IN THE HIGH COURT OF DELHI AT NEW DELHI

CIVIL WRIT JURISDICTION

CONT. CAS [C] No. OF 2004

IN
WP [C] NO.4638 OF 1993

IN THE MATTER OF:

M/s. Ajay Exports … Petitioner

VERSUS

Union of India & Ors. … Respondents

AND IN THE MATTER OF:

M/s. Ajay Exports

Having its registered office at:
110, Aurobindo Place,
Hauz Khas,
New Delhi
Through its Partner
Shri Ratan Lal … Petitioner

Versus

1. Shri P.N. Bchatti

Assistant Collector of Customs
Bond Department,
New Customs House,
Ballard Estate,
Bombay – 400038

2. Shri K.M. Tiwari,

Principal Collector of Customs
Bombay,
New Customs House,
Ballard Estate,
Bombay – 400038 … Contemnors/
Respondents

A PETITION FOR CONTEMPT OF COURT UNDER SECTION

2(b) AND SECTION 12 OF THE CONTEMPT OF COURT ACT
1971 AND ARTICLE 215 OF THE CONSTITUTION OF INDIA
FOR WILFUL DISOBEDIENCE OF THE ORDER PASSED BY
THE HON’BLE COURT IN C.W.P. NO.4638 OF 1993 PASSED ON
21.8.2003

1
To

The Hon’ble Chief Justice of Delhi High Court and his

Companion Justices.

The humble Petition of the

Petitioners above-named

MOST RESPECTFULLY SHOWETH:

1. The Petitioner in the above mentioned Writ Petition is constrained

to file the present Civil Contempt Petition before this Hon’ble Court, as the

Respondents abovenamed have willfully disobeyed the order of the

Hon’ble Court and have not complied with the Orders passed by this

Hon’ble Court on 21.8.2003 in CWP NO.4638/1993. A true copy of the

order dated 21.8.2003 is annexed hereto as Annexure-P/1.

2. The Petitioner submits that all the relevant facts and circumstances

leading to the filing of the present Petition have been set out in detail in

the afore-mentioned writ petition and the same are not being repeated

herein for the sake of brevity and to avoid unnecessary repetition. The

Petitioner craves leave of this Hon’ble Court to refer to and rely upon the

same at the time of hearing for the purpose of adjudication of the present

Petition.

3. At this stage it would be pertinent to highlight certain aspects of the

litigation in CWP No.4638/93 which have compelled the Petitioner herein

to file the present contempt Petition before this Hon’ble Court and also to

apprise this Hon’ble Court of the wrongful conduct of the Contemnors all

along:

(a) Petitioner is a private limited company carrying on the trade and

business activities, inter alia, of dealing in import and export of

spices.

2
(b) The Petitioners in the aforesaid writ petition were challenging the

levy of interest on the Petitioner’s goods imported by them and kept

in bond with the permission of the Contemnors herein.

[c] The Petitioners were charged with 18 per cent of interest on the

goods warehoused with the Contemnors at the time of clearance of

the goods.

(d) The Petitioners filed the writ petition challenging that the interest

has been charged on them without serving upon them any notice of

demand which is a mandatory requirement of Section 59 of the

Customs Act, 1962 before any interest can be charged on

warehoused goods.

(e) The details of the goods imported, the customs duty demanded by

the Department and paid by the Petitioners and the interest

demanded on and paid by the Petitioners are as follows:

NO. OF BAGS CUSTOMS DUTY INTEREST DEMANDED

DEMANDED AND PAID AND PAID
[RUPEES] [RUPEES]
1549 (Cloves) 62,90,866.00 7,04,232.00
1152 (Cloves) 47,54,078.00 5,32,196.00

[f] The aforementioned writ petition was accordingly decided vide

judgment and order dated 21 st August, 2003 wherein this Hon’ble

Court unambiguously observed that the Petitioner’s case is wholly

covered by the ratio of decision rendered on 14 th August, 2003 in

CWP No.1648 of 1991 which was decided on the basis of decision

in rendered by the Hon’ble Supreme Court in Union of India Vs.

Bangalore Wire Rod Mill [(1996) 3 SCC 588]. It needs to be

mentioned that in the said decision, the Hon’ble Supreme Court in

unmistakable terms had held that no interest on customs duty for

warehoused goods could be charged unless and until there was a

3
 notice of demand and the period of payment in the notice of

demand had not expired.

[g] It is not disputed, as is observed in the order of this Hon’ble Court

that the Petitioners did not receive any notice of demand under

Section 59 (1) of the Customs Act, 1962 and still at the time of

clearance of the goods for home consumption the Customs

Authorities demanded customs duty as well as interest thereon.

[h] The Petitioners also submitted before this Hon’ble Court that the

interest paid by them had been illegally collected by the Authorities

since they had no other option to take custody of the goods.

