MUBISHAR PESH IMAN VS FEDERATION OF PAKISTAN, 2016 PTD-KARACHI-HIGH-COURT-SINDH 518 (2014)

(a) Customs Act (IV of 1969)---

----S. 217---Protection against any legal proceedings---Pre-conditions---Protection provided by S. 217 of Customs Act, 1969, is conditional upon their having acted in good faith---Mala fide act is not protected under S. 217 of Customs Act, 1969---Ouster of jurisdiction can be claimed when action in question is focused to be within four corners of statute under which it is taken.

Federation of Pakistan v. Saman Diplomatic Bonded Warehouse 2004 PTD 1189 rel.

(b) Customs Act (IV of 1969)---

----S. 156(I)(89)---Specific Relief Act (I of 1877), Ss. 10, 42 & 54---Suit for recovery of specific movable property, declaration, injunction and damages---Show cause notice, assailing of---Confiscation of goods---Plaintiff was aggrieved of ceasing of betel nuts owned by him and had also assailed show cause notice issued by Customs authorities intending to confiscate the nuts under S. 156 (I)(89) of Customs Act, 1969---Validity---Plaintiff had successfully proved his case that he had legally purchased 42260 kilograms of betel nuts, which were lawfully imported and Sales tax was also duly paid thereon but Customs authorities illegally and unlawfully seized the same---Plaintiff had also claimed an amount against authorities severally and / or jointly, by way of damages for causing serious mental torture and bad name to him from the date of filing of suit till satisfaction of decree---Suit was decreed accordingly.

(c) Damages---

----Special and general---Proof---Person claiming special damages has to prove each item of loss with reference to evidence brought on record---For general damages relating to mental torture, anguish, distress and defamation, those are to be assessed following the Rule of Thumb---Such exercise falls in discretionary jurisdiction of Court which has to decide same in facts and circumstances of each case.

Abdul Majid Khan v. Towseen Abudl Haleem and others 2012 CLD 6 and Malik Gul Muhammad Awan v. Federation of Pakistan through Secretary M/o Finance and others 2013 SCMR 507 rel.

Munir A. Malik and Basil Nabi Malik for Plaintiff.

Nemo for Defendants.

Date of hearing: 5th August, 2014.

JUDGMENT

ZAFAR AHMED RAJPUT, J.---This is a suit for declaration, permanent injunction, possession/return of betel nuts and damages, filed by the plaintiff on 25.02.2004.

1.Briefly the relevant facts of the case, as narrated in the memo of plaint, are that the plaintiff had purchased 500 begs of betel nuts weighing 44955 kilograms (net) from defendant No.3 in October, 2002 in a sum of Rs.12,73,124/- for the purpose of investment as the price of betel nuts in the market was having an upward trend. It is further averred that the plaintiff was in India for attending a marriage ceremony when he was informed about the raid conducted by the defendant No.2, whereby his betel nuts weighing 12260 kilograms, stored at the premises of Times Press at Old Sabzi Mandi, Karachi, were seized by the defendant No.2 without any verification. It was also came into the knowledge of the plaintiff that his betel nuts were seized by the defendant No.2 along with the betel nuts of Messrs Zain Enterprises, who manufactures "Shahi. Products", under suspicion that the plaintiff's betel nuts were smuggled and as a result of this suspicion the betel nuts belonging to the manufacturer of "Shahi Products" were also seized and sealed at the spot and later on the plaintiff's betel nuts was shown as the case property in the FIR lodged against Messrs Zain Enterprises. It is the case of the plaintiff that if the property seized by defendant No.2 is found smuggled, the matter is adjudged by an officer appointed by defendant No.1 and the goods are, confiscated or released after charging duty and taxes, but in the instant case the betel nuts of the plaintiff were purchased by him legally and the duty was also paid; therefore, those were not liable to be seized in terms of Section 168 of the Customs Act, 1969, as the liability to confiscate such goods had not been determined in any proceedings. Further, the plaintiff had purchased the betel nuts from an importer i.e. Messrs S.S.C. International, the defendant No.3, who issued proper sales tax invoices in respect of the goods and the investment so made by the plaintiff, reflects in his wealth tax return; therefore, the plaintiff is the lawful owner of the same. It is further case of the plaintiff that he has nothing to do with any act and affairs of Messrs Zain Enterprises, nor there was any nexus between Messrs Zain Enterprises` and him, hence, the plaintiff was wrongly deprived of his lawful property which has also caused serious mental torture and bad name to him. Therefore, the plaintiff has maintained this suit with the following prayers:--

