1981 (2) TMI 89 - HC - Customs

Penal provisions not enforceable, if terms of bond incapable of performance - Bond - Any Accident - Interpretation of - Refund - Forfeiture of deposit illegal

Summary

Issues:
1. Seizure and confiscation of a motor lorry by Customs Authorities.
2. Appeal against the confiscation order.
3. Enforcement of bond terms and liability for confiscation.
4. Interpretation of the term "any accident" in the bond.
5. Application of Section 56 of the Contract Act.
6. Validity of the confiscation order under Section 115(2) of the Customs Act.
7. Legal proceedings and relief sought by the petitioner.

Analysis:

The petitioner, a registered owner of a motor lorry seized by Customs Authorities for carrying smuggled articles, had the lorry released by depositing a sum and executing a bond. The lorry was later destroyed in riots. The Customs Collector ordered confiscation of the lorry and forfeiture of the deposit, leading to an appeal to the Central Board of Excise and Customs. The appellate authority upheld the confiscation but reduced the fine. The petitioner challenged these orders in the High Court under Article 226 of the Constitution.

The main argument raised was that the lorry was non-existent at the time of the confiscation order, making it ineligible for confiscation. The petitioner contended that the bond terms became non-performable under Section 56 of the Contract Act due to the lorry's destruction beyond his control. The respondents argued that the rioting could be considered an "accident" under the bond terms, making the contract enforceable.

The High Court held that the term "any accident" in the bond referred to road accidents, not events like riots beyond the petitioner's control. It emphasized that if a contract becomes impossible to perform due to uncontrollable events, penal provisions cannot be enforced. The Court concluded that the destruction of the lorry made confiscation impossible, rendering the confiscation order invalid under Section 115(2) of the Customs Act.

The Court allowed the petition, quashing the orders for confiscation and forfeiture of the deposit. It directed the refund of the deposit amount to the petitioner, stating it shall not carry interest. The Court did not award costs in the circumstances of the case, focusing on the legal aspects related to the enforcement of the bond terms and the impossibility of performance due to uncontrollable events.