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M/s Overseas Enterprises Versus The Union of India through the Chief Commissioner of Customs (Preventive) , The Commissioner of Customs (Preventive) , Customs, The Additional Commissioner of Customs (Adjudication) , Customs, The Assistant Commissioner of Customs (Preventive) , Customs, The Superintendent of Customs (Preventive) , Office of Commissioner Customs and The Superintendent of Customs (Adjudication) , Customs

2016 (1) TMI 726 - PATNA HIGH COURT

Import of split betel nuts - Writ petition seeking release of split betel nuts - The petitioners asserted that the goods, namely, betel nuts imported by them, were also got tested and nothing spurious was found in the test report of the Export Inspection Agency at Kolkata. - Held that:- Having thus regard to the findings of the adjudicating authority in confiscation proceedings dated 29.11.2013 which also stands fully affirmed by way of dismissal of appeal filed by the department, this Court wou .....

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ally dismissed on 29.11.2013 some time in November, 2014 which led to return of bank guarantee to the petitioners in view of the order dated 11.11.2014 as quoted above in paragraph no.16 of this judgment. - What really amazes this Court is that even after the adjudication in confiscation proceedings were itself dropped, by the final order dated 28.11.2013 when there was no sanction of law under any provision of Customs Act which would have empowered the authorities of the Custom Department t .....

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epted by the competent reviewing/appellate authority. This Court again does not find any such provision in the Act which could have enabled the authorities of Customs Department to sit over the final order of adjudication in confiscation proceedings dated 29.11.2013. - Thus, having an overall picture this court will have no difficulty in coming to the ultimate conclusion that the petitioners on account of abnormal delay of almost 1˝ years caused in release of its seized betel nuts have been .....

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found that the petitioners have been put to a loss of at least ₹ 14,69,650/- on account of complete deterioration of quality of split betel nuts solely on account of deliberate laches on the part of the officials of the Custom Department it would direct respondent no.2 to pay a sum of ₹ 14,69,650/- along with interest at the rate of 9% per annum for the period 28.3.2013, the date on which the order of provisional release of the seized article was passed by the competent authority to .....

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of Excise and Customs Department of Revenue, New Delhi to get an enquiry conducted by an Officer not below in the rank of Chief Commissioner of Customs who must not be posted and/or associated in any manner with Patna Zone of the Custom Department. - Decided in favor of appellants. - Civil Writ Jurisdiction Case No.13382 of 2014 - Dated:- 30-11-2015 - MR. JUSTICE MIHIR KUMAR JHA For the Petitioner : Mr. Sudhir Kumar, Adv For the Respondent :Mrs. Nivedita Nirvikar, Adv, Mrs. Archana Meenakshi .....

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dly withheld by the Respondents despite the proceedings initiated against the petitioners in respect of the said goods for the charge of its illegal import has been dropped by the Adjudicating authority and there is a specific direction for release of the seized goods vide order dated 28.03.2013." (underlining for emphasis) 3. The facts giving rise to the aforesaid underlined prayer in this writ application lie in a very narrow compass. It is the case of the petitioners that they had import .....

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ed by the Transporter M/s SRC India Movers enroute to their business premises at New Delhi. The petitioners, in this regard, have also asserted that the goods, namely, betel nuts imported by them, were also got tested and nothing spurious was found in the test report of the Export Inspection Agency at Kolkata. 4. It is the further case of the petitioners that while transporting the betel nuts from Bangaon to its destination at New Delhi, its one of the consignment by Truck No HR46C3697 was inter .....

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n 111 of the Act. Such seized articles thereafter were brought to Patna where it was weighed and found to be 15.470 MT. The Custom officials, while seizing the goods, had also valued the same at ₹ 14,69,650/- apart from the value of the truck at ₹ 12,00,000/-. 5. On acquiring knowledge of such seizure, the petitioner no 2 claims to have appeared before the Additional Commissioner (Prev.), Patna on 06.03.2013 and had filed application for release of the said goods. The authorities of .....

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ting release of the goods in terms of the aforesaid order of the provisional release dated 28.03.2013, but the same was still not released by the authorities of the Custom Department who under a design and mala fide intention, in order to block the release of the seized goods on 2.4.2013 had sent the sample of goods (betel nuts) for testing to Central Food Laboratory, Kolkata Camp, Raxaul (hereinafter referred to as 'the C.F.L.') which on 03.04.2014 had submitted a report that the sample .....

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the Act and penalty in terms of Section 112 and 116 of the Act be not imposed upon them. The petitioners thereafter had filed their show cause reply dated 8.5.2013 to the show cause notice dated 08.04.2013 in which they had categorically denied the allegation made in the show cause notice and had gone to explain that the goods in question were legally imported with the valid documents as also after due custom clearance and were being transshipped to its destination at Delhi. 8. It is the further .....

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Commissioner of Customs, Patna both with regard to non-compliance of the order of the provisional release of the betel nuts dated 28.03.2013 as also the continued deterioration of the seized goods due to lack of its proper storage and preservation but even then their seized goods were not released. 9. According to the petitioners, the confiscation proceedings in the meantime was decided in their favour by the final order of Additional Commissioner (Adjn.) Customs, Patna dated 29.11.2013 dropping .....

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ntly pending for departmental review before the reviewing authority. The petitioners have also explained that after this communication nothing more was communicated to them and the department consumed a period of almost four months in only filing its appeal on 25.3.2014 against the final order of adjudication dated 29.11.2013. 10. The petitioners have in this regard have also explained that even when there was no order of stay passed by the appellate authority in such appeal yet its request for .....