"(a)That 42260 Kgs of betel nuts seized by the defendant No.2 and his subordinate staff have been wrongly seized as such betel nuts were lawfully imported, legally purchased by the plaintiff from defendant No.3 and even the Sales Tax was duly paid thereon.

(b)That the plaintiff being an Investor, the betel nuts so seized were purchased by the plaintiff from the defendant No.3, for the purpose of investment and such investment duly reflects in the wealth tax statement filed by the plaintiff with the Income Tax authorities.

(c)That the betel nuts having lawfully purchased from defendant No.3, were not liable for confiscation and could not have been seized in terms of Section 168 of the Customs Act, 1969.

AND while granting such declaration, the Honourable Court may be pleased to restrain the defendants 1 and 2, or their subordinate staff or any one representing through them from removing the betel nuts of the plaintiff to any other place from its present location.

Further restrain the defendants, their subordinate staff or any one representing through them or on their behalf from disposing-of the betel nuts of the plaintiff without the permission of this Honourable Court.

Further appoint the Nazir of this Honourable Court to verify the documents regarding lawful import and purchase of betel nuts, the subject matter of this Suit, from the defendant No.3 or from Customs/Sales Tax authorities and after proper verification hand over/deliver the same to the plaintiff.

Grant a decree in favour of the plaintiff and against the defendants 1 and 2 severally and/or jointly for a sum of Rs.10 million by way of damages from the date of filing of this Suit till the satisfaction of the decree.

Any other relief which this Honorable Court may deem fit and proper in the circumstances of the case. The plaintiff also prays for the costs."

2.Defendants were served with the summons. On 22.3.2004, Mr. Syed Raza Ali Abidi, advocate filed his power on behalf of defendant No.3, while on behalf of defendants Nos.1 and 2, Mr. Syed Tariq Ali, the learned standing counsel, filed his memo. of appearance on 01.04.2004. Thereafter, sufficient opportunities were availed by the defendants for filing of written statements but they failed to do so; therefore, vide Order dated 06.10.2004, they were debarred from filing of written statements.

3.On 13.12.2004, the learned standing counsel filed an application under Order VII, Rule 11, read with Section 151, C.P.C. (CMA No.8739/2004) for dismissal of the suit on the ground of non- maintainability in view of section 217 of the Customs Act, 1969 (hereinafter referred to as "the Act, 1969"). However, on 17.12.2004, it was agreed by the parties that the plaintiff shall approach the Collector of Customs (Adjudication) within three days by filing as application and thereafter the suit would come up after six (6) weeks for further orders, if necessary. After that, on 24.8.2005 learned counsel for the plaintiff informed the Court that the customs authority has decided the matter in favour of the plaintiff and the other side has preferred an appeal against the said decision. On that, the learned Federal Counsel did not press CMA No.8739/2004, consequently the said CMA was dismissed by this Court, and the Court, while observing that the defendants had not filed their written statement despite opportunities provided to them, passed an order to proceed with the matter ex-parte against them and directed the plaintiff to file Affidavit-in-Ex-parte Proof.

