1. This is a proceeding initiated and filed as an "Appeal" against the Orders of the Tribunal Nos. 313 to 367/1984-A (in Appeal Nos. 1847/83-A and 192 to 245/84-A) praying for the award of interest in a sum of Rs. 60,91,318.00 on the fine in lieu of confiscation paid in excess nearly 17 years ago together with Rs. 2,30,474.00 alleged to have been paid towards guarantee commission by the applicant to the bank on "excess Bank guarantee amount".
2. Briefly, the allegations appearing in the "appeal" supplemented from facts from the relevant papers in the record are - (a) pursuant to orders in adjudication by the Collectors of Customs, Bombay and Calcutta, certain imported goods were confiscated absolutely in some cases and subject to redemption on payment of a fine in lieu thereof in certain others ; (b) various appeals preferred against such orders, were disposed of by the Board of Central Excise and Customs in six orders between 1.6.1968 and 13.3.1969 by which redemption on payment of various fines in lieu of confiscation was allowed in all the cases. The aggregate of such fines amounted to Rs. 41,86,172/-; (c) the applicant, in accordance with the orders in original as well as those in appeal allowing redemption, redeemed the goods from confiscation, paying altogether an amount of Rs. 23,45,855/- in cash on diverse dates between 3.11.1967 and 21.5.1969 and furnishing a bank guarantee in the balance sum of Rs. 18,40,317/-; in the Hon'ble Supreme Court; (d) ultimately, as a sequel to the aforesaid appeals against the orders of the Board pursuant to a remand by the Hon'ble Supreme Court, the Tribunal by its order dated 30.5.1984, held that the fines in lieu of confiscation should be reduced to 25% of the C.I.F. value of the aggregate of the goods imported and observed further 'The consequential relief which flows from this order be given to the appellants forthwith as the matter is quite old. Further, we notice the appellants had also furnished bank guarantees for some of the amounts, although bulk of the fine had been paid in cash. As a result of the above decision, the said bank guarantees stand discharged"; (e) the excess of the fines in the aggregate paid by the applicant as aforesaid over the fines reduced by the Tribunal would work out to Rs. 21,38,128/-. Similarly, the excess amount for which the bank guarantee was furnished was in a sum of Rs. 16,56,185/-. The Bank also charged commission which worked out to Rs. 2,30,474/- over a period of 13 years and eleven months.
(a) "bare refund of the fines today (paid in excess - in consequence of the order of the Tribunal) does not compensate the appellant's colossal losses." "...the tremendous losses and agony undergone by the appellants can be compensated to a certain extent if the appellants are awarded interest on excess cash fines paid before 17 years"; (b) at 18%, which is the Bank rate, such interest on excess fines paid in cash for the period upto the date of the Tribunal's order -30.5.198f - comes to Rs. 60,91,318 (Annexure 'C'); (c) on the reversal of the orders of the Board and reduction of the fines, refund of the costs incurred and interest is the "only just and proper way of restitution being properly consequential on such reversal/modification". The glaring disproportion between the fines in lieu of confiscation and the penalties levied on the Mills should be taken into account in acceding to the prayer in the application; (d) accordingly, it was prayed that the Tribunal may be pleased to award payment of Rs. 63,21,792.00 (made up of Rs. 60,91,318.00 being interest on the excess fine paid in cash and Rs. 2,30,474.00 being the commission on the guarantee paid on the excess guarantee amount.
4. After the disposal of the appeals by the Tribunal by the order dated 30.5.1984, [as stated in para 2(d) supra], the appellant in all the said appeals, filed as many as four applications. They are - (a) ROM.17/84 dated 18.6.1984 for impleading the Collector of Customs, Calcutta in the array of parties; (b) C.Misc/26/85-A on 21.2.1985 for "instructions to the Collectors of Customs, Bombay and Calcutta, to give refund immediately to the appellants as due under the order of the Hon'ble Tribunal with interest at the rate of 12% from 30.5.1984 till date of actual payment"; (c) unnumbered application dated 6.6.1984, for arranging the return of the bank guarantee furnished by the appellant to the Registrar of the Hon'ble Supreme Court in Civil Appeal Nos. 1141-43/1970; (d) C/Misc/288/85-A on 2.12.1985 for "punishing respondent No. 1 (Collector of Customs, Bombay) for the contempt of interfering with the process of law or pre-empting the judicial decision of the matter sub judice before Hon'ble Tribunal".
