Zia-ur-Rehman and others VS Federation of Pakistan through Secretary Pakistan Railway & others

JUDGMENT SHEET

PESHAWAR HIGH COURT, PESHAWAR

JUDICIAL DEPARTMENT

W.P NO. 4448-P OF 2017 WITH C.M.

NO.2323-P OF 2017

JUDGMENT

Date of hearing..17.01.2018(Announced on 22.02.2018) Appellant: (Zia-ur-Rehman and others) by Amir Bilal, Advocate.

Respondents: (Federation of Pakistan through Secretary Pakistan Railway & others) by Ms. Amina Rafiq, Advocate, Mr. Abdur Rauf Rohaila, Advocate and Mr. Muhammad Asghar Kundi, Assistant Attorney General.

YAHYA AFRIDI, C.J.- Zia-ur-Rehman alongwith 222 others, the petitioners, seek the Constitutional jurisdiction of this Court, praying that:-

“It is, therefore, humbly prayed that on acceptance of this writ petition, petitioners may graciously be prayed to;

A(i) Declare that acts on the part of the respondents No.2, 3, 4, 5 and 6 regarding no action in respect of delay/detention certificate issued by the respondent No.7, are void, illegal, unjustified, arbitrary, malafide, without lawful authority and of no legal effect and consequently respondents No.2, 3, 4, 5 & 6 may kindly be directed to allow immediate release in petitioners cases without any further delay;

(ii)That the respondents No.7 & 8, while dealing with the issue on the effect of provisions available under Section 82 of the Act by providing safe passage from the storage charges, some vehicles were allowed to be shifted to customs warehouse and in a similar situation/circumstances the petitioners vehicle were left behind at the port. If respondents No.7 & 8 would have exercised their powers on the golden tenets of equity, present situation would not have happened, hence, it may be declared that discriminatory treatment was meted out to the petitioners on the part of respondents No.7 & 8.

(iii)That the respondents No.7 & 8 may be directed that in cases of petitioners abatement may be allowed by appraised the value of the stolen, damaged or deteriorated vehicles, in accordance with the relevant provisions of law.

(iv)That the respondent No.9 may be directed to make sure the immediate delivery of the petitioners vehicles under his supervision.

(v)That the respondents No.7 & 8 may be directed to amend the new date on the customs gate passes, already issued to the petitioners, so as to enable them to protect themselves from the fine which might be imposed by Motor Registration Authority due to late submission of documents for Registration.

(B)Restrain the respondents from taking any coercive or adverse measure against the petitioners.

(C)Extend any other relief considered just and appropriate in the given circumstances of

the case but not specifically prayed for.”

2.The brief and essential facts leading to the present petition are that in the year, 2013, the petitioners imported vehicles, under the Personnel Baggages/TRs Schemes introduced by the Federal Government. The said vehicles, on arrival for clearance at the Dry Port, Peshawar (“Railway Station Peshawar Cantt. Peshawar”), were objected to by the Customs officials asserting that, the said import was in violation of the Import Policy Order, 2008-09 read with Import and Export (Control) Act of 1950, and Section 16 punishable under Section 156(1)(9) of the Customs Act, 1969 (“Act”) read with SRO 487(1)/2007 dated 9.6.2007, and consequently departmental proceedings ensued against the petitioners.

Accordingly, the vehicles remained stationed at the Dry Port Peshawar. The said proceedings finally culminated in the order of the worthy Customs Appellate Tribunal dated 15.02.2017, wherein it was held that;

“Accordingly, for the reasons stated hereinabove, at paras 19 to 41 Supra, the appeal No.Cus.Remand-01/PB/2017 is hereby dismissed being devoid of any reason. As the appellant department has not been able to justify such extraordinary delay in filing of 392

appeals and no plausible explanation has been offered therefore, in view of the facts and law stated hereinabove, at paras 42 to 49 supra, and in view of the “ratio decidendi” of aforementioned judgments of the Hon’ble Apex Court, the reason provided by the appellant department to be a sufficient cause for the delay in filing of the 392 appeals Nos. Cus.Remand-02/PB/2017 to Cus.Remand-393/PB/2017 are hereby dismissed being barred by 52 days and the impugned Order-in-Remand No. 05 of 2015 dated 13.04.2015 is upheld”.

