C.A. No.-003807-003807 / 2020. CHIEF EXECUTIVE OFFICER AND VICE CHAIRMAN GUJARAT MARITIME BOARD vs ASIATIC STEEL INDUSTRIES LTD. Supreme Court, 24-11-2020

CourtSupreme Court (India)
JudgeHON'BLE MR. JUSTICE UDAY UMESH LALIT, HON'BLE MR. JUSTICE VINEET SARAN, HON'BLE MR. JUSTICE S. RAVINDRA BHAT
Writing for the CourtHON'BLE MR. JUSTICE UDAY UMESH LALIT
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3807 OF 2020
(Arising out of SLP (C) NO(S). 28244 OF 2015)
CHIEF EXECUTIVE OFFICER AND
VICE CHAIRMAN GUJARAT MARITIME
BOARD ...APPELLANT(S)
VERSUS
ASIATIC STEEL INDUSTRIES LTD AND ORS. ...RESPONDENT(S)
J U D G M E N T
S. RAVINDRA BHAT, J.
1. Leave granted. With consent, the appeal was heard. This appeal is
directed against a judgment of the High Court of Gujarat dated 24.07.2015. The
respondent (hereafter “Asiatic Steel”) had filed a writ petition before the High
Court seeking refund of contract consideration of ₹3,61,20,000/- paid by them
to the appellant (hereafter “the Board”). The High Court allowed the writ
petition, in view of its earlier interim order, and directed the Board to pay
interest for the period from 08.11.1994 to 19.05.1998. The brief facts that arise
for consideration are as follows.
Digitally signed by Dr.
Mukesh Nasa
Date: 2020.11.24
13:45:00 IST
Reason:
Signature Not Verified
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2. The Board issued a tender notice on 02.08.1994 for allotment of plots at
Sosiya (near Bhavnagar, Gujarat) for ship-breaking of „very large crude
carriers/ultra large crude carriers‟ (VLCC/ULCC). Asiatic Steel made the
highest bid, which was accepted and confirmed by the Board on 08.11.1994, for
₹ 3, 61, 20,000/- (hereafter the „Principal‟). Asiatic Steel was allotted Plot V-10.
The bid payment was made on 22.03.1995 in foreign currency, to the tune of
$1,153,000, while the earnest money deposit of ₹5,00,000/- was paid on
08.11.1994.
3. On 23.02.1995, Asiatic Steel and other allottees approached the Board
citing difficulties in commencing commercial operations, on account of the
connectivity to the plots and the existence of rocks inhibiting beaching of ships
on the plot for the purpose of ship-breaking. Through a letter dated 19.05.1998,
Asiatic steel intimated the Board that it wished to abandon the contract and
demanded that the payment be refunded (an amount of $1,153,000), with
interest at 10% per annum from the date of remittance. The Board, through a
notice dated 19.05.1998, stated that an amount of ₹3, 61, 20,000/- would be
refunded, but without interest. The Board also clarified that the refund would be
directed to the original allottee of the plot (i.e. the second respondent, i.e. M/s
Ganpatrai Jaigopal- hereafter referred to as “Ganpatrai”). Asiatic Steel then filed
a writ petition before the High Court, seeking (i) refund of USD $ 1,153,000
with interest of 12% per annum compounded quarterly, to the third respondent,
M/s Industeel Investment Holdings (hereafter “Industeel”, which had made the
payment originally on behalf of Asiatic Steel); and (ii) refund of earnest money
of ₹5,00,000/- with interest of 12% per annum, compounded quarterly to Asiatic
Steel.
4. Through an interim order dated 26.02.2002, the High Court held that
prima facie, Asiatic Steel was entitled to a refund with interest at 10% per
annum. Accordingly, the Board was directed to deposit the admitted amount,

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