Allahabad High Court Directs ICD, Dadri to Pass a Reasoned Order on Detention Charges on Storage of Goods

On 22nd June 2020, the Allahabad High Court passed an order directing the respondent, Container Corporation of India Ltd. (CONCOR) to take an expeditious decision on the reply submitted by the petitioner. Explicitly, the petitioner, M/S Manikya Creation Pvt. Ltd. protested against the demand notice charging ground rent and detention charges on storage of the cargo containers; beyond the free period of fourteen days, at the ICD Dadri.

The Bench comprised of Justice Sunita Agarwal and Justice Saumitra Dayal Singh. In view of the contentions before the Court, it directed the respondent to pass a reasoned and speaking order; within a period of two weeks.

Notably, the CAG Audit Report of 2016-17 confirms that the ICDs are “dry pots”. However, Respondent ICD, “Star Track Terminals”, had neglected to comply with the notifications issued by the Union Ministry of Shipping. To explain, these notifications, that directed all ports to permit free storage time to users amidst the lockdown, are not applicable to them.

In reference to a similar case, M/S Polytech Trade Foundation v. Container Freight Stations Association, the Delhi HC held that:

Government notifications/circulars/guidelines are mere advisories and are not binding. The petitioner will incur no irreparable losses if the court does not grant injunction/restrained order. If this court concludes that that these letters were binding directions, the petitioner can recover the ground rent/penal charges paid by them to, respondent.

Thus, the court has no grounds to grant an injunction or a restraining order in favor of the petitioner

Levying of detention charges by ICD: “In violation of Government orders”

The ICDs bear the responsibility of providing necessary infrastructure and security to import/export goods at the respective premises. Ordinarily, they provide 14 days of free storage facilities; exceeding which, detention charges will be applicable.

However, in the present case, ICD, Dadri had raised a demand to the tune of Rs. 25,65,800/- towards rent and detention charges amidst the lockdown period. Thereafter, the petitioner sought to quash these demands stating that they are in violation of Government orders issued vide respective notifications. Moreover, these guidelines are equally applicable to the respondent because their establishment is duly approved by the inter-ministerial committee.

In conclusion, the court considered all the contentions and disposed of the writ petition.

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