HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Court No. - 34 Case :- FIRST APPEAL No. - 823 of 2003 Appellant :- Jiya Ullah Respondent :- Union Of India through: A) Secretary, Finance Ministry, New Delhi. B) Chief Controller, Import & Export, Udyog Bhawan, New Delhi. C) Joint Chief Controller, Import and Export, 117/L4-444, Kakadeo, Kanpur-25 D) Deputy Collector of Customs, New Custom House, Balrd Estate, Mumbai- 400038 Counsel for Appellant :- K.K. Arora Counsel for Respondent :- Subodh Kumar Hon'ble Sudhir Agarwal,J.
Hon'ble Rakesh Srivastava,J.
1. This appeal under Section 96 of the Code of Civil Procedure has arisen from the judgment and decree dated 24.03.2003 and 01.04.2003, respectively, passed by Sri S.N. Tripathi, Additional Civil Judge (Sr. Div.), Court No. 1, Moradabad in Original Suit No. 431 of 1991 instituted by plaintiff-appellant whereby it has dismissed suit with cost quantified at Rs. 2,000/-.
2. The plaint case set up by appellant is that he is proprietor of firm M/s Jiya Ullah, son of Sami Ullah, 4/E-20, Faizganj, Purvi Moradabad and engaged in the business of export of German Silver Artware, Copper Handicrafts and other Handicraft articles. He required import of raw material for which he applied for an import license by submitting an application in the office of Joint Chief Controller, Import and Export, Kanpur (hereinafter referred to as 'JCCIE'). Plaintiff was granted an advance licence dated 14.04.1983 for importing goods of value of Rs. 3,82,000/- (CIF). Plaintiff could not place any order for import and in meantime lost his bag containing above licence. He lodged an FIR in Police Station, Mugalpura, District Moradabad, on 14.05.1983 complaining loss of import licence. He also informed JCCIE vide registered letter dated 15.05.1983 regarding above loss. Information was also given by plaintiff to Deputy Manager, Bombay Port Trust vide letter dated 16.05.1983 with request, if any goods are imported under the said licence the same be not cleared so that licence may not be misused. Plaintiff did not use import licence in any manner whatsoever. Deputy Collector (Customs), Bombay (hereinafter referred to as 'DC(C)') vide letter dated 07.11.1985 raised a demand of Rs. 5,.46,069/- from plaintiff towards outstanding dues of custom duty. Plaintiff replied vide letter dated 18.11.1985 that he has not imported any goods, hence no duty is payable. On 27.04.1991 plaintiff received a letter from Assistant Collector (Customs) for recovery of Rs. 4,56,069/- as arrears of land revenue for which recovery certificate was forwarded to Collector, Moradabad. Since plaintiff has not utilized import licence, no import of any goods was made by him and somebody else, if has misused licence, for that, Customs Department officials are responsible. Plaintiff is not liable to pay any custom duty. Hence he sought declaration that letter dated 07.11.1985 issued by DC (C) for recovery of Rs. 5,46,069/- and recovery certificate dated 27.03.1991 are null, void and illegal and on the basis thereof defendants be restrained from making any recovery from plaintiff in any manner.
3. The suit was contested by defendants A,B,C i.e. Secretary, Finance Ministry, New Delhi; Chief Controller, Import & Export, New Delhi and JCCIE, by filing their written statement dated 14.09.1992, wherein it was stated that for the first time plaintiff gave information of loss of licence on 27.01.1984 and also filed an affidavit to this effect. Thereafter he also sent a reminder letter dated 15.02.1989 in which he mentioned about letter dated 27.01.1984 whereby information of loss of licence was conveyed. Prior to that certain import of goods on import licence dated 14.04.1983 was already effected. Plaintiff imported 30.5 Metric Ton (in short 'M.T.') Brass scrap worth Rs. 3,62,791/- on 06.01.1984 whereupon he was liable to pay custom duty of Rs. 5,46,069/-. The aforesaid amount having not been paid by him, a demand letter was issued and thereafter recovery proceedings were initiated. In additional pleas defendants took plea that suit is not maintainable; it is barred by Section 3 of U.P. Public Money (Recovery of Dues) Act, 1972 (hereinafter referred to as 'UP Act, 1972'), necessary parties were not impleaded and that the recovery is in accordance with law, therefore, plaintiff is not entitled for any relief.
4. The Trial Court formulated following eight issues:-
1. D;k oknh us vk;kr fu;kZr ykblsUl izkIr djus ds i'pkr mldk iz;ksx ugha fd;k ;fn gka rks bldk izHkko\
1. Whether the plaintiff did not use the import-export licence after obtaining the same? If so, its effect?
2. D;k oknh dk vk;kr ykbZlsUl xqe gks x;k\
2. Whether the import-export license of the plaintiff was lost?
3. D;k oknh us vius vk;kr fu;kZr ykbZlsUl ds vk/kkj ij vk;kr fu;kZr dk O;olk; ugha fd;k\
3. Whether the plaintiff did not carry out import-export business on the basis of his import-export licence?
4. D;k oknh dh vksj ls 5]46][email protected]& :i;s dLVe M;wVh ds cdk;k gS\
4. Whether an amount of Rs. 5,46,069/- is due against the plaintiff as custom duty?
5. D;k oknh us fnukad 6&1&84 dks ykbZlsUl dk mi;ksx djds xyr rkSj ij mlds [kks tkus dh lwpuk lEcfU/kr foHkkx dks fnukad 27&4&84 dks nh\
5. Whether the plaintiff has, on 6.1.84, used the license; and has on 27.4.84 wrongfully informed the concerned department about the same having been missed?
