2018 (7) TMI 2300 - HC - Customs

Seeking to issue a writ of mandamus (writ issued by a superior court commanding the performance of a specified official act or duty) - seeking direction to respondents to issue detention certificate in connection with certain containers, which had been detained by issuing an order u/s. 5 of the Customs Act,1962 - permission denied to export of goods due to which huge amount and ground rent/demurrages was paid by petitioner (at no fault of petitioner). HELD THAT - here is no dispute that the petitioner intended to export the goods of 87 containers from Kandla Port Trust. As per the provisions of The Customs Act, the petitioner after following the procedure, ultimately got clearance certificate for all 87 containers, which were issued by the Customs Officer under the provisions of Sections 50 and 51 of the Customs Act, before 27.6.2006. Since the shipment was not available (as claimed by the petitioner in the memo of the petition and not denied by the respondent) remaining 67 containers could not be physically exported beyond the territory of India and therefore, while dealing with the applicability of notification dated 27/06/2006, Division Bench of this Court as well as Hon ble Apex Court, the action of the respondent authorities in not permitting the petitioner to load the goods, held to be illegal - By not permitting the petitioner to export the goods, at no fault of the petitioner, he was paying ground rent/ demurrages to respondent Nos.4 and 5, whose containers were used for storing the goods for export. Even though specific directions were issued, the respondent authorities were not permitting the petitioner to export the consignments. Though specific request was made by the petitioner and petitioner had to incur huge expenses towards ground rent/ demurrages towards such attitude of the officers and when the action of respondent authorities from the beginning was declared illegal, and are required to be deprecated and are bound to face the consequences. In case of SHIPPING CORPN. OF INDIA LTD. VERSUS CL. JAIN WOOLEN MILLS 2001 (4) TMI 83 - SUPREME COURT the Hon ble Apex Court has held that even confiscation of goods, which ultimately find out to be unsuccessful, the Court has held the same as illegal, parties would be entitled for demurrages, etc. - Similarly in unreported decision rendered in the case of Unisilk Ltd. 2013 (4) TMI 237 - GUJARAT HIGH COURT , Division Bench of this Court has considered the same as having similar facts and held that persons would be entitled for demurrages. Respondent No.2 is hereby directed to pay the demurrages, after examining the details supplied by the petitioner within a period of eight weeks from the date of receipt of copy of this order, with interest at the rate of 6% per annum from 24/06/2006 till the amount is paid - petition allowed.

Summary

Issues Involved:
1. Legality of the respondent's action in detaining the petitioner's containers.
2. Entitlement of the petitioner to demurrage and container charges.
3. Applicability of the notification dated 27/06/2006 and its interpretation.
4. Amendment of the petition and inclusion of additional prayers.

Issue-wise Detailed Analysis:

1. Legality of the respondent's action in detaining the petitioner's containers:
The petitioner, a partnership firm engaged in the export of various cereals and pulses, sought a writ of mandamus directing the respondents to issue a detention certificate for containers detained under Section 5 of the Customs Act, 1962. The Division Bench of the High Court in Special Civil Application No. 14642 of 2006 had previously directed the Customs Authority to permit the petitioner to export the consignments cleared by the Customs Authorities on 23-24/06/2006. Despite this, the respondent authorities did not permit the petitioner to export the goods, leading to the present petition. The Court held that the action of the respondent authorities in not permitting the petitioner to export the goods, despite having clearance certificates, was illegal and contrary to the Division Bench's judgment.

2. Entitlement of the petitioner to demurrage and container charges:
The petitioner incurred significant expenses towards ground rent and demurrage due to the respondent authorities' refusal to permit the export of the goods. The Court, referencing the Supreme Court's decision in Shipping Corporation of India Ltd. v. C.J. Jain Wollen Mills and others, held that the petitioner was entitled to demurrage and container charges. The Court emphasized that the customs authorities' actions were illegal and that they were responsible for the additional costs incurred by the petitioner. Consequently, the Court directed respondent No. 2 to pay the demurrage charges with interest.

3. Applicability of the notification dated 27/06/2006 and its interpretation:
The notification issued by respondent No. 2 on 27/06/2006 prohibited the export of various goods for six months. The Division Bench had previously held that this notification would apply from its date of issuance and not retroactively. The goods cleared by the customs department before this date were not covered under the notification. The Court reaffirmed this interpretation, stating that the respondent authorities' refusal to permit the export of the goods was based on a misinterpretation of the notification. The Court criticized the respondents for not adhering to the clear directions of the Division Bench and the Supreme Court.

4. Amendment of the petition and inclusion of additional prayers:
The petitioner amended the petition to include a prayer for the recovery of Rs. 62,85,667 paid towards demurrage and container charges. The amendment was allowed, and the Court considered the additional prayer. The respondents argued that the claim for demurrage was an afterthought and should not be allowed. However, the Court dismissed this argument, noting that the amendment was made in 2007 and was not challenged by the respondents at the time. The Court allowed the petition and directed respondent No. 2 to pay the demurrage charges with interest.

Conclusion:
The Court found the respondents' actions illegal and directed them to compensate the petitioner for the demurrage and container charges incurred due to the wrongful detention of the goods. The judgment emphasized the importance of adhering to legal interpretations and the consequences of misinterpretation by authorities. The petition was allowed, and the respondents were ordered to pay the specified amount with interest.