M/S
Northern Plastics Ltd. Vs. Hindustan Photo Films Mfg. Co. Ltd. [1997] INSC 195
(20 February 1997)
S.P.
BHARUCHA, S.B. MAJMUDAR
ACT:
HEAD NOTE:
S.B. Majumdar.J,
M/s Northern Plastics Ltd. is the common appellant in these two appeals moved
by it after obtaining special leave to appeal from this Court against a common judgement
dated 9th March 1990 passed by the High Court of Delhi
in two Civil Writ Petitions, one moved by M/s Hindustan Photo Films Mfg.Co.Ltd.
('HPF' for short), respondent no.1 in C.A. No.
2035
of 1990, and the other the Union of India, respondent no.1 in the companion
Civil Appal No. 2036 of 1990. The question companion Civil Appeal No. 2036 of
1990. The question posed for our consideration is as to whether 1st respondents
in these Civil writ appeals could be said to be 'persons aggrieved' within the
meaning of Section 129-A of the Customs Act, 1962 (hereinafter referred to as
'the Act') so that they could challenge before the customs, Excise and Gold
(Control) Appellate Tribunal ('CEGAT' for short) the order passed by the
Additional Collector of Customs, Bombay dated 5th June 1989 agreeing with the notings
made by the Assistant Collector of Customs dated 31st May 1989 recommending
release of the imported goods to the common appellant on payment of full
customs duty. The CEGAT took the view the respondent no.1 in both these appeals
had no locus standi to prefer appeals against the said order. The High Court of
Delhi by the impugned judgment has taken a contrary view and has ruled in favour
of the locus standi of these respective respondents.
Before
we deal with the aforesaid question it will be necessary to not the relevant
background facts leading to the present controversy between the parties. The
project a chequered history. The common appellant, Northern Plastics Ltd.,
which will hereinafter be referred to as 'the appellant' for the sake of
convenience, is said to have obtained Small Scale Industries Registration (SSI
Registration) on 24th August 1985 for slitting and confectioning of jumbo rolls
of various types of films. The said registration, according to the appellant,
was obtained under The Industries (Development & Regulation) Act, 1951
('IDR Act' for short). A notification was issued by the competent authority
under the said Act on 18th
July 1986 effectively
taking away the exemption fro requirement of licence in respect of Item 20 of
1st Schedule to the IDR Act thus making it obligatory for owner of industrial
undertaking to have licence within six months. It is the case of the appellant
that although it was not the owner of industrial undertaking as defined by the
IDR Act, under a mistaken belief it applied for COB licence on 8th December 1986. On 7th July 1988 a notification
was issued by the Central Government in exercise of its powers under sub-
section (i) of Section 25 of the Act exempting jumbo rolls of graphic art films
and jumbo rolls of photographic colour paper, of width 1 meter or more and of
length 600 meters or more, falling within Chapter 37 of the First Schedule to
the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so
much of that portion of the duty of customs leviable thereon under the said
First Schedule as was in excess of the amount calculated at the rate of 60 per
cent ad valorem, subject to the following conditions:
(i) the
importer undertakes conversion of the said jumbo rolls by slitting
confectioning into finished products;
(ii) the
importer holds an industrial licence under the Industries (Development and
Regulation) Act, 1951 (65 of 1951), for slitting and confectioning of photo-sensitised
materials from jumbo rolls.
According
to the appellant the benefit of the this concession in import duty on the jumbo
rolls of various types of films which were being imported by the appellant was
available to it. The appellant had imported various consignments of articles of
X-Ray films and graphic art films through the port at Bombay between January 1989 and May 1989.
The shipments concerned for the same consignments were made in favour of the
appellant by the foreign exporters between 15th December 1988 and 20th April 1989.
According
to the appellant the goods were worth Rs. 246 lacs approximately in foreign
exchange. That the appellant had paid customs duty amounting to Rs. 196 lacs on
these consiqnments and the additional duty if the exemption was not available
to the appellant on these consignments would have become payable to the extent
of Rs. 130 lac. The total value of the goods imported at Bombay port by the appellant during the
aforesaid period worked up to Rs.572 lacs according to the appellant. The
Assistant Collector of Customs (Bombay) had not granted the requisite relief of concessional import duty
payable for the imported consignments of the appellant. Hence a writ petition
being Civil Writ Petition No. 2021 of 1988 was moved by the appellant in the
High Court of Delhi where principal relief sough was for the grant of benefit
of the aforesaid customs exemption notification. A prayer was also made for
issuance of COB licence by the competent authorities under the IDR Act.
Initially the appellant had not joined M/s. 'HPF', a public sector undertaking
in the said writ petition as a respondent as it was merely a business rival of
the appellant. However on an application by the HPF a Division Bench of the
High Court by its order dated 8th May 1989
allowed it to be a party-respondent in the appellant's petition. In the
aforesaid writ petition filed by the appellant before High Court of Delhi
initially an order was passed by a learned Single Judge directing removal and
release of the jumbo rolls imported by the appellant at Bombay at concessional
rate of customs duty. However this interim order set aside by a Division Bench
of the High Court by its order dated 8th May 1989. Pending this writ petition on the
Delhi High Court, upon an application by the appellant, an order was proposed
to be passed by the Assistant Collector of Customs (Bombay) on 31st May 1989 permitting the clearance of the imported consignment of the
appellant upon payment of full rate of customs duty. The said proposed order
was placed for approval before the Additional Collector of Customs (Bombay). Below the said proposal the
Additional Collector of Customs (Bombay) put his endorsement agreeing to the said proposal on 1st June 1989. The said order which came to be
communicated to the appellant on 5th June 1989 entitled the appellant to clear the imported goods on
payment of full customs duty without availing of the benefits of the concessional
rate of import duty pursuant to the earlier referred notification dated 7th July 1988.
