Madras High Court
S.Cannussamy vs Commissioner Of Customs & on 4 June, 2018
Bench: S.Manikumar, V.Bhavani Subbaroyan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 04.06.2018 CORAM: THE HONOURABLE MR.JUSTICE S.MANIKUMAR and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN W.A.No.850 of 2018 S.Cannussamy ... Appellant Vs. 1. Commissioner of Customs & Central Excise, 1, Williams Road, Tiruchirappalli - 620 001. 2. Asst. Commissioner of Central Excise, Custom Division, First Beach Line Road, Nagapattinam. 3. Union of India, Rep. by Secretary, Government of India, Ministry of Finance, Central Secretariat, New Delhi. 4. Central Board of Excise & Customs, Rep. by Chairman, North Block, Central Secretariat, New Delhi. ... Respondents [Cause title accepted vide order of Court dated 29.01.2005, made in WAMP No.211 of 2005] Writ Appeal filed under Clause 15 of the Letters Patent against the Order dated 19.04.2004 made in W.P. No.10707 of 1998. For Appellant : Mr.R.Venkatesh for Usha Raman J U D G M E N T (Order of the Court was delivered by S.MANIKUMAR, J) Being aggrieved by the direction, of the writ Court, fixing compensation, of Rs.5,00,000/- with interest at the rate of 18% per annum on Rs.4,27,000/- from 07.10.1996 to 17.02.2003, instant appeal is filed on the grounds inter alia that the writ Court ought to have either directed the respondents to return the goods in the same condition, in which they were seized or pay the market value of the diamonds, as on the date of the filing of the writ petition. 2. Material on record discloses that on 12.11.1979, Collector of Central Excise and Customs, Madurai, seized goods of foreign origin, including diamonds, which were valued on that date at Rs.4,27,074/-. In the order of seizure, it was stated that the goods were imported into India, illicitly. After enquiry, the authority ordered confiscation of gold sheets, as well as 485 numbers of diamonds. Appeals were filed and the order of absolute confiscation was modified to one allowing the goods to be cleared on payment of fine in lieu of confiscation. Quantum of fine was fixed as Rs.4,25,000/-. Value of the diamonds, fixed by the original authority was not challenged. Proceedings before CEGAT ended in fixation of the value of the diamonds as Rs.4,27,000/-. Though, diamonds were assayed at Madurai and value fixed at Rs.40 Lakhs, on 26.06.1998, appellant accepted the value fixed by CEGAT at Rs.4,27,000/- and accordingly, paid redemption fine. Decision of CEGAT, was not challenged. 3. Diamonds were not returned. Hence, petition is filed in W.P.No.10707 of 1998, for a mandamus, directing Commissioner of Customs and Central Excise, Tiruchirapallai, and Assistant Commissioner of Central Excises, Customs Division, Nagapattinam, respondents 1 and 2 in W.P.No.10707 of 1998, to deliver 485 numbers of diamonds seized and also to pay interest on the value of the aforesaid diamonds estimated at Rs.40 Lakhs at the rate of 18% per annum, from the date on which they were bound to be returned. 4. Adverting to the abovesaid facts, grounds and after hearing the learned counsel for the parties, writ Court, vide order dated 19.04.2004 in W.P.No.10707 of 1998, ordered as hereunder. 10. As regards the complaint preferred by counsel for the petitioners that the petitioners have been waiting from the year 1979 to the year 1996, the petitioners are responsible for it since they had been challenging the order from authority to authority. At least in this regard, the authorities are not to be blamed. The petitioners had accepted the value as revised by the CEGAT at Rs.4,27,000/- and had also paid the redemption fine accordingly. The claim of the petitioners that they are entitled to Rs.40,00,000/- cannot be accepted since, in the various proceedings mentioned above, they had been repeatedly pleading that the diamonds were of less value, of course, in that context, it was to their advantage to plead so. But now, when they find that the diamonds were lost and that they had to be compensated, they make a volte face and enhance the value of the diamonds. It is impossible to accept the value claimed in the writ petition, viz., Rs.40,00,000/- in the absence of any material to support the said claim. 11. As regards the State's tortious liability, it has been held by the Supreme Court that the State cannot escape its liability if loss had been caused either to life or to property on account of the negligence of the State. Section 110(2) of the Customs Act, 1962 provides that where any goods are seized under Sub-section (1) and notice under Section 124 of the Act is not given within six months of the seizure, the goods shall be returned to the person from whose possession they were seized. Again, under Section 125 of the Act, the officer adjudging the confiscation of goods has the power to order payment of fine in lieu of confiscation. Therefore, it is clear that the Act provides for return of the goods under certain conditions which definitely implies that the goods shall be secured with due care and caution. 