M/S.British
Airways Plc. Vs. Union of India & Ors [2001] Insc 598
(6 November 2001)
R.P.
Sethi & Y.K. Sabharwal Sethi,J.
(With
CA 2763, 3756/2000)
The
appellants are the aircraft carrier engaged in the business of international
air transport of passengers and cargo across various countries. They are also
operating in India under bilateral agreements executed
between the countries of their origin and India. Claiming that as they are not the 'persons incharge' of the aircraft,
no liability of shortages of off-loading the complete quantity of goods can be
imposed upon them in terms of Section 116 of the Customs Act, 1962 (hereinafter
referred to as "the Act"). It is contended that once the officer incharge
of the aircraft is given a certificate under Clause (e) of Sub-section (2) of
Section 42 of the Act, the authorities cannot re-open the issue. According to
the appellants no penalty could be imposed upon either the owner of the
aircraft or the carrier as the owner and the carrier cannot be deemed to be an agent
of the person incharge of the conveyance under Section 148 of the Act.
It
appears that the aircrafts of the appellants unloaded their cargo at the Indira Gandhi International Airport, Delhi. They were issued show cause
notices alleging that some of the packages airlifted for India were found short
and required from them as to why penalty as detailed in the show cause notices
be not imposed upon them. The notices were appropriately replied disputing the
facts stated therein and pleading that show cause notices had been issued to
wrong persons because the appellants were not the 'person incharge' of the
conveyance, liable to be dealt under Section 116 of the Act. It was further
contended that the deficient quantities noticed in the cargo at the time of preparation
of the segregation report were infact either pilferaged at Delhi Aiport after
the cargo had been unloaded from the conveyance and before the preparation of
the segregation report under Section 45 of the Act or were not loaded on the
conveyance at all. The Assistant Commissioner of Customs was not satisfied with
the reply submitted to the show cause notice. The said appropriate authority
imposed the penalty on the appellant against which they filed appeals before
the Commissioner of Customs. On dismissal of their appeals by the Commissioner
of Customs (Appeals), they preferred further statutory appeals before the Joint
Secretary (Revenue) which were also dismissed.
Dissatisfied
by the orders passed by the authorities under the Act, the appellants filed
writ petitions in the High Court of Delhi which were also dismissed vide the
order impugned in these appeals.
Learned
counsel appearing for the appellants has vehemently argued that as his clients
were not the "person incharge" within the meaning of Section 2(31) of
the Act and the person incharge had obtained an order from the officer incharge
in terms of Clause (e) of sub-section (2) of Section 42 of the Act, no
liability could be fastened upon the appellants. Learned Attorney General for
India who appeared for the respondents drew our attention to Section 148 of the
Act and submitted that though strictly and technically speaking the appellants
were not the persons incharge, yet they were 'such persons' as contemplated
under sub-section (2) of Section 148 of the Act, liable to penalty and pay for
the price for the shortages in unloading of the cargo.
In
order to appreciate the rival contentions of the parties, a reference may be
made to various Sections of the Act which are relevant for the purpose of determining
the controversy in these appeals.
Section
2(31) of the Act defines "person incharge" to mean:
"(a)
in relation to a vessel, the master of the vessel;
(b) in
relation to an aircraft, the commander or pilot- in-charge of the aircraft;
(c) in
relation to a railway train, the conductor, guard or other person having the
chief direction of the train;
(d) in
relation to any other conveyance, the driver or other person-in-charge of the
conveyance." Section 42 of the Act provides that the person incharge of a
conveyance, which has brought any imported goods or off-loaded at a customs
station shall not cause or permit the conveyance to depart from that customs
station until a written order to that effect has been given by the proper
officer. Clause (e) of sub-section(2) of Section 42 prescribes that no such
order shall be given until the person in charge of the conveyance has satisfied
the proper officer that no penalty is leviable on him under section 116 or the
payment of any penalty that may be levied upon him under that section has been
secured by such guarantee or deposit of such amount as the proper officer may
direct. Section 45 puts restrictions on custody and removal of the imported
goods. Section 116 of the Act provides:
"116.