Having
come to know about the order of the Additional Collector of Customs, HPF which
is a public sector undertaking wholly owned by Government of India, which was
already joined as a party, at its own request, to the appellant's pending,
petition, moved an interim relief application in that petition for staying the
clearance and removal of the goods imported by the appellant. The High Court by
its order dated 9th
June 1989 in vacation
granted ex-parte stay of the Collector's order. The interim relief application
of HPF was subsequently heard another Vacation Judge in the High Court on 21st June 1989 and after completion of the
arguments on behalf of the HPF on 26th June 1989 a request was made for not
pronouncing the judgment in the said interim relief application. However the
said request was not granted and the interim relief application of HPF was
dismissed on 26th June
1989 by the high
Court. That thereafter HPF filed a writ petition in the High Court of Bombay on
that very day, that is, 26th
June 1989 praying for
similar interim relief against release of the imported goods to the appellant.
The High Court rejected the request for exparte interim relief. A Special Leave
Petition was also moved by the HPF before this Court against the Delhi High
Court order dated 26th
June 1989 vacating the
exparte stay granted against the releases of imported goods in favour of the
appellant. The said Special Leave Petition was dismissed as withdrawn by this
Court. After HPF's Special Leave Petition was dismissed as withdrawn by this
Court on 27th June 1989 a writ appeal was moved by the HPF before a Division
Bench of the Bombay High Court against the order of learned Single Judge
refusing to grant ex parte stay in writ petition of HPF, but no interim relief
was granted by the High Court even in this writ appeal. Under these
circumstances HPF filed an appeal to CEGAT on 28th June 1989 against the order of Additional Collector of Customs (Bombay) dated 5th June 1989. An exparte interim order was obtained from CEGAT for a
week up to 6th July
1989. HPF then
withdrew the writ petition before the Bombay High Court. In the meantime the
status quo order granted by CEGAT expired on 6th July 1989 and it was not extended. HPF then filed a writ petition
before the High Court of Delhi being Writ Petition No.1932 of 1989 against the
order dated 7.7.1989 passed by CEGAT and the Division Bench of the High Court
passed an ex parte stay of the order of the Additional Collector of Customs
dated 5th June 1989 on 12th July 1989.
The
High Court of Delhi by its order dated 17th July 1989 disposed of Writ Petition No. 1932
of 1989 moved by the HPF against the Additional Collector's order and directed
CEGAT to dispose of the appeal of the HPF. The High Court, however, further
directed that till the final disposal of the appeal by the CEGAT the stay
granted on 12th July
1989 would continue.
Before HPF's appeal could be heard by the CEGAT an appeal being No. 2072 of
1989 was filed by the Ministry of Industries, New Delhi before CEGAT under Section 129-A of the Act against the
very same order of Additional Collector dated 5th June 1989. A Bench of CEGAT by its order dated 31st July 1989
dismissed the appeal of HPF against Collector of Customs on the ground that HPF
being a business rival of the appellant was not 'person aggrieved' as
contemplated by Section 129-A of the Act and hence the appeal was not
maintainable. Thereafter on 8th August 1989 the other appeal filed by Ministry
of Industries against the very same order of Additional Collector of Customs
was also dismissed as not maintainable, the Ministry of Industries being held
not an 'aggrieved person' within the meaning of Section 129-A of the Act. Under
these circumstances HPF filed another Writ Petition No. 2286 of 1989 in the
Delhi High Court on 9th
August 1989
challenging two orders- (i) the order of CEGAT dated 31st July 1989 holding its appeal as not
maintainable; and (ii) the order of Additional Collector of Customs (Bombay) ordering release of the imported
goods to the appellant. A Division Bench of the High Court while admitting the
writ petition restrained clearance of the goods in favour of the appellant
pending the writ petition. In the said writ petition Ministry of Industries was
also permitted on its application to be impleaded as party-respondent. The
Union of India representing Ministry of Industries in its turn filed another
write petition being Civil Writ Petition No. 3023 of 1989 on 24th October 1989 before the High Court of Delhi
against the order dated 8th
August 1989 passed by
CEGAT against it. That petition was also admitted by the High Court of Delhi.
Both these writ petitions were heard together and by a common order dated 9th
March 1990 a Division Bench of the High Court took the view that the appeals
filed by the respective first respondents i n these appeals were maintainable
before the GEGAT as they could be said to be 'persons aggrieved' within the
meaning of Section 129-A of the Act and that they had sufficient locus standi
in public interest to maintain their appeals. In the result the Division Bench
of the High Court partly allowed the writ Petition of both the first
respondents in these appeals moved by the Union of India as well as HPF and
passed the following order:
"We
have held that the Union of India and M/s. Hindustan Photo Films Ltd. are
'aggrieved person' and can maintain an appeal under Section 129-A of the
Customs Act.