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the seized betel nuts of the petitioners whereafter they had been compelled to file this writ application on 05.08.2014. 11. As would be found from the prayer of the petitioners already quoted above their main grievance, on the date of filing of the writ application i.e. 05.08.2014, was that despite an order of provisional release passed by the competent authority of the Custom Department dated 28.03.2013 followed by the final order dated 29.11.2013 dropping the confiscation proceedings, its se .....

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.2014, but then, on 22.08.2014, a counter affidavit had been filed on behalf of the authorities of the Custom Department wherein an order of release dated 09.08.2014 had been enclosed directing for the provisional release of the split betel nuts of the petitioners and a plea was taken in such counter affidavit that since the goods had already been released in favour of the petitioners on 09.08.2014 on furnishing of the bank guarantee of ₹ 14,69,650/- as well as another bank guarantee for a .....

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ner of Customs (P), Patna is pleased to order for provisional release of 15470/-Kg of cut betel nuts of Bangladesh origin valued at ₹ 14,69,650/- (Fourteen lakhs sixty nine thousand six hundred fifty only) seized by the officers of Customs (Prev.) Hqrs., Patna on 17.02.2013 vide Unit case NO. 10/2012-13, to its legal owner on execution of Bank Guarantee @ ₹ 60 per Kg. backed by surety bond for full seizure value subject to completion of all conditions as prescribed in this regard. In .....

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tee of ₹ 9,28,200/- (Nine lakhs twenty eight thousand two hundred only numbered IBG54159 DATED 09.08.2013 issued by Federal Bank, Chandni Chowk Branch, New Delhi. This release order is issued in compliance to the said order. Sd/- 09.08.2014 Assistant Commissioner (Prev.) Customs Hqrs. Patna 13. Apart from the aforesaid explanation in the counter affidavit that was filed by the authorities of the Custom Department on 22.08.2014, it was also stated that the sample, drawn at the time of seizu .....

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s, it was claimed by the Custom Department that the seized betel nuts were not those for which the petitioners had obtained the test report of Export Inspection Agency, Kolkata dated 28.01.2013. 14. It was further stated in the counter affidavit that the departmental appeal before the Commissioners (Appeal) against the final order of Adjudication dated 29.11.2013 was still pending. What is actually relevant in this regard is that in para-5 of the counter affidavit the authorities of the Custom D .....

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erein below: 5. That in reply to para-7 to 13, it is stated that the Additional Commissioner (Adjn.), Customs Hars., Patna, vide his order dated 28.03.2013 had directed to release the seized goods. However, as the test report of the said betel nuts received from CFL, Raxaul said that "the sample of betel nuts does not conform to the standard laid down under Regulation No. 212 and 2.3.47(5) of Food Safety and Standard (FSS Act, 2006 and FSS (Food the proceedings of release were dropped." .....

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ed counsel for the petitioners, in fact, was of the view that in the period of almost one and half year, since the date of seizure to the date of release, the quality of the seized split betel nuts had deteriorated to such an extent that if become wholly useless and thus causing huge financial loss to the petitioner. 16. Mrs. Archana Meenakshi, learned counsel appearing on behalf of the Custom Department, on 2.12.2014 had produced a copy of the letter dated 11.11.2014 and had also submitted that .....

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ONER OF CUSTOMS PREVENTIVE 5TH FLOOR, C.R. BUILDING, BIRCHAND PATEL MARG PATNA:::::::::::::::::::::::::800001 C. NO.VIII (10) 10-Cus/P/H/Seiz/12-13/Part 1 12825 Date:11.11.2014 To, Kalu Ram Kudlia M/S Overseas Enterprises 2263/68, 1st Floor, Room No. 11 Gali Raghunandan, Naya Bazaar, Delhi-110006 Sir, Sub: Release of Bank guarantee No. 1BG54159 and surety Bond dated 09.08.2014 for ₹ 9,28,200/-, and ₹ 14,69,650/- respectively against release order dated 08.08.2014 issued from file No. .....

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any working day as per your convenience and kindly intimate the date of your visit to this office. Your s faithfully Assistant Commissioner (Prev) Customs (P) Hqrs, Patna Ms. Archana Meenakshi, Sr. Standing Counsel, She is requested to place the documents before the Hon ble High Court, Patna in proof to the letter was returned back with postal remark "Lock Closed" dt. 19.11.2014. Superintendent (Legal) Customs (Prev) Hqrs." 17. Learned counsel for the petitioners, however, had mad .....

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eafter the petitioners had furnished the bank guarantee and surety bond dated 09.08.2014 for a sum of ₹ 14,69,650/- and ₹ 9,28,200/- respectively. According to the learned counsel for the petitioners, had the petitioners not filed the writ application and this Court could not have called upon the authorities of the Custom Department for disclosing the reason of not releasing of the seized articles of the petitioners, it could have never been released. He has also submitted that as a .....

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the petitioners and the Commissioner of the Customs (Prev.) in person was directed to file an affidavit giving explanation as to why it had taken almost one and half year to act upon the provisional order of release dated 28.03.2013 and whether for such laches on the part of the concerned officers/employees any action had been taken against them or was proposed to be taken. The order of this Court dated 02.12.2014 being relevant is quoted herein below: Heard learned counsel for the parties. This .....

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r or for any purpose. Though Mrs. Archana Meenakshee, learned Senior standing counsel appearing on behalf of the Custom Officials, has produced a letter dated 11.11.2014, which is kept on records, this Court would direct the Commissioner of Customs (Preventive) to file an affidavit giving explanation as to why it had taken almost 1½ years to act upon the order of the provisional release and if he finds that some officials of the Department are responsible for such delay he must inform thi .....

