MYSORE SALES INTERNATIONAL LIMITED A GOVERNMENT OF KARNATAKA UNDERTAKING REP BY ITS COMPANY SECRETARY Vs. UNITED INDIA INSURANCE CO LTD REP BY ITS DIVISIONAL MANAGER

JUDGEMENT

(1.) AS common questions of fact and law arise for consideration in all these revision petitions, they were heard together and are being disposed of by this common judgment.

(2.) ALL these revision petitions are filed under Sec.18 of the Karnataka Small Causes Courts Act, against the judgment and decree passed by the Court of Small Causes, Bangalore. Facts leading to the presentation of these revision petitions are as under: Hindustan Aeronautics Limited (for shot HAL), a Government of India Undertaking imported certain spare parts for its Aircraft Division from foreign suppliers. These goods were duly insured with the United India Insurance Company Ltd., (for short Insurer). The imported goods landed in Bangalore Airport on 4.6.2000. The Mysore Sales International Limited, (for short MSIL) had been appointed as a custodian under Sec.45(1) of the Customs Act (hereinafter referred to as the Act) in respect of the goods imported and landed in Bangalore Airport which has been duly notified as a Customs Airport, as required under Sec.7 of the Act. The good imported by HAL which reached Bangalore Airport on 4.6.2000 came to the custody of the MSIL on the same day. The Air Cargo Complex maintained and managed by MSIL had been notified as customs area within the meaning of Sec.2(11) of the Act, as, such goods are required to be stored in the custom area only. The goods imported by HAL and stored in the Air Cargo. Complex maintained by the MSIL, was destroyed in a fire accident that occurred on 5.6.2000. Therefore, the Importer viz., HAL secured non delivery certificate from the custodian MSIL and lodged its claim with its Insurer. The Insurer, after satisfying itself about the correctness of the claim and also the destruction of the imported goods in a fire accident while in possession of the custodian viz., MSIL, satisfied the claim of the HAL. At the same time, the Insurer obtained a letter of subrogation from the HAL to claim damages from the person responsible for the destruction of the imported goods. Thereafter, the Insurer issued notices to the MSIL calling upon the MSIL to compensate the value of the goods imported by HAL which were destroyed in the fire accident.

(3.) THEREAFTER, the parties let-in evidence. One suit viz., SC 1087/2003 was pending before 1st Addl. Judge, Court of Small Causes while remaining 23 suits were pending before the III Addl. Judge, Court of Small Causes, Bangalore. The learned 1st Addl. Judge, Court of Small Causes, disposed of the said suit in SC 1087/2003 by judgment and decree dated 29.10.2004. The learned Judge, on consideration of the oral and documentary evidence and also various provisions of the Act, held that both custodian as well as customs authority are jointly and severally liable to pay the value of the imported goods to the Insurer which had satisfied the claim of the Importer, together with interest at 6% from the date of suit till the date of realization.