As per case facts, the Petitioner imported perishable 'KIWI' fruits, but the Shipping Company filed an incorrect Import General Manifest, causing the goods to be routed incorrectly and face significant ...
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CWP No. 9301 of 2023
IN THE HIGH COURT OF PUNJAB AND HARYANA
M/s Prenda Creations Private Limited
Union of India
CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA
HON’BLE MR. JUSTICE
Present:
SANJEEV PRAKASH SHARMA, J.
the nature of Certiorari/ Mandamus for cancellation of Import General
Manifest (IGM) No. 2341578 Dated 22.04.2023 filed at the port of Mundra,
thereby restraining the movement of goods from Sea Port of Mundra to ICD
Ludhiana, further direct
Bill of Entry at the port of ICD Ludhiana for clearance of goods comprising
of “KIWI” which are highly perishable in nature.
2.
Companies Act, 1956
A, Ludhiana, Punjab, and also having its Offices at Ludhiana, Chandigarh
Delhi & Kolkata and is engaged in the business of Import of “Food Items” at
various Sea ports including “Mumbai” as well as “Mun
at “New Delhi” and “Ludhiana” & “Pune”.
CWP No. 9301 of 2023
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP No.
Reserved on : 1
Date of Pronouncement:
Prenda Creations Private Limited
Versus
Union of India and others
CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA
HON’BLE MR. JUSTICE SANJAY VASHISTH
Mr. Saurabh Kapoor, Advocate, for the
Mr. Ajay Kalra, Senior Standing Counsel, for respondent
Nos. 1 to 4.
None for respondent no. 5.
***
SANJEEV PRAKASH SHARMA, J.
By way of present writ petition, the petitioner ha
the nature of Certiorari/ Mandamus for cancellation of Import General
Manifest (IGM) No. 2341578 Dated 22.04.2023 filed at the port of Mundra,
thereby restraining the movement of goods from Sea Port of Mundra to ICD
Ludhiana, further directions were sought for permission for filling of Manual
Bill of Entry at the port of ICD Ludhiana for clearance of goods comprising
of “KIWI” which are highly perishable in nature.
The petitioner being a Company incorporated under the
Companies Act, 1956, having its Registered Office at 306, Industrial Area
A, Ludhiana, Punjab, and also having its Offices at Ludhiana, Chandigarh
Delhi & Kolkata and is engaged in the business of Import of “Food Items” at
various Sea ports including “Mumbai” as well as “Mun
at “New Delhi” and “Ludhiana” & “Pune”.
CWP No. 9301 of 2023 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP No. 9301 of 2023 (O&M)
Reserved on : 16
th
December, 2024
Date of Pronouncement: 4
th
April, 2025
… Petitioner
Versus
…Respondents
CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA
SANJAY VASHISTH
, Advocate, for the petitioner.
Mr. Ajay Kalra, Senior Standing Counsel, for respondent
By way of present writ petition, the petitioner has sought writ in
the nature of Certiorari/ Mandamus for cancellation of Import General
Manifest (IGM) No. 2341578 Dated 22.04.2023 filed at the port of Mundra,
thereby restraining the movement of goods from Sea Port of Mundra to ICD
ions were sought for permission for filling of Manual
Bill of Entry at the port of ICD Ludhiana for clearance of goods comprising
of “KIWI” which are highly perishable in nature.
Company incorporated under the
, having its Registered Office at 306, Industrial Area
A, Ludhiana, Punjab, and also having its Offices at Ludhiana, Chandigarh
Delhi & Kolkata and is engaged in the business of Import of “Food Items” at
various Sea ports including “Mumbai” as well as “Mundra” and “Dry Ports
(O&M)
4
2025
sought writ in
the nature of Certiorari/ Mandamus for cancellation of Import General
Manifest (IGM) No. 2341578 Dated 22.04.2023 filed at the port of Mundra,
thereby restraining the movement of goods from Sea Port of Mundra to ICD
ions were sought for permission for filling of Manual
Bill of Entry at the port of ICD Ludhiana for clearance of goods comprising
Company incorporated under the
, having its Registered Office at 306, Industrial Area
A, Ludhiana, Punjab, and also having its Offices at Ludhiana, Chandigarh
Delhi & Kolkata and is engaged in the business of Import of “Food Items” at
dra” and “Dry Ports
CWP No. 9301 of 2023 - 2-
3. The brief facts which have culled out after perusing the entire
record of the case are that the petitioner is an importer of food items. During
the course of its business one consignment comprising of Kiwi fruit was
imported in four containers from its foreign suppliers, namely, R.A.
Logistics & Distribution LLC, Dubai, UAE. The imported food items were
to be imported at the port of ICD GRFL, Ludhiana and the import
documents issued by the shipping company i.e. Bill of Lading dated
16.4.2023 mentioned final place of delivery at Ludhiana. A request was
made by the petitioner online for filling of the bill entry under Section 46 of
the Customs Act, 1962 (hereinafter to be referred as ‘the Act’) for clearance
of the good items at port of ICD Ludhiana. Request was made for seeking
permission to file manual bill of entry in terms of Section 46 of the Act and
circular dated 04.05.2011. But the request was not acceded to. The said
goods had been dispensed with vide invoice dated 10.4.2023 which
mentioned the details of the goods as well as the material particulars.
Request for permitting to file manual bill of entry was made by the petitioner
on 25.04.2023 as well as the amendment of IGM filed by the shipping line at
Sea Port of Mundra on 26.04.2023. Amendment of IGM was denied to the
petitioner stating that the same can only be done by the shipping line. On
28.04.2023, a request was made by the petitioner as well to the shipping line
that the goods being perishable in nature, they may be allowed to file manual
bill of entry. However, the same was not allowed by the respondents. Since
the imported goods were food items having limited shelf life, the petitioner
approached this Court with a prayer to direct the respondents to permit filing
of bill of entry under Section 46 of the Act manually.
CWP No. 9301 of 2023 - 3-
4.
The petitioner during the course of business, imported one
consignment of “KIWI” from its foreign suppliers namely “R A Logistics”
& Distribution LLC, Dubai UAE. Since the goods in the present case were
accompanied with all the required export documents, the same were shipped
in 4 Refrigerated Containers and transported by the Shipping Company
namely M/s Transliner Marinetime Pvt. Ltd. having it office at 7 Ist Floor,
Corporate Park, Sector 8, Gandhidham Kutch, Gujarat., who had issued Bill
of Lading No. TRLJEAMUN9713241 Dated 16.04.2023, declaring the
particulars in respect of the consignment in question, including the Port of
Loading as well as Port of Discharge as well as Final Place of Delivery as
“ICD Ludhiana”.
5. In terms of the provisions of Section 30 of the Act, the goods
imported and transported into India, the Shipping Line has to mandatorily
mention the Final Place of Delivery of goods which as per the Bill of Lading
was ICD GRFL, Ludhiana. Further in terms of Section 30 of the Act, the
Shipping Company has to file “Import General Manifest” before arrival of
the goods into India. Section 30 of the Act reads as under:-
“Section 30 of The Customs Act, 1962
“30. Delivery of import manifest or import report.
Delivery of [arrival manifest or import manifest] or import
report.