It would be pertinent to note that the earlier order of 13.4.2015 maintained in the aforementioned decision had held that;

“13. In view of the foregoing and as per the best sense of judgment of the undersigned, the vehicles are hereby allowed release subject to payment of leviable duty and taxes and redemption fine equal to 15% of the customs value. Orders-in-Original No.02/2014 and 03/2014 dated 30.05.2014, respectively, have already been set aside by the Hon’ble Customs Appellate Tribunal vide Order dated 10.03.2015. Customs authorities at MCC Peshawar are also directed to;

i. Assess the vehicles on their fair value as done in case of identically old/similar vehicles; and

ii. Issue delay and detention certificates to enable the appellants to get waiver of demurrage charges.”

3.In the wake of the above decision, the worthy Collector Customs vide letter dated 24.06.2017 exercising his authority under Section 14A of the Act, issued the Delay and Detention

Certificates, in respect of the vehicles of the petitioners detained at Dry Port Peshawar. Despite receipt of the same, Railway authorities did not release the vehicles to the petitioners. Customs authorities issued a reminder vide letter dated 6.7.2017. Finally, the third letter dated 28.7.2017 was also served upon Railway authorities (respondent No.4) in terms that;

“5. Thereafter, FBR vide C.No.3(22)S(L-IDT)/2017 dated 16.06.2017 directed that appeal may be withdrawn from the High Court and Hqrs; office MCC, Peshawar vide letter C.No.Law/Cus/CR/845/2017/2-428 dated 19.6.2017 advised that the decision of the Customs Appellate Tribunal Peshawar, Peshawar in Customs Appeal No. Cus/Remand-I/PB/2017 and Appeals No.Cus/Remand-393/PB /2017 dated 15.02.2017 upholding the decision of the Collector (Appeals), Islamabad vide order in Remand No.05 of 2015 dated 13.4.2015 may be implemented. Therefore, the owners were asked for payment of duty and taxes who paid the same alongwith and redemption fine to the tune of Rs. 151.68 million and will pay Rs. 66.78 millions more for the remaining vehicles. However, the situation became complicated when the Railways authorities at Peshawar refused clearance to the vehicles and demanded detention charges from the owners.

6.Therefore, in view of the above, the case was referred for remitting the demurrage charges in terms of Section 14A read with Section 156(1)(7A of the Customs Act, 1969 to the Divisional Superintendent Pak; Railways, Peshawar vide letter C.No.Cus- DP/Vehicle-26/2013/1075 dated 24.06.2017 followed by letter C.No.1103 dated 6.7.2017.

7.The delay & detention certificates were not honoured by the Divisional Superintendent Pakl; Railways Peshawar Cantt. The owner of these vehicles who deposited the duty & taxes are pressing hard for early release of their vehicles. Of late Show Cause Notice was also issued to the concerned authorities vide C.No.Cus-DP/Vehicle- 26/2013/1132 dated 13.7.2017. However, the issue is still unresolved.

8.Under the above circumstances, it is requested that the matter for remitting delay and detention charges may kindly be considered at your end so that the issue is settled once and for all.

9.Looking forward to your kind cooperation in this regard.”

Failure of the Railways authorities to honour the Delay and Detention Certificates led Customs Authorities to initiate proceedings against the concerned officials of the Railways authorities under the enabling provisions of the Act, which finally led to the Order-in-Original No.1 of 2017 dated 19.09.2017 in terms that;

“16. After going through the case record, I am led to conclude that due to redtapism and continuous defiance of legal notices issued to railways authorities, owners of 349 vehicles are at present undergoing mental torture despite having deposited legitimate government revenue in the month of June, 2017.

