JUDGMENT <NAME>, J.

1. The respondent filed an application for winding up <ORG> (hereinafter referred to as "the company"). The petition was admitted by an order dated March 6, 1990. An appeal was preferred against the order by the company. This application has been filed in the appeal for stay of the order dated March 6, 1990. More than two months after the filing of the appeal, a reference was made by the company under Section 15 of the Sick Industrial Companies (Special Provisions) Act to <ORG> (hereinafter referred to as "the <ORG>") constituted under the Act. The reference has been registered by the secretary of the <ORG> under regulation 19 of <ORG> Regulations, 1987 (hereinafter referred to as "the Regulations"), on June 25, 1990. These facts were brought on record by way of a supplementary affidavit filed by the company.

2. The only question to be determined is whether, under these circumstances, the winding up proceedings against the company must be stayed under the provisions of Section 22(1) of the Act. No other point has been put forward in support of the stay application on behalf of the company.

3. It is contended by Mr. <NAME>, appearing for the company, that the winding up proceedings must be stayed. In support of this contention, the following submissions have been made :

(i) Immediately upon the registration of the reference, an enquiry under Section 16 must be said to be pending within the meaning of Section 22(1) of the Act. According to Mr. <NAME>, after the registration of a reference under Section 15 , the <ORG> has no option but to hold an enquiry under Section 16 of the Act. It is argued by way of analogy that a suit is said to be pending when it is filed and not only when the court takes up the suit for hearing. Similarly, according to him, an enquiry is pending when the reference is made and- not only when the enquiry is in fact held.

(ii) It was further argued by Mr. <NAME> that the preamble of the Act would indicate that the Act is a remedial measure for rehabilitation of sick companies and that the object of the Act would be frustrated if the winding up proceedings were permitted to be continued after the reference was made and before the <ORG> had an opportunity of considering the case. In support of this proposition, reliance has been placed on a passage from <NAME> on the Interpretation of Statutes, twelfth edition, page 45, which reads as follows :

"If the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that <ORG> would legislate only for the purpose of bringing about an effective result."

(iii) It is also contended by Mr. <NAME> that, in the event there was any doubt regarding the construction to be put on Sections 15 , 16 and 22 of the Act, the doubt should be resolved in favour of the company on the principle that the Act is a beneficial piece of legislation. In support of this argument, Mr. <NAME> has relied upon a passage in Maxwell on the Interpretation of Statutes, twelfth edition, page 92 :

". ..... even where the usual meaning of the words falls short of the object of the <ORG>, a more extended meaning may be attributed to them, if they are fairly susceptible of it ...... this relaxation of strictly literal principles of interpretation "(has been referred to) as beneficial construction : and the modern cases provide many instances of the judge's reluctance to stand upon the letter of a statute. They will not, of course, supply omissions, but where they are faced with a choice between a wide meaning which carries out what appears to have been the object of the <ORG> more fully, and a narrow meaning which carries it out less fully or not at all, they will often choose the former. Beneficial construction is a tendency, rather than a rule."

Reliance was also placed on the decision of Pilcher J. in Estate of Rippon [1943] 1 All ER 676.

(iv) It is lastly contended by Mr. <NAME> that in the event the <ORG> has an option not to hold an enquiry under Section 16 and chooses not to do so, an appeal could be preferred under the Act by any aggrieved person to the appellate authority from such refusal. In such case, even though the <ORG> has not commenced the enquiry under Section 16(1) , the provisions of Section 22(1) would in terms be immediately applicable.

4. Mr. <NAME>, appearing on behalf of the respondent, submitted :

(i) The phrase "enquiry under Section 16 is pending" in Section 22(1) of the Act means that the <ORG> should have applied its mind to the question whether it would enquire into the matter or cause an enquiry to be made under Section 16(2) . It was argued on behalf of the respondent that the registration of the reference by the secretary under regulation 19 is a mere ministerial act. According to Mr. <NAME>, the secretary does not form part of the <ORG> and has distinct functions allotted to him under Section 8 of the Act.

(ii) Mr. <NAME> further contended that the language of Section 16 would make it clear that there is a discretion which is vested in the <ORG> either to make or not to make an enquiry. It is contended that mere registration does not make an enquiry imperative under Section 16 . It is further argued that as soon as an enquiry is commenced by the <ORG>, it is a mandatory requirement that the <ORG> should appoint one or more persons to be a special director or special directors of the company for safeguarding the financial and other interests of the company. According to Mr. <NAME>, this would indicate that the enquiry commences only with the <ORG> taking a decision under Section 16(1) or (2) to hold or cause an enquiry to be held. In support of this argument, reliance has been placed upon the decision of <ORG> in <CITATION> . as well as on the unreported decisions of <NAME> in <ORG> v. <ORG> (Suit No. 46 of 1988, decided on 24-3-88) ; of <NAME> In re <ORG> (C. P. No. 185 of 1988, decided on 11-7-88) and of <ORG> of this court in <ORG> v. <ORG> (App. No. ... of 1990 decided on 19-4-90). It is stated that the object behind the appointment of a director under Section 16(4) is to protect the assets of the company keeping in view that the proceedings against the company have been stayed.

(iii) It is also argued that it would be open to any company which wished to avoid payment to its creditors to file a reference before the Board and contend that the creditors cannot recover their dues.

(iv) In answer to the question of interpretation of Sections 16 and 22 , Mr. <NAME> relied upon the principle that the jurisdiction of a court cannot be excluded or limited except by an express provision of law. It is also contended that any statute purporting to curtail the jurisdiction of courts must be strictly construed. It is contended that the principle of beneficial construction of a statute can apply only if there is ambiguity in the wording of the Section to be construed. It is stated that Sections 16 and 22 are not ambiguous and that there is no scope for applying the principle of beneficial construction. In support of this facet of his argument, Mr. <NAME> has relied upon the decision of <ORG> in <CITATION> , .

5. We are of the view that the contentions of Mr. <NAME> must be accepted.

6. We do not think that, after the registration of a reference under Section 15 of the Act, the <ORG> has no option but to hold an enquiry. The word "may" in Section 16(1) would indicate that the <ORG> can refuse to hold an enquiry. This power must, in any event, be taken to be a necessary corollary to the power to hold an enquiry. It is possible that if the <ORG> finds a reference to be frivolous, it may exercise its option of not holding an enquiry at all. We are fortified in our finding by the three unreported decisions relied upon by Mr. <NAME>. Although this issue was not specifically raised before <ORG> in the Gram Panchayat's case, , we cannot lose sight of the observations of <ORG> in paragraph 10 of the decision, viz. (at page 173 of 71 Comp Cas) :

"As soon as the enquiry under Section 16 is ordered by the Board, the various proceedings set out under Sub-section (1) of Section 22 would be deemed to have been suspended."

7. However, in our view, it is immaterial whether the Board has an option to hold or not to hold an enquiry under Section 16 of the Act in view of our interpretation of Section 22(1) .

8. Section 22(1) in so far as it is material provides as follows :

"22(1) Where, in respect of an industrial company, an inquiry under Section 16 is pending or ... .where an appeal under Section 25 relating to an industrial company is pending, then .... no proceedings for the winding up of the industrial company .... shall be proceeded with further, except with the consent of the Board or, as the case may be, the appellate authority."

9. We are of the view that the phrase "enquiry pending under Section 16 " does not include a reference under Section 15 . We are supported in our view by the scheme of the Act.

10. The scheme of the Act would show that a distinction is drawn between a reference, enquiry and scheme. Apart from the heading of Chapter III of the Act, the regulations would also show that a distinction is drawn between a reference and an enquiry. Regulation. 19 deals with references under Section 15 while regulation 20 deals with enquiries under Section 16 . An inquiry under Section 16 is, therefore, only a stage in the proceedings contemplated under the Act. If one were to adopt the analogy of a suit as submitted by Mr. <NAME>, the inquiry could be equated with the actual trial. A trial cannot be said to be pending merely because a suit is filed. Similarly, an enquiry under Section 16 cannot be said to be pending merely because a reference is filed,

11. In any event, the words of the statute are explicit. Section 22 refers to an enquiry under Section 16 . Had it been the intention of the <ORG> to extend the provisions of Section 22 to a reference made under Section 15 , the <ORG> would have provided for that expressly. This the <ORG> has not chosen to do.

12. The use of the words "under Section 16 " limits the words "enquiry pending" in Section 22(1) . The provisions of Section 22(1) apply only to such enquiries and to no other. It is well-established that, if the language is clear, the court must give effect to it, for "the words of the statute speak the intention of the <ORG>". In these circumstances, the case of In re Eippon  1 All ER 676, as well as the two passages from <NAME> cited by Mr, <NAME> can have no application.