(1) The person-in-charge of
(i) a vessel; or
(ii) an aircraft; or
(iii) a vehicle, carrying imported goods or export goods
or any other person as may be specified by the Central
Government, by notification in the Official Gazette in this
behalf shall, in the case of a vessel or an aircraft deliver
to the proper officer an arrival manifest or import
CWP No. 9301 of 2023 - 4-
manifest] by presenting electronically prior to the
arrival] of the vessel or the aircraft, as the case may be
and in the case of a vehicle an import report in the
Customs station, in such form and manner as may be
prescribed] and the arrival manifest or import manifest
or the import report or any part thereof, is not delivered
to the proper officer within the time specified is satisfied
that there was no sufficient cause for such delay, the
person in charge or any other person referred to in this
sub-section who caused such delay, shall be liable to a
penalty not exceeding fifty thousand rupees;
Provided that the Principal Commissioner of Customs or
Commissioner of Customs may, in cases where it is not
feasible to deliver arrival manifest or import manifest by
presenting electronically, allow the same to be delivered
in any other manner.
(2) The person delivering the arrival manifest or
import manifest or import report shall at the foot thereof
make and subscribe to a declaration as to the truth of its
contents.
(3) If the proper officer is satisfied that the arrival
manifest or import manifest or import report is in any
way incorrect or incomplete, and that there was no
fraudulent intention, he may permit it to be amended or
supplemented.”
6. In light of the aforesaid documents i.e. the Bill of Lading,
respondent No. 5 filed the Master as well as Local IGM of the goods at the
port of Mundra Gujrat, however the Local IGM was to be filed at Ludhiana
in view of the fact that the final place of delivery of the goods was
mentioned as “ICG GRFL, Ludhiana” mentioning port code as “IN5GF6”.
7. Since the goods were highly perishable in nature, the petitioner
preferred to file “Advance Bill of Entry” under Section 46 of the Act, at the
CWP No. 9301 of 2023 - 5-
port of ICD GRFL Sahnewal Ludhiana, however the same was not permitted
to be filed since the Shipping Company (i.e. Respondent No. 5) had filed
Online Import General Manifest declaring Final Place of Delivery as
Mundra instead of Port of ICD GRFL Ludhiana, thereafter, the goods
imported were discharged by the Shipping Line at Mundra.
8. As the petitioner was required to file Online Bill of Entry for
clearance of goods at Ludhiana and the Online EDI system which was linked
with the Import General Manifest filed by respondent No.5, the petitioner
was unable to file Bill of Entry for clearance of goods at Ludhiana and even
shift its goods at its own risk and cost from the Port of Mundra to ICD
GRDL Sahnewal, Ludhiana. The factum of petitioner having attempted to
file Bill of Entry is evident from Email dated 25.04.2023 addressed to
Respondent Customs Department, Ludhiana, however, respondent No. 4 i.e.
Commissioner of Customs intimated that the amendment in respect of IGM
can only be executed by the Shipping Company i.e. respondent No. 5.
9. The petitioner vide email dated 28.04.2023 requested the
Consignor of goods as well as Shipping Line to get the Import General
Manifest amended in order to enable the Petitioner to shift the goods from
Mundra to Ludhiana and get the clearance executed in terms of the
provisions of the Act.
10. Since the goods imported by the petitioner were “Perishable” in
nature, further the respondent failed to permit filling of Manual Bill of Entry
in view of the Circular dated 04.05.2011 and 12.05.2011, the petitioner
approached this Court by way of filling of present writ petition.
CWP No. 9301 of 2023 - 6-
11. This Court vide order dated 09.05.2023 directed the
respondents to let the goods of the petitioner be transferred from Mundra
Port to Ludhiana Port. The petitioner was permitted to file manual bill of
entry at Ludhiana. The Court observed as under:-
“
Learned counsel for the respondent has handed
over a copy of letter dated 08.05.2023 from respondent No. 5
wherein Assistant Commissioner of Customs, MCD, Mundra
Customs House was told to inform customer as well as to clear
this cargo from Mundra without further delay as cargo is
perishable in nature, line will not be responsible for any loss,
cost or consequences in regard to said matter.
Further as per Annexure P-2, the final delivery of
the goods has been mentioned as Ludhiana.
Since the respondent has not been able to correct
the IGM, a direction is given to the respondents to let the goods
of the petitioner be transferred from Mundra Port to Ludhiana
Port. The petitioner shall file the Manual Bill of entry at
Ludhiana.”
In terms of the order passed on 09.05.2023, the petitioner was allowed to
take goods from custom areas of Mundra without insistence of NOC.
12. On the next date i.e. 16.05.2023, this Court after noticing the
message received from the Deputy Commissioner, Mundra, directed that the
petitioner shall file a departure manifest along with carrier bond and pan
card of authorized carrier and after completion of the formalities, the goods
would be shifted to ICD Ludhiana. On 31.05.2023, the respondents had
amended the IGM for changing the port of destination from Mundra port to
GRFL ICD, Sahnewal, Ludhiana. In view of the amendment IGM dated
30.05.2023, the petitioner took the goods from the Custom Area, Mundra
without insistence of NOC from the shopping. However, although the
petitioner was allowed to take the goods from the custom area of Mundra on
CWP No. 9301 of 2023 - 7-
31.05.2023, the shipping company shifted the goods to Saurashtra Freight
Private Limited. Accordingly, the Court restraint the shipping company from
interfering in execution of the order and ordered the petitioner to take goods
from Saurashtra Freight Private Limited by a private carrier to Mundra
International Container Terminal. Help of local police was also provided.
13. This Court on the next date i.e. 07.06.2023 noticed that the
shipping company, namely, respondent no.5 was not complying with the
order and found such inaction to be contemptuous and, therefore, directed
respondent nos. 3 and 5 to ensure the release of goods in favour of the
petitioner without further insistence of NOC.
14. The samples of the Kiwis were taken and a report was
submitted on 15.06.2023 that Kiwis were fit for human consumption as per
the report of the Department of Food and Safety. While another sample had
been sent on 19.06.2023 to Amritsar Plant and Quarantine Department but
the report had not been received. The said report was noticed on the next
date namely 05.07.2023 by the Court to have been uploaded on 04.07.2023,
which reflected that it was found that Kiwi fruit is free from infection of
plant pathogen and pathogenic symptom. The department made an
apprehension at that stage that the origin of Kiwi fruit is from Iran and a fake
phytosanitary certificate had been presented by the petitioner to show the
Kiwi fruits were originated from Chile.
15. This Court took on record the Export Declaration Certificate
issued by the United Arab Emirates, Dubai Customs Authority which
reflected that the Kiwi fruits were imported from Chile and were cleared by
Dubai Customs. However, the respondents insisted that the fruits have been
CWP No. 9301 of 2023 - 8-
imported from Iran to which the respondents were directed to verify the
Export Declaration Certificate issued by Dubai Customs.
16. On 06.07.2023, the Court directed the respondent nos. 1 to 4 to
release the consignment of the petitioner forthwith and in the meanwhile
conduct an enquiry with respect to certificate issued by United Arab
Emirate, Federal Customs Authority, Dubai Customs. At the same time
directions were given to return the containers in which the Kiwi fruits were
lying. The respondents handed over an order dated 04.07.2023 passed by the
Deputy Director (E), Plant Protection, Quarantine and Storage, RPQS,
Amritsar, wherein it was ordered that the consignment/ container shall be
deported within 10 days. However, this Court keeping in view the report
dated 04.07.2023 issued by the lab website reflecting that the Kiwi fruit is
free from infection of plant pathogen and pathogenic symptom directed
respondent nos. 1 to 4 to release the consignment of the petitioner forthwith.
17. On 24.07.2023, the Court directed the department to accept
bond and release the goods after accepting ` 20 lacs in cash which was to be
paid by the petitioner as duty in relation to the other case whereas duty had
already been paid with regard to the said goods. A direction was given to
release the goods after doing inspection by associating a representative from
Food Safety Department and Plant & Quarantine Department.
