High Court Rules on Compensation for Delay in Transshipment Process

The High Court addressed compensation for delay in transshipment application processing, leaving the issue open for the petitioner to establish liability of the Customs Department. Regarding payment of demurrage charges due to delay, the court suspended the charges until the Commissioner of Customs reconsiders the issue. The court directed the Commissioner to decide expeditiously, with the petitioner not required to pay demurrages until re-evaluation. The appeal was closed without costs.

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Issues:
1. Compensation for delay in transshipment application processing.
2. Payment of demurrage charges due to delay in transshipment.

Analysis:

Issue 1: Compensation for delay in transshipment application processing
The High Court addressed the issue of compensation for the delay in processing transshipment applications. The learned Single Judge observed that if there was a breakdown in operations due to alleged arrests causing delays, the petitioner should be compensated. Referring to a Supreme Court case, the court left the issue open for the petitioner to establish the liability of the Customs Department for compensation. The court directed the petitioner to substantiate the allegations before the authorities and remitted the case back for appropriate orders within three months.

Issue 2: Payment of demurrage charges due to delay in transshipment
The appellant, M/s. Qatar Airways, filed an appeal challenging the direction to pay demurrage charges of approximately Rs. 67 lakhs due to delays in transshipment. The delay was attributed to the unavailability of office staff at Chennai Airport to process transshipment applications caused by the arrest of customs officials. The appellant argued that the delay was beyond their control, and the Customs Authorities should verify the reasons for the delay. The High Court, after examining the records and the order of the Single Judge, held that the demand for demurrage charges cannot be sustained at the moment. The court modified the order to suspend the payment of demurrage charges until the Commissioner of Customs reconsiders the issue and passes a fresh order after providing a hearing to the appellant.

In conclusion, the High Court disposed of the appeal, expecting the Commissioner to decide on the issue expeditiously, preferably within six weeks. The court clarified that the petitioner shall not be required to pay demurrages until the Commissioner re-evaluates the situation. The writ appeal was closed without costs, along with related petitions.

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