Indian Overseas Bank vs Collector of Customs, Madras

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.

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 :

As the goods have been imported without a valid import licence in contravention of clause 3 of the Import (Control) Order, 1955, read with sub-

section (2) of Section 3 of the Imports and Exports (Control) Act, 1947 (as amended) and an offence attracting the provisions of Section 111(d)

of the Customs Act, 1962, has thereby been committed, I confiscate the goods u/s 111(d) of the Customs Act, 1962.

I give the importers an option u/s 125 of the Customs Act, 1962, in lieu of confiscation to clear the goods for home consumption on payment of a

fine of Rs. 6 lakhs, Rs. 60,000 and Rs. 3 lakhs respectively (total Rs. nine lakhs and sixty thousand only), within three months from the date of this

order.

I also impose a personal penalty of Rs. 1 lakh, Rs. 10,000 and Rs. 50,000 respectively (total rupees one lakh and sixty thousand only), u/s 112 of

the Customs Act, 1962.

In the meanwhile the second respondent initiated proceedings for the recovery of demurrage charges due to the Port Trust over the said goods and

had issued a notice calling upon the petitioner-bank to pay the demurrage charges and costs within ten days of the receipt of the said notice, as

otherwise the goods would be sold by public auction on 28th August, 1980. The fourth respondent wrote letters on 31st July, 1980, and 1st

August, 1980, to the Customs Department and the Madras Port Trust that it has no intention of clearing the goods and that the documents have

been handed back to the petitioner-bank.

Under the Bills of Lading Act and the other provisions of law as well as the usage and custom in the trade, the goods vest with the Bank as soon as

the documents are drawn to the order of the shipper and endorsed in favour of the petitioner-bank for collection after presentation to the importer.

At least the bank becomes a pledgee of the goods which are held as a security by the bank for reimbursement of the moneys which it had paid to

the shipper on his presenting the documents, such as bills of lading, etc., for shipment of the goods under the c.i.f. contracts. According to the

usage and custom, the bank pays a huge amount, retains the interest and control over the goods till the money is paid by the importer and only then

the title in the goods passes to the importer. As a bona fide holder of the documents, on endorsement in favour of the petitioner-bank, the bank is

entitled to claim the goods, money and other liabilities arising in and over the goods, till such title passes to any other person. Since the documents

were not honoured on presentation, the title in the goods did not pass to the importer but remained with the petitioner-bank. It has a right to claim

the goods and to redeem the goods and to deal with them as the lawful owner of the same. The petitioner-bank should be deemed to be an

importer for the purposes of the Customs Act or at least as ""owner"" for the purpose of Section 124 of the Customs Act in relation to adjudication

proceedings. The petitioner-bank is authorised by the importer to deal with the goods and to claim the same from the Customs department.

Moreover, the importer had abandoned his right of ownership of the goods, as mentioned above, by letter. Under these circumstances, it is

imperative that the petitioner-bank should be treated as the owner at least as a pledgee having right title and interest in the goods. In any event, the

petitioner-bank is entitled to redeem the goods on payment of redemption fine and the personal penalty, as ordered by the Customs department.

Therefore, the present writ petition has been filed seeking a writ of mandamus on the following grounds :

Under the Bills of Lading Act and the other provisions of law as well as the usage and custom in the trade, the petitioner-bank has right, title and

interest in the goods at least as a pledgee to safeguard its interests in having advanced a huge sum of Rs. 77,39,626.18. As such, it should have

been deemed the owner of the goods for the purposes of Section 124 of the Customs Act. In such an event, no adjudication proceedings could be

validly taken without notice to the petitioner-bank. In so far as the mandatory provisions of Section 124 of the Customs Act and in particular as it

relates to the service of the notice on the owner of the goods and affording a reasonable opportunity to the petitioner-bank to show cause against

such proceedings have not been complied with, the entire proceedings are vitiated in law and are null and void and the proceedings are liable to be

quashed.

