The Punjab and Haryana High Court has directed the Customs Department to pay a compensation of ₹50 lakh to an importer whose kiwi fruit consignment was illegally withheld and subsequently destroyed. The Court criticized the authorities for their "lackadaisical approach" and stressed the urgent need for a policy that ensures imported goods, especially perishables, reach consumers on time.

Read also: Court Grants Compensation to Unborn Child in Motor Accident Case: Punjab & Haryana High Court

"We further direct that the petitioner/importer would be entitled to compensation calculated conservatively of ₹50 lakh as the Kiwi worth weighing 89,420 kilograms were destroyed on account of delay in release by the respondents. We have granted the said amount as the Importer has already paid the same to the seller for the Kiwi and brought in India. Kiwi is a high-valued fruit. The amount shall be recovered from erring officers as compensation to the Importer/petitioner."

• A total of 89,420 kilograms of kiwi fruit was destroyed due to delays in release by Customs.
• The delivery date of the consignment was April 16, 2023, but it was only released on August 1, 2023, after Court intervention.
• The Customs Authorities initially stopped the shipment, citing the absence of a Bill of Entry.
• The Court bench included Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth.

Read also: "With Rising Property Prices, Family Values Decline": Punjab & Haryana High Court Expresses Concern Over Increasing Land Disputes

“The present case is an example of red-tapism being followed by the government functionaries.”

• The consignment was unnecessarily held even after the Court directed the amendment of the Import General Manifest (IGM) from Mundra Port to GRFL ICD, Ludhiana.
• Despite the amendment, the goods were delayed further as the shipping company shifted the cargo to Saurashtra Freight Private Limited.
• The authorities raised further objections about the origin of the kiwi fruit, even though valid documentation from UAE Customs confirmed the origin as Chile.

Read also: Supreme Court Disposes Appeal After Sukhbir Badal & Bikram Majithia Express Remorse on Remarks Against Justice Ranjit Singh

“The respondents did not release the goods even thereafter and again raised a doubt with regard to the place of origin of import of Kiwi fruit inspite of there being documents issued by the UAE Custom evidencing the origin of the goods as Chile.”

• The goods were found completely damaged and unfit for human consumption upon release.
• The Court emphasized that such delays lead to unjust enrichment of authorities at the cost of genuine importers.

“In import cases of perishable goods there is an inherent urgency which needs to be noticed and considered by the concerned stakeholders.”

• The Court clarified that Section 26A(3) of the Customs Act does not support refund in the case of damaged perishables.
• However, it stated that this case is exceptional due to non-compliance with Court orders and active hurdles created by the authorities.

“It is a case where the respondents have themselves created hurdles in the release of the perishable goods. While 100% custom duty is imposed for import of perishable goods, if the goods itself are damaged and become completely un-useable for human consumption, in our opinion, the same deserves to be refunded.”

• The Court urged the authorities to create a coordinated policy involving Customs, shipping companies, and testing labs to speed up the release of perishable imports.

“The same needs to be creased out as it would result in discouraging the import of perishable goods. The Indian citizens also have a right to receive high- quality fruits which are available in different countries.”

• The importer suffered not just financial losses, but also reputational damage in the business community.

“The Importer/petitioner has not only suffered on account of the adamant approach of the respondents but has also suffered huge loss. His reputation in the business market would have also suffered as he must not have been able to supply the goods to the people to whom he had promised.”

• ₹50 lakh compensation to the importer.
• Refund of customs duty with 6% interest.
• Directions for forming a comprehensive policy for faster release of imported perishables.
• Recovery of compensation amount from the erring officers.

Mr. Saurabh Kapoor, Advocate, for the petitioner.

Mr. Ajay Kalra, Senior Standing Counsel, for respondent Nos. 1 to 4.

Title: M/s Prenda Creations Private Limited Union of India and others v. Union of India and others