5. The respective orders made on each one of the applications aforesaid are - (a) the Miscellaneous Order No. 458/84-A dated 19.6.1984 by which the Collector of Customs, Calcutta was impleaded as a respondent in the array of parties as prayed for; (b) the Miscellaneous Order No. 20/85-A dated 15.3.1985 by which the Collector of Customs, Bombay was directed to grant "consequential relief allowed by the Tribunal by 16.4.1985" and the Collector of Customs, Calcutta was similarly directed to grant "consequential relief" by 25.4.1985; (c) the Miscellaneous Orders No. 403/84 - 457/84 dated 19.6.1984 by which the Tribunal confirmed "the fact that the bank guarantee referred to above stands discharged without any claims thereunder"; (d) the Miscellaneous Order. No. 236/84-A dated 29.12.1986 by which it was dismissed for default.
6. (a) On the allegations made and reliefs prayed for in the instant proceeding, it will be an under-statement to say that one is baffled as to what exactly it is, since the jurisdiction of the Tribunal to hear and decide the issues raised depends on its true nature. Is it an appeal as it purports to be, against the orders of Tribunal or a review thereof as also prayed for or an application for rectification or for clarification or for restitution or for the award of compensation in the guise of consequential relief? (b) The Tribunal cannot obviously hear and decide an appeal against its own orders. Nor is the Tribunal empowered to review its own orders. A power of review has specifically to be conferred by Statute and there is no such power statutorily vested in the Tribunal. The statutory provisions defining the jurisdiction of the Tribunal speaks only of an amendment "to any order passed" in appeal by the Tribunal by way of rectification of any mistake apparent from the record [S.129-B(2) of the Customs Act, 1962]. Is this an application for rectification of any error in the orders passed by the Tribunal in the appeals? If so, what are the errors apparent from the record No errors at all are pleaded as requiring to be rectified. It cannot be, therefore, an application for rectification. Is it an application for clarification of the orders already made by the Tribunal in the appeals? Does the Tribunal have any jurisdiction whatsoever to clarify the earlier orders There is no prayer for any clarification whatsoever inviting us to clarify that consequential relief ordered by the Tribunal included not merely the amount of fine paid in excess over the amount determined by the Tribunal but payment of the interest claimed as well. Nor does the Tribunal have jurisdiction to clarify its earlier order "at any time within four years from the date of the order" as provided for rectification [S.129-B(2)]. Clarification is not rectification of errors apparent from the record. Even the civil court, Under Section 151 of the C.P.C. cannot, in the guise of clarification, make an order so as to effect substantive rights. 'The inherent powers saved by Section 151 of the Code are with respect to procedure to be followed by the court in deciding the cause before it. These powers are not powers over the substantive rights of a party." [AIR 1961 S.C. 218 - Padam Sen v. The State of U.P.].
(c) (i) While, obviously, it is none of these, in an application enclosed with what purports to be an appeal against the Tribunal's orders, the appellant talks of restitution on principles analogous to those in Section 144 of the C.P.C. and compensation for "tremendous losses and agony undergone by the appellants"; (ii) what is restitution in terms of Section 144 of the C.P.C. and how does restitution arise in the facts and circumstances of the case ; (iii) restitution, in terms of Section 144 of the C.P.C. is confined to a case where a decree or order made by court is varied or reversed in an appeal or is set aside or modified in any suit instituted for that purpose. It is the court which passed the original decree that has either been varied, modified or set aside that is to act in restitution. Not the court which had modified, reversed in appeal or set it aside in a separate suit, as the case may be. The restitution is to the extent it will, as far as may be, place the parties in the position they would have occupied but for such decree or order or such part thereof as has been varied. For this purpose, the court may order payment of interest or compensation amongst other reliefs ; (iv) a decree or order of a court is one that has to be complied with on pain of execution and enforcement thereof in accordance with the provisions of the code. Compliance with it is not left to the judgment debtor's option in any case. In a conditional decree, it may be, if at all, an option may be said to have been afforded to the Decree Holder - not the judgment Debtor. The performance of a condition by the decree holder is a condition precedent for the executability of the decree in such cases. It is only to that extent could an option be said to have been given. Once the Decree Holder exercises the option and complies with the condition precedent, the decree becomes executable against the judgment debtor who is compelled to act in terms thereof; (v) where property is delivered or money paid under compulsion of a decree or order of court (defined as a formal decision of a court which is not a decree), and such decree or order is varied, modified or set aside as the case may be, restitution is made by that court which originally made the order or decree; (vi) even so, the mode of restitution that may be ordered depends on the circumstances of each case. Thus, "Restitution conceived in that light - namely doing justice between the parties, will necessarily have to depend on the facts and circumstances of each case and cannot be reduced to the form of an inflexible rule that courts should have regard to the detriment suffered by one party and not the other:" [AIR 1963 Mad. 45 (F.B.) -Pappu Reddiar v. P.S.V. Rm.