17.This situation calls for legal action in terms of relevant provisions of the Customs Act, 1969. In the circumstances stated above, I, have no other option except to impose penalty of Rs. 500,000/- (Rupees five hundred thousands) per vehicle on the railways authorities; (i) The Divisional

Superintendent, Pakistan Railways, Peshawar (ii) The Divisional Commercial Officer, Pakistan Railways, at Dry Port Peshawar & (iii) The Commercial Supervisor (Goods), Pakistan Railways at Dry Port Peshawar for non-implementation of delay/detention certificates issued by the undersigned under the powers conferred upon me in terms of sub-section 2 of the Section 14A, read with Section 156(1) para 7A of the Customs Act, 1969.”.

This Court has further been informed that the Railways authorities have till date not filed the appeal against the aforementioned decision of the worthy adjudicating Customs Officer.

4.The main thrust of the worthy counsel for the petitioners was that once the Customs authorities issued the Delay and Detention Certificate under Section 14A of the Act, then the Railways authorities were bound to release the vehicles without demanding any demurrage or storage charges; it was further asserted that the refusal on the part of the Railways authorities was a penal offence under clause 7A of Section 156(1) of the Act and in this regard, respondent No.4 had, in fact, been made liable for refusing to honour the Delay and Detention Certificates vide Order-in- Original No.1 of 2017 dated 19.09.2017.

5.In rebuttal, the worthy counsel for the Railways authorities vehemently opposed the

contention of the worthy counsel for the petitioners on two main stands, which have been precisely stated in their written comments filed before this Court in terms that;

“2. In reply to Para No.2 it is stated that the custom authority on one hand concealed their fault in issuing delay detention certification besides collection custom duty and all taxes as well as 15% redemption fine while on the other they (the custom authorities showed the fault of the owner, of vehicles and thus malafidely referred the case to answering respondents for remitting demurrage charges in term of Section (1) (7A) of the Custom Act, 1969, hence, incorrect as denied.

3.Para No.3 of the Writ Petition is incorrect as custom authorities have tried to compel the answering respondent for release of vehicles without collecting demurrage/storage charges, which are leviable against petitioners according to commercial manual rules and Peshawar Dry port working procedure which clearly states that the custom detention certificate will be issued where parties are not at fault, 505 storage charges would be leviable for the period covered by the custom detention certificate.

(emphasis provided)

6.Valuable arguments of the worthy counsel for the parties heard and appended record gone through.

7.Railways Station Peshawar Cantt. was declared as a Dry Port under Section 9 of the Act vide SRO 618 dated 26.6.1986 (“Dry Port”).

8.The legislature in its wisdom inserted 14A in the Act vide Finance Ordinance, 1984, and thereafter, the provisions therein were substituted by Finance Act, 2013 providing that:- “14A. Provision of security and accommodation at Customs-port, etc—

(1)Any agency or person including port authorities managing or owning a customs-port, a customs-airport or a land customs station or a container freight station shall provide at its own his own cost adequate security and accommodation to customs staff for residential purposes, offices, examination of goods, detention and storage of goods and for other departmental requirements to be determined by the Collector of Customs and shall pay utility bills, rent and taxes in respect of such accommodation.

(2)Any agency or person including, but not limited to port authorities managing or owning a customs port, a customs airport or a land customs station or a container freight station, shall entertain delay and detention certificate issued by an officer not below the rank of Assistant Collector of Customs and also refund demurrage charges which the agency or person has received on account of delay because of no fault of importers or exporters”.

(emphasis provided)

9.What is crucial to note is that the above amendment introduced in Section 14A ibid vested in the Customs officer, the authority, to decide whether the delay in clearance of goods at the Dry Port was on account of any fault of the importer/

exporter or otherwise. The said provision also expressly imposed a duty upon the management of the Dry Port to refund any demurrage charges on receipt of the Delay and Detention Certificate issued by the Customs Officer in favour of the importer/exporter.

10.The legislature in order to emphasize the importance of the Delay and Detention Certificate issued by a competent Customs Officer under Section 14A ibid, imposed a penal consequence upon those who failed to honour it, by inserting clause 7A in Section 156(1) of Act, which reads that;

7.(A) if any agency Such agency or or person including person or port port authorities authority shall managing or be liable to a owning a customs penalty not port, customs exceeding five airport or a land hundred customs station or a thousand container freight Rupees.

station, fails to entertain a delay and detention certificate issued by the officer of Customs.

