2020 (12) TMI 204 - HC - Customs

Non renewal /extension of the Warehouse License - Demand of customs duty - goods were moved from one warehouse to another - injunction sought against the third respondent/defendant from interfering with the peaceful possession during the period of the lease - HELD THAT - Section 58 enjoins upon the licensee a duty to clear off the goods after cancellation of the license within seven days. There is no case of extension of period under Sub-section (4) of Section 58B of the Act in the present case. Therefore, in the eye of law, the possession of the vacant licensed warehouse, after seven days of the impugned order passed by the Customs Authority on 29.05.2020, should be deemed to be with its owner only. Even assuming for argument sake that this observation may affect the right of the appellant/petitioner in the pending suit before the Civil Court, it is the appellant/petitioner who is to be blamed for this, because it is the appellant/petitioner who has invoked the extraordinary jurisdiction of this Court based upon an interim order passed by the trial Court. The said suit was filed much before the expiry of the lease period on 31.03.2020 and the interim order of status quo granted by the trial Court on 26.04.2019 also cannot extend beyond the extent of the period of lease itself nor it can validate the possession of the licensee beyond the period of lease. We do not see any reason to extend the scope of the civil suit, which may be so if the contention of the appellant/petitioner before us is to be accepted. There are no reason for the appellant/ petitioner to have invoked the writ jurisdiction of this Court on the basis of a status quo order granted by the trial Court in a civil Suit in which Customs Department was not at all a party. Nothing prevented him to even implead Customs Department also as Defendant in that very suit, so that all related issues could be adjudicated by one Court. This is what, the abuse of process of law is and if an observation of a learned single Judge in this process is given against the appellant/petitioner, he cannot be permitted to raise a plea against that in the intra court appeal. Appeal dismissed.

Summary

Issues Involved:
1. Non-renewal of the Warehousing License.
2. Possession of the Warehouse.
3. Compliance with Customs Act provisions.
4. Legal rights and civil suit implications.

Issue-wise Detailed Analysis:

1. Non-renewal of the Warehousing License:
The appellant, M/s. ACME Warehousing Private Ltd., challenged the non-renewal of Warehousing License No.C058, WH Code INMAA1, which was refused by the Assistant Commissioner of Customs (Bonds) on 29.05.2020. The refusal was based on the expiration of the lease on 31.03.2020, and the ongoing court case between the appellant and the warehouse owner, Mr. S.Panneer Selvam. The Customs Department directed the appellant to clear the goods from the warehouse and prohibited further bonding of cargo.

2. Possession of the Warehouse:
The appellant contended that the learned Single Judge's observation in paragraph 2 of the order dated 25.08.2020, which stated that the third respondent, Mr. Panneer Selvam, was already in possession of the warehouse and had full liberty to take action for its gainful use, would unduly affect their rights in the pending civil suit. The court noted that the lease expired on 31.03.2020, and thus, the appellant had no legal right to remain in possession. The court emphasized that after the lease period, the warehouse's possession should revert to the owner.

3. Compliance with Customs Act Provisions:
The court highlighted the provisions of Sections 57 to 73A of the Customs Act, 1962, and The Warehouse (Custody and Handling of Goods) Regulations, 2016. Specifically, Section 58B(4) mandates that goods must be removed from a warehouse within seven days of license cancellation. The court found no valid ground to challenge the license cancellation, as the appellant lacked a valid possessory title post-lease expiration, and the Customs Authorities could not permit the operation of the bonded warehouse without a valid lease.

4. Legal Rights and Civil Suit Implications:
The court observed that the appellant's invocation of the writ jurisdiction based on an interim status quo order from the trial court was an abuse of the legal process. The appellant's civil suit for injunction against the third respondent did not involve the Customs Department, and the status quo order could not extend beyond the lease period. The court criticized the appellant for multiplying litigation across different forums and emphasized that issues like arrears of rent and possession should be adjudicated in the civil suit, not in writ jurisdiction.

Conclusion:
The court dismissed the writ appeal, stating that the appellant had no legal right to remain in possession of the warehouse post-lease expiration. The court upheld the Customs Department's decision to cancel the license and directed the removal of goods from the warehouse. The appellant's attempt to challenge the Single Judge's observation was deemed meritless, and the appeal was dismissed with no costs.