B.G. Overseas Corp. vs Union Of India (Uoi) And Ors.
2002 Latest Caselaw 1297 Del

JUDGMENT

Dalveer Bhandari, J.

1. The petitioner company is engaged in the export business. It is alleged that the petitioner has entered into firm contract with M/s. Overseas Trade promotion Centre Ltd., 5-9, Small St. Ultimo, Sydney (Australia) whereby the said foreign buyer placed orders on the petitioner company for the purchase of ladies and gents shirts. By means of the said contract the petitioner was to export/ship 50,000 pieces of ladies shirts at the Unit Price of U.S. Dollars 6.95 per piece and 20,000 pieces of gents shirts at the unit price of U.S. Dollars 6.90 per piece.

2. It is submitted the petitioner while acting on the said contract intended to ship at the first instance a quantity of 18750 pieces. The petitioner drew 4 invoices on the foreign buyer. The petitioner has filed 4 shipping bills between the period 31.3.2002 to 2.4.2002. It is also incorporated in the petition that since the shipping bills were filed for obtaining the benefits of drawback, the officer in exercise of quasi judicial powers vested in him fixed the price of the goods at the rate of US$ 6 per piece so that the drawback can be calculated on that basis. It is submitted that since the goods were to be shipped by sea and the container was to be loaded for movement from Delhi to Mumbai the same was put on the train for proceedings to Mumbai so that the same could be loaded on the ship.

3. it is incorporated in the petition that the petitioner came to know through the Custom House Agents (CHA) that the goods which were to be loaded on the ship at Mumbai have been detailed/seized under the instruction of respondent Nos. 2 & 3.

4. It is also mentioned in the petition that the said goods are seasonal in character and the foreign buyer is insisting for an immediate supply of these goods or face the consequences. It is also incorporated in the petition that the schedule of delivery is delayed and there is apprehension of cancellation of the contract.

5. It is also incorporated in the petition that the petitioner's officials have been going almost every day to the concerned officer of the respondents and have been requesting them to lift the detention/seizure order of the petitioner's goods. It is also mentioned that this is a clear case of harassment and violation of the petitioner's fundamental right of trade and business as envisaged in Article 19(1)(g) of the Constitution. The petitioner company prayed that the order of detaining/seizing of the goods be quashed.

6. Looking to the urgency of the matters, this court issued a show cause notice and directed the respondents to file a counter affidavit within the shortest possible time and listed this petition for hearing on 23rd May, 2002. The petition was adjourned to 30.5.2002 for completing pleadings. In pursuance to the directions of the court, Mr. M.K. Arora, the Deputy Commissioner Customs filed the counter affidavit on behalf of he respondents. It is mentioned in the counter affidavit that this petition suffers from concealment of material facts and is liable to be dismissed on this ground alone. The goods of the petitioner being ready-made garments which were sought to be exported have been seized by the respondents under Section 110 of the Customs Act. The respondents had adequate reasons to believe that the goods were liable to be confiscated under Section 113(h)(ii) of the Customs Act because the garments were found to be sub-standard, re-labelled and not conforming to the declared value of the goods and were seized on a reasonable belief that the highly inflated value was assigned with a view to claim undue drawback.

7. In the reply it is also mentioned that the officers of Customs, New Delhi intercepted and export consignment on 8.4.2002. The consignment consisting of 250 packages was examined on 8.4.2002 by selecting 26 packages on random basis. On examination of the goods it was revealed that the goods were sub-standard, re-labelled and not conforming to the declared value of US$ 6.95/6.90 per piece.

8. It is further mentioned that the consignment was meant for export to Sydney but the containers for both the consignments had been booked for Dubai. It is specifically incorporated that the consignment at ICD, Tuglakabad was seized on 20.4.2002 under proper Panchnama, a copy of which was given to the representative of Custom House Agent (CHA).

9. It is mentioned that the consignment has been seized in the shipping shed of ICD, Tuglakabad, New Delhi on a reasonable belief that the goods were being exported at a highly inflated value with a view to claim undue drawback. It is also mentioned in the reply that the Port of destination on the export documents is Sydney while the container was booked for Dubai.

10. It is mentioned in the reply that there is no illegality or any delay on the part of the respondents. It is also mentioned that it is the petitioner who is not joining investigating, despite a number of summons sent by the respondents. The petitioner company has chosen to approach the court instead of cooperating with the department and joining investigation. It is also mentioned in the reply that goods are actually not going to the buyers in Australia. In case the petitioner has such pressure from the so-called buyer he should cooperate with the department, present correspondence so that the credentials could be verified.

11. Mr. Jayant Bhushan, learned counsel appearing for the respondents, vehemently argued that this petition suffers from concealment of material facts and a serious effort has been made to mislead this Court and this petition deserves to be dismissed only on that ground.

12. The respondents along with the reply have annexed the copy of the panchnama which is Annexure R-1 to the reply. Mr. Bhushan has invited our attention to the panchnama which is dated 20.4.2002. The panchnama was prepared in the presence of Mr. Surinder Sharma & Mr. Rakesh Mehta, Panchas and Mr. Jitender Kumar, Customs House Agent. The panchnama is signed on both pages by Jitender Kumar, Customs House Agent. In the panchnama it is clearly mentioed that on examination, the goods were found to be sub-standard, re-labelled and not conforming to the declared value of US $ 6.95/6.90 per piece. It is also mentioned in the panchnama that the consignment was seized under Section 110 of the Customs Act, 1962 under the reasonable belief that the goods contained in the consignment were liable to be confiscated under Customs Act, 1962 as the same have been found to be sub-standard, re-labelled and not conforming to the declared value with an aim to export them to claim undue drawback. In the concluding portion of the panchnama it is mentioned that the proceedings were concluded in the presence of Jitender Kumar, Customs House Agent and two other panchas. The panchnama has been read over to them in vernacular and they have understood it. Mr. Jitender Kumar has signed on both the pages of panchnama.