The adjudication order passed by the first respondent herein is in violation of the principles of natural justice as also of the mandatory provisions

of Section 124 of the Customs Act. The petitioner-bank is the person who is personally affected and aggrieved by the adjudication order of the

first respondent. As stated above, neither the exporter nor the importer has any interest in the matter, in so far as the third respondent had received

the money from the petitioner-bank and the United Commercial Bank, viz., the value of the goods on endorsing the documents in favour of the

petitioner-bank. In so far as the importer, the fourth respondent is concerned, it has, by its attitude, wilfully abandoned its right over the goods and

had in fact intimated the customs authorities and the Port Trust by its letters dated 31st July, 1980 and 1st August, 1980, that it has abandoned the

goods. As such the person who really is interested in the goods can only be the petitioner-bank. Therefore, any order passed in the adjudication

proceedings really affects only the petitioner-bank especially when the petitioner is put to additional financial burden by way of redemption fine as

well as personal penalty of Rs. 16,26,000 and Rs. 2,71,000 respectively aggregating to Rs. 18,97,000. As such, notice of adjudication

proceedings should have been given to the petitioner-bank before any such decision to impose penalty and confiscation of the goods and also the

personal penalty, as has been done in this case. In so far as the principles of natural justice have been violated by the failure of the first respondent

to give notice of the adjudication proceedings, the same are null and void ab initio and are liable to be quashed.

The condition precedent for initiation of adjudication proceedings is that notice of such proceedings should be given to the owner of the goods.

On the facts and materials before the first respondent, viz., the letters written by the petitioner-bank as early as 15th July, 1980, and subsequent

correspondence, as also the materials placed before the authorities during personal representation by the representatives of the petitioner-bank and

the letters written by the fourth respondent-importer on 31st July, 1980, which would clearly indicate that the title to the goods did not vest with

the importer-fourth respondent, it follows that the real owner of the goods could have been either the petitioner-bank or the exporter, the third

respondent. The Collector of Customs, the first respondent, should have ascertained the real owner of the goods and issued notice to him before

he had proceeded with the adjudication in respect of these goods and passed final orders confiscating the goods and imposing the personal penalty

and also allowing the redemption of the goods on payment of redemption fine of Rs. 16,26,000. The ascertainment of the ownership of the goods

being a condition precedent for initiation of the adjudication proceedings, this fact should have been decided before initiation of the adjudication

proceedings.

The first respondent has failed to consider one vital aspect of the case in not recognising the banker, viz., the petitioner-bank, as a pledgee of the

goods which has invested a huge sum of money, viz., Rs. 77,39,626.18 on the strength of the documents of title endorsed in its favour by the

exporter, the third respondent. By the confiscation of the goods and denial of right to the goods by the customs authorities, the petitioner-bank is

deprived of its valuable rights to realise its dues by selling the goods. If sufficient opportunity had been given to the petitioner-bank it would have

convinced the first respondent of the justice involved in this case. At least the first respondent should have taken into consideration the

representations made by the petitioner-bank as early as 15th July, 1980, bringing to the notice of the first respondent the facts and circumstances

of the case and justifying the claim of the bank to clear the goods after complying with the customs formalities. Since the Collector has not applied

his mind to the said vital facts and circumstances of this case, in spite of the materials being made available to him and/or brought to his notice, as

stated above the Collector of Customs has committed a grave error of law and jurisdiction which has resulted in manifest injustice to the petitioner-

bank. As such the order is perverse and cannot be sustained in law.

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.

It is also incorrect to state the petitioner bank should have been given notice, that it is the owner or pledgee and that notice must be given to

pledgee. The documents of title having been passed on to the petitioner-bank would give it a lien on the goods, provided the goods are imported

according to law. Otherwise, the petitioner-bank has no standing to seek for clearance of the goods and its finances on doubtful bills of lading.

There is no reason why the petitioner-bank should be given notice of adjudication proceedings under the Customs Act.

