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2016 (4) TMI 923

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..... Alternative remedy - Held that:- there is no violation of the principle of natural justice or a fundamental right or there is impugnment of vires of the Act by way of any challenge. Moreover, we also do not find that the proceedings of the case are pending at a stage which could foreclose the right to avail the alternative remedy of filing appeal. In the case like the one in hand, the petitioner cannot be allowed to take recourse to prerogative writ under Article 226 of the Constitution of India otherwise it may amount to enabling and empowering a litigant to defeat the provisions of the statute providing for certain conditions for filing the appeal, like limitation, payment of Court fee, or deposit of some amount for entertaining the appeal. It is also not a case where there is arbitrary exercise of powers by statutory authority in clear violation of the provisions of statute. Though the petitioner has tried to offer some explanations in support of the arguments on the requirement of reason to believe' as contained in Section 110 of the Customs Act, 1962 but it is also not a case where the appeal or any further proceedings under the statute were not or would not be dealt with on .....

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..... hop in the name and style as M/s Radhika Jewellery with Registration No. 6192 of Municipal Council at Imphal. It is in the name of the wife of the petitioner Smjti RK Sonia Devi, but the business is mainly managed by the petitioner with the help of his wife, relatives and employees. The Head Office is situated at Sagolband Bijoy Govinda near NRL Pump, Imphal-795001 and the Branch Office is at Paona Bazar, Governor Road, Imphal. The business of the petitioner, inter alia, includes sale of gold, jewellery and gold coins. The petitioner purchases gold from the bonafide sources with valid documents. Besides, the petitioner is also engaged in side business of granites, tiles and marbles. 3. The Commissioner of Customs (Preventive), NE Region, Shillong (respondent No. 1) has the jurisdiction over the entire North Eastern Region under the Customs Act, 1962 and the rules made thereunder. The Superintendent (Preventive) of Customs Shillong (Respondent No.2) is an Officer subordinate to respondent No. 1. The Inspector of Customs (Headquarters) Preventive Unit, Shillong , (respondent No. 3) is an Officer subordinate to respondent Nos. 1 and 2. Respondents No. 2 and 3, both, have some deleg .....

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..... 34678/13-14 dated24.05.2013 1434.360 grams 37,15,000.00 10. 371279/13-14dated 31.05.2013 3716.420grams 99,60,000.00 11. 17320/13-14 dated29.04.2013 8000.000 grams 2,26,00,000.00 12. 39926/13-14 dated17.0562013 3090.910 grams 85,00,000.00 13. 39946/13-14 dated 18.06.2013 3145.450 grams 86,50,000.00 14. 40791/13-14 dated21.06.2013 379.260 grams 10,43,000.00 15. 44161/13-14 dated21.06.2013 2202.640 grams 55,00,000.00 16. 44821/13-14 dated03.07.2013 76.190 grams 2,00,000.00 17. 46827/13-14 dated10.07.2013 701.320 grams 18,55,000.00 18. 46987/13-14 dated11.07.201 .....

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..... hallan dated 25.08.2014 issued by the petitioner for and on behalf of Radhika Jewellery along with related invoices issued by Magna Project Pvt. Ltd. in respect of the alleged contravening gold items, namely, 26 (twenty six) pieces of gold biscuits were handed over to Smti T Santibala Devi and Smti RK Rojita Devi. The details of invoices issued by the Magna Project Pvt. Ltd. to cover 26(twenty six) pieces of gold biscuits are as follows: (i) 02080/14-15 dated28.07.2014 1960.780grams 55,00,000.00 (ii) 02084/14-15 dated28.07.2014 2495.540grams 70,00,000.00 (iii) 02083/14-15 dated28.07.2014 1781.900grams 50,00,000.00 Total 17.340 Kg 13,05,33,419.00 6. On 26.08.2014 in the late night/early morning, the aforesaid four persons boarded the train 15960 DN Kamrup express for Kolkata at Dimapur. During the course of the journey they were checked by the Railway Protection Force and on being checked the c .....

