Pil Mumbai (India) Ltd. vs Union Of India & Ors.
2010 Latest Caselaw 9 Del

      IN THE HIGH COURT OF DELHI AT NEW DELHI
12.
                           W.P.(C) No. 1865 of 2008


      PIL MUMBAI (INDIA) LTD                ..... Petitioner
                    Through: Shri Manoj Khanna, Advocate.


                           versus


      UNION OF INDIA & ORS.               ..... Respondents
                    Through: Mr. R.K.Joshi with Mr. Jyotindra
                    Kumar, Advocate for R-3.


       CORAM:
       HON'BLE DR. JUSTICE S. MURALIDHAR


       1. Whether Reporters of local papers may be
             allowed to see the judgment?                 No
       2. To be referred to the Reporter or not?          Yes
       3. Whether the judgment should be reported in Yes
             Digest?


                                    ORDER

06.01.2010

1. The Petitioner PIL Mumbai (India) Ltd. acts as agent for various

international lines and facilitates import and export of goods in

containers in the course of international trade. The Petitioner states

that it ensures that the containers of various shipping lines, of which

it acts as agent, are shipped to the destination shown in the bill of

lading. After delivery of the consignment the empty containers, for

the import of which the Petitioner executes a bond in favour of the

local customs authorities, are required to be re-exported by it within

a reasonable time.

W.P.(C) No. 1865 of 2008 page 1 of 11

2. The Petitioner states that it has nothing to do with the liabilities

attaching to the actual import or export of the consignments carried

in the containers. Those obligations are of the respective consignors

and consignees, as the case may be, and are governed by the contract

entered into between those parties.

3. As far as the present case is concerned, two containers (PCU

3686070/20 and TTNU 3868181/20) were shipped into India against

combined transport bills of lading issued by PIL Pacific International

Lines (Pte) Ltd., (the shipping line of which the Petitioner here is an

agent) from Lagos in Nigeria (port of loading) to Tuglakabad (the

place of delivery). The consignor/shipper mentioned in the bills of

lading was Don-Capo Afro Asia Ltd. and, the State Bank of India,

Maharajpur, District Ghaziabad was shown as the consignee. PGR

Overseas, New Raj Nagar was the party to be notified. The

consignment in question consisted of aluminium ingots.

4. It is stated that the containers were shipped on two vessels and

arrived at the Mundhra port on vessel on 24th September 2004. The

containers after being discharged from the vessel at the Mundhra

port with their seals intact, were in the custody of customs authority

through the Container Corporation of India Ltd. (CONCOR)

(Respondent No.3 herein). They were thereafter transported from

Mundhra to Tuglakabad, the port of delivery, by rail. A transship

permit to that effect was issued by the customs authority. The W.P.(C) No. 1865 of 2008 page 2 of 11 containers arrived at Tuglakabad on 22nd October 2004.

5. It appears that the consignee failed to take delivery of the

consignment within the time offered by the shipping line. The

consignee also failed to pay the inland haulage charges. The

containers were found to be weighing much less than the weight

shown in the bills of lading furnished by the shippers. It appears

from the affidavit filed by the CONCOR, in these proceedings, that

due to shortage of material found in the containers the police in

Delhi, at the instance of the consignee, registered FIR No. 460 of

2005 dated 16th July 2005 under Sections 406, 420 and 120B IPC

against the consignor. The goods in the two containers were

inspected by the police in the presence of the customs authorities, the

representatives of the Petitioner, CONCOR, the CHA, the importer

etc. After inspection a seizure memo was prepared and the goods

were given in superdari to the representative of CONCOR. The

containers were re-sealed by the police.

6. The Petitioner was however concerned about the delay in

unloading of the consignment from the containers and about re-

exporting the two containers in accordance with the bonds, furnished

by it to the customs authorities.

7. Meanwhile, the Petitioner was questioned by the Anti Forgery

W.P.(C) No. 1865 of 2008 page 3 of 11 Branch of the Economic Offence Wing („EOW‟), Crime Branch of

the Delhi Police in relation to the aforementioned FIR filed by the

consignee alleging cheating against the consignor. In relation to the

shortage of goods in the containers, the Petitioner informed the

Investigating Officer that the containers have been de-stuffed and

sealed by the shipper at its godown at the port of loading (Lagos)

itself and that the bills of lading were prepared on the shipper‟s

declaration. The containers reached the customs authorities in India

at the Mundhra port with the seals intact. Consequently, no fault or

liability could be attributed to the Petitioner for any alleged shortage

in the consignment.