13. In view of the express wording of the statute, there is no question of the application of the principles of beneficial construction. In any event, Section 2 of the Act indicates that the Act has been enacted for giving effect to the directive principles as contained in Articles 39(b) and (c). of the Constitution of India. The principles contained in Articles 39(b) and (c) relate to subserving the common good as opposed to concentration of wealth.

14. It would appear from the Statement of Objects and Reasons of the Act that one of the objects of the Act is to salvage the productive assets and realise the amount due to the banks and other financial institutions to the extent possible from the non-viable industrial companies through liquidation of those companies.

15. In other words, the benefit of the legislation is not aimed merely at reviving a sick industry but also to put an end to a non-viable sick industry with a view to protecting investment of public funds.

16. At the time of the registration of a reference, the secretary is expected only to see whether the documentation is in order. The secretary is not required to come to any decision regarding the merits of the reference. There is necessarily some hiatus between the registration of the reference and the commencement of the enquiry. As stated above, one of the objects of the Act is to protect public investment made through financial institutions. If we accept the construction of Section 22(1) put forward by Mr. <NAME>, it would defeat the objectives sought to be achieved by the Act. For example, a company, with the mischievous intent of avoiding its creditors, could file a reference under Section 15 with untruthful but correct documentation. It may be that the circumstances of the case may not warrant the filing of a reference in fact. According to Mr. <NAME>, the documentation being in order, the secretary would register the reference under regulation 19 and the enquiry under Section 16 would be pending from that date. The result would be that recovery proceedings by a financial institution would be stalled for a crucial period allowing the dishonest company time to siphon off its assets. This cannot have been the intention of the <ORG>.

17. In this background, the contention of Mr. <NAME> that any ambiguity in the statute must be resolved in favour of the company is also not tenable.

18. Section 16(3) of the Act also indicates that the enquiry is to be commenced by the <ORG>. The <ORG> is required to complete- the enquiry within 60 (sixty) days from the commencement of the enquiry. This cannot mean that the <ORG> must complete the enquiry within 60- (sixty) days from the registration of the reference but must be construed as meaning from when the <ORG> first applies its mind. We also accept Mr. <NAME>'s submissions that mere registration of a reference by the secretary to the <ORG> cannot mean any application of mind by the <ORG> itself.

19. Furthermore, it will appear from Section 22(1) that proceedings may be continued against the industrial company with the consent of the <ORG>. This would suggest that the <ORG> would have to apply its mind for the purpose of determining whether the consent should be granted or not. If the <ORG> has not commenced any enquiry at all, it would not be in a position to accord such consent.

20. The final contention of Mr. <NAME>, namely, that because an appeal may lie from the decision of the <ORG> not to hold an enquiry, therefore, the phrase "pending enquiry under Section 16 " in Section 22(1) of the Act must include references registered under Section 15 is, in our view, a non sequitur. Merely because <ORG>, in its wisdom, has made Section 22(1) applicable to appeals and permitted proceedings against the company to be stayed pending such appeal, that cannot lead to the conclusion that the phrase "on enquiry under Section 16 " in Section 22(1) must include a reference under Section 15 of the Act. We do not wish to speculate as to the reason why <ORG> included the pendency of appeals as a situation warranting stay of all proceedings. Suffice it to say that, in view of the clear wording of Section 22(1) , there is no need to embark upon an enquiry into the intention of <ORG>.

21. In that view of the matter, we dismiss this application and vacate all interim orders.

22. In the circumstances of this case, however, there will be no order as to costs.

23. In view of the decision given by us in this application, we do not think that any useful purpose will be served in keeping the appeal pending. The appeal is, therefore, treated as on the day's list and dismissed with no order as to costs. The appellant is discharged from its undertaking.

<NAME>, <NAME>

24. I agree.


CASE NO.: Appeal (civil) 4060 of 2001 PETITIONER: M/s <NAME> RESPONDENT: Vs. Commissioner of Customs, New Delhi DATE OF JUDGMENT: 07/07/2003 BENCH: M.B. SHAH & <NAME> JUDGMENT:

J U D G M E N T Shah, J.

Questions requiring consideration in this appeal are:— (A) Whether over-invoicing of the goods for export would mean attempt to export 'prohibited goods'? and (B) Whether, while exporting the goods, exporter has to give value of the goods as provided under Section 14 of the Customs Act, 1962 (hereinafter referred to as 'the Act') or the value of goods which he expects to receive on sale of goods in the overseas market?

The facts in brief are:— It is stated that the appellant is engaged in the export of garments. Appellant received an order from an overseas buyer i.e. from Dubai, for supply of ladies' skirts, the contracted price for which was said to be approximately $10.25 per piece. Appellant filed 4 shipping bills in 1998 for export of 28000 pieces of ladies skirts @ $10.25 per piece (Rs.434 per piece) amounting to Rs.1,21,54,447/-. On checking, the actual quantity of the skirts was found to be 21184 pieces. On enquiry, the market price of the skirts was ascertained to be Rs.45/- per piece, according to which total value of the goods comes to Rs.9,53,280/-. The exporters had claimed a draw back of Rs.21,87,800/- on the consignment @ Rs.78/- per piece. For shortage of goods, vide letter dated 4.2.1999, the exporters pleaded that it was an unintentional mistake which had happened on the part of the fabricators and suppliers. During the course of hearing, on 6.2.1999, for the drawback, it was admitted by the exporters that the market price of Rs.45/- per piece was acceptable to them and that their claim for drawback be not granted. The Commissioner of <ORG> noted that this was the second such case belonging to the same exporters and that there was an organized racket to claim fraudulent drawback by deliberately over-invoicing the readymade garments. The Commissioner of <ORG> imposed a redemption fine of Rs.10,00,000/- and levied a penalty of Rs.20,00,000/-. It was held that no drawback was admissible even if the party exported the goods in terms of Section 76 of the Act as the market value of the goods was less than the amount of drawback claimed.

Being aggrieved by the said order, the appellant filed appeal before <ORG>, New Delhi (hereinafter referred to as 'the <ORG>'). The <ORG> also dismissed the appeal and held that the over-invoicing of the goods for exportation was an offence under the Act. Hence, this appeal.

At the time of hearing of this appeal, learned senior counsel Mr. <NAME> for the appellant submitted that the appellant is not claiming any drawback and, therefore, that question is not required to be dealt with. However, his contention is – Section 113(d) is not applicable to the facts of the present case as the goods are not prohibited goods. He further stated that exporter is not required to declare the market value of the goods which he would fetch in the market in India. He is required to declare the value of the goods which he is expected to receive from the overseas purchaser and that is the scheme of the Customs Act as well as of the allied Acts.

Learned Additional Solicitor General Mr. <NAME>, on the other hand, contended that over-invoicing is not permitted under the Act as it is in violation of statutory provisions. He further submitted that at the time of export, the exporter has to give correct value of the goods and that correct value of the goods would be the value of goods which he would fetch in market in India or which he is likely to fetch from overseas purchaser.

At the outset, we would state that the learned counsel for the appellant has not pressed for the drawback in view of specific provision of Section 76 which inter alia provides that no drawback shall be allowed "(b) in respect of any goods the market-price of which is less than the amount of drawback due thereon". Therefore, for the purpose of getting drawback, relevant consideration is the market price of the goods prevailing in the country and not the price of the goods which the exporter expects to receive from the overseas purchaser.

Next — as the order for confiscation of goods is passed by referring to Section 113(d) of the Act, we would refer to the same. It reads as under: — "113. Confiscation of goods attempted to be improperly exported etc.— The following export goods shall be liable to confiscation:—

(d) any goods attempted to be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force."

