiscontention, he would also rely upon the judgment of the DivisionBench of this Court in Writ Appeal No.405 of 2003 etc., batch dated25.10.2007. 6. We do not agree with the learned Special Government Pleaderfor Forest Department for the reason that the official concernedhimself had given permission to the writ petitioner/respondents totake delivery of the materials only on 11.05.2002 and hence, thewrit petitioner/ respondents could not be expected to enter into theplace on 08.05.2002, the date on which the amount was paid. It isrelevant to point out that the writ petitions were filed on04.05.2002 and pending the writ petitions, the Forest Department haspermitted the writ petitioners to pay the entire sale considerationon 08.05.2002. In the judgment relied upon by the learned SpecialGovernment Pleader, viz., Writ Appeal No.405 of 2003 etc., batchdated 25.10.2007 the Division Bench, in paragraph 20 and 21, hasmade it very clear that, "20. In respect of demand of penalty and demurrage, theclause containing the demurrage proceeds that on thepurchasers presenting challan as proof that 50% of salevalue having been paid, the fact of remittance would beverified with the bank by asking for the triplicate copy ofthe challan or bank advice. On the receipt of which aproportion of the wood purchased will be weighed in his orin the agent's presence and the quantity handed over to him.If, however, proof is produced that the entire sale valuehas been paid, the whole quantity of sandalwood purchasedwill be weighed and handed over after due verification ofthe factum of remittance as above. The purchaser must takedelivery or remove the whole of the goods sold to him within75 days from the a of receipt of confirmation order. If hefails to take delivery of woods after all the amounts due onsuch wood are paid within the voidah, the wood would be keptin double lock or single lock as the case may be until suchtime as agreed to take delivery thereof and he shall beliable to pay a demurrage Rs.30/- per tonne per day for eachday the wood so kept in double lock or single lock beyond 75days.21. On the reading of the above condition it is clearthat on payment of the entire amount by the successfulbidder and on handing over of the goods to the purchaser, ifthe purchaser failed to take delivery within the voidahdate, the woods would have to be kept in double or singlelock as the case may be until such time as agreed to takedelivery thereof and the purchaser shall be liable to pay ademurrage Rs.30/- per tonne per day for each day the wood https://hcservices.ecourts.gov.in/hcservices/ kept in double or single lock beyond 75 days from the dateof confirmation."The Division Bench has also held that the question of demurrage wouldarise only after the entire amount is paid. As per the clause in thetender notification, if the amount stipulated is not paid within thetime prescribed in the tender conditions, it is open to the ForestDepartment to cancel the contract by forfeiting the entire amount andre-auction the same to third parties. Such a thing has not happenedin this case. The Forest Department having allowed the writpetitioners to pay the entire amount on 08.05.2002, cannot now turnaround and say that the writ petitioners delayed the payment,especially when the official has passed an order permitting the writpetitioners to take delivery on 11.05.2002. In such view of thematter, it is not possible to interfere with the order of the learnedJudge. Accordingly, the writ appeals fail and the same aredismissed. No costs. Connected miscellaneous petitions are closed. Sd/- Asst. Registrar / True Copy / Sub.Asst Registrar khToThe District forest OfficerSalem DivisionSalem.+ 1 cc to Special Government Pleader(Forest)SR.18166+ 1 cc to Ms.C.Uma,Advocate,SR.18007 WRIT APPEAL Nos.1212&1213/07KU(CO)EM/4.6.09