It may be that the holder of the bills of lading has a right to the property, but as long as there is no valid licence, the ownership of un-authorisedly

imported goods cannot arise. u/s 126 of the Customs Act when once the goods are confiscated, the Central Government is the owner of the

goods. u/s 125, an option to redeem the goods is given on payment of a fine. The averments in paragraph 7 of the petition are not admitted. The

petitioner-bank, instead of fighting for the goods which have been illicitly imported into India on false bills of lading, should have collected its

finance from the third respondent. It is strange that the petitioner-bank is admitting not to recover from its constituent at Singapore, for whom the

bills had been discounted, and debit its accounts. It is not the case of the petitioner-bank that it finances the fourth respondent. In fact, it is doubtful

whether the bank is a bona fide holder of the documents. It must have made enquiry to find out whether the bills of lading were true or genuine and

whether the ships called at the port on 7th February, 1980, if the loading was real. It is denied that the petitioner-bank is a bona fide holder of the

document. It would appear to be a fighting battle for the third respondent, an alien company in Singapore.

It is not correct to state that it should be deemed to be an importer for the purpose of the Customs Act. The contentions of the petitioner-bank

would amount to saying that the customs department should allow the bank not to do banking business but to import and deal in goods which are

contrary to the Import (Control) Order.

An owner is a person who has an import licence. The petitioner-bank is not the assignee of the import licence. Therefore, the petitioner-bank is

not an owner within the meaning of Section 124 of the Customs Act. The allegation that the adjudication is against principles of natural justice and

provisions of Section 124 of the Customs Act is denied. The petitioner-bank is interested in the exporter dealing with bogus bills of lading. For

having acquired and purchased the bills negligently, the petitioner-bank might have suffered a loss on account of the transaction, but that would not

make the petitioner-bank a lawful importer or the owner of the goods. Therefore, it is submitted that the petition should be dismissed with costs.

It may be stated at this stage that in Writ Appeal No. 514 of 1980 this Court directed the sale of the palm oil imported and the sale proceeds

are with the Collector of Customs. Another factor which requires to be stated is, against the order of the Collector of Customs, dated 6th August,

1980, an appeal was preferred and the Central Board of Excise and Customs, New Delhi, the appellate authority, by its order, dated 4th

December, 1980, held as follows :

Secondly they pointed out that the suppliers themselves had moved the authorities through their bankers for taking clearance of the consignments

and in this connection he referred to the letters written by the Indian Overseas Bank to the Collector of Customs, Madras. Later on the bank

moved the High Court for taking release of the consignments and the bank''s submission to the High Court would also support the appellant''s

contention that the suppliers had stepped in for taking release of the consignments as the importers had refused to do anything with the

consignments which have been shipped beyond the period stipulated for such shipment. All these clearly establish that the importers were not

concerned with the action taken by the Custom House in respect of the goods. They, therefore, pleaded that the orders of the Collector imposing

penalty on the appellants be set aside.

The Board had considered the defence contention. The Collector''s orders do not disclose any specific evidence to show that the importers had

been a party in the unauthorised importation. Though they are responsible for the imports they cannot be penalised unless it is established that they

were responsible for the unauthorised importation knowingly. From the facts on record it is quite clear that the importers were not aware of the

delay in shipment, and they have nothing to do with the ante dating of the bill of lading. There is, therefore, nothing to penalise them u/s 112 on

account of the delayed shipment. The Collector''s orders penalising them are not, therefore, sustainable. Accordingly, the orders of penalty on the

appellants are set aside and the appeals to that extent are allowed.

Under these circumstances, the contention of Shri G. Ramaswami, the learned counsel for the petitioner-bank, is that in law, since the bank is

the owner, more so when the fourth respondent had stated that it is not any longer claiming the goods in view of the fact that the bank is the holder

of the documents of title, the sale proceeds, after deducting the redemption fine and the charges due to the Port Trust, should be paid over to the

petitioner. The petitioner is not interested in the adjudication proceedings, though the ground that was raised in the writ petition is to the effect that

adjudication should take place after notice to the petitioner. The order of release of the goods, on payment of redemption fine, can be availed of by

the petitioner because that is a judgment in rem.

