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2022 (4) TMI 952 - HC - CustomsSeeking to grant leave to add the container freight station (CFS) and the Shipping Line as party respondents in the contempt petition - if the Shipping Line is considered as a third party on whom no specific direction was issued, can they be heard to say that the order does not bind them? - HELD THAT - Admittedly the detention certificate has to be issued by the Customs in terms of the provision of the Act and the various notifications issued from time to time. If one person, without just cause or excuse deliberately interfered with the trade or business of another, he was said to be acting unlawfully - It is admitted case that the Shipping Line was aware of the order of the direction issued to by this Court for issuance of detention certificate. The department had intimated the Shipping Line by email dated 08.03.2022 about the order passed by this Court on 04.03.2022 and requested them to forward action taken in compliance of the detention certificate dated 18.02.2022. It is not in dispute that the detention certificate was issued on 18.02.2022 and communicated to the Shipping Line and the CFS. Even much earlier by email dated 23.02.2022 and letter dated 25.02.2022, the Customs had called upon the Shipping Line to comply with the direction issued by this Court in its order dated 17.02.2022 at the earliest. The facts clearly disclose that the Shipping Line was communicated with the detention certificate, informed about the orders passed by this Court and they have submitted their reply/objection which would categorically show that they were not inclined to comply with the detention certificate and grant waiver. Thus, the order passed by this Court directing issuance of detention certificate to the Customs which direction was not complied with, though communicated to the Shipping Line - Therefore, the Shipping Line though would have been a third party to the proceedings when the writ petition was heard, on and after they have been issued with the detention certificate, they are precluded from raising a plea that they are third party to the proceedings and alien to the directions issued by this Court, resulting in issuance of the detention certificate. Thus, the Shipping Line is not only a necessary party to the proceedings but also a proper party to the proceedings. So far as the CFS is concerned, they also did not initially comply with the terms of the detention certificate and only during the pendency of this contempt application, it appears that they have complied with or agreeable to comply with the terms and conditions of the detention certificate. Therefore, in order to give a binding direction, the CFS is also held to be a proper and necessary party to the present proceedings - application allowed and the CFS and the Shipping Line are impleaded as party respondents to the contempt petition. Correctness of the contention of the Shipping Line that the detention certificate cannot negate their contractual rights which stands protected under the provisions of the Contract Act - HELD THAT - In terms of Regulation 6(l) of the 2009 Regulation, there is a complete bar for charging any rent or demurrage on the goods seized or detained or confiscated by the proper officer. Therefore, on an after issuance of the detention certificate, the Shipping Line cannot take umbrage under the proviso to Regulation 10(1)(l) of the 2018 Regulation and contend that their right to claim container detention charges still stands preserved and they can do so after expiry of 60 days. Admittedly, the Shipping Lines have registered themselves under the provisions of the statutory regulations. If that be the case, all conditions stipulated by the Customs under the provisions of the Act and the regulation binds the Shipping Line. The terms of the contract between the petitioner and the Shipping Line which is contended to be preserved and safeguarded under the provisions of the Contract Act would be subject to the conditions under the regulations to which the Shipping Line have consciously submitted themselves. Therefore, the right which according to the Shipping Line exists under the contract is subservient to the conditions under the regulations. Having held that the Shipping Line would fall within the definition of Customs Cargo Service Provider , the 2009 Regulation is held to be applicable and they are required to comply with the mandate under the said Regulation and in particular Regulation 6 (1) therein and they are not entitled to charge any rent or demurrage on the goods seized or detained or confiscated. One more fact which we note is that at no earlier point of time, the Shipping Line had sought to exercise their alleged right under the proviso to Regulation 10(l) of the 2018 Regulation and it is for the first time before this Court such a plea is being canvassed - by conduct, the Shipping Line was fully aware of the effect of the statutory regulations and the present attempt to wriggle out of their obligations is impermissible. The Shipping Line appears to have been sitting on the fence and watching the proceedings and to see as to what extent this Court may exercise its jurisdiction under the provisions of the Contempt of Courts Act. Thus, it can be safely concluded that the attempt of the Shipping Line is to obstruct the implementation of the order and directions issued by this Court by seeking to make an attempt to challenge the detention certificate by appearing before this Court after they have been put on notice in the impleadment application. There is a statutory embargo on the Shipping Line, prohibiting them from charging any rent or demurrages during the period of detention and a certificate having been issued by the proper officer waiving the detention charges, there is no escape from the rigour of such a certificate issued by the proper officer. The contractual rights which have been held to be subservient are to yield to the provisions of the statutory regulations, there is no escape, but to implement the detention certificate in its letter and spirit. No action to be initiated for contempt against the Shipping Line or the CFS but the Shipping Line and the CFS are directed to comply with the terms of the detention certificate issued by the Customs in its letter and spirit and consequently waive the detention charges and demurrages on account of the detention of the cargo along with the container by the proper officer of Customs from the date of detention till the date the cargo along with the container is released from the Customs Barrier. No adverse orders are passed against the officials of the Customs department and a decision will be taken subject to the compliance or otherwise of the directions issued to the Shipping Line and CFS - List the matter on 25.04.2022 for reporting compliance.
