Premium for value of scrips surrendered

CHENNAI: The Madras High Court has directed State Bank of India’s Overseas Branch on Rajaji Salai to pay H.Champalal Jain Rs.8.83 lakh, the premium for the value of scrips surrendered to the bank, with six per cent interest from the date of submission of the licence till the date of payment.

The Centre had introduced a scheme for issue of Exim scrips in July 1991 at the rate of 30 per cent on foreign exchange earned by exporters. They were easily transferable and saleable. Later, when the scrips were withdrawn, SBI was authorised to buy them at a premium of 20 per cent of their sale value.

Mr. Jain, who had purchased 20 Exim scrips, valued at Rs.44.17 lakh, presented them before the bank for encashment. The premium worked out to Rs.8.83 lakh. The Deputy Director-General of Foreign Trade (DDGFT), Chennai, instructed the bank not to pay the amount as some scrips were found to be bogus.

Action was initiated against Ayisha Exports Limited from whom the scrips were purchased. The scrips vendor was prosecuted by the CBI for submitting bogus and forged documents. The company and its director were later convicted and a fine was imposed.

It was stated that the first set of exim scrips valued at Rs.14.11 lakh purchased by the petitioner from the company and encashed was obtained by submitting forged documents. The petitioner filed a writ petition seeking a direction to the bank to pay the premium of Rs.8.83 lakh for the genuine Exim scrips purchased. It was heard along with other petitions.

Aggrieved by the single judge’s order, the Centre filed appeals. A Division Bench modified the single judge’s order. Subsequent to this, summons was issued to the petitioner and investigation completed.

Mr.Jain wrote to the Joint Director-General of Foreign Trade, who rejected his request in an order issued in December 1998. He challenged the order and the High Court set aside the order and directed the DDGFT to pass a fresh order after giving an opportunity to Mr.Jain.

Pursuant to that, the DDGFT passed the impugned order and rejected the petitioner’s case. It was stated that unless the petitioner paid Rs.14 lakh with interest against the first set of exim scrips obtained by fraudulent means, the authorities would not honour his claim seeking premium for the second set.

This order was challenged in the present petition. Allowing it, Mr.Justice K.Chandru said the petitioner’s rights had been secured by earlier orders of the High Court to the effect that the scrips sold were genuine. It gave an automatic right for the petitioner to claim the premium of 20 per cent on the scrips sold by the bank.