18. On 27.07.2023 a report was prepared which reflected that on
visual inspection 20% to 25% of the consignment of fresh kiwis was
damaged. The respondents were directed to release the consignment after
accepting the full duty in cash and surety bond for 75% of the consignment.
Further direction was given to the petitioner in respect of the damaged goods
CWP No. 9301 of 2023 - 9-
and he will get a report from the registered dealers and thereafter he can
claim refund in accordance with law.
19. On 07.08.2023, the Court noticed that the goods had been
released to the petitioner but the report with respect to the damaged goods
had not been received.
20. It is submitted by the petitioner that s
ince the goods imported
by the petitioner were ordered to be transshipped from Mundra Port to ICD
GRFL, Ludhiana, it transpired that Shipping Company had shifted the goods
from Mundra Sea Port to Saurashtra Freight Pvt. Ltd. making it impossible
for the petitioner to get its goods transported from Mundra to Ludhiana, as
there was no rail link from the port of Saurashtra Freight Pvt. Ltd.. It is
significant to mention that this Court vide order dated 02.06.2023 directed
Respondent No. 4 i.e. Customs Mundra to get the goods shifted from
Saurashtra Freight Pvt. Ltd. to Mundra International Container Terminal,
Mundra in order to enable the petitioner to get its goods shifted from
Mundra to Ludhiana via rail link. It is relevant to mention that this Court
being conscious of the fact that Respondent No. 5 did not permit movement
of goods and had purposely shifted the goods from Mundra International
Container Terminal to Saurashtra Freight Terminal Private Limited.
21. It is further submitted that the goods having been transhipped
from Mundra International Container Terminal to Inland Container Terminal
(GRFL) Ludhiana the subject goods were tested by the Plant & Quarantine
Department who vide their report dated 04.07.2023 had informed that “Kiwi
Fruit” is free from infection of plant pathogen and pathogenic symptom.
However the Respondent Customs (Ludhiana) had informed that they had an
apprehension that the Origin of “Kiwi” Fruits is from Iran instead of having
CWP No. 9301 of 2023 - 10-
been declared to have originated from “Chile”. The Petitioner having placed
on record the Export Declaration Documents issued by UAE Customs
evidencing the Origin of goods as Chile, the goods imported by the
Petitioner were thereafter detained by the respondent Customs Ludhiana.
22. Thereafter, the petitioner filed C.M. Nos. 10885-86-CWP of
2023 for placing on record documents as well as praying for joint inspection
of the goods, since at the time of inspection of the containers it transpired
that the imported “KIWI” had already deteriorated, due to passage of time
and for the reasons that the containers in which the KIWI was stuffed was
discharging water. The petitioner vide the said application had sought
direction for joint examination and compensation in respect of the value of
imported KIWI having been rendered unfit due to delay on the part of the
respondents.
23. It is submitted by learned counsel for the petitioner that despite
consistent orders of release having been passed by this Court the goods
comprising of “KIWI” Imported in the month of May 2023 were finally
released to the petitioner only on 01.08.2023 after a delay of more than three
months, which rendered the goods ‘unfit’ for consumption as the same were
damaged due to efflux of time and delay in clearance caused by the
Respondents Customs and Shipping Line from time to time. Copy of the
Disposal Certificate issued by “VEER SINGH & BROTHERS” Fruits
Dealer is as under:-
“TO WHOMSOEVER IT MAY CONCERN
This is to Certify that 8928 Packages of “KIWI” imported vide
Invoice No. EXP100423 Dated 10.04.2023 belonging to M/s
Prenda Creations (P) Ltd. having total weight of 89,420 Kgs
which were dispatched for sale in the Local market to us. The
CWP No. 9301 of 2023 - 11-
imported KIWI upon inspection was damaged and were
discharging water and found to be Unfit for Sale in Market. The
imported KIWI was thereafter destroyed in our presence being
Unfit for Human Consumption.”
24. The petitioner thereafter filed CM-18329-CWP-2024 for
placing on record the photographs of the damaged goods along with the
Video showing disposal of the imported Food items i.e. KIWI with the
prayer for refund of Customs Duty deposited at the time of clearance of
goods to the Petitioner.
25. In the aforesaid circumstances, the petitioner has now limited
his prayer to the submission that the report thereafter had been prepared
which reflected that the entire Kiwi was found to be totally damaged. The
petitioner have to be paid damages as the imported food items had been got
rotten due to delay in clearance of goods by the respondents. It was
submitted that the delay in release of the goods was at the behest of the
respondent nos. 1 to 5 inspite of the directions having been issued by the
Court from time to time to release the goods. The same were not released on
one pretext or the other.
26. Learned counsel for the petitioner further submitted that the
respondents having filed their reply to the writ petition as well as the
applications at no point in time have been able to rebut to the submission
made by the petitioner in respect of amendment of Import General Manifest
filed u/s 30 of the Act, wherein in terms of Sub Section 30 (3) the
respondents were empowered to make amendment in the Import General
Manifest filed by the Shipping Company. However to the contrary, the
respondents have relied upon the circular dated 11.04.2017 which prescribed
CWP No. 9301 of 2023 - 12-
amendment only at the behest of the Shipping Company. From the perusal of
Section 30 (3) of the Act, it transpires that the proper Officer after recording
his satisfaction may permit amendment or supplement the Import General
Manifest. Since in the present case from the perusal of the Bill of Lading
dated 16.04.2023 issued by respondent No.5 it was specifically mentioned
that the Final Place of delivery of goods shall be “Ludhiana” the Respondent
had erred in amendment of the Import General Manifest at the very first
instance when the petitioner had requested for amendment vide email dated
24.05.2023.
27. It is further submitted that the Respondent Department has
erred in appreciating that the goods imported by the petitioner were
Perishable Food Items Comprising of “KIWI” which has limited shelf life,
further the Act of the Respondent Customs in failure to amend the Import
General Manifest is in the teeth of Section 30 (3) of the Act, which directs
the Proper Officer to amend the Import General Manifest. Thus the perusal
of the aforesaid provisions as well as directions issued by this Court in the
interim orders passed from time to time demonstrate that the Respondents
had failed to perform their duties in accordance with the provisions of
Customs Laws. The Respondents cannot be permitted to take shelter of the
Circular dated 11.04.2017 as the said circulars has been issued for the proper
implementation of the provisions of the Customs Act, more so when in the
present case the Import documents including the Bill of Lading issued by the
Shipping Company had specifically mentioned in the said Bill of Lading as
GRFL Ludhiana to be the final place of delivery of goods.
CWP No. 9301 of 2023 - 13-
28. The respondents had miserably failed to act in accordance with
the provisions of 30 (3) of the Act which specifically directs amendment of
IGM where no fraudulent intention is apprehended, the present case the
import document particularly “Bill of Lading” which finds mention of the
Final Place of Delivery of goods to be Ludhiana had failed to carry on the
requisite amendments at appropriate point in time rendering the goods to
deteriorate. Further this Court vide Interim orders passed from time to time
had directed the Customs to carry out the necessary amendments in IGM, the
said officers failed to comply with the directions issued from time to time,
rendering the goods unfit for Human Consumption.
29. The Customs Officers at Mundra had failed to implement the
interim orders passed by this Court in so far despite passing of the interim
order dated 02.06.2023 the goods were shifted by the Respondent No. 5
from Mundra International Container Terminal to Saurashtra Freight P Ltd.