The aforesaid Section empowers the authority to confiscate any goods attempted to be exported contrary to any 'prohibition' imposed by or under the Act or any other law for the time being in force. Hence, for application of the said provision, it is required to be established that attempt to export the goods was contrary to any prohibition imposed under any law for the time being in force. Further, Section 2(33) of the Act defines "prohibited goods" as under:— "prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with." From the aforesaid definition, it can be stated that (a) if there is any prohibition of import or export of goods under the Act or any other law for the time being in force, it would be considered to be prohibited goods; and (b) this would not include any such goods in respect of which the conditions, subject to which the goods are imported or exported, have been complied with. This would mean that if the conditions prescribed for import or export of goods are not complied with, it would be considered to be prohibited goods. This would also be clear from Section 11 which empowers <ORG> to prohibit either 'absolutely' or 'subject to such conditions' to be fulfilled before or after clearance, as may be specified in the notification, the import or export of the goods of any specified description. The notification can be issued for the purposes specified in sub-section (2). Hence, prohibition of importation or exportation could be subject to certain prescribed conditions to be fulfilled before or after clearance of goods. If conditions are not fulfilled, it may amount to prohibited goods. This is also made clear by this Court in <CITATION> [] wherein it was contended that the expression 'prohibition' used in section 111 (d) must be considered as a total prohibition and that the expression does not bring within its fold the restrictions imposed by clause (3) of the Import Control Order, 1955. The Court negatived the said contention and held thus:— "… What clause (d) of Section 111 says is that any goods which are imported or attempted to be imported contrary to "any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to in that section applies to every type of "prohibition". That prohibition may be complete or partial. Any restriction on import or export is to an extent a prohibition. The expression "any prohibition" in section 111 (d) of the Customs Act , 1962 includes restrictions. Merely because Section 3 of the Imports and Exports (Control) Act, 1947, uses three different expressions "prohibiting", "restricting" or "otherwise controlling", we cannot cut down the amplitude of the word "any prohibition" in Section 111(d) of the Act. "Any prohibition" means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition. From item (I) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But nonetheless the prohibition continues."

The next question is — Is there any prohibition imposed under other law which is for the time being in force? For this purpose, reliance is placed upon Section 18 of the Foreign Exchange Regulation Act, 1973, relevant part of which reads thus:—

18. Payment for exported goods.— (1)(a) The Central Government may, by notification in the Official Gazette, prohibit the taking or sending out by land, sea or air (hereafter in this section referred to as export) of all goods or of any goods or class of goods specified in the notification from India directly or indirectly to any place so specified unless the exporter furnishes to the prescribed authority a declaration in the prescribed form supported by such evidence as may be prescribed or so specified and true in all material particulars which, among others, shall include the amount representing:—

(i) the full export value of the goods; or

(ii) if the full export value of the goods is not ascertainable at the time of export the value which the exporter, having regard to the prevailing market conditions, expects to receive on the sale of the goods in the overseas market, and affirms in the said declaration that the full export value of the goods (whether ascertainable at the time of export or not) has been, or will within the prescribed period be, paid in the prescribed manner.

This Section contemplates that exporter is required to furnish to the prescribed authority in prescribed form declaration of true material particulars which include:—

(a) the amount representing the full market export value of the goods; or in the alternative,

(b) if the full export value of the goods is not ascertainable, the value which the exporter expects to receive on the sale of the goods in the overseas market, and

(c) the exporter has to affirm that full export value of goods will be received.

These two clauses of Section 18 leave no doubt that exporter is not concerned with the prevailing market price in India of the goods sought to be exported, but he is required to disclose true export value of goods. That is to say, exporter has to disclose full and true sale consideration – export value of the goods. The notification issued in exercise of the power under Section 18 also inter alia provides that Central Government prohibits the export of all goods unless exporter furnishes to the prescribed authority a declaration in the prescribed form of material particulars including the full export value of the goods or in the alternative the value of the goods which he expects to receive on their sale in overseas market. Hence, importance is given to the value of goods which exporter is to receive. It also provides that the exporter shall affirm in the declaration that full export value of the goods has been or will within prescribed period be paid in the prescribed manner. Further, the learned Additional Solicitor General referred to the notification issued under the said Section, relevant part of which reads thus:— "GSR.78—In exercise of the powers conferred by sub-section (1) of Section 18 of the Foreign Exchange Regulation Act, 1973 , and in supersession of the notification of <ORG> in <ORG> (Department of Economic Affairs) No.GSR 2641, dated the 14th November, 1969, <ORG> hereby prohibits the export, otherwise than by post, of all goods, either directly or indirectly, to any place outside India, other than Nepal and Bhutan, unless the exporter furnishes to the prescribed authority a declaration in the prescribed form supported by such evidence as may be prescribed or so specified and true in all material particulars which, among others, shall include the amount representing:—

(i) the full export value of the goods, or

(ii) if the full export value of the goods is not ascertainable at the time of export, the value which the exporter, having regard to the prevailing market conditions, expects to receive on the sale of the goods in the overseas market, and affirms in the said declaration that the full export value of the goods (whether ascertainable at the time of export or not) has been, or will within the prescribed period be, paid in the prescribed manner."

Apart from the aforesaid provision, for finding out the true export value of the goods, Section 14 of the Act provides relevant procedure. Section 14 is to be read along with Section 2(41) , which defines the word 'value'. Section 2(41) reads as under:— "S. 2 (41) — "value", in relation to any goods, means the value thereof determined in accordance with the provisions of sub- section (1) of section 14 ."

Thereafter, relevant part of Section 14 reads thus:— "14. Valuation of goods for purposes of assessment. — (1) For the purposes of the Customs Tariff Act , 1975  or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value, the value of such goods shall be deemed to be— the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international trade, where the seller and the buyer have no interest in the business of each other and price is the sole consideration for the sale or offer for sale:

Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under section 46 , or a shipping bill or bill of export, as the case may be, is presented under section 50 ;

(1A) Subject to the provisions of sub-section (1), the price referred to in that sub-section in respect of imported goods shall be determined in accordance with the rules made in this behalf.

(2) Notwithstanding anything contained in sub- section (1) or sub-section (1A) if <ORG> is satisfied that it is necessary or expedient so to do, it may, by notification in <ORG>, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. (3) …. "

The aforesaid Section would be applicable for determining the value of goods for the purposes of assessment of tariff under the Act or any other law for the time being in force whereunder a duty of customs is chargeable on any goods by reference to their value. In the present case, on export of goods in question, no duty was payable under the Act. It was, therefore, contended that there is no scope of application of Section 14 for determining the value of goods by applying the criteria laid down in the said Section. In our view, this submission cannot be accepted. For determining the export value of the goods, we have to refer to the meaning of the word 'value' given in Section 2(41) of the Act, which specifically provides that value in relation to any goods means the value thereof determined in accordance with the provisions of sub-section (1) of Section 14 . Therefore, if the export value of the goods is to be determined, then even if no duty is leviable, the method (mode) for determining the value of the goods provided under Section 14 is required to be followed. Section 14 specifically provides that in case of assessing the value for the purpose of export, value is to be determined at the price at which such or like goods are ordinarily sold or offered for sale at the place of exportation in the course of international trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for sale. No doubt, Section 14 would be applicable for determining the value of the goods for the purpose of tariff or duty of customs chargeable on the goods. In addition, by reference it is to be resorted to and applied for determining the export value of the goods as provided under sub- section (41) of Section 2 . This is independent of any question of assessability of the goods sought to be exported to duty. Hence, for finding out whether the export value is truly stated in the shipping bill, even if no duty is leviable, it can be referred to for determining the true export value of the goods sought to be exported. It is true that Section 50 of the Act inter alia provides that before exporting the goods the exporter shall make entry thereof by presenting to the proper officer in the case of goods to be exported, a shipping bill and a bill of export in prescribed form. The Shipping Bill & Bill of Export (Form) Regulations, 1991 inter alia prescribes the said form. After that form is amended w.e.f. 15.6.2001, it is stated that exporter shall state "Value – FOB/PMV where applicable". We are not required to deal with this aspect in this appeal as the goods were sought to be exported in the year 1998.

From the aforesaid provisions, mainly, Section 2(41) read with Section 14 of the Act and Section 18 of the Foreign Exchange Regulation Act, 1973, it is crystal clear that:—

(a) Exporter has to declare full export value of the goods (sale consideration for the goods exported).

(b) Exporter has to affirm that the full export value of the goods will be received in the prescribed manner.

(c) If the full export value of the goods is not ascertainable, the value which the exporter expects to receive on the sale of the goods in the overseas market.

(d) Exporter has to declare true or correct export value of the goods, that is to say, correct sale consideration of the goods. Criterion under Section 14 of the Act is the price at which such or other goods are ordinarily sold or offered for sale in the course of international trade where the seller and buyer have no interest in the business of each other and the price is the sole consideration for sale or offer for sale.

To the same effect, Rule 11 of the Foreign Trade (Development and Regulation) Rules, 1993 provides. This Rule is to be read along with Section 11(1) of the Foreign Trade (Development & Regulation) Act , 1992, which inter alia provides that no export or import shall be made by any person except in accordance with the provisions of this act, the rules and the orders made thereunder and the export and import policy for the time being in force. Rule 11 reads thus:— "11. Declaration as to value and quality of imported goods.—On the importation into, or exportation out of, any customs ports of any goods, whether liable to duty or not, the owner of such goods shall in the bill of entry or the shipping bill or any other documents prescribed under the Customs Act , 1962 , state the value, quality and description of such goods to the best of his knowledge and belief and in case of exportation of goods, certify that the quality and specification of the goods as stated in those documents are in accordance with the terms of the export contract entered into with the buyer or consignee in pursuance of which the goods are being exported and shall subscribe to a declaration of the truth of such statement at the foot of such bill of entry or shipping bill or any other documents."