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..... Project Pvt. Ltd, Kolkata were also seized by the Customs Authorities but it seems that they did not find any mention about the transit challan dated 25.08.2014 issued by petitioner to the carriers of gold. It is pertinent to mention herein that three bills of Magna Project Pvt. Ltd. which the carriers were possessing were also seized by the Customs Authorities. 9. Thereafter, the petitioner was summoned by the Superintendent of Customs under Section 108 of the Customs Act, 1962 to appear before him on 09.09.2014 and accordingly, the petitioner appeared before the Authority at Imphal on 09.09.2014 where respondent No. 3, Customs Inspector had also gone from Shillong. He recorded the statement of petitioner at 1600 hours on 09.09.2014, at 1030 hours, on 11.09.2014 and also on 12.09.2014. However, the interrogation of the petitioner could not reveal any incriminating information against him. During the course of interrogation, the petitioner submitted the documents supporting the possession and ownership of 26 (twenty six) numbers of gold biscuits and explained all the circumstances whereunder the aforesaid gold biscuits were purchased and sent through the aforementioned four pers .....

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..... and are illegally imported into India. According to the petitioner the terms reason to believe , has to be understood with reference to the Customs Act, and has thus a well known connotation which is the only safeguard available to a person as against otherwise unguided and indiscriminate power of seizure conferred on the Customs Authority. The safeguard has to be strictly followed. In the instant case, it is not understood how respondent No. 3 at the time of making seizure could identify the 26 pieces of gold biscuits, which are rectangular in shape and size and bore no marking are of foreign origin and if that be so, how could there be a bonafide reason to be believe that the same were illegally imported when gold of Indian origin as well as legally imported gold of foreign origin is abundantly available in the market. The seizure memo also does not disclose as to how the Customs Authorities could assert that the seized gold biscuits are of foreign origin. It was obligatory on the part of the Customs Department first to establish reasons to believe to assume jurisdiction in the matter and then to establish that the gold biscuits were of foreign origin. According to the pleadin .....

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..... ons to believe and nor is there any material to justify, even prima facie, the allegations that 26 gold biscuits rectangular in shape and size and which bore no marking are of foreign origin and are illegally imported into India for exercising the power under Section 110 of the Customs Act, 1962. As such the conditions precedents to assume jurisdiction under Section 110(1) of the Customs Act, are completely missing and totally lacking. Thus, the very foundation of seizure being without jurisdiction, is not sustainable in law and the goods seized are required to be released forthwith. In support of the contention, the judgment of the Apex Court, in the case of Smti Kusum Lata Singhal vs. Commissioner of Income Tax, Rajasthan, reported in (1990) 4 SCC 1998, has been placed reliance. Para 8 of the judgment on reproduction reads as: .. Our attention was also drawn to the observation of this Court in vs. Ramkrishnan Srikishan Jhaver in support of the proposition that when a search was found illegal, the goods should be returned 15. The petitioner has pleaded that the illegal seizure of the goods amounted to infringement of the fundamental rights as contained in Article 19( .....

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..... ies took possession of the seized goods under the provisions of Section 110(1) of the Customs Act, 1962. In other words, the Customs Authorities did not seize the goods either from the petitioner or from the said carriers; therefore, the provisions of Section 123 of the Customs Act, 1962 which cast the onus on the petitioner to prove that the goods are not smuggled would not be applicable. 17. In reply to the aforesaid averments made in the writ petition, on behalf of respondents, an affidavit has been filed by Mr Apu Biswas, Inspector of Customs (Preventive) Unit, Shillong. According to him, the total quantity of gold is 4.335 kgs worth ₹ 1.22 crores. At the time of seizure, they were in the form of rough biscuits without any markings/inscriptions or any number. Each gold biscuit weighed 166.52 gms to 167.05 gms. These biscuits were carried from Imphal through bus and then by sleeper class of train by the carriers without any covering documents like Challan, Invoice, Bill, etc. issued by the consignor to the consignee. Three photocopies of invoices carried by the carriers were also examined. The descriptions of invoices were like (i) Invoice No. 37260/13-14 dated 01.06.20 .....