It is pertinent to mention that in terms of Section 141 of the Customs Act,
1962, the goods and conveyance shall be subject to control of the Customs
Officers. Since the Bill of Lading found mention that the final place of
delivery of goods was “ICD GRFL Sahnewal Ludhiana” the Customs had
failed to perform their duties in permitting movement of goods to Saurashtra
Freight Private Ltd, thereby further causing delay in movement of goods to
its final place of Delivery i.e. ICD Ludhiana.
30. The act of respondent No. 5 in purposely filling Wrong Import
General Manifest and failure to file correct IGM mentioning Final Place of
Delivery of goods to be GRFL Ludhiana is in the teeth of the provisions of
Section 30 of the Customs Act, 1962 which directs the incharge of the vessel
CWP No. 9301 of 2023 - 14-
or the concerned person to file correct information at the time of filling of
Import General Manifest. Further for failure to file correct information it
was incumbent upon the Respondent Customs Officers to initiate action
against the Shipping Company under the provisions of Section 30 of the Act,
read with Regulation 11 of the Sea Cargo Manifest Regulations, 2020.
31. It is further submitted that the action of the respondent Shipping
Company in filing wrong Import General Manifest is evident from the fact
that the Respondent Shipping Company has placed on record annexure R5/3
which is an internal email communication dated 11.04.2023 and 12.04.2023,
between the offices of the Shipping Company wherein it has been mentioned
that the Final delivery shall be GRFL, ICD Sahnewal, Ludhiana INSGF6.
32. The delay in amendment of IGM and further filing of Manual/
Advance Bill of Entry for clearance of goods at Ludhiana was solely on
account of Shipping Company as well as Customs Mundra who were not
amending the Import General Manifest as evident from the emails dated
24.04.2024 wherein, it was advised that necessary amendments in IGM was
to be carried out by Customs. Further the Shipping Company has
referred to letter dated 19.05.2023 and 29.05.2023 wherein the Shipping
Line had intimated that necessary amendments were to be carried out by
the Customs Mundra, however due to delay in the necessary
amendments in IGM the Respondent No.5 insisted that NOC for movement
can only be issued subject to payment of Container Detention Charges
amounting to ` 4,63,247.70, Detention Charges till 10.06.2023 amounting to
` 63,55,564.56, CFS Cost amounting to ` 10,57,160.00 and Security Deposit
of ` 2,00,000.00 per container. It is pertinent to mention that all the aforesaid
CWP No. 9301 of 2023 - 15-
charges were on account of fact that the Customs as well as Shipping
Company failed to correct IGM details due to which online Bill of Entry
could not be filed.
33. The respondents have failed to carry out the duty of amendment
of Import General Manifest and permit filling of Bill of Entry at appropriate
point in time leading to damage to the goods being highly perishable in
nature as is evident from the fact that the email dated 03.06.2023 written by
Shipping Company (i.e. Respondent No.5), wherein it has been informed
that the NOC to customs was already issued for making necessary
amendments in the IGM, however the Customs Department not only failed
to make the said amendments at the appropriate time, but permitted shifting
of goods from Mundra International Import Terminal to Saurashtra Freight
Private Ltd.
34. Despite the fact that the goods were permitted to be transported
from Mundra to ICD Ludhiana the Customs Ludhiana failed to act in
accordance with the provisions of Customs Laws and failed to permit
immediate clearance as evident from the letter dated 07.07.2023 (P-14)
requesting the Customs Ludhiana for immediate compliance of the order
dated 06.07.2023. Further the respondent-customs failed to draw samples
and clear the goods despite issuance of NOC from FSSAI and Plant &
Quarantine Department. The Petitioner informed the Customs Department
that the goods have already deteriorated and the Customs Duty is being
deposited under protest.
35. The Respondents had miserably failed to comply with the
orders passed by this Court and had illegally detained the goods despite
CWP No. 9301 of 2023 - 16-
NOC from FSSAI and Plant & Quarantine Department. The petitioner
having preferred CM No. 10886 of 2023 seeking directions for joint
inspection and payment of cost of the goods, the said Joint Examination was
also not conducted for the reason that respondent No. 5 did not participate,
also the part examination conducted revealed that the goods were already
deteriorated. Relevant extracts of Joint Examination report issued vide
Panchnamma dated 27.07.2023 reads as under:-
“It was explained by the Customs Officers that undamaged
goods i.e. Fresh Kiwi has to be released and for that the
segregation of the consignments is mandatory. The
representative of the importer, however submitted that the
consignment may be released in toto and they undertook to
dispose off the damaged kiwi as per law and will provide the
disposal certificate to this effect.”
It is pertinent to mention that the Joint inspection was conducted pertaining
to crates of Fresh KIWI stored in front of the container and inspection of
Fresh KIWI was not conducted in respect of 100% material stored in all the
containers. Thus evidencing that at the relevant point in time, 100%
examination of the goods i.e. Fresh “KIWI” was not conducted by the
respondent Customs Officers.
36. Since the petitioner had specifically lodged protest vide letter
dated 07.07.2023 before depositing duty and the respondent in joint
examination report dated 27.07.2023 had permitted the petitioner to file
proof of disposal, the petitioner having provided the relevant documents
along with photographs and videography, the petitioner is entitled for refund
of customs duty paid under protest.
CWP No. 9301 of 2023 - 17-
37. As the petitioner was not permitted release of goods at the
relevant point in time the goods imported by the Petitioner were illegally
detained by the Customs. He relies on Gian Chand and Others Vs State of
Punjab 1983 (13) ELT 1365 (S.C.), wherein it has been held as under:-
“Seizure’ means to take possession of contrary to the wishes of
the owner of the goods in pursuance of a demand under legal
right. Seizure involves a deprivation of possession and not
merely of custody of goods. Thus, the unilateral act of the
person seizing is the very essence of the concept of seizure”
38. Further reliance is placed on the judgment rendered in the case
of S.J. Fabrics Pvt. Ltd. Vs Union of India 2011 (268) ELT 17 (Cal.),
wherein it has been held as under:-
“7. We approve the observation of the learned Single Judge
that do not there is no time limit for issuing order of seizure
under Section 110. If the consignment of a person is detained, it
should be presumed that the goods has been seized in terms of
Section 110 of the Act even if no formal order has been issued
by the Customs Authority and the time for issuing notice to
show-cause in terms of Section 124(a) runs from the actual date
of detention. In the case before us, it appears that the
respondent authority has also treated the seizure to be
operative and consequently, has started investigation by issuing
summons under Section 108 of the Act and has also given show-
cause notice for extension of time by further six months.”
Reliance has also been placed on the judgment of Calcutta High Court in
E.S.I Ltd. Vs Union of India 2003 (156) ELT 344 (Cal.), wherein it has
held as under:-
CWP No. 9301 of 2023 - 18-
“20. Having behalf of the respective considered the
submissions made on parties we are inclined to accept Mr.
Panja’s submission that dominion over the goods initially
detained on 9th November, 2000, went out of the hands of the
appellant-company when on 22nd November, 2000, the rooms
in which the goods had been kept were sealed by the Customs
Officers, Varanasi Division. The facts of this case are squarely
covered by the facts of the Hindustan Motors case (supra).
Once the dominion over the goods passed out of the hands of
the appellant-company it tantamounted to seizure for all
practical purposes. It is one thing for the goods to be kept
detained in a manner where the owner thereof has access to the
same but is prevented by a prohibitory order from dealing with
the same. The situation is radically altered when the owner of
the goods no longer has access thereto and has no control over
the same.”