Hence, in cases where the export value is not correctly stated, but there is intentional over-invoicing for some other purpose, that is to say, not mentioning true sale consideration of the goods, then it would amount to violation of the conditions for import / export of the goods. The purpose may be money laundering or some other purpose, but it would certainly amount to illegal / unauthorised money transaction. In any case, over-invoicing of the export goods would result in illegal/irregular transactions in foreign currency. Learned senior counsel Mr. <NAME> submitted that in some cases, exporter may get much higher value of the goods than the market price prevailing in the country and, therefore, merely because higher export value is mentioned, it cannot be inferred that it is not the true sale consideration. In some cases, this hypothetical contention may be right. However this would depend upon facts and circumstances as well as evidence on record in each case. If the goods are easily available in the market, then it would be difficult to arrive at the conclusion that a foreign buyer – a prudent businessman would pay ten times more than the prevailing market price of readymade clothes, particularly, in the days where information is easily available through internet or various other sources. In any case, when margin of profit appears, on the face of it, unreasonable, it is for the exporter to establish that it was a true export value stated in the shipping bill. Section 14 itself contemplates that the price at which such or like goods are ordinarily sold or offered for sale in the course of international trade would be the value of the goods. <CITATION> [], full export value of the goods was not correctly stated in the shipping bills along with G.R. I forms and it was a case of under-valuation in respect of full export value of goods. In that set of circumstances, the Court upheld the order passed by the authorities that there was violation of Section 12(1) of the Foreign Exchange Regulation Act, 1947.

In the present case, as found by the authorities, 28,000 pieces of ladies skirts at the rate of $10.25 per piece, export value of which was mentioned as Rs.1,21,54,447/-, were sought to be exported. The market price of such skirts was ascertained to be Rs.45/- per piece and on that basis total value of the goods came to be Rs.9,53,280/-. The exporter claimed a drawback of Rs.21,87,800/- on the consignment on the basis that value of each skirt was Rs.78/- per piece. No doubt, during the enquiry exporter admitted that the market price of Rs.45/- per piece was acceptable to him and the claim for drawback was withdrawn. Thereafter, the exporter has not led any evidence that export value mentioned in the shipping bill was the true sale consideration for the goods sought to be exported. Considering the aforesaid facts and also the fact that this was the second case belonging to the same exporter, the authorities arrived at the conclusion that it was an organized racket to claim fraudulent drawback or an act of deliberate over-invoicing the readymade garments. Hence, the authority imposed redemption fine as well as levied penalty. In our view, this finding arrived at by the authorities below cannot be said to be, in any way, unreasonable which would call for interference by this <ORG> in this appeal. In the result, the appeal is dismissed. There shall be no order as to costs.

I.A. No.3 OF 2002 We had heard learned counsel for the intervenor on the question of law involved in this appeal. I. A. stands disposed of accordingly.


JUDGMENT <NAME>, J.

1. The petitioner is a society registered under the Tamil Nadu Co-operative Societies Act LIII of 1961. It has a manufacturing unit at Cudilore in which cotton fabrics are woven. It has also another unit called the yarn and cloth processing centre at Erode. Under the Central Excises and Salt Act , 1944, manufacture of cotton fabrics is liable to excise duty. But Notification No. 47 of 1962, dated 24th April 1962, <ORG> exempted unprocessed cotton fabrics falling under Item No. 19 of the First Schedule to the Central Excises and Salt Act if manufactured on a handloom, from the whole of the duty leviable thereon. The petitioner, <ORG>, as one manufacturing handloom fabrics falling under Item No. 19, therefore, under the said Notification, was exempt from excise duty in respect of cotton fabrics, woven in the Cuddalore unit. By two other Notifications No.111 and No. 112 of 1962, dated 13-6-1962, <ORG>, in exercise of their powers under Rule 8 of the Central Excise Rules, 1944, provided for levy at concessional rate in respect of processed fabrics made from grey fabrics when processed by an independent processor. The concession consisted of two parts. In respect of the first 20,000 sq. metres of cotton fabrics cleared, the goods were exempt from the whole of excise duty; and in respect of those in excess of 20,000 sq. metres, a concessional rate of duty at four fifths of the normal rate was levied. But these these notifications were subject to the condition that the processing was done by an "independent processor." The words "independent processor" is defined in the Notification as meaning a manufacturer, who is engaged exclusively in the processing of cloth with the aid of power, and who has not properietary interest in any factory engaed in the spinning of yarn or weaving of cotton fabric. There is no dispute that petitioner society is engaged in processing of cloth with the aid of power. But the only dispute is whether the petitioner-society has any proprietory interest in any "factory".

2. The Assistant Collecton of <ORG> <NAME> considered tnat the existance of its factory in Cuddalore, where weaving cotton fabrics is done, would disentile, the petitioner-society to the concessional levy. He accordingly issued a notice to the petitioner on 27th April, 1966, stating that since the petitioner-society is not an "indepenent processor" Within the meaning of the definition in the Notification, it would not be entitled to the concessional levy and that the levy and collection of excise duty at the concessional rate was a mistake. He accordingly demanded the difference between the normal rate of duty and the amount collected at the concessional rate from the petitioner-society for the period from 14.6.1962 to 4.3.1963, which amounted to Rs. 1,32,767.10, be paid by the petitioner. He also ordered that the petitioner-society is liable to pay duty at the normal rate from 5,3.1966;

3. So far as difference in the levy for the period from 14.6,1962 to 4.3.1963 is concerned, it has now been held that Rule 10A is not applicable and that the difference could not also be collected under rule as it is barred by limitation.

4. So far as the subsequent period is cohcerned, the petitioner had paid duty at the normal rate under protest and claimed the benefit of the Notifications. The Assistant Collector of <ORG> helt that since handloorn fabrics which are woven in the <ORG> factory of the petitioner-society are excisable goods coming under Item No. 19 of the First Schedule to the Act, the petitioner is not an "independent processor" within the meaning of that term in the Notification and that, therefore, it is not entitled to concessional levy. That order of the Assistant Collector was confirmed by the Collector of <ORG> and by the Goverment of India ultimately.

5. In this writ petition, the Learned Counsel for the petitioner contends that the factory at Cuddalore owned by the petitioner will not come within the definition of the term in the Act and that, therefore, the petitioner should be deemed to be an "independent processor" in respect of the processing unit at <ORG>. 'Factory' is defined in Section 2(a) of the Act as follows:

"Factory" means any permises, including the precints thereof wherein or in any part of which excisable goods other than salt are manufactured of wherein or in any part of which any manufacturing process connected with the production of there good is being carried on or is ordinarily carried on."

The term "excisable goods" is denned in Section 2(d) of the Act as the following:

"Excisable goods" means goods specified in the First Schedule as being subject to a duty of excise and includes salt."

6. It is the contention of the learned Counsel for the petitioner-society that on the exemption of cotton fabrics by Notification No. 47, dated 24.4.1962, the goods ceased to be "Excisable goods" within, the meaning of the term in Section 2(d) , According to the learned Counsel, in order to be satisfied in the First Schedule, they should also IK subject to a duty of excise. He also contends that any other construction will make the words "as being subject to a duty of excise "redundant,, and it would have been enough to define excisable goods specified in the First Schedule. In other words, specification of the goods as an Item in the First Schedule as also subjecting them to a duty of excise are to be satisfied as cumulative conditions in order to bring the goods within the definition of "excisable goods". The Learned Counsel relies upon the Notification exempting goods from the levy of excise duty as amounting to taking away the goods from the category of "excisable goods".

7. We are unable to agree with the contention of the learned Counsel. We are of the view that the words "as being subject to a duty of Excise" in the definition of the term "excisable goods" are only descriptive of the goods specified in the First Schedule, and have no reference to the factum of their Liability to duty. In fact, it is seen that some of the rate of duty as 'NIL'. It could not be contended that these goods are not 'excisable goods'. In this connection, we may also refer to Section 3 , which is the charging section, which provides for the levy and collection of excise duty on all excisable goods. Produced or manufactured in India at the rate set forth Schedule, thereby showing that excisable goods in the, definition in the section refer only to the description of the goods in column (2) of the First Schedule, and not to the rate of duty in column (3) of that Schedule. The exemption granted by the Notification of <ORG> made on 24.4.1962. only exempts handloom fabrics from the levy of excisable duty and it does not change the nature and character of the goods as excisable goods within the meaning the Act. The Notification proceeds on the assumption that the handloom fabrices are excisable goods. If the handloom fabrice are not excisables goods, there was no need or occasion for exempting the same from the levy of excise duty. We are unable to agree with the learned Counsel for the petitioner that once the handloom fabrics are exempted from excise duty, they cease to be excisable goods. As we have already pointed out, the character as excisable goods does not depend on the actual levy of duty, but on the description as excisable goods in the First Schedule to the Act. We are, therefore, unable to interefere with the orders of the respondents.