13. Mr. Bhushan submitted that the panchnama has been prepared in the presence of Jitender Kumar, Customs House Agent on 20.4.2002 and the same was signed by him on both the pages of panchnama. This petition has been filed on 13.5.2002, the petitioner deliberately did not mention the reasons why the goods were detained or seized. All these facts were mentioned in the panchnama. It is admitted in the petition that the petitioner had came to know through Customs House Agent that at Mumbai, the goods which were to be loaded in the the ship have been detained/seized under the instruction of respondent Nos. 2 & 3. He submitted that it is wholly inconceivable that the petitioner did not know why the goods have been detained and seized when it is categorically mentioned in the panchnama that the goods were found to be sub-standard, re-labelled and not conforming to the declared value of US $ 6.95/6.90 per piece. He further submitted that it is also mentioned in the panchnama that the goods have been seized under Section 110 of the Customs Act under the reasonable belief that the goods contained in the consignment were liable to be confiscated under the Customs Act. All these facts have been deliberately suppressed and concealed from this court.

14. It is alleged in the petition that the officials of the petitioner company have been going almost everyday to the concerned officer of the respondents and have been requesting them to lift the order of detention/seizure of the goods. Mr. Bhushan submitted that this statement of the petitioner is false to his knowledge. He further submitted that despite a number of summons the petitioner has not joined the investigation in one pretext or the other. He has produced letter dated 23.4.2002 sent by the petitioner in response. to the summons of the respondents. The letter reads as under:

"Dated: 23.04.2002

To

The Superintendent of Customs (Prev)

New Customs House New Delhi

Ref: C.No. VIII (SB)9/10/GR-III

Dear Sir,

This is in reference to your summons dated 15.4.2002, wherein you have called me personally to attend your office on 24.4.2002 for giving the evidence and/or producing documents in respect of the exports of readymade garments affected by us. In this connection we would like to inform you that we have received this summon today itself and we regret to inform you that it is not possible to attend your office on the date and time required therein the summons as we have already have got prior appointment form our overseas buyer who came to India for executing further export orders.

Therefore it is our humble submission to your to please adjourn the matter for a next date.

Thanking you,

Yours faithfully for B.G. (OVERSEAS) CORPORATION

PROPRIEtor"

15. Mr. Bhushan has also placed on record, another letter dated 6.5.2002 sent by the petitioner in pursuance to the summons dated 26.4.2002 in which the petitioner has again expressed its inability to attend the hearing on 6.5.2002. The same reads as under:

"Dated 6th May, 2002

To

The Superintendent of Customs (Prev)

New Customs House Near I.G.I. Airport New Delhi - 110037

Ref: Your C.No. VIII (SC)9/10/2002/572 Dt: 26.4.2002

Dear Sir,

We are in receipt of your summons under captioned reference.

In this connection we would like to inform you that due to other customs works and the hearings that has been fixed in the matter relates to the same case, we are unable to attend your office on the required date there in the summons i.e. 6th May, 2002 at 1100 Hrs., therefore we request your goodself to please differ the date of summons by a fortnight so that we can able to arrange all the documents that required under the summons.

Hope you will understand and will oblige without your affirmative response.

Thanking you,

Yours faithfully for B.G. (OVERSEAS) CORPORATION

PROPRIEtor"

16. The petitioner failed to provide any satisfactory reply for suppressing or concealing these material facts from this court. This is the settled position of law which has been crystalised by a catena of judgments that anyone who approaches the court must come with clean hands. Anyone who is guilty of misleading the court or concealing/suppressing material facts form the court is not entitled to any relief.

17. We are clearly of the opinion that the petitioner company has not approached the court with clean hand and it has not disclosed the true and correct facts which were well within their knowledge. In view of this unfortunate turn of even we would not like to examine various submissions made by the learned counsel for the parties and the judgments cited at the bar.

18. The courts have repeatedly observed that those who approach the court must come to the court with clean hands.

19. In Rajabhai v. Vasudev , their Lordships of the Supreme Court observed that a party who approaches the Court knowing or having reason to believe that if the true facts were brought to its notice this Court would not grant special leave, withholds that information and persuades this Court to grant leave to appeal is guilty of conduct forfeiting all claims to the exercise of discretion in his favor. It is his duty to state facts which may reasonably have a bearing on the exercise of the discretionary powers of this Court. Any attempt to withhold material information would result in revocation of the order, obtained form this Court.

20. In Har Narain v. Badri Das reported as , their Lordships of the Supreme Court observed that it is of utmost importance that in making material statements and setting forth grounds in applications for special leave, care must be taken not to make any statements which are inaccurate, untrue or misleading

21. In Asiatic Engineering Co. v. Achhru Ram, , the court observed that no relief can be granted in a writ petition which is based on mis-statement or suppression of material facts.

22. Similar principles have been enunciated in English cases. The King v. Williams (1914) 1 KB 608 and Rex v. Kinsington Income Tax Commissioners (1917) 1 KB 486, which were considered with approval by the Supreme Court in number of judgments. Their Lordships of the Supreme court also relied on these cases. In Udai Chand v. Shankar lal, . In this case the court revoked the special leave petition and vacated the stay order. The court while following the ratio of the aforementioned cases observed that the Supreme Court would be justified in revoking the leave to appeal if the same was obtained by making mis-statement of a material fact.

23. This principle has been consistently followed in a number of other cases by various courts. The petitioner company has not approached the court with clean hands.

24. In view of its conduct the petitioner company is not entitled to any relief from this court in exercise of its extra ordinary powers. Consequently, this writ petition is dismissed with costs.