BANK OF MADURA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE Petitioner No. 1 is a Banking Corporation and claims that in the month of October 1981, respondent No. 5 M/s. Hansons Enterprises approached the Bank with a request to open an irrevocable letter of credit in favour of M/s. Metal Import Export, Romania. The petitioner Bank opened letter of credit and thereafter M/s. Hansons Enterprises filed an indent for purchase of quantity of about 1300 Metric tonnes of hot rolled mild steel plates. The letter of credit opened by the petitioner No. 1 Bank was of a value of Rs. 35,75,000/ -. The consignment arrived in bombay in March 1982 and the bills of entries for home consumption were filed on March 3, 1982. The Customs authorities declined to clear the consignment as it was noticed that the import of the goods was not permissible. On enquiry, the Customs authorities realised that M/s. Hansons Enterprises is a non-existing Company and the entire transaction was shrouded in mystery.

(2.) THE Customs authorities received information that one Vinod Kumar was importing consignments in the name of different firms including M/s. Hansons Enterprises against forged documents. On realisation that M/s. Hansons Enterprises was not in existence and one Harnam singh was conducting business as proprietor and Harnam Singh had stated before the Income tax authorities that his name was lent nominally and in fact the business was carried on by vinod Kumar, after completion of investigation the Additional Collector of Customs, Bombay commenced proceedings for confiscation of the consignment in accordance with provisions of section 111 (d) of the Customs Act read with Section 3 (2) of Imports and Exports (Control) Act.

(3.) IN the proceedings commenced by the Additional Collector of Customs, Bombay, the petitioner No. 1 Bank appeared claiming that the title to the goods vests in the Bank as M/s. Hansons Enterprises had opened letters of credit after depositing S. S. I. U. registration certificate with the Bank. The Bank of Madura claimed that the transaction was an International one and as the title in the goods vested in the Bank, the confiscation was not permissible. The additional Collector of Customs by order dated November 16, 1984 turned down the contention and directed confiscation of the consignment but permitted the Petitioner No. 1 Bank to redeem the goods on payment of fine of Rs. 6,00,000/- The order of the Additional Collector is under challenge in this petition filed under Article 226 of the Constitution of India. Before adverting to the claim urged on behalf of the petitioner, it must be stated that the Income Tax authorities had issued an order of attachment in respect of the consignment as the Income Tax authorities had to recover a sum of about Rs. 34 crores from Vinod Kumar and his alleged firms.