2013 (8) TMI 621 - HC - Customs

Recovery of Imported Goods - Liability of AAI for goods misplaced or stolen - Plaintiff (importer) had made payments to the foreign supplier for the consignment and even paid Customs Duty in respect of one consignment. The plaintiff had claimed not only the value of goods, including the Customs Duty and Interest for certain period but also damages on account of loss of reputation. The suit had impleaded AAI and the Customs authorities.. Held that - the fact that the plaintiff did not pay duty, or approached the Customs authorities late, does not in any manner implicate or detract from the appellant s duty of exercising diligent and proper care of the goods, till they were claimed and cleared. May be, if the plaintiff had neglected to clear the goods, after assessment, the Airport Authority would have, after issuing notice in terms of Sections 45, 46 and 48 of the Customs Act, entitled it to dispose of the goods, and apply the proceeds to realize customs duty dues (statutorily chargeable) and its detention or demurrage charges. However, those facts are not pleaded or proved before the Court. This court is also unpersuaded by the appellant s submission that the principle of res ipsa loquitur did not apply. Even if it were inapplicable, arguendo, the plaintiff proved all the foundational facts in the case, such as their entry into India, on the dates alleged, the payment made to their suppliers, evidence of due filing of Bills of Entry, assessment of two of those, and payment towards one of them. It had also alleged that the non-availability certificate in respect of the consignments was not forthcoming, due to which it could not claim any insurance amount towards the lost or stolen consignment. The judgment cannot be faulted with in holding that the goods belonging to the plaintiff (importer) went missing while they were in the care and custody of the defendant Authority. Bar of Limitation Held that - The plea of the Assesse that the suit was time-barred, as it was filed beyond the period of one year, under Article 72 of the Limitation Act, was meritless - As regards the factual findings in the judgment the Court had already noticed that they do not call for interference, and are unexceptionable Article 72 had limited application and applied to protect bona fide exercise of power, or bona fide omission to do something, under belief that such act or omission was covered by statutory authority - It was not only a limitation, but also restriction of ordinary rights and had to be strictly construed. Only if the AAI had urged that it lost the goods from its custody, as a result of some omission (or act) which it bona fide thought was part of its duties, (traceable to some provision of law) would it be entitled to successfully say that the shorter period of limitation applied - Therefore, neglect of duty, whether statutory or otherwise, does not afford the State or state agency shelter of the shorter period of limitation - Decided against assesse.

Summary

Issues Involved:
1. Entitlement of the plaintiff to recover the claimed amount.
2. Entitlement of the plaintiff to interest, and the applicable rate and period.
3. Determination of negligence on the part of the defendant.
4. Relief.

Issue-wise Detailed Analysis:

1. Entitlement of the plaintiff to recover the claimed amount:
The plaintiff filed a suit for recovery of Rs. 35,25,000, alleging that goods imported under three invoices were warehoused by the Airports Authority of India (AAI) and later misplaced or stolen. The plaintiff had made payments to the foreign supplier and paid Customs Duty for one consignment. The AAI denied liability, contending that the plaintiff misappropriated the consignment in collusion with agents and employees. The learned Single Judge found that remittances were made on behalf of the plaintiff by its banker to the foreign buyer, proving payments for the consignments and Customs Duty. The judgment held that the plaintiff proved remittances and established payment of Customs Duty, and that the defendant admitted custody of the goods but failed to provide evidence that the plaintiff or its agent stole the goods.

2. Entitlement of the plaintiff to interest, and the applicable rate and period:
The learned Single Judge decreed the suit to the extent of Rs. 13,37,586 with interest at 10% compounded quarterly from 23-12-1999 till payment. The Court held that the defendant was negligent in not keeping the goods in safe custody, thus justifying the award of interest.

3. Determination of negligence on the part of the defendant:
The AAI contended that it took due care of the cargo under Section 45 of the Customs Act, but the Court found that the AAI did not lead any evidence to support its claim that the plaintiff or its agent stole the goods. The Court noted that the AAI's representative admitted no notice was issued to the plaintiff regarding the auction of unclaimed goods, and delay by the importer did not absolve the Authority from its duty. The principle of res ipsa loquitur applied, indicating negligence on the part of the AAI.

4. Relief:
The Court granted a decree for the amount mentioned with interest, finding the AAI negligent in its duty. The appellant's plea that the suit was time-barred under Article 72 of the Limitation Act was rejected. The Court held that the longer period prescribed in Article 113 applied, and the suit was filed within the time. The appeal was dismissed, upholding the factual findings and legal conclusions of the learned Single Judge.