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TMI Blog2010 (4) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Respondent. [Judgment per : V.C. Daga, J.]. - This petition filed under Article 226 of the Constitution of India is directed against the act of refusing to grant remission of demurrage charges of 80% of first 150 days and 50% beyond 150 days by the 1st respondent in violation of their own guidelines which provide for such remission when the detention of the goods by the Custom is for bona fide operations and ITC facilities. Factual Backdrop : 2.The petitioners is carrying on the business, inter alia, as dealers and importers of diverse goods, including zinc ingots and copper wire bars. 3.Respondent No. 1 is the Board of Trustees of the Port of Bombay established and functioning under the provisions of the Major Port Trusts Act, 1963 ("the MPT" for short) governed by the rules and regulations framed thereunder. 4.One M/s. Metal Distributors (UK) Ltd., London in the normal course of business contracted to supply 78 consignments of zinc and copper wire bars to five different parties/consignees in India. The said consignments were shipped during the period September to November, 1991. As per the terms of the contract, the property in the goods were to pass to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners came into picture) seeking clearance of certain goods covered by 37 bills of entry. In respect of the remaining 41 consignments, no bills of entry were filed by any of the said five consignees. The petitioners having contracted to purchase the said goods, took up themselves the task of getting IGM amended and also produce other documents including the Bills of entry, where the earlier parties had filed the same, for obtaining the clearance of the goods with the Custom Authorities. 9.The Petitioners also approached the Shipping company's local agents - M/s. Trans World Shipping Services (I) Pvt. Ltd. and others to seek necessary amendment in I.G.M. The said local agents of Shipping Company accordingly made applications for amendment of the I.G.M. in terms of diverse letters addressed by them during the period April, 1992 to June, 1992 to the Custom Authorities. The petitioners also filed the requisite amendment applications under the provisions of Section 149 and 30 of the Custom Act, 1962. However, none of the said applications were entertained by the Custom, as such, the claim of the petitioners as the legitimate consignee was not recognized by the Custom authorities. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso the earlier 10 bills of entry where Thokka was granted, will not be accepted due to initiation of investigation against the importers pending with the S.I.I.B. of the Custom. 14.The said afore-action of the Custom Department was a subject matter of challenge in the Writ Petition No. 1397 of 1992, which was admitted on 4th August, 1992. During the pendency of this petition, Trustees of BPT purported to put up certain consignments for sale by auction. In such circumstances, the petitioners again approached this Court by another Writ Petition bearing No. 2464 of 1992. However, the petitioners could not get stay of the auction sale. With the result, the petitioners were required to approach Apex Court by way of SLP, which was, ultimately, converted into an appeal and disposed of on 3rd December, 1992 directing BPT not to deliver or part with the consignments pursuant to the sale effected by the BPT in favour of respondent Nos. 6 and 7 to the SLR The petitioners were directed to pay charges for the two consignments. The petitioners made payments, subject to final orders in the Writ Petition No. 2464 of 1992. 15.The petitioners, during the course of hearing of the Petition No. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the remaining 32 detention certificates, the period of detention was certified as from 9th June, 1992 to 9rh September, 1992. All the above detention certificates, carried following endorsement. "..............for investigation which amending the IGM, finally amendment in I.G.M. allowed in favour of M/s. Rasiklal Kantilal Co. Bombay." 19.On 11th September, 1992, the Deputy Collector of Custom informed the BPT that the petitioner had filed 41 Bills of Entry. However, in order to investigate as to whether or not the change in the name in the IGM was sought due to fraudulent reasons or otherwise the subject goods were not allowed to be cleared. In the process, some time was lost in effecting amendment to IGM. The petitioner suffered huge amount of demurrage as such their request for remission of demurrage should be considered sympathetically. 20.On 14th September, 1992, the Assistant Commissioner of Custom also wrote to the BPT informing them that the petitioner had been allowed to clear 41 consignments, however, clearance of 37 consignments had not yet been allowed since investigations was pending. It was further informed not to put goods on auction. The petitioner also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he guidelines framed by the BPT itself provides for remission asked for by the petitioners when the detention of the goods by the Custom was for bona fide operation of ITC formalities. 25.Mr. Shroff strongly urged that the remission had been refused on the ground that the first respondent did not grant remission for the period prior to the date of noting in the Bill of Entry. According to him, reason given is manifestly false. He pressed into service, the resolution of BPT dated 20th October, 1994 in the case of Gilt Pack (Pvt.) Ld. ("Gilt Pack" for short) wherein, according to him, in factually identical situation, the BPT has granted remission to the Gilt Pack for the period prior to the noting of the importer's name in the Bill of Entry. In his submission, this act of respondent No. 1 amounts to hostile discrimination against the petitioner and renders their action or decision wholly arbitrary, unreasonable and mala fide in violation of the fundamental rights granted by Article 14 of the Constitution of India. 26.Mr. Shroff, further submits that for the negligence or inaction on the part of the Custom, the petitioners cannot be allowed to suffer punishment and financial loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the BPT. He submits that the period during which the petitioners did not have right, title and interest in the goods purchased by them, the petitioners could not be allowed to claim remission. He further submits that the Review preferred by the petitioners was considered on its own merits and it did not find favour with the first respondent. He further submits that the power of judicial review in the present case has been exercised to see that the safeguards are being complied within the decision making process. He, thus, submits that this Court, not being a Court of Appeal is not expected to interfere with the decision of the BPT unless it finds the same to be arbitrary, perverse or contrary to the guidelines. 