Reliance is also placed on Rajesh Arora Vs Collector of Customs 1998
(101) ELT 246 (Del.) wherein this Court has held as under:-
“11. Thus the customs department never disputed the
fact that the car in question was being detained by them.
If they were not detaining the car they would have
immediately responded to the notices of the petitioners
and said that the car was not being detained by them and
the petitioners was free to take away the same. The
customs authorities thus are trying to be clever and in
order to overreach the Court have how taken the stand
that they never detained the car. The fact remains that
the car even when it was kept at the premises of Bagla
was impounded and the petitioner in any case was
deprived of its possession or custody. Moreover the
respondents have themselves admitted in sub-para (D) of
the submissions about brief facts of the case that S.P.
Bagla submitted a letter dated 22nd September, 1993
CWP No. 9301 of 2023 - 19-
wherein he submitted the keys of the car in question to
the department with an undertaking not to use the car
without the permission of the department. Thus
admittedly the car was within the control and custody of
the respondents. In law this is sufficient for purposes of
treating it as a seizuring under Section 110 of the
Customs Act.”
39. Relying on the aforesaid judgments, he submits that the
petitioner is entitled for full refund of duty as well as costs of goods. He
submits that since the goods were detained by the Respondent-Customs for
failure on the part of the Respondent Shipping Company to file correct
Import General Manifest, which the Respondent Commissioner of Customs
Mundra were required to amend the same immediately when it was brought
to the notice of the Customs Department vide letter dated 25.04.2023 (P-3).
The Respondents collectively failed on more than one counts to permit
timely filling of Bill of Entry, Amendment in IGM, shifting of Goods from
Saurshtra to Mundra port and thereafter movement of goods to Ludhiana,
thus, the goods imported by the petitioner got damaged and lost its shelf life.
Further despite shifting of goods from Mundra to Ludhiana, the Customs
Officers posted at Ludhiana failed to clear the goods within stipulated time,
which is evident from the fact that the samples pertaining to goods were not
permitted to be drawn immediately when the containers had reached
Ludhiana. Thereafter the goods were ordered to be seized on the reasonable
belief that the same had not originated from the Country of Origin declared
as “Chile”. The series of facts causing delay in every action by the
respondents collectively at relevant time and continuous failure on the part
of the Respondent Officers and Shipping Company in timely compliance of
the interim orders leading to delay in clearance of goods for more than three
CWP No. 9301 of 2023 - 20-
months, the respondents are required to be saddled with the cost of goods.
Reliance is placed on Union of India vs M.D. Esa Ali 2011 (269) ELT 49
(Gau.), wherein it has been held as under:-
“13. It is apparent that a specific direction was issued to the
respondent appellant authority to return the goods seized by
them by obtaining a security bond of Rs. 15,000/-. However, the
order passed by this Court was not carried out without any
cogent reason. Over and above, the Commissioner of Customs,
North Eastern Region, also passed an order on 26.02.2002, for
releasing the goods and vehicle to the owner, which only
reveals and reflects that the seizure was illegal. Indolence of
the appellant authority in taking immediate necessary action to
save the goods is writ large. Undeniably, the goods, in
question, got damaged due to apathy on the part of the
authority concerned. Apparently, if the goods would have been
returned to the petitioner/respondent at the right earnest, in
response to the direction issued by the learned single Bench of
this Court, the goods would not have been damaged.
Consequently, the respondent would not have suffered any loss.
The loss suffered by the respondent is solely due to the
irresponsible attitude of the appellant authority and blatant
defiance of the direction issued by the learned Single Judge in
WP (C) No. 3380 of 1999.
14. The grounds canvassed by the appellants counsel that the
loss and damage to the goods was not caused due to the fault of
the officers of the Department, but due to non-listing of the
application filed by the Department, for clarification of the
order passed in WP (C) No. 3380 of 1999, do not at all appeal
to us. However, fact remains that due to mishandling of the
entire situation and inaction on the part of the appellants, the
goods got damaged and consequently, the respondent had to
sustain loss and injury, for which he has been rightly held to be
entitled to adequate compensation.
CWP No. 9301 of 2023 - 21-
15. In Nagendra Rao v. State of A.P. reported in AIR 1994
SC 2663, 1994 SCC (6) 205 a question arose for consideration
before the Hon’ble Supreme Court, as to whether seizure of the
goods in exercise of statutory powers, under the Act, immunizes
the State, completely, from any loss or damage suffered by the
owner. Whether confiscation of part of the goods absolves the
State from any claim for the loss or damage suffered by the
owner for the goods, which are directed to be released or
returned to it. While deciding the Issue in question Hon’ble
Supreme Court, by discussing the decision rendered in Basavva
Kom Dyamangouda Patil v. State of Mysore observed as
follows :-
“Similarly, in Basavva Kom Dyamangouda Patil v. State
of Mysore [(1977) 4 SCC 358: 1977 SCC (Cri) 598 : AIR
1977 SC 1749 240], the question arose regarding powers
of the Court in indemnifying the owner of the property
which is destroyed or lost whilst in the custody of the
Court. The goods were seized from the possession of the
accused. They were placed in the custody of the Court.
When the appeal of the accused was allowed and goods
were directed to be returned it was found that they had
been lost. The Court, in the circumstances, held : (SCC
pp. 361-62, para 6) “It is common ground that these
articles belonged to the complainant/appellant and had
been stolen from her house. It is, therefore, clear that the
articles were the subject-matter of an offence. This fact,
therefore, is sufficient to clothe the Magistrate with the
power to pass an order for return of the property. Where
the property is stolen, lost or destroyed and there is
no prima facie defence made out that the State or its
officers had taken due care and caution to protect the
property, the Magistrate may, in an appropriate case,
where the ends of justice so require, order payment of the
value of the property.
CWP No. 9301 of 2023 - 22-
33. Therefore, where the goods confiscated or seized
are required to be returned either under orders of the
court or because of the provision in the Act, this Court
has not countenanced the objection that the goods having
been lost or destroyed the owner of the goods had no
remedy in private law and the court was not empowered
to pass an order or grant decree for payment of the value
of goods. Public policy requires the court to exercise the
power in private law to compensate the owner where the
damage or loss is suffered by the negligence of officers of
the State in respect of cause of action for which suits are
maintainable in civil court. Since the seizure and
confiscation of appellant’s goods was not in exercise of
power which could be considered to be act of State of
which no cognizance could be taken by the civil court,
the suit of the appellant could not be dismissed.”
16. In State of Bombay (now Gujarat) v. Menon Mahomed
Haji Hasam: AIR 1967 SC 1885, Hon’ble Supreme Court
observed that “the power to seize and confiscate was dependent
upon a customs offence having been committed or a suspicion
that such offence had been committed. The order of the Customs
Officer was not final as it was subject to an appeal and if the
appellate authority found that there was no good ground for the
exercise of that power, the property could no longer be retained
and had under the Act to be returned to the owner. That being
the position and the property being liable to be returned there
was not only a statutory obligation to return but until the order
of confiscation became final an implied obligation to preserve
the property intact and for that purpose to take such care of it
as a reasonable person in like circumstances is expected to
take”.
17. In Century Spinning & Manufacturing Co. Ltd. and
Another v. The Ulhasnagar Municipal Council and
Another, MANU/SC/0397/1970 : [1970] 3 SCR 854 it has been
CWP No. 9301 of 2023 - 23-
held by the Hon’ble Supreme Court that the High Court is at
liberty to exercise its judicial discretion under Article 226 of to
give effective relief especially when a party is claiming to be
aggrieved by the action of a public body or authority and it
need not relegate a party to seek “relief by a somewhat lengthy,
dilatory and expensive process by a civil suit”, merely because
a question of fact is raised.
