Messrs EURO GULF TRADING FZOO VS DIRECTOR OF INTELLIGENCE AND INVESTIGATION
2004 P T D 1964
[Karachi High Court]
Before Shabbir Ahmed and Gulzar Ahmed, JJ
Messrs EURO GULF TRADING FZOO
Versus
DIRECTOR OF INTELLIGENCE AND INVESTIGATION
H.C.A. No. 10 of 2003, decided on /01/.
th
September, 2003. (a) Civil Procedure Code (V of 1908)‑‑‑
‑‑‑‑O.XLI, R. 33‑‑‑Appeal against interlocutory order‑‑‑Power of Appellate Court‑‑‑Scope‑‑‑Appellate Court would not substitute its own discretion for that of Trial Court, except where discretion was exercised arbitrarily, perversely, contrary to legal principles and on basis of assumption not borne out by record.
(b) Specific Relief Act (I of 1877)‑‑‑----
‑‑‑‑S. 54‑‑‑Directory injunction, grant of‑‑‑Guidelines.
Directory injunction can be granted in a case, where the party has a strong case for trial, that is, it shall be of a higher standard than prima facie case that is normally required for a prohibitory injunction; that it is necessary to prevent irreparable or serious injury, which normally cannot be compensated in terms of money; and that balance of convenience is in favour of the one seeking such relief.
(c) Customs Act (IV of 1969)
‑‑‑‑S. 138‑‑‑Customs Rules, 2001, R. 86‑‑‑Expression "frustrated cargo" as used in S. 138 of Customs Act, 1969 and R.86 of Customs Rules, 2001‑‑‑Connotation‑‑‑Re‑shipment of such cargo, entitlement for‑‑ Frustrated cargo is a cargo brought into a customs‑station by reason of inadvertence or misdirection or where consignee is untraceable or has dishonoured his commitment and consignor wishes to have same re shipped‑‑‑Collector of Customs can, subject to rules, allow export of such goods without payment of duties on application of person‑in charge of conveyance which brought such goods or consignor thereof.
(d) Customs Act (IV of 1969)‑‑‑--
‑‑Ss. 138 & 2(s)‑‑‑Customs Rules, 2001, R. 86‑‑‑Frustrated cargo‑‑Proof‑‑‑No document (like invoice, packing list or Bill of Lading) was placed on record to show nature of consignment, its destination for Zimbabwe and its advertent stuffing in container destined for Karachi‑‑ Prohibited items attracting provisions of S.2(s) of Customs Act, 1969 were found in such container, for which proceedings had been initiated‑‑ Held: Such consignment was not a "frustrated cargo".
Muhammad Muzaffar Khan v. Muhammad Yousuf Khan PLD 1969 SC 9 ref.
(e) Specific Relief Act (I of 1877)‑‑‑--
‑‑‑S. 54‑‑‑Injunction, grant of‑‑‑Principles‑‑‑No injunction could be granted, where party could be compensated in terms of money.
Muhammad Ibrahim Khan v. Pateshwari Parshad Singh AIR 1960 All. 252 rel.
Ms. Navin S. Merchant for Appellants.
Syed Tariq Ali for Respondents No. 1, 2 & 4.
Miss Masooda Siraj for the Respondent No.2.
Date of hearing: 22nd August, 2003.
JUDGMENT
SHABBIR AHMED, J.‑‑‑The appellant has preferred this appeal impugning the order, dated 1‑1‑2003, passed by the learned Single Judge on Original Side, dismissing the C.M.A. No.6904 of 2002, filed by the appellant for injunction against the respondents in Suit No. 1020 of 2002.
The above appeal has arisen in the following circumstances:‑‑
The appellant deals in various types of consumers commodities. A consignment of 1539 cases of assorted foodstuff was shipped in favour of officials of Yemen Embassy, Islamabad, per combined transport Bill of Lading ‑No.DXB/KHI/550, dated 21‑1‑2002. The consignment was dis‑patched under six exemption certificates, with details of items of dutiable goods imported by the Diplomatic Officials named therein for their personal use. The consignment arrived from U.A.E. on Vessel X‑Press `Dhaulagiri' at Karachi in Containing No.IEAU‑218032‑7 (in short the consignment). The Bill of Entry, dated 20‑2‑2002 was filed by Orient Shipping Services for clearance. It is case of the appellants that some portion of the goods of the Container were those which were destined for Zimbabwe and were stuffed in the container mistakenly. When the appellant noticed such fact, they informed the respondent No. 3 and sought permission to reship the container, such permission was granted. In the meantime a notice, dated 19‑8‑2002 was issued by the respondent No.1 for the examination of the goods addressed to the Clearing and Forwarding Agent. The appellant served legal notice on the respondents maintaining therein that it was a frustrated cargo and there was no justification for examination of the cargo. Ultimately, the suit for declaration, injunction and damages was filed with the prayer in the following terms:‑‑
(a)Declare that the action of the defendant No.1 in detaining the Container No. IEAU 218.0327 is unlawful, without jurisdiction and mala fide.