8. Aggrieved by the continued detention of the containers by the

Respondents, the Petitioner filed the present petition seeking, inter

alia, a direction to the Respondents to forthwith release the two

containers in question and to compensate the Petitioner for loss of

business and loss of profits on account of the detention of the

containers. According to the Petitioner the detention charges, if any,

are to be paid by the consignee and, therefore, there was no

justification for not releasing the containers to the Petitioner.

9. Learned counsel for the Petitioner has in addition relied upon the

judgment of this Court in Kawasaki Kisen Kaisha Ltd. v. Union of

India 1996 (82) ELT 27 (Del) where in similar circumstances a

direction was issued by this Court to release the containers in W.P.(C) No. 1865 of 2008 page 4 of 11 question to the shipping line in that case. Further, reliance is placed

upon the order dated January 2007 passed by a learned Single Judge

in Writ Petition (C) No. 8792 of 2006 where, in the background of

shipment of similar consignments of similar aluminium ingots from

Lagos in Nigeria, a direction was issued to release the containers to

the shipping line.

10. An affidavit has been filed on behalf of Respondent No.2,

Assistant Commissioner (Preventive), Department of Customs on 5th

December 2008 in which it is stated as under:

"It is submitted that the containers bearing Nos. PC-

          3686070          and   TINU-3868181   have   never   been
          seized/detained by the answering respondent.         The

answering respondent had already intimated the Assistant Commissioner of Customs (SIIB), ICD, TKD, New Delhi vide its office letter dated 12.9.2005 that since the investigation undertaken in this Commissionerate in respect of subject empty container from Lagos had already been completed and no customs angle was involved and as such the Commissionerate had no objection for release of two subject containers to the Petitioner. Copy of the letter dated 12.09.2005 has been Annexed herewith and marked as Annexure R-1."

11. On its part Respondent No.3 CONCOR has filed an affidavit on

6th July 2009 where apart from certain technical objections, it is

stated in para 6 as under:

"6. Contents of paragraph 6 are denied. It is denied W.P.(C) No. 1865 of 2008 page 5 of 11 that the containers have been detained by the answering respondent. It is denied that the services of the principle of the petitioner were engaged for the limited purpose. It is denied that the petitioner has the right to exercise lien over the consignment as alleged. The detention charges mentioned in the paragraph under reply are denied. In any case, the same has to be recovered from the importers/consignees by the petitioner as per their contract(s) with them. Due to shortage of the material found in the containers, the police had registered FIR No. 640/05 dated 16.7.2005 under Section 406, 420 and 120 B of IPC and the goods were inspected in the containers by the police in the presence of Customs, CHA, importer etc. After inspection a seizure memo was prepared and the goods were put under the superdari of the representative of the answering respondent and the container was re-

sealed by the police. The goods are lying in the container. The answering respondent has no objection if the goods are taken either by the importer or Customs to their bounded warehouse and the containers are released after making their payments."

12. At the previous hearing on 28th August 2009 this Court had

impleaded the Anti Forgery Branch, Economic Offence Wing, Crime

Branch of Delhi Police as a Respondent. However, despite service

none appears on behalf of the said newly added Respondent No.4.

13. Mr. Joshi, learned counsel appearing for Respondent No.3 while

no disputing the stand taken by it as contained in para 6 of the

affidavit, submits that the consignor and consignee would have to be W.P.(C) No. 1865 of 2008 page 6 of 11 made parties to this petition and a comprehensive order passed in

lines of the order dated 12th September 2008 passed by the Division

Bench of this Court in Writ Petition (C) No. 22731 of 2005

permitting the consignment in question to be auctioned for

recovering the detention charges. A reliance is also placed on an

order passed by the Supreme Court in Board of Trustees Port of

Mumbai v. Transworld Shipping Service (1998) 9 SCC 610 where it

was directed that the goods in question should be auctioned after

being de-stuffed from the containers in question.

14. The submissions of Mr. Joshi have been considered.

15. It is plain that as far as the Petitioner is concerned, it is merely a

shipping line that facilitates the carriage inward of goods in the

process of import. There is no liability attached to the shipping line

itself for either payment of haulage charges or detention charges to

the port authority or to CONCOR. At all times it was understood by

the parties that the liabilities, if any, arising out of the import was

governed by the terms of the contract between the consignor and the

consignee. As far as the shipping line is concerned, it has furnished

a bond to the customs authorities for importing the containers, and

after unloading the goods carried therein at the destination indicated

in the bill of lading, to re-export the containers to the country of

origin.

