TMI Blog2023 (3) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout following the legal procedure as contemplated under the law of seizure. Therefore, release was directed within one week from the date of receipt of copy of the order. As held by the Apex Court in case of Mumbai Port Trust vs. M/s. Shri Lakshmi Steels and Ors. [ 2017 (7) TMI 977 - SUPREME COURT ], this Court had already permitted the petitioner to approach the respondent authority for exemption and remission of demurrage for the authority concerned to take a sympathetic view while considering the case of the petitioner. At the same time, the detention charges of the shipping lines are to be paid on the basis of the contract between the petitioner and the shipping line. The Apex Court had been quite clear that the High Court cannot in writ proceedings direct the DRI/Customs to pay the detention charges to the shipping line, firstly because there was a contract between the importer and the shipping line and moreover, under the writ jurisdiction, these aspects are not to be adjudicated as there are many aspects on facts which would need the proper adjudication. The petitioner had 14 days of free period to clear the consignment by making payment of all the due charges and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed - The respondents shall release the consignment imported under B/E No. 4956991 dated 06.08.2021 on the petitioner furnishing the bank guarantee to the tune of Rs. 16,00,000/- for a period of six (06) months. - R/SPECIAL CIVIL APPLICATION NO. 8495 of 2022 - - - Dated:- 6-1-2023 - HONOURABLE MS. JUSTICE SONIA GOKANI AND HONOURABLE MRS. JUSTICE MAUNA M. BHATT Appearance: For the Petitioner(s) No. 1 : Kurven K Desai (7786) For the Petitioner(s) No. 1 : Tirth Nayak (8563) For the Respondent(s) No. 1,2,3,4 : Mr Utkarsh R Sharma(6157) For the Respondent(s) No. 5 : Mr Ashish Verma with Mr. Gnanesh G Bhatt(10015) ORAL JUDGMENT (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. The short question that needs to be addressed is the non-compliance of the directions of this Court and waiver of the demurrage and detention charges by the respondent no.5 in the following factual background:- 1.1. A petition was filed under Article 226 of the Constitution of India being Special Civil Application No. 14849 of 2021 by the present petitioner seeking to release the consignment comprising Chinese Knotted Woolen Carpets which were detained by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ediately within one week from the date of receipt of the copy of this order on following due procedure of law. 32. It is to be noted that there is no dearth of power with the respondent for it to seize the goods and provisional release could have been also permitted in such eventuality. Here neither the seizure is made nor any other proceedings pursuant to the lackadaisical approach to the summons is addressed. And, therefore, this Court needs to show indulgence without even entering into the binding decision of Canon India Pvt. Ltd.(supra) of the Supreme Court. 33. Petition is allowed. Consignment of carpets of the petitioner shall be released without loss of time within a week of receipt of the copy of this order. The petitioner shall abide by his undertaking without fail. The petitioner is also permitted to request for demurrage to the respondent, which shall consider the said request in wake of the findings and observations made herein on following due process of law. 2. Since the consignment imported dated 06.08.2021 had not been released despite the specific direction of this Court to release the goods within a week, the petitioner has preferred the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that his argument referred to above is fortified by the judgment of the Supreme Court in the case of Mumbai Port Trust Vs. M/s. Shri Lakshmi Steels and Ors., Civil Appeal No.9831-32 of 2017 decided on 27.07.2017 , more particularly, the observations made in para 46 and 47 thereunder. The same read thus: 46. We are, therefore, clearly of the view that even though there may be some delay on the part of the DRI and the customs authorities, the respondent-importers have also been guilty of delaying the matter and, therefore, they cannot claim that they are not liable to pay demurrage and detention charges. We may, however, clarify that the respondent-importers are free to approach the Mumbai Port Trust in terms of Section 53 of the Act for exemption and remission of demurrage and other charges and the Board may take a sympathetic view while considering the case of the respondent-importers under Section 53. 47. As far as detention charges of the Shipping Line are concerned, in addition to what we have observed above, we are of the view that the High Court could not in writ proceedings have directed the DRI/Customs to pay the detention charges to the Shipping Line since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide order dated 01.08.2022 in favour of the respondent no.5 was directed to be continued till the final disposal of this petition and this order was directed to be placed before this Court on 28.09.2022. 4. The affidavit-in-reply is filed for and on behalf of respondent no.5 on 05.05.2022 wherein it is contended that the role of this respondent in dealing and transactions between the petitioner and other respondents is very limited. It is in a position to answer only the facts, dealings and averments which are related to the present respondent. 4.1. The present respondent is a private limited company having its registered office at Andheri (East), Mumbai and is engaged in the business of Shipping Line, Shipping Transportation, Multimodal Transportation and providing Containers on lease and hire basis. The respondent is governed by the provisions of the Multimodal Transportation Act, 1993, Indian Bills of Lading Act, 1856, the Carriage of Goods by Sea Act and other Acts as well as statutes. The role played of the Shipping Line have been made clear from time to time by the judicial decisions. 4.2. The overseas local agent of the respondent in USA i.e. Hapag Lloyd (America) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al as well as the other charges in respect of the said goods need to be paid to the present respondent. The goods arrived at the Mundra and the petitioner filed the Bill of Entry on 06.08.2021 for release of the goods. Now as per the policy of the respondent no.5, the petitioner had 14 days of free period to clear the said consignment by making payment of all the due charges and releasing the empty container to the present respondent. The petitioner is well aware of the same and also aware of the fact that in default of the clearance and return of empty container to the respondent within the scheduled time-frame, the detention as well as demurrage charges would start applying on the consignment. 