AI Drafter 
TaxTMI 
TaxTMI 
2015 (3) TMI 1300
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the request of defendant No. 1:- (i) Consignment from Korea under Bill of Lading No.CBK-31 dated 28.12.1990 in the vessel "M/v Pamella-II" in six containers of 40 feet each and one container of 20 feet. The consignment arrived on 21/25.2.1991 and bill of entry was filed on 23.2.1991. (ii) Consignment from Taiwan under Bill of Lading No. ICDKEBM- 4(A) dated 31.12.1990 in six containers, each of 20 feet in the vessel Jalgodavari. The consignment arrived on 10.3.1991 and Bill of Entry was filed on 19.4.1991. (iii) Consignment from Taiwan under Bill of Lading No.ICDKEBM- 9(A) dated 05.02.1991 in six containers, each of 20 feet. The consignment arrived on 1.4.1991 and Bill of Entry was filed on 21.3.1991. 4. The containers were provided by the plaintiff. Reliance is placed on the India-Pakistan-Bangladesh-Ceylon Tarrif (IPBC Tarrif) and shipping practice to state that as per the Bill of Lading a delivery order is valid for 5 days. Defendants No. 1 to 5 on release of such an order were required to take delivery of the consignments within five days free of any detention charges. In case of delay, they were obliged to pay detention charges for the said con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efendants No. 1 to 5 again approached the plaintiff with a fresh detention certificate but they again wanted delivery of the goods without paying detention charges. These requests were hence turned down by the plaintiff. 9. Thereafter writ petition No. 3057/1995 was filed before this High Court by defendant No.1 whereby the relief of waiver of the detention of charges levied by the plaintiff was sought. This court disposed of the said matter on 24.08.1995. Relying on the judgment of the Supreme Court in International Airport Authority of India vs. Grandslam International & Ors., JT 1995 (2) SC 452 it held that it may not be possible to accede to the prayer of defendant No. 1 for release of the consignment by waiving demurrage charges. As it was claimed that the fault was of the Customs Department, Defendant No. 1 was permitted to file a fresh petition stating the claim against the Custom Department. 10. In the meantime, another firm by the name Sanjeev Woollen Mills of which defendants No. 2 to 5 are also partners got embroiled in a litigation with defendant No. 6, for a similar consignment. Defendant No. 6 in a writ petition filed by the said Sanjeev Woollen Mills being CWP ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....njeev Woollen Mills, (1998) 9 SCC 547 to submit that the facts of the present case are exactly akin to the facts of Sanjeev Woollen Mills (supra) and hence, defendant no. 6/Customs Department would be liable for detention and demurrage charges, if any as directed in that case by the High Court and upheld by the Supreme Court. 14. It is stated that several such consignments were imported earlier and were got released without detention or demurrage charges. It is further stated that the goods were detained by defendant no. 6/Customs Department due to mala fide reasons to harass the defendants on the false excuse that the containers did not contain the goods described. It is stated that an illegal demand of Rs. 50 lakhs was made by one of the officials of the Customs Department for release of the goods and that is why goods were needlessly detained by the Customs Department. 15. The defendant no. 6/Customs Department also filed the written statement. They have stated that the suit is barred under Section 155 of the Customs Act. They have relied upon the judgment of the Supreme Court in the case of International Airports Authority of India and Ors. vs. Grand Slam International an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dated 26th November, 2014 for disposal of the suit within three months, then the evidence of PW-1 on behalf of the plaintiff was not complete. The Joint Registrar on 27th November, 2014 noted that though the issues were framed on 26th July, 2010, the plaintiff has been taking dates on few previous hearings. Thereafter, the evidence of PW-1 was completed on 15th December, 2014; 16th December; 19th December; and 6th January, 2015. An opportunity was given on 6th January, 2015 to the defendants to file their affidavit by way of evidence. The cross-examination of DW-1 took place on 4th February, 2015 and 5th February, 2015. The matter was placed before the Court for hearing on 11th February, 2015. 22. The limited arguments advanced by the counsel for the plaintiff and defendant nos. 1 to 4 were heard on 19th February, 2015 and on 24th February, 2015. Parties filed their written submissions. The judgment was reserved on 24.02.2015. 23. At this stage, I may refer to another aspect. A question was posed to learned counsel for the parties as to what is the nature of the proceedings which have led to the Special Leave Petition having been filed before the Supreme Court where order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd were required to obtain delivery order and take delivery of consignment from the containers within five working days on arrival of the containers. As the same was not done it is urged that the said defendants became liable to pay detention charges for the containers as per IPBC Tariff 1991 as amended in 1995. It is stated that disputes arose between defendants No.1 to 5 and the Customs Department/defendant No.6. Defendant No.6 finally issued the Detention Certificate on 8.6.1993. However, the plaintiff required defendants No.1 to 5 to pay the container detention charges. It is urged that as detention charges were not paid the plaintiffs had a lien and powers to retain the goods under section 170 and 171 of the Indian Contract Act, 1872 till the dues are paid. The issuance of the certificate of detention by the Customs Authority could not compel the plaintiffs being the shipper not to charge the detention charges. Reliance is placed on the judgments of the Supreme Court in Shipping Corporation of India vs. C.L.Jain Woolen Mills & Ors., (2001) 5 SCC 345 and International Airports Authority of India & Ors vs. Grand Slam International & Ors., (supra). 