4.Thereafter, on 27.9.2005, the learned standing counsel filed another application under section 151, C.P.C. read with Section 217 of the Act, 1969 (CMA No.7623/2005) for setting aside orders dated 24.8.2005 and 21.9.2005 and to dismiss the suit, alleging therein that the Collector of Customs (Adjudication) by Order-in-Original dated 18.5.2005 has decided the subject matter, therefore, suit has become infructuous and that the order dated 24.8.2005 for proceeding of the case ex-parte against the defendants is erroneous and contrary to the facts and provisions of law as contained in section 217 of the Act, 1969. The said application was disposed of by this Court vide order dated 03.5.2006 with the observation that the case shall be decided after hearing Mr. Syed Tariq Ali, the learned standing counsel, on the point of maintainability of the suit and the matter was adjourned for final arguments. However, as per record the matter was adjourned thereafter on more than 10 dates of hearing, but the learned standing counsel failed to appear and argue the matter, despite the notices issued to him.

5.On 20.9.2005, the plaintiff filed his Affidavit-in-Ex-parte Proof, wherein he has reiterated the same facts as stated in the memo. of plaint and produced the copies of FIR (lodged against the Mst. Shamima Khatoon, the owner of Messrs Zain Enterprises, Karachi, and others), Challan, Two Sales Tax Advices, Income Tax and Wealth Tax Returns and prayed for judgment and decree in his favour as prayed by him.

6.In order to substantiate his claim, the plaintiff also produced one witness, namely, Taimur Siddiq, the attorney of Mst. Shamima Khatoon; who is the proprietor of Messrs Zain Enterprises. He has stated in his affidavit that on 23.1.2004 the officials of the customs department raided the premises of Times Press, where the factory of Messrs Zain Enterprises is also located within its compound. He has further stated that the Messrs Zain Enterprises, who are the manufacturers of "Shahi Sounf Supari", was not the owner of the betel nuts ceased by the customs officials from the warehouse of Time Press and the same belonged to the plaintiff.

7.I have heard Mr. Basil Nabi Malik, Advocate for the plaintiff and perused the material available on record.

8.The learned counsel for the plaintiff has contended that the defendants Nos.1 and 2 have not resisted the suit by filing any written statement. He has also, contended that the provisions of section 217 of the Act, 1969 is not applicable in this case as this is a suit for declaration, permanent injunction, possession/return of betel nuts and damages against the illegal act and maladministration of the defendants Nos.1 and 2. He has further contended that in pursuance of the order dated 17.12.2004, the plaintiff filed an application before the Collector of Customs (Adjudication-II), Karachi, who decided the matter in his favour vide Order-in-Original No.95/2005 dated 18.5.2005 and the appeal preferred by the defendants Nos.1 and 2 before the Customs, Central Excise and Sales Tax Appellate Tribunal Bench-III, Karachi against the said Order-in-Original, being Customs Appeal No.536/2005, has also been dismissed vide order dated 06.4.2007; therefore, the plaintiff is entitled for the relief as prayed by him. The learned counsel for the plaintiff has also produced the copies of the said orders passed by the Collector of Customs (Adjudication-II), Karachi and Customs, Central Excise and Sales Tax Appellate Tribunal Bench-III, Karachi

9.I have given very anxious consideration to the contention raised by the learned counsel for the plaintiff and the material available on record. It appears from the perusal of the case file that the instant suit was instituted on 25.02.2004, but the defendants, despite availing sufficient opportunities, failed to file their written statement; thereafter, they were debarred from filing the same by the Court, vide order dated 06.10.2004. However, the learned standing counsel has raised legal objections in his application bearing CMA No. 7623/2005 of the maintainability of the suit in view of the order passed by the Collector of Customs (Adjudication-II), Karachi and section 217 of the Act, 1969. I, therefore, deem it appropriate to decide the issue of maintainability of the instant suit.