(b)Declare that the action of the defendants. Nos. 1 and 2 in not allowing the plaintiff to re‑ship their goods contained in the Container No. IEAU 2180327, is unlawful, without jurisdiction, mala fide and tainted with ulterior motives.
(c)To grant the injunction requiring the defendant No. 1 to lift the detention if any from the container without any further delay.
(d)To grant the injunction requiring the defendant No. 2 to allow the re‑shipment the goods immediately.
(e)Declare that the plaintiff is not liable to pay any demurrage charges and in alternate direct the defendant No.2 to issue the delay detention certificate for the demurrage charges for the period of the goods are liable to pay the demurrage charges.
Along with the plaint, C.M.A. No. 6904 of 2002 was filed for mandatory injunction directing the respondents to release and allow the re‑shipment of the container to Dubai, supported by affidavit of Mr. Pappan Pershotam, attorney of the appellant, maintaining therein that under section 138 of the Customs Act, the Collector of Customs is empowered to allow export/re‑shipment of any cargo which has entered the Customs Station inadvertently. The respondents with mala fide intention detained the cargo and have not taken any cognizance of the repeated request by the Embassy of Yemen for re‑shipment. It was also pleaded that the items of the consignment are perishable and will not serve the purpose of anyone if not sent back immediately. The existence of prima facie case and balance of convenience was also pleaded in favour of the appellant with further plea that in case of injunction is note granted the appellant would suffer irreparable loss.
The case of the respondent No.1 was that an information was received that some smugglers, with the active help and connivance of others are actively involved in the smuggling of illegal an contraband goods into the country under the garb of diplomatic goods exclusively meant for the personal use of the Diplomats. Such smuggling under the garb of diplomatic consignments by the smugglers has been going on for a considerable period of time. It was also pleaded that para. 2 of Article 36 of the Vienna Convention permits the inspection of such cargo in case of serious grounds for presuming that the cargo contains articles not covered by the exemption or the articles prohibited etc., the para. 2 reads thus:‑‑
`The personal baggage of diplomatic. agent shall be exempted from inspection unless there are serious ground for presuming, that it contains articles, not covered by the exemptions mentioned in para. 1 of this Article, or articles the import or export of which is prohibited by a the law or controlled by the quarantine regulations of the receiving State. Such inspection shall be conducted only in the presence of the diplomatic agent or of his authorized representatives.
It was also pleaded that the container shipped in the name of the Embassy of Republic of Yemen, Islamabad besides four other containers imported in the name of Consulate General of Kazakhstan, Embassy or Jordan, Islamabad, Embassy of DPR Korea, Karachi/Islamabad and Embassy of Iraq were detained for inspection, on the basis of secret information that the said containers do not contain the goods as per declaration but‑ in fact contain contraband goods i.e. Alcoholic Beverages, Liquor. Art. Silk Cloth, Ball Bearing etc., which were not covered under the exemption certificates issued to the above foreign missions and import of which into Pakistan is prohibited under the Trade and Procedure Order, as well as under sections 2(s), 16 and 32 of the Customs Act. The consignment shipped in the name of Embassy of Republic of Yemen, by the appellant vide IGM No. 307 of 2002, dated 18‑2‑2002 was declared as assorted foodstuff by Messrs Orient Shipping Services in completion of the Customs formalities for the clearance of the subject consignment under Bill of Entry free No. 459 of 2002. However, before being out of charge of the consignment, the delivery was stopped by the respondent No.1 for examination/investigation. The Ministry of Foreign Affairs, (Camp Office) Karachi and Clearing Agent through letter C. No. Appg‑14/DCI of 2002, dated 4‑3‑2002 were informed regarding import of contraband goods which were not covered under the exemption certificate with request to get examined the container on 11‑3‑2002. However there was a request for re‑export of the consignment by the appellant, after two months of its shipment on the plea that goods were shipped mistakenly as the same was meant for Zimbabwe, without details of the goods stuffed mistakenly in the container. The Embassy of Republic of Yemen had already disassociated with the container vide their letter, dated 2‑10‑2002. It was pleaded that the consignment shipped by the appellant did not qualify the status of frustrated cargo containing prohibited goods shipped knowingly, with wilful knowledge under the cover of Diplomatic consignment. When the investigation was initiated by the respondent No.1 the appellant finding no way and to give legal cover to their own mistake with active connivance of culprits involved in the offence, pleaded a case of frustrated cargo which can never be treated as frustrated cargo. The action taken by them for inspection was in accordance with the law. They also pleaded the initiation of criminal proceeding and adjudication proceeding and further maintained that the Embassy has disowned any liability or responsibility in connection with the container.