4.7. It is further the say that as per the detention charges for the said container, the charges are payable from the expiry of 14 days from the date of arrival of the cargo at the destination Port, and, 14 days from 06.08.2021 would be 20.08.2021. This charges are due and payable by the petitioner as a precondition to get the delivery order of the subject consignment. The detention of cargo by the customs as well as DRI was held to be illegal and therefore, the release was directed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without payment. 4.10. The Dept. of Customs issued a letter dated 04.02.2022 to the present respondent directing not to charge any detention charges till the clearance of the said goods. These directions have been issued under Regulation 10(1) of the Regulations which ipso facto is bad in law as it directs the respondent not to charge any detention till the clearance of the goods. The proviso to Clause (1) of sub-regulation (1) of Regulation 10 of the Regulations make the picture clear that the present respondent i.e. the carrier is well within the right to demand the container detention charges for the period after expiry of 60 days. The said regulation reads as follows:- l. not demand any container detention charges for the containers laden with the goods detained by customs for purpose of verifying the entries made under section 46 or section 50 of the Act, if the entries are found to be correct. Provided that the authorised carrier may demand, container detention charges for the period, commencing after expiry of sixty days. 4.11. According to this respondent, there could be no compulsion to comply with the letter dated 04.02.2022 which is illegal and contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that the charges of detention and demurrage have not been paid by the petitioner when in fact this Court itself has found the action of the authority to be contrary to law on the basis of the decision of Apex Court in case of Mumbai Port Trust vs. M/s. Shri Lakshmi Steels and Ors. (supra) where the Apex Court in para 46 and 47 held thus:- 46. We are, therefore, clearly of the view that even though there may be some delay on the part of the DRI and the customs authorities, the respondent importers have also been guilty of delaying the matter and, therefore, they cannot claim that they are not liable to pay demurrage and detention charges. We may, however, clarify that the respondent-importers are free to approach the Mumbai Port Trust in terms of Section 53 of the Act for exemption and remission of demurrage and other charges and the Board may take a sympathetic view while considering the case of the respondent importers under Section 53. 47. As far as detention charges of the Shipping Line are concerned, in addition to what we have observed above, we are of the view that the High Court could not in writ proceedings have directed the DRI/Customs to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The apprehension on the part of the respondent no.5 is that once the goods are released, he would never get the recovery of demurrage and detention charges as the petitioner is not responsive to the statutory authorities like Customs and DRI and would not respond to the respondent s claims as well. 8. In case of Mumbai Port Trust vs. M/s. Shri Lakshmi Steels and Ors. (supra) two issues arose before the Apex Court; (i) whether any direction could be given to the Mumbai Port Trust to waive demurrage charges and; (ii) whether the liability to pay the demurrage/detention charges in respect of the imported goods could be fastened upon the DRI/ Customs Authorities. The Court held and observed thus:- 14. Two issues arise before us (1) whether any direction could be given to the Mumbai Port Trust to waive the demurrage charges and (2) whether the liability to pay the demurrage/detention charges in respect of the imported goods could be fastened upon the DRI/Customs Authorities. 15. As far as the first issue is concerned, it would be pertinent to point out that the Mumbai Port Trust is a statutory authority created under the Major Port Trusts Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, it has been held that the Customs Authorities could not restrain the carrier from claiming demurrage charges, however, in the peculiar circumstances, the Supreme Court directed the carrier to waive the demurrage charges if so requested by the Customs Authorities. The Court extensively considered the Contract Act, 1872 particularly Sections 170 and 171. The Court held and observed thus:- 2. In this batch of appeals, a common question of law having arisen, they were heard together and are being disposed of by this common judgment. The question for consideration is whether the appellant, who under the terms of the contract between him and the owner of the goods, having a lien over the goods, until the dues are paid can be forced to release the goods, without charging any demurrage, merely because the customs authorities issued a detention order for a specified period ? We would discuss the question in relation to the facts in the case between the Shipping Corporation of India vs. C.L. Jain Woolen Mills. The respondent C.L. Jain Woolen Mills, imported the consignment of polyester filament yarn from Korea to India. The port of load was Busan in Korea and the port of disch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut payment of duty, the customs authorities committed error in proceeding with the confiscation proceedings and ordering confiscation as well as levying penalty. The customs authorities as well as the Controller of Imports and Exports had been arrayed as party respondents in the writ petition. Both of them as well as Union of India resisted the claim of the owner, who had imported the goods in question. The High Court disposed of the writ petition by judgment dated 9th September, 1994, quashing the order of the Additional Collector of Customs dated 10th August, 1990 as well as the order of the Customs Excise and Gold (Control) Appellate Tribunal dated 21st March, 1991 and directed the Collector of Customs to release the goods forthwith. The High Court also further held that since the action of the customs authorities is illegal, the goods in question will have to be released