Introduction:
The Delhi High Court, in the case of Gor Sharian v. The Commissioner Of Customs (W.P.(C) 1807/2025), delivered a significant ruling concerning the obligations of the Customs Department in handling confiscated or detained property. The case revolved around the wrongful disposal of gold belonging to the petitioner, a Russian national, despite a prior order directing its release. The Court, comprising Justices Prathiba M. Singh and Dharmesh Sharma, held that the Customs Department must ensure that intimation of disposal of detained or confiscated property is given to the concerned party through both email and mobile communication to prevent deprivation of rightful property due to administrative lapses. The Court further directed the Customs Department to compensate the petitioner at the market rate of the gold on the date of the order and imposed costs for non-compliance.
Arguments of Both Sides:
The petitioner, represented by Mr S. Vijay Kanth and Mr Utkarsh Tripathi, argued that the Customs Department’s actions were arbitrary and amounted to gross negligence. They contended that despite the Commissioner’s order directing the release and re-export of the gold upon payment of the redemption fine and penalty, the Department proceeded to dispose of the gold without intimation. The petitioner emphasised that even after making the required payments, the Customs authorities failed to comply with the order, leading to financial and legal hardship.
On the other hand, the Customs Department, represented by Senior Standing Counsel Mr Gibran Naushad, justified its actions by citing an alleged communication lapse. The Department contended that the oversight occurred because the Commissioner’s order was not properly conveyed to the officials responsible for executing it. They further argued that procedural complications led to the disposal and that no deliberate malfeasance was intended. However, the Court remained unconvinced by this explanation, highlighting the Department’s failure to inform the Court or the petitioner at any stage of the proceedings regarding the disposal of the confiscated gold.
Court’s Judgment:
The Court delivered a scathing critique of the Customs Department’s handling of the case. It emphasised that the petitioner’s fundamental right to property was violated due to the Department’s negligence. The bench noted that the disposal of the gold without proper intimation to either the petitioner or the Court amounted to a serious procedural lapse. The Court observed, “Even if there was a lack of communication, the fact of disposal of the detained gold ought to have been communicated to the Court when the W.P. (C) No. 6690/2023 was being heard…In the said petition, the Court had directed release of the detained gold, which order would not have been passed if the gold was already disposed of.”
Recognising the financial loss incurred by the petitioner, the Court ruled that the petitioner was entitled to compensation equivalent to the market value of the detained gold on the date of the judgment. The Customs Department was ordered to make the payment within three weeks, failing which an additional cost of Rs.1,00,000/- would be levied. The Court also mandated that the Department ensure future compliance by sending intimation of disposal through email and mobile notifications to prevent similar instances from occurring.