LEGAL ASPECTS OF BUSINESSASSIGNMENT

PRESENTED BY:

ABHAY YADAV (79)ABHISHEK TRIPATHI

(80)AJAY PANDEY (81)

AMANPREET KOHLI (82)ANAND VERMA (83)ASTHA SHUKLA (84)

AYUSH GAUR (85)

MACKINNON MACKENZIE AND Co. Vs.

STATE OF WEST BENGAL 1966

APPELLANT : Mackinnon Mackenzie and Co.

RESPONDENT : State of West Bengal

DATE OF JUDGEMENT: November;1966

FACTS Mackinnon Mackenzie & Co. Pvt. Ltd was incorporated on 30th March

1951, under the provisions of the Companies Act, 1913, as a Public limited company.

It became a private limited Company on from 27th March 1956 The Registered office of the company is situated at 16, Strand Road ,

Calcutta The Company wanted to relocate its registered office from Calcutta to

Bombay to enhance business interest. By passing the special resolution of the company in accordance with

section 189of companies act 1956 at the general meeting held on November 1965. It was unanimously resolved that the MOA has been altered and new regd. Office will be at Bombay.

The Govt. of West Bengal objected on the grounds of losing revenue for the state

Factors Presented by Mackinnon Mackenzie and Co.

The Head office is at Bombay from 1964

The company lost India coastal trade in Calcutta because immigration restrictions in Burma & Malaya. In lieu Bombay became more important port

Most of the Senior staff were posted to Bombay

Strength of Employees were high at Bombay

The Volumes of Business is larger at Bombay because of coastal restrictions and difficulties of trade with Burma & Malaya

Factors Presented by State of Bengal & ROC

There will be a loss of Revenue to the state

The Petition does not show that any economy will be made by the proposed transfer of Registered office to Bombay

The Resolution is not validly passed

JUDGEMENTAppeal upheld; Govt. claim dismissed

REASON : Under section 17 of the companies act 1956 , a company may, by

special resolution , alter the provisions of the memorandum so as to change the place of its registered office from one state to another.

Dominant factors in favor of the change of office were resolution of the company and the interest of creditors and shareholders.

M/S RICKMERS VERWALTUNG GMB HVS

THE INDIAN OIL CORPORATION LTD

APELLANT : Rickmers Verwaltung Gmb H

RESPONDENT : The Indian Oil Corporation Ltd.

DATE OF JUDGEMENT: 19th November 1998

FACTS The respondent, Indian Oil Corporation Ltd., entered into an agreement with M/s

Tubacero of Mexico for purchase of pipes for its Kandla-Bhatinda Pipeline project on September 16, 1993.

M/s Tubacero were to deliver the pipes to the respondent at Tampico Port in Mexico. In order to bring the pipes to India, the respondent, a Government Corporation, was required to go through M/s Transchart, a department of the Ministry of Surface Transport, which brokers charter party arrangements with various vessel owners, for the purposes of shipping of pipes from Tampico Port.

In order to execute a contract between the parties, respondent No. 1 was to establish a standby letter of credit as per the format to be mutually agreed upon by the parties while the appellant was to furnish a performance bond also in a format to be mutually agreed upon by both the parties.

The appellant, however, did not proceed in the matter because the format and the language of the standby letter of credit in the form issued by its bankers was not approved by the first respondent. The draft letter of credit proposed by the first respondent was also not approved by the appellant and fresh proposals were exchanged between the parties.

As a consequence, the appellant did not carry the pipes, as according to it. the formats of standby letter of credit and performance guarantee were not settled between the parties. The first respondent was, therefore, compelled to arrange for the carriage of first consignment of pipes received from M/s Tubacero at Mexico.

Transchart by it telex dated December 24, 1993 apprised the appellant about the failure to carry out its obligation, despite repeated requests which had resulted in the Charterers to finalise alternative shipping arrangements.

The appellant filed a request for arbitration with the Indian Council of Arbitration on 11.6.1994. On June 28, 1994 the first respondent received a notice from the Indian council of Arbitration intimating it that the appellant had filed an application dated June 16, 1994 invoking Clause 53 of the Agreement of Affreightment (AOA) relating to arbitration and that it had laid a claim of 1,031,668.77 US dollars. The first respondent was directed to deposit a sum of Rs. 83,200/- towards costs of the arbitration on or before July 28, 1994.

The first respondent informed the Indian council of Arbitration (second respondent) that there did not exist any binding contract between the first respondent and the appellant.

The contract between the parties had not been signed by the first respondent and the document was nothing more than a mere proposal made by the appellant, which was subject to the parties agreeing on the format and language of the standby letter of credit.

The Indian Council of Arbitration on January 3, 1995, intimated to the parties that it had appointed Mr. M.K.Chawla a retired Judge of the Delhi High Court as an Arbitrator.

Factors presented by Rickmers Velwatung Even though the agreement dated November 11, 1993 had not been signed by the

parties but the parties had acted upon it treating it to be a binding contract.

Transchart had faxed a fresh draft of standby letter of credit to the appellant and in the communication attached thereto, it was indicated that the draft letter of credit would be acted upon by respondent .

Factors presented by Indian Oil Corporation Ltd. Perusal of the correspondence exchanged between the parties established that there

was no meeting of mind between the parties and no agreement could also be spelt out from the correspondence exchanged between the parties.

The "draft" Charter Party agreement dated November 11,1993 even if it had in fact been executed between the parties, could not become enforceable because the terms of letter of credit and performance guarantee had not been agreed to between the parties.

JUDGEMENTDecided in favour of Indian Oil Corporation Ltd.

REASON

No concluded bargain had been reached between the parties as the terms of the standby letter of credit and performance guarantee were not accepted by the respective parties.

There is nothing expressly agreed between them and no concluded enforceable and binding agreement come into existence between them.

The fax messages exchanged between the parties, referred to above go to show that the parties were only negotiating and had not arrived at any agreement.

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