Dwarika Prasad Agrawal vs Union of India (UOI) and Others

Navaniti Pd. Singh, J.—By the present writ application, the petitioner has sought for an appropriate writ and/or direction to the respondent Union of India in the Department of Customs for the refund of the price of betel nut which was wrongly and arbitrarily seized by the customs authorities and sold, as a consequence of the order of confiscation being set aside in to to by the appellate authority. Counter affidavits have been filed and reply thereto filed. The uncontroverted facts are that certain stocks of betel nut while in transit were seized by the customs authorities on the ground that they had reason to believe that the said quantity of betel nut was imported in India unauthorisedly. A confiscation proceeding, as envisaged under the Customs Act, was initiated. At the time of initiation of proceedings, the Customs Valuation Committee evaluated the value of the seized betel nut at about Rs. 96,000/- which is not disputed. The Collector, Customs ordered confiscation against which statutory appeal was preferred by the petitioner which was allowed. The order of confiscation was set aside. The natural consequence thereof was that the petitioner became entitled in law to the return of the seized goods in the condition in which they were seized or in lieu thereof, the market price of the seized goods on the date of seizure.

It appears while the confiscation proceedings were pending, the authorities, treating the goods to be perishable, auction sold the goods. The entire quantity of betel nut which had been valued by the Evaluation Committee of the Customs Department itself at Rs. 96,000/- was auction sold for Rs. 36,150/- only. This is yet another matter which the higher authorities of the custom must look into as to who would be the beneficiary of such undervalued sale.

The appeal being allowed in favour of the petitioner, petitioner was favoured with a cheque of Rs. 36,150/- only being the sale proceeds of the auction. Petitioner challenges this. He submits that when at the time of seizure, the customs authorities themselves valued the goods at Rs. 96,000/- then when he succeeded and the confiscation order was set aside, he should have been paid the same value which was the market value assessed by the Department itself.

Having heard the parties, I am of the considered opinion that the writ application has to succeed. The respondents have to make the entire payment as they had valued themselves on the date of seizure that is 15.2.1997. They would, thus, be required to pay the difference amount of Rs 96,000/- and Rs. 36150/- already paid on 9.6.2005. In addition thereto, they would be required to pay an interest of 12% from the date of seizure upto the date of payment of Rs. 36,150/- on the entire amount of Rs. 96,000/-. They would further be required to pay interest on the differential amount upto the date when the entire payment is made.

This order is being passed by this Court in view of the judgment of Supreme Court in the case of Northern Plastics Ltd. (Now Merged With Consolidated Photo and Finvest Ltd.) Vs. Collector of Customs and Central Excise, wherein under similar circumstances when the customs authorities sold the seized articles and subsequently ordered confiscation which was upset by the Apex Court, the Apex Court directed that the authorities would be liable to pay the market price as assessed at the time of seizure and not the auction price. Similar view has been taken by this Court in the case of Sharda Plastic Industries and Another Vs. The Union of India (UOI) and Others, as also in the case of Jitendar Bothra Vs. Union of India (UOI) and Others, . I am also fortified by an earlier unreported judgment of this Court passed by S.N. Jha, J. as he then was in the case of Kailash Rai vs. Union of India and Ors. dated 7.4.1999 in Cr. WJC No. 571 of 1998 which decision applies as full force to the facts of the present case. In the result, this writ application is allowed with the aforesaid direction which must be complied within a period of one month from today.