18. In view of the above discussions, the petitioner/
respondent was entitled to all the seized articles, in question.
However, admittedly, the seized goods, in question, got
damaged and destroyed, consequently, it could not be returned
to the petitioner/respondent. Therefore, the award of
compensation made by the learned single Judge in the
impugned order is reasonable and justified.”
40. Learned counsel for the petitioner also relies on the judgment of
Hon’ble the Supreme Court in N Nagendra Rao & Co. Vs State of A.P. (1994)
SCC (Cri) 1609, wherein it has been held as under:-
“30. In this case after conclusion of proceedings the
authorities intimated the appellant to take the goods as they
having not been confiscated, he was entitled for return of it. The
appellant in response to the limitation went there but it refused
to take delivery of it as, according to it, the commodity had
deteriorated both in quantity and quality. This claim has been
accepted by the lower courts. What was seized by the authority
was an essential commodity within the meaning of clause (d) of
sub section (2) [sic Section 2 (a)]. What the law requires under
sub-section (2) of Section 6-C to be returned is also the
essential commodity. Any Commodity continues to be so, so
long as it retains its characteristics of being useful and
serviceable. If the commodity ceased to be of any use or is
rendered waste due to its deterioration or rusting, it ceases to
be commodity much less essential commodity. Therefore, if the
CWP No. 9301 of 2023 - 24-
commodity of the appellant which was seized became useless
due to the negligence of the officers it ceased to be an essential
commodity and the appellant was well within its rights to claim
that since it was not possible for the authorities to return the
essential commodity seized by them , it was entitled to be paid
the price thereof as if the essential commodity was had been
sold to the Government. The fiction of sale which is
incorporated in sub-section (2) is to protect the interest of the
owner of goods. It has to be construed liberally and in favour of
the owner. The respondents were thus liable to pay the price of
the Fertiliser with interest as directed by the Trial Court.”
41. In Basavva Kom Dyamangouda Patil (SMT) Vs State of Mysore and
Another (1977) SCC (Crl.) 598, the Supreme Court held as under:-
“6. It is common ground that these articles belonged to the
complainant/appellant and had been stolen from her house. It is
therefore, clear that the articles were the subject matter of an
offence. This fact, therefore, is sufficient to clothe the
Magistrate with the power to pass an order for return of the
property. Where the property is stolen, lost or destroyed and
there is no prima facie defence made out that the State or its
Officers had taken due care and caution to protect the property,
the Magistrate may, in an appropriate case, where the ends of
justice so require, order payment of the value of the property.
We do not agree with the view of the High Court that once the
articles are not available with the Court, the Court has no
power to do anything in the matter and is utterly helpless.”
42. Learned counsel for the petitioner also relies on the judgment of
Hon’ble the Supreme Court in State of Guajrat Vs Menon Mahomed Haji Hasan
(Dead) by his Legal Representative AIR 1967 SC 1885, wherein it has been
observed as under:-
CWP No. 9301 of 2023 - 25-
“7. On the facts of the present, case, the State Government,
no doubt seized the said vehicles pursuant to the power under
the Customs Act. But the power to seize and confiscate was
dependent upon a Customs offence having been committed or a
suspicion that such offence had been committed. The order of
the Customs Officer was not final as it was subject to an appeal
and if the Appellate Authority found that there was no good
ground for the exercise of that power, the property could no
longer be retained and had under the Act be returned to the
owner. That being the position and the property being liable to
be returned there was not only a statutory obligation to return
but until the order of confiscation became final an implied
obligation to preserve the property intact and for that purpose
to take such care of it as a reasonable person in like
circumstances is expected to take. Just as a finder of property
has to return it when its owner is found and demands, it so the
State Government was bound to return the said vehicles once it
was found that the seizure and confiscation were not
sustainable. There being thus a legal obligation to preserve the
property intact and also the obligation to take reasonable care
of it so as to enable the Government to return it in the same
condition in which it was seized, the position of the State
Government until the order became final would be that of a
bailee. If that is the correct position once the Revenue Tribunal
Set aside the order of the Customs Officer and the Government
became liable to return the goods the owner had the right either
to demand the property seized or its value, if, in the meantime
the State Government had precluded itself from returning the
property either by its own act or that of its agents or servants.
This was precisely the cause of action on which the
respondent’s suit was grounded. The fact that an order for its
disposal was passed by the Magistrate would not in any way
interfere with or wipe away the right of the owner to demand
the return of the property or the obligation of the Government
to return it. The order of disposal in any event was obtained on
CWP No. 9301 of 2023 - 26-
a false representation that the property was an unclaimed
property. Even if the Government cannot be said to be in the
position of a bailee, it was in any case bound to return the said
property by reason of its statutory obligation or to pay its value
if it had disabled itself from returning it either by its own act or
by any of its agents and servants. In these circumstances it is
difficult to appreciate how the contentions that the State
Government is not liable for any torturous act of its servants
can possibly arise.”
43. In Century Spinning and Manufacturing Company Ltd. Vs
Ulhasnagar Municipal Council & Another (1970) 1 Supreme Court Cases 582,
the Supreme Court held as under:-
“8. The High Court may, in exercise of its discretion, decline
to exercise its extraordinary jurisdiction under Article 226 of
the Constitution. But the discretion is judicial if the petition
makes a claim which is frivolous, vexatious, or prima facie
unjust, or may not appropriately be tried in a petition invoking
extraordinary jurisdiction the court may decline to entertain the
petition. But a party claiming to be aggrieved by the action of a
public body or authority on the plea that the action is unlawful,
high handed , arbitrary or unjust is entitled to a hearing of its
petition on the meris. Apparently the petition filed by the
Company did not raise any complicated question of fact for
determination, and the claim could not be characterized as
frivolous, vexatious or unjust. The High Court has given no
reasons for dismissing the petition in limine and on a
consideration of the averments in the Petition and the material
placed before the Court we are satisfied that the Company was
entitled to have its grievance against the action of the
Municipality which was prima facie unjust tried.”
44. Upon placing reliance on the aforesaid judgments, the
petitioner’s goods being perishable in nature, it was duty cast upon the
CWP No. 9301 of 2023 - 27-
Officers of Customs to have acted promptly in ordering for amendment of
Import General Manifest as evident from the Bill of Lading which described
Final Place of Delivery of goods to be ICD GRFL Ludhiana. Thus, failure
on the part of the Officers of Customs as well as Shipping Company for
amending the IGM the goods imported by the petitioner stood detained for a
considerable period of time rendering them unfit for use. Further, the
respondents having agreed upon joint examination that the goods were
rendered unfit, with directions to submit proof of disposal, the petitioner has
placed all such documents on record.
45. Learned counsel for the petitioner submits that the delay in
movement of the goods from Mundra to Ludhiana by the respondents as well
as delay in clearance of goods by Ludhiana Customs has resulted in causing
complete loss to the petitioner and, therefore, has prayed to direct the
respondents to bear the cost of the goods which had got rotten and destroyed
and refund the duty.
46. Written submission has been filed on behalf of respondent nos.
1 to 4. It is stated that as per Section 26A of the Act, requirements had not
been completed because the goods had not been destroyed in presence of the
proper officer. It is submitted that the application for refund under Section
26A of the Act has not been filed within the time line provided therein. The
respondents by way of their written submission have also alleged that the
phytosanitary certificate submitted by the petitioner is not genuine and is
fabricated as they had received an email from Deputy Director, DRI,
Nagpur, of the petitioner having imported Iranian origin Kiwi fruits.