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..... merous seizures of smuggled gold have been effected in recent times while being transported by air/trains. In the instant case, the four persons who were arrested have been involved in carrying, keeping, concealing or any other manner dealing with 26 seized gold biscuits which were without proper documents, and believed to be illegally smuggled/procured. One of the accomplices, namely, RK Templer was found to be involved in an earlier case with a different name as RK Swami Singh. The three tax invoices appeared to be just a cover-up, in case of detection by the law enforcing agencies. The identifying particulars mentioned in the three tax invoices were different from the identification of seized gold which is one of the elements amongst others that formed a reasonable belief. As there were no documents of Sales Tax, the State Govt. was also deprived of the revenue and it also amounted to a grave threat to national economy. Therefore, there was reasonable belief that the gold was smuggled. Mr RK Angangbi Singh was directly involved in illegally importing and clandestinely sending the gold through his relatives to various destinations for his personal interest and gain by defying var .....

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..... iption of gold seized by the Custom Authority. (e) The seized gold was being carried contrary to the requirement of Form 61 under Assam VAT Rules 2005. (f) One of the carrier/co-passenger in the Train (Shri RK Templer) is involved in some other case. (g) The manner in which the goods had been kept and concealed with the body of the carriers. (h) Information existed that there is a spur in smuggling of gold mainly of Myanmar origin from across the border along Manipur. 20. According to the petitioner, the Inspector of Customs in his affidavit in order to justify the exercise of powers under Section 110(1) of the Customs Act, 1962, has taken the aforesaid grounds which, do not constitute a reasonable belief. It is not disputed by the respondents that the gold in question was in the form of rough metal biscuits without any markings, inscriptions or numbers. Regarding the consignment of gold weighing 4.335 Kgs, the petitioner asserts that he was sending the consignment of gold for processing to make Hallmark gold coins at Kolkata for sale during the Nigol Chak Kouba festival in the State of Manipur, because during that festival, the demand of gold coins is very high .....

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..... e of seizure, he has purchased gold worth ₹ 13 crores from an authorized Bullion merchant, namely, M/s Magna Projects Pvt. Ltd, Kolkata, which is supported by valid purchase documents and moreover all such transaction of purchase were made only through petitioner s Axis Bank Account No. 91302000035118723. Besides, during the course of normal trade practice, the gold bars purchased by the petitioner were transformed by processing (Dhalai) to make them suitable for making gold. Thus, the arguments of Customs Department that the shape, size and weight of the gold bar mentioned in the accompanied purchase invoices did not match the shape, size and weight of the gold in question does not in any manner suggest that the gold in question was smuggled. The Customs Department has only raised irrelevant grounds to justify their act of search and seizure. The persons from whom the search and seizure were made did not make any statement under CrPC or Railway Act. Besides, RPF personnel are not supposed to function as Customs Officer, not being entrusted with any powers under the Customs Act. Moreover, the seizure of gold made by the RPF and the statement alleged to have been recorded were .....

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..... ctivities for the sole purpose of ransom/demand of money. The fact that the petitioner himself did not carry the gold by air to Kolkata cannot, in itself, constitute a reasonable belief that the ownership of gold in question was suspicious being smuggled and thus, was liable to be confiscated is totally be unfounded. Further, no person is expected to carry valuable goods more particularly, gold openly in a bag or suitcase in a crowded public place or train. The owner is supposed to adopt safety measures to avoid threat or loss in any other manner. The persons from whom the gold was seized by RPF were travelling in an area known as disturbed area having frequent law and order problems. It was, therefore, obvious to carry the gold by concealing the same in their persons for safety. It is a common practice in every part of the world to carry valuables or even a small amount of money with utmost care and secrecy. The mode of transportation of valuables in a covert manner has been accepted as a general practice. Thus, carrying gold in person cannot provide a basis to have presumption about its possession being illegal in nature. The claim of Customs Department that there existed prior i .....

