D.A. Mehta, J.
1. It is necessary to take note of the fact that Special Civil Application Nos.11935 of 2003, 1188 of 2004 and 1234 of 2004 had been originally circulated before the learned Single Judge as per roster. However, by an order dated 20th October, 2004 made by the Court, all the petitions have been clubbed together and directed to be heard together and that is how this Court has taken up all the petitions for hearing together.
2. Taking into consideration the nature of disputes between the parties and the subject matter of controversy, namely, a ship named "M.V. PALANGA" (hereinafter referred to as "vessel" or "goods") and its ownership and rights of respective parties averred qua the said property, the matters have been heard at length and finally with the consent of the learned advocates for the respective parties. Hence, RULE (except in Special Civil Application No.1188 of 2004 and 1234 of 2004). The learned advocates for the respective respondents waive service of rule.
SPECIAL CIVIL APPLICATION NO.4433 OF 2004
3. This petition has been moved praying for the following reliefs :
"12. In the above premises, the petitioners most respectfully pray as under:
(A) That Your Lordships may be pleased to issue a Writ of Mandamus or a Writ of Certiorari or any other appropriate writ, direction of order, quashing and setting aside the permission issued by the second respondent herein in favour of Messrs Jogadia Polymers Pvt. Ltd., vide letter F. No.SBY/106-99/2K dated 24.9.2003 (Annexure "F" hereto);
(B) That Your Lordships may be pleased to issue a Writ of Prohibition or any other appropriate writ, order or direction completely and permanently prohibiting the respondents Nos.1 and 2 herein, from entertaining any application of whatsoever nature as regards vessel M.V. PALANGA for any purpose concerning the provisions of the Customs Act, 1962 and the Rules and Regulations framed there under and the Central Excise Act, 1944;
(C) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to retrain respondents Nos.1 and 2, their servants and agents from taking any action as regards vessel M.V. PALANGA in pursuance of permission granted from F.No.SBY/106-99/2K dated 24.9.2003 (Annexure "F" hereto);
(D) That an ex-parte ad-interim relief in terms of para (C) above may kindly be granted;
(E) That any other further relief that may be deemed fit in the facts and circumstances of the case may also please be granted. "
4. The petitioner is a District Co-operative Bank [hereinafter referred to as 'the Co-operative Bank'] carrying on business of banking. It is the case of the petitioner that respondent No.2 - Dy. Commissioner of Customs, Bhavnagar, has illegally and unauthorizedly granted permission to respondent No.3 - M/s. Jogadia Polymers Private Limited [JPPL] to clear the imported goods, which is a vessel named "M.V. PALANGA", despite the fact that the said goods have not been imported or are not owned by respondent No.3. The petitioner has approached the Court on the basis that in the course of its banking business it had advanced various amounts, more particularly described in Paragraph No.3.1 of the petition, to one Deep Shipbreaking Industrial Co-operative Society Limited [DEEP] and DEEP had in the course of its business activities purchased the vessel for the purpose of ship breaking. That DEEP had included the said vessel in the statement showing stock in trade as on 10th June, 1997. Thus, according to the petitioner, it was entitled to stake its claim for recovery of outstanding dues from DEEP against the vessel.
5. DEEP purchased the vessel having LDT of 3293.00 MT and valued at US$ 5,81,784.63 from one Standard Marine TDG. INC. [Standard Marine] as per Memorandum of Agreement dated 25th April, 1997. The vessel arrived at Alang anchorage on 13th May, 1997 and after completion of boarding and rummaging formalities on 14th May, 1997, the vessel was beached on 25th May, 1997 at Plot No.145, SBY-Sosiya. It appears that DEEP had some problems with its bankers and hence, it could not open Letter of Credit and as a consequence Bill of Entry was not presented by DEEP.
6. Standard Marine, therefore, appears to have entered into another Memorandum of Agreement dated 15th July, 1997 with one Alang Marine Limited [Alang Marine] for US$ 4,86,171/-.
7. In the meantime, it appears that the customs authorities received information that DEEP had commenced breaking of the vessel without filing Bill of Entry under Section 46 of the Customs Act, 1962 (the Act) and without discharging the duty liability in terms of Section 12 read with Sections 14 and 15 of the Act. That as the aforesaid action was without an order permitting clearance of vessel for home consumption, the officers of Headquarters Central Excise (Preventive Branch), Rajkot visited the plot where the vessel was beached and noticed that various items, more particularly described in Paragraph No.2.2 of Order-in-Original dated 29th April, 1999, were removed from the vessel and were lying in the plot. Accordingly, the said items as well as the vessel were seized on 19th July, 1997 under provisions of Section 110(1) of the Act. Respondent No.5, Commissioner of Customs and Central Excise, Rajkot, recorded statements of one Dr. Jiten A. Jogadia, stated to be Manager/Secretary of DEEP, as he was present at the time of seizure, wherein the aforesaid clandestine activity was admitted; statements of Watchman Shri Bhanjibhai Bijalbhai Solanki, Master Shri Krishna Nand Tiwari were also recorded. The said authority, namely, respondent No.5, after recording statements of other persons as mentioned in the Order-in-Original dated 29th April, 1999, issued show-cause notice dated 16th January, 1998.
8. It appears that in the meantime, litigation ensued between the Standard Marine and Alang Marine as well as DEEP but, ultimately, the suit was withdrawn vide order dated 23rd July, 1998.
9. DEEP approached this Court by way of Special Civil Application No.9085 of 1998 on receipt of the show-cause notice and ultimately this Court passed an order on 4th December, 1998 permitting DEEP to withdraw the petition and reply to the show-cause notice by 7th December, 1998. The customs authorities were directed to adjudicate the matter as expeditiously as possible, preferably before 31st December, 1998 but not later than 11th January, 1999. It appears that in the meantime, by way of Misc. Civil Application No.96 of 1999 JPPL had been permitted to file representation before the adjudicating authority and the adjudicating authority was directed to consider the same on merits. Therefore, the adjudicating authority was called upon to decide as to from amongst DEEP, Alang Marine and JPPL who was the importer under Section 2(26) of the Act and who should be allowed to file Bill of Entry for home consumption under Section 46 of the Act. It was the case of JPPL that neither DEEP, nor Alang Marine nor Standard Marine should be treated as an importer under Section 2(26) of the Act and the two memoranda entered into by Standard Marine with DEEP and Alang Marine were required to be rejected as they were executed without any consideration. That JPPL was the real importer in light of the Memorandum of Agreement dated 1st September, 1998 entered into by JPPL with Standard Marine for a price of US$ 3,28,975.71. That JPPL had also opened a Letter of Credit dated 16th September, 1998 and had also filed a Bill of Entry on 15th October, 1998.
10. The adjudicating authority, therefore, after setting out contentions of the parties, recorded its 'Discussion and Findings' commencing from Paragraph No.4.1 of the Order-in-Original and vide Paragraph No.4.2 the adjudicating authority has taken cognizance of the fact that this Court in earlier round of litigation had
"..... after considering various claims and counter claims made in the various Civil Applications left the matter regarding ownership of the ship as to who has to be treated as the importer of the ship to the Commissioner of Customs and Central Excise, Rajkot, the adjudicating authority. .....".