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seizure of foreign origin betel nut weighing 15470 kg. valued at ₹ 14,69,650/- along with the truck bearing registration number HR 46C 3697 valued at ₹ 12,00,000/- totally valued at ₹ 26,69,650/- was made on 16.02.2013 by a team of Customs Officers, Patna. 5. That it is further submitted that the petitioner filed an application for release of aforesaid seized goods on 06.03.2013 followed by another dated 12.03.2014 before the Department. 6. That it is further submitted that th .....

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ed for unconditional release of the said goods as those were legally imported on provisional assessment basis by executing bank guarantee covering the differential duty leviable thereon. 8. That it is further submitted that in terms of CBEC Instruction issued vide F.No. 450/100/2006-Cus. IV dated 12th October, 2006, a representative sample was drawn and sent for testing to the Central Food Laboratory, Raxaul on 30.03.2013. As the sample was found adulterated the Adjudicating Authority vide lette .....

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e petitioner, a fresh representative sample was drawn in presence of the petitioner on 12.03.2014, which too was reported as adulterated by the Central Food Laboratory vide their report dated 21.04.2014. 11. That it is further submitted that the show cause notice issued to the petitioner was adjudicated vide order in original issued on 29.11.2013, whereby the Adjudicating Authority dropped the proceedings initiated vide the show cause notice dated 08.04.2013 which was communicated to the petitio .....

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ms that the seized goods cannot be released when goods found adulterated as per the Chemical examination report under PFA Act, 1954 by the notified laboratory. 14. That it is further submitted that the petitioner on 08.08.2014 submitted the Bond with requisite bank guarantee and subsequently the goods were handed over to the petitioner. 15. That it is further submitted that when the matter was decided by Commissioner (Appeals), orders for release of Bond and Bank Guarantee were immediately issue .....

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.02.2013, even though were directed to be released on an application filed by the petitioners on 06.03.2013 under the order of the competent authority, namely, the Superintendent (Adjn.), Customs (Hqs.) Patna, on 28.03.2013, the release was not made. In this regard it would be useful to reproduce the order of the provisional release which reads as follows: "GOVERNMENT OF INDIA OFFICE OF THE COMMISSIONER OF CUSTOMS PATNA:::::::800001 C. NO.VIII (10) 10-Cus/P/H/Seiz/12-13/Part 1 12825 Date:11 .....

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cle and goods backed by security of 30% of the seizure value of seized vehicle and in respect of seized goods ie. Betel nut backed by the Bank Guarantee @ ₹ 60/KG only and subject to completion of all conditions as prescribed in this regard. Sd/- Superintendent (Adjn) Customs Hqrs, Patna 21. Thus, it would become clear that the aforesaid order of provisional release dated 08.08.2013 on furnishing Bank guarantee as was also even earlier directed in the order of provisional release dated 28. .....

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o this Court on 16.12.2014 by filing a second supplementary counter affidavit that he had instituted an inquiry to be conducted by Mr. K.Ramamurti, Additional Commissioner, Customs for fixing responsibility on the concerned officials who had caused abnormal delay in the release of the consignment of the petitioners. Para 15 of the second supplementary counter affidavit in this regard reads as follows: "That an inquiry has been ordered in the matter to ascertain the name of the officers who .....

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of Food Adulteration Act 1954, there was no scope for the department to release the goods. (ii) Though the adjudication order was in favour of the party, the goods could not be released because the Reviewing Authority did not accept the adjudication order which necessitated filing of Appeal against the said the adjudication order. In compliance with the Review order, appeal was filed before the Appellate authority. During pendency of the Appeal, the goods could not be released. (iii) The bonafid .....

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thority to allow provisional release of the goods after the sample was reported to be adulterated. Procedural requirement delayed early release of the goods. (K. Ramamurthy) Addl. Commissioner Customs (P), Patna. 24. On 19.12.2014, in fact, a further supplementary counter affidavit was filed on behalf of the respondents bringing on record the dates and events and the connected documents in chronological order to justify the delay of nearly one and half years in releasing of the goods and Mrs. Ni .....

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port of the seized betel nuts were made in authorized manner and, as such, were fit to be released in favour of the petitioners. This was followed by his another application filed before the Commissioner of Custom, Preventive, Patna dated 12.3.2013 wherein the petitioner no.2, while undertaking to face the confiscation proceeding under Section 111 of the Custom Act, had specifically brought to the notice of the Commissioner of Custom that the seized goods were perishable in nature and had to be .....

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ommissioner, Custom by his letter dated 26.3.2013 to furnish relevant documents necessary for considering the request of the petitioners for provisional release of the seized articles. The competent authority in his such letter dated 26.3.2013 had also specifically asked the Assistant Commissioner, Preventive to give specific comments as to whether provisional release of the seized processed betel nut and the vehicle would have any adverse impact on investigation of the case against the petition .....

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ssistant Commissioner, Custom, Preventive. 27. It appears that after the direction for provisional release by the competent authority was already issued in terms of Section 110A of the Custom Act that the specimen of the goods were sent on 2.4.2013 to the Central Food Laboratory (C.F.L.), Kolkata having its extension center at Raxaul and on 3.4.2013, the report was submitted by the C.F.L. Raxaul stating that the split betel nut was found to be adulterated. 28. From the records that have been sub .....

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ernment of India should be released without delay failing which the Department could become liable to pay the seizure value to the petitioners. 29. It is here that this Court will have to also take note of the communication of the Superintendent, Adjudication contained in his letter no. 2038 dated 29.4.2013 wherein referring to the report of CFL, Raxaul stating the betel nuts to be adulterated, it was specifically directed to get the sample test of the said seized betel nuts reconducted at Food .....