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..... . It is evident that the seizure of the goods was not made by the Customs Authority. The expression, seize was defined by the Supreme Court in Gian Chand and State of Punjab, in the context in which it is used in the Act. That word was stated to mean the taking of possession, contrary to the wishes of the owner of the Property. It cannot be denied that in the instant case, as far as the Police was concerned, there was a seizure of the goods from the accused/respondent, but as far as the Customs Authorities were concerned, the goods were received and not seized by them, because they were willingly parted with by the RPF, who by that time had the custody of the goods, to the Customs Authorities. There was therefore no seizure of goods within the meaning of Section 123 in the instant case. Besides, the seizure must be with the reasonable belief that they are smuggled goods. There is nothing on record to show that the goods were seized by the Police in the reasonable belief that they were smuggled goods. 22. Thus, according to the petitioner, the ratio decidendi of the judgment can also apply in the instant case for the reason that the gold was seized by the RPF personnel under .....

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..... out whether any irregularity has been committed. In the judgment referred to by the Customs Department in the affidavit in reply namely, in Natwarlal Damodardas Soni s case, the Supreme Court has made observation in relation to requirements of guilty knowledge or mens rea under clauses (a) and (b) of sub section 1 of Section 135 of the Customs Act, 1962. Another case sought to be relied upon by the Customs Department, namely, State of Gujarat v. Mohanlal Jeetmalji Porwal is the one where in the burden of proof under Section 123 of the Customs Act, 1962 has been discussed. In the instant case, the petitioner has rather challenged the very basis of this seizure by referring to affidavitin- opposition of the Customs Department wherein it is stated in paragraphs 12 and 13 that the seizure of goods is initially made to find out as to whether the same are smuggled goods/ contraband items. 23. During the proceedings, this Court passed a detailed order dated 8.12.2014. Paragraphs 8 and 9, contain the operative portion of the order as: 8. However, at this stage during the course of hearing, an apprehension was expressed that in two cases of seizure of huge quantity of gold, at the t .....

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..... of rectangular yellow metal biscuits believed to be gold was recovered from Smti T Santibala Devi, which was kept concealed insider her Jeans Pant. Similarly another 13 pcs of rectangular yellow metal biscuits believed to be gold were recovered from Smti RK Rojita Devi, which were kept concealed insider her Petticoat. At total of 26 pcs of Gold Biscuits were recovered and none of the Gold biscuits bore any markings. No contraband goods were found from the two male accomplices. It was further confirmed by the RPF officials that during their investigation that the gold biscuits were given by one RK Anganbi Singh of Village-Sagolband, Bijoy Govinda Leikai, PO/PS Imphal West, Dist: Imphal West, Manipur and were meant to be delivered to the said person at Howrah, West Bengal. Shri RK Anganbi Singh was supposed to go to Kolkata by flight. It was also stated that they came from Imphal to Dimapur by road and were supposed to board Kamrup Express from Dimapur as they were having reservation vide PNR No. A 6133126565 dated 26.8.2014. The RPF personnel also recovered 3 mobile phones cash ₹ 13,400, 4 Identity Cards, 4 Air Bags containing clothing items. These were seized by the RPF perso .....

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..... ms officers then prepared the inventory incorporating all the details in the presence of independent witnesses and a Claimed Case was booked vide Case No. 06/CL/IMP/CUS/HQRS. PREV/SH/14-15 dated 27.8.2014 totally valued at ₹ 1,22,15,438/- (Rupees One Crore Twenty Two Lakh Fifteen Thousand Four Hundred Thirty Eight) only under the relevant provisions of Customs Act, 1962. Thereafter, the 26 gold biscuits were packed and sealed in the presence of two independent witnesses, 4 accused persons, seizing officer and a gazette officer in a cloth pouch with departmental seal bearing inscription CCP/NER/SHILLONG/No.17. The samples of all the 26 gold biscuits which were drawn and were put in separate envelopes and sealed with the same seal for the purpose of assaying in Government Mint, Kolkata. 7. That the sample of seized gold biscuits were sent for Assaying to the Deputy General Manager, India Government Mint, New Alipore, Kolkata, West Bengal vide letter C. No. 06/CL/IMP/CUS/HQRS.PREV/SH/14- 15/9804(B) dated 01.09.2014 and the report of the same is still awaited. 8. That your deponent humbly submits that the 26 gold biscuits were packed and sealed in the presence of two in .....