Shri K. N. Balasubramaniam, the learned Standing Counsel for the Customs department, would state that this is a clear case where, merely

because the petitioner-bank has come into possession of the documents in relation to the goods, if it is allowed to have payment, it would amount

to putting a premium on illegal importation. As on today, the adjudication of imposing redemption tine and personal penalty was with reference to

treating the fourth respondent as importer. Therefore, there is absolutely no justification for the petitioner-bank claiming the goods or even the

equivalent value thereof. The redemption fine is personal to the fourth respondent. By all means, if the fourth respondent claims the goods, the

Customs department will have no objection to make the payment to it. Where, therefore, an order had been passed on an adjudication with

reference to an import by the fourth respondent, whatever may be the attitude of the fourth respondent that cannot be availed of by the petitioner-

bank. Then again, it is not open to the petitioner-bank to claim the goods or the equivalent value thereof, because the fourth respondent has stated

that it was not interested in clearing the goods. If really an adjudication takes place, treating the petitioner-bank as the owner, different

consequences might follow. All that the petitioner wanted was an adjudication after notice. The customs department is willing for such a course.

Therefore, under no event the petitioner-bank can take advantage of an order passed against the fourth respondent.

Shri Habibullah Badsha, the learned Counsel for the fourth respondent, states that so long as no endorsement takes place as against his licence

concerning the import in question, he has no objection to the amount being paid over to the petitioner-bank.

Shri C. Krishnan, the learned Counsel for the Port Trust, contends, whoever is held to be the owner of the goods, in so far as the dues to the

Port Trust are paid, the Port Trust is not interested in the decision in relation to ownership.

This is a case in which admittedly it was at the instance of the fourth respondent that the goods, namely, 1,219.23 metric tonnes of palm oil

were imported. Later the fourth respondent stated that it was not interested in clearing the goods. On 31st July, 1980, it wrote to the Assistant

Collector of Customs as follows :

Dear Sir,

Sub : 1. Import of RBD Palm Oil per ''ENFIELD'' G.M. No. 224/80 Line Nos. 4, 13 and 14, dated 1-4-1980.

Import of RBD Palm Oil per ''DECCAN PIONEER'' G.M. No. 254/80 Line Nos. 42 and 43, dated 5-5-1980.

In respect of the goods mentioned above we understand from your show cause notice that the goods have not been shipped within the validity

period of the licence for which we (have) already given a reply on 20-6-1980 and 1-7-1980. Please refer to our letters dated 22-4-1980, 2-5-

1980 and 23-5-1980. We state that we are not liable for any default on the part of the supplier.

It now transpired that the documents have been handed over to the Indian Overseas Bank by the Lakshmi Commercial Bank Ltd., under

instructions from the suppliers M/s. Patel Holdings Pvt. Ltd., Singapore. We are, therefore unable to get the documents to clear the goods. The

goods were sent on D/P terms. As the contractual obligation regarding despatch of the goods within the validity period of licence were not

apparently fulfilled we did not effect the payment. Consequently we could not clear the goods. Now that the bankers have also been changed, we

have no intention of clearing the goods. We understand that the suppliers themselves are making arrangements to clear the goods, through the

Indian Overseas Bank.

In these circumstances we request you to treat the above 5 bills of entry filed by us as cancelled. We are in no way responsible for the alleged ITC

contravention.

We have no objection to release the goods to the supplier/Indian Overseas Bank subject to the cancellation of our bill of entries.

Thanking you,

Yours faithfully,

For HYDER ENTERPRISES

Sd/-

Manager.

And on 8th August, 1980, it wrote to the Indian Overseas Bank, Cathedral Branch, Madras-2, the petitioner, as follows :

Dear Sir,

Sub : Import of RBD Palm Oil per ss. ''ENFIELD'' and ss. ''DECCAN PIONEER'' from Singapore exported by M/s. Patel Holding Pvt. Ltd.,

Singapore.