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g awaited, the Superintendent, Adjudication, in his communication to the Superintendent, Preventive, Custom, had explained the request of the petitioner no.2 for release of the seized betel nut to the petitioners on his undertaking by making the consignment fit for human consumption. The Superintendent, Preventive, Custom was accordingly asked by the Superintendent, Adjudication, Custom, Patna to seek further report from C.F.L. Kolkata Extension Center at Raxaul and Food Analyst, Bihar, P.H. Lab .....

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n for provisional release of the betel nuts. 31. From the records, it is also borne out that the Officer in-charge of C.F.L., Raxaul Extension Center, Raxaul, in his letter dated 2.8.2013, had informed the Superintendent, Preventive that certifying the fitness of betel nuts for human consumption was beyond the scope of activities of C.F.L. It appears that on 12.8.2013, the Food Analyst, Bihar, P.H. Lab, MADA, Dhanbad earlier was given another reminder for sending the report in respect of specime .....

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or justification for keeping the seized article and that the same should be released for which the petitioners along with their counsel were to appear on 16.12.2013. It was in reply to the aforesaid legal notice dated 7.12.2013 / 10.12.2013 that the Assistant Commissioner, Preventive by his letter dated 17.12.2013 had informed to the lawyer of the petitioners that as the final order dated 29.11.2013 dropping confiscation proceedings was presently pending for departmental review, the request for .....

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y to execute bond for their release of betel nuts. When this prayer of the petitioner no.2 also did not evoke any response, he had filed an application on 12.3.2014 before the competent authority who had passed the order of provisional release on 29.3.2014, namely, Additional Commissioner, Custom and in his such application dated 12.3.2014, the petitioner no.2 had again undertaken to comply the prescribed terms and conditions for such provisional release as incorporated in the earlier order date .....

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t the order dated 29.11.2013 passed by the Additional Commissioner, Custom dropping the adjudication in the confiscation proceeding. The petitioners who were however desperate to get their seized betel nuts released had once sent a legal notice dated 29.3.2014 asking the Assistant Commissioner, Custom to release betel nuts and in the aforesaid legal notice, it was made clear that the seized betel nuts were in fact to be used for manufacturing of mosquito repellent coils and not for the human con .....

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ncluding insects damaged betel nuts had exceeded the prescribed limits. The Department thereafter claims to have sent the copy of the said report of C.F.L., Raxaul to the petitioner no 28.4.2014. 36. The bunch of papers submitted by the learned counsel for the Custom Department thereafter has contained only the order of the provisional release dated 8.8.2014 which of-course was passed after filing of the writ application on 5.8.2014 and the first order of this Court dated 6.8.2014 directing the .....

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a classic case of highhandedness and arbitrary exercise of power by the officials of the Custom Department at Patna. 38. In this regard this court firstly must deal with the aforesaid inquiry report of Mr. K. Ramamurthy, the Addl. Commissioner of Customs, who was entrusted the enquiry by Mr. Kishori Lal, the Commissioner Customs (Preventives) Patna on 9.12.2014 as explained earlier in his supplementary counter affidavit for the purposes of fixing responsibility on the erring officials of the Cus .....

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ing of the consignment at least from the date of 29.11.2013 to the date of filing of the appeal i.e. 23.4.2014 he also being instrumental in causing delay in the eventual release of the seized articles of the petitioners could not have been fair and impartial in fixing the responsibility on erring officials of the Custom Department. 39. As a matter of fact this Court is thoroughly disappointed with the conclusions arrived by Mr. K. Ramamurthy in his inquiry report as already quoted above in para .....

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of the matter could have become a factor after the order of the provisional release dated 28.03.2013 was passed and unless such order was set aside by the higher authority the same had to be essentially acted upon. 40. It is also apparent that Mr. K. Ramamurthy either in ignorance or deliberately had lost sight of the fact that it was only after order of the provisional release was passed by the competent authority on 28.3.2013 and that too upon perusal of test report of Kolkata dated 28th Janua .....

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mely, betel nuts for its test report by the CFL. Raxaul and in fact such recourse itself smacks of malafide on the part of officials of Custom Department. . 41. The second reasoning of Mr. K. Ramamurthy in his conclusion of enquiry report is equally bad, inasmuch as under the provisions of the Customs Act if the adjudication in confiscation proceedings is decided in favour of the person concerned alleged to have violated the provisions of the Customs Act, the seizure made itself becomes illegal .....

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o staying the final order of confiscation proceeding is at least not contemplated under the provisions of the Customs Act. 42. It is in fact here that Mr. K. Ramamurthy has become judge of his own cause because he too was a party in obstructing release of seized articles of the petitioners on the ground of pendency of alleged review of the final order of confiscation proceedings dated 29.11.2013 as well as in filing of the appeal after a period of nearly four months and thus had become responsib .....

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noted above, the first report of F.S.L. was received on 4.4.2013 and on that basis the officers of Custom Department had set over and virtually overruled the statutory adjudicatory order under section 110A of provisional release of the seized articles of the petitioners dated 28.3.2013. Thereafter the adjudication proceedings got concluded by way of dropping of confiscation proceedings against the petitioners on 29.11.2013 and as noted above, the appeal was not filed till 23.4.2014. Thus, if th .....

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n the counter affidavits and also in the enquiry report of Mr. K. Ramamurthy to suggest that the provisional order of release dated 28.3.2013 had been reviewed by the same authority on 29.4.2013 but no such order has been produced before this Court except some noting in the file or inter departmental communication dated 29.4.2013. By-now it is well settled that a noting in the file is not a concluded order as was held by the Apex Court in the case of Bachhittar Singh v. State of Punjab & anr .....