During the hearing of the application on 20‑12‑2002, by consent order, the inspection of the subject consignment was conducted by appointment of Nazir of this Court as Commissioner to inventorize the contents of the container.
In compliance of the order, Nazir de‑sealed the container on 21‑12‑2002 and prepared the inventory. The inspection reveals the presence of cartons of Scotch Whisky packed, in double cartons. The details thereof are as follows:‑‑
S. NoContentsQuantityBrand
30.Scotch Whisky112.5 clBallantines
31.Scotch Whisky100 clLong Jhon
32.Scotch WhiskyOld Smuggler
33.Scotch Whisky1.125 litresTeachers
with further details as follows:‑‑
90 Cartons1x12x1.125 litres1080 Bottles
70 Cartons1x12x1 litres840 Bottles
70 Cartons1x12x1 litres840 Bottles
70 Cartons1x12x1 litres840 Bottles
Total3600 Bottles
After hearing the learned counsel for the parties, the learned single Judge concluded that the appellant has failed to show any evidence whether indeed the cartons containing the Whisky were meant for Zimbabwe and the reluctance on the part of the appellant to get the goods examined does not show their bona fide. Resultantly, the injunction application was dismissed by impugned order, dated 1‑1‑2003. Hence the present appeal.
We have heard Ms. Navin S. Merchant, learned counsel for the appellant, Syed Tariq Ali, learned Federal counsel for respondents No. 1,3 and 4, Miss Masooda Siraj, learned counsel for the respondent No. 2, Ms. Navin Merchant and Syed Tariq Ali, learned counsel for the contesting parties had requested that this appeal may be disposed of finally at Katcha Peshi stage. Miss Masooda Siraj, learned counsel for the respondent No.2 did not object to the above proposition and it was agreed that this appeal would be disposed of finally at Katcha Peshi stage.
The question for consideration in the present appeal is whether the learned Single Judge by dismissing the injunction application by the impugned order has exercised the discretion guided by law and the same is not arbitrary, vague and fanciful but legal and regular.
The contours with regard to the power exercisable by the Appellate Court in appeal against the interlocutory orders is well‑settled. The Appellate Court will not substitute its own discretion for that of trial Judge except where ;discretion was exercised arbitrarily, perversely, contrary to legal principles and on basis of assumptions not borne out by record. The guideline for the grant of directory injunction is also well settled. The injunction can be granted in the following terms:‑‑
(i)The party has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.
(ii)It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money.
(iii)The balance of convenience is in favour of the one seeking such relief.
The appellant's case is based on the concept of frustrated cargo and their entitlement for its re‑shipment. Section 138 of the Customs Act deals with such cargo which provides that where any goods are brought into a customs station by reason of inadvertence, misdirection or untraceability of the consignee, the Collector of Customs may, on application by the person‑in‑charge of the conveyance which brought such goods or of the consignor of such goods and subject to rules, allow export of such goods without payment of duties.
The contention of the learned counsel for the appellant was that the `frustrated cargo' has not been defined in the Customs Act but referred the rule 86 of the Chapter VII of Customs Rules, 2001, pertaining to `frustrated cargo', which states that Frustrated Cargo D will be such goods as are brought into a customs‑station by reason of inadvertence or misdirection or where the consignee is untraceable or has dishonoured his commitments and the consignor wishes to have it re‑shipped to him.
It is clearly manifest from the combined reading of the section 138 and Rule 86 that `Frustrated Cargo' is a cargo brought into a customs‑station by reason of inadvertence or misdirection or where the consignee is untraceable or has dishonoured his commitment's and the consignor wishes to have it re‑shipped.
On above premises, it was contended by the learned counsel for the appellant that the appellant are y the consignor; the part of the consignment was destined for Zimbabwe but by mistake it was stuffed in the container and 'the consignee, namely, Yemen Embassy has also dishonoured its commitments. Therefore, the consignment fulfils the conditions of a frustrated cargo. It was further contended by her that the respondent No.2 has the jurisdiction to permit the re‑shipment of such cargo but the respondent No.1 detained the cargo, though they have no jurisdiction to detain the consignment. The detention of the consignment is beyond their jurisdiction and to re‑enforce her submission, she referred the customs circular, dated 26‑8‑1987, whereby the role of Intelligence Staff in Customs Clearances was specified, whereunder, the Intelligence start acre not required to take over the duties of the Customs officials except in suspected cases of evasion or collusion they had the power to inspect the document and examine the goods and whenever necessary, would intercept, detain and seize the consignment that have not been cleared in accordance with law: On the basis of above circular, it was contended that the respondent No.1 or their staff has no role in side the customs station. Their domain starts after, clearance of the consignment.