10.It is matter of record that on the complaint of defendant No.2, the Collector of Customs (Adjudication-II), Karachi had issued a show- cause notice vide Case No.34(II)Adj-lI/2004/2207 to Messrs Shamima Khatoon, the owner of Messrs Zain Enterprises, Karachi, and others for the violation of sections 2(s), 16 and 178 of the Act, 1969, whereby they were asked to explain as to why the ceased betel nuts should not be confiscated under sub-clause (I)(89) of Section 156 of the Act, 1969. Mst. Shamima Khatoon and other contested the said show-cause notice. The plaintiff also filed an application in the said case. The Collector of Customs (Adjudication-II), Karachi vacated the said show-cause notice vide Order-in-Original No. 95 / 2005. The operative part of the said Order is reproduced as under:--

"16. I have gone through the record of the case and also considered the written and verbal arguments put forth by the respondents as well as the representative of the department. My observations/findings on the issues raised in the show cause notice and the replies thereof are as under:

i.As regards the status of Foreign origin betel nuts, weighing 42260 Kgs, recovered from the Godown is concerned; the learned counsel has contended that the impugned goods were purchased from an importer who had imported the subject goods vide bills of entry IGM No.1628/02 dated 18.09.2002 Index Nos.375, 75 and 76 and have paid all the duties and taxes leviable thereon. The learned counsel also produced the sales tax invoices showing legal purchase and possession of the subject goods.

ii.As regards the status of foreign origin betel nuts, weighing 50730.74 Kgs, recovered from the factory premises is concerned; the learned counsel for the respondents M/s. Zain Enterprises, stated that the impugned goods were purchased from the open market and produced copies of the sales tax invoices in support of his contention. The sales tax invoices submitted by the respondents in support of lawful possession of betel nuts were duly audited by the auditors of Revenue Receipts Audit, Government of Pakistan, Karachi.

iii.The respondents have successfully discharged the burden cast on them by the producing the copies of bills of entry-along with sales tax invoices. It was the duty of the seizing department to prove that the seized goods are not covered by the bills of entry and sales tax invoices submitted by the respondents in support of their contention. However the department miserably failed to rebut the arguments of the respondents and challenge this bills of entry and sales tax invoices produced by the respondents.

iv. ..

17. In view of the above discussion it is held that the department failed to establish the charges leveled in the show cause notice. The impugned goods were lawfully imported and all duties and taxes leviable thereon, have been paid. I, therefore, consider it appropriate to vacate the show cause notice. The seized goods are released subject to the condition that the same are got tested by a well reputed Laboratory, confirming that these are fit for human consumption."

11.Defendant No.2 assailed the said Order-in-Original before the Customs, Central Excise and Sales Tax Appellate Tribunal, Karachi, in Customs Appeal No. 536/2005, which was also dismissed vide Order dated 06-4-2007, with the following observation:--

"8. Before parting with this order, we may observe that both the respondents have produced the documents regarding import purchase betel nuts in the year 2002-2003 whereas raid was conducted in the January, 2004 and order-in-original was passed on 18.5.2005. It is thereafter that in compliance thereof a Laboratory report of betel nuts has been obtained from Industrial Analytical Center at H.E.J. Research Institute of Chemistry vide reference letter C. No.M-849/DCT/Seiz/04/3044, dated 10.12.2006 which shows that sample of betel nuts (whole) and (Cut) both were found to be high, microbiological lead i.e. unfit for human consumption. Therefore, the seized goods (betel-huts) not being fit for human consumption shall, not be released the respondents and further appropriate action shall be taken for its lawful disposal."

12.It can, therefore, be seen that the matter adjudicated by the Collector of Customs (Adjudication-II), Karachi was not in respect of the claim raised by the plaintiff in this suit, but with regard to the show-cause notice, issued to Mst: Shamima Khatoon, the owner of Messrs Zain Enterprises, Karachi, and others for the alleged violation of sections 2(s), 16 and 178 of the Act, 1969. Since the grievance of the plaintiff is yet to be determined, the suit of the plaintiff has not become infructucus.

13.In order to appreciate the contentions of the learned counsel, it would be advantageous if the provisions of section 217 of the Act, 1969 are reproduced:

"217 Protection of action taken under the Act.