In Paragraph No.4.4 the adjudicating authority records as to what is the main issue arising for adjudication, namely, whether DEEP, Alang Marine or JPPL should be treated either owner of the ship or importer of the ship and should be allowed to file the Bill of Entry for home consumption. After recording the facts from Paragraph No.4.5 onwards, which are undisputed, the adjudicating authority has reproduced various definitions vide Paragraph No.4.10 of the Order-in-Original. After referring to the different Memoranda of Agreement entered into by Standard Marine with DEEP, Alang Marine and JPPL, the adjudicating authority has categorically found in Paragraph No.4.15 of the order that the department is not required to decide as to whether Standard Marine has received any consideration or not; the department was only required to assess the value on which the duty could be levied. In Paragraph No.4.16 the adjudicating authority has further taken note of the fact that the original Memorandum of Agreement dated 25th April, 1997 entered into by DEEP with Standard Marine had at no stage been cancelled; that physical delivery of the vessel had already been handed over to DEEP by Standard Marine. In the subsequent paragraphs the adjudicating authority records the following findings :
"4.17 In view of above noticee no.1, after receiving the physical delivery of the ship, were and continue to be the lawful owner and/or importer of the ship in terms of Section 2(26) of the Act inasmuch as not only the IGM and other relevant import documents were in their name but also had taken all steps for completing all the formalities starting from the stage when the ship entered the Indian Customs Waters upto beaching of her in their Plot.145, SBY-Sosiya."
Thereafter, the adjudicating authority has referred to various decisions of the Tribunal and High Courts in support of its findings. In Paragraph No.4.27 the adjudicating authority records, after appreciating the evidence on record, that Alang Marine is neither a plot holder nor is registered with Central Excise Department at SBY-Sosiya and Gujarat Maritime Board does not permit beaching of a vessel or permission to break the vessel to an outsider.
11. The claim of JPPL as to ownership of the vessel and being treated as an importer under Section 2(26) of the Act has been dealt with vide Paragraph No.4.33 of the order as well as 4.34 of the order. In the latter paragraph the adjudicating authority has taken note of the fact that Shri Jiten A. Jogadia had acted as Manager and Honorary Secretary of DEEP on the one hand and as Managing Director of JPPL on the other hand; that he "was aware of every notorious act and behaviour of all concerned, ....". That Dr. Jogadia has signed the seizure memo on 19th July, 1997 as well as tendered statement under Section 108 of the Act on 19th July, 1997 on behalf of DEEP. That despite the knowledge of the seizure action on behalf of the department in the Memorandum of Agreement executed on 1st September, 1998, the said fact was not mentioned even where JPPL was a party to the agreement and the memorandum had been executed and signed by Dr. Jogadia as Managing Director on behalf of JPPL. In Paragraph No.4.36 of the Order-in-Original the adjudicating authority has further found that Memorandum of Agreement dated 1st September, 1998 was not entered into in the course of international trade but had been signed due to involvement of Dr. Jogadia in the affairs of DEEP and also Alang Marine and to bail out DEEP and Standard Marine from financial crisis. The adjudicating authority has further gone on to observe that
"...... it is absolutely clear that the MOA dated 1.9.1998 was collusive in nature and was a device on the one hand for the furtherance of the financial interests of noticee No.1 and noticee No.2 and on the other hand a ploy to evade custom duty by depressing the value of the ship to the benefit of JPPL."
(Noticee No.1 is 'DEEP' and Noticee No.2 is 'Standard Marine').
12. Ultimately in Paragraph No.5 the adjudicating authority holds as under :
"5. In view of the foregoing noticee No.1 who are the original buyers of the ship and had purchased the ship from noticee No.2 for US$ 581,784.63 in terms of MOA dated 25.04.1997 and in whose name IGM and other related import documents like Commercial Invoice dated 13.5.97, Bill of Sale dated 13.5.1997, Survey Reports dated 14.5.1997 etc. should and who have completed all the required customs formalities like boarding, rummaging, obtaining entry inward of the ship, beaching permission and have got the physical delivery of the ship from noticee No.2 vide Physical Delivery Certificate dated 15.5.1997 are to be treated as the importer under Section 2(26) of the Act. I am unable to persuade myself to accept the claim of noticee No.3 or JPPL for treating for the reasons discussed in the paras above them as importer of the ship under Section 2(26) of the Act and accordingly, their claim in this regard is rejected."
13. The adjudicating authority after holding DEEP as importer under Section 2(26) of the Act permitted DEEP to file Bill of Entry for home consumption under Section 46 of the Act on payment of appropriate Customs Duty and held that the price stated in MoA dated 25th April, 1997 shall be the price for arriving at the assessable value under Section 14 of the Act. He further ordered confiscation of the ship but granted option to DEEP to redeem the ship on payment of fine in lieu of confiscation. He also imposed personal penalty on DEEP and Dr. Jogadia under Section 112 of the Act.
14. This order was carried in appeal before the Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) by DEEP. CEGAT, after hearing the parties, held as under :
"7. In the facts, circumstances and the legal position as discussed above, it is clear that the finding regarding violation of Clause (j) of Section 111 of the Customs Act is totally devoid of any merit. Consequently, the confiscation of the vessel and imposition of penalties are set aside as entirely unwarranted, with consequential relief to the appellants. M/s.Deep Shipbreaking Industrial Co-operative Society shall be at the liberty to carry out the shipbreaking activity in respect of the imported vessel, M.V. Palanga, incompliance with the provisions relating to payment of duty."
15. It appears from the averments in the petition that both DEEP and JPPL have entered into various litigations. The petitioner - Co-operative Bank had moved Board of Nominees (the Board) seeking appropriate relief against DEEP and had succeeded in the said proceedings. Against the order made in Lavad Suit No.153 of 1998 JPPL had carried the matter before the Gujarat State Co-operative Tribunal (the Tribunal) and the Tribunal had rejected its Misc. Application seeking permission to file appeal against which JPPL has preferred Special Civil Application No.1188 of 2004. According to the petitioner Co-operative Bank in the said writ petition JPPL had annexed a permission letter issued by respondent No.2 bearing F.No.SBY/106-99/2K dated 24th September, 2003. It is this letter issued by respondent No.2 which has given rise to the present petition.
16. Mr. Paresh M. Dave, learned advocate appearing on behalf of the petitioner - Co-operative Bank, submitted that once DEEP had itself accepted as per its own stock statement dated 10th June, 1997 that the vessel in question forms part of its stock-in-trade and the petitioner - Co-operative Bank had been able to establish before the Board that it had advanced sums of money on the basis of such statement, the petitioner Co-operative Bank was entitled to seek recovery of such outstanding loan from DEEP. That as the Order-in-Original made by the adjudicating authority and confirmed by CEGAT show DEEP had been held to be importer under the provisions of the Act, had been permitted to file Bill of Entry and in the circumstances JPPL could not be permitted to defeat the rights of the petitioner Co-operative Bank by staking a claim as being owner/importer of the vessel when the same had already been turned down by the adjudicating authority. That respondent No.2, in the circumstances, could not have granted the permission to file Bill of Entry as per impugned letter dated 24th September, 2003. He, therefore, urged that the said letter dated 24th September, 2003 (Annexure-F) be quashed and set aside.
17. On 9th April, 2004 this Court had made the following order :
"At the request of Mr Paresh M Dave, learned counsel for the petitioner, leave to add Deep Ship Breaking Industrial Co-operative Society Ltd. as respondent No.4. 2. Mr Dave submits that in view of the order-in-original No.1/COMMR/CUS/1999 dated 29.4.1999 (Annexure "C") of the Commissioner of Customs & Central Excise, Rajkot read with the order dated 30.5.2002 of the CEGAT (Annexure "D"), the Assistant Commissioner of Customs, Bhavnagar could not have allowed clearance of the ship in question being vessel M.V. PALANGA by respondent No.3-M/s Jogadia Polymers Pvt. Ltd.