As you are aware, the documents relating to the above shipment were transferred at the instance of your constituent in Singapore, M/s. Patel

Holding Pvt. Ltd. from our bankers M/s. Lakshmi Commercial Bank Limited, Madras.

As you might also be aware, the problem arose in respect of these shipments with the customs department as regards the date of bill of lading.

While the customs department have been investigating into the matter and have come to the conclusion that the goods were not shipped on the

date of bill of lading and the date was beyond the validity period of the relevant import licence.

The customs department have not so far accepted our evidence and proof of shipment and papers furnished by the exporters M/s. Patel Holding

Pvt. Ltd. and we are unable to satisfy the Customs department about the correctness of the date of shipping within the validity period of the

licences.

During the period of investigation by the customs on the documents submitted by the exporters for proof of shipment and evidence the goods were

lying in the Port Trust incurring demurrage. The Madras Port Trust wrote to us on 6-5-1980 and 13-5-1980 letters threatening to auction goods to

which we immediately replied on 23-5-1980 saying that it is not valid since the matter was under investigation by the customs. However on 15-7-

1980 the Madras Port Trust have sent a notice under Sections 61 and 62 of the Major Port Trust Act, 1963, threatening auction on 28-8-1980.

On 1-8-1980 we have written to the Assistant Collector of Customs, a copy of which is enclosed, with a copy of letter from Madras Port Trust,

dated 15-7-1980 also our reply on them dated 1-8-1980.

We also enclose herewith a copy of letter from the steamer agents dated 25-7-1980 and our reply dated 1-8-1980. We have also written to the

clearing agents, M/s. South India Shipping Services, dated 1-8-1980 in this regard. Photostat copies of the correspondence are enclosed

herewith.

We are doing this to bring to your kind notice the urgent necessity of taking immediate steps since you are in possession of the documents at the

instructions of the foreign bankers of M/s. Patel Holding Pvt. Ltd., Singapore.

Thanking you,

Yours faithfully,

For HYDER ENTERPRISES

Sd/-

Manager.

However, in an adjudication dated 8th August, 1980, the Collector of Customs, the first respondent, passed an order (already extracted while

narrating the facts) confiscating the goods, with an option to the fourth respondent to clear the goods within three months on payment of a fine and

personal penalty imposed in the order.

The order of imposition of personal penalty of Rs. 1,60,000 has been successfully appealed against and the relevant portion of the appellate

order has also been extracted already.

I will now refer to the relevant provisions of the Customs Act, 1962. Section 111 is one in relation to confiscation of goods. Section 112 is in

relation to imposition of penalty. Section 124 is to the following effect :

No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or

such person -

(a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty;

(b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of

confiscation or imposition of penalty mentioned therein; and

(c) is given a reasonable opportunity of being heard in the matter :

Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned be

oral.

In my considered view, when an adjudication takes place either-under Section 111 or u/s 124, the adjudication is in relation to the goods. This

must be clearly borne in mind. The object of the Customs Act generally is to see that there is no illegal importation of goods. The various policies

under the Import Trade Control are enunciated with reference to the economic conditions of the country, and one cannot claim an inviolable right

with regard to importation. An item which is freely importable today may be subject to restrictions tomorrow or even altogether banned. In other

words, the import of a particular goods may be licit today but will become illicit tomorrow. Thus, the power of the authorities under the Act is to

determine whether a particular import is licit or illicit. Section 112 imposes the personal penalty on the person concerned in the import. It is very

wide in its amplitude. Section 111 dealing with confiscation does not contemplate any person. The procedure for confiscation is set out in Section