The
main question in the writ petition at the root of the entire controversy
between the parties is whether the said importation of the photo-sensitized
material at Bombay was legal or not would now be
decided by the Appellate Tribunal.
But
assuming that M/s. Northern Plastics Ltd. takes an appeal against our order to
the Supreme Court and our decision is reversed, still the question of the
legality of the importation would be open to the parties to be argued in this
writ petition before us. Thus, till the main question of legality of
importation is finally disposed of, in the interests of justice, it is necessary
that the subject-matter, of the controversy, viz. the imported goods, are
preserved in the custody of the Customs Authorities and are not released.
Since
the goods are now stored under the suitable conditions of storage with M/s.
Northern Plastics Ltd. there is no likelihood of their deteriorating. No
variation in our order dated 9.8.89 in regard to the release of goods is,
therefore, called for.
The
writ petition is partly allowed to the extent indicated above." As already
noted the aforesaid common order of the Division Bench of the High Court of
Delhi has resulted in present two appeals on grant of special leave by this
Court. Pending these appeals it was felt by this Court that the imported goods
in question were likely to deteriorate with passage of time and if the happened
the contesting parties would stand to suffer irretrievably. Consequently by an
order dated 25th April
1990 a Bench of two
learned Judges of this Court was pleased to direct that Chief Controller of
Imports and Exports may be appointed as Court Receiver for disposing of the
goods in question by sale in auction as expeditiously as possible and at the
maximum price they will fetch in the market. It was further directed that the
amount of the sale proceeds of the auction shall forthwith be deposited by the
receiver in this court to the credit of these appeals.
Accordingly
the goods were auctioned. By a further order dated 21st September 1990 another
Bench of two learned Judges of this Court accepted the offer of four purchasers
who had offered to purchase all the disputed goods for a total sum of Rs.
1,40,00,000/-. Four action sales were confirmed in favour of the concerned
auction purchasers. By the same order it was directed that the auction amount
shall be deposited by this Court in a Fixed Deposit Account and the amount so
deposited shall remain in the custody of the Court and shall be disposed of in
accordance with the final judgment in the appeals pending before the Customs,
Excise and Gold (Control) Appellate Tribunal. The aforesaid order was passed
for the obvious reason that by that time under the common judgment under appeal
CEGAT was directed by the High Court to dispose of the appeals of Union of
India as well as HPF pursuant to its judgment. However as these appeals are being
disposed of finally by us by the present judgment appropriate order will have
to be passed by us in connection with this deposited amount. We shall do so
after considering the main question involved in controversy between the parties
in these appeals.
For
the purpose of these appeals we shall assume that the order of Assistant
Collector of Customs (Bombay), as approved by the Additional Collector of
Customs (Bombay), of 1st June 1989 was in itself appealable to CEGAT under
Section 129-A of the Act being a decision and order passed by an adjudicating
authority under Section 122 of the Act.
We
assume as aforesaid for the simple reason that Shri Dave, learned senior
counsel for the appellant has vehemently contended that the said endorsement of
the Additional Collector of Customs was of an administrative nature and was not
appealable. Neither CEGAT nor the High Court of Delhi has considered that
question and as that question strictly does not arise for our consideration in
the present appeals for deciding the controversy between the parties we have
assumed as aforesaid.
Rival
Contentions Shri Dave, learned senior counsel for the appellant has vehemently
contended that the Division Bench of the High Court had patently erred in
taking the view in the impugned common judgment that HPF as well as Industries
Ministry of the Union of India were 'aggrieved person' within the meaning of
Section 129-A of the Act. According to Shri Dave, the only parties which could
prefer appeal to CEGAT could be either the aggrieved importer or the Collector
of Customs after following the procedure of Section 129-D of the Act.
That
save and except these two parties no third party had a right to appeal under
the Act. That right of appeal under the appeal under the Act. That right of appeals
under the Act is a creature of statute. Therefore, we have to look at the
relevant provisions of the statute with a view of finding out whether an appeal
lies at the instance of any third parties like the present first respondents in
both these appeals. Shri Dave in this connection placed strong reliance on
Section 129-A sub-section (1) as well as sub- section (3) thereof. In support
of his submission he placed reliance on judgment of this Court to which we will
make a reference at an appropriate stage. Shri Dave submitted that the concept
of locus standi as expanded be decisions of this Court in connection with
public interest litigations moved before this Court under Article 32 or before
the High Court under Article 226 of the Constitution of India had no
application to the statutory right of appeal to be culled out for the express
language of the statute creating the appellate forum and also confirming the
right of appeal to the parties mentioned therein. In the alternative submitted Shri
Dave, neither the Industries Ministry nor the HPF, which is a rival commercial
concern, can be said to be aggrieved by the order of the Assistant Collector of
Customs (Bombay) directing release of the imported
goods in favour of the appellant on payment of full customs duty. Shri Dave
also tried to submit that it could not be urged by the contesting respondents
that the import of the goods in question was unauthorised as for additional
import licence purchased by the appellant actual user test was not applicable.