6. D;k okn /kkjk&3 ;w0ih0 ifCyd euh fjdcjh vkQ M;wt ls ckf/kr gS\
6. Whether the suit is barred by Section 3 of the U.P. Public Money Recovery of Dues?
7. D;k okn vko';d i{kdkj phQ daVªksyj bEiksVZ ,UM ,DliksVZ 'kk[kk eqjknkckn dks i{kdkj ugh cuk;s dk nks"k gsS\
7. Whether the suit suffers from not arraying the Chief Controller, Import & Export, Muradabad Branch as necessary party?
8. D;k oknh fdlh vuqRkks"k dks ikus dk vf/kdkjh gS\
8. Whether the plaintiff is entitled to get any relief?
(English Translation by Court)
5. Plaintiff in support of his claim submitted six documents besides deposing himself as PW-1. Defendants adduced four documents and produced one Suresh Chandra Agarwal as DW-1 and K.P. Singh as DW-2 to give oral evidence. Issue 7 was decided by Trial Court by order dated 20.08.1991. It took issues 1, 2, 3 & 5 together and answered all of them against plaintiff, observing that regarding alleged loss, no First Information Report was lodged, and no evidence in this regard was adduced before Court below. Further, plaintiff did not produce any material as to the firms from where he had received orders and for supply whereof he required import of raw material. The Court thus drew inference against him that since very beginning plaintiff's intention was mala fide. Issue 4 was answered against plaintiff and Court also observed that he has filed suit by concealment of fact that against demand of custom duty, he filed a statutory appeal in department which was rejected but thereafter neither he proceeded further under relevant statute nor disclosed this fact in plaint. The Court, therefore, held that plaintiff has approached Court with concealment of material facts and not in a bona fide manner. Issue 6 was answered against plaintiff observing that against demand of custom duty plaintiff filed first appeal which has been rejected and order of appellate authority was not challenged in suit. Even otherwise, Civil Court was not competent to examine correctness of such statutory order since remedy in this regard was available to the plaintiff under statute. Consequently issue 8 was also answered against plaintiff and suit was dismissed with special cost of Rs. 2,000/-.
6. Sri K.K. Arora, counsel for the appellant contended that the plaintiff having not used import license at all, no recovery could have been made from him. He further submitted that even if he had filed an appeal under the statutory provisions against demand of duty, still the suit under Section 9 CPC was maintainable and Court below has erred in law in taking otherwise view.
7. Sri Subodh Kumar, counsel for the defendant-respondent on the contrary submitted that import licence is issued under the provisions of Import and Export (Control) Act, 1947 (hereinafter referred to as 'Act, 1947') read with Import Control Order, 1955 (hereinafter referred to as 'Order, 1955'). Plaintiff applied for issue of duty free import license for import of Brass scrap vide application dated 21.03.1983. Under aforesaid license i.e. duty free import licence, license holder can import raw material, duty free i.e. without payment of custom duty with commitment to export goods manufactured out of the raw material within specified period. The license, therefore, carries commitment to export goods manufactured out of imported goods so as to earn foreign exchange. Where such export is not made, liability of duty is attracted. Plaintiff was issued advance license on 14.04.1983 for Rs. 3,82,000/- permitting import of 37.50 M.T. of Brass scrap. License was issued with condition that party shall export 37.125 M.T. of Brass Artware of value (FOB) of Rs. 9,37,500/- within six months from date of clearance of first consignment into India against advance license and also execute bond backed by Bank guarantee, equal of full value of custom duty, before clearance of first consignment. Customs authorities at Bombay reported vide letter dated 24.02.1989 that plaintiff imported 35.50 M.T. Brass scrap worth Rs. 3,62,791/- on 06.01.1984 against advance license dated 14.04.1983. In the meantime plaintiff reported vide letter dated 27.01.1984 supported with an affidavit that license has been lost/ misplaced and requested for its cancellation. It was actually cancelled on 22.03.1984. However, since there was an import of raw material on 06.01.1984 and plaintiff did not produce any export document showing fulfillment of export obligation, a show cause notice was issued on 04.10.1988 under Clause 10 of Order, 1955 proposing to take action under Clause 8 (1) by debarring the firm from receiving import license etc. The plaintiff firm did not respond to said show cause notice. Another show cause notice was issued to plaintiff firm on 26.03.1990 for enforcement cum adjudication proceedings under Clause 10 of Order, 1955 read with Section 4L of Act, 1947. A penalty order dated 11.06.1962 was passed under Section 4I of Act, 1947 imposing penalty of Rs. 18,13,955/-. The order was appealable under Section 4M of Act, 1947.
