2006 (5) TMI 479 - HC - Customs

High Court Upholds Interest Award for Wrongful Confiscation, Rejects Delay Condonation

UNION OF INDIA Versus C.L. JAIN WOOLLEN MILLS PVT. LTD.

The High Court dismissed the appeal, upholding the trial court's judgment awarding interest to the plaintiff for the wrongfully confiscated goods. The ... - Issues Involved:1. Entitlement of the plaintiff to the claimed amount.2. Condonation of delay in filing and refiling the appeal by the defendants.3. Jurisdiction of the trial court to entertain and decide the suit.Issue-wise Detailed Analysis:1. Entitlement of the plaintiff to the claimed amount:The plaintiff, a private limited company, filed a suit for recovery of Rs. 3,35,000/- against the defendants, including the Secretary, Ministry of Finance (Revenue), and the Commissioner of Customs. The plaintiff was engaged in import and export and had been granted a Duty-Free Licence with import entitlement for acrylic fibre without payment of duty, contingent upon exporting acrylic yarn. The plaintiff fulfilled these obligations, but the officials of the defendants allegedly harassed the plaintiff and made false reports. A notice was issued under Section 124 of the Customs Act, 1962, leading to the confiscation of goods and imposition of a penalty, which was later quashed by the court. The plaintiff sought interest on the refunded amount of Rs. 5 lakhs, which was deposited during the appeal. The trial court decreed the suit, awarding interest at 12% per annum from the date of deposit until the refund date, citing the erroneous order of the defendants. The plaintiff was also entitled to interest on the decretal amount pending litigation until realization.2. Condonation of delay in filing and refiling the appeal by the defendants:The defendants filed an appeal against the trial court's judgment, along with applications for condonation of delay in filing and refiling the appeal. The delay was attributed to unreadable photocopies of documents and the need for multiple approvals within the Union of India (UOI). The appeal was initially filed 203 days late and refiled after more than a year. The court found the reasons for the delay insufficient and lacking basic details. It emphasized that while the UOI might not need to explain each day's delay, a reasonable explanation for the overall delay was necessary. The court referenced several judgments, including those of the Supreme Court, emphasizing that the right accrued to the decree-holder by lapse of time should not be disturbed lightly and that sufficient cause must be shown to condone the delay. The court found no merit in the applications for condonation of delay and dismissed them.3. Jurisdiction of the trial court to entertain and decide the suit:The defendants contended that the trial court lacked jurisdiction to entertain the suit. However, this objection was not raised in the written statement, no issue was framed, and the parties led evidence conceding the court's jurisdiction. The court noted that even if such an objection existed, it would stand waived, and the memorandum of appeal did not clarify the grounds for questioning the court's jurisdiction. The plaintiff's claim was based on the wrongful retention of amounts by the defendants, and the court found no merit in the jurisdictional contention.Conclusion:The High Court dismissed the appeal, finding no merit in the defendants' applications for condonation of delay and rejecting the jurisdictional challenge. The trial court's judgment awarding interest to the plaintiff was upheld, and the parties were directed to bear their own costs.