INDIAN OVERSEAS BANK Vs. COLLECTOR OF CUSTOMS MADRAS

JUDGEMENT

(1.) This writ petition is for a writ of mandamus to direct the second respondent to release 1,219.23 metric tonnes of palm oil shipped by the third respondent to the fourth respondent, now lying at the Madras harbour warehouse, to the petitioner. The facts are as follows : The third respondent, a private limited company in Singapore, shipped 1,219.23 metric tonnes of palm oil of the total value of American Dollars 9,87,576.30 equivalent to 77,39,626.18 Indian rupees, to Messrs. Hyder Enterprises, the fourth respondent, under a valid import licence. The goods were shipped on board the vessels "Enfield" and "Deccan Pioneer" before 28th February, 1980, the date of expiry of the import licence. The ships arrived in Madras on or before the 30th March, 1980, and 14th April, 1980, respectively. Two bills bearing Nos. UBP. 115/80 and UBP. 116/80 for American Dollars 1,29,567.60 and 2,68,928.10 were discounted by the Singapore Branch of the petitioner-bank. Three other bills for the balance amounts were discounted through the United Commercial Bank, Singapore. The shipment of the goods being on the basis of documents on presentation, the five bills along with other documents were sent for collection through the Lakshmi Commercial Bank Ltd., Madras, as instructed by the fourth respondent. The fourth respondent, for reasons best known to it, failed and neglected to make the necessary payment and take delivery of the goods and the petitioner-bank was instructed by its branch at Singapore as well as the United Commercial Bank, Singapore, to take delivery of the documents relating to the said five shipments and to clear and store the consignments after completing the necessary customs formalities. Since the import licence was in the name of the fourth respondent and as the fourth respondent appeared to have already filed a bill of entry with the customs authorities through its clearing agents, the petitioner-bank was unable to clear the said five consignments.

(2.) Further, the fourth respondent had abandoned the goods. Therefore the petitioner-bank represented to the Collector of Customs in writing on 5th July, 1980, requesting him to permit the clearance of the goods by the petitioner-bank on the ground that it is having sufficient financial interest at stake since it has financed and paid the exporter, namely, the third respondent, a huge sum of money amounting to Rs. 77,39,626.18 on the basis of the documents which the fourth respondent was to honour on presentation through its bankers and clear the goods. In pursuance of this, the petitioner-bank's representative also met the Assistant Collector and the Deputy Collector of Customs in person and had a detailed discussion in the matter. In turn the petitioner-bank was directed to file a fresh bill of entry, because it was the holder of the documents in due course, for consideration and for adjudication of the case on the issue of non-production of the import licence. Subsequently the bill of entry could not be filed by the petitioner-bank through its clearing agents, because of the earlier bill of entry filed by the importer, the fourth respondent. Once again on 28th July, 1980, the petitioner-bank sent a letter to the Deputy Collector of Customs setting out the circumstances and requesting permission for the clearance of the goods. No reply to these letters were received. Penalty proceedings were initiated against the fourth respondent and an order was passed to the following effect :

(3.) The Collector of Customs, after admitting the facts, says as follows in his counter affidavit : The petitioner's contention is that the goods were shipped on board within the validity period of the licence is not correct. The two bills UBP. 115/80 and UBP. 116/80 for American Dollars 1,29,567.60 and 2,68,928.10 purported to have been discounted by the Singapore Branch of the petitioner-bank is not admitted. The dates are also not admitted. The petitioner is put to strict proof. The first respondent also does not admit that the three other bills for American Dollars 3,75,896.70, 35,405.10, 1,77,778.80 were discounted through the United Commercial Bank. The fourth respondent is the importer who filed the bills of entry for clearance of the goods without import licence and by letter, dated 31st July, 1980, requested for cancellation due to inability to clear the goods. This was not permitted by the first respondent. The fourth respondent is the importer and the fourth respondent alone has the licence to import. The petitioner-bank has no licence to import. The petitioner-bank has no authority to write to the Collector of Customs to clear the goods. The fact that the petitioner-bank has documents of title would not make the importation valid, for the import is only by the fourth respondent and the licence had been granted only to the fourth respondent. Once the importer filed bills of entry, there can be no question of the petitioner-bank also filing the bills of entry on the basis that it is holding the documents. It is incorrect to state that the petitioner-bank was directed by an officer of the Customs House to file a fresh bill of entry. The allegation about the letters written on 15th July, 1980, and 19th July, 1980, is therefore, irrelevant.