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..... under Section 110 (1B) of Customs Act, 1962. (Copy of the authenticated Inventory of the seizure and order of the District and Sessions Judge, Shillong is annexed as Annexure B ). 10. That in respect of the Tax Invoices bearing No. 37260/13-14 dated 01.06.2013, 38757/13-14 dt. 11.6.13 and 47709/13-14 dt. 19.07.13, purportedly issued by M/s Magna Projects Pvt. Ltd., 163, Rabindra Sarani, Kolkata (which were seized along with the 26 nos. of gold biscuits), followup investigation has been taken up with the Additional Director General, Directorate of Revenue Intelligence, Kolkata to verify the genuineness and authenticity of the same vide letter C . No . 06 / CL / IMP / CUS / HQRS.PREV/SH/14- 15/9800(B) dated 01.09.2014. They have been also asked to provide specifications of gold if at all sold to Shri RK Angangbi Singh. The investigation report is still awaited. The case is still under investigation under the said Act by the competent authority and till the adjudication process under the said Act is completed the seized gold would be remain under the safe custody of the Commissioner of Customs on behalf President of India . The Customs Department has again filed another aff .....

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..... 801.63 SO-B45576 801.63 Total 7123.98 4334.79 It is clearly evident from the above that gold biscuits physically recovered from the carriers do not match with the description written in the recovered invoices. 2. Further, the assay report of the seized gold furnished by the Government of India Mint, Kolkata has shown higher purity, then what is mentioned in the recovered invoices, whereas on the contrary the petitioner has claimed that he had processed the gold with alloys which had reduced the purity to a lower fineness. Thus, it is evident that the gold biscuits under seizure were not the same as the ones written in the Invoices under seizure. 3. That, Shri R.K.Angangbi Singh misused the purchase invoices issued by M/s Magna Projects Pvt. Ltd., Kolkata as covering documents for transporting the gold biscuits while he also claimed that said biscuits were reprocessed by him though no Invoice/Challan of his own business establishment was issued. 4. That no intimation is required to be made to Customs for chan .....

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..... ss transactions dispatched 26 (twenty six) pieces of gold bar, with gross weight 4350 grams and purity average 99.5 to 99.9 through Smti T Santibala Devi and Smti RK Rojita Devi. The said Smti T Santibala Devi and Smti RK Rjita Devi are the wives of the cousin brothers of the petitioner namely Shri RK Semsong Singh and RK Ranjit Singh respectively, who, also accompanied the two ladies. They decided to travel by bus from Imphal to Dimapur on 25.08.2014 and then by 15960 DN Kamrup Express Train from Dimapur to Howrah on 26.08.2014. The reservation and the payments were also made from the account of the petitioner. As a security measure, the gold biscuits/bars were instructed to be carried while being concealed in their clothes and not in a bag etc. The petitioner travelled by air and was supposed to meet the carriers at Kolkata Air Port. He also issued a challan on 25.08.2014 for and on behalf of the jewellery shop along with related invoices issued by the Kolkata Jewellers, namely, Magna Project Pvt. Ltd. On 26.08.2014, in the late night/early morning, the carriers aforementioned boarded the train for Kolkata at Dimapur. The carriers disclosed that they were carrying gold bars/biscu .....

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..... reveal any incriminating information. The petitioner has also claimed to have produced the documents required in support of the possession and ownership of 26 gold biscuits, and explained the circumstances whereunder the said gold biscuits had been purchased and sent through the carriers. 27. On the other hand, the Department of Customs while taking a divergent stand has contended that there was no marking or inscription on any of the gold bars/biscuits and the 3 Tax Invoices contained different descriptions than the actual shape; size and weight of the gold biscuits. At the time of seizure, the gold items were only in the form of rough biscuits without any marking or inscription or any number. Each gold biscuit weighed 166.52 gms to 1637.05 gms. The gold biscuits were carried from Imphal through buses and thereafter in sleeper class of the train by the carriers without any valid covering documents like challan, invoices, bills, etc., issued by the consignor to the consignee. The three photo copies of invoices carried along with the gold biscuits were like (i) Invoice No. 37260/13-14 dated 01.06.2013; (ii) No. 38757/13-14 dated 11.06.2013 and (iii) No. 47709/13-14 dated 19.07.20 .....