to the owner without payment of any detention or demurrage charges by the owner. Needless to mention, the Shipping Corporation of India, the appellant in the present appeal, who was the carrier and who under the Bills of Lading had a lien over the goods, until the dues are paid had not been made a party t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod and further held that if any detention or demurrages charges are payable, the same shall be paid by the customs department within three weeks. It further directed the carrier of the goods, including the appellant to release the goods after the customs department pays the detention/demurrage charges. Notwithstanding the aforesaid order, the goods not being released, when a fresh contempt petition was filed, registered as CCP No. 89/99, the High Court issued notice on 25.2.99, calling upon the alleged contemnor to file their reply by 11th March, 1999. Against the initiation of the aforesaid contempt proceeding, the Shipping Corporation of India filed SLP No. 3391/99. The order dated 18.1.99 was also assailed by the Shipping Corporation, which was registered as SLP No. 5001/99. The container Corporation of India filed a special leave petition on identical circumstances and raising identical question, which is SLP No. 9021/99. The Union of India also assails the order dated 18.1.99 by filing Special Leave Petition No. 3063/2001 along with the application for condonation of delay. This batch of cases were listed before a Bench of two learned Judges on 11th February, 2001 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e demurrage and container charges. Further the Chief Commissioner of Customs, later had ordered unconditional release of goods and yet the goods had not been released. It is under these circumstances and in view of the specific undertaking given by the customs authorities, this Court held that from the date of detention of the goods till the customs authorities intimated the importer, the importer would not be required to pay the demurrage charges. But in that case even subsequent to the orders of the customs authorities on a suit being filed by one of the partners of the importer-firm, an order of injunction was issued and, therefore it was held that for that period, the importer would be liable for paying the demurrage and container charges. The judgment of this Court in Sanjeev Woolen Mills, therefore, was in relation to the peculiar facts and circumstances of the case and the Court had clearly observed that the order in question is meant to do justice to the importer, looking to the totality of the circumstances and the conduct of customs authorities. Thus, we see no inconsistency between the ratio in Sanjeev Wollen Mills and the Judgment of this Court in Grand Slam. That apart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him and he approached this Court by invoking the writ jurisdiction. He, however, had ensured to cooperate with the inquiry after furnishing the bond before this Court. 10. In this background, this Court had specifically held that there was sufficient independent device and mechanism under the law for him to be asked to appear and assist the inquiry/investigation and non-appearance cannot be a valid ground for the authority to hold back the goods without following the legal procedure as contemplated under the law of seizure. Therefore, release was directed within one week from the date of receipt of copy of the order. 10.1. While disposing of the petition, the Court permitted the petitioner to make a request for waiving the demurrage and directed the respondent to consider such a request in wake of the findings and observations. It is not in dispute that the consignment has not been released till date as the respondent no.5 is demanding the demurrage charges to the tune of Rs. 25,00,000/- when the total value of the goods is of Rs. 16,00,000/- only. The strong objection on the part of the respondent no.5 is that unless the container detention charges are paid, he cannot be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not on the horizon as he was not impleaded as a party and it was a matter between the petitioner and other respondents which excluded the respondent no.5. Since the respondent no.5 was not a party in the previous petition, it was not heard while directing the release on 07.01.2022. The container since has been lent to the petitioner under the contract of carriage and the detention is in exercise of its right to lien over the said goods, the agreed terms of the contract between the parties would surely govern their fate. At the same time, on the issue of demurrage charges in respect of the consignment, the liberty was granted to the petitioner to approach the respondent for waiver of demurrage and the customs department in its discretion has waived the demurrage charges payable to the petitioner, however, towards the detention of the container, it would be the contract of the parties which would govern their fate and if there is anything on the part of the other respondents which had prolonged the detention of the containers, the adjudication authority shall need to actually determine this aspect. 10.6. The Court also cannot be oblivious of the fact that the request was made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner as well. 11. The additional affidavit on behalf of respondent no.5 is indicative of the fact that the Customs Appeal Diary No. 10904 of 2022 before the CESTAT is pending whereby the challenge is made and the delay have been condoned by an order dated 20.12.2022. The question as to whether the release of goods without charging the detention or the demurrage charges, is the issue directly before the CESTAT. The respondent no.5 is also in the process of filing the application for early hearing of the Customs Appeal before the CESTAT. Therefore, on the issue of detention charges, the order of the CESTAT shall govern the parties as it would also require the authority concerned to enter into the merits of the facts. We would, therefore, choose not to decide the contractual terms between the parties at this stage. Suffice to note that the contract, as mentioned between the parties, since is governed by their personal contractual terms and the owner of the shipping line also since has a lien over the goods until the dues are paid, so far as to ensure that the Court s directions are not in any manner flouted and the goods are being released in favour of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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