47. Learned counsel for the respondents has also invited attention
to provisions of Section 26A(3) of the Act to submit that no refund under
CWP No. 9301 of 2023 - 28-
sub-section (1) shall be allowed in respect of perishable goods and goods
which have exceeded in their shelf life or their recommended storage before
use period. Therefore, there was no occasion to permit refund of duty. He
relies on B. Premanand and others vs Mohan Koikal and others
2011 (4)
SCC 266.
48. Learned counsel for the respondents further submits that on
27.07.2023, when the joint inspection was done, the Kiwis which were
damaged from 20 to 25% while the application under Section 26A of the Act
has been moved alleging 100% of kiwis being damaged. Claim of refund of
100% custom duty, therefore, is not maintainable. He further submits that
disputed question is involved in the petition and this Court ought not
entertain the plea of refund of the duty.
49. We have considered the submissions.
50. From the perusal of the facts which have come on record and
the orders passed by this Court from time to time, we are satisfied that the
respondent-Custom Department had wrongfully and illegally withheld the
perishable food item i.e. Kiwi which has limited shelf life. We noticed that
in import cases of perishable goods there is an inherent urgency which needs
to be noticed and considered by the concerned stakeholders. In the facts of
the present case, we find that there has been huge delay in compliance of the
procedure. While initially the respondents did not issue the necessary orders,
it is only with the direction of this Court that the respondents permitted the
amendment of Import General Manifest (IGM) from Mundra port to GRFL
ICD, Sahnewal, Ludhiana. This Court in its order dated 31.05.2023 noticed
as under:-
CWP No. 9301 of 2023 - 29-
“Pursuant to the letter dated 30.05.2023, the respondents
have amended the IGM for changing Port of destination from
Mundra Port to GRFL ICD Sahnewal (INSGF6), Ludhiana and
they have allowed Transshipment of the cargo. Pursuant to
letter dated 30.05.2023, petitioner to take the goods from the
Customs area, Mundra without insistence of NOC because the
dispute qua shipping is a private dispute.
For compliance list on 02.06.2023.”
51. But we find that in spite of the amendment of IGM, the goods
were not actually released and were allowed to be shifted by the shipping
company from Mundra Sea Port to Saurashtra Freight Private Limited. This
Court had to again intervene by passing order dated 02.06.2023, as noticed
above. It is only when the Court found that its orders were not being
complied with and action amounted to committing contempt of Court that
the goods were transshipped to Ludhiana. The respondents did not release
the goods even thereafter and again raised a doubt with regard to the place of
origin of import of Kiwi fruit inspite of there being documents issued by the
UAE Custom evidencing the origin of the goods as Chile. Upon joint
inspection conducted in terms of orders passed by this Court on 24.07.2023,
25% of the goods were only examined which reflected 25% of the said
goods have been completely damaged.
52. We find that the goods were ultimately released on 01.08.2023
and the certificate which has been placed on record reflects that the entire
goods weighing 89,420 Kgs were found completely damaged and were
rendered being unfit for human consumption. A certificate has been placed
by the petitioner along with the written statement which has been taken on
record. We are, therefore, constrained to find the lackadaisical approach
CWP No. 9301 of 2023 - 30-
adopted by the respondents, which has resulted in causing loss to the
importer. It would, therefore, be a rule in the provisions of Section 26A(3) of
the Act, which reads as under:-
“
26A. Refund of import duty in certain cases. (1)Where
on the importation of any goods capable of being easily
identified as such imported goods, any duty has been paid on
clearance of such goods for home consumption, such duty shall
be refunded to the person by whom or on whose behalf it was
paid, if-
(a) the goods are found to be defective or otherwise not in
conformity with the specifications agreed upon between the
importer and the supplier of goods:
Provided that the goods have not been worked, repaired or
used after importation except where such use was
indispensable to discover the defects or non-conformity with
the specifications;
(b) the goods are identified to the satisfaction of the Assistant
Commissioner of Customs or Deputy Commissioner of
Customs as the goods which were imported;
(c) the importer does not claim drawback under any other
provision of this Act; and
(d) (i) the goods are exported; or
(ii) the importer relinquishes his title to the goods and
abandons them to customs; or
(iii) such goods are destroyed or rendered commercially
valueless in the presence of the proper officer,
in such manner as may be prescribed and within a period not
exceeding thirty days from the date on which the proper officer
makes an order for the clearance of imported goods for home
consumption under section 47:
Provided that the period of thirty days may, on sufficient
cause being shown, be extended by the Commissioner of
Customs for a period not exceeding three months:
CWP No. 9301 of 2023 - 31-
Provided further that nothing contained in this section
shall apply to the goods regarding which an offence appears to
have been committed under this Act or any other law for the
time being in force.
(2) An application for refund of duty shall be made
before the expiry of six months from the relevant date in such
form and in such manner as may be prescribed.
Explanation.-For the purposes of this sub-section,
"relevant date" means,-
(a) in cases where the goods are exported out of India, the
date on which the proper officer makes an order
permitting clearance and loading of goods for
exportation under section 51;
(b) in cases where the title to the goods is relinquished, the
date of such relinquishment;
(c) in cases where the goods are destroyed or rendered
commercially valueless, the date of such destruction or
rendering of goods commercially valueless.
(3) No refund under sub-section (1) shall be allowed
in respect of perishable goods and goods which have exceeded
their shelf life or their recommended storage-before-use
period.”
However, in our opinion, provisions of Section 26A(3) of the Act would not
be applicable in the facts of the present case where the goods perished on
account of non-compliance of Court’s order within time. It is a case where
the respondents have themselves created hurdles in the release of the
perishable goods. While 100% custom duty is imposed for import of
perishable goods, if the goods itself are damaged and become completely
un-useable for human consumption, in our opinion, the same deserves to be
refunded. Import of Section 26A(3) of the Act cannot be understood to allow
unjust enrichment from a justified, bonafide importer.
CWP No. 9301 of 2023 - 32-
53. Thus, from the above provisions of Section 26A(3) of the Act,
it is apparent that the aforesaid Section does not allow refund of duty in
respect of perishable goods and the goods which have exceeded their shelf
life or where the goods are found to have been damaged. However, at the
same time it does not deal with the situations, as have arisen in the present
case. Obviously, as noticed above, the department has issued several
circulars from time to time sensitizing the need to deal with the import goods
expeditiously, which are perishable in nature. But we find that even after
intervention of this Court directing the respondents to take action
expeditiously, the officers have put a lot of obstacles and hurdles in the
release of perishable goods resulting the goods to be unuseable for human
consumption. In the circumstances, the question arises as to whether the
claim of import duty deposited by the importer/ petitioner under protest
should be allowed to be returned by the Custom Authorities.
54. The interpretation of Section 26A(3) of the Act, as noticed
above, cannot be held to mean the denial of a refund claim even where the
goods have perished and the shelf life has ended after the goods have already
touched the store. We have extensively noticed the order passed from time to
time by the Court (supra). The same reflects the attitude adopted by the
Custom Authorities that they were not ready to release the goods. The
shipping company also did not cooperate in spite of directions by this Court,
and an attitude of insensitivity to the goods being perishable was adopted.
