Bhartiya Plastic Udyog And Anr. vs Central Warehousing Corpn. And ...
2003 Latest Caselaw 466 Del

JUDGMENT

S.K. Mahajan, J.

1. The short point involved in the writ petition is whether the respondent-Corporation could refuse to deliver the second consignment because of non-payment of warehousing charges in respect of the first consignment and even assuming the respondent had a right to refuse delivery of the second consignment because of non-payment of warehousing charges of the first consignment; is the Corporation entitled to claim warehousing charges in respect of the second consignment though it was warehoused or stored in the Godown of the warehouse keeper without the consent of the petitioner? A few facts relevant for deciding the writ petition are :

The petitioner imported acrylic scrap vide the Bill of Entry No. 105167 dated 29.10.1992 (in short referred to as the First Consignment). The goods were contained in three containers. The declared value of the goods was US $ 240 PMT, however, when they reached India, the customs authority assessed the price of the goods at US $ 475 PMT. Notice for adjudication was issued by the Customs Authorities and as the matter was under adjudication, the goods were not cleared for home consumption and they were warehoused with the Central Warehousing Corporation (in short referred to as the CWC). In the meantime, another consignment containing the acrylic scrap was imported by the petitioner vide the Bill of Lading No. CDHP 65703 dated 28.6.1993 and Bill of Entry No. 154441 dated 6.9.1993 (hereinafter referred to as the Second Consignment). The petitioner presented the bill of entry for home consumption and after inspection of the goods by the customs authorities and its assessment by them, a total duty of Rs. 5,41,016/- was imposed by the customs department. On deposit of the aforesaid duty on 17.9.1993, the customs authorities made an endorsement on the bill of entry "the goods passed out of customs charge". Despite the payment of the customs duty and despite the entry having been made by the custom department that the goods have passed out of customs charge, the delivery of the same was not given to the petitioner by the respondent-CWC on the ground that by 17.9.1993 a sum of Rs. 1,60,000/- was due to the respondent-Corporation from the petitioner as warehousing and insurance charges in respect of the first consignment. Still another consignment imported by the petitioner vide the Bill of Entry No. 108884 dated 3.8.1993 (hereinafter referred to as the Third Consignment) was detained by the respondent-Corporation and the goods, namely, Polythene Film Scrap in two containers were not delivered to the petitioner on the same grounds that in respect of the first consignment, the petitioner had not paid warehousing and insurance charges to the respondent-Corporation. As the goods of the second and third consignment were not delivered because of non-payment of warehousing and insurance charges of the first consignment, the petitioner filed the present writ petition claiming the following reliefs: -

  (a)    A writ of mandamus and/or any other writ, order or direction in the  nature of mandamus commanding the respondents 1 and 2, their servants,  agents and/or employees to forthwith deliver and/or permit the petitioners  to take delivery of consignment of four containers of Polythene Film  Scrap being container Nos. MAEU 241.66302, TPHU 489.083-9, MAEU  706.671-1, EXTRU 414.662-3 (as fully detailed in Invoice  No. 8097).  

 

  (b)   A writ of mandamus and/or any other writ, order or direction in  the nature of mandamus commanding the respondents 1 and 2, their servants, agents and/or employees to forthwith deliver and/or permit the petitioners to take delivery of consignment of four containers of Polythene Film Scrap being container No. GSTU 7234829 and EACU 9128592, covered  by bill of Entry No. 108884 without levying any charges from the date of  detention.  

 

  (c)   A declaration declaring that the letter dated September 17, 1993  issued by the respondents 1 and 2 is arbitrary, illegal and that the same is  void and unenforceable in law.  

 

  (d)    A writ of prohibition restraining the respondents, their servants, agents and/or employees for in any manner whatsoever demanding,  levying and/or collecting any amount in excess of what has already been  collected by each of them to effect delivery of Polythene Film Scrap being  container Nos. MAEU 241.66302, TPHU 489.083-9, MAEU 706.671-1,  EXTRU 414.662-3 (as fully detailed in Invoice  No. 8097).  

 

 And/or  

 

  Restraining the respondents 1 and 2 from enforcing the communication  dated September 17, 1993.   