Mr Dave further states that the impugned order dated 24.9.2003 (Annexure "F") of the Assistant Commissioner of Customs, Bhavnagar came to the notice of the petitioner-Bank only when the same was produced by respondent No.3 along with the affidavit in rejoinder of Dr Jogadia in Special Civil Application No.1188 of 2004 only about a week ago. He further states that Dr Jogadia is the common Director of Deep Ship Breaking Industrial Co-operative Society Ltd. and also respondent No.3-M/s Jogadia Polymers Pvt. Ltd.
3. In view of the above statements and submissions, notice for final disposal returnable on 26th April, 2004.
Till then, there shall be ad-interim stay of operation of the order dated 24.9.2003 (Annexure "F") of the Assistant Commissioner of Customs, Bhavnagar. 4. It is clarified that pendency of this petition or the aforesaid ad-interim stay does not preclude respondent Nos. 1 and 2 i.e. the Customs Department from recovering customs duty leviable on vessel m.v. PALANGA in accordance with the order-in-original No.1/COMMR/CUS/1999 dated 29.4.1999 (Annexure "C") of the Commissioner of Customs & Central Excise, Rajkot read with the order dated 30.5.2002 of the CEGAT (Annexure "D").
5. Ms Dharmista Raval, learned senior standing counsel for the Central Government waives service of notice for respondent No.1.
Direct Service is permitted on the rest.
(M.S. Shah, J.) (A.M. Kapadia, J.)
18. When the matter came up on 10th February, 2005 this Court permitted the petitioner to join Commissioner of Customs and Central Excise, Rajkot as respondent No.5. Accordingly, after issuance of notice the said respondent No.5 has appeared and is represented by Mr. Y.N. Ravani. It was submitted by Mr. Ravani that on 7th May, 1999 DEEP had entered into a Memorandum of Understanding with JPPL whereby DEEP had interalia agreed to relinquish the title of the vessel in favour of JPPL. It has further been submitted that despite DEEP having been held as "owner and importer of the vessel", DEEP had relinquished the title of the vessel in favour of JPPL and hence, the action of respondent No.2 to grant permission to JPPL to file Bill of Entry could not be said to suffer from any legal infirmity. It was further submitted that the petitioner - Co-operative Bank had suppressed the factum of relinquishment of title of the vessel by DEEP in favour of JPPL, and the petitioner had not explained how DEEP could retain the status of importer after relinquishing the title in favour of JPPL through MoU dated 7th May, 1999. In this connection he invited attention to the provisions of Section 23(2) of the Act and submitted that the said provisions permitted relinquishment of title to the goods.
19. Mr. P.J. Kanabar, learned advocate appearing on behalf of respondent No.3 - JPPL, submitted that the Order-in-Original made by respondent No.5 on 29th April, 1999 holding DEEP as an importer was not binding on JPPL. That the only reason which weighed with the adjudicating authority was that DEEP had agreed to purchase the vessel for a price which was higher than the price at which JPPL had agreed to purchase the vessel. That the MoA between DEEP and Standard Marine had not gone through in as much as DEEP had not been able to open Letter of Credit nor make payment, and hence, Standard Marine had executed subsequent MoA dated 1st September, 1998 with JPPL. In the circumstances, he fervently urged that title to the vessel belonged to JPPL and though DEEP was treated to be an importer at a given time in past, DEEP had not only failed to honour its part of the commitment under the agreement, but also failed to file Bill of Entry, pay duty, etc. as required under the law. He, therefore, submitted that respondent No.2 was perfectly justified in permitting JPPL vide the impugned letter to file Bill of Entry and pay duty in accordance with law. It was also submitted that JPPL had explained its stand vide affidavit-in-reply dated 26th April, 2004, including the fact that JPPL had challenged the Order-in-Original by way of appeal before CEGAT. That the appeal was belated by a period of 75 days and the application seeking condonation of delay in filing the appeal had been rejected by CEGAT. Against which JPPL had preferred a petition before this Court being Special Civil Application No.263 of 2005. That before the said petition could be proceeded with on merits, as CEGAT had decided the appeal filed by DEEP, JPPL withdrew the said petition. He, therefore, urged that it was incorrect to state that JPPL had accepted the order of the adjudicating authority.
19.1 A further contention was urged that the Order-in-Original did not survive after the order made by CEGAT, whereby CEGAT quashed and set aside the order of confiscation and imposition of penalty. Respondent No.2, according to Mr. Kanabar, therefore, was justified in initiating fresh action in accordance with law and granting permission to JPPL to file Bill of Entry. Lastly, it was urged that the entire petition moved by the Co-operative Bank was misconceived in as much as the petitioner - Co-operative Bank had not lent any funds to DEEP.
20. Mr. Jitendra M. Malkan, appearing on behalf of respondent No.2, referred to the affidavit-in-reply dated 11th May, 2004. According to respondent No.2 as per the said affidavit-in-reply he was justified in permitting JPPL to file a Bill of Entry because DEEP had not opened Letter of Credit and if payment for vessel is not made by DEEP, Standard Marine had right to resell the vessel to any other buyer as per Clause 15 of the MoA dated 25th April, 1997. That accordingly Standard Marine had sold the vessel to JPPL vide MoA dated 1st September, 1998 and JPPL had opened Letter of Credit and payment had been released by State Bank of Bikaner and Jaipur, C.G. Road, Branch, Ahmedabad. That DEEP had abandoned the vessel and also gave No Objection Certificate if the vessel is sold to any other buyer and hence in interest of "huge Government revenue which has been blocked for long back the respondent has rightly ordered to hold JPPL as importer." Mr. Malkan, therefore, after referring to the aforesaid averment in the affidavit-in-reply supported the impugned permission granted under letter dated 24th September, 2003.
21. Though served, there is no appearance on behalf of respondent No.4 i.e. DEEP.
22. It is apparent from the facts which have come on record that the impugned permission dated 24th September, 2003 granted by way of letter (Annexure-F) cannot be upheld for the reasons that follow hereinafter.
23. The first and foremost, it requires to be noted and emphasized that the Order-in-Original dated 29th April, 1999 had been made by the Commissioner of Customs and Central Excise, Rajkot who was then having jurisdiction, while the impugned permission has been granted by a subordinate authority viz. Dy. Commissioner of Customs. It is not the case of respondent No.2 that the order made by respondent No.5 Commissioner was not a valid order or was made without jurisdiction. It is not even the case of respondent No.2 that the said order had not been confirmed by CEGAT and had not merged in the order of CEGAT, as urged by JPPL. The impugned letter granting the permission is silent as to the reasons which weighed with respondent No.2 while granting the permission. The said reasons are supplied in the affidavit-in-reply. In the circumstances, the subordinate authority could not have passed the impugned order, which is non-speaking order, especially when an order made by the superior authority was valid and in existence and had merged in the order of CEGAT.
24. The stand of respondent No.2 that the impugned permission has been granted due to loss of huge revenue is a hollow claim as can be seen from the facts which have come on record. Respondent No.5 had categorically turned down the claim of JPPL on the basis of very same Memorandum of Agreement dated 1st September, 1998 and one of the reasons was that the valuation of vessel, namely, the price at which JPPL had agreed to purchase the vessel was lesser than the price at which DEEP had agreed to purchase the vessel from Standard Marine. Therefore, respondent No.2 could not have taken recourse to the very same MoA which had already been dealt with and not accepted by his superior while framing the Order-in-Original.
