Delhi High Court Dismisses Petition Challenging Circular Instructions on Seized Gold Jewelry

Case Name:

Jatin Khurana vs. Union of India & Ors.

Key Takeaways:

1. The petitioner’s public interest petition challenging circular instructions on the disposal and sale of seized gold jewelry has been dismissed by the High Court of Delhi.
2. The court held that the petitioner lacked standing to challenge the instructions as they had not been adversely affected by them.
3. The court emphasized that individuals who own gold jewelry and travel by air are not considered economically or socially backward and can approach the courts directly.
4. The rule of locus standi (the right or capacity to bring an action or to appear in a court) is relaxed in public interest litigation to ensure that the rights of the poor, socially and economically backward, or persons with disabilities are not denied.
5. Public interest litigation is linked to the enforcement of social and economic rights in India.

Case Synopsis:

This is a judgment from the High Court of Delhi in a case titled “Jatin Khurana vs. Union of India & Ors.” The petitioner, Jatin Khurana, filed a public interest petition seeking the quashing of two circular instructions issued by the Central Board of Indirect Taxes and Customs (CBIC). The instructions in question are Circular instruction No. 22/2022-Customs dated 06th September 2022 and Circular instruction No. 27/2021-Customs dated 03rd December 2021.

The petitioner argued that these instructions are arbitrary and ultra vires (beyond the powers) of the Customs Act, 1962, and violate Articles 14, 21, 31, and 300A of the Constitution of India. The petitioner claimed that the instructions fail to differentiate between gold jewelry/ornaments/articles with design and emotional value and other forms of gold. The petitioner also argued that the conversion of gold jewelry into gold bars and their subsequent sale closes all doors for restitution and causes irreparable loss to the rightful owners. Additionally, the petitioner contended that the instructions fail to differentiate between ‘seized’ gold jewelry and ‘confiscated’ gold jewelry.

After hearing the arguments of the petitioner’s counsel, the court held that the present petition is not maintainable. The court stated that it is a settled principle of law that an aggrieved person must approach the court. The petitioner, in this case, is considered a stranger who has not been adversely affected by the impugned circular instructions since none of their ornaments or jewelry items have been seized. The court further explained that while the rule of locus standi (the right or capacity to bring an action or to appear in a court) is relaxed in public interest litigation, it is done so to ensure that the poor, socially and economically backward, or persons with disabilities are not denied their rights. In this case, the petitioner, who owns gold jewelry and travels by air, is not considered economically or socially backward and can approach the courts directly.

Therefore, the court held that the present petition filed as a public interest litigation is non-maintainable and dismissed it along with any pending applications.

FAQ:

Q1: What was the petitioner seeking in the public interest petition?

A1: The petitioner sought the quashing of circular instructions mandating the disposal and sale of seized gold jewelry within three months.

Q2: Why did the court dismiss the petition?

A2: The court dismissed the petition as the petitioner had not been adversely affected by the circular instructions and lacked standing to challenge them.

Q3: Can individuals who own gold jewelry and travel by air approach the courts directly?

A3: Yes, the court emphasized that such individuals are not considered economically or socially backward and can approach the courts directly.

Q4: What is the rule of locus standi in public interest litigation?

A4: The rule of locus standi is relaxed in public interest litigation to ensure that the rights of the poor, socially and economically backward, or persons with disabilities are not denied.

1. Present public interest petition has been filed seeking quashing of the impugned Circular instruction No. 22/2022-Customs dated 06th September, 2022 and Circular instruction No. 27/2021-Customs dated 03rd December, 2021, to the extent it mandates compulsory disposal and sale to RBI of all gold ornaments/ jewellery within three months from the date of seizure as ultra vires Section 150 (of Income Tax Act, 1961), 125 and 110(2) of the Customs Act, 1962 (the ‘Customs Act’) and violative of Articles 14, 21, 31 and 300A of the Constitution of India.

2. Learned counsel for the Petitioner states that the impugned Instructions are arbitrary and ultra vires the Customs Act as they fail to differentiate between gold jewellery/ornaments/articles which have design and emotional value from other forms of gold. He further states that conversion of gold jewellery into gold bars and their consequent sale closes all doors for restitution and causes irreparable loss to the rightful owners.

He also states that the impugned Instructions are arbitrary as they fail to differentiate between ‘seized’ gold jewellery and ‘confiscated’ gold jewellery.

3. After hearing the learned counsel for the petitioner at some length, this Court is of the view that the present petition is not maintainable as it is a settled principle of law that an aggrieved person must approach the Court. The standing doctrine characteristic is that a potential litigant must be injured by the action it is challenging. In the opinion of this Court, the petitioner is a stranger, who has not been adversely affected by either of the impugned Circular Instructions as none of his ornaments or articles or jewellery items have been seized.

4. Undoubtedly, the rule of locus standi is relaxed in case of public interest litigation, but that is to be done only to ensure that the poor or socially and economically backward or persons with disability are not denied their rights. In a public interest case, there need be no litigant, if a problem is deemed by the Court as worthy of attention. The concept of public interest litigation, as stated here in above, is linked to the enforcement of the social and economical rights in India. The Supreme Court in Guruvayoor Devaswom Managing Committee & Anr. vs. C.K. Rajan & Ors., (2003) 7 SCC 546 has held as under:-

“41. The courts exercising their power of judicial review found to their dismay that the poorest of the poor, the depraved (sic), the illiterate, the urban and rural unorganized labour sector, women, children, those handicapped by “ignorance, indigence and illiteracy” and other downtrodden persons have either no access to justice or had been denied justice. A new branch of proceedings known as “social action litigation” or “public interest litigation” was evolved with a view to render complete justice to the aforementioned classes of persons. It expanded its wings in course of time. The courts in pro bono publico granted relief to inmates of prisons, provided legal aid, directed speedy trials, maintenance of human dignity and covered several other areas. Representative actions, pro bono publico and test litigations were entertained in keeping with the current accent on justice to the common man and a necessary disincentive to those who wish to bypass real issues on merits by suspect reliance on peripheral procedural shortcomings. (See Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai [(1976) 3 SCC 832 : 1976 SCC (L&S) 517 : (1976) 3 SCR 591] .)

42. The Court in pro bono publico proceedings intervened when there had been callous neglect as a policy of State, a lack of probity in public life and abuse of power in control and destruction of the environment. It also protected inmates of prisons and homes. It sought to restrain exploitation of labour practices.”

5. At this stage, learned counsel for the petitioner states that the petitioner has filed the present Public Interest Litigation as jewellery / ornaments worth as low as Rs.50,000 can be seized at the airport and sold immediately.

6. This Court is of the view that any individual who owns gold jewellery/ ornaments and who travels by air is not economically or socially backward and can approach the Courts directly.

7. Consequently, the present petition which has been filed as Public Interest Litigation is held to be non-maintainable and the same is dismissed alongwith pending application.

ACTING CHIEF JUSTICE

MINI PUSHKARNA, J

NOVEMBER 24, 2023