Ramanatha Iyer]; (vii) what are the circumstances in this case? The goods imported were confiscated. The order of confiscation is not set aside even in the judgment of the Hon'ble Supreme Court wherein, it was confirmed that the importer was guilty of the offence of trafficking in licenses [Paras 4 and 5 of the report of the decision of the Hon'ble Supreme Court in AIR 1981 SC 1196]. An order of confiscation is, undoubtedly, an order in rem - rather than in personum - like e.g.
penalty Under Section 112 of the Customs Act, 1962 - one in relation to the goods rather than in relation to the person in any way concerned with them [AIR 1974 SC 859 - Collector of Customs v. Boormull]. On confiscation, the importer's title, if any, to the goods is extinguished and it vests in the Government. It is an act of appropriation of private property for State or sovereign use.
Confiscation is "an act done in some way on the part of the Government of the country where it takes place and in some way beneficial to that Government [per Lord Ellen-borough in Levin v. Allnut, (1812) 15 East 267 at 269].
The seizure and appropriation of property as a punishment for breach of the law whether municipal or international was held to be confiscation in (1947) Ch. 629 [Frankfurther v. W.L. Exner]. So also, property confiscated was construed to mean, in its ordinary sense, property taken by the Crown by way of penalty - in Re Burnett [(1902) 1 Ch 858 cited in Stroud's Judicial Dictionary]. Likewise, criminal law provides for confiscation of property produced before the court or in its custody or used for the commission of any offence [S. 452 of the C.R.P.C., 1973]. Confiscation is, in the circumstances, penal in nature. One would be hard put to find an award of interest by way of restitution on a penalty or fine set aside in appeal or revision in criminal law. The fine or penalty goes to the State and to none else and when set aside, there is no restitution other than refund thereof; (viii) one other distinguishing feature appears straightaway. The order of confiscation had become final and not reversed or modified or set aside. The property in the goods had irrevocably vested in the Government. What was modified was the fine in lieu of confiscation. But then, it was not obligatory to pay the fine or incur expenses for a bank guarantee to secure any part of it. It was entirely optional. The compulsive force of a decree is conspicuous by its absence. Could one who had opted to pay the fine and incur expenses for a bank guarantee, not having been compelled to do so but entirely on his own in a quasi criminal proceeding claim restitution, in consequence of a reduction in the quantum thereof in an appeal As a result of the exercise of the option, he had the benefit of having the goods released from confiscation. We do not know what profit he realised by sale of those goods. One would hardly expect payment of the fine to obtain a release from confiscation unless there was an expectation of profit. Not one word of the profit he realised in these proceedings. As a result of the order in appeal, he had the benefit of a reduction in the quantum of the amount he had to pay for such release. What further restitution is he entitled to for a purely voluntary act in a quasi criminal proceeding and where should he apply, if at all Not to the appellate forum in any event. Again, the order of confiscation was meant to benefit the State. The redemption fine in lieu of such confiscation is also to the benefit of the State. If any part of it is reduced in appeal, the benefit to the State to that extent is reduced to the advantage of the person redeeming the goods. Should there be restitution on top of it just because the benefit to the State was reduced. There can be no question of restitution for a voluntary act - much less so in a quasi criminal proceeding. If, therefore, it is such a claim in the appellate forum rather than in the forum of first instance, it deserves to be straightaway dismissed not merely as frivolous and not maintainable but on the issue of jurisdiction as well; (ix) in