11.When the legislature has imposed a penalty upon those who fail in complying with a provision, then the said provision is to be strictly

construed and its fulfillment is to be considered mandatory and not directory. In this regard, the law is well settled by the Apex Court in its celebrated judgment in Maulana Naur-ul-Haq’s case (2000 SCMR 1305), wherein it was held:-

“No doubt there exists no faultless acid test or a universal rule for determining whether a provision of law is mandatory or directory and such determination by and large depends upon the -intention of Legislature and the language in which the provision is couched but it is by now firmly settled that where the consequence of failure to comply with the provision is not mentioned the provision is directory and where the consequence is expressly mentioned the provision is mandatory”.

12.The principle settled by the Apex Court in the above case has been consistently followed by our superior Courts in Malik Umar Aslam’s case(2007 PLD 362 SC),Ghulam Hassan’s case (2001 SCMR 1001 SC) and Aftab Munawar’s case

(2016 SCMR 90 SC).

13.Keeping in view the ratio decidendi of the decisions of the Apex Court in the aforementioned cases, it would be safe to state that the Delay and Detention Certificates issued by the worthy Collector Customs in favour of the

petitioners had to be honoured by the Railways authorities.

14.As the refusal of the Railways

authorities to honour the Delay and Detention Certificates issued by the Customs Officer is a matter in dispute between the two departments of the Government and is subjudice, thus passing any specific finding thereon would prejudice their respective claims before the appropriate legal forum under the law. Suffice it to state, that the provisions contained in Section 14A ibid were mandatory and Certificates issued thereunder could not be ignored without valid reason.

15.Let us also consider the two main stands taken by the Railway authorities in their comments; First, the malafide attributed to the Customs authorities in issuing the Delay and Detention Certificates is, as stated earlier, a matter relating to a pending proceedings before the departmental hierarchy under the Act, and thus, it would not be appropriate to pass any finding thereon, and second, the demurrage charges are being imposed by the Railways authorities based on the provisions contained in the Pakistan

Railways Commercial Manual Rules and the Dry Port Working Procedure.

16.When the worthy counsel for the Railways authorities was confronted to explain under which provision of The Railways Act, 1890 or any other law was the demurrage/storage charge being imposed upon the petitioners. The response was that Section 30 ibid empowered the Central Government to fix by general or special order the rates of demurrage and to specify the conditions subject to which such rates were to apply.

17.Interestingly, Section 30 of The Railways Act, 1890 was repealed way back in 1937. This crucial fact has, in fact, been acknowledged by the Railways authorities, as they have sought clarification from the Ministry of Railways, Government of Pakistan, in their letter dated 18.1.2018 in terms;

PAKISTAN RAILWAYS

HEADQUARTERS OFFICE

LAHORE

No. 32-DP/CDC/PSC/HQ Dated 18.01.2018 The Secretary Railways Board, Ministry of Railways, (Railways Board) Government of Pakistan, Islamabad..

Sub: CONFIRMATION OF UPDATION/REVISION OF

RAILWAY ACT 1890

Please refer to letter received from the office of Divisional Superintendent/Peshawar (copy enclosed) it is

submitted that the Divisional Superintendent/Peshawar office is facing litigation matter regarding the provisions of demurrage, wharfage. As per the Railway Act 1890 available on the net, in PDF form printed in 1997 the up date has been printed by Ministry of Railways. The relevant sections of demurrage, wharfage have been shown as repealed. It is requested that it may kindly be confirmed whether this act has been printed by Ministry of Railways or not.

Sd/- (Dr. Hasan Tahir Bokhari) SChief Traffic Manager/Dry Ports

Copy for information to the Divisional Superintendent, Pakistan Railways, Peshawar.”

18.Even otherwise, the reliance of the Railways authorities on clause 17.56 of the Pakistan Railways Commercial Manual, 1988, (“Manual”) read with clause 11.2(b) Dry Port Working Procedure (“Procedure”) for demanding demurrage charges from the petitioners is misplaced. The said provisions read;

Manual.