124, which has already been extracted. Both these sections, as I said above, relate only to the goods and not to the person. It is true, unless there

is a person involved, there cannot be an importation. But we are here concerned with the scope of Sections 111 and 124. In other words, what I

want to stress is, the confiscation u/s 111 following the procedure u/s 124 is with reference to the goods. This is very important for the purpose of

this case. The word ""owner"" used in Section 124 would definitely take within it the petitioner-bank. It is not denied before me by the Customs

department that the petitioner-bank is holding the relevant documents. Either by the application of the Sale of Goods Act or the Bill of Lading Act,

it is the bank which is the title holder. Where, therefore, when the first respondent, by his order dated 6th August, 1980, in adjudicating the nature

of the import, gave an option to the fourth respondent to redeem u/s 125 of the Customs Act, the adjudication was with reference to the goods.

Section 125 of the Customs Act reads as below :

(1) Whenever confiscation of any goods is authorised by this Act the officer adjudging it may, in the case of any goods, the importation or

exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to

the owner of the goods an option to pay in lieu of confiscation such fine as the said officer thinks fit :

....................

Here again, the ""owner"" would mean only the holder of the documents. This is all the more so in view of the categoric stand of the fourth

24/123 respondent that it had no intention of clearing the goods, as stated in its letter dated 31st August, 1980. The appellate order dated 4th

December, 1980, also says in unmistakable terms that the fourth respondent was not a party in the unauthorised importation. Therefore, though the

imposition of personal penalty contemplated u/s 112 has been set aside by the appellate order, yet there is no other go than to permit the

petitioner-bank, who is the owner of the goods and in whose favour the bills have been endorsed, to redeem the goods. When the order of the first

respondent dated 6th August, 1980, gives the importer (the fourth respondent) an option u/s 125, it could only mean the ""owner"" because, as seen

above, Section 125 uses only the word owner.

I gave careful consideration to the argument that by allowing the petitioner-bank to claim the sale proceeds it would amount to putting a

premium on an illegal import. I am more than surprised to note as to why, when the fourth respondent, Hyder Enterprises, disclaimed the

ownership to the goods, an order of absolute confiscation was not passed. A golden opportunity has been let go by the first respondent.

Notwithstanding the zealous attitude of the Customs department to fill the public coffers by reason of this unauthorised importation, it is the

Customs department which has brought woe open itself by passing this order. I am tempted to quote William Wordsworth :

Miss not the occasion :

By the forelock take that subtle power. The never halting time.

The ""miss"" by the customs was a costly one, and very rightly it is said, that the surest way of missing success is to miss the opportunity.

Therefore, to avoid such a situation in future all that will be necessary is, to pass an order of confiscation, which is the easiest thing to do. Under

these circumstances, I cannot but reject the argument advanced on behalf of the customs department.

I am also unable to accept the arguments of the Customs department when it says that there must be a fresh adjudication treating the

petitioner-bank as the owner, Shri G. Ramaswami, the learned Counsel for the petitioner-bank, has fairly stated before me that the bank is no

longer interested in adjudication, after notice to it. Even otherwise, if the law is that once an adjudication takes place with reference to the goods as

has been done by the first respondent under his order dated 6th August, 1980, there cannot be a further adjudication in relation to the same goods.

Accordingly, the writ petition will stand allowed and a command will issue to the first respondent to pay over the sale proceeds of 1,219.23

metric tonnes of palm oil, now in the hands of the Customs department, to the petitioner-bank, after deduction of (1) the redemption fine of Rs.

9,60,000 as ordered by the first respondent in his order dated 6th August, 1980, (2) all the dues to the Port Trust, the second respondent,

including the demurrage charges, and (3) all duties by way of customs duty and other charges that are legally leviable by the Customs department.

I make it clear that inasmuch as the Central Board of Excise and Customs, by its order, dated 4th December, 1980, has held that the fourth

respondent is not in any way connected with the illegal importation, there will be no endorsement on its licence concerning this importation.

The Customs department will have every right to issue notice to the petitioner-bank and take proceedings u/s 112 of the Customs Act with

regard to the imposition of personal penalty, notwithstanding the above.

There will be no order as to costs.