For resolving the present controvesy it is not necessary to consider this
alternative contention of Shri Dave. We will confine our decision to the
limited question whether appeals moved by each of the first respondents in
these appeals before CEGAT were maintainable or not.
Learned
counsel Shri Subba Rao appearing for the Union of India as well as learned
counsel appearing for HPF on the other hand tried to support the decision
rendered by the High Court of Delhi and submitted that on the express language
of Section 129-A sub-section (1) of the Act the Industries Ministry of the
Union of India as well as HPF could be said to be 'persons aggrieved'. That
according to the Industries Ministry of Union of India the appellant had imported goods which were liable to confiscation
under the Act and, therefore, the order of the Additional Collector of Customs
(Bombay) was patently erroneous. That it
affected the public revenue as well as the effective implementation of IDR Act
and, therefore, it could not be said that the Industries Ministry did not
represent sufficient public interest to maintain the appeal before CEGAT.
Learned counsel for HPF in his turn submitted that HPF which is wholly owned
Government company where more than Rs. 400 crores are sunk by Central Government
from public coffers is a limb of the Union of India itself and when such large
extent of public funds are involved in the working of HPF it cannot be said
that it did not represent sufficient public interest to maintain the appeal
against the order of Additional Collector of Customs by which huge quantity of
illegally imported goods were sought to be released in favour of the appellant.
That such goods, if permitted to be imported, would result in flooding the
local market and would severely prejudice the working of HPF which is a public
concern that has now gone sick and hence the High Court had committed no error
in holding that the HPF had sufficient locus standi to maintain its appeal
before CEGAT.
In the
light of these rival contentions we now proceed to consider the question posed
for our decision.
At the
outset it must be kept in view that appeal is a creature of statute. The right
to appeal has to be exercised by persons permitted by the statute to prefer
appeals subject to the conditions regarding the filing of such appeals. We may
in this connection usefully refer to a decision of four learned judge of this
Court in the case of The Anant Mills Co. Ltd. etc. etc. v. State of Gujarat
& others etc. etc. [AIR 1975 SC 1234 = (1975) 2 SCC 175]. In that case Khanna,
J., speaking for the Court had to consider the question whether the provision
of statutory appeal as per Section 406(2)(e) of the Bombay Provincial Municipal
Corporation Act, 1949 which required the appellant to deposit the disputed
amount of tax before appeal could be entertained could be said to be in any way
violative of Article 14 of the Constitution of India. Repelling the aforesaid
challenge to the vires of the said provision the following pertinent
observations were made in para 40 of the Report :
"...The
right of appeal is the creature of a statute. Without a statutory provision
creating such a right the person aggrieved is not entitled to file an appeal.
We fall to under stand as to why the Legislature while granting the right of
appeal cannot impose conditions for the exercise of such right. In the absence
of any special reasons there appears to be no legal or constitutional
impediment to the imposition of such conditions. It is permissible, for
example, to prescribe a condition in criminal cases that unless a convicted
person is released on bail, he must surrender to custody on bail, he must
surrender to custody before his appeal against the sentence of imprisonment
would be entertained.
Likewise,
it is permissible to enact a law that no appeal shall lie against an order
relating to an assessment of tax unless the tax had been paid. Such a provision
was on the statute book in Section 30 of the Indian Income-tax Act, 1922.
The
proviso to the section provided that '..........no appeal shall lie against an
order under sub-section (1) of Section 46 unless the tax had been paid'. Such
conditions merely regulate the exercise of the right of appeal so that the same
is not abused difficulty in the enforcement of the order appealed against in case
the appeal is ultimately dismissed. It is open to the Legislature to impose an
accompanying liability upon a party upon whom legal right is conferred or to
prescribe conditions for the exercise of the right. Any requirement for
discharge of that liability or the fulfilment of that condition in case the
party concerned seeks to avail of the said right is a valid piece of
legislation, and we can discern no contravention of Article 14 in it
........." It has also be noted that the wider concept of locus standi in
public interest litigation moved before this Court under Article 32 of the
Constitution of India which itself is a fundamental right or under Article 226
before High Courts which also offers a constitutional remedy cannot be imported
for deciding the right of appeal under the statutory provisions contained in
the Customs Act.
Whether any right of appeal is conferred on anyone against the orders passed
under the Act in the hierarchy of proceedings before the authorities has to be
judged from the statutory settings of the Act and not before them. Therefore,
in our view, the High Court in the impugned judgment had erred in drawing the
analogy from the more elastic concept of locus standi under Article 32 of
Article evolved by this Court by its decisions on the subject. It is also to be
appreciated that the decision of this Court in Bar Council of Maharashtra v.
M.V. Dabholkar etc. etc. AIR 1975 SC 2092 was based on an entirely different statutory
scheme. For judging the competence and locus standi of the Union of India or
the HPF for moving appeals before CEGAT against the order of Additional
Collector of Customs passed under Section 122 of the Act the answer must be
found from within the four corners of the Act itself.
We
have, therefore, to turn to the Scheme of the Act providing for appeals.
Provision of appeals is found in Chapter XV of the Act. Section 128 deals with
'Appeals to Collector (Appeals)' and Section 128-A deals with 'Procedure in
appeal'. The Appellate Tribunal is constituted as per Section 129 of the Act.