27. The defendants No.1 to 4....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Supreme Court will be squarely applicable to the present case also. It is further urged that in this case also there was an attempt to twist the arm of the defendant to extract illegal money as in the case of Union of India & Ors. vs. Sanjeev Woolen Mills (supra). The disciplinary proceedings have been commenced against the concerned officer in Sanjeev Woolen Mills and the same officer was responsible for delaying the release of the goods of the defendant herein. 31. Reliance is also placed on judgments of this High Court in the case of Om Petro Chemicals vs. Union of India and Ors. 2002(140) ELT 353(Del.) and Sonia Overseas (P) Ltd. vs. Asst.Commr.,Customs, 2009(244) ELT30(Del.) to contend that the liability if any is of defendant No.6. 32. The facts which are sought to be relied upon by the plaintiff are not really disputed by defendants No.1 to 4. The bill of lading in question is dated 28.12.1990 and 31.12.1990. The consignments have arrived on 21 to 25.2.1991 and on 10.3.1991 respectively. The defendant No.6 issued a detention certificate on 8.6.1993. Hence, the defendants were thereafter free to get the goods released. However, detention charges were not paid and hence....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on 21 to 25.2.1991 and 10.3.1991. The customs department issued the detention certificate on 8.6.1993 and 29.5.1993. From 8.6.1993 till the year 2000 when the present suit was filed the defendants kept asking for reduction of detention charges or that the payment be collected from defendant No.6 while the plaintiff kept insisting that it had a lien on the goods and would not issue the delivery order till necessary detention charges were paid. 37. Even after having filed a suit, despite lapse of another 15 years nothing has been done by the plaintiffs and the goods are lying exactly where they were. Plaintiff never sought interim directions from this court to sell/deal with the goods lying in the containers. The condition of the goods as of now is not known. As per the defendants, when they filed the written statement they stated that 30% of the goods have been damaged due to natural calamities and 30% of the cargo has been stolen for which an FIR has been got registered. It is unlikely that the cargo would be of much worth today. 38. What is the effect of the conduct of the plaintiff? The value of the goods was around 14 lacs when they were imported. According to the plain....
X X X X Extracts X X X X
X X X X Extracts X X X X
....charge from the vessel (or after the arrival of the Goods at the place of delivery if named herein) the Carrier shall be at liberty at his discretion either to unpack the container(s) and to put the goods in safe custody on behalf of the Merchant and at the Merchant‟s risk and expense or to charge demurrage in accordance with the carrier‟s tariff applicable to the route over which the Goods are carried. If unpacking the contents of Container is required for whatever reason and the contents cannot be identified as to remarks and numbers, cargo sweepings, liquid residue and any unclaimed contents not otherwise accounted for shall be allocated for completing delivery to the Merchant. The Carrier shall not be required to separate or deliver goods in accordance with brand, marks, numbers, size or types of packages as stated by the Merchant in his particulars but only to deliver total number of container(s) (If same loaded by the Merchant, or packages or Units (if containers) loaded by the Carrier) shown on the face of this Bill of Lading." 43. The above clause clearly provides that if within 48 hours the goods are not taken out of the container the plaintiffs can remove t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....61 of the MPT Act. If payment is not made by the consignee to the wharfinger, in a case where Section 171 of the Contract Act applies, the wharfinger can only retain the goods bailed as security and will have to take recourse to other proceedings in accordance with law for securing an order which would then enable the goods to be sold for realisation of the amounts due to it. It may in this connection, be necessary for the wharfinger to file a suit for the recovery of the amount due to it and Section 131 of the MPT Act clearly provides that such a remedy of filing a suit is available to the Board. The added advantage of sale given by Section 61 of MPT Act in respect of current dues cannot be regarded as whittling down the right of general lien contained in Section 171 of Contract Act in respect of old dues." 45. Hence, the right of lien provided under sections 170 and 171 of the Contract Act enables the plaintiff to detain goods as security. He has, however, no right to sell the goods and realise its dues. He has to file a suit for recovery of the amount due and take orders from the Court for sale of goods. 46. The facts show that after 1993 when the Detention Certificate was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. In Law Lexicon it is defined to mean "A reasonable time, looking at all the circumstances of the case; a reasonable time under ordinary circumstances; as soon as circumstances will permit; so much time as is necessary under the circumstances, conveniently to do what the contract requires should be done; some more protracted space than 'directly'; such length of time as may fairly, and properly, and reasonably be allowed or required, having regard to the nature of the act or duty and to the attending circumstances; all these convey more or less the same idea." 48. In Firm Bachraj Amolakchand and Anr. vs. Firm Nandlal Sitaram and Ors., AIR 1966 MP 145;MANU/MP/0039/1966, a Division Bench of Madhya Pradesh High Court held as follows:- "...In the absence of there being any agreement with regard to the time within which the contract was to be performed, the provisions of the Contract Act require that the contract has to be performed within a reasonable time. What is „reasonable time‟ is a question of fact depending upon the particular circumstances of each case." 49. Hence, the plaintiff was obliged to take steps within a reasonable time to realise i....