spite of the true nature of confiscation (an order - in rem and expropriatory as a penalty) and of the proceedings (quasi criminal), the learned Counsel attempted to urge that the fine in lieu of confiscation is, however, not penal in character since, it represented, in reality, the price of the goods. "With confiscation, the punishment was complete and the crime had been washed out (crime + punishment = cleansing of the person). The loss of goods worth Rs. 40,00,000/- is adequate punishment on the Petitioners" says he in a written note with a letter dated 26.5.1986 submitted after the arguments. Does he realise the inconsistency with what was urged before the Supreme Court and the Tribunal thereafter in support of a reduction in the fine? Or was all that conveniently forgotten? Or one can approbate and reprobate? If the fine was merely the price for the confiscated goods, how at all could it be said to have been glaringly disproportionate to the penalties levied on the Mills and reduced to 25% of the C.I.F. price? If the fines were price and not penalty, why should they have been reduced at all Are goods worth, admittedly, 40 lakhs, to be sold at a price of 25% of their C.I.F. price in lieu of confiscation? If by the word "fine", all that was intended was "price" what prevented the legislature from using "price" instead of "fine"? The confusion is compounded by citing the illustration of the entitlement of an auction purchaser to a refund of his bid amount with interest in case of auction is set aside. The distinction is obvious. The auction purchaser pays a price for purchase of goods in an auction, while the importer whose goods had been confiscated pays a fine, penal in character, in redeeming the goods from such confiscation. The fine need not be equal to the price of the goods. In actual fact, it is intended to mop up the profit he intends to make so that it has a deterrent effect on him and others of his ilk. It is, however, subject to a ceiling of the market price on the date of import when the offence is committed.
Redemption is not intended to be illusory. Payment of the market price all over in the shape of fine is a mug's game and not worth it unless the profit that may still be made is more than 100%. The contention advanced is wholly contrary and inconsistent with the case of the applicant all along and cannot be accepted; (x) what is more interesting, the learned Counsel admits that "money paid by the Petitioners to redeem the goods is an optional disposal", thereby giving up the case for restitution altogether; (xi) in trying to sustain the claim as a restitution, he had nevertheless cited the case reported in AIR 1975 Allahabad 102 (F.B.) which reiterates generally the principle of restitution.
Section 144 of the C.P.C. is not exhaustive on restitution and it may equally be granted on the application of the maxim "actus curiae neminum gravabit". It is really the duty of the court to grant restitution under its inherent powers when a person has been deprived of his property due to an order of court which has subsequently been varied or reversed as being erroneous even if such' party could not invoke the powers of the court Under Section 144. May be so. But then, has the appellant/applicant been deprived of any property due to an order that has been varied An order affording him an option which he freely exercised is no deprivation of his property. Nor has the order of confiscation been varied or set aside. It is penal in nature. If some part of the fine is reduced, there is no question of restitution by the award of interest to the extent it was reduced; (d) (i) The claim for interest in an amount much in excess of the original fines paid in lieu of confiscation [interest claimed is in a sum of Rs. 60,91,318.00, while the fines aggregated to Rs. 41,86,172/-] is sought to be sustained on the ground that it is compensation; (ii) compensation for what? The agony suffered? That was his own choosing. He need not have paid the fines at all, in which case, in all probability, the Government would also not be put to any loss.
