UNION OF INDIA Vs. ATIABARI TEA COMPANY LTD

JUDGEMENT

(1.) This appeal is directed against a Judgment and order of Sinha, J, dated December 8, 1958 whereby a Rule Nisi obtained by the respondent in a petition under Art. 226 of the Constitution, was made absolute. The respondent is the owner of and manages a tea estate known as Atiabari Tea Estate, in the district of Jalpaiguri. Tea from the respondent's garden is sent to Calcutta and sold there, both for export and also for internal consumption, through auction sales held by tea brokers. In July, 1953, the respondent made over to the North Eastern Railway Administration at Garopara 402 chest of tea containing 42016 lbs. of black tea, for carriage and delivery to the respondent at Calcutta. The respondent paid the excise duty as required by the Central Excises and Salt Act, before the tea was removed from the gardens for booking with the railway administration. The railway administration arranged for carriage of the tea through the R. S. N. Co. Ltd. and T.G. N. and Rly. Co. Ltd. to Calcutta by river route, part of which was in Eastern Pakistan. The excise department required the respondent to execute a bond and such a bond was executed by the respondent. The bond was addressed to the Collector of Land Customs, Calcutta and it provided that in consideration of permission granted to the respondent to transport the goods by steamer or rail through Pakistan to places in India the surety guaranteed to produce and deliver within two months from the date of despatch, certificates from consignee of due reception of goods by them. There was an undertaking not to divert any goods destined for India enroute. There was a further provision that in the event of short delivery at the destination in India as compared with the consignments despatched Surendra Kumar Nag, Manager, Atiabari Tea Estate and Kedarnath Banerjee Manager, Patkapara Tea Estate, Sureties, undertook to pay duty and/or cess if any such penalty as may be adjudicated by the Customs Collector under the Land Customs Act, after giving an opportunity to the exporter to explain the causes of the short delivery.

(2.) The consignment of tea was put on board the steamer S. S. Pagan, for carriage to Calcutta. On July 22, 1953 the said steamer was involved in an accident near Jagannathganj, in Eastern Pakistan, as a result of which it sank, with its entire cargo on board, including the said consignment of tea. There was thus a total loss of the goods. By a letter dated October 1, 1953 the respondent informed the Collector of Central Excise, Calcutta of the loss of the said consignment. Particulars and documents relating to the said loss were called for by the Central Excise department. The respondent alleges that such documents were furnished. On April 19, 1954 the Inspector of Central Excise, Atiabari range demanded payment by the respondent of Rs. 7878/- as export duty and Rs. 840/- as cess. The respondent filed an objection alleging that the goods being lost, no export duty or cess was payable. This objection was rejected and proceedings were commenced against the respondent for realisation of the alleged dues for export duty and cess. Being aggrieved by those proceedings the respondent moved this court under Art. 226 of the Constitution for the issue of appropriate writ directing the appellants to forbear from giving effect to the notice of demand, dated April 19, 1954 and June 8, 1955, together with the one issued on July 2, 1955 and not to enforce realisation of the said sums. A Rule Nisi was issued, which was made absolute as hereinbefore stated. The appellant has preferred this appeal against this order making the Rule Nisi absolute.

(3.) The respondent instituted a suit being suit No. 3 of 1954, in the court of the Subordinate Judge at Jalpaiguri against the Union of India, as owner of the said railway administration and also the said R.S.N. and Co. Ltd. and T.G.N. and Rly. Co. Ltd. for compensation for loss of the said consignment of tea. This suit has been decreed in favour of the respondent. In the written statement filed on behalf of the Union of India, it was admitted that the goods were lost in transit in consequence of an accident, as a result of which the steamer sank and the cargo including the consignment of tea was lost. The material allegations in the written statement are as follows :