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re clear from reading of the aforesaid letter dated 29.4.2013 produced by the Ms. Nivedita Nirvikar, learned counsel for the respondents in her compilation of the documents, at page 28, which reads as follows:- "GOVERNMENT OF INDIA OFFICE OF THE COMMISSIONER OF CUSTOMS :::::::::: PATNA C No. VIII (48)15-CUS/HQRS/PR 13/ 2038 Dated 29.04.2013 To, The Superintendent (Prev.) Customs (P) Hqrs., Patna Sub:- Regarding provisional release of seized goods i.e. 15,470 kgs of Cut Betel nuts valued  .....

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. Lab, MADA, Dhanbad without any delay so that the further procedures can be carried out smoothly. Sd./- 29.4.13 Superintendent (Adjn.) Customs (P) Hqrs. Patna" 46. That apart even if the story of so called review of the provisional order of release dated 28.3.2013 by the so called order dated 29.4.2013 is to be accepted, that again cannot be justified in law, inasmuch as such a statutory order dated 28.3.2013 on the application of the petitioners dated 6.3.2013 in terms of Section 110A of .....

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e defence of the so called review of the provisional order of release dated 28.3.2013 by the same authority who allegedly in the file had passed some order on 29.4.2013. 47. Let it be kept in mind that the order of provisional release of the seized goods passed by the adjudicating authority on 28.03.2013 was also never made subject matter of any appeal by any authority on any ground whatsoever and, therefore, the internal correspondence with regard to sending sample of the consignment for obtain .....

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but then obvious cutting in the letter no. 2038 by seeking to change the figure '8' of 2038, will itself create a doubt regarding its authenticity of this letter, even if it was an inter departmental communication. This letter dated 29.4.2013 at best appears to be a subsequent defence of the officials of Custom Department and the best proof of the same will be that while the order of provisional release dated 28.03.2013 had been communicated to the petitioners, but they were never infor .....

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of seized betel nut had to be reconducted by the Food Analyst, Bihar, P.H. Lab, MADA, Dhanbad. The fact however remains that this report from the Food Analyst, Bihar, P.H. Lab, MADA, Dhanbad was never received and, therefore, on the strength of this order dated 29.4.2013, the authorities of the Custom Department had no power or jurisdiction to annul the order of provisional release passed in favour of the petitioners by the competent authority in exercise of power under Section 110A of the Cust .....

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mamurthy. Let it be kept in mind that the adjudicating authority had also taken into account the report of C.F.L. dated 3.4.2013 and had rejected the same while passing his final order. The relevant portion of the final order dated 29.11.2013 dropping the confiscation proceedings against the petitioners, in fact, reads as follows: "It is observed that no documents could be found at the time of interception of seized goods, either in the truck or in the possession of Noticee no.1, who is kha .....

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s per the details contained in the said Suvidha form, the consignor of the goods is M/s Jahan Processing Export Limited and the consignee is M/s Overseas Enterprises, Naya BAzar, New Delhi and the relevant Invoice No. is EXP/JPEL/OE/048/2012 dated 19.11.2012. The consignment note no. is 16413 dated 14.02.2013 and vehicle No. is HR 46C 3697 and it is crossed Integrated Check Post, Dobhi on 15.02.2013 at 1:37 PM for Integrated Check Post, Karmnasa. It is apparent that the declaration of the consig .....

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seized goods pertained to the Bill of Entry NO. 01210/16/2013 dated 28.01.2013. It is further observed from the documents available on record viz. the weighment slip and statements made by the notices that the seized goods were loaded from Bangaon. As regards the contentions of the department that the Bill of Entry did not mention the seized vehicle, I find that the seized goods are not prohibited goods and are freely imported at preferential rate of duty from Bangladesh. Further, the investigat .....

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and that the notices have already declared the consignment before the Commercial Tax authorities before interception as one legally imported. Further, no investigation appears to have been made on the notices statutory documents w.r.t. rest of the consignments. Further, the investigation done at Petrapole and at Bangaon by the seizing unit has not revealed any new facts so as to hold the consignment as contraband. Under the circumstances, I find it difficult to go by the department's conten .....

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ssibility of at least some part of the consignment getting infected in the intervening period cannot be ruled out. In view of the above, I find that the seized goods pertain to legally imported consignment of betel nuts imported form Banglaesh vide Bill of Entry No. 01210/16/2013 dtd. 28.01.2013 processed at LCS, Petrapole. Accordingly, the proceedings initiated vide Show Cause Notice issued under C.No. VIII(10)10-Cus/P/H/Seiz/2012-13 dated 08.04.2013 is liable to be dropped. Order Taking into c .....

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ease of the seized goods on obtaining a bond with security and also imposing any conditions in the following words: "110-A . Provisional release of goods, documents and things seized pending adjudication.- Any goods, documents or things seized under section 110, may, pending the order of the [adjudicating authority], be released to the owner on taking a bond from him in the proper form with such security and conditions as the [adjudicating authority] may require." 51. Thus, when in exe .....

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the C.F.L., Raxaul for finding out its edible quality. That seems to be a layman explanation and in fact a burning example of red tapism prevailing in the office of the Custom Department. 52. In this regard it must be kept in mind that the petitioners in terms of the aforementioned order of provisional release dated 28.3.2013 were always prepared and ready to furnish bank guarantee, as directed in the order of release dated 28.03.2013, but the betel nuts were not released. It must be borne in m .....