25. The letter granting permission, emanating from the office of the Dy. Commissioner has been signed by Assistant Commissioner. The signatory to the letter does not state that he has been authorized by the Dy. Commissioner to forward the said communication and the order is made by the Dy. Commissioner. It is necessary to take cognizance of this fact in light of the facts which have unfolded by way of the affidavit-in-reply on behalf of respondent No.2 as well as respondent No.5 to which reference will be made very soon.
26. Affidavit-in-reply dated 11th May, 2004 filed on behalf of respondent No.2 has been affirmed by one Shri Nilkanth Deshmukh, who is the Assistant Commissioner of Customs, Bhavnagar. It is averred in Paragraph No.1 of the said affidavit that the deponent is conversant with the facts of the case and thus, is authorized and competent to swear and file the affidavit-in-reply. The deponent does not state that he is authorized by the Dy. Commissioner to swear the affidavit-in-reply. Apart from the averment to which reference has already made hereinbefore during the course of recording submission of Mr. Malkan, it is necessary to take note that in Paragraph No.14 of the affidavit-in-reply of respondent No.2 the deponent states as under:
"14 With reference to paragraph 6 of the petition I say that it is true that the respondent could not act contrary to the order passed by his superior officer. In this regard, it is submitted that the respondent has not taken any decision contrary to the order of the superior. The decision to hold J.P.P.L. as "Importer" has been taken by the Commissioner of Customs, Jamnagar. As per provisions of Section 2(26), any person can be held as Importer till the clearance is given by the Customs. The decision of the Commissioner of Customs, Jamnagar holding M/s.J.P.P.L. as Importer is not contrary to the order of the Commissioner of Customs and Central Excise, Rajkot as the decision is as per law."
Thus, it is seen that the deponent accepts that he cannot go contrary to the order passed by the superior officer; being alive to this legal position, he goes on to state that the decision to hold JPPL as importer has been taken by the Commissioner of Customs, Jamnagar. It is interesting to note that respondent No.5 who was Commissioner of Central Excise and Customs, Rajkot, as at the relevant point of time he was having jurisdiction has since been replaced by Commissioner of Customs, Jamnagar who has stepped into the shoes of respondent No.5 and this is apparent from the affidavit-in-reply tendered on behalf of respondent No.5 wherein this fact is accepted and averred. Though the Assistant Commissioner of Customs, Bhavnagar states in his affidavit that the decision to hold JPPL as importer has been taken by the Commissioner of Customs, Jamnagar, in the affidavit-in-reply dated 9th March, 2005 filed by the said authority, the said authority, namely, respondent No.5 - Commissioner of Customs (Preventive), Jamnagar does not state that he has take any decision to hold JPPL as importer. The reason is not far to seek. He is the same authority, namely, of the same rank who was the adjudicating authority having passed the Order-in-Original dated 29th April, 1999. He himself having turned down the claim of JPPL could not have thereafter taken a contrary view, his order having merged with the order of CEGAT.
27. The aforesaid averment in the affidavit-in-reply of respondent No.2 has another aspect which requires to be borne in mind. The affidavit-in-reply on behalf of the Commissioner of Customs (Preventive), Jamnagar dated 9th March, 2005 has also been affirmed by the same gentleman, namely, Nilkanth Rao Deshmukh, who is the Assistant Commissioner of Customs, Bhavnagar. When attention to this aspect of the matter was invited, during the course of hearing, Mr. Ravani, appearing on behalf of respondent No.5, placed on record communication dated 8th March, 2005 (from Commissioner of Customs, Jamnagar to Assistant Commissioner, Bhavnagar), 30th March, 2005 (from Assistant Commissioner Customs, Bhavnagar to Shri Ravani), 2nd March, 2005 (from Assistant Commissioner Customs, Bhavnagar to Shri Malkan), 2nd March, 2005 (from Assistant Commissioner Customs, Bhavnagar to Joint Commissioner (Legal) Customs, Jamnagar) as well as letters dated 21st February, 2005 and 25th February, 2005 (from Commissioner of Customs and Central Excise, Rajkot to Assistant Commissioner (Legal), Bhavnagar and Commissioner of Central Excise to Assistant Commissioner, Bhavnagar). It is apparent from the aforesaid communications that the Commissioner of Customs (Preventive), Jamnagar has abdicated his authority in favour of a junior officer, namely, the Assistant Commissioner of Customs, Bhavnagar, when he has merely approved the draft of affidavit which was forwarded by the Assistant Commissioner of Customs, Bhavnagar to him at Jamnagar. It is a sorry state of affairs that a superior authority has without application of mind authorized the junior officer to make statements on oath on his behalf which are not only contrary ex-facie to the stand he had adopted when the Order-in-Original was passed, but refer to an order which is not even made by him at any point of time (at least the record does not reveal any such order). An averment made by respondent No.2 that JPPL has been held to be an importer by Commissioner of Customs, Jamnagar does not appear in his affidavit and the least that was expected of respondent No.5 was to ensure that there are no averments in the affidavit-in-reply which are contrary to the order made by him as an adjudicating authority.
28. Apart from the aforesaid position it is necessary to take note of the fact that respondent No.5 has referred to Memorandum of Understanding dated 7th May, 1995 entered into by DEEP with JPPL for the purposes of referring to relinquishment of title by DEEP in favour of JPPL without even annexing the said document. Respondent No.5 thereafter goes on to castigate the petitioner Co-operative Bank for not referring to the said Memorandum of Understanding pertaining to so-called relinquishment of title without even appreciating that a person who is not a party to an agreement cannot be expected to make any averment unless and until it is shown that the said person had the knowledge about the such a document. The averment that the petitioner has suppressed the factum of relinquishment of title, to say the least, is an averment which is not supported by any factual foundation laid before making such an averment. The entire affidavit is based on the so-called document of relinquishment of title by DEEP in favour of JPPL without the said document being placed on record. All that could be said qua this affidavit-in-reply is that if respondent No.5 had taken care that was expected from an officer of his rank things would not have come to such a pass.
