P. Periyaswamy Alagu Vs. Senior Intelligence Officer - Court Judgment

Excerpt:
writ jurisdiction - relief sought for by the petitioners is premature in nature and the goods seized/confiscated under sections 108, 109, 110 of the customs act, 1962 on the charge of unauthorised import and mis-declaration of value--however 4 weeks time is allowed to customs for completing investigations--the goods shall be released on a deposit of 50% (approx) amount of the value assesee and furnishing bank guarantee for the balance -sections 108, 109, 110, 111(d) & 111(m) of the customs act; article 226 of the constitution of india, 1950. - securitisation & reconstruction of financial assets & enforcement of security interest act, 2002 [c.a. no. 54/2002]section 17; power of tribunal to impose condition relating to deposit for grant of stay of auction held, there is no specific provision made under section 17 of securitisation act or under any other provisions of the said act empowering the tribunal to pass any interim order. but under sub-section (12) of section 19 of the recovery of debts due to banks and financial institutions act, 1993, the tribunal has been empowered to pass various interim orders. if sub-section (7) of section 17 of securitisation act is read along with sub-section (12) of section 19 of recovery of debts due to bank is and financial institutions act, it would be clear that the tribunal also has jurisdiction to pass interim orders under section 17 of the securitisation act in appropriate cases. the tribunal is empowered to grant interim stay subject to such conditions as may be deemed proper including condition of deposit. even under section 69 of the transfer of property act, the only remedy of the borrower whose mortgage has invoked section 69 of the transfer of property act, is to file a civil suit and in such suit the court has power to grant injunction and to impose condition for the grant thereof--section 17; [a.p. shah c.j., f.m. ibrahim kalifulla & v. ramasubramanian, jj] proceedings under section 17 power of the tribunal to pass any interim order held, once the possession of the secured asset is taken, there would be no occasion for the tribunal to order redelivery of possession till final determination of the issue. in other words, it is only when the tribunal comes to the conclusion that any of the measures, referred to in section 13 (4) taken by the secured creditor are not in accordance with the provisions of the act and the rules made thereunder, then only the tribunal can restore possession of such secured assets to the borrower. by virtue of sub-section (7) of section 17 of the securitisation act read with section 19 (12) of the recovery of debts due to banks and financial institutions act the tribunal undoubtedly possess ancillary power to pass interim orders subject to the conditions as it may deems fit and proper to impose, but it does not in any way override the special provisions contained in section 17(3) of the securitisation act. the statutory scheme of the securitisation act is such that the borrower could take recourse to application under section 17 only if one or other measure is taken by the secured creditor, and the tribunal can restore the status quo ante only if it comes to the conclusion that any of the measure taken by the secured creditor is not in accordance with the provisions of the act. the scheme cannot be bypassed by issuing a mandatory order for redelivery of the possession before conclusion of the proceedings under section 17--sections 17, 13 (4); [a.p.shah, c.j., f.m. ibrahim kalifulia &v. ramasubramanian, jj] scope of enquiry under section 17 held, the main purpose of the securitisation act, and in particular section 13 thereof, is to enable and empower the secured creditors to take possession of their securities and to deal with them without the intervention of the court. therefore, in an application under section 17, the tribunal is concerned only with the validity of the acts of the secured creditor in taking possession of the securities and dealing with the same under section 13. all such grounds, which would render the action of the bank/financial institution illegal, can be raised before the tribunal in the proceedings under section 17. it is for the tribunal to decide in each case whether the action of the bank was in accordance with the provisions of the act and legally sustainable. however, while considering the question of validity of the action of the bank, it is not necessary for the tribunal to adjudicate the exact amount due to the secured creditors. in other words, the purpose of an application under section 17 is not the determination of the quantum of claim per se as the tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under section 13(4)--sections 17(4), 13(4) ; [a.p. shan c.j.,f.m.ibrahim kalifulla & v. ramasubramanian, jj] appeal right of bank held, the right of the bank is not automatically suspended upon filing of an appeal by borrower under section 17 of the securitisation act and the bank as secured creditor can proceed to auction secured asset where no stay is granted by the tribunal. there is nothing in section 17 of the securitisation act which would indicate that the legislature intended that there would be automatic stay of recovery proceedings