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..... ot an exception, but on earlier occasions also, such seizure of smuggled gold while being transported by air or train had been carried out. Moreover, the gold items in the instant case were being carried stealthily by the accused persons. Thus, according to Customs authorities, there was a reasonable belief that the instant goods have been smuggled into India without payment of customs duty in violation of Section 7(1)(c) and Section 11 of the Customs Act, 1962 and were liable for confiscation under Section 111 of the Act after seizure under Section 110 of the customs Act, 1962. The reasons furnished by the petitioner in the petition as well as subsequent affidavits seem to be only hyper-technical and learned counsel has tried to build up his case mainly on the basis of case laws. There is no dispute about the settled legal propositions but the same have to apply in a case with similar facts. It is argued that the conditions precedent required under Section 110 of the Customs Act, 1962 for carrying the seizure are non-existent; the power of seizure has not been exercised in good faith, but for extraneous consideration; a reason to believe must exist prior to the exercise of seizure .....

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..... hallenge. Moreover, we also do not find that the proceedings of the case are pending at a stage which could foreclose the right to avail the alternative remedy of filing appeal. In the case like the one in hand, the petitioner cannot be allowed to take recourse to prerogative writ under Article 226 of the Constitution of India otherwise it may amount to enabling and empowering a litigant to defeat the provisions of the statute providing for certain conditions for filing the appeal, like limitation, payment of Court fee, or deposit of some amount for entertaining the appeal. It is also not a case where there is arbitrary exercise of powers by statutory authority in clear violation of the provisions of statute. Though the petitioner has tried to offer some explanations in support of the arguments on the requirement of reason to believe' as contained in Section 110 of the Customs Act, 1962 but it is also not a case where the appeal or any further proceedings under the statute were not or would not be dealt with on merit and may end as a mere idle formality because the administrative authorities under the Customs Act are also a quasi judicial authority and as such, they are under a .....

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..... ertain the petition or to deal with it, but is rather a rule which Courts have laid down for the exercise of their discretion. The law on this matter has been enunciated in several decisions of this Court but it is sufficient to refer to two cases: In Union of India v. TR Varma (1), Venkatarama Ayyar, J, speaking for the Court said: t is well-settled that when an alternative and equally efficacious remedy is open to a litigant, he should be required to pursue that remedy and not invoke the special jurisdiction of the High Court to issue a prerogative writ. It is true that the existence of another remedy does not affect the jurisdiction of the court to issue a writ; but, as observed by this Court in Rashid Ahmed v. Municipal Board, Kairana (a), the existence of an adequate legal remedy is a thing to be taken into consideration in the matter of granting writs. KS Rashid and Son v. The Income Tax Investigation Commission (). And where such remedy exists, it will be a sound exercise of discretion to refuse to interfere in a petition under Article 226 unless there are good grounds therefore. 32. In the case of Babu Ram Prakash Chandra v. Antarim Zila Parishad Muzaffar, .....

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..... isions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies. In the King v. Postmaster General Ex parte Carmichael (1928)1)K 291) a certiorari was issued although the aggrieved party had and alternative remedy by way of appeal. It has been held that the superior court will readily issue a certiorari in a case where there has been a denial of natural justice before a court of summary jurisdiction. The case of Rex v. Wandsworth Justice Ex parte Read (1942)(1)KB 281) is an authority in point. In that case a man had been convicted in a court of summary jurisdiction without giving him an opportunity of being heard. It was held that his remedy was not by a case stated or by an appeal before the quarter sessions but by application to the High Court for an or .....

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