Penalty for not account for goods-- If any goods loaded in a conveyance for
importation into India, or any goods transhipped under the provisions of this
Act or coastal goods carried in a conveyance, are not unloaded at their place
of destination in India, or if the quantity unloaded is short of the quantity
to be unloaded at that destination, and if the failure to unload or the
deficiency is not accounted for to the satisfaction of the Deputy Commissioner
of Customs or Assistant Commissioner of Customs, the person-in-charge of the
conveyance shall be liable,--
(a) in
the case of goods loaded in a conveyance for importation into India or goods
transhipped under the provisions of this Act, to a penalty not exceeding twice
the amount of duty that would have been chargeable on the goods not unloaded or
the deficient goods, as the case may be, had such goods been imported;
(b) in
the case of coastal goods, to a penalty not exceeding twice the amount of
export duty that would have been chargeable on the goods not unloaded or the
deficient goods, as the case may be, had such goods been exported."
Section 148 of the Act, reads:
"148.
Liability of agent provided by the person in charge of a conveyance-- (1) Where
this Act requires anything to be done by the person in charge of a conveyance,
it may be done on his behalf by his agent.
(2) An
agent appointed by the person in charge of a conveyance and any person who
represents himself to any officer of customs as an agent of any such person in
charge, and is accepted as such by that officer, shall be liable for the fulfilment
in respect of the matter in question of all obligations imposed on such person
in charge by or under this Act or any law for the time being in force, and to
penalties and confiscations which may be incurred in respect of that
matter." It may be noticed that Sub-section (2) of Section 148 was
incorporated by way of an amendment. The Objects and Reasons for its
incorporation were notified in Gazette of India on 14.12.1962, Part-II, S.2,
Ext., P.368 as under:
"Clause
148. - Sub-clause (1) corresponds to the existing Section 5.
Sub-clause
(2) is a new provision which makes the agent responsible for all the penalties
and confiscations to which the person-in-charge of a conveyance may be liable.
Since
the person-in-charge of a conveyance has to leave with the conveyance, it is
necessary that his agent in India should
be made responsible for all the penalties and confiscations." While
interpreting a statute the court should try to sustain its validity and give
such meaning to the provisions which advance the object sought to be achieved
by the enactment. The court cannot approach the enactment with a view to pick
holes or to search for defects of drafting which make its working impossible.
It is a cardinal principle of construction of a statute that effort should be
made in construing the different provisions so that each provision will have
its play and in the event of any conflict a harmonious construction should be
given. The well-known principle of harmonious construction is that effect shall
be given to all the provisions and for that any provision of the statute should
be construed with reference to the other provisions so as to make it workable.
A particular provision cannot be picked up and interpreted to defeat another
provision made in that behalf under the statute. It is the duty of the court to
make such construction of a statute which shall suppress the mischief and
advance the remedy. While interpreting a statute the courts are required to
keep in mind the consequences which are likely to flow upon the intended
interpretation.
The
scheme of the Act provides that the cargo must be unloaded at the place of
intended destination and it should not be short of the quantity. Where it is
found that the cargo has not been unloaded at the requisite destination or the
deficiencies are not accounted for to the satisfaction of the authorities under
the Act, the person incharge of the conveyance shall be liable in terms of
Section 116 of the Act.
Besides
the person incharge of the conveyance, the liability could be fastened upon his
agent appointed under the Act or a person representing the officer incharge who
has accepted as such by the officer concerned for the purposes of dealing with
the cargo on his (officer-in-charge) behalf. Assuming that the appellants are
neither the officer incharge within the meaning of Section 2(31) of the Act nor
his agent, it cannot be denied that they shall be deemed to be a person
representing the officer incharge to the officers of the customs as his agent
for the purposes of dealing with the cargo off-loaded from the aircraft of the
appellants carrier.
It is
found from the record that the mechanism of unloading and accounting of the
cargo prevalent at the airport is that on arrival of the aircraft the carrier
Airlines are not unloading the package and accounting the same airway bill wise
as manifested in the cargo manifest. They bring out cargo in pallets and ULDs
which contains many number of packages relating to number of Master Airways
Bill and House Airways Bills. Thereafter they carry the pallets and the ULDs by
their transport to the cargo terminal for handing over to the Airport Authority
of India (the custodian). At this stage pallets and ULDs are opened and
packages relating to each Master Airway Bill & House Airway Bill are
unloaded to the ground and handed over to the custodian by the representatives
of the airlines. At this stage the airlines tally the goods with the cargo
manifest and a segregation report is prepared indicating the account of cargo
handed over by the airlines. Any discrepancy in number of packages not handed
over as found short against a particular airway bill or the package if found in
damaged condition is recorded. The segregation report is jointly signed by the
airlines, AAI and the customs. Before this stage the custodian have no
mechanism to know as to how many packages are contained in the pallets and ULDs
and as to whether they relate to cargo manifest or not. In such circumstance
custody cannot be passed on to a custodian unless a person carrying the goods
hands over by identifying to a document of account. The segregation report
prepared by the airlines and the custodian is the document of accounting for
the goods carried by the carrier and passing on the custody by the carrier to
the custodian.