(1)No suit, prosecution or other legal proceeding shall lie against the [Federal Government] or any public servant for anything which is done or intended to be done in good faith in pursuance of this Act or the rules and notwithstanding anything in any other law for the time being in force no investigation or enquiry shall be undertaken or initiated by any governmental agency against any officer or official for anything done in his official capacity under this Act, rules, instructions or directions made or issued thereunder without the prior approval of the Board,

(2)--------------------------------------------

14.The above provisions of law clearly lays clown the common law rule of the ouster of the jurisdiction that where the government or their servants do, or intend to do anything under which they are authorized to act, shall not be liable civilly or criminally. However, it is pertinent to note that the protection provided by this provision is conditional upon their having acted in good faith; accordingly, a mala fide act is not protected under this section. It is; therefore, now well settled that ouster of the jurisdiction can be claimed when the impugned action is focus to be within four corners of the statute under which it is taken. It is the consistent views of the superior Courts that the provisions contained in statutes debarring the Court of general jurisdiction is to be construed very strictly and unless the case falls within letter and spirit of the barring provision it would not be given an effect. However, once an action taken under a statute is not within the four corners of that Act, such action would be without jurisdiction. In the case of Federation of Pakistan v. Saman Diplomatic Bonded Warehouse (2004 PTD 1189), this Court has held that the bar of jurisdiction could never be sustained if it could be shown that the impugned action was taken not in bona fide exercise of powers conferred by the Act or the Rule and where the jurisdiction of a Civil Court is challenged on the ground of ouster of jurisdiction of the Civil Court, it must be shown that the action taken by the authority was not mala fide and that in taking the action, the principles of natural justice was not violated and unless all the conditions mentioned above are satisfied, the action of the authority would not be immune from being challenged before a Civil Court.

15.So far this case is concerned; there is ample material before the Court to prove that the act of customs officials in this case was patently illegal and perverse, which could not be taken to be act done in "good faith" and their act is clearly mala fide. Therefore, I am of the view that this Court has jurisdiction to entertain and adjudicate the instant suit.

16.In view of above facts and circumstances, I am satisfied that the plaintiff has successfully proved his case that he had legally purchased 42260 Kgs. betel nuts, which was lawfully imported and the Sales Tax was also duly paid thereon, but the defendant No.2 and his subordinate staff illegally and unlawfully seized the same. The plaintiff has also claimed for a sum of Rs.10 million against the defendants 1 and 2, severally and/or jointly, by way of damages for causing serious mental torture and bad name to him from the date of filing of this Suit till the satisfaction of the decree. It may be noted that there is no denial of the fact that the plaintiff had to suffer mentally due to illegal and mala fide act of defendant No.1.

17.It is by now a well established principle that the person claiming special damages has to prove each item of loss with reference to the evidence brought on record and for general damages, as claimed by the plaintiff relating to mental torture, anguish, distress and defamation, those are to be assessed following the Rule of Thumb and the said exercise falls in the discretionary jurisdiction of the court which has to decide it in the facts and circumstances of the case. Reliance in this regard in place upon the case of Abdul Majid Khan v. Towseen Abdul Haleem others (2012 CLD 06) and Malik Gul Muhammad Awan v. Federation of Pakistan through Secretary M/o Finance and others (2013 SCMR 507).

18.For the foregoing facts, reasons and circumstances of the case, I deem it fit and proper to decree the plaintiff's suit in the following terms.

i.The plaintiff was/is the lawful owner of the 42260 Kgs. betel nuts, which was seized by the defendants Nos. 1 and 2 illegally and malafidely; therefore, the defendants Nos. 1 and 2, severally and/or jointly, are liable to return the plaintiff's 42260 Kgs. betel nuts or alternatively they are liable to pay its costs, as per market rate, on the day of payment.

ii.The defendants Nos. 1 and 2, severally and jointly, are liable to pay general damages to the plaintiff to the tune of Rs.10,00,000=00 (Rupees Ten Lacs Only) with mark-up at the rate of 10% per annum from the date of decree of the suit till the recovery of the entire amount for the illegal, mala fide and unwarranted action, which resulted the plaintiff to suffer mental torture, anguish, distress and the injury as pleaded by him in the suit.

MH/M-169/SindhSuit decreed.