29. Regardless of the validity of the averments, provisions of Section 23(2) of the Act may be examined to ascertain as to whether DEEP could have made any such relinquishment in terms of the said provision. Section 23 of the Act deals with remission of duty of lost, destroyed or abandoned goods. Under sub-section (2) of Section 23 of the Act it is provided as to in what circumstances duty can be remitted on imported goods. Sub-section (2) of Section 23 of the Act on which reliance has been placed by respondent authorities reads as under :-
"[(2) The owner of any imported goods may, at any time before an order for clearance of goods for home consumption under section 47 or an order for permitting the deposit of goods in a warehouse under section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon.] "
On plain reading of the provision it is apparent that for the said section to become applicable an owner of imported goods is entitled to relinquish his right to the goods at any time before an order for clearance of goods for home consumption under section 47 or an order permitting the deposit of goods in a warehouse under section 60 has been made and in case of such relinquishment of title to the goods the owner shall not be liable to pay the duty of such goods. In the present case, it is not shown as to how the aforesaid provision can come into play. At the cost of repetition it requires to be noted that vide Paragraph No.7.2 of the Order-in-Original dated 29th April, 1999 DEEP had been permitted to file Bill of Entry for home consumption under section 46 of the Act for clearance of the ship on payment of appropriate Customs Duty in terms of Section 12 read with Sections 14 and 15 of the Act. Therefore, the question of DEEP exercising its right to relinquish title to the goods before an order of clearance of goods for home consumption is made does not arise. The only requirement which is not fulfilled, is the payment of duty. The Order-in-Original came to be confirmed by CEGAT and CEGAT has specifically held that DEEP shall be at liberty to carry out ship breaking activity in respect of the imported vessel in compliance with the provision relating to payment of duty. In the circumstances, the reliance on behalf of respondent No.2 in the affidavit-in-reply on provision of Section 23(2) of the Act is misplaced and unwarranted. The said provision cannot be resorted to DATE : 08-04-2005
30. In light of the aforesaid averments in the affidavit-in-reply the respondents were called upon to explain as to whether in fact DEEP has made any such application by resorting to provisions of Section 23(2) of the Act. The respondents have failed to show that DEEP has moved any such application. The only application pointed out on behalf of the respondents, is the communication dated 4th July, 2003 forming part of correspondence commencing from Page No.98, which is part and parcel of affidavit-in-reply filed by respondent No.3 i.e. JPPL. The said letter is by JPPL and not DEEP. The No Objection Certificate given by DEEP, which is stated to be enclosure No.10 to communication dated 4th July, 2003 addressed by JPPL to Superintendent of Customs Alang, is relied on by respondent No.2 as being an application under Section 23(2) of the Act. During the course of submissions Mr. Y.N. Ravani, on behalf of respondent No.5, referred to provision of Section 148 of the Act in light of the instructions received by him. When the learned counsel was called upon to explain as to how the conditions for applicability of the said provision are satisfied, he was unable to explain. It is not shown as to, if at all any application for amendment of a document has been made, who is the applicant and which is the document which is required to be amended. In these circumstances, the reference to Section 148 of the Act cannot come to the assistance of respondent No.2 to uphold the invalid order/communication dated 24th September, 2003.
31. In these circumstances, the communication/order dated 24th September, 2003 (Annexure-F) cannot be permitted to hold the field. The said document is without any legal basis. Respondent No.2 has failed to show circumstances in which he can assume jurisdiction for the purposes of making such an order in light of a valid and subsisting order of superior authority in relation to the same property i.e. the vessel. The said communication is, therefore, quashed and and set aside, being the permission issued to M/s.Jogadia Polymers Private Limited by respondent no.2 vide letter F.No.SBY/106-99/2K dated 24th September, 2003 (Annexure "F").
32. The petition is, accordingly, allowed to the aforesaid extent. Rule made absolute. The costs payable by respondent No.2 and respondent No.5 each are quantified at Rs.2,500/- (Rupees Two thousand Five hundred only) each.
SPECIAL CIVIL APPLICATION No.1188 of 2004 Date of decision: 08/04/2005
33. This petition has been moved with two fold challenge :
[i] against judgment and award passed by Board of Nominees, Bhavnagar (the Board) in Lavad Suit No.153 of 1998 dated 25th September,2002; and
[ii] order passed by Gujarat State Cooperative Tribunal (the Co-operative Tribunal) dated 25th August,2003 refusing leave to prefer appeal against judgment and award of the Board in Misc. Civil Application No.1186 of 2002.
The petitioner, JPPL has prayed for the following reliefs :
(A) Your Lordships be pleased to admit this Special Civil Application;
(B) Your Lordships further be pleased to allow this Special Civil Application quashing and setting aside the judgment and award passed by the learned Board of Nominees, Bhavnagar in Lavad Suit No. 153 of 1998 dated 25/9/2002 and the order passed by the Hon'ble Gujarat State Co-operative Tribunal in Misc. Application No.1186 of 2000 dated 25/8/2003 (Annexure-"E" to the petition);
(C) Your Lordships further be pleased to permit the petitioner to dispose of and/or break the ship "M.V. Palanga" by appropriate directions with respect to the realisation of its value and deposit of it in the facts and the circumstances of the present case and in the interest of justice;
(D) to pass such other and further orders necessary in the interest of justice".
34. Respondent No.1 - Cooperative Bank filed Lavad Suit No.153 of 1998 before the Board at Bhavnagar for recovery of amount of Rs.2,41,68,033/- against respondent No.2. It appears that in earlier round of litigation against attachment of the property, including the vessel, this Court permitted respondent Nos. 3 and 4 to be joined as party and the Board was directed to hear and dispose of the matter on merits. At that stage two applications were moved being Exhibits No.79 & 84 whereunder the petitioner as well as respondent No.3 State Bank of Bikaner & Jaipur (SBBJ) applied to the Board. The Board rejected the application vide order dated 29th November,2001. JPPL preferred Revision Application before the Co-operative Tribunal which came to be rejected for default on 26th June,2002. The application for restoration also came to be rejected. JPPL challenged the same by way of Special Civil Application No.9607 of 2002 before this Court. When the said petition came up for hearing on 27th September,2002 attention of the Court was invited to the fact that Board had already pronounced the final judgment and award in Lavad Suit on 25th September,2002. The Court therefore disposed of the petition vide order dated 27th September,2002.
35. At this stage, JPPL filed an appeal against the order of the Board made on 25th September,2002 in Lavad Suit and simultaneously moved an application seeking leave to appeal by way of Misc. Civil Application No.1186 of 2002. The Co-operative Tribunal has rejected the application and declined to grant leave to appeal as per judgment and order dated 25th August,2003.
36. Mr. P.J. Kanabar, appearing on behalf of the petitioner submitted that in light of the order made by this Court on 27th September,2002 in Special Civil Application No. 9607 of 2002 it was not open to the Co-operative Tribunal to reject the application for leave to appeal and in the circumstances the said order dated 25th August,2003 (Annexure-E) be quashed and set aside directing the Co-operative Tribunal to permit the petitioner to file an appeal before it and hear the same on merits. It was also submitted that taking into consideration totality of the facts and circumstances of the case appropriate orders/directions be made or issued for the disposal of the vessel which is otherwise deteriorating day by day and the inherent value of the property is thus diminishing.
37. Mr. Kanabar further submitted that the judgment and award made by the Board itself was bad in law and was required to be struck down. That respondent No.1 Cooperative Bank had in fact no locus to approach the Board by filing lavad suit against respondent No.2-DEEP considering the fact that the Cooperative Bank had no charge over the vessel, the vessel was not owned by DEEP, title to the said property, viz. the vessel vested in JPPL by virtue of subsequent documents; and the order of the custom authorities, on which reliance was placed by respondent No.1-Cooperative Bank, could not decide the title to the property.
38. As during the course of hearing it was noticed that two applications viz. Exhibits 79 & 84 which were filed before the Board did not form part of the record of the petition, the learned Advocate for the petitioner was called upon to produce the same. The same have been placed on record. As can be seen from Exhibit 79 the said application is by the petitioner JPPL and is dated 21st June,2000. Amongst the various prayers made in the said application prayer No.4 seeks an order to join SBBJ as co-respondent considering the fact that, according to the petitioner, SBBJ has advanced funds qua the said vessel viz. "M.V. Palanga".
Application Exhibit 84 is moved by JPPL as third party and is dated 18th July,2000. The facts stated in the said application remain almost same as in the earlier application, the only difference being that in this application the prayer to join SBBJ is vide prayer clause No.6. But what is material and requires to be noted is the fact that in none of the applications SBBJ is a signatory, apart from the fact that SBBJ has not moved any application on its own for being joined as party in the said proceedings.
39. As both the aforesaid applications had been rejected by the Board, JPPL approached the Co-operative Tribunal. The Co-operative Tribunal while passing the impugned order dated 25th August,2003 in Misc.Application No.1186 of 2002 framed the following issues :
(i) Taking into consideration the facts and circumstances of the case whether, the application moved by the petitioner to file an appeal against the order of Board declining the request to join the petitioner as party in Lavad Suit No.153 of 1998 is required to be granted or not?