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The bills of entry were in respect of synthetic waste (soft quality) imported by the respondent. Sanjeev Woolen Mills in that case sought release of the goods free of duty in terms of valid import/export passbook. The customs claimed that on testing, the goods were found to be of prime fibre and not soft waste. Defendants No.1 to 4 alongwith the written statement have filed a copy of the Show Cause notice issued on 23.6.1993 by the Assistant Collector of Customs in the present case. Though this document has not been proved, it is not a disputed document and I can refer it for culling out the facts of the present case regarding the dispute with defendant No.6. As per the Show Cause Notice the bills of entry in the present case were for clearance of goods for synthetic waste/soft quality. As per the test report, it is stated that in the Show Cause that the sample tested found that there is no existence/percentage of waste as defined earlier. The bills of entry are also of February to April 1991. The facts of the present case are more or less identical with the facts of the case in which judgments were passed by this High Court and the Supreme Court in the case of Sanjeev Wool....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ithstanding the judgment of the High Court, the goods not having been released, the impugned order and direction dated 18.1.99, cannot be held to be infirm in any manner. In the absence of any provision in the Customs Act, entitling the customs officer to prohibit the owner of the space, where the imported goods have been stored from levying the demurrage charges, levy of demurrage charges for non-release of the goods is in accordance with the terms and conditions of the contract and as such would be a valid levy. The conclusion of the High Court to the effect that the detention of the goods by the customs authorities was illegal and such illegal detention prevented the importer from releasing the goods, the customs authorities would be bound to bear the demurrage charges in the absence of any provision in the Customs Act, absolving the customs authorities from that liability. Section 45(2)(b) of the Customs Act cannot be construed to have clothed the customs authorities with the necessary powers, so as to absolve them of the liability of paying the demurrage charges. In the aforesaid premises, we see no infirmity with the directions given by the Delhi High Court on 18.1.99. The go....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Petro Chemicals vs. Union of India and Ors. (supra) held that the burden is on the petitioner to produce sufficient material to suggest malafides of the authorities concerned. It is a heavy burden which can be discharged ordinarily by initiating civil proceedings. Unless malafides are established, liability on the customs cannot be established. 57. The question is: Are the malafides established in the present case? In Union of India & Ors. vs. Sanjeev Woolen Mills (supra) the Supreme Court had noted that the conduct of the Customs Officers concerned is under investigation. In fact the customs was directed to file a progress report regarding a departmental enquiry in the said case. 58. In the present case also in the written statement itself defendants No.1 to 4 have stated that the goods of the defendants were detained illegally as there was a demand of Rs. 50 lacs made by one of the Customs Department official for release of the goods. DW-1 in his evidence by way of affidavit has clearly pointed out the name of the official namely Mahesh Kumar Badha. It is stated that the said official has been chargesheeted for his conduct relating to the goods of Sanjeev Woolen Mills. His ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., copy annexed marked Exhibit-D8. May this Hon‟ble court be pleased to direct the lower court to expedite and decide the same within 3 months as it is based on all documentary evidences taken under RTI Act, 2005 to curb malpractices in CRCL, New Delhi." 60. DW-1 in his cross-examination has reiterated that it is on account of fault of defendant Mahesh Kumar Badha the then Collector of Customs/ICD who had demanded bribe from the defendant that the goods were detained prior to 30.6.1993. He was also asked as to whether there is any difference between the facts of the case of Sanjeev Woolen Mills and the present case. He has denied any difference. 61. Relevant portion of his cross-examination reads as follows:- "It is incorrect to suggest that the goods were detained prior 30.06.1993 on account of fault of the defendant. Sh.M K Bhada was the person concern, the then Collector of Custom ICD, New Delhi who had demanded the bribery from the defendant. Q. Would you be able to say as to whether there is any difference in between the facts of Sanjeev Woolen Mills Case and the present case? A.No." 62. In the light of the above categorical averments, and the e....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... already held that in view of the judgment of the Division Bench in CWP 17979-77/2004, there is no liability on defendant No.6. The present issue would not really survive. 69. In any case, as I have already held that the goods were illegally detained for mala fide. If some liability was to be thrust on defendant No.6 on account of the said mala fide act, it could not be said that the suit is barred under Section 155 of the Customs Act. 70. The Division Bench of this Court in Sonia Overseas (P) Ltd. vs. Asst.Commr. Customs, (supra) held as follows:- 7. As regards the immunity granted by the statute, it will be noted that Section 155 of the Customs Act seeks to protect the actions of the local authority from any legal prosecution or proceedings in following words:-...... Thus, no liability, civil or criminal, may be attracted so long as the power that has been exercised by the Customs Authority is in good faith and not in colourable exercise of power. Explaining the concept of exercise of power in good faith their Lordships in Express Newspaper (P) Ltd. -vs- Union of India, (1986) 1 SCC 133 held thus:- 18. The expression "good faith" has not been defi....