Delhi High Court Denies Traders' Plea Seeking Waiver Of Detention Charges Imposed By ICDs and CFSs During Lockdown

LIVELAW NEWS NETWORK

14 Aug 2021 8:01 AM GMT

  • Delhi High Court Denies Traders Plea Seeking Waiver Of Detention Charges Imposed By ICDs and CFSs During Lockdown

    The Delhi High Court recently disposed off a plea filed by traders seeking waiver of penal detention charges and ground rent levied by the Inland Container Depots (ICDs) and Container Freight Stations (CFSs) during the COVID lockdown. A Bench of Justices Rajiv Sahai Endlaw and C. Hari Shankar dismissed the various writ petitions filed by importers/exporters while noting that all...

    The Delhi High Court recently disposed off a plea filed by traders seeking waiver of penal detention charges and ground rent levied by the Inland Container Depots (ICDs) and Container Freight Stations (CFSs) during the COVID lockdown.

    A Bench of Justices Rajiv Sahai Endlaw and C. Hari Shankar dismissed the various writ petitions filed by importers/exporters while noting that all issues before Court involved disputed questions of fact, not amenable to adjudication under Article 226 of the Constitution of India.

    "It is not open to the Court – just as it was not open to the executive authorities – to approach the matter solely from the point of view of the importers or exporters, unmindful of the difficulties which were faced by the ICDs and CFSs during the lockdown, and the constraints under which they operated. Equity inherently inheres in the exercise of jurisdiction under Article 226, and we are not persuaded to hold that the equities of the present case are entirely in favour of the petitioner importers/exporters, and to the prejudice of the respondent ICDs/CFSs/shipping lines, as would warrant our inference under Article 226 of the Constitution of India", remarked the Bench.

    Facts before the Court:

    Importers or exporters, pay charges to Shipping Lines, ICDs and CFSs (who are Customs Cargo Service Providers), who permit storage of imported goods, prior to their being released by the Customs after payment of duty, against pre-fixed and pre-determined charges.

    Penal detention charges are levied by ICDs/CFSs, for the period, beyond a certain number of "free days", during which the goods continue to remain in their premises, and levied by shipping lines, in the event the containers are not returned to them within a fixed number of "free days".

    Consequent to the COVID-2019 pandemic, there was a considerable disruption in the movement of goods. As a result, the petitioners were unable to remove the imported goods from the premises of the ICDs/CFSs, or return the containers to the shipping lines, within the permissible number of "free days".

    Petitioner's submissions:

    The petitioners' argued that, by virtue of instructions, contained in Office Orders and Circulars issued by the Ministry of Shipping (MOS), Directorate General of Shipping (DGS) and Central Board of Indirect Taxes and Customs (CBIC), they were entitled to waiver of penal detention charges and ground rent, for the lockdown period.

    Inability to move or transport their goods, during the said period, was pleaded by the traders.

    Advocate Amit Sibal contended that ICDs and CFSs were themselves extended various ameliorative benefits, by way of waiver of penal charges, by the Port authorities. Refusal to extend such benefits to the importers and exporters, he submitted, would, therefore, be discriminatory and violative of Article 14.

    Court's findings:

    The ICDs and CFSs told the Court that many importers did actually have their goods released, even during the period of lockdown, at times availing the discounts provided by the ICDs and CFSs.

    This indicates, to our mind, that there was no inherent impossibility, even during the lockdown period, in securing the release of the imported goods, said the Bench.

    "The fact that some importers did manage to secure such release indicates that, if other importers were unable to do so, the reason for such inability would have to be assessed on a case-to-case basis."

    Moreover, the ICDs and CFSs themselves had, in place, a mechanism for such aggrieved importers and exporters to approach them, hence, there was no reason behind exercising jurisdiction under Article 226 of the Constitution of India.

    "Like Oliver Twist, the petitioners want more." remarked the Bench.

    The Bench went on to examine whether the official Orders, Circulars and Advisories entitled the petitioners to a mandamus to CFSs, ICDs and shipping lines not to charge any penal charges.

    The High Court relied on decisions of the Supreme Court in Small Scale Industrial Manufacturers Association v. U.O.I. and Indian School v. State of Rajasthan.

    In acceding to the prayer of the petitioners in Small Scale Industries case, for waiver of interest on interest/compound interest/penal interest, and for extension of such benefit to all borrowers, the Supreme Court, did not proceed on the basis of a qualitative assessment that greater benefits were due to the petitioners than had been extended by the RBI on the Governmental authorities. Rather, it proceeded on the principle of discrimination and arbitrariness, noted the Court.

    "It is important to notice this distinction. It is not as though the Supreme Court fashioned a benefice (metaphorically speaking) in favour of the petitioners before it, in excess of the beneficial dispensations already extended by the Governmental authorities. The Supreme Court, instead, proceeded on the premise that, while extending such beneficial dispensations, the Government could not act arbitrarily or in a manner which would discriminate between entities similarly situated. This, in turn, would also follow from the hallowed principle that, even in distribution of largesse, the Government cannot act in a manner which is arbitrary or discriminatory in nature", it added.

    While relying on Indian school case, the Court addressed the aspect of "mitigation" where in the Supreme Court held, that "mitigation measures", under the Disaster Management Act, "are aimed merely for reducing the risk/impact or effects of a disaster or threatening disaster situation".

    There is, according to the Supreme Court, "not even a tittle of indication that in the name of mitigating measures, the disaster management plan may comprehend the issue of direction in respect of economic aspects of legitimate subsisting contracts or transactions between two private individuals with which the State has no direct causal relationship, and especially when the determination of compensation/cost/fees is the prerogative of the supplier or manufacturer of the goods or service provider of the services".

    Directions issued:

    While disposing off the petitions, the Court decided to act on a prayer made by Indian Agro and Recycled Paper Mills Association.

    The Association sought a direction to the Ministry of Finance to respond to their representation on grant of a stimulus package for the industry and directions to the banks and Non-Banking Financial Corporations to take a lenient and proactive policy and provide adequate financial support to the members of the petitioner association.

    In this regard, the Bench directed the Union of India to take a decision on the petitioners' representation and communicate the decision to the petitioner as expeditiously as possible.

    Last year, the Allahabad High Court had directed the Container Corporation of India Ltd. (CONCOR) to decide on the issue of levying detention charges/ ground rent by the ICDs, for storage of cargo containers beyond the free period of fourteen days, during the lockdown period.

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