Sub-section (1) thereof lays down that, 'the Central Government shall
constitute an Appellate Tribunal to be called the Customs, Excise and Gold
(Control) Appellate Tribunal consisting of as many judicial and technical
members as it thinks fit to exercise the powers and discharge the functions
conferred on the Appellate Tribunal by this Act'. It is, therefore, obvious
that the Appellate Tribunal CEGAT is a creature of statute and derives its
jurisdiction and powers only from the statute creating it and not outside the
same. Then follows Section 129-A dealing with 'Appeals to the Appellate
Tribunal'. The relevant provisions thereof read us under :
"129-A.
Appeals to the Appellate Tribunal.- (1) Any person aggrieved by any of the
following orders may appeals to the Appellate Tribunal against such order _ (a)
a decision or order passed by the Collector of Customs as an adjudicating
authority;
(b)...
... ... ...
(c)...
... ... ...
(d)...
... ... ..." Sub-sections (2) and (3) of Section 129-A are relevant for
our present purpose. The read as under :
"129-A(2).
The Collector of Customs may, if he is of opinion that an order passed by- (a)
the Appellate Collector of Customs under Section 128, as it stood immediately
before the appointed day, or (b) the Collector (Appeals) under Section 128-A,
is not legal or proper, direct the proper officer to appeal on his behalf to
the Appellate Tribunal or, as the case may be, the Customs and Excise Revenues
Appellate Tribunal established under Section 3 of the Customs and Excise
Revenues Appellate Tribunal Act, 1986, against such order.
(3)
Every appeal under this section shall be filed within three months from the
date on which the order sought to be appealed against is communicated to the
Collector of Customs, or as the case may be, the other party preferring the
appeal." Section 129-D(1) of the Act also deserves to be noted at this
stage. It reads as under:
"129-D.
Powers of Board or Collector of Customs to pass certain orders.-(1) The Board
may, of its own motion, call for and examine the record of any proceeding in
which a Collector of Customs as an adjudicating authority has passed any
decision or order under this Act for the propose of satisfying itself as to the
legality or propriety of any such decision or order and may, by order, direct
such Collector to apply to the Appellate Tribunal or, as the case may be
Customs and Excise Revenues Appellate Tribunal established under Section 3 of
the Customs and Excise revenues Appellate Tribunal Act, 1986, for the
determination of such points arising out of the decision or order as may be
specified by the Board in its order." Section 129-DA gives powers of
revision to Board or Collector of Customs in certain cases and as we are
concerned here with further proceedings against the order of Collector of
Customs sub-section (1) of Section 129-DA would be relevant. It reads as under:
"129-DA.
Powers of revision of Board or Collector of Customs in certain cases.- (1) The
Board may, of its own motion or on the application of any aggrieved person or
otherwise, call for and examine the record of any proceeding in which a
Collector of Customs has passed any decision or order not being a decision or
order passed under sub-section (2) of this section of the nature referred to in
sub-section (5) of Section 129-D for the purpose of satisfying itself as to the
correctness, legality or propriety or such decision or order and may pass such
order thereon as it thinks fit." Similarly Section 129-DD gives powers of
revision to Central Government to entertain revision petitions against certain
orders of the Collector (Appeals). It provides as under:
129-DD.
Revision by Central Government.- (1) The Central Government may, on the
application of a person aggrieved by any order passed under Section 128-A,
where the order is of the nature referred to in the first proviso to
sub-section (1) of Section 129-A, annul of modify such order.
Explanation
.-for the purposes of this sub-section, 'order passed under Section 128-A'
includes an order passed under that section before the commencement of Section
40 of the Finance Act, 1984, against which an appeal has not been preferred
before such commencement and could have been, if the said section had not come
into force, preferred after such commencement to the Appellate Tribunal."