(ii) Whether it is possible to intervene in the order made by the Board below applications Exhibits 79 & 84 and whether the order made by the Board is required to be quashed and set aside ?
(iii) What order ?
40. The Co-operative Tribunal has thereafter given reasons as to why no interference is required in the order made by the Board. Taking into consideration the documents exhibited at Exhibits 101 to 145 before the Board it is found by the Co-operative Tribunal that the Cooperative Bank had sanctioned different loans for a sum of Rs.2.90 crores and Rs.1.40 crores to DEEP. Various documents which permitted the office bearers including Secretary Dr.Jiten Jogadia, to operate the Bank Account and draw funds from the loan Account have also been taken into consideration by the Tribunal. Thereafter, the Co-operative Tribunal has also taken into consideration the correspondence entered into between the Cooperative Bank and DEEP. The Co-operative Tribunal has further taken of the note that the vessel has been purchased by DEEP from Standard Marine : the vessel has been beached on plot No.145, the same has been reflected in the stock statement of DEEP filed with the Cooperative Bank and the vessel is in possession of DEEP. Thereafter the Co-operative Tribunal has taken into consideration the Order-in-Original made by the Commissioner of Customs, Rajkot whereunder DEEP has been held to be owner/importer of the vessel. It is in the aforesaid circumstances that the Co-operative Tribunal has found that the application moved by JPPL has correctly been rejected by the Board. The Co-operative Tribunal has further noted that SBBJ has not signed the application seeking permission to be impleaded as party and hence the application by SBBJ has rightly been rejected by the Board. The Co-operative Tribunal has further found that JPPL is the lessee of plot No.144, DEEP is lessee of Plot No.145 and the various transactions entered into by JPPL in relation to ownership of the vessel is nothing but an attempt by Dr.Jiten Jogadia to create confusion and obtain funds from different banks. The Co-operative Tribunal has also taken note of the fact that the order made by the Commissioner of Customs has been confirmed by CEGAT. It is in this context that the Co-operative Tribunal after recording the aforesaid findings confirmed the order made by the Board.
41. During the course of hearing Mr. Kanabar on behalf of the petitioner JPPL raised a contention based on Section 17 of The Recovery of Debts Due To Banks And Financial Institutions Act, 1993 (DRT Act). The contention is that as SBBJ has moved Debt Recovery Tribunal and JPPL is defendant therein neither the Board nor the Co-operative Tribunal could have exercised jurisdiction in relation to subject property viz. vessel.
42. The aforesaid contention proceeds on the footing that JPPL is already a party in the proceedings before the Board which have been initiated by the Cooperative Bank against it. If JPPL has not been granted permission to be impleaded in the proceedings there is no question of the Board or the Co-operative Tribunal being fettered by any proceedings which SBBJ might have initiated against JPPL under the DRT Act. The contention also loses sight of the fact that SBBJ itself has not moved any application for being impleaded as party in the proceedings. As noticed hereinbefore, it is only JPPL who has moved both the applications and signed the applications. The Co-operative Tribunal has taken into consideration all these facts. It is also necessary to note that this contention has been raised without any pleading in this regard in the petition. In this context reference was invited to averment made in paragraph No.11 of petition filed by DEEP viz. Special Civil Application No. 1234 of 2004 losing sight of the fact that the said proceeding was by a different entity and was for claiming entirely different relief. SBBJ itself has not only not applied for being impleaded in the proceedings before the Board or the Co-operative Tribunal, but has also not raised any such contention before this Court, even though it is respondent No.3 and is represented by learned Advocate Shri P.V. Nanavati. Be that as it may, the contention does not merit acceptance as stated hereinbefore and is rejected accordingly.
43. Legal position as to the scope and the extent of the parameters in which the High Court can exercise powers under Article 226 of the Constitution of India is well settled by now. Article 226 of the Constitution lays down power of High Court to issue writs in certain circumstances. It provides for the power of judicial review, but such power of judicial review is not directed against the decision but is confined to the decision making process. A judicial review is not an appeal from a decision but a review of the manner in which the decision is made. The Court sits in judgment only on the decision making process and not on the correctness of the decision itself. It is by now well settled that jurisdiction under Article 226 is an original jurisdiction but that it is not an ordinary original jurisdiction but an extraordinary original jurisdiction. Article 226 is couched in the widest possible terms and in absence of clear bar to its jurisdiction, the power under the Article can be exercised when there is any act which is against any provision of law or violative of the constitutional provisions and when recourse cannot be had to the provisions of a statute for appropriate relief. The powers under the Article are discretionary and there are no limits upon that discretion. Therefore, the discretion has to be exercised subject to certain self imposed limitations and not arbitrarily. The High Court does not sit as an appellate Court :interference with pure findings of fact and appreciation of evidence is not permissible. Reappreciation of evidence cannot be undertaken. Even if on same set of facts, circumstances and evidence on record a different view may be possible that by itself is not enough to permit the High Court to intervene. A mere wrong decision does not clothe the High Court with jurisdiction, unless it is shown that the Tribunal has reached a decision without any evidence in support of same, or that it has considered evidence which is partly relevant and partly irrelevant. In short, arrived at a decision no reasonable person would arrive at. The High Court confines itself to the question of legality and is concerned only with whether :
[i] decision making authority exceeded its power;
[ii] committed an error of law;
[iii] committed a breach of the rules of natural justice;
[iv] reached an unreasonable decision;
[v] abused its powers.
The High Court must while examining the decision making process ensure that the same is not capricious; irrational; discriminatory or violative of Constitutional or statutory provisions or malafide. That the authority has genuinely addressed itself to the matter before it. But the High Court is at the same time required to balance the competing interests. The High Court is not required to exercise its powers in relation to disputes regarding a purely commercial transaction or decide questions which are academic in nature.
44. Applying the aforesaid tests to the facts of the case it becomes apparent that there is no infirmity in the impugned order of the Co-operative Tribunal made on 25th August,2003. The Co-operative Tribunal has upheld the findings recorded by the Board and while doing so it has taken into consideration all the relevant facts and evidence on record. It is a different matter that, on the same set of facts and evidence on record, a different view might be possible. That by itself cannot be a ground for the High Court to intervene. The view adopted by the Co-operative Tribunal is not a view which cannot be arrived at by a reasonable person.
45. As already noticed, while deciding Special Civil Application No.4433 of 2004, the order made by the Commissioner of Customs has merged with the order of CEGAT and both the authorities are superior to the Assistant Commissioner of Customs or Deputy Commissioner of Customs. The said order treating DEEP as an importer under the provisions of the Customs Act has attained finality and is not modified, set aside or reversed by an order of any superior competent forum. Therefore there is no error committed by the Board and the Co-operative Tribunal in referring to and relying upon the said orders for the purpose of deciding the applications viz. Exhibits 79 & 84 filed by JPPL before the Board. In these circumstances, the impugned order of the Co-operative Tribunal rejecting Miscellaneous Application and not granting leave to appeal to JPPL does not suffer from any factual or legal infirmity so as to require interference at the hands of this Court.