 

2. When the matter came up for hearing before the Court on 5.11.1993, the Court observed that prima-facie it was of the view that the petitioner was not liable to pay the storage charges to the Warehousing Corporation but the petitioner has agreed to furnish the bank guarantee for the amount claimed by the respondent. In respect of second consignment, the Court directed the respondents to release the petitioner's goods without payment of any further charges to the respondents. As regards the third consignment consisting of two containers covered by the Bill of Entry No. 108884, the Court directed that the petitioner could get it cleared on payment of the customs duty, which was stated to have been paid, and warehousing charges till the date of delivery. In terms of the orders of the Court, delivery of four containers covered by the second consignment was given to the petitioner, however, delivery of two containers covered by the third consignment was not taken by the petitioner as they were not agreeable to pay the warehousing charges of the third consignment on the ground that the goods were not warehoused by the petitioner but were detained by the respondent-CWC of their own because of non-payment of the warehousing and insurance charges of the first consignment. The controversy in the present case, therefore, is confined only to the question whether the warehousing corporation could detain the subsequent consignments of the petitioner and not deliver the same to them for non-payment of the warehousing and insurance charges of the first consignment and even assuming they were entitled to detain the subsequent consignments for non-payment of dues of the first consignment; is the warehousing corporation entitled to claim warehousing and insurance charges even in respect of the third consignment detained by them without the consent of the petitioner?

3. Learned counsel for the petitioner has relied upon the judgment of the Supreme Court reported as Shipping Corporation of India Limited Vs. C.L. Jain Woollen Mills and Others (2001) 5 Supreme Court Cases 345 to contend that in the absence of any provision in the Customs Act entitling the Custom Officers to prohibit the owner of the space, where the imported goods have been stored from levying the demurrage charges, levy of demurrage charges for non-delivery of the goods was in accordance with the terms and conditions of the contract and as such would be a valid levy, however, if the goods are illegally detained which prevented the importer from releasing the goods, the Customs Authorities would be bound to bear the demurrage charges in the absence of any provision in the Customs Act, absolving the Customs Authorities from that liability. It is, therefore, submitted that as the goods were illegally detained by the Warehousing Corporation without their being any authority in them to detain the same for non-payment of warehousing charges of the first consignment, the petitioner was not liable to pay warehousing charges in respect of the third consignment and the goods should be directed to be released without payment of such warehousing charges.

4. In Shipping Corporation of India Ltd. Vs. C.L. Jain Woollen Mills and others (supra), the facts were that the respondent had imported goods from foreign countries to India and the Shipping Corporation was one of the carriers of the said goods. The goods were discharged without customs clearance and containers were transhipped to ICD, Delhi. Treating the import to be illegal, the Customs Authorities passed an order confiscating the goods and also imposed penalty. The order of confiscation was held by the High Court to be illegal and the direction was given to the Customs Department to release the goods without payment of any detention and demurrage charges. The Shipping Corporation, which under the Bill of Lading had a lien over the goods, until the dues were paid, were not imp leaded in the proceedings before the High Court. The Special Leave Petition filed by the Customs Authorities against the High Court order was dismissed. Since the goods were not cleared even then, the owner again approached the High Court. Observing that the High Court had absolved the owner of any liability to pay demurrage charges, the High Court directed the Custom Authorities and the Carriers to decide if the carriers were entitled to any detention or demurrage charges and further directed that in case any such charges were to be paid, they should be paid by the Customs Department and that after such payment, the carriers would release the goods. The order of the High Court directing the Customs Department to pay detention and demurrage charges was challenged in appeals before the Supreme Court. The Supreme Court on these facts held that the Customs Authorities under the Act had a power and control over the imported goods and without their permission the goods could not be cleared but there was no provision in the Customs Act to prohibit or injunct any other authority where the imported goods are stored from charging demurrage charges for the service rendered for storing the imported goods. It was held that there was no provision in the Customs Act, which would enable the Customs Authorities to compel the carrier not to charge demurrage charges. It was held that the Customs Authorities might have bonafide initiated the proceedings for confiscation of goods, which, however, ultimately turned out to be unsuccessful and the Court held the same to be illegal but the same would not by itself clothe the Customs Authorities with the power to direct the carriers not to charge any demurrage charges, etc. It was held that the High Court having held that the detention of the goods to be illegal, the Customs Authorities would be bound to pay the demurrage charges in the absence of any provision in the Customs Act absolving them from that liability.

