Chandigarh: The Punjab and Haryana High Court has come down heavily on the customs department and a private shipping company, directing them to refund customs duty with six percent interest and pay Rs 50 lakh as compensation to an importer, M/s Prenda Creations Private Limited.
The petitioner importer had suffered a massive loss after a consignment of 89,420 kilograms of kiwi fruit, imported from Chile via Dubai, rotted due to delays spanning over three months in 2023.
Pronounced on 4 April 2025, the high court order reveals a saga of apathy, procedural hurdles, and defiance of judicial directives, leaving the importer high and dry with goods worth over Rs 66 lakh rendered unfit for human consumption.
In a scathing judgment, the bench, comprising Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth, held the customs authorities at Mundra and Ludhiana, along with the shipping firm M/s Transliner Maritime Pvt. Ltd., accountable for their “lackadaisical approach” and “insensitivity” towards perishable goods.
The court’s 37-page verdict, reserved on 16 December 2024 and pronounced on Friday, not only grants relief to the petitioner but also sounds a clarion call for systemic reforms to ensure timely handling of perishable imports.
The saga of the spoiled kiwi
The ordeal began in April 2023 when Prenda Creations, a company engaged in importing food items across ports in Mumbai, Mundra, New Delhi, and Ludhiana, among others, brought in four refrigerated containers of kiwi from R.A. Logistics & Distribution LLC, Dubai.
The consignment, valued at US$ 80,478 (approximately Rs 66 lakh), was shipped with a bill dated 16 April 2023, clearly showing the final destination as Ludhiana. However, what should have been a routine import turned into a nightmare due to a series of blunders by the shipping company and customs officials.
The shipping firm filed an erroneous document on 22 April 2023, listing Mundra as the final destination instead of Ludhiana.
When Prenda Creations sought to file an advance bill of entry under the customs law on 25 April 2023, the online system rejected it due to the mismatched address in the documents.
The company’s pleas to amend the address and allow a manual bill of entry fell on deaf ears, with customs officials at Mundra claiming only the shipping line could make the correction—a stance the court held is contrary to Section 30(3) of the Customs Act, 1962, which allows officers to amend documents if no fraud is suspected.
As the kiwi languished at Mundra, Prenda Creations approached the high court on 9 May 2023, seeking urgent relief.
The court ordered the goods to be shifted to Ludhiana and permitted a manual bill of entry, but the saga was far from over.
The shipping company, defying court orders, moved the consignment to Saurashtra Freight Pvt. Ltd., a facility lacking rail connectivity to Ludhiana, further stalling the process.
It was only after repeated judicial interventions, including a contempt warning on 7 June 2023, that the goods were finally transhipped to Ludhiana by 31 May 2023.
Even after reaching Ludhiana, the kiwi faced another roadblock. Customs officials raised suspicions about its origin, alleging it came from Iran instead of Chile. This objection was raised despite an export declaration certificate from Dubai Customs proving otherwise.
The court directed an inquiry, but not before the goods underwent testing by the Plant & Quarantine Department which, on 4 July 2023, certified them free of pathogens. Yet, the customs department dragged its feet, detaining the consignment and ordering its deportation on 4 July 2023—an order the court overruled on July 6, directing immediate release.
By 27 July 2023, a joint inspection revealed 20-25 percent of the kiwi was damaged, but by the time the consignment was released on 1 August 2023, the rot was complete.
A disposal certificate from Veer Singh & Brothers, a fruit dealer, confirmed that all 89,420 kilograms were “unfit for human consumption” and destroyed, with photos and videos submitted as evidence.
The petitioner, having paid customs duty under protest, sought a refund and compensation for the loss, blaming the respondents’ delays.
The high court rejected the customs department’s defence that Section 26A(3) of the Customs Act bars refunds for perishable goods past their shelf life. In this case, the law was inapplicable because the spoilage resulted from the authorities’ own failures, the court held.
“The respondents have themselves created hurdles in the release of the perishable goods,” the bench observed, accusing them of seeking “unjust enrichment” by retaining duty on unusable goods.
The bench, asserting its constitutional powers under Article 226, ordered the refund of the customs duty with six percent interest and Rs 50 lakh as compensation, noting the importer’s loss of reputation and business credibility. “The amount shall be recovered from erring officers,” the court ruled, signalling accountability for the fiasco. It also lambasted the respondents’ “adamant approach”, warning that such practices could deter importers and deprive Indian consumers of quality perishables.
(Edited by Radifah Kabir)