9911796707
TMI Blog2013 (11) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 15,000/- in respect of the premises and Rs. 2,000/- for two car parking spaces. A refundable security deposit was, according to the Petitioners, paid on the execution of the licence. Under clause 4 of the licence agreement the deposit was to be refunded by the licensor to the licensee upon the expiry or sooner determination of the agreement, after deducting amounts due and payable by the licensee and upon the licensee handing over to the licensor quiet, vacant and peaceful possession of the premises. In the event of the licensor failing to refund the security deposit, the deposit was to carry interest at 18% per annum from the date on which the licensee was in a position to handover vacant possession until actual receipt of the security deposit. Until then, the licensee was entitled to continue use of the premises without being liable to pay any compensation until the security deposit was refunded together with interest. 2. Admittedly, the alleged licence agreement was not renewed after the expiry of the original term on 17 May, 1998. 3. The premises of the residential flat were attached on 19 June, 1998 by the Customs Authorities for the recovery of amounts due and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By a letter dated 17 July, 1998, the predecessor-in-interest of the First Petitioner informed the Assistant Commissioner of Customs of the flat having been taken on leave and licence from the Seventh Respondent and it was stated therein that it would be in order for the company to continue making the licence payments as non-payment would jeopardize both its occupation and the security deposit. On 24 July, 1998 the Commissioner of Customs addressed a communication to Birla Global Finance Limited calling upon it to pay the monthly compensation/parking charges to the Assistant Commissioner of Customs and to send a copy of the leave and licence agreement at the earliest. On 5 August, 1998, the Seventh Respondent was informed that payment would be made of the licence fee to the Assistant Commissioner of Customs. On 11 March, 1999 the Assistant Commissioner of Customs addressed a communication stating that the premises have been attached on 19 June, 1998 and calling upon the predecessor-in-interest of the First Petitioner to vacate the premises by 30 April, 1999. On 25 March, 1999 the Petitioners by their reply stated that they have furnished a security deposit of Rs. 30 lacs and since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nication dated 29 November, 2010 the Joint Commissioner of Customs informed the Petitioners' advocates that since the amount was paid by the Petitioners to the Seventh Respondent, their claim for interest on deposit would lie against the Seventh Respondent and not the Government. By a letter dated 19 January, 2011 the Petitioners responded to the communication. On 29 January, 2011 the Joint Commissioner of Customs informed the Petitioners that it was intended to advertise only the deposit amount as an encumbrance while issuing the auction notice. By their advocate's letter dated 21 February, 2011 the Petitioners claimed that they were entitled to the payment of not only the security deposit of Rs. 30 lacs but also interest thereon in terms of the agreement. On 5 August, 2011 a communication was addressed to the Petitioners stating that the premises had vested in the Government of India. The Petitioners were called upon to furnish a copy of the lease deed, particulars of payment towards licence fees and other documents. The Petitioners have claimed that on 23 June, 2011 they received a copy of a letter from Deputy Commissioner of Customs (Exhibit X) where the department reiterated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement dated 18 June, 1997 until the security deposit is refunded together with interest. Reliance in that regard is placed on the judgment of a Division Bench of this Court in Sumikin Bussan (Hong Kong) International Limited v. Manharlal Trikamdas Mody - 2006 (4) Bom. C.R. 131; (iii) The Petitioners are admittedly in occupation of the residential flat and have continued to remain in settled use and occupation at any rate since prior to the date on which the flat was attached. The Customs Authorities have accepted licence fee from the Petitioners until May, 2012. A solemn statement was made before the Court in the earlier writ petition on 22 September, 1999 that the Petitioners would not be dispossessed without due process of law. Due process of law would not be met by the Assistant Commissioner of Customs passing an order calling upon the Petitioners to vacate the residential flat. In the circumstances, the occupation of the Petitioners in respect of the flat would have to be protected. 8. On the other hand, it has been urged on behalf of the Respondents that : (i) The original leave and licence agreement is admittedly not forthcoming. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows : "(ii) the proper officer may, on an authorisation by Commissioner of Customs and in accordance with the rules made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus, if any, to such person." Under the aforesaid provision on an authorisation by the Commissioner, the proper officer is empowered in accordance with the rules made in that behalf to distrain any movable or immovable property belonging to or under the control of such person. The expression "such person" necessarily refers to the person by whom any sum is due and payable to the Central Government . If the amount remains unpaid for a period of thirty days, the proper officer is empowered to cause the property to be sold. The proceeds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 11. Significantly neither the provisions of Section 142 of the Customs Act, 1962 nor the provisions of the Rules framed thereunder provide for the vesting of the property without encumbrance. There is no provision under which any encumbrance in respect of the property is to get divested. On the contrary, it is evident from Rule 23(1) that what is vested in the purchaser is the right, title and interest of the defaulter in the property. 12. The bone of contention in the present case is in regard to the authenticity of the leave and licence agreement which is sought to be challenged by the Customs Authorities. In the petition as it was originally filed, a typed copy of the leave and licence agreement was annexed at Exhibit A to the petition. Clause 21 of the leave and licence agreement stipulates that the agreement shall be executed in duplicate and the original shall be retained with the licensee while the duplicate would be with the licensor. During the course of the hearing of these proceedings, it has been admitted by the learned Senior Counsel appearing on behalf of the Petitioners that the Petitioners do not have an original of the licence agreement. The receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d occupation of the Petitioners as been to the knowledge of the Customs Authorities right at least from July, 1998. The Petitioners have paid monthly compensation and licence fees in respect of the flat to the Customs Authorities from August, 1998 until March, 2012 after which the authorities have declined to accept payment. As the record would indicate, in a series of letters, the officers of the Customs Department had indicated to the Petitioners that while advertising the auction of the residential flat, they would include the security deposit of Rs. 30 lacs which the Petitioners had claimed to have paid to the Seventh Respondent, which would be treated as an encumbrance. When the earlier writ petition came up before this Court on 22 September, 1999, a Division Bench of this Court recorded the statement of the Union of India and the Customs Authorities that the Petitioners would be dispossessed from the property only after following due process of law. The record does not indicate that due process of law has been followed by the Customs Authorities. Merely addressing letters to the Petitioners to vacate the premises would not constitute due process of law. In view of the fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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