[i] Pursuant to these submissions of the Petitioners, this Hon’ble Court

held that the Petitioners were not liable to pay any interest and the

interest has been wrongly and illegally recovered from the

Petitioners.

[j] Insofar as the question of refund of the interest so paid by the

Petitioners, the Petitioners were directed to approach the Customs

Authorities for refund of the same.

[k] The Petitioners were also directed to approach the appropriate

Authorities for the purpose of refund within four weeks of its order.

3. It is in these circumstances that the aforementioned writ petition

filed by the Petitioners was disposed of by this Hon’ble Court vide

its order dated 21st August, 2003.

5. In pursuance of the said order of this Hon’ble Court, the Petitioners

approached the Customs Authorities by way of an Application

accompanied with duly signed Form No.27 as prescribed under the

Customs Act, 1962 and the Rules framed thereunder giving therein full

details in order to avoid any rejection of the refund claim due to technical

4
reasons. A true copy of the Application for refund of the interest sent to the

Customs Authorities by registered post on 30 th September, 2003 along

with its Annexures is marked and annexed hereto as Annexure-P/2

(Colly.).

6. The aforesaid Application sent by the registered post was duly

acknowledged on behalf the Respondent-Contemnors on 3 rd October,

2003. A true copy of the receipt of registered AD issued by the Postal

Department dated 30.10.2003 and also the AD Card delivered by the

Postal Department dated 3.10.2003 is marked and annexed hereto as

Annexure-P/3.

7. It is further submitted that the Petitioners have since not received

any communication from the Respondent-Contemnors with regard to the

application of the Petitioners claiming refund of the interest illegally and

wrongfully recovered from them which goes to show that no steps have

been taken by the Respondent Authorities during all this time to refund the

interest amount due towards the Petitioners and such irresponsible

attitude of Respondent authorities is a clear contempt of the orders of this

Hon’ble Court.

8. It is submitted that non-complacence of the express directions of

the Hon’ble Court is nothing but wilful and deliberate act of disobedience

amounting to contempt of this Hon’ble Court.

9. It is further submitted that entire object and purpose of institution of

writ petition will stand defeated if the orders passed by this Hon’ble Court

are not enforced and given effect to according to their letter and spirit and

effectively and surely.

PRAYER

It is, therefore, most respectfully prayed that this Hon’ble Court may

graciously be pleased to:

5
[a] Issue appropriate directions to initiate contempt proceedings

against the Respondent-Contemnors for willfully disobeying the

orders dated 21st August, 2003 passed by this Hon’ble Court in

CWP No.4638 of 1993 in compliance of which the Petitioners had

approached the Respondent-Contemnors who failed to take any

action even after elapse of considerable time.

[b] Pass such other and further order or orders as the Hon’ble Court

may deem fit and proper in the facts and circumstances of the

case.

AND FOR WHICH ACT OF KINDNESS, THE PETITIONERS, AS IS

DUTY BOUND, SHALL EVERY PRAY

FILED BY:
DRAWN BY:

Ms. Namrata Chopra INDIAN LAW ASSOCIATES

Advocate ADVOCATES FOR THE PETITIONER
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI -110001
New Delhi
January 2004

6
 IN THE HIGH COURT OF DELHI AT NEW DELHI

CIVIL WRIT JURISDICTION

CONT. CAS [C] No. OF 2004

IN
WP [C] NO.4638 OF 1993

IN THE MATTER OF:

M/s. Ajay Exports … Petitioner

Versus

Union of India & Ors. … Contemnors/

Respondents

AFFIDAVIT

I, Ratanlal, Partner, M/s. Ajay Exports, having its registered office at: C-15
Qutab Institutional Area, New Delhi – 110016, do hereby solemnly affirm
and declare as under :

1. That I am Partner of the Petitioner-firm in the above

mentioned matter and am therefore competent to file this
Affidavit in this case in support of the present Contempt
Petition.

2. That I am fully aware of the facts and circumstances of the

present case and am, therefore, also competent to swear
the present Affidavit.

3. That I have read and understood the contents of the

accompanying Contempt Petition ,the contents of which are
true and correct to my knowledge and information.

4. That the documents annexed to the Petition are certified

true copies of the respective originals.

DEPONENT
VERIFICATION:

Verified at New Delhi on this th day of February, 2004 that the

contents of my above Affidavit are true and correct and that
nothing false has been stated therein.