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th regard to adulterated quality of the betel nuts dated 04.04.2013, could not be given them any power to review or recall the order of provisional release passed by the competent authority in exercise of power under Section 110(A) of the Act. 54. What would still make the matter worse for the authorities of the Custom Department is that after the adjudication in confiscation proceedings, in terms of Section 122 of Custom Act, had been brought to an end in favour of the petitioners on 29.11.2013 .....

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a period of 04 months and in this period there was no stay of any court or any authority not to release the seized goods of the petitioners. 56. This Court, in fact, has amazed with the approach of the authorities of the Custom Department, which, in the name of obtaining the report from the C.F.L., had kept the matter relating to release of seized goods of the petitioners pending from 03.04.2013 to 24.04.2014 despite both the provisional order of release dated 28.03.2013 and the adjudicatory ord .....

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4.2013 to be unsustainable either on fact or in law. It is for this purpose that this Court would deem it necessary to reproduce the report dated 3.4.2013 which reads as follows:- "Analysis Report i) Sample Description : Split Betel Nut Batch- NIL ii) Physical Appearance : Split Betel Nut in sealed envelop. iii) Label: Sl. No. Quality Characteristics Name of the Method test used Result Data Obtained Prescribed standards as per: a) Item no.2.12 & 2.3.47(5) of the FSS Regulation, 2011 b) .....

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is found adulterated in respect of tests mentioned above. Place: Raxaul Dated 03.04.2013 Sd./- (Dr. Debadutta Mishra) Officer-in-Charge CFL, Kolkata (Extension Centre, Raxaul)" 58. There is a valid reason for this Court to reject the said analysis report dated 3.4.2013 because subsequently when after more than one year, the samples of the same betel nuts were sent to the same C.F.L. Laboratory, Raxaul, the same person, namely, Dr. Debdutta Mishra, the Officer-in-charge, C.F.L., Kolkata in .....

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b) As per label declaration for priority foods. c) As per provisions of the Act & Rules for both the above. 1. Physical Examination Visual Examination Betel Nut from fungal growth Free from fungal growth and discoloration 2. Extraneous Vegetable Matter (m/m) DGHS MANUAL Absent 1% 3. Damaged & Discolored Nuts including Insect Damaged Betel Nuts (m/m) DGHS MANUAL 62.18% 2% 4. Rodent Hair & Excreta DGHS MANUAL Present 5. Insect DGHS MANUAL Present 6. Added Colouring Matter DGHS MANUAL P .....

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mpared, first of all, it would be clear that the report dated 3.4.2013 does not contain the prescribed standard on the basis of which the C.F.L., Raxaul could have declared the split betel nut of the petitioners to be adulterated whereas in the subsequent report dated 16.4.2014 in the last column, the prescribed standard were mentioned at least in respect of three of the parameters/quality/characteristic but then in the last report dated 16.4.2014, the betel nuts were not declared to be adultera .....

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be 62.18% which by itself would be a proof of the fact that such betel nuts on account of long storage in not a proper condition for a period of more than one year had become further damaged by exceeding the ratio around 40%. What would really also go in favour of the petitioners is that in the period of one year, the quality of betel nut had deteriorated, inasmuch as, rodent hair & excreta were found to be absent in the report dated 3.4.2013 but found to be present in the report dated 16.4 .....

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the law has been laid down by this Court or the Apex Court in the case of Salsa Transport Company that the authorities of the Custom Department will be justified in not releasing the seized food articles if they were found to be allegedly contaminated. As a matter of fact, from the order of this Court dated 4.3.2013 in CWJC No. 3784 of 2013 in the case of Salsa Transport Company and another Vs. Union of India, it would be found that when the learned Single Judge had directed for releasing the b .....

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th July 2013 made by the learned single Judge in M.J.C. No.2185 of 2013 arising from the order dated 17th January 2013 made by the learned single Judge in C.W.J.C. No. 317 of 2012. The matter at issue is the seizure of some 38920 Kg. of Bengal Fali Betel Nuts transported by the writ petitioners by two vehicles seized by the appellant Customs authorities. Under order dated 4th March 2013 made in C.W.J.C. No. 3784 of 2013, the learned single Judge directed the respondents to release the betel nuts .....

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tension Centre, Raxaul), Bihar. According to the said report, the sample was adulterated by insect affected betel buts and damaged betel nuts. The application was contested by the writ petitioners. According to the writ petitioners, the betel nuts were being sent for processing at Kanpur and it was not meant for human consumption until processed. The learned single Judge has, under the impugned order dated 24th July 2013, dismissed the application for modification. Therefore, this Appeal. Learne .....

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y of Finance, Department of Revenue in respect of the clearance of the food articles, drawing and testing of samples to the effect that pursuant to the Notification issued by the Director General of Foreign Trade, the Customs should, inter alia, follow certain norms mentioned in the said Circular and to ensure that the food items meet specifications. The learned single Judge has considered the application and has dealt with the contentions raised by the Union of India and has refused to modify t .....

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rt dated 8.5.2014 shall never mean that the Apex Court had held that the Custom Authorities, who had already passed an order of provisional release like in the case of the petitioners and in whose favour the confiscation proceeding was also dropped, could still impound betel nuts by way of permanent seizure and confiscation. This Court cannot read so in the order of the Apex Court dated 8.5.2014 of dismissal of the Special Leave Petition filed by the Custom Department observing question of law t .....

