Madras High Court
M/S. Shasun Pharmaceuticals Limited vs The District Collector on 23 August, 2022
Author: N. Anand Venkatesh
Bench: N. Anand Venkatesh
W.P.No. 12106 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 23.08.2022
CORAM:
THE HONOURABLE Mr. JUSTICE N. ANAND VENKATESH
W.P.No. 12106 of 2015
&
M.P. No.1 of 2015
M/s. Shasun Pharmaceuticals Limited,
Rep. by: N.T. Shekar, Asst. General Manager
No.A-1/B, SIPCOT Industrial Complex,
Kudikadu Village, Cuddalore 607 05. ... Petitioner
vs
1. The District Collector,
Cuddalore District.
2. The Tahsildar,
Cuddalore.
3. The Revenue Inspector,
Manjakuppam Sub Divisio, Cuddalore.
4. The Development Commissioner
MEPZ Special Economic Zone &
HEOUs in Tamil Nadu
National Highway - 45,
Tambaram, Chennai 600 045. ...Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of
India praying to issue a Writ of Certiorari, order or direction, in the
nature of a Writ, under Article 226 of the Constitution of India, to call for
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W.P.No. 12106 of 2015
records relating to the impugned proceedings bearing
No.Voo.Mu.295/2015 dated 26.02.2015 issued by the 3rd respondent
consequent to the proceedings bearing No.O.Mu.A6
(Na.Ka.A6)/1113/2014 dated 21.11.2014 issued by the 2nd respondent
and quash the same as illegal, arbitrary, unsustainable and opposed to
principles of natural justice.
For Petitioner : Mr. M.A. Mudi Mannan
For R1 to R3 : Mr. R. Kumaravel
Additional Government Pleader
For R4 : Mr. P.R. Ramesh Babu
Senior Standing Counsel.
ORDER
This Writ Petition has been filed challenging the impugned proceedings of the 2nd respondent dated 21.11.2014 and the consequential proceedings of the 3rd respondent dated 26.02.2015.
2. The case of the petitioner is that M/s. Amajin Agro Exports Pvt. Ltd. came to be wound up through proceedings in C.P. No.249 of 1997 by order dated 30.04.2002, passed by this Court. The Official Liquidator, who took custody of the assets and liabilities, brought the subject property for sale through public auction. M/s. Chemix https://www.mhc.tn.gov.in/judis 2/10 W.P.No. 12106 of 2015 participated in the said auction and they were the successful bidder and they remitted the amount directed by this Court by order dated 30.04.2002. The petitioner purchased the land and building from M/s. Chemix and they had set up an expansion unit and were carrying on with their manufacturing activities.
3. The petitioner received a communication dated 21.11.2014 from the 2nd respondent stating that M/s. Amajin Agro Exports Pvt. Ltd., was in arrears of a sum of Rs.10,00,000/-, which is recoverable under the Revenue Recovery Act from the said company and since that company merged with the petitioner's company, the petitioner was directed to remit the sum of Rs.10,00,000/-, failing which, further action will be initiated.
4. The petitioner on receipt of the notice, collected all the particulars and it was found that a penalty was imposed against M/s.Amajin Agro Exports Pvt. Ltd., under Section 13 of the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter called as the “Act”) for not fulfilling the export obligation. The total penalty was fixed at Rs.10,00,000/-. It is only to recover this penalty, the impugned https://www.mhc.tn.gov.in/judis 3/10 W.P.No. 12106 of 2015 letter was issued directing the petitioner to pay the sum of Rs.10,00,000/-
5. The petitioner, on receipt of the letter, explained the 3rd respondent that there was no merger or amalgamation of the petitioner- company with M/s. Amajin Agro Exports Pvt. Ltd., and hence the penalty that was imposed against the said company cannot be collected from the petitioner. In spite of the explanation, the 3rd respondent, proceeded to issue the consequential notice dated 26.02.2015 directing the petitioner to pay the sum of Rs.10,00,000/-, failing which, proceedings will be initiated under the Revenue Recovery Act. Aggrieved by the same, the present Writ Petition has been filed before this Court.
6. Heard Mr. M.A. Mudi Mannan, learned counsel appearing for the petitioner, Mr. R. Kumaravel, learned Additional Government Pleader appearing for the respondents 1 to 3 and Mr. P.R. Ramesh Babu, learned Senior Standing Counsel appearing for the 4th respondent.
7. The only issue that arises for consideration in the present case is as to whether the penalty imposed under the Act against M/s. Amajin https://www.mhc.tn.gov.in/judis 4/10 W.P.No. 12106 of 2015 Agro Exports Pvt. Ltd., can be recovered from the petitioner who had purchased the property subsequently from a Court auction purchaser and had set up an expansion unit.
