2017 (8) TMI 808 - HC - Customs

Compensation for the loss of materials in transit through India - company registered in foreign country (Nepal) - Held that - Article 226 of the Constitution of India does not limit the exercise of such powers by High Court at the instance of citizens of India only. The Courts, over a period of time, have recognized the availability to the recourse to Article 226 of the Constitution of India to persons other than natural persons who are Indians. A juristic person carrying on business in India has been recognized to be entitled to maintain and obtain relief under Article 226 of the Constitution. A foreign national, has also been recognized to be entitled to approach the High Court under Article 226 of the Constitution of India, in the event of violation of human rights. In the present case, the right to transport the goods from the port of Kolkata to the territory of Nepal has been claimed to be violated by the action or the non-action of the State authorities. Essentially it is a right having its foundational basis and emanating out of Article 19(1)(g) of the Constitution which the petitioner is seeking to enforce. Article 19(1)(g) is available to a citizen of India. Its availability has been extended to juristic persons constituted under the laws of India. A foreign company cannot be allowed to invoke Article 226 founding its claim on the violation of Article 19(1)(g). The treaty does not contemplate that the Indian Government has to pay for the alleged theft of the materials in transit. The culmination of the First Information Report has not been produced on record. It has not been conclusively established that there was any theft. The question of grant of compensation by the Indian Government to the petitioner does not arise - petition dismissed - decided against petitioner.

Summary

Issues:
1. Whether a foreign national can maintain a writ petition for redressal of grievances in India?
2. Whether the demand notice issued by customs authorities to a foreign company for lost goods in transit is valid?
3. Whether a foreign company can invoke Article 226 of the Constitution of India for violation of rights?
4. Whether the action of customs authorities in demanding payment from a foreign company is arbitrary or in violation of the Constitution?
5. Whether the Indian Government is liable to compensate a foreign company for theft of goods in transit?

Analysis:
1. The petitioner, a company incorporated in Nepal, imported goods which were stolen while in transit through India. The petitioner sought compensation and withdrawal of a demand notice issued by Indian authorities. The petitioner argued that the customs authorities acted in violation of the treaty and statutory obligations, making the demand notice invalid. The petitioner relied on precedents to support the maintainability of a writ petition by a foreign national for redressal of grievances in an Indian court.

2. The Respondent, represented by the Additional Solicitor General, contended that a foreign national cannot maintain a writ petition for all grievances and cited precedents to support limited grounds for such petitions. The Respondent argued that the demand notice was valid as per the Treaty of Trade and Trade Related Agreement between Nepal and neighboring countries. The customs authorities demanded payment from the petitioner as per the treaty's provisions, and their action was not arbitrary or in violation of the Constitution.

3. The petitioner claimed to be a private limited company engaged in manufacturing in Nepal, importing goods to Nepal through India. The petitioner challenged the demand for payment by customs authorities and sought compensation for alleged theft by Indian nationals. The petitioner invoked Article 226 of the Constitution, arguing that foreign nationals can approach the High Court for the violation of human rights.

4. The judgment highlighted that Article 226 of the Constitution is not limited to Indian citizens but can be invoked by juristic persons, including foreign nationals, for the violation of rights. Precedents were cited to distinguish between claims based on Article 14 and Article 19(1)(g) of the Constitution. The judgment emphasized that the petitioner's claim was founded on Article 19(1)(g) and not Article 14, making the writ petition maintainable.

5. The judgment concluded that the demand notice issued by customs authorities was valid as per the Treaty of Transit provisions. The petitioner was liable to pay the specified amount as per the undertaking given to customs authorities. The judgment dismissed the writ petition, stating that the Indian Government was not liable to compensate the petitioner for alleged theft in transit, as it was not conclusively established. The prayer for stay was also rejected by the court.