by bank under section 13(4) on filing an appeal by borrower under section 17. use of the expressions if and then under section 17 would not mean that the bank can take one or more measures laid down under section 13(4) only if the tribunal declares that the action taken already is in accordance with the provisions of the securitisation act and the rules made thereunder. use of the word if does not connote a condition precedent. it is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in a sense in which they harmonized with the object of the statute and which effectuate the object of the legislature. the provisions of section 17 must, therefore, receive such construction at the hands of the court as would advance the object and at any event not thwart it. in other words, the principle of purposive interpretation should be applied while construing the said provisions. the securitisation act is enacted to provide a speedy and summary remedy for recovery of thousands of crores which were due to the banks and financial institutions. orderp.d. dinakaran, j.1. alleging that the unaccompanied baggages of the petitioners in the above writ petitions were mis-declared, the respondents have seized the same. hence, the above writ petitions.2. in w.p. no. 8628 of 2000, the petitioner prays for issue of a writ of mandamus to direct the first respondents to release the goods covered under the unaccompanied baggages no. 900/2000 and t.r. no. 737/2000 seized by the first respondent on 15.05.2000 and to further direct the first respondent not to proceed further in the matter as the action initiated by the first respondent is arbitrary and against law.3. in w.p. no. 8656 of 2000, the petitioner prays for issue of a writ of mandamus to direct the first respondent to release the goods covered under the unaccompanied baggages no. 901/2000 and t.r. no. 738/2000 seized by the first respondent on 15.05.2000 and to further direct the first respondent not to proceed further in the matter as the action initiated by the first respondent is arbitrary and against law.4. according to the petitioners, the value of the goods in w.p. nos. 8628 and 8656 of 2000 are rs. 65,000/- and rs. 66,000/- respectively. as against the said value, the second respondent has valued the respective goods as rs. 1,16,004/- and rs. 1,14,840/- in these writ petitions. thereafter, the first respondent, after a further investigation valued the goods of the petitioners in w.p. nos. 8628 and 8656 of 2000 as rs. 2,44,4127- and rs. 2,32,2607- respectively.5. placing reliance on the decision in mohan meakin ltd. v. commissioner of central excise, kochi, reported in : 2000ecr5(sc) , the learned counsel for the petitioners contends that it is not open to the collector to initiate another proceeding under another clause of section 111 of the customs act, 1962, for recovery of so-called differences in valuation of imported goods from the ultimate bonafide purchaser for value, as, irrespective of under which sub-clause section 111 the adjudication made, it was obligatory on the part of the adjudicating authority to find out the market value of goods imported and collect all duty and charges payable before releasing the goods on payment of redemption fine, as per sections 111(d), 111(m) and 125 of the customs act, 1962.6. per contra, mr. c. krishnan, learned senior central government standing counsel appearing for the respondents, contents that the writ petitions are not maintainable for not impleading the union of india, and that the goods seized from the petitioners are not bonafide domestic articles, but they are goods of commercial nature, which can be confiscated by the respondents by exercising power under sections 108 to 110 of the customs act, 1962. it is further contended that as the respondents have already initiated confiscation proceedings under sections 111(d) and 111(m) of the customs act, 1962, the petitioners are not entitled for the relief as sought for.7. i have given a careful consideration to the submissions of both sides.8. in my considered opinion, the relief sought for by the petitioners is premature in nature and the goods seized by the respondents are subject matter of confiscation proceedings, as rightly contended by the learned senior central government standing counsel. hence, it may not be proper to keep the goods pending with the custody of the respondents indefinitely nor to ignore the interest of the state in the matter of such confiscation proceedings. therefore, it is suffice to direct the respondents to complete the investigation within four weeks from today and on completion of the said period, the second respondent shall release the goods on condition that the petitioner in w.p. no. 8628 of 2000 shall deposit a sum of rs. 1,16,0047- and the petitioner in w.p. no. 8656 of 2000 shall deposit rs. 1,14,8407- to the credit of the respective confiscation proceedings and the petitioners shall also furnish bank guarantee for the balance amount of valuation, viz., rs. 1,28,4087- in w.p. no. 8628 of 2000 and rs. 1,17,4207- in w.p. no. 8656 of 2000. the said deposit and the bank guarantee shall be subject to the result in the confiscation proceedings.the writ petitions are disposed of accordingly. consequently, w.m.p. nos. 12729 and 12759 of 2000 are closed.

