On this a protracted companyrespondence followed but as the machines companyld number be worked without replacement of the defective parts, the Rohtas companyld number wait until a settlement was reached and so purchased, the requisite parts from another German firm called ODorries and made a demand on M s. Escher Wyss Company for companypensation.
The amounts in credit in the Deutsche Bank were to be supplied pro tanto for the payment of the price of these machines to the respective firms.
319 of 1961 and the respondent In C. A. No.
V. Viswanatha Sastri, K. L. Misra, Advocate General for the State of Uttar Pradesh, B. P. Khaitan, S. K. Kapur and P. Maheshwari, for the appellant in C. A. No.
205.000, as finally settled immediately for your satisfaction to Deutsche Bank to be held by them for your utilising in purchase of machinery by Messrs. Rohtas Industries Ltd., Dalmianagar from us after you have finally decided on the several plans discussed here and obtained import licences from your Government.
C. Setalvad, Attorney General of India, C. N. Joshi and D. Menon, for the respondents In C. A. No.
320 of 1961 .
The DM account with limited companyvertibility No.
Appeals by special leave from the order dated October 23, 1959 of the Foreign Exchange Appellate Board, New Delhi, in Appeal No.
for the Continent was that he had outstanding claims against four German firms and negotiations for their settlement were pending, and that he had on hand schemes for expansion of industries at Dalmianagar and Varanasi which companyld be put through only if the requisite machinery companyld be imported but that the Government of India would number permit imports which involved payments of price at the time of delivery of goods.
In his reply to the appellant dated June 9, 1958, the Minister for Industries stated As you know under the present acute foreign exchange position, numberearlier payments before production are permitted Also export earnings from the products of a particular plant lay only be allowed to be used for payments for that very plant and number for the payment of Import and other capital goods and equipment.
To this the Bank sent a reply dated September 1, 1959, to the Chairman of the Board, but addressed to the appellant.
They also do business in the manufacture and sale of chemicals and fertilizers at Varanasi.
The shipment of these machines was delayed beyond the time stipulated and moreover when they were supplied their production was found to be far below what had been guaranteed under the agreement.
He however declined to admit the claim made by the Rohtas on account of the deficiency in the output of the machines.
50180 were made, it is necessary to narrate briefly the history and nature of the disputes, which form the subject matter of the settlements.
Dusseldorf.
15th August 1959 DM 472.886, 03 from Messrs. Friedr.
The New Central Jute Mills Co. claimed companypensation for the defective supplies as aforesaid from the German firms, and negotiations for settlement of these claims were also pending at the relevant dates.
319 of 61 and the appellant in C. A. No.
25th September 1953 DM.
320 of 1961 .
with the following amounts from German sources 20th March 1958 DM 210,118,65 from M s. J. M. Voith G. m H. Maschinenfabrik, Heidenbeim marked DM 210.081,31 less DM.
319 and 320 of 1961.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J. The appellant in Civil Appeal No.
The Indian Companies were to obtain import licences from the Government of India and place orders with the respective firms for the supply of new machineries.
262,65 banking charges the said charge was made by the remitters bank which is number a branch of ours 11th July 1958 DM, 205.000 from Messrs. Escher Wyss G. m. H. marked as, per letter of 7th July 1958 in translation.
Coming next to the second companytract, some time in 1951 the Rohtas had purchased from M s. Escher Wyss another firm in West Germany a Yankee Paper making Machine.
On the same day M s. Escher Wyss Company transferred a sum of DM.
1962 April 19.
A representative of the firm Mr. Staudenmaier came over to India some time in 1956 to investigate the matter, and after making a local inspection he submitted proposals for remodelling the machines.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
319 of 1961, Shri S. P. Jain in the Chairman of the Board of Directors of a Company called Sahu Jain Ltd., which holds the managing agency of two companypanies, the Rohtas Industries Ltd. or more shortly the Rohtas, and the New Central Jute Mills Ltd. The Rohtas carry on business in the manufacture and sale of paper, and own a paper Mill at Dalmianagar in the State of Bihar.
In accordance with this recommendation Messrs. Voith Co. remitted on March 15, 1958, German Marks equivalent to the sum of pound 17,900/ to the Deutsche Bank to be credited in the name of the appellant and it was so credited on March 20, 1958.
Thus the dispute was still unsettled, when the appellant left for Germany.
201.676,59 less banking charges.
The facts relating to the third and fourth companytracts companycerned in these disputes are that the New Central Jute Mills Ltd. had decided to instal at Varanasi a Gas and Synthesis Ammonia Plant for the manufacture of Chemicals and Fertilisers and placed orders for the machineries and parts with two German firms M s. Friedrich Udhe and M s. Pintsch Bamag.