46. The petition is accordingly rejected. Rule discharged. There shall be no order as to costs.
SPECIAL CIVIL APPLICATION No.1234 of 2004 Date of decision: 08/04/2005
47. In this petition, petitioner No.1 is an Industrial Co-operative Society Limited and it is stated that petitioner Nos. 2 to 7 happened to be the officers of the petitioner society. Petitioner No.3 is one Dr.Jiten A.Jogadia and the affidavit in support of the petition has been sworn by petitioner No.3 Dr.J.A.Jogadia in the capacity as Ex.Secretary of the petitioner society. No evidence has been placed on record to suggest that petitioner No.1 - Society has authorized the said Gentleman to prefer the petition on behalf of the society or on behalf of the remaining petitioners who are separate individuals. The petition is therefore required to be summarily rejected on this limited ground. However, considering the fact that this petition was heard along with other interconnected petitions, the Court has permitted the petitioner to address the Court on merits.
48. This petition has been moved praying for the following reliefs :
"(A) Your Lordships be pleased to admit this Special Civil Application;
(B) Your Lordships further be pleased to allow this Special Civil Application quashing and setting aside the judgment and order passed by Hon'ble Gujarat State Co-operative Tribunal, Ahmedabad in Appeal No.1190 of 2002 dated 28/8/2003 confirming the ex-parte judgment and award passed by the learned Board of Nominees, Bhavnagar in Lavad Suit No.153 of 1998 dated 25/9/2002 (Annexure-I to the petition) and further be pleased to direct the Board of Nominees, Bhavnagar to hear and decide Lavad Suit No.153 of 1998 on merits and after hearing the parties in accordance with law;
(C) Pending admission, hearing and final disposal of this petition, Your Lordships be pleased to stay the execution, operation and implementation of the judgment and order passed by Hon'ble Gujarat State Co-operative Tribunal in Appeal No. 1190 of 2002 dated 28/8/2003, Annexure-"K" to the petition, and the ex-parte judgment and award passed by the learned Board of Nominees, Bhavnagar in Lavad Suit No.153 of 1998 dated 25/9/2002 in the facts and the circumstances of the present case and in the interest of justice;
(D) to pass such other and further orders necessary in the interest of justice".
49. In the Lavad Suit filed by respondent No.1 Cooperative Bank before the Board, the petitioner remained absent and the suit came to be decided and decreed in favour of the Cooperative Bank exparte. Aggrieved by the said order dated 25th September,2002, the petitioner preferred appeal and the Cooperative Tribunal in Appeal No.1190 of 2002 passed an order on 28th August,2003 after hearing the parties upholding the order made by the Board and dismissing the appeal. Though the petition is styled as a petition under Articles 226 and 227 of the Constitution, in effect it is a petition under Article 227 of the Constitution.
50. Mr. Dhaval Barot, learned Advocate appearing on behalf of the petitioners does not dispute the fact that the petitioners had not remained present in the proceedings before the Board, but submits that even in an exparte proceeding, it was incumbent upon the Board to decide merits of the controversy even in absence of the defendant. When his attention was invited to the fact that both the orders of the Board and the Co-operative Tribunal had discussed the merits of the case between the parties viz. Cooperative Bank and DEEP and thereafter rendered the decision, the learned Advocate submitted that both the Board and the Co-operative Tribunal had failed to take into consideration the facts stated by JPPL in its application for being joined as party. He, therefore, urged that in the circumstances both the orders of the Co-operative Tribunal and the Board be quashed and set aside and the petitioners be permitted to avail an opportunity of hearing subject to conditions that may be imposed by the Court in the process.
51. The principles which govern the exercise of jurisdiction of the High Court while dealing with a petition under Article 227 of the Constitution do not materially defer from the principles applicable when the High Court is dealing with an application under Article 226 of the Constitution. The said principles have already been set out while deciding Special Civil Application No.1188 of 2004 today. The said principles may be applied and the impugned order of Co-operative Tribunal may be tested.
52. The Co-operative Tribunal has recorded in its order that the petitioners have challenged the order of the Board by stating that the Board has not recorded any reasons and the judgment and order of the Board is not speaking one. That though the office bearers of petitioner No.1-Society had not remained present before the Board the said individuals had not obtained any personal advantage from the loan stated to have been advanced by the respondent Cooperative Bank. That despite various facts having been stated in Misc.Application No.1186 of 2002 moved by JPPL the said facts were not taken into consideration by the Board and hence the said facts and the application may be treated as part and parcel of this appeal and be dealt with accordingly.
53. After recording the aforesaid submissions made on behalf of the petitioners before the Co-operative Tribunal, the Co-operative Tribunal has framed issues and thereafter dealt with merits of the dispute between the parties. The Co-operative Tribunal has recorded that as per Exhibit 10 all the petitioners have been served with the summons and hence contention that summons had not been served on the petitioners was an incorrect statement. As per Exhibit 30, defendant Nos. 1 to 8 had appeared and sought permission to engage an Advocate. Exhibit 14 denotes that in fact an Advocate has been engaged. The Co-operative Tribunal has further noted that despite the fact that the Board had granted permission to file written statement the defendants i.e. petitioners herein have failed to file the written statement. The Co-operative Tribunal has further noted that in relation to the evidence recorded by way of statements of witnesses for the plaintiff the Board has granted an opportunity to cross-examine the said witnesses but the defendants have failed to avail of the said opportunity.
54. Even otherwise, on going through the impugned order of the Co-operative Tribunal it is apparent that the Co-operative Tribunal has taken into consideration various documents exhibited before the Board and thereafter upheld the findings recorded by the Board. As the said evidence has been referred to in detail in the judgment rendered in Special Civil Application No.1188 of 2004 today, the facts remaining the same, it is not necessary to repeat.
55. Though strictly speaking it is not necessary to examine the order of the Board which has merged with the order of the Co-operative Tribunal, the Court has gone through the order of the Board for the limited purpose of examining as to whether the petitioners were granted adequate opportunity of presenting their case. As recorded by the Board in paragraph No.2 of its order the petitioners i.e. defendants before the Board were granted very many opportunities but had failed to avail the same and it was only at that stage, in absence of any written statement despite numerous opportunities, the Board proceeded to decide the matter exparte. The Board has taken note of the fact that not only no written statement was filed but no other evidence or pleadings have been placed on record before the Board on behalf of the defendants. On merits it becomes apparent that the Board has taken into consideration the evidence produced before it and the same has been discussed and appreciated in detail as can be seen from the order dated 25th September,2002.
56. The contention raised on behalf of the petitioners that various averments made in application by JPPL seeking permission to be joined as party as well as application for leave to appeal before the Co-operative Tribunal have not been taken into consideration by the Board or the Co-operative Tribunal while deciding the respective proceedings deserves to be stated to be rejected. It is not as if the said applications were moved by the petitioners. The applications were moved by third party and when third party is not being permitted to be impleaded in the proceedings any averment made therein or documents produced cannot form part of the record so as to make it incumbent upon the authority to appreciate the same. A document or a piece of evidence which has not been admitted on record in accordance with law cannot form part of the record and cannot be taken into consideration. To the contrary, if Board or the Co-operative Tribunal had taken the said document or evidence into consideration their orders would have been vitiated as the said document/evidence had not come on record in accordance with law.
57. There cannot be any dispute with regard to the position of law that the parties shall be entitled to reasonable opportunity of putting up their case but at the same time it is necessary to qualify right to a reasonable opportunity in the context of the duty of a Court or the Tribunal to manage the hearing. A party does not have an unfettered right. If a party ignores the procedural deadlines imposed by the Court or the Tribunal it can be only at the peril of the party itself. The Tribunal is entitled to and obliged to avoid unnecessary delay and expense that would be caused by such an approach wherein hearing keeps on being dragged interminably without any end in sight under the guise of granting reasonable opportunities to the party. (Ref : Council of Institute of Chartered Accountant of India v. Mukesh R. Shah : AIR 2004 (Guj.) 164).