5. The submission of the petitioner, therefore, is that in the present case, the goods were detained by the Warehousing Corporation wholly illegally inasmuch as there is no provision either in the Warehousing Corporation Act or in the Contract Act or in the Customs Act permitting the Warehousing Corporation to have a lien over the goods, which have not been warehoused or stored with them for non-payment of warehousing and insurance charges of the goods which had been warehoused and about which the adjudication proceedings were pending with the Customs Department.

6. I am in agreement with the contention raised by learned counsel for the petitioner. Under Section 48 of the Customs Act, if any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transhipped within 30 days from the date of unloading thereof at a customs station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer, be sold by the person having the custody thereof. Under Section 63 of the Customs Act, the owner of any warehoused goods shall pay to the warehouse keeper rent and warehouse charges at the rate fixed under any law for the time being in force or where no rates are so fixed, at such rate as may be fixed by the Commissioner of Customs. It further provides that if any rent or warehouse charges are not paid within 10 days from the date when they become due, the warehouse keeper may, after notice to the owner of the warehoused goods and with the permission of the proper officer cause to be sold such sufficient portion of the goods as the warehouse-keeper may select. A reading of Sections 48 and 63 clearly show that the lien, if any, which the warehouse keeper may have, can only be on the goods, which have been warehoused and stored with the consent of the owner and not any other goods. For non-payment of the warehouse charges, provisions has been made in Sections 48 and 63 of the Act to dispose of the goods by auction so as to recover the amount that may be due to the warehouse keeper. The contention of learned counsel for the respondent is that as the goods were under adjudication, the Warehousing Corporation could not auction the goods under Sections 48 and 63 of the Act so as to recover its charges and it was, therefore, within the powers of CWC to detain any other goods which had come under its control. Under Section 45 of the Customs Act save and otherwise provided by the law for the time being in force, imported goods unloaded in a Customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII of the Act. The submission of learned counsel for the respondent is that the Warehousing Corporation is the custodian of the Customs Department under Section 45 of the Act and they have been so notified by a notification. It is submitted that since the goods could not be removed from the Corporation without the permission of the Customs Department and adjudication proceedings were pending, the respondents could not dispose of the goods by auction as provided by Sections 48 and 63 of the Act and consequently the only way for the Warehouse Corporation to recover the rent due to them was to detain the subsequent goods imported by the petitioner.

7. In my opinion, the arguments advanced by learned counsel for the respondent have to be noted to be rejected. As already observed above, there is no provision in the Customs Act or the Warehousing Corporation Act or in the Contract Act which enables the Warehousing Corporation to have a lien on the goods, which were not warehoused. It is admitted case of the parties that the goods imported vide the second and third Bill of Lading were not warehoused or stored with the respondent-Corporation. Under Section 63 of the Act only the warehoused goods or the goods stored under the provisions of the Customs Act can be sold by auction or otherwise for recovery of the warehousing charges. The respondent could not have a lien over the goods, which were neither warehoused nor stored with them and which were otherwise passed out of the customs authority. In case, any amount was due from the petitioner to the respondent-Corporation towards warehousing and insurance charges in respect of first consignment, the respondent-Corporation may have sought recovery of the same in a manner, as may be permissible in law but it had no authority to detain the goods covered by the second and third consignment. I am, therefore, of the view that the goods covered by the third consignment contained in two containers were illegally detained by the respondent-Corporation. As the detention of the goods contained in two containers imported vide Bill of Entry No. 108884 dated 3.8.1993 was illegal, the respondent-Corporation cannot claim warehousing and insurance charges for the said consignment for the period they were illegally detained. I, accordingly, make the RULE absolute and direct the respondent Central Warehousing Corporation to release the consignment covered by the Bill of Lading No. 108884 dated 3.8.1993, contained in containers No. GSTU-7234829 and EACU-9128592 forthwith without claiming any warehousing or insurance charges from the petitioner. In the facts of this case, I leave the parties to bear their own costs.