12. In Jay Laxmi Salt Works (P) Ltd. Vs. State of Gujarat [(1994) 4 SCC 1] the question was what is the tortious liability of the State when a 'Reclamation bundh' was constructed by the State Government without heeding to the appellant's request to change the location and it resulted in the flood water entering the appellant's factory. There is a detailed discussion regarding the strict liability, fault liability, and some observations are relevant, which are extracted hereunder:- But to be actionable and get redress from court it must assume legal shape by falling in one or the other statutorily, judicially or even otherwise recognised category of wrong, such as negligence, 'negligence' ordinarily means failure to do statutory duty or otherwise giving rise to damage. The axis around which the law of negligence revolves is duty, duty to take care, duty to take reasonable care. But the concept of duty, its reasonableness, the standard of care required cannot be put in strait-jacket..... The damage was caused to the appellant not only because of negligence of officers but also because it was due to failure in discharge of public duty and mistake at various stages. Liability in tort may arise as observed by Salmond without fault. The basic ingredients of torts, namely, injury and damage due to failure to observe duty has been found to have been established. In the conservative sense it was negligence. But in modern sense and present day context it was not only negligence but mistake, defective planning, failure to discharge public duty. 13.In Rajkot Municipal Corporation Vs. Majulben Jayantilal Nakum [(1997) 9 SCC 552], it was held as follows:- Duty may be of such paramount importance that it is owed to all the public. It would be wrong to think that on an action, the duty could be enforced by way of damages when duty is owed to a section of public and cannot be enforced if an individual sustains damages to whom the Corporation owes no duty and no private interest is infringed. Beach of statutory duty, therefore, requires to be examined in the context in which the duty is created not towards the individual, but has its effect on the right of individual vis-a-vis the society. ..... The action for damages will not lie if the damage suffered by him is not of the type intended to be guarded against. It seems to be contrary to statutory intendment to impose liability upon public body for a thing for which no reasonable care in the performance of the concerned act could be inferred from the language used in the statute; it ought not to be so construed as to inflict the liability on the public authority unless the purpose sought to be achieved has been wanting due to want of exercise of duty and reasonable care in the performance of duty imposed by the statute. .... The proper approach, therefore, is to consider whether a duty of care situation exists in public law tort which the law ought to recognise and whether in that situation the defendant's conduct was such that he should have foreseen the damage that would be inflicted on the plaintiff. 14. Though a case was filed on the ground of breach of trust as against the officers concerned, it is also seen that the Customs officials are reluctant to expose their staff. The counter filed does not show that, in spite of the required care and caution, the diamonds had been removed from custody. When valuable goods are seized or confiscated, the order of confiscation is not always made absolute or confirmed: it is liable for modification by the authorities or even the superior courts, in which case the petitioners get the right, on payment of fine, penalty etc., to redeem the goods confiscated from them. Therefore, the authorities owe a duty of care and caution until the goods are returned to the persons from whom they were seized or until they are disposed of in accordance with law. 15. For the above reasons, the petitioners definitely require to be compensated for the negligence on the part of the respondents. It is difficult to arrive at the value of compensation. When the petitioners paid the redemption fine, the respondents ought to have at least returned the value of the diamonds, as found in the order of the CEGAT, without prejudice to their rights. But till 2003, they did not do so. 16. Hence, I fix the compensation payable to the petitioners at Rs.5,00,000/- plus a sum of 18% per annum on Rs.4,27,000/- from 7.10.1996 to 17.2.2003. This is not awarded as interest, but only as compensation in the absence of any other parameter to arrive at the value of compensation. The writ petition is ordered as above. 5. Though, Mr.R.Venkatesh, learned counsel for the appellant reiterated, that the value of the diamonds seized, was Rs.40 Lakhs and that therefore, this Court, should direct modification of the abovesaid order, to the effect that the respondents should pay, the amount as prayed for, in the writ petition, this Court is not inclined to accept the said contention for the reason that the appellant had already accepted the value of the diamonds, fixed by CEGAT at Rs.4,27,000/- and also paid the redemption fine. Appellant cannot approbate and reprobate. At one stage, for the purpose of redeeming the goods, the appellant had accepted the value of diamonds as Rs.4,27,000/-, which decision cannot be retracted, by filing a writ petition. 6. Having accepted the same, contrary contention of the appellant that at the time of seizure, the value of diamonds, was Rs.40 Lakhs, cannot be accepted. We do not find any manifest illegality in the order of writ Court, warranting interference and hence, Writ Appeal is dismissed. No Costs. [S.M.K., J.] [V.B.S., J.] 04.06.2018 Index : Yes/No. Internet : Yes Speaking/Non-speaking Order ars To 1. Commissioner of Customs & Central Excise, 1, Williams Road, Tiruchirappalli - 620 001. 2. Asst. Commissioner of Central Excise, Custom Division, First Beach Line Road, Nagapattinam. 3. The Secretary, Union of India, Government of India, Ministry of Finance, Central Secretariat, New Delhi. 4. The Chairman, Central Board of Excise & Customs, North Block, Central Secretariat, New Delhi. S. MANIKUMAR, J.
AND V.BHAVANI SUBBAROYAN, J.
ars W.A.No.850 of 2018 04.06.2018