8. Section 11of the Act reads as follows:
11. Contravention of provisions of this Act, rules orders and export and import policy. ?
(1) No export or import shall be made by any person except in accordance with the provisions of this Act, the rules and orders made thereunder and the export and import policy for the time being in force.
(2) Where any person makes or abets or attempts to make any export or import in contravention of any provision of this Act or any rules or orders made thereunder or the export and import policy, he shall be liable to a penalty not exceeding one thousand rupees or five times the value of the goods in respect of which any contravention is made or attempted to be made, whichever is more.
(3) Where any person, on a notice to him by the adjudicating Authority, admits any contravention, the Adjudicating Authority may, in such class or classes of https://www.mhc.tn.gov.in/judis 5/10 W.P.No. 12106 of 2015 cases and in such manner as may be prescribed, determine, by way of settlement, an amount to be paid by that person. (4) A penalty imposed under this Act may, if it is not paid, be recovered as an arrear of land revenue and the Importer-exporter Code Number of the person concerned, may, on failure to pay the penalty by him, be suspended by the Adjudicating Authority till the penalty is paid. (5) Where any contravention of any provision of this Act or any rules or orders made thereunder or the export and import policy has been, is being, or is attempted to be, made, the goods together with any package, covering or receptacle and any conveyances shall, subject to such requirements and conditions as may be prescribed, be liable to confiscation by the Adjudicating Authority. (6) The goods or the conveyance confiscated under sub- section (5) may be released by the Adjudicating Authority, in such manner and subject to such conditions as may be prescribed, on payment by the person concerned of the redemption charges equivalent to the market value of the goods or conveyance, as the case may be.
https://www.mhc.tn.gov.in/judis 6/10 W.P.No. 12106 of 2015 For the purpose of the present case, Section 11(4) of the Act will have direct relevance. On a careful reading of the same, it is seen that where a penalty is imposed under the Act and it is not paid by the person against whom such a penalty is imposed, the same can be recovered as an arrear of land revenue from that person. It is now a settled position that penalty is in the nature of a punishment and where a punishment is imposed against a particular person or entity, the same cannot be shifted to another person. The penalty in the present case pertains to the non fulfillment of export obligation by M/s. Amajin Agro Exports Pvt. Ltd. Therefore, if at all any penalty is recoverable from the said entity, the concerned authorities can only proceed against that entity or the properties belonging to that entity.
9. It is seen from the materials placed before this Court that M/s.Amajin Agro Exports Pvt. Ltd., was wound up by an order passed by this Court in C.P. No.249 of 1997, dated 30.04.2002. The assets and liabilities came within the control of the Official Liquidator and he brought the properties for auction sale. The property was purchased by M/s. Chemix and from them, the petitioner has purchased the property. The moment the property was brought for auction sale, sold and was https://www.mhc.tn.gov.in/judis 7/10 W.P.No. 12106 of 2015 further confirmed by this Court, there is no question of recovering penalty from that property which no longer belongs to M/s. Amajin Agro Exports Pvt. Ltd.
10. The 2nd respondent went on the presumption that the petitioner has merged/amalgamated with M/s. Amajin Agro Exports Pvt. Ltd. The said assumption is contrary to the materials available on record. The 2 nd and 3rd respondent ought to have properly verified on the status of the property and thereafter should have initiated proceedings. They cannot proceed further on assumptions and more particularly without putting the petitioner on notice.
11. In view of the above discussion, this Court has no hesitation to interfere with the impugned proceedings of the 2nd and 3rd respondent and accordingly the same is hereby quashed. It at all the amount has to be recovered from M/s. Amajin Agro Exports Pvt. Ltd., proper notice must be issued to the Official Liquidator, who is in charge of the assets and liabilities of the said Company and further action must be taken. This is is the only way out to recover the penalty from M/s. Amajin Agro Exports Pvt. Ltd.
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12. In the result, this Writ Petition is allowed. No costs. Consequently connected miscellaneous petition is closed.
23.08.2022 Internet : Yes / No Index: Yes / No Speaking order / Non speaking order Bga To
1. The District Collector, Cuddalore District.
2. The Tahsildar, Cuddalore.
3. The Revenue Inspector, Manjakuppam Sub Divisio, Cuddalore.
4. The Development Commissioner MEPZ Special Economic Zone & HEOUs in Tamil Nadu National Highway - 45, Tambaram, Chennai 600 045.
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