Lumbini Industries Pvt. Ltd. v. Union Of India & Ors.

Debangsu Basak, J.:— A Company registered in a foreign country has sought compensation from the Union of India for the loss of materials in transit through India as also withdrawal of a demand notice dated March 26, 2002 issued by the authorities on Company.

2. Learned Advocate for the petitioner has submitted that, the petitioner is a company incorporated in Nepal. The petitioner had imported goods. In accordance with the treaty existing between Nepal and India, the petitioner had transported such imported goods from the port of Kolkata to Nepal. The goods were being transported by road on a lorry. The goods were stolen while in transit. A First Information Report had been lodged by the Criminal Investigation Department, West Bengal in respect of such loss. The goods were never recovered. The Indian authorities owe an obligation for safe transport action of the goods from the port of India to Nepal. Since the goods were lost to the petitioner in transit in India for no fault of the petitioner, the customs authorities cannot make any demand upon the petitioner. The demand made by the customs authorities dated March 26, 2002, therefore, has to be quashed. The customs authorities having acted in violation of the treaty and statutory obligation, a writ petition is maintainable by a foreign national for redressal of its grievance in a Court of law in India. In support of the proposition a writ petition is maintainable, learned Advocate for the petitioner has relied upon AIR 1993 P&H 162 (Saeid Reza Moein v. Punjabi University, Patiala) and All India Reporter 1954 Madras page 806 (R.M Seshadri v. Second Addl. Income-tax Officer, Salaries Circle, Madras).

3. Learned Additional Solicitor General appearing on behalf of the respondents has submitted that, a foreign national cannot maintain a writ petition for redressal of all its grievances. A writ petition at the behest of a foreign national is maintainable on limited grounds. In support of such proposition he has relied upon of All India Reporter 2003 Allahabad page 153 (Power Measurement Limited, Petitioner v. Uttar Pradesh Power Corporation Limited). He has submitted that, the petitioner in the present facts of the case is essentially canvassing a right under Article 19(1)(g) and not under Article 14 of the Constitution. The petitioner is, therefore, not entitled to maintain the writ petition.

4. Learned Additional Solicitor General has also referred to the Treaty of Trade, Treaty of Transit and Trade Related Agreement between the Government of Nepal and neighbouring countries as amended up to July, 2010. He has referred to Clause 9A of such treaty. He has submitted that, the petitioner was required to furnish, to the satisfaction of the Commissioner of Customs, a legally-binding undertaking that the amount equal to the difference between the market value of the goods in India and their c.i.f value shall be paid, on demand, to the Commissioner of Customs, in the event of goods not reaching Nepal. The petitioner had furnished such undertaking. Admittedly, the goods did not reach Nepal. The customs authorities, therefore, has acted in terms of Clause 9A of the treaty and has demanded the payment in terms therewith from the petitioner. The action of the customs authorities in making such demand cannot be termed as arbitrary or in violation of Article 14 of the Constitution. Therefore, the writ petition should be held not maintainable, and in any event, the demand made by the customs authorities contained in the impugned notice dated March 26, 2002 cannot be said to be bad.

5. The petitioner claims to be a private limited company incorporated in Nepal. It claims to be engaged in the business of manufacturing at Nepal. It was importing copper rod to Nepal through India. As Nepal is a landlocked country, a Treaty for Transit exists between Nepal and India. In accordance with such treaty, the petitioner was required to and it did give a declaration of the goods to be transported by road through India to Nepal. It had also furnished a declaration as to the value of the goods. The goods did not reach Nepal. The petitioner has alleged theft by Indian nationals and has sought compensation from India on such score. Since, the goods transported through India, did not reach Nepal, the Custom authorities have demanded the difference in value from the petitioner in terms of the treaty. The petitioner has challenged such action also.

6. Article 226 of the Constitution of India does not limit the exercise of such powers by High Court at the instance of citizens of India only. The Courts, over a period of time, have recognized the availability to the recourse to Article 226 of the Constitution of India to persons other than natural persons who are Indians. A juristic person carrying on business in India has been recognized to be entitled to maintain and obtain relief under Article 226 of the Constitution. A foreign national, has also been recognized to be entitled to approach the High Court under Article 226 of the Constitution of India, in the event of violation of human rights.

7. Saeid Reza Moein (supra) has recognized the right of a foreign student to invoke Article 226 for protection of its rights. R.M Seshadri (supra) has held that, the word “person” in Article 14 includes not only human beings but also juristic person such as Corporation. In Power Measurement Limited (supra) it has been held that, a foreign company cannot claim violation of Article 14. In that case a foreign company had applied for tender floated by an Article 12 authority. Such authority had preferred a domestic company over a foreign company although the bid of the domestic company was the second lowest. In such circumstances, it has been held that, the foreign company cannot claim violation of Article 14 independent to Article 19(1)(g) of the Constitution. It has also held that, fundamental rights which are available to the citizen of the country cannot be extended to non-citizen through Article 14 of the Constitution of India. In the present case, the right to transport the goods from the port of Kolkata to the territory of Nepal has been claimed to be violated by the action or the non-action of the State authorities. Essentially it is a right having its foundational basis and emanating out of Article 19(1)(g) of the Constitution which the petitioner is seeking to enforce. Article 19(1)(g) is available to a citizen of India. Its availability has been extended to juristic persons constituted under the laws of India. A foreign company cannot be allowed to invoke Article 226 founding its claim on the violation of Article 19(1)(g).

8. The Treaty of Transit between the Government of Nepal and the Government of India contemplates that, the traffic in transit would be subject to the procedure laid down in the protocol annexed to such treaty. The protocol to the Treaty of Transit between Nepal and India contemplates a memorandum. The memorandum to the protocol to the Treaty of Transit between Nepal and India provides in Article 9A as follows:

“9A. For goods other than those specified as sensitive by the Government of India in terms of paragraph 9 above, the importer furnish, to the satisfaction of the Commissioner of Customs, Calcutta a legally-binding undertaking that the amount equal to the difference between the market value of the goods in India and their c.i.f value shall be paid, on demand, to the Commissioner of Customs, Calcutta, in the event of the goods not reaching Nepal”.

9. The petitioner was taking goods in terms of Clause 9A of such memorandum. It had submitted an undertaking to the customs authorities. The goods not having reached Nepal in terms of the undertaking given by the petitioner to the Commissioner, it became liable to pay the amount specified. The petitioner not having paid such amount, the customs authorities have issued the demand notice. It has not been demonstrated and even contended that, the demand by the authorities was in excess of their entitlement or beyond the undertaking given by the petitioner. Such demand by the customs authorities cannot be termed as arbitrary or unreasonable or violative of Article 14.

10. The treaty does not contemplate that the Indian Government has to pay for the alleged theft of the materials in transit. The culmination of the First Information Report has not been produced on record. It has not been conclusively established that there was any theft. The question of grant of compensation by the Indian Government to the petitioner does not arise.

11. In such circumstances, I do not find any merit in the present writ petition. W.P No. 533 of 2004 is dismissed. No order as to costs.