Isabella Mariam

The High Court of Judicature at Bombay Division Bench of Justice M.S. Sonak and Justice Jitendra Jain held that the revocation of registration and forfeiture of security deposit of a courier company under the Courier Imports and Exports (Clearance) Regulations, 1998 was valid and justified. The Court dismissed the writ petition challenging the orders of the Customs authorities, concluding that the petitioner had violated key regulatory obligations and failed to exercise due diligence in its courier operations. The Bench stated that the misconduct on the part of the petitioner resulted in serious regulatory breaches, warranting strict action under Regulation 14 of the 1998 Regulations. Consequently, the petition was dismissed, and the revocation of the licence along with the forfeiture of Rs.10 lakhs was upheld.

The petitioner, a public limited company, was registered under the Courier Imports and Exports (Clearance) Regulations, 1998 and authorised to handle courier cargo at the Mumbai terminal. Intelligence received in November 2012 indicated that two consignments imported from a Gulf country contained contraband gold jewellery. These consignments were handled by the petitioner and declared as containing "Die and Hydraulic bottle jack," valued at Rs. 8,728/-. However, upon examination, gold jewellery weighing 4879.9 grams with an estimated value of Rs. 1.21 crore was discovered concealed within the items.

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Subsequent investigation revealed that the petitioner had been handling consignments of three entities linked to one Shri Mansukhlal Dhanak—Balaji Engineering, Chamunda Enterprises, and Regent Engineering—without proper authorisation from the consignees. Between April and October 2012, over 250 consignments described as "hydraulic jacks, dies and bladeless fans" were cleared by the petitioner for these entities.

The authorities recorded statements from Shri Dhanak, Shri Mohan Naik (intermediary), and petitioner employees. It was admitted that Shri Naik acted as an intermediary between Shri Dhanak and the petitioner, arranging for clearance services. Payments were allegedly made through illegal channels. A show-cause notice was issued, and an Order-in-Original (O-I-O) was passed on 28 November 2013, finding violations of Regulations 13(a), 13(c), 13(g), 13(i), and 13(j). Consequently, the petitioner’s registration was revoked, and the security deposit forfeited under Regulation 14.

The petitioner challenged this order before the Chief Commissioner of Customs, who upheld the O-I-O on 20 February 2014. With no further statutory remedy under the Regulations, the petitioner approached the High Court under Article 226 of the Constitution.

The petitioner contended that it had obtained the necessary authorisations and had verified the credentials of the importing entities. It argued that its conduct did not amount to willful non-compliance and that the punishment imposed was disproportionate.

The Court stated "Regulation 13(a) obliges an Authorized Courier to obtain an authorization on behalf of the consignee or consigners as agent for clearance of import/export of goods." The Court examined the authorisation document dated 11 April 2012 submitted by the petitioner and held "The said document, so-called authorization, is not in the name of the petitioner but in the name of another entity."

It was further observed "The said document does not say the petitioner is authorized to clear the goods imported by the importer for all times to come."

Regarding Regulation 13(i), the Court stated "We have not been shown any material by the petitioner that would compel us to conclude that the petitioner has verified the antecedents, identity, and functioning of the entities owned by Shri Mansukhlal Dhanak at the declared address using reliable, independent, and authentic documents."

On the issue of Regulation 13(g), the Court observed "We have not been shown any records or documents which the petitioner claims to have maintained in compliance with Regulation 13(g)."

With respect to Regulation 13(j), the Court accepted the petitioner’s submission, stating "Since the petitioner has not subcontracted its functions, Regulation 13(j) cannot be said to have been violated."

However, the Court concluded "Given these serious violations, the finding regarding Regulation 13(j) of the 1998 Regulations, even if excluded, will not affect the impugned orders in the least."

Regarding the proportionality of the punishment, the Court stated "Considering the nature of the business in which the petitioner is engaged and for which he was authorised under the 1998 Regulations, non-compliance with the Regulations must be dealt with strictly."

It further held "Any such exercise of discretion of leniency will only encourage persons to commit the offence by taking recourse to the services of the courier agencies."

The Court referred to the Supreme Court's decision in Commissioner of Customs v. K. M. Ganatra & Co. and quoted, "Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations."

Thus, it concluded that "there is no infirmity in the decision-making process of both the Authorities nor is it the case of the petitioner."

The High Court dismissed the writ petition and confirmed the revocation of the petitioner’s registration and forfeiture of the security deposit. The Bench declared, "In view of the above, the Rule is discharged, and the petition is dismissed. Notice of motion, consequently, does not survive."

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It also recorded, "We do not find any infirmity in the decision-making process of both the Authorities nor is it the case of the petitioner."

On the plea for leniency, the Court stated, "We do not accept the submission of the petitioner in the instant case that a lenient view should be taken."

The Bench justified the revocation, stating, "The revocation is because the petitioner failed to carry out its obligations under the 1998 Regulations which if carried out would have detected the bogus importers and saved the nation of the outflow of foreign exchange by illegal means."

Further, the Court remarked, "The revocation of license is justified and any leniency shown in the misconduct of this nature would send wrong signals."

Advocates Representing the Parties:

For the Petitioners: Mr. Chirag Shetty i/by Economic Law Practice

For the Respondents: Ms. Maya Majumdar a/w Mr. Abhishek R. Mishra

Case Title: M/s. Skypak Services Specialists Limited v. Union of India & Ors.

Neutral Citation: 2025: BHC-OS:9660-DB

Case Number: Writ Petition No. 1326 of 2014

Bench: Justice M.S. Sonak and Justice Jitendra Jain