1. Seizure of goods — Petition under Article 226 for release and export during pending statutory adjudication. (Para 1 )
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1994 Supreme(SC) 112
SUPREME COURT OF INDIA
UNION OF INDIA
VERSUS
PHARMASIA Private Limited
DECIDED ON: January 24, 1994
Important Points
The sanctity of legal proceedings and the protection of the interests of the respondents are paramount in matters of seizure and export of goods.
Subject
Civil Law - Commercial Law
Act Referred
Headnote
Intervention - Seizure and Export of Goods - The High court's intervention in allowing the export of seized goods during the pendency of statutory adjudication was set aside by the Supreme Court. The court emphasized the sanctity of legal proceedings and directed the completion of statutory adjudication within 45 days to protect the interests of the respondents.
Fact of the Case:
The respondents moved a petition under Article 226 before the High court and obtained an interdiction of further proceedings after the goods were seized. The Single Judge directed the release of the seized goods. The division bench further directed that the respondents may even export the goods during the pendency of the statutory adjudication.
Finding of the Court:
The Supreme Court set aside both the orders of the Single Judge and the division bench, emphasizing the sanctity of legal proceedings and directing the completion of statutory adjudication within 45 days to protect the interests of the respondents.
Issues: High court's intervention in allowing the export of seized goods, the sanctity of legal proceedings, and the protection of the interests of the respondents.
Ratio Decidendi: The court emphasized the sanctity of legal proceedings and directed the completion of statutory adjudication within 45 days to protect the interests of the respondents.
Final Decision: The writ petition before the High court was dismissed, and the completion of statutory adjudication within 45 days was directed to protect the interests of the respondents.
Legal Category Hierarchy
Table of Contents
2. Whether goods may be exported during statutory adjudication on the basis that they could eventually be redeemed by payment of fine in lieu of confiscation. (Para 2 )
3. Seizure and confiscation proceedings are in rem; right to export cannot be based on a future title expected after adjudication. (Para 3 )
4. In in rem proceedings of seizure and confiscation, the right to export goods cannot be granted based on the prospect of future redemption by payment of fine. (Para 3 )
5. High Court orders set aside; writ petition dismissed; statutory adjudication directed to be completed within a specified timeframe. (Para 4 , 5 )
6. Can goods be exported during pending seizure and confiscation proceedings based on the prospect of future redemption?
No. Seizure and confiscation proceedings are in rem. A party cannot export goods based on a future title they expect to acquire through payment of a fine before the adjudication process is completed. (Para 3 )
7. Does the potential for earning foreign exchange justify the release of seized goods before statutory adjudication?
No. The court held that the sanctity of legal proceedings cannot be compromised or whittled down on grounds of expediency, such as the earning of foreign exchange. (Para 3 )
8. At what stage can the claim to redeem seized goods by payment of fine be considered?
The claim to redeem goods by payment of fine in lieu of confiscation is to be considered by the statutory authority at the appropriate stage and in accordance with law during the adjudication process. (Para 4 )
( 1 ). We have heard learned counsel on both the sides. Delay condoned. Even at the stage when the goods were seized, the respondents hastened to move a petition under Article 226 before the High court and obtained aninterdiction of further proceedings. The learned Single Judge also directed the release of the seized goods. In the appeal preferred by the Revenue, the revenue was worse off than it was before the appeal as the division bench went further and directed that the respondents may even export the goods during the pendency of the statutory adjudication.
( 2 ). We fail to appreciate how this intervention could have been made by the High court in a matter of this kind at that particular stage. Shri chidambaram, learned Senior Counsel, however, submitted that the respondents would in any event be entitled to have the goods released on payment of fine in lieu of confiscation even if there was such confiscation. He said that in that view of the matter even the prospect of an order of confiscation of the goods in the statutory adjudication need not detain the export as the respondents could always pre-empt confiscation by payment of fine in lieu thereof.
( 3 ). This submission looks attractive on the face of it but on closer scrutiny it is not as sound as it is attractive. The proceedings of seizure and confiscation are proceedings in rem. Until the culmination of the adjudication it is difficult to envisage any right on the part of the respondents from whom they are seized to export them on the basis of a future title they expect to acquire by payment of fine. The learned counsel, however, says that it would earn foreign exchange for the country. But sanctity of legal proceedings cannot be whittled down on grounds of such expediency.
( 4 ). In the circumstances, we set aside both the orders of the learned single Judge as well as of the division bench. The writ petition before the high court deserves to be and is hereby dismissed. The interest of the respondents will be adequately protected, if we direct the statutory adjudication to be completed within 45 days from 1/2/1994. The first date of hearing before the statutory authority shall be 1/2/1994, and the respondents shall appear before the authority without further notice. The authority shall call the matter on that date for further proceedings in the matter. The claim of the respondents to entitlement to redeem the goods by payment of fine in lieu of confiscation may be considered by the authority at the appropriate stage and in accordance with law. If the goods are so returned to the respondents, then the respondents may become entitled to export them. Against the adjudication the respondents shall, of course, be entitled to pursue their statutory appeals etc.
( 5 ). The special leave petition is disposed of.
