1926 (10) TMI 3 - HC - Customs

Summary

Issues Involved:
1. Territorial Jurisdiction
2. Applicability of Section 19 of the Code of Civil Procedure
3. Applicability of Section 106(2) of the Government of India Act, 1915

Detailed Analysis:

1. Territorial Jurisdiction:
The plaintiff brought a suit against the Secretary of State for India in Council, alleging wrongful conversion of goods (gold thread) seized by the Customs Inspector on the grounds of smuggling. The plaintiff contended that the cause of action arose within the jurisdiction of the High Court of Madras since the order for confiscation was made by the Collector of Customs in Madras. However, the Court held that the actual wrongful act (seizure of goods) occurred in Salem, Coimbatore, or Cuddalore, not in Madras. The Court concluded that the seizure and detention of goods outside Madras did not confer jurisdiction to the Madras High Court, as the mere confirmation of the seizure by the Collector in Madras did not constitute an effective dealing with the goods within its jurisdiction. The Court emphasized that the plaintiff should have sought leave to sue on the Original Side of the High Court, which he failed to do.

2. Applicability of Section 19 of the Code of Civil Procedure:
The plaintiff argued that the suit could be maintained under Section 19 of the Code of Civil Procedure, which provides jurisdiction if the defendant resides or carries on business within the local limits of the Court. The Court rejected this argument, stating that the Secretary of State for India (interpreted as the Madras Government) cannot be considered as residing or carrying on business in Madras merely because its headquarters are located there. The Court clarified that the terms "resides" and "carries on business" refer to natural persons and commercial entities, not governmental functions. The Court further noted that the business of the government is to govern, not to engage in commercial activities, and thus does not fall within the meaning of Section 19.

3. Applicability of Section 106(2) of the Government of India Act, 1915:
The Court examined whether the suit was barred by Section 106(2) of the Government of India Act, which prohibits High Courts from exercising original jurisdiction in matters concerning revenue or acts done in the collection thereof. The Court held that the seizure and confiscation of goods by customs authorities are acts related to the collection of revenue, as the proceeds from the sale of confiscated goods contribute to the customs revenue. The Court referenced the decision in Best & Co., Ltd. v. The Collector of Madras, affirming that Section 106(2) is an express prohibition against the exercise of original jurisdiction by the High Court in revenue matters. Consequently, the Court concluded that it had no jurisdiction to entertain the suit on this ground.

Conclusion:
The High Court of Madras dismissed the plaintiff's suit, holding that:
1. The cause of action did not arise wholly within the jurisdiction of the Madras High Court.
2. The Secretary of State for India does not fall within the scope of Section 19 of the Code of Civil Procedure.
3. The suit was barred by Section 106(2) of the Government of India Act, 1915, as it concerned the collection of revenue.

The suit was thus dismissed with costs, affirming the lack of jurisdiction on multiple grounds.