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the confiscation proceeding itself by an order dated 29.11.2013. 63. Having thus regard to the findings of the adjudicating authority in confiscation proceedings dated 29.11.2013 which also stands fully affirmed by way of dismissal of appeal filed by the department, this Court would find it difficult to accept any of the plea of Custom Department with regard to non-release of the seized articles of the petitioners for a period of nearly one and half year commencing from 28.03.2013 till 09.08.201 .....

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r of fact, there are four phases of time period in this case which was required to be explained by the authorities of the Custom Department in respect of not releasing the seized betel nuts of the petitioners:- (i) From 28.03.2013 to 28.11.2013 inasmuch as the order of provisional release dated 28.3.2013 in favour of the petitioners passed by the competent authority, had never been cancelled though the adjudication proceedings had continued up to 28.11.2013. (ii) From 29.11.2013 when the final o .....

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ding that there was nothing contaminated/ spurious in the quality of seized betel nuts of the petitioners. (iv) From 25.04.2014 to 09.08.2014 in the period in which neither there was any order of stay passed by the appellate authority against the final order of adjudication nor there was any adverse report against the quality of the seized betel nut being adulterated before it got released on 09.08.2014 in favour of the petitioners only on account of pendency of the writ application since 05.08. .....

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of review in the adjudicatory authority, either the effort of the officials in withholding the seized consignment of cut betel nuts of the petitioners or its alleged order of review by the adjudicating authority of 29.04.2013 was itself without jurisdiction. 66. In any event after adjudication in confiscation proceeding was decided in favour of the petitioners on 29.11.2013 and confiscation proceeding against the petitioners was dropped on 29.11.2013, there was no justification whatsoever, in s .....

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en the petitioners were repeatedly insisting for its release by furnishing adequate bank guarantee in terms of order of their provisional release dated 28.03.2013. 67. What really amazes this Court is that even after the adjudication in confiscation proceedings were itself dropped, by the final order dated 28.11.2013 when there was no sanction of law under any provision of Customs Act which would have empowered the authorities of the Custom Department to withhold the release of the seized articl .....

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ate authority. This Court again does not find any such provision in the Act which could have enabled the authorities of Customs Department to sit over the final order of adjudication in confiscation proceedings dated 29.11.2013. 68. Let it be in this regard also kept in mind that in spite of repeated pressing for release of betel nuts by the petitioners, the Department, under the pretext of pendency of the appeal as also in the name of getting the fresh test report of food analyst through C.F.L, .....

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3 had not been stayed by any competent authority or the Court. 69. The matter in fact become still worse for the authorities of the Custom Department because they had consumed a period of more than one year in only getting the test report of the Laboratory with regard to edible quality of the betel nuts and despite a negative test report of betel nuts dated 16.4.2014, the seized betel nuts of the petitioners was released by the Custom Department only on 9.8.2014. In fact, there could be no logic .....

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e Custom Department to explain as to why the goods of the petitioners were not released despite an order of provisional release dated 28.03.2013 and the final order of the adjudicating authority dropping the proceedings itself on 29.11.2013. 70. In any event after 24.04.2014, when a negative test report of the cut betel nuts of CFL, Raxaul dated 16.4.2014 was received by the department from C.F.L, Raxaul there was no valid reason whatsoever for not releasing the goods in question in favour of th .....

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06.08.2014, directing the standing counsel for the Customs Department to disclose the reasons for not releasing the goods by filing the counter affidavit that the conditional order of release on furnishing of taking bank guarantee and bond by the petitioners had been passed on 8.8.2014 which in turn would go to show that this could have been done even on 24.4.2014 if not on 29.11.2013 or 28.3.2013. Thus, the reason for not releasing the goods on account of pendency of the appeal is also a mere .....

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s, which has resultantly caused immense loss to the quality of the seized betel nuts of the petitioners and eventually has become absolutely of no use for the petitioners. The petitioners, in fact, were made to run around the corridors of the office of the Custom Department since 28.03.2013 for getting release of their seized articles and as such when there is also evidence to show both in the final order dropping the confiscation proceedings dated 29.11.2013 as also in test report of CFL dated .....

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the view that had the authorities of the Custom Department released the seized betel nuts in view of provisional release dated 28.3.2013 by accepting the Bank guarantee as granted in the aforementioned order which they eventually did on 9.8.2013, neither the petitioners could have been put to a loss nor the authority of the Custom Department in any way could have been prejudiced in pursuing and completing the confiscation proceedings. 74. This Court is really disturbed in the manner in Mr. Kisho .....

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sion questioning the order of final adjudication dated 28.11.2013 as is clear from Annexure XV to the last counter affidavit filed by the respondents, Mr. Kishori Lal in all fairness, ought to have not entrusted such an enquiry to Mr. Ramamurthy as was done by him vide his D.O. Letter dated 09.12.2014. The said D.O. letter of Mr. Kishori Lal reads as follows:- "Kishori Lal I.R.S. Commisisoner Government of India Mionistry of Finance/Department of Revenue Office of the Commissioner Customs ( .....

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2.2014, where it transpired that the court wanted to know as to why the consignment was seized when no contravention has been found in the adjudication proceedings and why there has been delay in the provisional release of goods to the petitioner. You are therefore requested to inquire into the matter and submit the inquiry report within seven days hereof, indicating therein the names of the officers who have been at fault, so that the disciplinary action may be initiated against them. With best .....

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artment who had caused delay of one and half year in releasing the betel nuts of the petitioners in all fairness ought to have not handed over such inquiry to any independent officer and not to Mr. Ramamurty who had to defend also his own action leading to delay in release of seized betel nuts. 76. Thus, having an overall picture this court will have no difficulty in coming to the ultimate conclusion that the petitioners on account of abnormal delay of almost 1½ years caused in release of .....