DEPONENT

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 IN THE HIGH COURT OF DELHI AT NEW DELHI

CIVIL WRIT JURISDICTION

CONT. CAS [C] No. OF 2004

IN
WP [C] NO.4638 OF 1993

MEMO OF PARTIES
IN THE MATTER OF:

M/s. Ajay Exports … Petitioner

VERSUS

Union of India & Ors. … Respondents

AND IN THE MATTER OF:

M/s. Ajay Exports

Having its registered office at:
110, Aurobindo Place,
Hauz Khas,
New Delhi
Through its Partner
Shri Ratan Lal … Petitioner

Versus

1. Shri P.N. Bchatti

Assistant Collector of Customs
Bond Department,
New Customs House,
Ballard Estate,
Bombay – 400038

1. Shri K.M. Tiwari,

Principal Collector of Customs
Bombay,
New Customs House,
Ballard Estate,
Bombay – 400038 … Contemnors/
Respondents

FILED BY:

Ms. Namrata Chopra

INDIAN LAW ASSOCIATES
ADVOCATES FOR THE PETITIONER
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI -110001
New Delhi
February ,2004

8
 IN THE HIGH COURT OF DELHI AT NEW DELHI

CIVIL WRIT JURISDICTION

CONT. CAS [C] No. OF 2004

IN
WP [C] NO.4638 OF 1993

IN THE MATTER OF:

M/s. Ajay Exports … Petitioner

VERSUS
Union of India & Ors. … Respondents

AND IN THE MATTER OF:

M/s. Ajay Exports … Petitioner

Versus

Shri P.N. Bchatti & Anr. … Contemnors/Respondents

INDEX

S. PARTICULARS Page
No. No.

1. Urgent Applicatiion A
B
2. Memo of Parties

3. Petition for contempt of court under Section 2(b) and 1 -7

Section 12 of the Contempt of Court Act, 1971 and
Article 215 of the Constitution of India for wilful
disobedience of the order passed by the Hon’ble
Court in CWP No.4638 of 1993 passed on 21.8.2003
with Affidavit

4. ANNEXURE-P/1
True copy of the order dated 21.8.2003 passed by this 8–9
Hon’ble Court in CWP No.4638 of 1993

5. ANNEXURE-P/2 (Colly.)
True copy of the Application for refund of the interest 10 – 18
sent to the Customs Authorities by registered post on
30th September, 2003 along with its Annexures

9
 6. ANNEXURE-P/3
True copy of the Receipt of registered AD dated 19
30.10.2003 issued by Postal Department and the
AD Card delivered by the Postal Department
dated 3.10.2003

7. Vakalatnama 20

FILED BY:

Ms. Namrata Chopra

INDIAN LAW ASSOCIATES
ADVOCATES FOR THE PETITIONER
16, TODARMAL ROAD,
NEAR BENGALI MARKET
NEW DELHI -110001

February ,2004

10
 THE HIGH COURT OF DELHI AT NEW DELHI

C.W. NO.4638/1993

Date of decision: 21.08.2003

M/s Ajay Exports …Petitioner

Versus

Union of India & Ors. …Respondents

Advocates who appeared in this case:

For Petitioner: Mr. Rajiv Dutta Sr. Advocate with

Ms. Namrata Chopra

For Respondent: None

CORAM:

HON’BLE MR. JUSTICE BADAR DURREZ AHMED

1. Whether Reporters of local papers may be allowed to see

the judgment?

2. To be referred to the Respondent or not?

3. Whether the judgment should be reported in Digest?

BADAR DURREZ AHMED, J (ORAL)

1. In this writ petition rule was issued on 15.4.1994. By the

same order it was directed that this writ petition be heard along
with CW 1648/1991. The said CW 1648/91 was heard and
disposed of by a judgment dated 14.8.2003wherein, following
the Supreme Court decision in Union of India V. Bangalore Wire
Rod Mill. (1996) 3 SCC 588, it was held that no interest on
customs duty for warehoused goods could be charged unless and
until there was a notice of demand and the period of payment in
the notice of demand had not expired. In the present case, it is
stated by learned senior counsel appearing on behalf of the

11
petitioner that in fact there was no notice of demand under
Section 59(1) of the Customs Act. 1962. Yet at the time of
clearance of the goods for home consumption the Customs
Authorities demanded customs duty as well as interest thereon.
As the petitioner had no option, it paid the customs duty as well
as the interest demanded as indicated below:-

NO. OF BAGS CUSTOMS DUTY INTEREST DEMANDED

DEMANDED AND PAID AND PAID
[RUPEES] [RUPEES]
1549 (Cloves) 62,90,866.00 7,04,232.00
1152 (Cloves) 47,54,078.00 5,32,196.00

2. Accordingly, the petitioner submits that the interest that

ahs been paid by it has been illegally collected by the
authorities. This case is entirely covered by the decision in CW
1648/1991. No interest at all could have been charged from the
petitioner. it is, therefore, held that the petitioner was not liable
to pay any interest and the interest has been wrongly and
illegally recovered from the petitioner. Insofar as the question of
refund of the interest is concerned, the petitioner may approach
the authorities for refund of the same which will be done in
accordance with the law. The petitioner may approach the
authority in this regard within four weeks.

3. The writ petition is allowed to this extent and is disposed of

accordingly.

August 21, 2003 BADAR DURREZ AHMED

(JUDGE)

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