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Judgment
The 1st Petitioner is a partner of the reconstituted firm of Messrs Takandas H. Kataria. The said firm, as then constituted, had in 1971 purchased from Respondents No. 4 on high-sea basis, 28 cases of C.N. sheets. The said consignment was cleared by the Clearing Agents of this firm on 17th August 1972. The said goods were subsequently consumed by the said firm in the course of their business. The 2nd Petitioners are the firm of Messrs Takandas H. Kataria as reconstituted on 31st December 1974.
By a Show Cause Notice dated 21st May 1973 u/s 28 of the Customs Act Respondent No. 1 called upon Respondents Nos. 4 to pay a sum of Rs. 31,199,23 towards short-levy of duty. The clearing agents of the old firm replied to the show cause notice on 31st May 1973. After adjudication an Order confirming the demand came to be passed on 4th January 1974. The Appeal filed by the clearing agents as against that Order was dismissed on 24th January 1979. The Petitioners applied for a copy of that Order. However, by a letter dated 3rd July 1979 the Petitioners have been refused a copy of that Order on the ground that they are not parties to the proceedings.
Some time in May, 1977, Respondents No. 4 had invited tenders for purchase of cellulose nitrate sheets. The Petitioners by their letter date 23rd May, 1977 made their offer and deposited a sum of Rs. 58,360/- as earnest money. The Petitioners'' tender was accepted in respect of certain lots. A sum of Rs. 8,660/- was accordingly deducted from the deposit of Rs. 58,360/-. The balance amount of Rs. 49,700/- should therefore have been returned to the Petitioners. The 4th Respondents however retained an amount of Rs. 31,199.23 on the footing that they had been called upon to pay this by way of short levy of duty.
By this Petition, the Petitioners challenged the Order dated 4th January, 1974 and 24th January, 1979. They further challenge the action of the 4th Respondents in withholding the earnest money given in respect of an independent and separate transaction.
In my view, the Petitioners cannot challenge the Order dated 4th January 1974 as the same has merged in the Order of the Appellate Tribunal dated 24th January 1979. Before me, there is no real challenge to the Order of the Appellate Tribunal dated 24th January 1979. All grounds of challenge are based on Order dated 4th January 1974. In my view, it does not lie in the mouth of the Petitioners to say that they could not to so as they had no copy of the Order. At all stages, the clearing agents had acted in the against the Order dated 4th January 1974. The copy of the Order dated 24th January 1979 could easily have been obtained by them. That has not been done. The Order of the Appellate Tribunal dated 24th January 1979 not being assailed before me, the petition to this extent will have to be dismissed.
However, in my view, the 4th Respondents have no right, in law, to retain the amounts deposited as earnest money in respect of an independent and separate transaction. There is no general right of lien which can be claimed by Respondents No. 4. Even if Respondents No. 4 claim a right to be reimbursed by the Petitioners, their remedy, if any, is by way of separate action. That not having been done, it is not open to still pending and no amounts had actually been paid by Respondents No. 4. In my view, the Respondents No. 4 are bound to refund this amount.
It is clarified that I have not decided not express no opinion on the question as to whether Petitioners are bound to pay to Respondents No. 4 the amounts claimed as short-levy of duty.
In this Petition before the Appeal Court Respondents No. 4 have undertaken that in the event of the Petitioners succeeding, they will return the amount to the Petitioners with interest at 10% per annum. Under the circumstances, the Petition is made absolute in terms of prayer (c). The amount to be returned with interest at the rate of 10% per annum from the date that the same should have been refunded till payment. There will be no order as to costs of the Petition.