The
process of unloading is completed only when the cargo carried by the carrier
airlines are put on the ground and handed over to the custodian accounting each
package to an airway bill in conformity with the cargo manifest. Till then the
cargo remains in possession and control of the carrier airlines and they all
along have to keep the safety of the goods. If any loss or pilferage takes
place prior to the handing over of the cargo to the custodian the goods cannot
be taken as accounted for by the carrier. The process of unloading and
accounting of the cargo clearly and unambiguously shows that the goods are
handed over by such persons who are the representatives of the carrier and
represent themselves as an agent of the "person incharge" of the
conveyance. It is undisputed that such person who represent themselves as agent
of the officer incharge of the conveyance are accepted as such by the officers
of the respondents dealing with the carrier.
All
the authorities under the Act have found on facts that the cargo was being
dealt with by the representatives of the officer incharge of the conveyance
which was owned and are possessed by the appellants. The appellants have tried
to take shelter under the technicalities of law to avoid their liability
without disputing the fact that packages or quantities in the packages were
found short.
Accepting
the submission of the appellants that after the issuance of an order under
Section 42 of the Act no proceedings could be initiated against the officer incharge
of the carrier would amount to negating the working of the Act and defeating
the object sought to be achieved by it. Sections 42 and 116 of the Act are
distinct as they deal with different contingencies. Whereas Section 42 puts the
restriction that no conveyance shall be permitted to depart from the customs
station until a written order to that effect is given by the proper officer
under sub-section (2) of it, Section 116 deals with the penalty for not
accounting for goods unloaded at the intended destination. The purpose of
Section 42 is to not detain the conveyance unnecessarily and pass an order for
its departure on prima facie satisfaction that the person incharge of the
conveyance has unloaded the goods which apparently do not show the levy of a
penalty under Section 116 of the Act. Even after compliance of the provisions
of Section 42 if it is found that the goods unloaded are short of quantity, the
Designated Officer under Section 116 of the Act can proceed with the matter and
impose penalty after following the procedure prescribed under the Act. The
officers contemplated under Sections 42 and 116 are different authorities,
obviously for dealing with different situations.
It may
be noticed that sub-section (2) of Section 148 was enacted to give relief to
the aircraft carrier and the officer incharge of a conveyance and permit him to
leave with the conveyance by making his agent and person representing him
responsible for all the penalties and confiscations. Accepting the submissions
of the appellants in this context would defeat the purpose of incorporation of
sub-section (2) of Section 148 of the Act and make the working of the Act
impractical.
Such
an interpretation would be detrimental both to the carrier, the officer incharge
on the one hand and the revenue and customs authorities under the Act, on the
other. Insistence of ascertaining the liability under Section 116 of the Act
before passing an order in terms of Section 42 would mean not permitting the
conveyance to depart from the customs station unless its officers have minutely
examined the whole case and determined the consequences for not accounting of
goods.
Such
could not be the intention of the Legislature.
Alternatively
the learned counsel for the appellants referred to the facts of the case to
canvass that even if the appellants are liable under the law to be served with
the show cause notice, the respondents authorities have on facts not proved the
averments made in the show cause notice. Such a submission is factually incorrect
and legally impermissible. All the authorities on facts have found that the
shortages had not been accounted for and actually not denied by the appellants.
The findings of fact arrived at by all the authorities under the Act could not
be disturbed by the High Court in exercise of the writ jurisdiction under
Article 226 of the Constitution of India.
There
is no merit in these appeals which are accordingly dismissed with costs
quantified at Rs.5,000/- in each appeal.
.......................J.
(R.P.
SETHI) .......................J.
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