58. If the aforesaid principles are applied to the facts of the case it is apparent that no fault can be found with the Board in closing right of defence qua the petitioners. The Co-operative Tribunal has also appreciated this position in the right perspective and there is no infirmity in the impugned order of the Co-operative Tribunal.
59. In the circumstances, the petitioner has failed to make out any case so as to hold that judgment and order dated 28th August,2003 made by the Cooperative Tribunal in Appeal No.1190 of 2002 (Annexure-K) suffers from any infirmity, legal or factual, which would require this Court to interfere. The petition is accordingly rejected. Rule discharged. There shall be no order as to costs.
SPECIAL CIVIL APPLICATION No.11935 of 2003 Date of decision: 11/04/2005
60. This petition has been filed by JPPL challenging the order dated 18th July 2003 made below exhs.30 and 33 by the Court of 7th Joint Civil Judge (S.D.) - Bhavnagar in Special Darkhast Application No.31 of 2004.
61. Respondent Co-operative Bank preferred Lavad Suit No.261 of 1998 before the Board seeking decree for recovery of a sum of Rs.39,57,630/- with interest and costs. The said suit came to be allowed by the Board vide judgement and award dated 5th October 2001. The Board had decided the suit exparte in absence of appearance on behalf of the petitioners. As a consequence, the respondent Co-operative Bank filed Special Execution Application No.31 of 2002 and in course of execution of the decree, sought an order of attachment of the properties mentioned in the execution application. The Court of Civil Judge (S.D.) directed the judgment debtors, namely the petitioners, with special reference to petitioner Nos.2 and 3 to file affidavits making a statement as to the assets of the petitioners, as required by Order 21 Rule 41(2) of the Code of Civil Procedure, 1908 (CPC).
62. The petitioners challenged the aforesaid order and directions made by the Executing Court, who after hearing the parties, vide order dated 15-4-2002, rejected the application exh.9 observing that the same was filed to delay execution proceedings. It appears that thereafter the respondent Co-operative Bank had moved an application seeking detention of petitioner Nos.2 and 3 which was granted by the Executing Court on payment of process fees. The same was challenged by way of Civil Revision Application No.436 of 2002 moved before this Court. The said Civil Revision Application came to be withdrawn subsequently with a view to file an appropriate application before the Executing Court. The petitioners, therefore, applied to the Executing Court to dispose of the execution proceedings against the petitioner Nos.2 and 3, but, it is the say of the petitioners that the said application was not decided by the Executing Court. However, below applications exhs.30 and 33, the Executing Court passed an order on 18th July 2003 directing each of the petitioners, namely JPPL and its two directors, to submit a bank guarantee of Rs.22 lakhs each within one month from the date of the order i.e. 18th July 2003. The said order has been modified by this Court by extending the period of furnishing bank guarantee from time to time.
63. Heard Mr. P.J. Kanabar, the learned advocate appearing for the petitioners. It was submitted that the respondent - Co-operative Bank had not moved an application under Order 21 Rule 41(1) of the CPC and straightaway moved an application under Order 21 Rule 54 of the CPC. He, therefore, submitted that, in these circumstances, the Executing Court having permitted respondent Co-operative Bank to act contrary to the provisions of the CPC, with special reference to Order 21 and the Rules thereunder, the impugned order dated 18th July 2003 was required to be quashed and set aside, and the Executing Court directed to proceed in accordance with law.
64. Mr. Shirish Joshi appearing on behalf of the respondent Co-operative Bank has also been heard. He has supported the order made by the Executing Court.
65. It is necessary to take note of the fact that the Executing Court had called upon the petitioners to comply with requirement of Order 21 Rule 41(2) of the CPC and the same was complied with by the petitioners after litigating by way of filing CRA as recorded hereinbefore. It is not the case of the petitioners that petitioner No.1 has enough properties so as to satisfy the entire debt of the decree holder Co-operative Bank. Though Mr. Kanabar, during course of hearing, contended that, it was incumbent upon the Executing Court to first of all proceed only against JPPL and call upon the petitioner Nos.2 and 3 only in the event of JPPL not being able to satisfy the debt of respondent Co-operative Bank in entirety, he could not show from the record that JPPL had adequate properties which would not require the Executing Court to call upon the petitioner Nos.2 and 3. This is also apparent from the additional affidavits dated 6th April 2005 filed by the petitioner Nos.2 and 3 as directed by this Court. It is an accepted position that JPPL is principally relying upon the ownership of Vessel 'M.V. PALANGA' so as to satisfy the debt after breaking up the vessel and make payment on receipt of sale proceeds. As already noticed hereinbefore, in relation to Special Civil Application No.4433 of 2004 and other connected matters, ownership and possession of JPPL are not accepted either by the customs authorities or by the Board and the Co-operative Tribunal. In these circumstances, the claim of petitioner Nos.2 and 3 that the Executing Court could proceed against them only in the event JPPL failed to fulfill the obligation incurred by JPPL to which they are guarantors, is not acceptable and it is not possible to find any error in the approach adopted by the Executing Court.
66. The only infirmity in the impugned order made by the Executing Court is, when it issued direction to all the three petitioners to furnish bank guarantees. As can be seen from a plain reading of provisions of Rule 54 of Order 21 of the CPC, the only requirement is, in case of immovable properties, an order of attachment shall contain a prohibition qua the judgement debtor from transferring or charging the property in any way, and all persons from taking any benefit from such transfer or charge. The provision nowhere permits the Court in execution proceedings to call upon the judgement debtors to furnish bank guarantee in lieu of order of attachment.
67. In the circumstances, the impugned order dated 18th July 2003 made by the Executing Court below exhs.30 and 33 directing the petitioners to furnish bank guarantees to the tune of Rs.22 lakhs each is bad in law and is hereby quashed and set aside. The Executing Court having further stated in the impugned order that if the petitioners failed to furnish such bank guarantee, the properties mentioned in the impugned order shall be considered for the purposes of ordering attachment is modified to the following extent :
Taking into consideration the fact that the petitioners are not required to furnish any bank guarantee and the fact that the petitioner No.1 has not been able to show that apart from the vessel in question, there are other properties sufficient to satisfy the outstanding dues of the respondent Co-operative Bank, all the properties mentioned by the petitioners before the Executing Court in the affidavits filed before it, namely vide mark 26/1, 26/2 and 26/3, shall be attached by the Executing Court.
68. The petition is accordingly allowed to the aforesaid extent and the order dated 18th July 2003 made by the Executing Court below applications exhs.30 and 33 stands modified to the aforesaid extent. Rule made absolute to the aforesaid extent, with no order as to costs.
69. To summarize :
(i) Special Civil Application No.4433 of 2004 is, accordingly, allowed to the extent stated. Rule made absolute. The cost payable by respondent No.2 and respondent No.5 each are quantified at Rs.2,500/= (Rupees Two thousand five hundred only) each.
(ii) Special Civil Application No.1188 of 2004 is, accordingly, rejected. Rule discharged with no order as to costs.
(iii) Special Civil Application No.1234 of 2004 is, accordingly, rejected. Rule discharged with no order as to costs.
(iv) Special Civil Application No.11935 of 2003 is, accordingly, allowed to the extent specified. The order dated 18th July, 2003 made by the Executing Court stands modified to the extent specified. Rule made absolute to the extent specified with no order as to costs.