TMI Blog2010 (10) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... irect the Customs Department, Respondent No. 2 herein, to pay the demurrage charges accrued on the goods of the Petitioner to the AAI. A further prayer is for a direction to the AAI to realise the demurrage charges accrued on the consignment in question kept in the custody of the AAI from the Customs Department. 2. The Petitioner sought to export readymade garments to Russia by way of four shipping bills through M/s SAM Aviation Pvt. Ltd. on 6th June 2001. It is stated that the shipping bills were cleared on the same date. While the said consignments were lying for shipment on, 11th June 2001 the officers of the Department of Revenue Intelligence ("DRI") detained the consignments for some investigation. On 4th July 2001, the DRI referred the investigation to the Commissioner of Customs (Preventive). On 6th July 2001 SAM Aviation requested the AAI for waiver of demurrage charges. On 11th July 2001 the Petitioner was summoned by the Commissioner of Customs (Air Cargo Preventive) for giving evidence and producing documents in respect of the enquiry being conducted with regard to the consignments. 3. By a letter dated 20th July 2001 the AAI directed SAM Aviation to produce certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er (Cargo) AAI to the following effect: Sir, This is with reference to letter No. VIII {2} Aircus/Cru/Detention/1279/01/816 Dated 22 August 2001 from Dy. Commissioner {Preventive} Air Cargo Unit Authorizing shipment of detained cargo. As no penalty/fine has been imposed on our cargo we request that the cargo be released and demurrage charges waived off as the cargo is being lying here since a long time your humble and kind initiative will be highly obliging to us for upliftment of cargo from here at the earliest. Awaiting for an early response from your side." (emphasis supplied) 8. It is stated that by this time, the goods in question had accrued a demurrage of Rs. 46 lakhs. In these circumstances, the present petition was filed on 4th September 2001 seeking the reliefs mentioned hereinbefore. 9. By an interim order dated 20th December 2001, this Court permitted the Petitioner to shift the goods to the Customs Department Bonded Warehouse but further directed that the goods will not be removed without the permission of the Court. It was clarified that the AAI will continue to have a lien over the goods for the amount which may be due to it towards demurrage. The Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demurrage charges that compelled the Petitioner to approach this Court. Alternatively it is submitted that the Petitioner cannot be made to bear the burden of the laxity on the part of the Department of Customs to clear the consignment. Therefore it is the Customs Department which should bear the liability of the paying demurrage charges. Reliance is placed on the decisions of the Supreme Court in Priyanka Overseas Pvt. Ltd. v. Union of India 1991 (51) ELT 185 (SC); Kuil Fireworks Industries v. Collector of Central Excise 1997 (95) ELT 3 (SC) and the decision of a Division Bench of Andhra Pradesh High Court in Sujana Steels Ltd. v. Commissioner of Customs Central Excise 2002 (141) ELT 51 (AP). 12. Appearing for the AAI, Mr. Aruneshwar Gupta, learned counsel points out that the Customs Department has no powers and cannot regulate the activities of the AAI. The AAI acts as bailee vis-a-vis the consignee, and is governed by the provisions of Sections 152 and 161 of the Contract Act, 1872 ("CA"). The power of the AAI to levy demurrage charges flows from the IAAI Act read with the 1993 Regulations. He placed reliance on the decisions of the Supreme Court in Shipping Corporation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harges are, they usually go to the office of the AAI to ascertain what demurrage charges are and pay them. Even if an exporter is aggrieved by having to pay demurrage charges which it feels is unjustified, the course available is to make payment under protest and later seek appropriate remedies. In the instant case, there is nothing to show that the Petitioner ever offered to the AAI that it would pay the demurrage charges, or for that matter even 20 per cent of the demurrage charges. In the circumstances, the Petitioner was not justified in waiting for the AAI to communicate the demurrage charges. On the other hand it does appear that the Petitioner was never prepared to pay any demurrage charges as is evident from its letter dated 27th August 2001. One possible reason may have been that since the demurrage charges had already accumulated to Rs. 46 lakhs, the Petitioner decided to contest the demand and therefore, filed this petition in early September 2001. In the circumstances this Court is unable to conclude that AAI was under an obligation to communicate to the Petitioner the exact demurrage charges and that the failure to do so would exempt the Petitioner from paying the demu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailee, who exercises a lien, is not entitled to charge rent for storage of goods can never apply to a case where the lien is exercised for non-payment of rent or storage charges. If such a proposition were to be accepted it would lead to catastrophic results. It is well known that in most cities, particularly port cities like Calcutta and Bombay, storage space is at a premium. If such a proposition were accepted then all that a person need to do is to make a demand for removal of the goods without offering to pay the storage charges. If the bailee were to refuse to allow clearance and exercise his right of lien, as he is bound to do, the bailor's purpose would be served. He would thereafter have rent free storage space. He could then continue to store the goods free of rent. On the other hand, if the bailee were to permit clearance, in almost all cases, his charges would not be subsequently paid and he would have to then pursue the bailor for recovery of his charges. This could never be the law." 17. In the circumstances, it is not possible for this Court to grant the reliefs prayed for in the writ petition. It is for the Petitioner to pay the demurrage charges to the AAI. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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