M/S GOKULDAS EXPORTS versus M/S JAIN EXPORTS (P) LTD.

Citation: [2003] SUPP. 3 S.C.R. 378 · Decided: 04-09-2003 · Supreme Court of India · Bench: BRIJESH KUMAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
M/S GOKULDAS EXPORTS 
V. 
MIS JAIN EXPORTS (P) LTD. 
SEPTEMBER 4, 2003 
B 
[BRIJESH KUMAR AND ARUN KUMAR, JJ.] 
Export-Import Policy, 1981-82 Paras 198(2); 199(1); 211-Import 
licences-Second revalidation-Permissibility of-Held, not permissible-
Request for revalidation can be allowed for a period not exceeding six 
C months-Party seeking revalidation for a longer period has to make such 
a request while seeking revalidation at the first instance disclosing special 
reasons-Such request is to be considered with the approval of Chief 
Controller of Imports and Exports-There cannot be two requests for 
revalidation-IPC Circular No. 10104 dated 111511984-IPC Circular No. 
D 14192 dated 3/5/I982-Handbook of Import and Export Procedures I98/-
82-Para 201(2). 
Import Licences-Failure on part of licensee to utilise licences-
Claim for refund of proportionate amount of margin money-Appellant 
E obtaining import licences which were purchased by respondent as per an 
agreement-Appellant issuing requisite letter of authority in favour of 
respondent-Respondent unable to utilise licences during validity period 
of one year-Appellant seeking revalidation of licences at respondent's 
request which was extended for six months by licencing authority-Request 
F for second revalidation by respondent not complied by appellant on ground 
that second revalidation was not permissible-Claim of respondent for 
refand of proportionate amount of margin money received by appellant-
Maintainability of-Held, question of refand of proportionate amount of 
margin money did not arise-The agreement did not visualise any piecemeal 
G or pro rata payment of margin money based on utilisation of /icence-
Payment of margin money not linked to respondent's performance qua the 
licence. 
Import licence-Facilitating operation of-Meaning of-Held, it 
H means taking steps in order to see that the licence is folly exploited and 
378 
GOKULDAS EXPORTS v. JAIN EXPORTS (P) LTD. 
379 
does not cast any obligation to seek extension of the operation period of A 
the licence. 
Appellant obtained an import licence of the value of Rs. 1,91,28,382 
which was split into two licences, one for Rs. 1,00,000 and the other 
for Rs. 91,28,382. The licences were issued on 16/1/82. Respondent B 
purchased the licences from appellant as per agreement on 151~/82. In 
pursuance of the above agreement, appellant issued requisite Letter of 
Authority in favour of respondent. Respondent paid a sum of 
Rs. 7,65,135.28 to appellant being the minimum margin guaranteed 
under the terms of the agreement. 
c 
The validity period of licences was one year. Respondent was 
unable to utilise the licences during that period. Therefore, appellant 
sought revalidation of the licences at respondent's request. Accordingly, 
validity of the licences were extended for six months. The licences 
ultimately expired on 1st October, 1983. Subsequently, respondent D 
requested appellant to seek second revalidation of the licences. Appellant 
expressed regret in applying for second revalidation stating that Joint 
Chief Controller of Imports and Exports informed them that Letter 
of Authority facility had been withdrawn under the new Policy. 
Respondent disagreed stating that the new policy relating to E 
discontinuance of Letter of Authority would not apply to old cases 
where such letters had already been issued. 
Respondent, ultimately, filed a suit in the City Civil Court for 
recovery of the proportionate amount of margin money which the 
appellant had received from the respondent along with interest. The F 
trial court decreed the suit holding that appellant had committed 
breach of contract in not applying for second revalidation of the 
licences. Therefore, appellant was held liable to refund the proportionate 
amount of the margin money received. Appeal by appellant in the High 
Court was dismissed. Hence the present appeal. 
G 
Allowing the appeal, the Court 
HELD : 1.1. Second revalidation of the licence is not permissible. 
A reference to paras 198(2) and 199(1) of the Export-Import Policy, 
1981-82 shows that request for revalidation is not normally entertained. H 
380 
SUPREME COURT REPORTS [2003] SUPP. 3 S.C.R. 
A However, after considering the request on merit, request for revalidation 
can be allowed for a period not exceeding six months. If a party seeks 
revalidation for a longer period it has to make such a request while 
seeking revalidation at the first instance and the request has t

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