IN THE HIGH COURT OF KARNATAKA AT BANGALORE, while deciding the C.R.P. Nos. 126/2005, C/W/CRP/294/2005, 587-589, 591, 592-697, 609, 614-621, 623-637/2007 and CRP/586/2007 in re: MYSORE SALES INTERNATIONAL LTD vs UNITED INDIA INSURANCE CO. LTD., it was observed as follows:-

QUOTE: There is no difficulty in holding that having regard to the scheme of the Act and the manner in which the imported goods landing in Customs Area are handled, the Customs authorities are liable to account for the loss of such imported goods. The Court below in SC No. 1087 of 2003 has rightly held that the Customs authrorities are answerable to the claim of the plaintiff. However, the learned Judge, in other cases, has over-looked the purpose and the Scheme of the Act as contained in the aforesaid provisions and purpose and the scheme of the Act as contained in the aforesaid provisions and has gone to an extent of holding that the Customs authorities do not exercise any control over the imported goods handed over to the possession of the custodian and therefore, they are not liable to account for the loss of goods. In my considred opinion, the said finding is erroneous having regard to the scheme of the Act. Any arrangement made by the Customs department for proper storage of such imported goods, by appointing the custodian, would not absolve its liability to account for the loss, if any, of such imported goods even if such goods were in posession of the custodians. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_kar_crp_126]

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HIGH COURT JUDGEMENTS custodian, loss of goods, scheme of the Act