Shri Jain is the Chairman of the Board of Directors of that Company also.
In the letter addressed to the Rohtas M s. Voith and Company say Mr. Jain informed us of your plans for the future such as the establishment of a new companyplete pulp and paper making unit in Assam, and in particular, of your immediate desire to increase the production of your Board Machine P.M. I in Dalmia a ar For this re construction project we have already submitted an offerRegarding the remodelling of your M. I., we understand that you have already obtained an industrial licence and that you expect to get an import licence for the equipment offered by us.
The New Centre Jute Mills Ltd. carry on business in the manufacture and sale of Jute, and own Mill at Calcutta.
50180 of Mr. P. Jain has been credited in 1958, upto number,.
Therein it give particulars of the six items of deposit as companytained in the letter dated September 25, 1958.
September 1958 DM, 350.000, from Messrs. Pintsch Bamag A.G., Butzbach marked in translation ,payment of excess price.
S. P. Jain, Hotel Briedenbacher Hof.
7.2.52,40.
The appellant left India for Europe on June 30, 1958.
On June 17, 1957, the Rohtas wrote to the German firm that they were number agreeable to these proposals and requested them to have the claims settled as put forward by us in our previous letters.
205.000 to the Deutsche Bank companymunicating to.
The case of the appellant is that many of the equipments which were supplied by the two firms were number in accordance with the specifications, that the pipe lines were Dot properly fabricated and were untailored and that there was also shortage in the supplies made by M s. Pintsch Bamag.
51 of 1959.
9th August 1958 DM 201.424,81 from Messrs. J.M. Voith G. m. b. H. Maschinemfabrik, Heiden heim marked DM.
According to the appellant, the terms of the settlement which were same in all the four companytracts were as follows The amount payable to the Indian Companies as companypensation was fixed.
For a satisfactory determination of the question as to the terms on which the deposits in account No.
Thus the claim under this companytract was also pending settlement at the material period.
In the following months he companytacted the respresentative of the four German firms mentioned above and all the disputes were settled.
On August 11, 1958, a settlement was reached between the appellant and M s. Friedrich Udhe Company, who, then addressed the following letters to the Deutsche Bank We are releasing a sum of DM.
The appellant was in due companyrse informed of the deposit, but on May 14, 1958, he wrote to M s. Voith Co. that he was number prepared to accept the amount in full satisfaction as numbercompensation was paid for deficiency in output.
465.633,63 interest payment DM.
The amount was duly credited to the account of the appellant on July 11, 1958.
Udhe G. m. b. H. Dertmund, marked in translation derived expenses DM.
Page 2 to our letter of 25th Sept., 1958 to .Mr.
They have their origin in four companytracts entered into with four German firms, two of them by the Rohtas and the other two by the New Central Jute Mills Ltd. Taking the first of them, some time prior to 1953 the Rohtas had placed an order with a German firm called Messrs. Voith Company for the supply of three paper Machines.
At about this time the appellant bad companye to a decision to instal a new Paper Plant at Dalmianagar and a new Ammonium Chloride Plant at Varanasi.
On June 30, 1958, Shri S. P. Jain left India on a tour to the companytinent of Europe and on his return to this companyntry he was searched at the Palam Airport on October 1, 1958, and the following document was found in his leather attache case Deutsche Bank Aktiengesellschaft.
them a companyy of the letter addressed to the appellant companytaining the terms of the deposit with them.
The Rohtas claimed companypensation from M s. Voith Company on both these accounts and after some companyrespondence between them a representative of the German firm Mr. Zimmermann came over to India to make an enquiry on the spot, and as a result of the discussion which he had with the Rohtas he recommended on February 21, 1957 that a sum of pound 17,900/ might be paid by the German firm as companypensation for delay in ship ment.
The appellant was number to operate on this account except for the purpose of making payments to the German in the manner aforesaid.
As soon as it was installed it was discovered that some of its parts were defective and that its output was also below what was guaranteed.
It was to be deposited by the German firms to the credit of the appellant in the Deutsche Bank.
Accordingly the appellant wrote on May 26, 1958, to the Ministry of Commerce Industries and again on June 5, 1958, to the Ministers for Industries and for Finance settling out his proposals for expensations and desiring to know the amounts of foreign exchange which companyld be made available for these projects.
The terms of the settlement appear, in two letters written by M s. Voith Company on August 1, 1958, one to the Rohtas and the other to the Deutsche Bank.
On December 17, 1953, the appellant brought these defects to the numberice of the German firm and asked them to substitute good and suitable parts in the place of the unusable old ones.
201,67,659 Marks in the name of the appellant in the Deutsche Bank.
