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Second Appeal No. 10 of 1986, decided on 5th November, 1986.

‑‑‑S. 201‑‑Auction of goods by Customs Authorities‑‑Claim for recovery of balance sale amount‑‑Jurisdiction of civil Court‑‑Appellants/importer, failing to get clearance of goods, served with notice from Port Trust Authorities in whose care and custody goods were lying that goods, having not been cleared, would be sold by public auction‑‑Appellants taking no steps as provided by Customs Act to challenge auction proceedings‑‑Dispute being about the balance amount of sale proceed, civil Court, held, had jurisdiction in the matter‑‑Appellants were found entitled to balance of amount left out from sale proceeds after deducting customs duty and demurrage charges etc.

Ibrahim Pishori for Appellant.

Abdul Saeed Khan Ghori for Respondents.

Date of hearing: 5th November, 1986.

The appellant imported 450 cases and one carton containing F /Match Oil additives from U.S.A. against import licence on payment of price to the exporter. The goods were shipped on board the 'President Eisenhover' which discharged the same at Karachi in the custody of Karachi Port Trust. The appellant through United Shippers, the Clearing and Fowarding Agents, Karachi filed bill of entry on 23‑1‑1980 for taking delivery of the goods. The respondent No. 1 disputed the I.T.C. classifications of the goods, whereupon the appellant/ demanded show‑cause notice for submitting a reply. In the meantime, the appellant also applied for permission to remove the goods into the bonded warehouse pending the determination of I.T.C. classification of the goods. This request was allowed on 17‑5‑1980. The respondent No. 1 did not issue any show‑cause notice to the appellant, nor bill of entry was passed for clearance of the goods. On 3‑6‑1980 the appellant received a notice from the Karachi Port Trust in whose care and custody the goods were lying, that the goods would be sold by public auction. On 1‑7‑1980 the appellant applied for stay of the auction as the goods were pending clearance. It was stayed for one month. However, the appellant came to know that the goods were auctioned and the defendants have recovered Rs.1,33,500 as sale proceeds from the auction purchase. The appellant claimed that it is liable to pay Rs.46,095 towards customs duty, sales tax, income‑tax and demurrage charges and after adjusting this, amount the respondent should pay the balance of Rs.87, 485. According to the appellant a statutory notice, dated 9‑11‑1980 was served on the respondents Nos. 1 and 3 but no reply was received.

The respondents filed their written statement challenging the jurisdiction of the Court and maintainability of the suit. On merits the allegations made by the plaintiffs were denied. It was alleged that the appellant had not supplied bill of entry and therefore, no comments could be offered. It was further pleaded that the appellant had adequate knowledge of the auction and although the auction was stayed for one month, no steps were taken to clear the goods. Consequently, the goods were auctioned on 26‑8‑1980 in accordance with the provisions of the Customs Act and Rs.1,33,500 were realized. It was further stated that the appellants are entitled to receive sale proceed within the limits prescribed by law. The learned trial Court, held, that the Court had jurisdiction to try the suit. The auction would, held, without any notice to the appellant, and consequently decreed the suit with cost. In appeal the learned IIIrd Additional District Judge, Karachi by the impugned judgment held, that the Court had no jurisdiction to adjudicate upon the matter as it was barred under law. The judgment and decree of the trial Court was set aside and suit was dismissed.

Before dealing with the contentions raised by the learned counsel for the parties, it would be proper to state certain facts which were not disputed during the arguments. The appellant had imported the goods which were sold in auction by the respondent who realised Rs.1,33,500. The appellant was aware of the fact that the auction was to be held and had even applied for its stay which was granted by the respondent No. 1, but it seems that thereafter, no further action was taken by the appellant. It was open to the appellant to have challenged the auction or the proceedings taken by the customs authorities under the Customs Act but no step was taken. Instead notice for refund of the balance amount as claimed by the appellant was served on the respondents Nos. 1 and 2. In these circumstances, the appellant cannot challenge the auction proceeding. The controversy, therefore, remains whether the appellant is entitled to recover the balance amount The balance amount according to the plaintiff is Rs.87,405 whereas according to the respondents, it is .Rs.69,301. Although the respondents have not given the details or any evidence to this effect they have mentioned a calculation in the memo of appeal and during arguments Mr. Pishori agreed that the balance amount will be Rs.69,301. In view of this statement, I need not further investigate the amount due to the appellant, nor I feel it necessary to make calculation on the basis of the provisions of law under which Rs.64,199 has been deducted towards the customs duty, demurrage charges and other expenses permissible under law. The respondent during trial had applied for depositing Rs.69, 301 in A Court and this request was granted. Mr. Ghouri has stated that the Nazir had certified that cheque No. A709009/A07141, dated 3‑6‑1984 was deposited with the Nazir. In the undertaking given by the defendants before the trial Court, they had stated that they are depositing the due amount of the sale proceeds in Court provided the original documents may be supplied to them to process the claim of the appellant. It is noteworthy that during the pendency of the suit the respondent No. 1 asked for certain documents from the appellant which had been filed in Court. From these facts, it is clear that the respondents had submitted to the jurisdiction of the Court. The main argument of the learned counsel for the respondent is that the appellant had not taken steps as provided by the Customs Act to challenge the auction proceedings, therefore, no action by way of civil suit can be taken by the appellants. From the record it is clear and Mr. Pishori admits that the appellant has not challenged the auction proceedings. The appellant only requires the respondents to pay the balance amount which it is entitled to recover under section 201 of the Customs Act. There seems to be some dispute about the deduction but in view of the statement made by the learned counsel for the parties, there is hardly any dispute about the amount refundable to the appellant.

Mr. Ghouri contended that the appellant should have followed the procedure provided under the Customs Rules for recovery of the amount but as it has failed to do so it is not entitled to recover by way of suit. The auction was held on 26‑8‑1980 and on 9‑11‑1980 the appellant had served a notice for refund of the amount due to it, but neither any reply was sent, nor any order for refund was passed till the filing of the suit. If there was any objection to the claim made by the appellant or any document was required for the refund, the respondent could have intimated and asked for it from the appellant. As the respondents did not reply, nor passed any order within a reasonable time, the appellant was justified in seeking assistance from the Court for claiming the refund. In these circumstances it cannot be successfully argued that the civil Court had no jurisdiction to entertain the suit. The appeal is, therefore, allowed and the suit is decreed for Rs.69,301 against the defendants jointly and severally with no order as to cost. According to Mr. Ghouri Rs.69,301 has been deposited in Court, but if it is found that the cheque delivered to the Nazir had not been encashed, the respondent /defendant shall deposit Rs.69,301 within a period of one month.

M.Y.H./5143/K Appeal allowed.

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