8. Counsel for respondent, therefore, submitted that since there was statutory adjudicatory forum, with due fairness, suit by necessary implication under Section 9 CPC was barred.
9. The point for determination in this appeal is:-
1. Whether the plaintiff's suit assailing recovery proceedings of outstanding custom duty was maintainable in the Civil Court?
10. In order to answer aforesaid question we have to examine scheme of Act, 1947 regarding the power of the authorities thereunder to raise demand or impose penalty etc. and the procedure and forum provided therein for adjudication of such liability etc. Section 4I read with Section 4K of Act, 1947 confers power to impose penalty which is to be adjudicated by Chief Controller or Additional Controller or Deputy Chief Controller as authorized. Against the said order of penalty, the person aggrieved has statutory remedy of appeal under Section 4M. If the order has been passed by Chief Controller or Additional Chief Controller appeal lies to Central Government. If order has been passed by any officer below the rank of Chief Controller or Additional Chief Controller, such appeal lies to Chief Controller or Additional Chief Controller as directed by Chief Controller. Under Section 4N there is further power of revision. The Act, 1947, therefore, provides a self-contained adjudicatory machinery in respect of impugned order of penalty determined under Act, 1947.
11. In our view, looking to scheme of Act, 1947, a suit challenging liability determined by a statutory authority under Act, 1947, is clearly barred. Section 9 CPC provides that Civil Court shall try all suits of civil nature subject to pecuniary jurisdiction unless congnizance, expressly or by necessary implication is barred. The suit barred would not be maintainable.
12. The Apex Court in Panjab State Electricity Board & Anr. Vs. Ashwini Kumar reported in (1997) 5 SCC 120, had an occasion to consider similar question. Therein Electricity Board suspected that the meter had been tempered by Consumer, hence removed the same and installed a new meter. For the period it suspected tempering of meter and non recording of correct consumption, Electricity Board made an assessment and sent a bill to the Consumer. Consumer filed suit seeking permanent injunction restraining Electricity Board and its officers from collecting or recovering the amount, by assessment, from Consumer. The Trial Court decreed the suit and said decree was confirmed in appeal as also second appeal. Since both were dismissed, hence Electricity Board went in appeal before Apex Court. The contention was that in respect of assessment made by Electricity Board under statutory circulars issued by Board, there is an adjudicatory machinery provided and in view thereof suit under Section 9, by necessary implication is barred. This aspect was considered by Court and in para 8, it said as under:-
"9. The question then arises: whether the Civil Court would be justified in entertaining the suit and issue injunction as prayed for? It is true, as contended by Shri Goyal, learned Senior Counsel, that the objections were raised in the written statement as to the maintainability of the suit but the same given up. Section 9 of C.P.C. Provides that Civil nature, subject to pecuniary jurisdiction, unless their cognizance is expressly or by necessary implication is barred. Such suit would not be maintainable. It is true that ordinarily, the Civil Court has jurisdiction to go into and try the disputed questions of Civil nature, there the fundamental fairness of procedure has been violated. The statutory circulars adumberated above do indicate that a fundamental fairness of the procedure has been prescribed in the rules and is being followed. By necessary implications, the cognizance of the civil cause has been excluded. As a consequence, the Civil Court shall not be justified in entertaining this suit and giving the declaration without directing the party to avail of the remedy provided under the Indian Electricity Act and the Indian Electricity (Supply) Act and the instructions issued by the Board in that behalf from time to time as stated above."
13. Similarly in State of Andhra Pradesh v. Manjeti Laxmi Kantha Rao, AIR 2000 SC 2220, the Court held:-
"The normal rule of law is that civil courts have Jurisdiction to try all suits of civil nature except those of which cognizance by them is either expressly or impliedly excluded as provided under Section 9 of the Code of Civil Procedure but such exclusion is not readily inferred and the presumption to be drawn must be in favour of the existence rather than exclusion of jurisdiction of the civil courts to try civil suit. The test adopted in examining such a question is (i) whether the Legislature intent to exclude arises explicitly or by necessary implication, and (ii) whether the statute in question provides for adequate and satisfactory alternative remedy to a party aggrieved by an order made under it. In Dhulabhai v. State of Madhya Pradesh, it was noticed that whether a statute gives finality to the orders of the special Tribunals jurisdiction of the civil courts must be held to be excluded if there is an adequate remedy to do what the civil courts would normally do in a suit and such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure."
14. It is not in dispute that the procedure prescribed under Act, 1947 is consistent with principles of natural justice, gives due opportunity to import license holder who is alleged to have violated its conditions etc. whereupon penalty is imposed. Since a statutory adjudication forum is provided in Act, 1947, and in this regard it is a complete Code, we are of the view, that a civil suit under Section 9 CPC, by necessary implication is barred. The question formulated above thus is answered against appellant and in favour of respondents.
15. In view thereof appeal has no merit.
16. Dismissed with costs.
Order Date :- 3.11.2015 Pradeep/-