TMI Blog1976 (3) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... with other relevant facts and circumstances which had to be looked into by the adjudicator for application of Section 20 of the Sale of Goods Act, he committed a manifest error of law apparent on the face of the order, the High Court's jurisdiction to interfere under Article 226 of the Constitution is clearly attracted. The submission of Mr. Sanghi is, therefore, without any force. The orders of confiscation of the goods and penalties imposed are invalid and the High Court was right in quashing the same by issuing the appropriate writs - 1434-1435 of 1968 - - - Dated:- 31-3-1976 - H.R. Khanna and P.K. Goswami, JJ. [Judgment per : P.K. Goswami, J.]. - These two appeals are on certificate by the Calcutta High Court from its common judgment of 6-4-1967, in Appeal Nos. 175 and 177 of 1963. 2.Respondent No. 1 prior to its liquidation was a private limited company carrying on business as an importer and dealer in sewing machines. On or about April 16, 1958, the respondent was granted an import licence by the Joint Chief Controller of Imports and Exports, Bombay, by which it was authorised to import industrial sewing machines together with spare parts to the extent of 5 per c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a sum of Rs. 2,894.80 np by way of marginal deposit to the extent of 10 per cent of the value of the letter of credit and the necessary Bank charges. 5.On February 20, 1959, while the said goods were on the high seas there was an agreement between the respondent and the Cycle Company by which the respondent agreed to sell and the Cycle Company agreed to buy at a future date certain quantities of industrial sewing machine heads and oscillating rock shafts. The contract of sale may be quoted in extenso : "Sale Contract We Messrs. Pednekar and Co. Private Ltd., 172 Girgaon Road, Bombay-4, hereby agree to sell in forward sale Industrial Sewing Machine Heads and parts thereof to Messers. Bombay Calcutta Cycle Co. of 48, Popatwadi, Kalbadevi Road, Bombay, on the following terms and conditions :- Items and quantity : 221 pcs. Industrial Sewing Machine Heads, TA-1 Model complete with knee Lifter, accessories box Bobbin winder made in Japan. 200 dozen Oscillating Rock Shaft "Coto" brand made in Japan. Rates and value : 221 pcs. Industrial Sewing Machine Heads @ Rs. 305/- per machine. Rs. 67,405/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly similar show cause notice was served upon the respondent by the Assistant Collector of Customs in respect of the goods arrived by s.s. State of Andhra. In these notices it was alleged that the importation of the goods in question had been made by the Cycle Company without any valid import licence in their favour and not by the respondent and that the Cycle Company was the real owner of the goods. It was further alleged that the respondent had aided and abetted in the unauthorised importation of the goods by the Cycle Company. There was a further charge that the respondent had transferred the licence in favour of the Cycle Company. It was alleged in the show cause notice of October 28, 1959, that the licence in any case did not cover the importation of oscillating rock shafts. The respondent was asked to show cause within 14 days of receipt of the respective notices as to why the goods should not be confiscated and why a penalty should not be imposed on the respondent for being concerned in the unauthorised importation of the said goods. The respondent was also asked in the first show cause notice to show cause why oscillating rock shafts of the value of Rs. 1,373.79 np should n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g also the Cycle Company as respondent No. 4 therein. 11.The learned single Judge of the High Court dismissed the respondent's writ applications except with reference to the oscillating rock shafts. According to the learned Judge these shafts were properly imported under Section 2, Part V, Item 76(a) of the Import Trade Control Policy Book, but these shafts also except 8 dozen were liable to confiscation in view of his decision against the respondent in respect of 200 sewing machine heads. The respondent then appealed to the Division Bench of the High Court. The Division Bench allowed the appeals by setting aside the judgment of the single Judge without disturbing at the same time the aforesaid portion of the judgment regarding oscillating rock shafts. The High Court granted certificates to appeal to this Court under Article 133(1)(a) of the Constitution of India to the appellants. 12.We may note in passing that during the pendency of the proceedings before the High Court, the respondent was wound up by an order of the High Court of Bombay and necessary substitution was made. 13.We are only concerned in these appeals with the confiscation of 200 sewing machine heads and of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in the contract indicating that the property in the goods would pass to the buyer at a later stage. Therefore, under Section 20 of the Sale of Goods Act, the property passed at the time of the contract of sale and it was immaterial that time for payment of price and also time for delivery were postponed." The Division Bench, on the other hand, after extensively dealing with all the facts and circumstances of the case including the terms of the contract, came to the conclusion that - " ..... no property could pass before the goods were delivered at the Bombay godowns of the B.C. Cycle Company." 17.The controversy has to be resolved by reference to Sections 18, 19 and 20 of the Sale of Goods Act, 1930. 18.It is, in our opinion, not possible to hold that the property in goods passed at the time of agreement dated February 20, 1959. The contract to sell related not to the entire consignment of the goods which were being imported by the respondent but only to part of those goods, even though it may be a major part. Out of 208 dozen rock shafts which were imported, 200 dozen were to be sold by the respondent company to respondent No. 2. There was nothing to prevent the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods had never passed during the importation as alleged by the Customs authorities. 21.The entire controversy before the adjudicator was with reference to the importation of the goods by the Cycle Company which fact was sought to be established against the respondent from the legal position urged with regard to the passing of property to the Cycle Company at the time the contract had been made on February 20, 1959. Mr. Sanghi submits that if, on the facts and circumstances, conduct of the parties and the correspondence during the relevant period taken with the advance of finance and guarantee of the Cycle Company, the adjudicator came to the conclusion that the property had passed and the goods were liable to confiscation and the conclusion was prima facie reasonable, the High Court had no jurisdiction to interfere with the order under Article 226 of the Constitution. This would be true, says counsel, even if the High Court could on the same facts and circumstances take another view in the matter. We are unable to accede to the submission. 22.We are dealing with an order of confiscation of certain goods imported under a licence granted to the respondent. It was never disput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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