Authorized Courier Acts In Fiduciary Capacity On Client's Behalf: Bombay High Court Upholds Deregistration Under Courier Imports & Exports (Clearance) Regulations

The Petition before the High Court challenged the orders whereby the petitioner’s registration under the Courier Imports And Exports (Clearance) Regulations, 1998 (1998 Regulations) was revoked and an order of forfeiture of Rs 10 lakh, deposited by the petitioner as security at the time of registration, was passed.

The Division Bench of Justice Jitendra Jain and Justice M.S. Sonak said, “On a reading of various obligations cast on authorised couriers under Clauses (a) to (j) of Regulation 13, in our view, an authorised courier acts in a fiduciary capacity on behalf of their client and the customs authorities. He is a bridge on which the customs authorities rely heavily in ensuring that clearance of imports and exports of goods affecting the economy is legal.”

“Keeping Regulation 13 analysed and cited above would certainly show that by a legal fiction the Petitioner steps into the shoes of the importer and has a legal responsibility which crystallises into legal liability to answer any contravention or fraud or for that matter any criminality in conduct.”

Advocate Chirag Shetty represented the Petitioner while Advocate Maya Majumdar represented the Respondents.

Factual Background

The petitioner, engaged in the business of providing courier services, was granted registration under the 1998 Regulations for conducting its business of clearing express import/export cargo through the courier mode as an authorized courier at the Mumbai terminal. In the first week of November 2012, intelligence was received that the two consignments imported from the Gulf country carried contraband gold jewellery. Based on this intelligence, two consignments were detained.

On an in-depth enquiry and examination of the said two consignments, gold jewellery weighing 4879.9 g was found concealed in the die and hydraulic bottle jack. The estimated value of the gold on the date of seizure was Rs 1.21 crore. On investigation, it was revealed that the petitioner was handling courier parcels belonging to one Mansukhlal Dhanak, without obtaining proper authorization from the consignee. It was also revealed that the petitioner had cleared more than 250 consignments. Proceedings were initiated by the respondents against the petitioner, and the courier license issued was deregistered under Regulation 14 along with forfeiture of the security deposit.

Reasoning

The Bench noted that more than 250 consignments were cleared by the petitioner on behalf of the entities, which were not genuine. It was only after six months and on receipt of intelligence that the two consignments under consideration were detained and from which approximately 4879 gms. of gold was seized. The said gold was smuggled into the country in violation of the law.

“Had the petitioner discharged its obligation under Regulation 13, the illegality committed by the bogus entities of Shri Mansukhlal Dhanak could have been prevented at least from being carried out through the petitioner. Shri Dhanak has admitted in his statement that payments for all these consignments were sent to the Gulf by illegal channels. This shows that earlier consignments cleared by the petitioner amounted to smuggling, leading to a huge loss to the State”, the Bench said.

“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. If any lenient view is taken, particularly in light of the present case, it would send a wrong signal, and this Court, under Article 226 of the Constitution of India, cannot condone such leniency. 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”, it further added.

The Bench also explained that Regulation 13(b) requires the authorized courier to advise their clients to comply with the Customs Act, Rules and Regulations. Regulation 13(c) requires the exercise of due diligence to ascertain the correctness of various information submitted to the authorities. He is obliged not to withhold information from the assessing officer of the Customs under Regulation 11, and the authorized courier is liable to pay duty and interest also.

Thus, dismissing the Petition, the Court further stated, “In short, the Petitioner courier agency has breached the trust reposed on it by the Revenue. Therefore, the revocation of license is justified and any leniency shown in the misconduct of this nature would send wrong signals. Punishment of revocation of licence would certainly go a long way to act as a deterrent.”

Cause Title: M/s. Skypak Services Specialists Limited v. . Union of India (Neutral Citation: 2025:BHC-OS:9660-DB)

Appearance

Petitioner: Advocate Chirag Shetty

Respondent: Advocates Maya Majumdar, Abhishek R. Mishra

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