The aforesaid provisions of the Act leave no room for doubt that they represent
a complete scheme or code for challenging the orders passed by the Collector (Customs)
in exercise of his statutory powers. It is axiomatic that the importer against
whom the collector has passed the impugned order of adjudication and who is
called upon to pay the customs duty which, according to him, is not payable an
appeal under Section 129-A(1) of the Act. So far as departmental authorities
themselves are concerned including the Collector of Customs no direct right of
appeal is conferred on Collector to prefer appeal against his own order before
the CEGAT. However there is sufficient safeguard made available to the Revenue
by the Act for placing in challenge erroneous orders of adjudication as passed
by the Collector of Customs by moving the Central Board of Excise and Customs
under Section 129-D(1) for a direction to the Collector to apply to the CEGAT
for determination of such point arising out of the decision or order as may be
specified by the Board of Revenue in this connection. Similarly a statutory
remedy is provided to the Collector of Customs in connection with orders of the
Appellate Collector of Customs passed immediately before the appointed day and
also in connection with the orders passed by Collector of Customs under Section
128-A, to direct proper officer to appeal on his behalf as laid down by Section
129-DA(1) as well as on the Central Government under contingencies contemplated
by Section 129-DA(1). These are the only statutory modes contemplated by the
Act by resort to which the orders of Collector (Customs) could be brought in
challenge before higher statutory authorities including the CEGAT. In the light
of this statutory scheme, therefore, it is not possible to agree with the
contention of learned counsel for the contesting respondents that sub-section
(1) of Section 129-A entitles any and every person feeling aggrieved by the
decision or order of the Collector of Customs as an adjudicating authority, to
prefer statutory appeal to the Appellate Tribunal. Neither the Central
Government, through Industries Department, nor the rival company or industry
operating in the same field as the importer can as a matter or right prefer an
appeal as 'person aggrieved' is wider than the phrase 'party aggrieved'. But in
the entire context of the statutory scheme especially sub-section (3) of
Section 129-A it has to be held that only the parties to the proceedings before
the adjudicating authority Collector of Customs could prefer such an appeal to
the CEGAT and the adjudicating authority under S.122 can prefer such an appeal
only when directed by the Board under Section 129-D(1) and not otherwise. It is
easy to visualise that even a third party may get legitimately aggrieved by the
order of the Collector of Customs being the adjudicating authority if it is
contended by such a third party that the goods imported really belonged to it
and not to the purported importer or that he had financed the same and,
therefore, in substance he was interested in the goods and consequently the
release order in favour of the purported importer was prone to create a legal
injury to such a third party which is not actually arraigned as a party before
the adjudicating authority and was not heard by it. Under such circumstances
such a third party might perhaps be treated to be legally aggrieved by the
order of the Collector of Customs as an adjudicating authority and may
legitimately prefer an appeal to the CEGAT as a 'person aggrieved'. That is the
reason why the Legislature in its wisdom has used the phrase 'any person
aggrieved' by the order of Collector of Customs as adjudicating authority in
Section 129-A(1). But it order to earn a locus standi as 'person aggrieved'
other than the arraigned party before the Collector of Customs as an
adjudicating authority it must be shown that such a person aggrieved being
third party has a direct legal interest in the goods involved in the
adjudication process. It cannot be a general public interest or interest of a
business rival as is being projected by the contesting respondents before us.
In
this connection we may refer to a Constitution Bench judgment of this Court in
the case of Adi Pherozshah Gandhi v. H.M. Seervai, Advocate General of Maharashtra,
Bombay [(1970 (2) SCC 484]. Question before the Constitution Bench in that case
was as to whether Advocate General of the High Court who was be to issued a
notice in disciplinary proceedings by the Bar Council as per the provisions of
Section 35(2) of the Advocate Act, 1961 had locus standi to prefer an appeal
against the order of the disciplinary authority under Section 37 of the
Advocates Act before Bar Council of India. A majority of the Constitution Bench
took the view that the Advocate General had no such locus standi.
He
could not be said to be a 'person aggrieved' by the decision of the
disciplinary authority exonerating the concerned delinquent advocate. Mitter,
J., speaking for the majority considered the question in the light of the
statutory settings of the Act and observed that to decide the question one had
to look at the proceedings of this kind. We may refer to the pertinent
observations in this connection made in paras 9 and 10 of the Report of the
said judgment of Mitter, J.:
"Generally
speaking. a person can be said to be aggrieved by an order which is to his
detriment.
pecuniary
or otherwise or causes him some prejudice in some form or other. A person who is
not a party to a litigation has no right to appeal merely because the judgment
or order contains some adverse remarks against him. But it has been held in a
number of cases that a person who is not a party to a suit may prefer an appeal
with the leave of the appellate court and such leave would not be refused where
the judgment would be binding on him under Explanation 6 to Section 11 of the
Code of civil procedure. We find ourselves unable to take the view that because
a person has been given notice of some proceedings wherein he is given a right
to appear and make his submissions, he should without more have a right of
appeal from an order rejecting his contentions or submission. An appeal is a
creature of statute and if a statute expressly gives a person a right to
appeal, the matter rests there.
Innumerable
statutes both in England and in India give the right of appeal to 'a person
aggrieved' by an order made and the provisions of such statutes have to be
construed in each case to find out whether the person prefering an appeal falls
within that expression. As was observed in Robinson v Currey [7 QBD 465] the
words 'person aggrieved' are 'ordinary meaning put upon them'.
According
to Halsbury's Laws of England (Third Edition, Vol.25), page 293, footnote 'h':
'the
expression is nowhere defined and must be contrued by reference to the context
of the enactment in which it appears and all the circumstances.' Attempts have
however from time to time been made to define the expression in various cases.
In Ex parte Sidebotham In re Sidebotham [14 Ch D 458 at 465] it was observed by
James.L.J.:
'But
the words 'person aggrieved' do not really mean a man who is disappointed of a
benefit which he might have received if some other order had been made. A
'person aggrieved' must be a man who has suffered a legal grievance, a man
against whom a decision has been pronounced which has wrongfully deprived him
of something, or wrongfully refused him something, or wrongfully affected his
title to something." A Bench of four learned Judges of this Court in the
case of Jasbhai Motibhai Desai v. Roshan Kumar Haji Bashir Ahmed and others
[(1976) 1 SCC 671] had to examine the scheme of Bombay Cinemas Regulation Act
1953 and a rule therein with a view of finding out whether a rival cinema owner
could appeal against a No objection Certificate grated to an applicant who
wanted to establish a cinema theatre of his own. Sarkaria, J., speaking for the
Court observed that under the relevant provisions of the Regulations no right
was conferred by way of special interest on such a rival cinema owner as he did
not satisfy the test of 'person aggrieved'. Nor could he be treated to be a
valid objector being resident of the locality or person to whom any special
right of objection was conferred by the statutory scheme.