Judgment:
ORDER

P.D. Dinakaran, J.

1. Alleging that the unaccompanied baggages of the petitioners in the above writ petitions were mis-declared, the respondents have seized the same. Hence, the above writ petitions.

2. In W.P. No. 8628 of 2000, the petitioner prays for issue of a Writ of Mandamus to direct the first respondents to release the goods covered under the Unaccompanied Baggages No. 900/2000 and T.R. No. 737/2000 seized by the first respondent on 15.05.2000 and to further direct the first respondent not to proceed further in the matter as the action initiated by the first respondent is arbitrary and against law.

3. In W.P. No. 8656 of 2000, the petitioner prays for issue of a Writ of Mandamus to direct the first respondent to release the goods covered under the Unaccompanied Baggages No. 901/2000 and T.R. No. 738/2000 seized by the first respondent on 15.05.2000 and to further direct the first respondent not to proceed further in the matter as the action initiated by the first respondent is arbitrary and against law.

4. According to the petitioners, the value of the goods in W.P. Nos. 8628 and 8656 of 2000 are Rs. 65,000/- and Rs. 66,000/- respectively. As against the said value, the second respondent has valued the respective goods as Rs. 1,16,004/- and Rs. 1,14,840/- in these writ petitions. Thereafter, the first respondent, after a further investigation valued the goods of the petitioners in W.P. Nos. 8628 and 8656 of 2000 as Rs. 2,44,4127- and Rs. 2,32,2607- respectively.

5. Placing reliance on the decision in Mohan Meakin Ltd. v. Commissioner of Central Excise, Kochi, reported in : 2000ECR5(SC) , the learned counsel for the petitioners contends that it is not open to the Collector to initiate another proceeding under another clause of Section 111 of the Customs Act, 1962, for recovery of so-called differences in valuation of imported goods from the ultimate bonafide purchaser for value, as, irrespective of under which Sub-clause Section 111 the adjudication made, it was obligatory on the part of the adjudicating authority to find out the market value of goods imported and collect all duty and charges payable before releasing the goods on payment of redemption fine, as per Sections 111(d), 111(m) and 125 of the Customs Act, 1962.

6. Per contra, Mr. C. Krishnan, learned Senior Central Government Standing Counsel appearing for the respondents, contents that the writ petitions are not maintainable for not impleading the Union of India, and that the goods seized from the petitioners are not bonafide domestic articles, but they are goods of commercial nature, which can be confiscated by the respondents by exercising power under Sections 108 to 110 of the Customs Act, 1962. It is further contended that as the respondents have already initiated confiscation proceedings under Sections 111(d) and 111(m) of the Customs Act, 1962, the petitioners are not entitled for the relief as sought for.

7. I have given a careful consideration to the submissions of both sides.

8. In my considered opinion, the relief sought for by the petitioners is premature in nature and the goods seized by the respondents are subject matter of confiscation proceedings, as rightly contended by the learned Senior Central Government Standing Counsel. Hence, it may not be proper to keep the goods pending with the custody of the respondents indefinitely nor to ignore the interest of the State in the matter of such confiscation proceedings. Therefore, it is suffice to direct the respondents to complete the investigation within four weeks from today and on completion of the said period, the second respondent shall release the goods on condition that the petitioner in W.P. No. 8628 of 2000 shall deposit a sum of Rs. 1,16,0047- and the petitioner in W.P. No. 8656 of 2000 shall deposit Rs. 1,14,8407- to the credit of the respective confiscation proceedings and the petitioners shall also furnish bank guarantee for the balance amount of valuation, viz., Rs. 1,28,4087- in W.P. No. 8628 of 2000 and Rs. 1,17,4207- in W.P. No. 8656 of 2000. The said deposit and the bank guarantee shall be subject to the result in the confiscation proceedings.

The writ petitions are disposed of accordingly. Consequently, W.M.P. Nos. 12729 and 12759 of 2000 are closed.