Title to a stranded vessel and customs clearance depended on proof of transfer, abandonment, and ownership

Dispute concerned whether customs authorities could be directed to accept a Bill of Entry and permit clearance of a vessel where title was said to be disputed after the vessel drifted, grounded and was abandoned. The Court treated the agreement as an agreement to sell rather than a completed sale because the contractual conditions for transfer of property were not shown to be fulfilled; safe anchorage, delivery of the vessel and release of the letter of credit were not established. It also rejected the contention that the wreck automatically vested in the Central Government under the Merchant Shipping Act, 1958, and applied the principles governing abandonment and ownership of imported goods. On that basis, relief was granted for clearance on payment of duty.

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Issues: Whether the petitioner was entitled to a writ directing the customs authorities to accept the Bill of Entry and permit clearance of the vessel on payment of duty, in the context of the disputed passing of title and the vessel having drifted, grounded and been abandoned.

Analysis: The agreement relied upon by the respondents was treated as an agreement to sell, not a completed sale, because the contractual conditions for transfer of property were not shown to have been fulfilled. The Court found that safe anchorage at Alang Port had not occurred, the vessel had drifted out of control and grounded, and there was no material to show delivery of the vessel or release of the letter of credit as required for title to pass. The customs reliance on automatic vesting of rights in the Central Government was rejected, as the scheme of the Merchant Shipping Act, 1958 dealing with casualty and wreck did not show that the wreck vested automatically in the Government. In the absence of proof that the original importer had become the owner, and in the light of the principles governing abandonment and ownership of imported goods, the petitioner could not be denied relief on that basis.

Conclusion: The petitioner succeeded and the Court directed the respondents to accept the Bill of Entry and allow clearance of the goods on payment of customs duty in accordance with law.

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