55. The certificates placed on record duly satisfy us that the fruits-
Kiwi had got rotten and destroyed, being unfit for human consumption. If
the fruit would have been allowed to be sold in the market, it would have
affected the health of large number of persons. Once we find that the goods
CWP No. 9301 of 2023 - 33-
have been destroyed, the respondents cannot be allowed to retain the import
duty as it would mean to unjust enrichment. In Ramrameshwari Devi vs
Nirmala Devi AIR 2011 SC 3117, Hon’ble the Supreme Court has defined
the principle of unjust enrichment. It was held that a party cannot be unjustly
enriched at the expense of another and it is the duty of the Courts to prevent
unjust enrichment.
56. It is also noticed that the Importer/ petitioner has not only
suffered on account of the adamant approach of the respondents but has also
suffered huge loss. His reputation in the business market would have also
suffered as he must not have been able to supply the goods to the people to
whom he had promised. As per the invoice placed before this Court, it is
noticed that Kiwi weighing about 89,420 kilograms were imported to India
which were of value amounting to 80,478 USD, which if calculated in
rupees is approximately ` 66,79,674/-, @ ` 83 per USD.
57. In view of the above, we direct that the Importer should also be
compensated for his loss proportionately. In D. K. Basu vs State of West
Bengal 1997 (1) SCC 416, Hon’ble the Supreme Court has examined the
aspect regarding granting of compensation while exercising writ jurisdiction
and held as under:-
“Thus, to sum up, it is now a well accepted proposition in most
of the jurisdictions, that monetary or pecuniary compensation is
an appropriate and indeed an effective and sometimes perhaps
the only suitable remedy for redressal of the established
infringement of the fundamental right to life of a citizen by the
public servants and the State is vicariously liable for their acts.
The claim of the citizen is based on the principle of strict
liability to which the defence of sovereign immunity is nor
available and the citizen must revive the amount of
CWP No. 9301 of 2023 - 34-
compensation from the State, which shall have the right to be
indemnified by the wrong doer. In the assessment of
compensation, the emphasis has to be on the compensatory and
not on punitive element. The objective is to apply balm to the
wounds and not to punish the transgressor or the offender, as
awarding appropriate punishment for the offender, as awarding
appropriate punishment for the offence (irrespective of
compensation) must be left to the criminal courts in which the
offender is prosecuted, which the State, in law, is duty bound to
do, That award of compensation in the public law jurisdiction is
also without prejudice to any other action like civil suit for
damages which is lawfully available to the victim or the heirs of
the deceased victim with respect to the same matter for the
tortious act committed by the functionaries of the State. The
quantum of compensation will. of course, depend upon the
peculiar facts of each case and no strait jacket formula can be
evolved in that behalf. The relief to redress the wrong for the
established invasion of the fundamental rights of the citizen,
under he public law jurisdiction is, in addition to the traditional
remedies and not it derrogation of them. The amount of
compensation as awarded by the Court and paid by the State to
redress The wrong done, may in a given case, be adjusted
against any amount which may be awarded to the claimant by
way of damages in a civil suit.”
58. In Nilabati Behera vs State of Orissa 1993 (2) SCC 746, the
Apex Court held that High Court has power under Article 226 of the
Constitution of India to award compensation.
59. In a recent judgment passed in Satyanand Singh vs Union of
India and others 2024 INSC 236, the Apex Court held as under:-
“18. The Constitution, through its Preamble, guarantees to
all its people ‘Justice’, in the deliverance of which, the Courts
of the land have developed a nuanced compensatory
CWP No. 9301 of 2023 - 35-
jurisprudence through a catena of judgments, for a wide
compass of situations.
19. This Court, towards the end of the last century held
in D.K. Basu v. State of West Bengal (1997) 1 SCC 416 that:
“54. Thus, to sum up, it is now a well-accepted
proposition in most of the jurisdictions, that monetary or
pecuniary compensation is an appropriate and indeed an
effective and sometimes perhaps the only suitable remedy
for redressal of the established infringement of the
fundamental right to life 2023 SCC OnLine SC
1220 (1997) 1 SCC 416 of a citizen by the public servants
and the State is vicariously liable for their acts.”
20. In P.S.R. Sadhanantham v. Arunachalam (1980) 3 SCC
141, this Court while emphasising its power to do full and
complete justice, ruminated:
“6. The jural reach and plural range of that judicial
process to remove injustice in a given society is a sure
index of the versatile genius of law-inaction as a delivery
system of social justice. By this standard, our
constitutional order vests in the summit Court of
jurisdiction to do justice, at once omnipresent and
omnipotent but controlled and guided by that refined yet
flexible censor called judicial discretion. This nidus of
power and process, which master-minds the broad
observance throughout the Republic of justice according
to law, is Article 136.”
21. While discussing award of ‘just compensation’ in a
personal injury case, this Court in K. Suresh v. New India
Assurance Co. Ltd. (2012) 12 SCC 274 had the occasion to
observe that:
“10. It is noteworthy to state that an adjudicating
authority, while determining the quantum of
compensation, has to keep in view the sufferings of the
injured person which would include his inability to lead a
full life, his incapacity to enjoy the normal amenities
CWP No. 9301 of 2023 - 36-
which he would have enjoyed but for the injuries and his
ability to earn as much as he used to earn or could have
earned. Hence, while computing compensation the
approach of the Tribunal or a court has to be broad
based. Needless to say, it would involve some guesswork
as there cannot be any mathematical exactitude or a
precise formula to determine the quantum of
compensation. In determination of compensation the
fundamental criterion of “just compensation” should be
inhered.”
60. In another case Mahabir and others vs The State of Haryana
2025 INSC 120 relating to compensation under the criminal law where
Hon’ble the Supreme Court set aside the order of conviction and
compensation was awarded to the victim.
61. Hon’ble the Supreme Court recently in CA No. 004590 of
2025– Zulfiquar Haider vs The State of Uttar Pradesh, decided on
01.04.2025 has awarded compensation to the victims whose houses were
wrongfully demolished. The Courts in cases where there is deliberate and
willful action of the State or its functionaries in depriving any person ought
not shy away from granting compensation. Keeping in view that in spite of
several orders passed by this Court for release of perishable fruit ‘Kiwi’, the
respondents did not act promptly and the entire consignment of imported
goods got perished. We find that huge loss has occurred to the importer
which needs to be compensated.
62. In view of the above, we allow the writ petition and direct the
respondents to release the amount paid as custom duty on the Kiwi for
import into India along with interest @ 6% per annum. Taking note of the
above, we further direct that the petitioner/ importer would be entitled to
compensation calculated conservatively of ` 50 lacs as the Kiwi worth
CWP No. 9301 of 2023 - 37-
weighing 89,420 kilograms were destroyed on account of delay in release by
the respondents. We have granted the said amount as the Importer has
already paid the same to the seller for the Kiwi and brought in India. Kiwi is
a high valued fruit. The amount shall be recovered from erring officers as
compensation to the Importer/ petitioner.
63. Before we close the case, we find that the present case is an
example of red-tapism being followed by the government functionaries. The
same needs to be creased out as it would result in discouraging the import of
perishable goods. The Indian citizens also have a right to receive high-
quality fruits which are available in different countries; however, if the
approach, as adopted by the respondents, is allowed to continue, the
importers would toe their line and release rotten fruits, vegetables, and
perishable goods that have lost their freshness, and ultimately the public
would be the main sufferer. A policy needs to be formulated by the
concerned authorities so that testing labs, shipping companies, and Customs
Authorities work in tandem and an atmosphere is created so that the
imported goods reach the public as soon as possible.
64. All pending applications stand disposed of.
65. No costs.
(SANJEEV PRAKASH SHARMA)
JUDGE
4
th
April, 2025 (SANJAY VASHISTH)
vs JUDGE
Whether speaking/reasoned Yes/No
Whether reportable Yes/No
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