The goods could have been disposed of at a price that might include not merely their landed cost and redemption fines but some profit as well - such profit as the applicant, in all likelihood, earned on the goods after redemption. Is compensation to be claimed for injury assumed to have been caused for a voluntary act ?; (iii) compensation for loss When was the loss quantified Has the applicant disclosed what loss he had suffered except repeating parrotwise "tremendous losses". What is the profit earned on the goods redeemed No knowing; (iv) award of interest as part and parcel of compensation provided for in a statute stands altogether on a different footing. That is where property is compulsorily acquired, say, under the Land Acquisition Act or the Estates Abolition Acts or any of the Nationalisation Acts. The right, title and interest of a person are extinguished compulsorily, subject, however, to the receipt of the compensation statutorily fixed. Sometimes, the payment of interest on delayed payment of compensation, as part and parcel thereof is sanctioned by the statute itself. In other cases, payment of interest on the delayed payment of the amount of compensation is awarded on equitable grounds. In such cases, compensation is held to relate back to the date of compulsory acquisition and the delay in the payment thereof is compensated by award of interest. To quote the Privy Council in AIR 1928 P.C. 287, "upon the expropriation of land under statutory power, whether for purpose of private gain or of good to the public at large, the owner is entitled to interest upon the principal sum awarded from the date when possession was taken, unless the statute clearly shows a contrary intention." The cases cited and relied upon in support of the claim for payment of interest as compensation are one and all relating to compulsory acquisition by statute only. Thus, in AIR 1985 S.C. 382 [Joginder Singh v. State of Punjab], it was a case of acquisition under the Land Acquisition Act and all that was stated therein is that the right to compensation relates back to the date of acquisition and so also the enhanced compensation and not, necessarily, from the date of the judgment enhancing the amount. Interest has, therefore, to be computed on the enhanced compensation as well with effect from the date of dispossession. Likewise, in AIR 1961 S.C. 908 [Sathinder Singh v. Umrao Singh] it was held that a claim for interest is not, in reality, a claim for damage "properly or technically so called".
It is a claim based on entitlement to compensation the instant dispossession occurs. Delay in its payment is to be compensated by award of interest on the amount of compensation and an award of such interest is not precluded under the provisions of the Interest Act (32 of 1839). The decision in 1969 (3) S.C.C. 49 [R.V.M. Neeladri Rao v. The Board of Revenue] is an instance under the Madras Estates (Abolition etc.) Act, 1948. The estate was abolished with effect from 7.9.1949 and the rents were directed to be collected directly from tenants at the reduced rates. On a question as to whether a representative of a post settlement lessee, (from the Estate Holder) who was dispossessed, was entitled to payment of interest on the amounts of unpaid rents in the hands of the Government in terms of Sections 20 and 55 of that Act, it was held that on the language of Section 55 as well as the general principles of law interest was payable. The decision of AIR 1963 S.C. 1171 [The National Insurance Co. v. Life Insurance Co. v. Life Insurance Corporation] is an instance arising under a Nationalisation Act. Despite there being no specific provision for payment of interest: on delayed payment of compensation under the Life Insurance Corporation Act, interest was awarded on the basic principle of compensation on dispossession; (v) confiscation is not to be confused with compulsory acquisition.
Confiscation, admittedly, is penal in nature and character. If confiscation is to be compensated, it loses its character of confiscation altogether. Again, confiscation was upheld throughout.
Is the applicant claiming compensation for confiscation on the analogy of the dispossession occurring on compulsory acquisition Is such a claim sustainable The answer is obvious; (vi) while it may be that under the Criminal Procedure Code compensation is payable, as retributive or expiatory of the offence, for an accusation without reasonable cause (S. 250 of the C.R.P.C.) or for a groundless arrest (S. 358 of the C.R.P.C.), and such fines as are otherwise levied may also be applied towards compensation for injured persons (S. 357 of the C.R.P.C.), it does not appear that on the reduction of fine imposed in respect of any offence, in appeal, the accused is to be compensated not merely by the refund of the fine to the extent reduced but by award of interest on it as well. A different principle cannot apply in a quasi criminal proceeding where, admittedly, the levy of a fine is penal as well as optional, in character; (e) The award of interest as part of mesne profits [AIR 1965 S.C. 1231 - Mahant Narayan Das v. Board of Trustees T.T. Devasthanam] is on account of the fact that interest is an integral part of mesne profits in terms of the definition thereof in Section 2(12) of the C.P.C. That decision has no applicability to the facts of the case.
(f) Similarly, where the levy of duty was illegal and without authority of law, it could be required to be refunded with interest in a writ proceeding or a suit impugning the levy [20 Guj. L.R. 944 at 958 - Vijay Textiles v. Union of India]. A reduction in the quantum of fine in lieu of confiscation is not in the same category as an illegal levy without authority of law ab initio, The confiscation was upheld. So also the fine in lieu thereof. Neither has been struck down as illegal or without authority of law.