8. The writ petitioner accordingly fails and it is dismissed. The rule nisi is discharged. But there will be no order as to costs.


<NAME>, J.

(1) The plaintiff, <ORG> filed this suit against the defendant, <ORG> for a permanent injunction against the defendant restraining it from selling in any manner its product under the brand name Curechlor' or any other deceptively mark similar to the registered trade mark of the plaintiff 'Peclor' with respect to the pharmaceutical preparation known as Chloramphenicol. Along with the suit the plaintiff filed this application under Order 39 Rules I and 2 and Section 151 of the Code of Civil Procedure with the same prayer for temporary injunction till the decision of the suit.

(2) The case of the plaintiff is that the plaintiff has been selling the said product under the trade mark 'Reclor' in India from the year 1971 to March 1, 1977 through the instrumentality' of its registered users, <ORG> and <ORG> and that from March 1. 1977 onwards till now the said product is being sold by its proposed registered users, <ORG> It is alleged that the trade mark Reclor' with respect to the said substance was registered in favor of the plaintiff in India on May 4, 1966. This was registered with respect to medicinal and pharmaceutical preparations. The further allegations of the plaintiff are that in October 1984, the plaintiff came to know that the defendant had also been selling the medicine containing Chloramphenicol under the trade name Curechlor' in capsules. According to the plaintiff the defendant has appropriated the trade mark of the plaintiff and has added the letters 'Cu' in the beginning and has added the letter h after c of the trade mark 'Reclor of the plaintiff and that the trade mark 'Curechlor' as adopted by the defendant is deceptively similar, visually and phonetically, with its trade mark 'Reclor'. The plaintiff in paragraph 8 of the application made a specific averment that the defendant's preparations 'Curechlor' is likely to be supplied mistakenly by the druggists and chemists when 'Reclor' is prescribed. It was further stated that it was quite possible that even a trained nurse might be misled into giving to a patient 'Curechlor' in place of 'Reclor'.

(3) The question for consideration is as to whether the adoption of the trade mark 'Curechlor' by the defendant for its product containing the basic drug 'Chloramphenicol' amounts to inparations. The further allegations of the plaintiff are that in supreme <ORG> in the case of <CITATION> ., considered the question as to whether the word 'Dropovit' was deceptively similar to the word 'Protovit', both of them being vitamin preparations. In this case <ORG> and Co. Ltd. had applied for rectification of the registration granted in favor of <ORG> of the trade mark 'Dropovit' in respect of medicinal and pharmaceutical preparations and substances' The Supreme <ORG> held that the question of deceptive similarity must be decided on the basis of class of goods to which the two trade marks applied. It was observed that from the nature of the goods it was likely' that most of the customers would obtain a prescription from a doctor and show the same to the chemist before the purchase. In such a case, except in the event of the handwriting of the doctor being very bad or illegible' the chance of confusion was remote. The Supreme <ORG> also on a comparison of the competing trade marks came to the conclusion that the trade mark 'Dropovit' was not deceptively similar to the trade mark <ORG> Mr. <NAME>, learned counsel for the defendant, also cited a few English judgments relating to the cases of pharmaceutical preparations namely, Re : Bayer Products, Lid's Application, (1947) 2 AU. E.R. 188,(2) <ORG> Chelsea Drug and Chemical Company Limited, (1966) Rpc 64(3) and <ORG> v. <ORG>., (1975) Rpc 545. (4) He also referred to the decision in the case of <ORG>, Calcutta v. <ORG> Kanpur, Air 1965 Punjab 17;(5) <CITATION> , and <ORG> v. A. Wulfing and another,, (1979) 3 Iplr 193 (Born. HC). (7) He also referred to para 671 of Narayanan on Trade Marks and Passing-Off (Third Edition). These judgments deal with cases of pharmaceutical preparations and a similar view has been taken in all these judgments as was * taken by the Supreme <ORG> in <NAME> case (supra) i.e. that the question of deceptive similarity must be decided on the basis of class of goods to which the two trade marks applied. We have to judge the case of the plaintiff on the principal as stated above.

(4) The two trade marks in question are obviously not similar visually as the trade mark of the defendant starts with the letter 'Cu' preceding the entire trade mark 'Reclor' of the plaintiff. There is also an addition of the letter 'h' after the letter 'c' of 'Reclor". Phonetically also there is a distinct dissimilarity between the two trade marks 'Reclor' and 'Chrechlor'. I do not agree with the submission of Mr. <NAME> that there is a great similarity in the two marks phonetically as suggested by him that the letter 'cu' which creates the distinction in the two marks phonetically may sometimes be spoken feebly or may not be quite audible to a person with whom an order is placed for the sale of 'Reclor' It is also worth noting that that the name of the defendant company is <ORG> The defendant has filed its price list effective from July 1, 1985. This shows that the plaintiff has brand names for a number of its preparations starting with the word 'Cure' such as 'Curecycline', 'Curemide, 'Curemox Curifam'. Curebutorl 'Curepar and 'Curedopa Nothing has been alleged by plaintiff that the defendant has adopted the trade mark Curcchlor' dishonestly with a view to trade on the trade mark 'Reclor' of the plaintiff. To the contrary the fact that the plaintiff's name is <ORG> and a number of its products have the letters 'Cure' appended in the beginning to its brands goes to show that the adoption .of She trade mark Curechlor' by the defendant for marketing 'Cholramphenical' which is the base drug, is a bean fide one. The defendant's counsel explained that the defendant has adopted the letters 'Cure' from its trading style and has adopted the word 'chlor' from the product itself just as the plaintiff has done for Its mark 'Rcclor' as is the common practice with the pharmaceutical companies. The preparation 'Chloramphenicol' which is being marketed by both the sides under ihe two brand names is admittedly a Schedule 'H" drug end as per sub-rule (9)(a) of Rule 65 of the Drugs and Cosmetics Rules, 1945 substances specified in Schedule or Schedule X shall not be sold by retail except on and in accordance with the prescription of a- Registered Medical Practitioner. The supply of drugs specified in Schedule or Schedule X to Registered Medical Practitioners, Hospitals, Dispensaries and Nursing Homes can also be made only against the signed order in writing which ha.) to be preserved by the licensee for a period of two years. There arc conditions given for the purposes of preparation of prescriptions also with regard to the Schedule drugs. Sub-rule (11) of Rule 65 says that persons dispensing a prescription containing a drug specified in Schedule H, like the drug in question, shall comply with the requirements as detailed there under which also places a number of restrictions on the dispensing chemists for their sale to customers. The dispensing chemists also according to these rules have to be persons qualified in the Science of Pharmacology. Thus keeping in view these safeguards and restrictions regarding the stocking and sale to customers thereto by the chemists I am of the considered view that the chemists who alone are to sell the product in question to customers are not likely to be confused by the trade mark of the defendant when they have to sell the product of the plaintiff under the brand name 'Rector'. It may also be stated that the plaintiff has not placed any material whatsoever on the record to prima facie show, nor even alleged that any particular person whether an ordinary customer or a chemist was misled to take the product of the defendant as that of the plaintiff. The plaintiff has placed two cash memos on the record relating to the sale of the product of the defendant under the name 'Curechlor'. In both the cash memos the name of the patient as also the name of the doctor prescribing the same are duly given which showed that the preparation in question of the defendant is sold only on the prescription of a Medical Practitioner. Thus in view of what has been said above I am of the view that the plaintiff does not have a goods prima facie case and it does not have a good chance of ultimate success in the suit for the perpetual injunction as prayed for by it.

