2002 (12) TMI 551 - HC - Customs

Issues Involved:
1. Maintainability of the application for release of containers by defendants 4 and 5.
2. Impact of confiscation of goods on the release of containers.
3. Operational concerns and safety issues raised by CCIL.
4. Liability for warehouse charges.
5. Vesting of confiscated goods in the Central Government.
6. Compliance with Supreme Court orders regarding hazardous waste.

Issue-wise Detailed Analysis:

1. Maintainability of the Application for Release of Containers by Defendants 4 and 5:
The court found that the application for release of containers by defendant No. 4 was not maintainable. The plaintiff/respondent No. 1's application for release of goods was dismissed due to the hazardous nature of the goods, which was not disputed. Since the suit was filed by the plaintiff/respondent No. 1, relief of this nature could not be granted to defendants 4 and 5. The court noted that defendants 4 and 5 should have brought separate proceedings against the plaintiff/respondent No. 1, CCIL, or customs authorities rather than filing an application in the suit filed by the plaintiff/respondent No. 1.

2. Impact of Confiscation of Goods on the Release of Containers:
The court held that once the goods are confiscated, this confiscation includes the containers. The customs authorities and CCIL have no privity of contract with defendants 4 and 5, whose cause of action, if any, was against the plaintiff/respondent No. 1. The court rejected the argument that defendants 4 and 5 could seek the release of their containers through an application in the existing suit, as it would lead to multiplicity of litigation.

3. Operational Concerns and Safety Issues Raised by CCIL:
CCIL argued that the drums were leaking, and destuffing them would adversely affect the operational area of ICD, which is already beyond its operational capacity. The court agreed that the learned Single Judge had overlooked the operational and safety concerns raised by CCIL, including the potential jeopardy to the working conditions at ICD and the safety of personnel and nearby inhabitants.

4. Liability for Warehouse Charges:
The learned Single Judge had referred to a Supreme Court judgment and a Government of India office memorandum regarding the liability of warehouse charges. However, the court found this aspect irrelevant in the present case, as the goods had been confiscated by the customs authorities. The court held that the issue of who has to pay the warehouse charges was not pertinent once the goods were confiscated.

5. Vesting of Confiscated Goods in the Central Government:
The court emphasized that under Section 126 of the Customs Act, 1962, confiscated goods vest in the Central Government. It is the prerogative of the Central Government to decide how to deal with the confiscated goods, including the containers. Therefore, the containers could not be released to defendants 4 and 5 without the Central Government's decision.

6. Compliance with Supreme Court Orders Regarding Hazardous Waste:
The court noted that the Supreme Court had ordered that hazardous waste, including the goods in question, should not be released or auctioned until further orders. CCIL argued that it was already handling 500 containers with hazardous waste as per the Supreme Court's directions, and releasing the containers would adversely affect its operations. The court did not express a final opinion on this submission but highlighted its relevance.

Conclusion:
The appeal was allowed, and the impugned order dated 10th May 2002, passed by the learned Single Judge, was set aside. IA No. 11658/2001 filed by defendants 4 and 5 was dismissed as not maintainable. The court concluded that CCIL had been adversely affected by the impugned order and was competent to maintain the present appeal.

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