Thus
he was merely a rival cinema owner who was likely to be adversely affected in
his commercial interest if another cinema theatre got established and came to
be run in the light of the No objection Certificate. That such an interest was
considered to be too remote to clothe the objectors with a right to object to
the No Objection Certificate to run a cinema under the Rules. Paras 47 and 48
of the Report in this connection deserve to be noted:
"Thus,
in substance, the appellant's stand is that the setting up of a rival cinema
house in the town will adversely affect his monopolistic commercial interest,
causing pecuniary harm and loss of business from competition. Such harm or loss
is not wrongful in the eye of law, because it does not result in injury to a
legal right or a legally protected interest, the business competition causing
it being a lawful activity.
Juridically,
harm of this description is called damnum sine injuria, the term injuria being
here used in its true sence of an act contrary to law [Salmond on
Jurisprudence, 12th Edn. by Fitzgerald, p.357, para 85]. The reason why the law
suffers a person knowingly to inflict harm of this description on another,
without holding him accountable for it, is that such harm done to an individual
is a gain to society at large.
In the
light to the above discussion, it is demonstrably clear that the appellant has
not been denied or deprived of a legal right. He has not sustained injury to
any legally protected interest.
In
fact, the impugned order does not operate as a decisions against him, much less
does it wrongfully affect his title to something. He has suffered no legal
grievance. He has no legal peg for a justiciable claim to hang on. Therefore he
is not a 'person aggrieved' and has no locus standi to challenge the grant of
the no-objection certificate." Shri Subba Rao, learned counsel for Union
of India contended that the Central Government through the Industries Ministry
had interest in the litigation in question as large public revenue was involved
and the protection to be conferred on the local manufactures and those dealing
in local markets had to be guarded against the onslaught of mushroom importers.
That this public interest was sought to be vindicated by the Union of India by
raising the present dispute. If the concerned import was found to be illegal
the goods would be liable to confiscation. That when more than Rs.400 crores
were sunk by the Union of India in its company HPF it could not be said that
the Union of India through the Ministry of Industries was a total stranger and
had no locus standi whatsoever to challenge the order of the Additional
Collector of Customs. So far as the Union of India is concerned we may proceed
on the basis that it may have to subserve a larger public interest by raising
the present dispute and may legitimately feel aggrieved by the order of the
Additional Collector of Customs. But even if it is so, the statutory procedure
laid down by the Parliament in its wisdom for enabling the challenge to the adjudication
order of the Collector of Customs by way of appeals or revisions, to which we
have made a mention, has got to be followed in such an eventuality. Bypassing
the said statutory procedure a direct frog leap to CEGAT is contra-indicated by
the statutory scheme of the Act. If such direct appeals are permitted the very
scheme of Section 129-D(1) would get stultified. It must, therefore, be held
that direct appeal filed by the Union of India through Industries Ministry to
CEGAT under Section 129-A(1) was clearly incompetent. It may by added that the
Union of India could have used the mode set out in section 129D, but it did not
do so.
So far
as the appeal filed by HPF is concerned it is still on a weaker footing. Even
though HPF may be a public limited company wholly owned by the Central
Government and even if Central Government might have sunk more than Rs.400 crores
in constituting it, its function would still remain in the domain of commercial
enterprise. It may be a limb of the Central Government or its alter ego so far
as Article 13 of the Constituting is concerned and may be treated end to answer
challenges about violation of constitutional guarantees or statutory provisions
under which it may be acting, but that would not clothe it with a legal locus standi
to prefer a statutory appeal before CEGAT under Section 129-A(1). From the
point of view of that provision it is no more than a business rival and cannot
be said to be a 'person aggrieved' by the adjudicatory order of the Collector
of Customs releasing imported goods to the appellant on payment of full customs
duty. It has also to be noted that the Customs Act nowhere provides for any
special interest of such public concerns which may be operating as rivals in
the same commercial field in which the importer may be operating. In the
absence of any special statutory provision for protecting the interest of such
Government concerns or public sector undertakings no statutory locus standi can
be called out in their favour on the express language of the relevant
provisions of the Act noted by us earlier. It must, therefore, be held that HPF
was a mere business rival operating in the same commercial field and carrying
on the same commercial activities as the appellant.
Its
locus standi to challenge the order of Additional Collector of Customs in favour
of the appellant, therefore.
gets
squarely ruled out by the ratio of the decision of this court in the case of Jasbhai
Motibhai Desai (supra). Learned counsel for the HPF in this connection
submitted that if imported goods of the appellant were allowed to enter the
market HPF's commercial interest would be materially prejudiced and by now it
has already become a sick unit.
That
is neither here nor there. The said grievance would still be in the realm of damnum
since injuria as indicated in Jasbhai Motibhai Desai's case (supra) by this
Court.
Consequently
the appeal filed by HPF before the CEGAT also must be treated to be incompetent
and could not be covered by the sweep of Section 129-A(1) of the Act.
