2016 (3) TMI 611 - HC - Customs

Rejection of claim for recovery of demurrage charges - Writ petition - Validity of order - Seeking invokation of Article 226 of the Constitution of India - Held that - when there is a dispute with regard to demurrage charges claimed by the petitioner as against the 2nd respondent, the same cannot be decided by this Court in the Writ Petition, when the 2nd respondent had paid the duty payable to the 1st respondent and the Dock officials had issued out of charge orders. The 1st respondent had rightly observed that once the customs duty was realized, the goods cannot be included in the Lot for fresh auction. The Writ Petition is filed in public law remedy. While exercising the power of judicial review is concerned with illegality, irrationality and procedural impropriety of an order passed by the State or a Statutory Authority, the remedy under Article 226 of the Constitution cannot be invoked for resolution of a private law dispute as contra-distinguished from a dispute involving public law character. The petitioner cannot force the 1st respondent to conduct an auction so as to recover the demurrage charges from the 2nd respondent, even though the 1st respondent does not have any control over the goods. - Decided against the petitioner

Summary

Issues:
1. Disposal of goods by auction due to non-clearance
2. Applicability of judgments on warehousing charges
3. Dispute over demurrage charges and legal remedy

Issue 1: Disposal of goods by auction due to non-clearance
The petitioner, a Container Freight Station, sought permission to auction goods stuffed in containers due to non-clearance by the 2nd respondent within the stipulated time. The 1st respondent initially permitted auctioning in one case but not in another where duty was paid last minute. The petitioner argued for auction based on Customs Act provisions.

Issue 2: Applicability of judgments on warehousing charges
The petitioner relied on a Delhi High Court judgment regarding recovery of warehousing charges from auction sale proceeds. The judgment emphasized the priority of recovering warehousing charges over customs duty from sale proceeds. However, the 1st respondent contended that the Delhi High Court judgment did not apply as the goods in question were not warehoused.

Issue 3: Dispute over demurrage charges and legal remedy
The court noted that the dispute primarily involved demurrage charges between the petitioner and the 2nd respondent, with the 1st respondent having no control over the goods. It emphasized that Article 226 of the Constitution could not be used to resolve private law disputes. The court suggested pursuing a civil suit for recovering demurrage charges.

In conclusion, the court dismissed the Writ Petitions, stating that the remedy under Article 226 could not resolve private law disputes. It advised pursuing a civil suit for the recovery of demurrage charges and clarified that the 1st respondent could not be compelled to conduct an auction for such purposes. The judgment highlighted the distinction between public law and private law disputes in seeking legal remedies.