SHA TARAJI MANILAL Vs. COLLECTOR OF CUSTOMS MADRAS

JUDGEMENT

(1.) THESE petitions under Article 226 of the Constitution are to quash two orders of the Collector of Customs dated July 1, 1960 directing confiscation under section 167(8) of the Sea Customs Act, 1878, 1878 of certain consignment of wired cast glass imported under cover of an Actual user Licence No. C. 970919/57/CCI/HQ/NQQ dated June 6, 1958. The petitioner claiming to be a financier and holding a letter of authority from the licensee sought to clear the goods covered by the licence when they arrived at the Madras Port. The Collector of Customs by the impugned orders found that the letter of authority produced by the petitioner was a bogus one and proceeded to state:

(2.) IN this Court, on behalf of the petitioner, it is contended that the impugned orders are ex facie erroneous because they proceeded upon the mistaken basis that the imports were under the letter of authority and not against the licence admittedly issued in favour of the Globe Engineering and Trading Co. According to the petitioner he put his entire case as to how he happened to come by the letter of authority in his letter dated April 15, 1959 addressed to the Chief Controller of Imports and Exports. IN that letter the petitioner stated that Messrs Sea Shore Traders at Madras persuaded the petitioner to lend financial assistance on the understanding that the goods should be imported under the licence, that the licencee would pay of a financing commission of 10% besides interest at 12% on the amount to be actually financed by the petitioner in addition to other charges, that the licensee would send the petitioner a sum of Rs. 12, 000/- equivalent to the 25% of the invoice value on its intimation to the licensee of the presentation of the documents by Shippers through Bank, that the licensee would take delivery of the materials so imported against payment of value and commission with expenses and that the licensee would provide the petitioner with a letter of authority in its favour. The rest of the terms of the understanding are not quite material. It is on such an understanding, says the petitioner, that the goods were imported under licence. The petitioner also brought it to the notice of the Chief Controller of Imports and Exports that upto April 1959 the licensee had not fulfilled its promise to send a sum of Rs. 12, 000/- in spite of demands and that it found itself entangled with the Shippers by having guaranteed payment of the drafts in the event of the drawee failing to honour the same. It is in the context of these circumstances the petitioner happened to come into the picture. Most of these facts do not appear to be seriously disputed by the respondent. As I said, all that he has found in the impugned orders is that the letter of authority said to have been executed by the licensee in favour of the petitioner was a bogus document and that, therefore, the petitioner had no right to act on behalf of the licensee. It is nowhere denied by the respondent that the imports themselves were under the licences, that the consignee of the goods was the licenses and that all the documents of title in relation to the same were also in the name of the consignee. Nevertheless, the respondent has found that the goods were imported under the letter of authority.

(3.) IT is, however, contended on behalf of the respondent that the imports were under the letter of authority and by the petitioner and that the consignee of the goods should also be regarded as the petitioner because it was on account of the petitioner that the goods were imported. IT suffices to say that this contention has no basis on the facts. The imports, as I said, were under the licence and all the documents relating to the imports were in the name of the licensee. The fact that the authorisation of the petitioner is found to be bogus one does not lead to the result that the import under the cover of the licence is illegal. The imports themselves being under a valid licence, Section 167(8) will clearly have no application.