(5) Mr. <NAME>, learned counsel for the plaintiff, also cited a number of judgments in support of his contention that the trade mark 'Curechlor' is deceptively similar to the trade mark 'Rector' in respect of medicinal preparations. It was pointed out that in the case of <ORG> v. <ORG>, (8) a photo copy of which judgment was placed on the record, an order allowing a temporary injunction in favor of <ORG> plaintiff j respondent, restraining the defendant/appellant from using the trade mark 'Kempsillin' in respect of the medicinal preparation was affirmed. In that case the plaintiff's registered trade mark was 'Campicillin'. A perusal of the judgment shows that the ratio to the decision in that case was that there was 99 per cent phonetical similarity in the two names. Such is not the position in the present case when we compare the two marks 'Reclor' and 'Curechlor'. In <ORG> v. <ORG> 1980 Iplr 117,(9) the Lucknow Bench of <ORG> held that the trade mark 'Winotone' amounted to infringement of the trade mark 'Vintone' when both of them were in respect of medicinal preparations. There is obviously a great similarity phonetically in both these marks. Besides that the preparations in that case were mere tonics and were not Schedule 'C' or Schedule 'H' drugs.RS so that they were to be dispensed by the chemists on a prescription of a Medical Practitioner only. This judgment is, therefore, distinguishable from the present case and is of no help to the case of the plaintiff (6) None of the other judgments as referred to by Mr. <NAME> relates to the case of medicinal and pharmaceutical preparations and they deal with general classes of consumer goods and they are not quite relevant for the purpose of the present case as the present case relates to the trade mark in relation to pharmaceutical preparations.

(7) In conclusion I find no merit in the application and the same is dismissed.

SUITNo. 2152/85 THE parties are directed to appear before the Deputy Registrar on March 18, 1986 for admission I denial of documents and the suit be listed before the <ORG> on May 26, 1986 for framing of issues.


JUDGMENT <NAME>, J.

1. This appeal with certificate is directed against a judgment dated 26/27 July 1965 of <ORG> of <ORG> by which the appellant's appeal from a judgment of a Single Judge of that High Court had been dismissed. The short facts of the case are as follows:

The appellant is the sole proprietor of a firm by the name of <ORG> and carries on business of importing plantation and agricultural machinery, implements, accessories and spare parts of such machinery. The appellant is also the sole selling agent of a German firm called "<ORG>". In October, 1956, on the strength of two import licences dated 9 February 1956 and 16 March 1956, the appellant imported from his principals the aforesaid firm of <ORG>, certain parts of agricultural machinery known as Express Battery Sprayers. The relevant invoice is dated 28 October 1956 and the Bill of Lading is dated 10th November, 1956. The appellant filed his Bill of Entry before the <ORG> authorities on 3 January 1957. When the goods arrived at the Bombay Port in January, 1957 the <ORG> authorities, after examining certain samples, gave clearance in respect of the goods on 10 January 1957. The goods consisted on 28 crates and contained, according to the appellant, 220 pieces of spare parts for power driven agricultural machinery. The value declared was Rupees 37,943. Subsequently, it appears, the <ORG> authorities had some doubts as to whether the goods correctly answered the description of goods for which the appellant had been given an import licence and with the help of search warrants searched the appellant's business premises and seized 10 cases of Express Battery Sprayers, certain ball bearings and certain hose clips. By a memorandum dated 28 December 1957 the appellant was asked to show cause why penal action should not be taken against the appellant under Section 167, Clause (8) of the Sea <ORG> Act, 1878 read with Section 3(2) of the Imports and Exports (Control) Act, 1947. Under the same memorandum the appellant was also asked to show cause why penal action should not be taken against him under Section 167(39) of the Sea <ORG> Act, 1878 for taking out certain goods without making a due "entry" for them. The memorandum, therefore, contained two charges. We are in this appeal concerned mainly with the charge under Section 167(8) of the Sea <ORG> Act 1878. The appellant, in due course showed cause against the said notice and asked for a personal hearing. He was given a personal hearing by the Assistant Collector of <ORG> on 21 July 1968.

2. It is better at this stage to set out what are the respective contentions of the appellant and the <ORG> authorities in this matter. The import licence that was granted to the appellant described the things covered by the licence as "spare parts in power-driven agricultural machinery (parts of sprayers)". Admittedly the import licence is one which relates to Item 74 (vi) of Part V of Schedule I to the Imports (Control) Order (1955) made under the Imports and Exports (Control) Act, 1947, The Schedule will hereafter be briefly referred to as the I.T.C Schedule. Item 74 (vi) of Part V of that Schedule reads as follows:

(vi) Parts of Power-driven agricultural machinery.

The goods that the appellant actually brought were certain liquid containers which were parts of sprayers. According to the appellant, the abovementioned Item 74(vi) permits all kinds of spare parts of power-driven agricultural machinery. "Spare parts" in this case were intended to be parts of certain sprayers fabricated by <NAME> and generally described as Express Battery Sprayers. These sprayers, according to the appellant, function normally with the help of Power-driven pumps. Functionally, therefore, what the appellant imported were according to him, correctly described in the import licence. In other words, the appellant contends that the imports were in terms of the import licence. The <ORG> authorities on the other hand, say that the Sprayers built by <NAME> are hand-operated sprayers and, therefore, fall within Item 74(x) of Part V of the I.T.C. Schedule which item relates to "sprayers (other than power-driven) and parts". As both Items 74(vi) and 74(x) with which we are concerned belong to Part V of the I.T.C. Schedule, we shall, for the sake of convenience, refrain hereafter from mentioning either the Schedule or the relevant part. According to the <ORG> authorities, though the appellant's import licence was one in respect of goods covered by Item 74(vi), he had, in fact, brought goods falling under Item 74(x) so that, in effect, the goods that the appellant had imported were not covered by any valid import licence.

3. The appellant, we are told, gave various demonstrations before the <ORG> authorities to show how the liquid containers in question fitted into the <ORG> sprayers and how those sprayers were operated with power. The appellant admits that the spraying machines in question could also be operated by hand though, he says, the efficiency of the machines in that case would be reduced to a very great extent. Finally, on or about 25 May, 1960, one <NAME> who, incidentally, was not the Collector who heard the appellant, passed an order by which he held that the appellant's firm had deliberately cleared "<ORG>" battery sprayers in an unauthorised manner that is to say without a valid licence to cover their imports. <NAME> also found that the appellant had taken out certain goods valued at Rupees 8,163/- without proper declaration or without filing an appropriate Bill of Entry and also without production of a valid licence. On these grounds the Collector found the appellant guilty under Section 167(8) of the Sea <ORG> Act and imposed a personal penalty of Rupees 80,000. The Collector, however, did not confiscate the goods. The appellant asked for a rehearing but no rehearing was given. Thereupon, instead of following the usual remedies under the Sea <ORG> Act the appellant filed a petition under Article 226 of the Constitution before <ORG>. The petition was heard and dismissed by a Single Judge of that High Court and, on appeal, the order of the Single Judge was confirmed by <ORG>. The present appeal is directed against the order of <ORG>.

4. There is very little controversy between the parties regarding the facts of this case. Both parties admit that the sprayers in question can be operated with the use of power as well as mechanically. <NAME>, Collector of <ORG> has recorded the following findings regarding the nature of the imports in his order of 25 May, 1960:

The Express Battery Sprayers (Containers) have no self-contained pumps- by which they could be charged. They can be charged by a hand filling or by a power pump. They are not specially designed for exclusive use with power pumps and hence cannot be classified under Section No. 74(vi) of the Schedule as parts of power-driven agricultural machinery. They are sprayers which would require an I.T.C. Licence under Section No. 74(x) Part V of the I.T.C. Schedule.

5. Mr. <NAME> who appeared for the appellant before us admitted frankly that unless the Collector's decision is found to be perverse, neither the High <ORG> nor this <ORG> could interfere with that decision. He contended, however, that if in interpreting the I.T.C. Schedule for the purpose of finding out which was the proper item of the Schedule under which the imported goods would fall, the Collector is found to have made any mistake that would be open to correction by the High <ORG> as well as by this <ORG> He also argued that while the Collector's finding on facts about the results of the demonstration before him Cannot be legally questioned by the appellant, it is permissible for him to dispute the correctness of the statements made by the Collector in the last two sentences of the paragraph which we have set out above from the Collector's order.

6. On the assumption that the Collector's finding on fact cannot be assailed in a writ petition we must start from the proposition that the imports were of spare parts of spraying machines which were capable of being used both as a power-driven machinery as well as a hand-operated machinery. According to the <ORG> authorities since the machines in question are not specially designed for exclusive use of power pumps they cannot be described as power-driven agricultural machinery and therefore, the spare parts in question could not be classified under Item 74(vi). The only question that arises in these circumstances, can, in our opinion, be framed in the following manner. Does the fact that certain machinery which can be power-driven also admits of an alternative method of operation by mechanical force completely divests that machinery of its character qua 'power-driven machinery'? If a machinery is suitable for two alternative uses, is it wrong to describe the machinery as capable of only one of these alternative uses?