Conversely, learned Federal counsel's submission was that plea of `frustrated cargo' has been taken by the appellant after the service of notice for inspection. The claim of `frustrated cargo' is neither supported by the circumstances nor by the materials placed on record. His further submission was that the Bill of Entry, with invoice, exemption certificate package list, was filed to get the consignment cleared which contains the prohibited items. His further submission was that inspection of the cargo was avoided by the appellant, ultimately Nazir of this Court under the direction of the Court inspected the cargo and prepared the inventory. Contraband/prohibited items were found in the shape of 3600 Bottles of different Brand of Scotch Whisky, a prohibited item. Case has been registered under the Customs Act for the offence of smuggling, the consignment is also subject to adjudication proceedings. His further submission was that in terms of Circular No. 1 of 1997, dated 16‑2‑1997, the functions of the respondent No. 1, inter alia, are to carry out prevention operation throughout country related to smuggling and to detect and investigate cases cognizable under the prevention of Smuggling Act. He further pointed out that on information received of smuggling under the cover of diplomatic consignment, the container was subject to inspection which was avoided in spite of notice: On these premises, his contention was that for the purpose of the inspection in case of doubtful cargo, the respondent No. 1 under para. 2 of Article 36 of Vienna Convention have the power of inspection of the cargo even inside customs‑station in terms of Circular of 1 of 1997.
Learned counsel for the appellant on second leg of her arguments, argued that the learned Single Judge has not followed his own judgment in Suit No.592 of 2002, (Muhammad Kamran v. Collector of Customs (Preventive) and others) wherein by order, dated 1‑1‑2003 during the hearing of the injunction application, the suit was disposed of and the Customs Authorities were directed to release the goods as `frustrated goods' on similar facts. Whereas, the prayer for the release of the appellant's frustrated cargo was declined by impugned order. The contention of Miss Navin Merchant is based on the dictum of the apex Court in Muhammad Muzaffar Khan v. Muhammad Yousuf Khan (PLD 1959 SC 9) that the own previous decision on point of law is binding on the learned Judge.
Learned Federal counsel contended that the case referred to above by the learned counsel for the, appellant is distinguishable on the facts as such, the plea that consistency on the point of law has not been following is not available. Mr. Merchant learned counsel for the appellant has taken us through the other provisions of Customs Act, particularly, sections 168 and 171 to contend that the seizure of the cargo was illegal for want of show‑cause notice and non‑compliance of the provision of section 171.
Learned Federal counsel met with such plea by maintaining that after inspection under the Court's order and as a result thereof, the prohibited items were found, the respondents have taken all the steps necessary for initiation of the criminal as well as adjudication proceeding with regard to the consignment under the Customs Act.
We are of the view that any observation/comments on these points may cause prejudice to the contesting parties at the trial or in adjudication proceedings. It is left to be addressed by such fora for the reason that the pivotal point for the disposal of the present appeal is whether the appellant has established the arrival of the cargo at customs station inadvertently.
It is case of the appellant that some of the consignment was destined for Zimbabwe and on that account the plea of the appellant was that it is `frustrated argo' and the appellant is entitled for the re‑shipment thereof. When Ms. Navin Merchant was asked if any material was placed 1, during the hearing with regard to the nature of such cargo, she frankly conceded that there was no material like invoice, packing list or Bill of Lading, or like other documents .to show the nature of the consignment and to show that its destination was, Zimbabwe and the same was inadvertently stuffed in the container destined for Karachi.
On inspection, 3600 Bottles of Scotch Whisky of different brands were found in the container, the prohibited items, bringing into Pakistan of such items attracts the provisions of section 2(s) of the Customs Act, an offence of smuggling. It is the case of the respondents that the proceedings have been initiated. We are of the view that in such circumstances, the appellants have failed to demonstrate that the consignment is a `frustrated cargo'.
The appellants have also claimed damages to the tune of Rs.100 million. It is now well‑settled when a party can be compensated in terms of money, no injunction can be granted. Under section 54 of Specific Relief Act, an injunction can be granted to the appellants when the, invasion is such that pecuniary compensation would not afford adequate: relief. In case where pecuniary compensation could be granted the general rule is that no injunction should be granted. If any reference to this regard is required, case of Mohammad Ibrahim Khan v. Pateshwari Parshad, Singh (AIR 1960 Allahabad 252) may be referred.
In the instant case; the appellants have already quantified damages to the tune of Rs.100 million. We are of the view that appellants have failed to make out a case for injunction.
Resultantly, we are of the view that the learned Single Judge has exercised the jurisdiction in accordance with the law and needs no interference, accordingly the appeal is dismissed in limine alongwith listed application.
S.A.K./E‑2/KAppeal dismissed.