32.Mr. Makhija, while taking this Court through the sequence of events, right from the date of arrival of the goods in the Custom Area, urged that 78 consignments remained in the Port during the period from November, 1991 to January, 1992. According to him, the BPT was not concerned with the dispute between the petitioners and the Custom Authorities. According to him, the petitioners were allowed to file 41 Bills of Entry in the month of May, 1992 after amendment to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he high-seas purchasers and as such, Gilt Pack, continued to be owners of goods and that the goods should be released in their favour. Upon reference made by respondent No. 1 Collector of Custom had advised that though Bills of Entry were noted by Gilt Pack, on 18th July, 1994, their entry in IGM was made on 13th December, 1993. Thus, detention certificate was issued for the period from 13th December, 1993 to 19th July, 1994. The BPT, thus decided to honour detention certificate for ITC formalities. Accepting the case pleaded by Gilt Pack, consignment was released in favour of original importer, Gilt Pack, without levy of fine or penalty, after SlIB's investigation of these aspects. Accordingly, in the case of Gilt Pack, 80% remission in demurrage fees for first 150 days of certified detention and 50% remission in demurrage fees for remaining period of certified detention was granted by respondent No. 1. Thus, in the case of Gilt Pack, the original importer and party who originally cleared the goods were one and the same. As at the time of import, Gilt Pack alone had title to the goods and it continued till the date of lifting the goods. 36.Mr. Makhija urged that the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 150 days in accordance with their own guidelines. So there is no dispute with respect to the period mentioned herein. (c)The disputed period involved is from the date of filing i.e. presentation of Bills of Entry (according to the petitioner) i.e. 23rd March.1992 till the date of noting in the Bills of Entry (9 were noted 1st May, 1992 and the remaining 9th June, 1992). In respect of this period, the petitioner had claimed a remission and the same has been refused on the ground that for granting remission the BPT procedure has been that the period of detention only after the noting in the Bill of Entry is considered. This part of the dispute is a subject matter of the petition. (Emphasis supplied) 40.The reason given by the BPT for not allowing remission of the demurrage charge for the period involved in the aforesaid last item is a subject matter of challenge as indicated in the opening part of this petition. 41.Before going into the reasons assigned by BPT in not allowing remission which the petitioners are demanding through this petition, it is necessary at the cost of repetition to recapitulate the facts in short. 42.A foreign supplier had shipped 78 consignments to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance 29 consignments, vide resolution No. 183 dated 9th May, 1995, remission, on ex-gratia ground to the extent of 80% demurrage fees recovered for first 150 days of certified detention but from the date of noting of Bills of Entry and 50% for remaining period upto 13th March, 1993, was sanctioned. The details of which are to be found in tabular form in Exhibit-2, reproduced hereinbelow : Sr.No. Total No. of consignments Demurrage charges paid to BPT Amount received from BPT Balance amount to be received from BPT 1. 41 1,15,48,093 34,39,820 81,08,273 2. 21 1,18,80,858 42,09,570 76,71,288 3. 6 33,49,906 11,56,050 21,93,856 4. 2 13,88,476 2,47,095 11,41,381 70 2,81,67,333 90,52,535 1,91,14,798 Balance Amount : 1,91,14,798 45.The respondent-BPT vide their letter dated 16th September, 1995 had advised the petitioners that the detention certificate prior to the date of noting of the Bills of Entry would not be considered for grant of remission but detention certificate, issued for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke detention under Court injunction, detention of cargo by Custom for special examination and chemical analytical test under Section 17 of the Custom Act, 1962 other than the ordinary process of appraisement by the Custom, detention of the goods by the Custom for bonfire operation of ITC facilities. (II)In all the above cases, ordinarily remission only upto 80% of the demurrage accrued for the period of detention can be given. 48.The factual recap sketched hereinabove compels us to observe that in so far as the contention of the petitioner is concerned that the claim of the petitioner is not considered under Section 53 of the Major Port Trust Act is required to be rejected. It is on record that from time to time the BPT has been considering the cases of the petitioner sympathetically and, ultimately, to the extent their case was justified in the hand of the BPT was accepted and remission to the extent of Rs. 90,52,535/- was granted. The respondent No. 1 - BPT has not only considered the case of the petitioner based on the guidelines issued by the Central Government but have also taken into account other factors and, ultimately, came to the conclusion that part of the period for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property in the goods were to pass to the consignees only upon their retiring the documents presented for payment through bankers. The said dealings between the parties were on C.A.D. basis. The goods had already landed during the months of November, 1991 to January, 1992 at Bombay Port. In this scenario, according to the petitioners, admittedly, the property in goods had not passed to and in favour of any of the said five parties much less in favour of the petitioners until May-June, 1992. If that be so, the petitioners hardly had any locus to claim remission. They were not the title holders of the goods. One can also take judicial note of the fact that when the goods were purchased by the petitioners, they wee aware of the liability to be incurred while in trading into contract. The petitioners entered into contract with open eyes knowing fully well as to what would be their liability in the event of purchase of goods discarded by earlier consignee. Under these circumstances, in our considered view, the petitioners are not justified in making claim of refund against the respondent-BPT. 50.The reasons given by the authorities cannot be said to be extraneous or not germane to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served thus : "It was urged that the basic concept of the manner of the development of the real estate and disposal of occupancy rights were vitiated by unreasonableness. It is a truism, doctrinally, that powers must be exercised reasonably. But as Prof. Wade points out : "The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the courtmust not usurp the discretion of the public authority which Parliament appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. If it passes those bounds, it acts ultra vires. The court must therefore resist the temptation to draw the bounds too tightly, merely according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices which the legislature is presumed to have intended. Decisions which are extravagant or capricious cannot be legitimate, But if the decision is within the confines of reasonableness, it is no part of the court's function to look further into its merits. "With the question whether a particular policy is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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