7. Mr. <NAME> argued that if we have any doubts in our minds as to the answer to this question, in other words, if two alternative interpretations are possible of the exact scope and effect of the description of the items in the I.T.C. Schedule, we should favour that interpretation which would be beneficial to the subject. He relies for this purpose on an unreported decision given by two Judges of this Court in <CITATION> . Appeal No. 801 of 1964, D/- 10-1-1967 (<ORG>), where it was held:

Assuming that there is a doubt in the construction of the licence, the appellant against whom the penal provisions of Section 167(8) of the Sea Customs Act, 1878 are sought to be enforced, is entitled to the benefit of the doubt.

8. Mr. <NAME> appearing for the respondents, however, drew our attention to decisions of two larger Benches of this <ORG>, according to which, if the view taken by the <ORG> authorities as to the scope and applicability of the different I.T.C Schedules be a reasonable view there should be no interference with the decision of the <ORG> authorities. Thus in the <CITATION> AIR 1963 SC 319 the question arose whether certain goods described as "feed-oats" for feeding race-horses were goods that fell under Item 42 of Part IV of the Import Trade Control Schedule which permitted the import without licence of "fodder..." or under Item 32 which did not allow the import of grains without a licence. The <ORG> authorities held that the goods were 'grains' within the meaning of Item 32 and confiscated the goods and imposed a penalty on the importer in lieu of confiscation. The importer succeeded In <ORG> in a writ petition for prohibiting the authorities from recovering the penalty imposed. This <ORG> in a Bench consisting of five Judges considered this matter and held that <ORG> had no jurisdiction to interfere with the decision of the <ORG> authorities. <NAME>, J who delivered the judgment of the <ORG> found that the decision of the Assistant Collector of <ORG> and of the Collector of <ORG> on appeal holding the oats in question to be 'grains' could not be characterised as perverse or mala fide. On these grounds his Lordship held that the learned Judges of <ORG> had erred in interfering with the order of the Collector of <ORG>. <NAME>, J. referring to an earlier decision of this <ORG> in <NAME> v. <NAME> observed as follows:

This <ORG> proceeded on the basis that it is primarily for the Import Control authorities to determine the head of entry under which any particular commodity fell; but that if in doing so these authorities adopted a construction which no reasonable person could adopt i.e., if the construction was perverse then it was a case in which the <ORG> was competent to interfere. In other words if there were two constructions which an entry could reasonably bear, and one of them which was in favour of <ORG> was adopted, the <ORG> has no jurisdiction to Interfere merely because the other interpretation favourable to the subject appeals to the <ORG> as the better one to adopt.

9. In another decision namely <CITATION> of this Court consisting of four Judges was called upon to decide whether the Collector of <ORG> had made a wrong decision in the matter of construing the scope of Entry 22 of Part I of the Import Trade Control Handbook and held that a court dealing with a petition under Article 226 does not sit in appeal over the decision of the <ORG> authorities and the correctness of the conclusion reached by those authorities on the application of the several items in the Handbook or in the Indian Tariff Act, is not a matter which falls within the writ jurisdiction of <ORG>.

10. In view of these two decisions of this Court which are binding on us, we have no manner of doubt that <ORG> was quite right in accepting the conclusions and findings of the <ORG> authorities about the proper scope of Item 74(vi) of the I.T.C. Schedule. In our opinion, there is nothing in the decision of the Collector which can warrant its condemnation as perverse or unreasonable. Even if it be assumed that because of the language used in the two items viz Items 74(vi) and 74(x) of the I.T.C Schedule, there is some room for confusion, it would not be competent for <ORG> to interfere in a writ petition with the conclusion or finding-of the Collector of <ORG> regarding the scope and ambit of those items.

11. In the result this appeal fails. We dismiss the appeal and confirm the decision of <ORG>. In the peculiar facts and circumstances of this case, however, we make no order as to costs.


JUDGMENT <NAME>, J.

1. The point taken before us in this Second Appeal for the defendant-appellant is, that the plaintiff's suit is barred by Section 47 Civil Procedure Code, his only remedy being an application under that section. It was not taken in the Lower Courts but as it is a question of law arising on the facts found, we have allowed it to be raised.

2. The facts relevant for the argument are these. One <NAME> obtained a mortgage decree against the plaintiff; the properties were sold in <ORG> auction and one of the items was purchased by the present defendant who was a stranger to the mortgage suit and to the decree. A sale certificate was issued to him and he obtained a delivery order. In execution of that order he got possession of plots A, B and C. This was about Hi years ago. It is the plaintiff's case that plot C alone was included in the decree and in the sale certificate, and was delivered to the defendant, and that the defendant subsequently trespassed on the plots A and B which are the subject matter of the present suit; he now sues to recover them. The defendant pleaded that all the plots were included in the <ORG> sale and in his certificate, and that he got possession of them all properly through court and that he was entitled to them. The Lower <ORG>s have found that the alleged trespass is untrue and that the plaint plots were delivered to the defendant by the <ORG> <ORG>. They have however also found that plots A and B were not really included in the mortgage deed or in the decree or in the sale certificate or in the delivery order, which all contained the same description of the property as to boundaries and measurements. The <ORG>'s mistake in delivering them to the defendant arose from a mistake in the measurements in the documents and the plots really belonged to the plaintiff. Applying Article 144 of the Limitation Act , the lower <ORG>s held that the plaintiff was not barred by limitation and gave him a decree for the plots.

3. Mr. <NAME> for the defendant-appellant contends that on the finding, this is a claim by the judgment debtor under a mortgage decree for the recovery of property overdelivered in execution to the court auction-purchaser, and, as such, this is a case to which Section 47 Civil Procedure Code applies even though the purchaser was a stranger to the mortgage suit. He urges that the present suit is thus barred by the section and should have been dismissed. If the section applies there can be no doubt that the plaintiff's claim must fail whatever the merits may be, for the suit cannot be treated as an application under Section 47 Clause (2) with any advantage as it will then have to be' dismissed in limine as barred by limitation.

4. To make Section 47 applicable it is clear from its language that two conditions are necessary to be fulfilled. The question raised must be one relating to the execution, discharge, or satisfactiSn of a decree, and it must also be one arising between the parties to the suit or their representatives. On the authorities in this Court, the first condition must be held to be satisfied in this case. See <NAME> v. <NAME> (1912) M.W.N. 44 and <CITATION> (1918) 45 Indian Cases 608. In the latter case the second condition was also fulfilled as the parties to the application for redelivery were the judgment debtor on one side and the decree-holder purchaser on the other. In the present case we have a stranger purchaser. Mr. <NAME> contends that this will make no difference, that the stranger-purchaser should be looked upon as the representatives of the decree-holder in this matter, and that whether he be such representative or not the case falls under Section 47 Civil Procedure Code under the recent ruling of <ORG> in <NAME> v. <NAME> (1919) I.L.R. 43 Mad. 107. In <ORG> case the question arose in three appeals two being between one <NAME>, a stranger purchaser in execution of a money decree on one side, and one <NAME> the decree-holder-purchaser of some of the items under the mortgage decree on the other side, and the third appeal being one between the same <NAME> and one <NAME> a stranger purchaser of other items in execution of the same mortgage decree. On the question of the representative character of these stranger-purchasers there was a difference of opinion between the members of the Bench. The learned Officiating Chief Justice was of opinion that the question whether such a purchaser was the representative of the judgment-debtor or of the decree-holder depended on the nature of the question raised and on who the contesting party was. See page 124. He adopted the view stated in <CITATION> (1894) I.L.R. 18 Mad 13 at P. 18 that such a purchaser represented the judgment debtor to the extent of the property purchased, and the decree-holder so far as his right to bring "to sale such property in execution of the decree was concerned. So that according to his view, the purchaser in asking for delivery of possession or in resisting re-delivery would be a representative of the decree-holder. His view on this point was, however, not adopted by the majority who held that such a purchaser was the representative of the judgment-debtor only, and never of the decree-holder. I must follow the view of the majority on this point whatever my own view may be. There was a considerable conflict of opinion on the point in <ORG> previously, and it was to settle the question that the reference was made, and we must take <ORG> decision as settling it. I am not therefore referring to the previous authorities.

5. On the first part of his contention Mr. <NAME> cannot therefore succeed, as on the view above stated, his client will be a representative of the plaintiff-judgment-debtor and the question here will thus be one between a party and his own representative. See <NAME> <NAME> (1897) I.L.R. 25 Cal. 49. It is however suggested by him that the Full Bench did not consider the question of the representative character of the mortgage-decree purchaser which is the point berfore us, but confined itself to that of the money decree purchaser, and that there is a difference between the two kinds of purchasers in the matter. The last question referred to the Full Bench specifically raised the question as to the <ORG> decree-purchaser, See page 113, and though <ORG> has not answered the question, the other Judges have dealt with it and have made no distinction between the two. Taking the view of the <ORG> regarding the money-decree purchaser, I think no proper " distinction can be made on the point between him and a mort gage-decree purcharser. Section 89 of the Transfer of Property Act, under which the order absolute for sale was made in the present case, declares that, on such an order being made, the right to redeem and the security shall both be extinguished. Thereafter there is only a right to sell the property, just as there is after attachment under a money decree, See <NAME> v. <NAME>, (1918) I.L.R. 40 All. 407 and the rights flowing from the purchase are the same. The fact that as a matter of equity the purchaser under a mortgage decree is allowed under certain circumstances to plead the mortgagee's right in the property purchased as a shield has no bearing on this question.