(g) Reliance on the analogy of Section 214. of the Income Tax Act, which, inter alia, provides for payment of interest on refund of excess tax collected, is of significance only to the extent it supports the Respondent's contention to the effect there is no comparable provision in the Customs Act, 1962. The only provision that provides for payment of interest in the Customs Act is S. 61(2) - whereby, payment of interest on unpaid duty in respect of goods warehoused beyond the periods specified therein is provided. The legislature is well aware of Section 214 of the Income fax Act but yet did not provide for interest even on duty refunded much less on refunds of fines in lieu of confiscation or penalties. Is it not a significant omission, asks the learned Departmental Representative as well he might.
(h) (i) The argument that the Petitioner is seeking . execution of the order of the Tribunal dated 30.5.1984 insofar as it directs consequential relief which, necessarily, includes payment of interest on the amount of fine required to be refunded in terms of the order, is one of despair; (ii) an application for execution is never made to an appellate forum. On the contrary, in AIR 1961 S.C. 264 (Ambalal v. Union of India) it was held that even where the confiscation of some goods was declared to be illegal, that Hon'ble Court had no jurisdiction even to reduce the redemption amount correspondingly, however, justified such a plea may be, as it is a matter entirely within the discretion of the officer concerned in terms of Section 183 of the Sea Customs Act (comparable to Section 125 of the Customs Act, 1962). Liberty was, hence, afforded for applying to the concerned officer for a corresponding reduction of the fine. Although there were contrary observations in Boormull's case (AIR 1974 SC. 859), on the issue of jurisdiction of the Hon'ble Supreme Court, there was no difference. The aforesaid case is relevant only to the extent of rebutting the argument that this Tribunal is an appellate forum and not to be confused with an executing court; (iii) nor is the award of interest by way of compensation, consequential relief. Under the Court Fees Act, for example, "the expression consequential relief means some relief which would follow directly from the declaration given, the valuation of which is not capable of being definitely ascertained and which is not specifically provided for anywhere in the Act and cannot be claimed independently of the declaration as 'substantive relief "[AIR 1941 Lah. 97 (F.B.) - Mst. Zeb-ul-nissa v. Din Mohammad; followed in AIR 1978 Delhi 114 - Purshottamdas v. Har Narain - (F.B.)]. The aforesaid dictum of the Lahore High Court was confirmed by the Hon'ble Supreme Court in AIR 1973 S.C. 2384 [Shamsher Singh v. Rajinder Pershad] when consequential relief was defined to mean one that is said to follow directly from a declaration sought as distinguished from a substantive relief. The entitlement to compensation. otherwise than by way of restitution, whether by award of interest or in any other manner, is a substantive relief in itself and not merely consequential to any other. It does not flow directly. It has to be pleaded and proved separately. Similarly, interest in a money suit upto the date of the suit is a matter of substantive law and right and consequently Section 34 of the C.P.C. does not deal with it. Even interest pendente lite and interest subsequent to decree till realisation, comprehended by Section 34 of the C.P.C., have to be specifically prayed for in the plaint itself so that such claims can be contested, if so desired, in the written statement. Interest, before or after suit, when not so claimed and adjudged as duty, cannot, in execution of a decree, even if, may be for consequential relief, be awarded. ' Where a decree "is silent in respect of the payment of further interest on such principal sum from the date of the decree to the date of payment or other earlier date, the court shall be deemed to have refused such interest and a separate suit, therefore, shall not lie" [S. 34(2) of the C.P.C.]; (iv) it would, in the premises, appear that compensation being a substantive relief cannot be claimed by way of consequential relief.
Nor can interest be construed to have been awarded in the shape of consequential relief when it has not been specifically awarded.
(i) Lastly, we are told that the bank which had guaranteed part of the fine had returned the amount deposited with interest and we are asked why should not interest be granted on the amount by which the fine was reduced. The answer is obvious. The guarantee is pursuant to a contract between the applicant and the bank. We do not know its terms. May be, the applicant was required to keep the amount guaranteed or a part thereof in deposit with the bank subject to payment of interest thereon. Is it a comparable case The fine paid earlier is not a deposit to be returned with interest in terms of a contract, failing which it could be enforced. It is unconditionally, appropriated to the State. When reduced in appeal, the question is if interest is to be awarded on the amount to the extent of such reduction. That question is not answered by the bank's liability under a contract.
7. In the premises, the application is not only without any merits whatsoever but would appear to be frivolous. It is, accordingly, dismissed.