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ference in this connection may be made to the judgment of the Apex Court in the case of Lucknow Development Authority Vs. M.K. Gupta reported in 1994(1) SCC 243, in the case of State of A.P. Vs. Food Corporation of India reported in 2004(13) SCC 53 and in the case of Delhi Airtech Services Private Limited and Anr. Vs. State of Uttar Pradesh & Anr. reported in 2011(9) SCC 354. The apex Court in this regard in the case of Lucknow Development Authority (supra) had approved the following observa .....

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rhaps also other unlawful acts causing injury." 78. Having held so, the Apex Court in the case of Lucknow Development Authority (supra) had also laid down law as with regard to fixing responsibility on the erring government officials in the following terms:- "11. Today the issue thus is not only of award of compensation but who should bear the brunt. The concept of authority and power exercised by public functionaries has many dimensions. It has undergone tremendous change with passage .....

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mined should be whose? In a modem society no authority can arrogate to itself the power to act in a manner which is arbitrary. It is unfortunate that matters which require immediate attention linger on and the man in the street is made to run from one end to other with no result. The culture of window clearance appears to be totally dead. Even in ordinary matters a common man who has neither the political backing nor the financial strength to match the inaction in public oriented departments get .....

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suffered by him for capricious exercise of power and the National Commission finds it duly proved then it has a statutory obligation to award the same. It was never more necessary than today when even social obligations are regulated by grant of statutory powers. The test of permissive form of grant is over. It is now imperative and implicit in the exercise of power that it should be for the sake of society. When the court directs payment of damages or compensation against the State the ultimate .....

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cerned to pay the amount to the complainant from the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries." 79. A similar view was taken by the Apex Court in the case of Food Corporation of India (supra) wherein recovery of costs in the frivolous legal proceeding was sought to be made from the officer concerned for negligence in prosecuting litigation on .....

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lapses by the public officials in the land acquisition resulting into huge loss to the government exchequer on account of negligence and/or overt act of the officials had also held as follows:- "213. These authorities are instrumentalities of the State and the officers are empowered to exercise the power on behalf of the State. Such exercise of power attains greater significance when it arises from the statutory provisions. The level of expectation of timely and just performance of duty is .....

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of State of Bihar v. Subhash Singh [(1997) 4 SCC 430], this Court, in exercise of the powers of judicial review, stated that the doctrine of full faith and credit' applies to the acts 108 done by the officers in the hierarchy of the State. They have to faithfully discharge their duties to elongate public purpose. 215. The concept of public accountability and performance of functions takes in its ambit, proper and timely action in accordance with law. Public duty and public obligation both ar .....

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f public accountability and transparency in State action are applicable to cases of executive or statutory exercise of power, besides requiring that such actions also not lack bona fides. All these principles enunciated by the Court over a passage of time clearly mandate that public officers are answerable for both their inaction and irresponsible actions. If what ought to have 109 been done is not done, responsibility should be fixed on the erring officers; then alone, the real public purpose o .....

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he rights of the parties besides there being violation of the statutory rule. 217. This Court had occasion to express its concern in different cases from time to time in relation to such matters. In the case of State of Andhra Pradesh v. Food Corporation of India [(2004) 13 SCC 53], this Court observed that it is a known fact that in transactions of Government business, no one would own personal responsibility and decisions would be leisurely taken at various levels. 218. Principles of public ac .....

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ierarchy of the State, by virtue of his being public officer' or public servant', is accountable for his decisions to the public as well as to the State. This concept of dual responsibility should be applied with its rigours in the larger public interest and for proper governance." 81. Recently, the Full Bench of this Court in the matter of illegal appointment had adopted the same yardstick for fixing responsibility against the government officers in the case of Ram Sevak Yadav & .....

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take appropriate civil/ criminal action against the officer. The illegality in the appointment is not a one way street. If there was someone willing to pay a price for the job, there was another waiting to take advantage of the same by fixing a price. It is not without reason that majority of such appointments relate to class III and IV posts. The standard by which the government professes to act is the same standard by which its action shall be judged. Therefore, whenever the government termina .....

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wever, the real guilty person, namely, the appointing authority does scot free. The result is that even though large number of such appointments have been quashed by the courts, the appointing authorities have showed total indifference to the orders passed by the courts, and they continue to make such appointments. It is a wellknown fact, so far as this state is concerned, that appointment in majority of cases has to be bought. The ordinary citizen who has concern for the law and morality, must .....

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ointment is said to have been illegally made, in the sense that the rules governing the appointment is made by flouting the law in such a manner that the motive of the appointing authority becomes suspect, simultaneously with the cancellation of such illegal appointment, action must be initiated against the appointing authority, and in appropriate ccases they should be immediately suspended pending departmental proceedings. If such action is not taken, courts will doubt the genuineness of the re .....

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t the State Govenrment to identify the officials concerned with the present appointments and take appropriate action against them in accordance with law and expeditiousness. Let a report be then submitted within eight weeks." 82. Thus, when this Court has found that the petitioners have been put to a loss of at least ₹ 14,69,650/- on account of complete deterioration of quality of split betel nuts solely on account of deliberate laches on the part of the officials of the Custom Depart .....

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rs on account of delay of nearly 1½ years in release of the seized articles, shall be recovered from the erring officials and for the purposes of fixing individual responsibility on such erring officials this Court would direct the Chairman of Central Board of Excise and Customs Department of Revenue, New Delhi to get an enquiry conducted by an Officer not below in the rank of Chief Commissioner of Customs who must not be posted and/or associated in any manner with Patna Zone of the Custo .....

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