6. <ORG> however went further and held on the authority of the P. C. decision in <NAME> v. Kali Das Sanyal I.L.R. 19 Cal. 683 that irrespective of any question of the representative character of the auction-purchaser-applicant, Section 47 Civil Procedure Code should be applied to his case where the question raised, is one relating to execution, and is one in which the decree-holder and the judgment-debtor are adversely interested. <NAME> J. put it thus: "What the courWhave to see is whether the issues arising for decision relate (a) to execution and (b) to deciding rival rights of the decree-holder and the judgment-debtor in the subject matter. If those conditions are satisfied, the fact that others are interested in the result of the decision should not affect the jurisdiction and competency of the executing court to deal with the matter." On this point the Full Bench were unanimous, and it was, I think, on the application of this view that the case between the stranger money-decree purchaser, <NAME> and the stranger mortgage-decree purchaser <NAME> was held to fall under Section 47 , C.P.C., the question of delivery of property purchased in court sale being evidently held to be one relating to execution and one in which the decree-holder and the judgment-debtor were adversely interested. It is statedly on this view that <ORG> thought it unnecessary to answer the last question referred to the Full Bench. This is made further clear by the subsequent judgment of the referring judges reported in <NAME> v. <NAME> (1920) I.L.R. 43 Mad. 696: 39 M.L.J. 456. They applied Section 47 to all the 3 cases. Except on this view, Section 47 Civil Procedure Code could not well have been applied in <NAME> case, as he would be the representative only of the judgment-debtor, <NAME> the other party to that application. I am unable to accept the suggestion that Section 47 was applied to that case by oversight. <ORG> as Iunderstand them hold that the condition in Section 47 C.P.C. that the question should be one " arising between the parties is satisfied by the question being one of a nature in which the parties to the suit are adversely interested, though the person actually raising it in any particular case against one party may not be the representative of the other party. In fact they gave an extended meaning to these words.

7. Applying this view to the present case we have to see whether the question raised here is one in which the rival rights of the decree-holder and the judgment-debtor have to be decided. In the <ORG> case the application was for delivery of properties included in the decree and purchased in court sale. That question was treated as falling within Section 47 even where the purchaser was a stranger. The present case no doubt refers to property claimed by one side to be included in the decree and denied by the other side to be so included and found by the court to be not so included. Does that make a difference? I was at first inclined to think that it did and that the decree-holder was not interested in the present controversy, as it refers to property over delivered to the purchaser. But on further consideration I have come to the conclusion that it is not correct. If the decree-holder can be held to be interested in the delivery of the property included in the decree to the purchaser as was done by the <ORG> I think we must hold consistently with that view that he is also interested in the questions as to what properties that decree covered. The mistake in the boundaries in the present case is not merely in the delivery order but also in the mortgage deed and in the decree and in the sale certificate, and if the decree or the sale certificate had been asked to be rectified on the point, the question would clearly have arisen between the parties to the suit. The fact that it is now raised against the purchaser should not make any difference as to whether it is to be done in execution or not. It is clearly appropriate that these mistakes in execution proceedings should be rectified by the executing court itself, and we should not put too narrow a construction on Section 47 and drive parties to suits for the purpose. If plaintiff in the present suit loses his property on this view it is only due to his own laches in delaying for so many years.

8. I would therefore hold Section 47 Civil Procedure Code applies to the present case, and as the result I will allow the Second Appeal and dismiss the suit, but, in the circumstances, without costs in any of the courts.

<NAME>

9. I am not prepared to dissent from my learned brother's view of the meaning of the <ORG> judgments in <NAME> v. <NAME> (1919) I.L.R. 43 Mad. 107 and although they seem to me to extend the applicability of Section 47 Civil Procedure Code to a degree hardly suggested by the wording of the Section I feel bound to follow them.

10. I concur in the order proposed.


JUDGMENT

1. The plaintiff had preferred a claim under Section 278 of the Civil Procedure Code and his claim was disallowed under Section 281 of the Civil Procedure Code. Within a year of the order disallowing the present plaintiff's claim, the judgment-debt was satisfied otherwise than by the sale of the attached property. The present suit is now brought to establish the plaintiff's right to the properties as usufructuary mortgagee and for recovery of possession from the defendants. It has been held that the suit is barred under Article 11 of schedule II of the Limitation Act.

2. Mr. <NAME>, appearing for the plaintiff who is the appellant before us, contends that the order under Section 283 enures in favour of or against the decree-holder or the claimant and not the judgment-debtor, The judgment-debtor, according to this contention, is not a party within the meaning of Section 283 and this contention would seem to be supported by the decisions in <NAME> v. <NAME> (1888) I.L.R. 15 Calc. 574 and <NAME> v. <NAME> (1905) 3 C.L.J. 381 where the proposition is laid down that, in proceedings under Section 278, the real question for decision is not whether the title to the property belongs to the judgment-debtor or the claimant but whether the property should be released from attachment or not. We may also point out that the observations of their Lordships of <ORG> in <NAME> v. <NAME> (1888) I.L.R. 15 Calc. 521 at p. 525 would indicate that, besides the claimant, the only other party within the meaning of Section 280 is the judgment-creditor. <CITATION> (1906) I.L.R. 29 Mad. 225 and <CITATION> (1902) I.L.R. 25 Mad. 721 proceed upon the view that if the judgment-debtor be made a party to the proceedings and there has been an adjudication between him and the claimant, the suit of the claimant would be barred as against him if not brought within a year. Even supposing that to be the correct interpretation of the section of the Code in question--and we do not think that the respondent can properly put her case any higher--we find that in the present case the respondent, who was judgment-debtor in the claim proceedings, neither appeared nor was there adjudication of the claim as between her and the present plaintiff. We may point out that the decision in <CITATION> (1869) M.H.C.R. 472 proceeds upon the Code of 1857 where the language employed is different from that of the code of 1882.

3. We therefore hold that the view taken by the lower <ORG> on the question of application of Article 11 of the ' Limitation Act is wrong. The decree of lower <ORG> will be set aside and the case will be remanded to it for disposal on the other issues. Costs will abide the result.


JUDGMENT Straight, J.

1. In this case the plaintiffs-appellants are the assignees of certain mortgagors-deed, dated the 15th March 1883, of a house charged as security for the <ORG>. debt, and the plaintiffs in this case sue for redemption of the mortgage and bring the money into court for that purpose. The plea of the defendant-respondent is, in effect and substance, that the suit is premature; that the term of the mortgage was ten years, and that neither the plaintiffs nor their assignor was in a position, under the terms of the instrument, to redeem the property before the ten years had expired. <ORG> has adopted this view, and it is this decision of the <ORG> which is impeached by the appeal before us.

2. The primary question is, under the term of the instrument of the 15th March 1883, what was the time at which the principal money advanced on the mortgage was payable by the mortgagor to the mortgagee? In other words, after what date would the mortgagee be able to enforce his rights under the mortgage-deed?

3. I have no doubt that <ORG> was right in the construction placed by it on the instrument of the 15th March 1883, that the advance of Rs. 200 by the mortgagee to the mortgagor was for a period of ten years certain, and that while, on the one hand, the mortgagee could not enforce his rights during that period, on the other hand the mortgagor was not entitled before that period had expired to redeem the property. It is essentially a case in which, looking to the merits of the matter between the parties, their obligations were mutual and reciprocal; and there is nothing in the terms of the deed to take it out of the ordinary rules applicable to documents of this nature. Moreover, in the deed itself it is provided that the principal money is to be paid "at the promised time," and that, in default of such payment, certain contingencies shall arise. Reading this expression with the rest of the language of the instrument, it is obvious that by "promised time" was meant a specific point of time, and that was the period of ten years for which the mortgage was made. I may add that I entirely concur with the views of the learned Judges of <ORG> expressed in Vadju v. Vadju I.L.R. 5 Bom. 22 with regard to the principles which should be applied to such matters, and to which expression had been given in Sections 60 and 61 of the Transfer of Property Act.

4. The appeal must be dismissed with costs.

Tyrrell, J.

5. I am of the same opinion.