W.P.(C) No. 1865 of 2008 page 7 of 11

16. The customs authorities in this case have no objection to the

release of the containers to the shipping line. The customs authority

has made it clear that the investigations undertaken by the

Department of Customs has already been completed, that "no

customs angle is involved" and that there can be no objection to

release of the two containers to the Petitioner. Therefore as far as the

customs department is concerned, they have no objection to the

prayer of the petition being granted.

17. As far as the CONCOR is concerned, it has categorically stated

on affidavit that it too has no objection to the empty containers being

returned to the Petitioner, "after the goods are taken either by the

importer or customs to their warehouses and the containers are

released after making their payments." However, learned counsel for

the CONCOR repeatedly insisted that this Court should pass an order

directing the auctioning of the goods seized and for that purpose

urged that the consignor and consignee should be impleaded as

parties. The relevant paragraph of the affidavit of CONCOR as

extracted hereinbefore makes clear that the goods in question have

been sealed pursuant to the investigation undertaken by the EOW in

FIR No. 640 of 2005. It is difficult to appreciate how when the said

goods have been seized pursuant to a criminal case, and have been

entrusted in superdari to the representative of the CONCOR, this

Court can simply direct that the goods be auctioned off. At the same

time, there appears to be no justification for denying release of the

W.P.(C) No. 1865 of 2008 page 8 of 11 containers, which per se do not constitute the case property, to the

Petitioner. A distinction has necessarily to be drawn between the

consignment contained in the containers and the containers

themselves. While the consignment certainly forms subject matter of

the criminal case, and of the contract between the consignor and the

consignee, it is nobody‟s case that the containers constitute case

property and are required to be detained for the purposes of a

criminal case. It has already been noticed that even the customs

authorities have no objection to the release of the containers to the

Petitioner.

18. Learned counsel for the CONCOR was unable to show to the

Court any provision in the Major Ports Act, 1963 that obligates the

Petitioner, as a shipping line, to pay the rent for the containers. Even

the order passed by the Supreme Court in Board of Trustees Port of

Mumbai v. Transworld Shipping Service in para 4 notes the

contention of learned counsel for the Petitioner in that case that

"there is no liability on the client‟s part to pay ground rent because

the containers are being detained due to non-performance of the

statutory duty of the customs authority and also the Port Trust."

After noting the said submission, the Supreme Court observed that

"all these questions must be finally decided by the High Court."

Therefore the said order cannot be an authority for the proposition

that in a case like the present one, the liability to pay the detention

charges or the rent should be fastened on to the shipping line.

W.P.(C) No. 1865 of 2008 page 9 of 11

19. The order passed by the Division Bench of this Court in Writ

Petition (C) No. 22731 of 2005 also does not help the case of the

CONCOR. In that case it happened that the consignor and the

consignee were parties to the petition and a comprehensive order

could therefore be passed by the Court directing the auctioning of the

consignment. That case did not involve seizure of goods pursuant to

the registration of a criminal case. The two cases are therefore not

on the same footing.

20. For the aforementioned reasons, this Court finds no merit in the

contentions of the learned counsel for the CONCOR that this Court

should pass an order directing the auctioning of the consignment in

question for recovering the detention charges. It is nevertheless

clarified that it would be open to CONCOR to proceed in accordance

with law to recover the detention charges without insisting that the

containers should not be released to the Petitioner.

21. For the aforementioned reasons, this petition is allowed. A

direction is issued to Respondents 1 to 4 to release the two containers

in question to the Petitioner, within six weeks from today, after

unloading the consignment contained therein and retaining the said

goods in a sealed condition. It will be open to Respondent No.3 to

take appropriate steps in accordance with law to require the keeping

of the goods in a bonded warehouse and recover the detention

charges from the importer/consignor or the consignee, as the case W.P.(C) No. 1865 of 2008 page 10 of 11 may be. The other prayer of the Petitioner for damages cannot be

decided in the present proceedings. It would be open to the Petitioner

to avail of any other remedy for that purpose in accordance with law.

22. A copy of this order be given dasti to the learned counsel for the

parties.

                                             S. MURALIDHAR, J
JANUARY 06, 2010
dn




W.P.(C) No. 1865 of 2008                                    page 11 of 11