“17.56. Demurrage on vehicles._ Commercial Assistant (Goods) and Station Masters are responsible for the recovery of demurrage charges on vehicles detained beyond the time allowed free. When vehicles are to be unloaded by the consignee, arrival notices must be issued, as far as possible immediately on receipt of the vehicles at the station. The time up to which the vehicles will remain under load free of demurrage charges, must also be shown on the notice of arrival.

Procedure.

11.2(b). In cases where a consignment of machinery is cleared from Karachi in parts, and the consignment is of such a nature that assessment of Custom Duties on a

part which ______at Dry Port, the Railway would consider remission of wharfage charges after a certificate is given in this behalf by the Customs.

In all cases where a consignment had been detained by Customs and for which a Customs Detention certificate is issued, and in which parties are not at fault, no wharfage charges would be levied for the period covered by the Customs Detention Certificate.

(emphasis provided)

19.When further confronted, the worthy counsel for the Railways was unable to point out the enabling provision for framing of the Rules and the Procedure. Now, even if this Court considers the aforementioned provisions of the Manual and Procedure to be intra vires, and to have been framed as Rules under The Railways Act, 1890, the same would not support the specific stance taken by the Railways authorities. It is noted that clause 11.2

(b)of the Procedure appears to cover specific cases relating to clearance of goods, including vehicles under the Act. While clause 17.56 of the Manual is a more general provision catering for vehicles being transported through carriage facilities provided by Railways authorities, and thus not relevant to the facts of the present case.

20.Let us now review clause 11.2 (b) of the Procedure, which specifically deals with import

of goods being cleared by Customs authorities at the Dry Ports established under the Act, such as Dry Port Peshawar. The said provision clearly states that in cases relating to detention of goods by the Customs authorities, no demurrage charges could be levied on fulfillment of two conditions precedent; firstly, when the competent Customs Officer issued a Detention Certificate, and secondly, when the private party was not at fault.

21.In the present case, it is an admitted position that the vehicles were detained on the orders of the Customs authorities and Delay and Detention Certificates were issued by a competent Customs Officer. There is no evidence on the record to suggest that the petitioners were at fault in keeping the vehicles at the Dry Port after the issuance of the requisite Delay and Detention Certificates. In fact, the petitioners have, at every step, urged the Customs and Railways authorities for clearance of their vehicles, but to no avail.

22.It would be pertinent to note that extract of clause 11.2(b) of the Manual annexed with the comments of the Railways authorities has certain overwriting, whereby the word “No” has been cut and the figure “50%” has been over

written thereon. The worthy counsel insisted that the word “No” in clause 11.2(b) ibid had been replaced with “50%”. In support thereof, letter dated 15.02.2003 of the Railways authorities has been annexed therewith.

23.In the instant case, the substitution of “50%” in place of word “No” in clause 11.2(b) ibid having not been published in the official Gazette as per the mandate of Section 143(2) of the Railways Act, 1890, would not take any legal effect and thus, cannot be applied to the case in hand. The said provision reads;

(2)Where any rule made under this Act, or the cancellation, rescission or variation of any such rule, is required by this Act to be published in the [official Gazette], it shall, besides being so published, be further notified to persons affected thereby in such manner as the authority making, canceling, rescinding or varying the rule], by general or special order, directs.

(emphasis provided)

24.In conclusion, it would suffice to state that command contained in Section 14A of the Customs Act, 1969 is the express intent of the legislature, and the force thereof cannot be diminished by provisions contained in the Railways

Commercial Manual Rules or the Dry Port Working Procedure, being subordinate legislation.

Accordingly, for the reasons stated

hereinabove, this Court accepts the instant petition in terms that;

I. the Delay and Detention Certificates issued by the Collector Customs in favour of the petitioners are in accordance with law; and II. the Railways authorities are directed to immediately release the vehicles of the petitioners without demanding demurrage or storage charges thereon.

Announced.

Dated.22.02.2018

CHIEF JUSTICE

JUDGE

Noor Shah, PS

(DB)Hon`ble Mr. Justice Yahya Afridi, Chief Justice Hon`ble Mr. Justice Muhammad Ghazanfar Khan , Judge