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Madras HC Slams Company for Abusing the Process of Law by Invoking Writ Jurisdiction of the High Court

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Madras HC Slams a company for abusing the process of law by invoking Writ Jurisdiction of the high court upon an interim order of the trial court. Herein the company was asked to shift its goods from a bonded warehouse on expiry of their lease. The same was ordered by the Trial Court. However, the respondent company took offence to an observation made by the Judge in the said order.

The Company moved High Court to appeal against this observation, claiming that it hurts their position in other present or future suits. The matter was heard and decided upon by a two-judge bench comprising Hon’ble Justice Vineet Kothari and Hon’ble Justice M. S. Ramesh. 

Facts of the Case

The appellant M/s. ACME Warehousing Private Ltd filed an intra court writ appeal, only aggrieved by the observation of the learned Single Judge in paragraph 2 of the order dated 25.08.2020 made in W.P.No.8086 of 2020.

The Writ Petition, W.P.No.8086 of 2020 was dismissed by the Judge with a direction to list the matter for reporting compliance regarding removal of the goods from the licensed Warehouse, which was taken under lease by the petitioner appellant M/s. ACME Warehousing Private Limited, from the private respondent No.3 Mr.S.Panneer Selvam.

The renewal for the Warehousing License was refused to the appellant company as the lease by the third respondent had expired on 31.03.2020. Assailing the said non-renewal /extension of the Warehouse License, the appellant/petitioner approached this Court by way of W.P.No.8086 of 2020. The final order passed by the Single Judge included a paragraph as under:

“… R3 is already in possession of the warehouse and is granted full liberty to take such action, as he may deem fit and necessary, to obtain gainful use thereof.”

It is this text from the order that the appellant company seeks be set aside as it could hurt their position in other impending and future suits.

Arguments Before the Court

The counsel for the appellants submitted that they are not so aggrieved by the dismissal of the writ petition, but by the observation of the learned Single Judge in paragraph 2 of the said order. This observation, the counsel argued gives a finding that the third respondent, Mr.Paneerselvam, is already in possession of the warehouse and is granted full liberty to take action as he may deem fit and necessary to obtain gainful use thereof.

The counsel maintained that the learned Single Judge ought not to have made these observations, which will unduly affect the appellant’s right in the pending suit filed by the appellant against the respondent, in which injunction suit, admittedly the Customs Department is not a party.

The counsel for the Customs Department however submitted that the Department has taken steps for removal of the goods from the said Bonded Warehouse and a counter in regard to it has been filed before this Court. 

The counsel for the third respondent, Mr.Panneerselvam, submitted that the suit was only for injunction against him in which the Customs Department is not a party. The appellant had admitted arrears of rent to be paid to him, not only in the plaint, but also before this Court. 

Court’s Observations

The Court observed that there was no merit in the present writ appeal. The Court noted that the appellant cannot take any exception to the said observation of the learned Single Judge. It is because, after 31st March 2020 with the lease period being over, there is no legal right vested with the lessee to remain in possession.

The goods lying in the said bonded warehouse after cancellation of license by the Customs Department have to be removed. Therefore, the observation of the learned Single Judge that the third respondent is in possession of his own warehouse in question cannot be assailed by filing this intra court writ appeal.

With regard to the process of law, the Court further observed that multiplying the litigation by availing the remedies in different forums is a deliberate effort on the part of the petitioner to abuse the process of law. 

In addition to the abuse of process of law, the Court also noted that the licensee under the Bonded Warehouse Scheme acts as an Agent on behalf of the Customs Department. Section 58B of the Customs Act, 1962 read with The Warehouse (Custody and Handling of Goods) Regulations, 2016, states that it is the duty of the licensee to clear off the goods after cancellation of the license within seven days. There is no case of extension of period under Sub-section (4) of Section 58B of the Act in the present case. 

The Court also went on to observe that the appellant had no reason to invoke writ jurisdiction on the basis of a status quo order granted by the trial Court in a civil Suit in which Customs Department was not at all a party. 

Court’s Decision

The Court dismissed the writ petition. 

Read the original Judgment here. is now on Telegram. Follow us for regular legal updates and judgments from the Court. Follow us on Google NewsInstagramLinkedInFacebook & Twitter. You can also subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

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