TMI Blog1980 (5) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... y this Court while granting leave. Therefore, this decision will virtually and the writ petition pending in the Bombay High Court. This procedure has the consent of all the Counsel and their parties and brings to a close a litigation whose life may otherwise lengthen into after-life. 3. We are in the provience of export of silver which is governed by the Imports and Expels (Control) Act, 1947 (for short, the Act). Section clothes the Central Government with power to :...make provision for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order: (a) the import-export, carriage coastwise or shipment as ship. stores of goods of any speeded description; (b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried. (2) All goods to which any order under Sub-section (1) applies shall be deemed to be goods of which the import of export has been prohibited under Section 11 of the Customs Act, 1962 and all the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... private dealers like Damani. Law is the handmaid of economics and when the economics of Trade suffers a radical change Law helps the process without hampering the flow. The flexible form of the contracts which emerged on canalisation of silver export is relevant for us because the bone of contention between Damani and the STC, apart from the challenge to the vires of the Exports (Control) Fifteenth Amendment Order, 1979 in so far as it prohibits pre-ban commitments (or the exclusion of such contracts from its operation, by way of interpretation), is about the efficacy of an indemnity clause in the contract between the two. 8. The nation lives not for the benefit of Big Business but for conservation of Its own resources, and export policy is dictated by a host of considerations ordinarily imponderable for the Court. Although its reasonableness is not beyond the power of this Court to examine when constitutionality is in issue, the zone is so sensitive, the subject is so strategic and the import and impact so intricate that judges do not rush in where administrators fear to tread. The reasons for the ban on sliver exports brought about in February 1979 are explained briefly by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of his, to the unforeseeable risk of a heavy liability in a foreign jurisdiction This contention may have to be considered here or else where, but, if we may anticipate our conclusion even here, this question is being skirted by us because the kismet of this case can be settled on other principles. The discipline of the judicial process forbics decisional adventures not necessary even if desirable. 10 The canalisation programme has for its raison detre many purposes including policing and servicing foreign trade and, hopefully, making some profit for the benefit of the nation, apart from stablising the country's foreign trade on a sound and credible basis, pledging the credit worthiness of the State. 11. Now we will move on to the events which escalated to a crisis resulting in these proceedings (one of many in the Bombay and Delhi High Courts), Ws are dealing with an interlocutory order but really we are disposing of the writ petition. Respondent No. 1 (Damani), as per the practice involved between the STC and the Trade, had registered itself for export trade in silver with the STC, The press note issued by Government on 26th August, 1976, reads thus: Government has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are concerned The first respondent, being one of the registered suppliers of silver for export, had an agreement of 1st October, 1976 with the STC. The said agreement is still extant. Pursuant to Clause 2(a) thereof Damani has furnished a bank guarantee to the STC as a pre condition to supply of silver for export as per the agreement The integral link and intimate relationship between Damani's agreement with the STC and the STC's contracts with the foreign buyers is obvious. The most important provision with which we are concerned is Clause 9(a) which runs thus: 9(a). Any cess, duty, rate or tax whatsoever, payable in respect of any transaction covered by this contract shall be borne by the supplier. The supplier hereby indemnifies the STC and shall always keep it indemnified against all claims including claims for sales/purchase tax action, losses, damages, expenses etc arising out of or relating to or in respect of this contract and/or the export contract, and STC shall be free to invoke the Bank Guarantee and/or for felt the cash security deposit for the same. 16. Although many contentions have been canvassed before us, the battle of legal wits has been fought on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f one country offered no immunity in a foreign jurisdiction; what the judges say it is and judges do speak in diverse and so the need to keep alive the indemnity clause as against Damani was an economic cecessity of legal tenability. We do not discuss further or express our view because the Delhi Judgment is now pending in appeal and we propose to bypass this issue for toe nonce. 18. Nobody questioned before us the power of parliament to make a law banning or regulating export and import of essential commodities, subject,. of course, to the fundamental rights of citizens. But as earlier stated, the contesting respondent challenged as unreasonable and arbitrary the application of a total ban, all of a sudden, on contracts for export which had become complete and concluded before the ban. In short, it was unreasonable and, therefore invalid vis a vis pre ban commitments otherwise ready for performance. Secondly, Shri Diwan for the respondent argued that the indemnity in the amulliary contract with the STC had become non east from the point of view of performance because the principal contract had become frustrated. He was ready to perform the contract, but the STC was not ready to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that the indemnity clause had an independent existence and embraced all possibilities so that any manner of liability flowing from the foreign contract would bring to life the indemnity clause in the Indian contract. The implied term cannot be set up in opposition to the express terms: Where the contract (said Lord Summer) makes provision (that is, full and complete provision, so intended) for a given contingency it is not for the Court to import into the contract some other and different provision for the same contingency called by a different name. (Anson's Law of Contract 24th Edn. p. 490) 20. The thorny issue being by passed for the while, the next question is whether the constitutionality of the Export (control) Fifteenth Amendment Order, 1979 should be examined closely vis-a-vis pre-ban contracts. Constitutional questions should be considered by Courts only when it is absolutely necessary, not otherwise. In the present case, broadly speaking, we are not inclined to stand in the way of the full operation of a policy decision by the Central Government in regard to export of silver Prima Facie, national policy in this area should not be interfered with by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners and/or in implementation of the decision not to allow the petitioners to export silver pursuant to the said contracts/licences, and further directing the Respondents, their officers, servants and agents by an order and injunction of this. Court to allow the petitioners to export silver pursuant to the licences/contracts mentioned in Exhibit 'A' here to and to do all export silver including the grant of licences in respect of the contracts in Exhibit 'A' here to. 24. This Court, was moved under Article 136 for leave to appeal against this order and, when leave was granted, an application was moved for stay of operation of the judgment and order of the High Court. Upon hearing Counsel this Court passed the following order: Special leave to appeal granted There will be a partial stay of the operation of the injunction granted by the High Court subject to the following condition : 1. The respondents shall be at liberty to export 5.1 tons of silver in pursuant to given contracts entered into with foreign buyers through State Trading Corporation in respect of which licensing endorsements have been made on or before 20th February, 1979. 2. In respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay by this Court. In this context, the significance of the direction by our learned brother, Desai J. cannot be missed. As we have indicated earlier, we are inclined to agree tentatively with the larger relief that the Union of India has claimed, namely, a prohibition of the export of silver pursuant even to pre-ban commitments. It must be remembered that even the STC pleaded with the Union of India for permission to export silver in pursuance of contracts concluded prior to the ban. We must also notice that the indigenous supplier Damani, had collected a huge quantity of silver and offered delivery to the STC in full compliance with the contract. The first respondent had done all it could to fulfil the contract. Once the embargo on the export is upheld by us, the consequent financial loss of the first respondent must be considered from an equitable angle. It is iniquitous that on top of that it should be exposed to the risks, perhaps remote yet real, of the foreign buyer involving the STC in a long drawn out ;litigation fought on foreign soil. The would be double injury. (Daughter gone and ducats too) Of course, if the legal consequence resulted in double damage, Oamani would have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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