2020 (11) TMI 729 - HC - Customs

Court dismisses writ appeals, upholds denial of interim relief in private contractual dispute.

GOLDEN IMPORTERS Versus UNION OF INDIA

The court dismissed the writ appeals, upholding the decision of the Learned Single Judge to decline the interim relief sought by the appellants. The court ... Deadlocks/inordinate delays for clearance of import cargo. due to COVID-19 pandemic lockdown - the Learned Single Judge ordered that the payment of container detention charges or other penal charges by the petitioners for release of the cargo covered by Bills of Lading shall be provisional and subject to further orders in the writ petitions. - HELD THAT:- True, at the time of considering the interim relief, the Court is bound to consider whether, (1) there is prima facie case, (2) balance of convenience, and (3) likelihood of irreparable hardship. Writ court though not specifically adverted to the above, reading of the impugned order reflects the same. On the aspect of violation of Article 14 of the Constitution of India, that the earlier interim order in W.P. (C) No. 10177/2020, dated 25-5-2020 has not been followed, it could be deduced that the earlier order has been passed at the stage of admission of that writ petition, but subsequently, writ court has taken note of the interim order passed by the Hon’ble High Court of Delhi. Going through the pleadings, submissions of the contesting parties, the order, which was taken note of by the Learned Single Judge in the impugned order, and the decisions on interim relief vis-a-vis main relief considered by us, we are of the considered view that there is no error in the interim order dated 30-6-2020, warranting interference in the instant appeals. Appeal dismissed. Issues Involved:1. Force Majeure Clause and COVID-19 Pandemic: Whether the COVID-19 pandemic and subsequent lockdowns constituted a force majeure event excusing the appellants from paying detention and demurrage charges.2. Validity and Enforcement of Government Advisories: Whether the advisories and orders issued by the Ministry of Shipping and Director General of Shipping were mandatory and binding on private entities like shipping lines.3. Contractual Obligations and Private Contracts: Whether the dispute over detention and demurrage charges was a private contractual matter not warranting judicial intervention.4. Interim Relief and Main Relief: Whether granting the interim relief would effectively grant the main relief sought in the writ petitions.5. Comparative Hardship and Balance of Convenience: Whether the balance of convenience and comparative hardship justified granting interim relief to the appellants.Issue-wise Detailed Analysis:1. Force Majeure Clause and COVID-19 Pandemic:The appellants argued that the COVID-19 pandemic and the nationwide lockdown constituted a force majeure event, excusing them from paying detention and demurrage charges. They relied on various government advisories and orders, including the Ministry of Finance's Office Memorandum dated 19-2-2020, which clarified that the disruption of supply chains due to COVID-19 should be considered a natural calamity under the force majeure clause. The court acknowledged the force majeure situation but emphasized that the advisories were not binding on private entities.2. Validity and Enforcement of Government Advisories:The appellants contended that the advisories and orders issued by the Ministry of Shipping and the Director General of Shipping (Exhibits-P2 to P7) were binding on the respondents, including private shipping lines. However, the court noted that these advisories were not mandatory but merely recommendatory. The respondents argued that they had already provided significant relief by waiving detention charges during the initial lockdown period but were not obligated to extend these waivers beyond the specified dates.3. Contractual Obligations and Private Contracts:The respondents argued that the dispute over detention and demurrage charges was a private contractual matter between the appellants and the shipping lines, not warranting judicial intervention. The court agreed, emphasizing that the terms of the contracts, including detention charges, were negotiated and agreed upon by the parties. The court also noted that the shipping lines had continued to operate and provide services during the lockdown, and the appellants' inability to clear the cargo was not solely due to the lockdown.4. Interim Relief and Main Relief:The court observed that granting the interim relief sought by the appellants would effectively grant the main relief sought in the writ petitions, which is not permissible. The court cited several precedents, including the Supreme Court's decision in State of Orissa v. Madan Gopal Rungta, which held that interim relief should not grant the main relief sought in the petition. The court emphasized that interim relief should only be granted to maintain the status quo and not to provide the final relief.5. Comparative Hardship and Balance of Convenience:The court considered the balance of convenience and comparative hardship, noting that the appellants had not demonstrated that they would suffer irreparable harm if interim relief was not granted. The court also noted that the respondents had already provided significant relief during the initial lockdown period and that further relief would impose undue hardship on the shipping lines. The court concluded that the balance of convenience did not favor the appellants and that the interim relief sought was not warranted.Conclusion:The court dismissed the writ appeals, upholding the decision of the Learned Single Judge to decline the interim relief sought by the appellants. The court emphasized that the advisories issued by the government were not binding on private entities, that the dispute was a private contractual matter, and that granting the interim relief would effectively grant the main relief sought in the petitions. The court also noted that the balance of convenience and comparative hardship did not favor the appellants.