Learned
counsel for HPF invited our attention to a decision of a two-member Bench of
this court in the case of K.Ramadas Shenoy v. The Chief Officers. Town
Municipal Council. Udipi and others [(1975 (1) SCR 690]. In that case a
resident in a locality wherein a cinema building was being constructed contrary
to be binding Town Planning Scheme, was held to be entitled to challenge the
said building. Said decision is rendered on its own facts. The statutory Scheme
was for the benefit of persons residing in the locality.
Under
the said Scheme the Municipal authorities owed a public duty and obligation
under the statute to see that the residential area is not spoiled by unauthorised
construction. Under these circumstances it was held that the aggrieved party
had sufficient locus standi under Article 226 of the Constitution of India of
move the High Court against the violation of the statutory scheme by the
municipal authorities. It is easy to visualise that in that case this Court was
concerned with the locus standi of an 'aggrieved party' under Article 226 of
the Constitution of India which is of a wider nature as compared to the
statutory right of appeal under a given statutory scheme before a statutory
authority created by that very statute.
The
said decision is, therefore, of no avail to HPF.
As a
result of the aforesaid discussion it must be held that the High Court had
committed a patent error of law in taking the view that the concerned writ
petitioners before it had sufficient locus standi to prefer appeals before CEGAT.
The decision of CEGAT holding that they had no such locus standi was perfectly
justified on the scheme of the Act and it was wrongly set aside by the High
Court.
Consequently
the appeals will be required to be allowed.
However
a further question survives for our consideration. As the High Court has noted
in the impugned judgment, the other contentions in the writ petitions filed by
the contesting respondents were not considered by it in view of its decision on
the right of appeal which was made available to the concerned writ petitioners
before the CEGAT. We have, however, to observe in this connection that the High
Court was not at all justified in presuming what it should do in case the
appellant's appeal succeeded before the Court. Proper direction in that
connection should have been left to be given by this Court in such an
eventuality.
High
Court could not have been pre-empted the same by the impugned judgment. However
in view of the fact that other contention in the writ petitions were not
examined by the High Court in any case they will now have to be examined by it.
As the decision on the right to appeal to CEGAT made available to the
contesting respondents by the High Court is being set aside by us, the question
remains as to what further appropriate orders can be passed in the connection.
So far
as this question is concerned it may be noted that tow writ petitions were
moved, one by Union of India being Civil Writ Petition No. 3023 of 1989 and
another by HPF being Civil Writ Petition No.2286 of 1989. As we have taken the
view that HPF being a business rival of the appellant had no right to challenge
the order of Additional Collector of Customs, Bombay passed in favour of the
appellant its writ petition being Civil Writ Petition No.2286 of 1989 filed
before the High Court will stand dismissed. However writ Petition No.3023 of
1989 will have to be permitted to proceed further on remaining controversy
before the High Court in so far as Union of India seeks of challenge the order
of Collector of Customs, Bombay dated 1st/5th June 1989. As we have taken the
view that Union of India could legitimately challenge the said order before
appropriate forum in public interest and as it has wider locus standi at least
in proceedings under Article 226 of the Constitution of India if not before
CEGAT, its challenge in the writ petition under Article 226 against the said
order cannot be told off the gates. That challenge will have to be examined by
the High Court under Article 226 on its own merits. It is obvious that it will
be open to be appellant as contesting respondents to try to support the
impugned order of the Assistant Collector/Collector of Customs on all legally
permissible grounds. In short the said controversy between the Union of India
on the one hand and the appellant on the other in Union of India's Writ
Petition No.3023 of 1989 will have to be examined by the Division Bench of the
High Court on its own merits. AS the proceedings are pending since long before
the High Court so far as the aforesaid challenge is concerned it would be in
the interest of justice to request the High Court to decide the said writ
petition on the merits of the question regarding the legality and propriety of
the order of Collector/Assistant Collector of Customs dated 5th June 1989 as
expeditiously as possible preferably within a period of four months from the
date of receipt of a copy of this order at its end.
Now
remains the last question as to what is to be done about the amount fetched in
auction of the goods pursuant to the interim order of this Court dated 24th
September 1990.
We
cannot accede to the request to the learned counsel for the appellant that the
said invested amount with accrued interest may be permitted to be withdrawn by
the appellant at this stage by furnishing bank guarantee. In our view as the
amount is lying deposited and invested by this Court since more than six and
half years by now and as we are requesting the High Court to decide the pending
writ petition of Union of India on the surviving question as aforesaid within
four months from the date of receipt of copy of the present order it would be
in the interest of all concerned to continue the investment of the deposited
amount of the auction price by this Court and to direct that the withdrawal of
that amount shall abide by the final result of the writ petition of the Union
of India before the High Court and shall also remain subject to the result of
further appeal, if any, against the High Court's judgment in the said writ
petition.
The
appeals are accordingly allowed. The common judgment under appeal as rendered
by the High Court is quashed and set aside with a direction to the High Court
to decide on merits the Union of India's Writ Petition No.3023 of 1989 on the
remaining grounds in the light of the observations made in this judgment. There
will be no order as to costs in the facts and circumstances of these cases.
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