Issues Involved:
1. Application to add Container Freight Station (CFS) and Shipping Line as party respondents in a contempt petition. 2. Compliance with the Appellate Authority’s order regarding retesting and warehousing of goods. 3. Issuance of detention certificate and waiver of demurrage and container charges. 4. Legal standing and obligations of the Shipping Line under the Customs regulations. 5. Validity and enforceability of the detention certificate against the Shipping Line. Detailed Analysis: 1. Application to Add CFS and Shipping Line as Party Respondents: The petitioner sought to add M/s. Century Plyboards (I) Limited and PIL India Private Limited as respondents in the contempt petition. The High Court allowed the impleadment application, concluding that both entities are necessary and proper parties to the proceedings. The Court noted that the CFS had complied with the direction to waive demurrage charges, while the Shipping Line had not, making it essential to include them in the proceedings to enforce compliance. 2. Compliance with Appellate Authority’s Order: The petitioner had initially filed a writ petition seeking compliance with the Appellate Authority's order, which directed the Customs department to draw fresh samples for retesting and allow warehousing of the goods. The High Court had previously directed the Customs department to comply with these orders. However, the petitioner alleged that the Customs department had deliberately delayed obtaining the test report and warehousing the goods, leading to the contempt petition. 3. Issuance of Detention Certificate and Waiver of Charges: The Customs department issued a detention certificate waiving demurrage and container charges, but the Shipping Line did not comply. The Court observed that the Shipping Line was informed of the detention certificate and the Court's orders but failed to waive the charges. The Court held that the Shipping Line's refusal to comply amounted to obstructing the implementation of the Court's orders. 4. Legal Standing and Obligations of the Shipping Line: The Shipping Line argued that they were not bound by the 2009 and 2018 Customs Regulations and that their contractual rights under the Indian Contract Act should prevail. However, the Court held that the Shipping Line falls within the definition of "Customs Cargo Service Provider" under Regulation 2(b) of the 2009 Regulations and is bound by both the 2009 and 2018 Regulations. The Court emphasized that the statutory regulations override the contractual rights, and the Shipping Line must comply with the detention certificate issued by the Customs department. 5. Validity and Enforceability of the Detention Certificate: The Court rejected the Shipping Line's contention that the detention certificate could not negate their contractual rights. It held that the 2009 and 2018 Regulations are statutory in nature and bind the Shipping Line, which had voluntarily submitted to these regulations by obtaining a license. The Court concluded that the detention certificate is valid and enforceable, and the Shipping Line must comply by waiving the detention charges and demurrage. Conclusion: The High Court directed the Shipping Line and CFS to comply with the terms of the detention certificate issued by the Customs department, waiving the detention charges and demurrage from the date of detention until the release of the cargo. The Court granted three days for compliance, failing which it would consider initiating contempt proceedings. The matter was listed for reporting compliance on 25.04.2022.
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