B.J. Wadia, J.
1. The plaintiffs are a joint stock company incorporated in the Kingdom of Norway, having their registered office at Dramtaen, and are the owners of the motor tanker ' Hamlet' used for the carriage of mineral oils by sea. They have filed this suit against the Secretary of State for India in Council, after giving him the requisite notice under Section 80 of the Civil Procedure Code, to recover from him the sum of Rs. 11,536-12-0 which was imposed as a penalty by the Assistant Collector of Customs, Bombay, under Section 167 (17) .of the Sea Customs Act (VIII of 1878) (hereinafter referred to as the Act). The penalty was imposed for an alleged shortage of quantity in a certain cargo of benzene oil carried by the ship from Touapse on the Black Sea to Bombay in April, 1933. The penalty was paid in the first instance by James Mackintosh & Co., the ship's agents, in fulfilment of their obligation under certain undertakings signed by them in accordance with the provisions of the Act, and the plaintiffs say that they have refunded the sum to James Mackintosh & Co., and claim to recover the same from the defendant. They contend that there was no shortage in fact as alleged, that in any event there was no adjudication of the shortage in accordance with -the provisions of the Act, and that therefore the imposition and collection of penalty were wrongful and illegal. The defendant, besides raising various preliminary points of objection to the suit, denies that there was no shortage or no adjudication as alleged, and denies liability to refund the amount of the penalty to the plaintiffs.
2. The material facts are that on or about March 28 and 29, 1933, the vessel ' Hamlet' loaded certain quantities of mazout oil and diesel oil at Batoum on the Black Sea. The cargo of benzene oil which is in dispute was loaded at Touapse on March 31, 1933. The receivers or importers of the cargo of benzene were the Western India Oil Distributing Co. The manifested quantities were 3341 tons of diesel, 1424 tons of mazout, and 1907.25 tons of benzene, oil. The ullages or measurements taken at the time of loading the cargo on board showed that there were 33277 tons of diesel, 1432-5 of mazout, and 1912 tons of benzene, in the tanks of the vessel. The vessel sailed direct for Bombay on April 1, 1933, and proceeded to the Pir Pau Oil Pier, Bombay, to discharge the cargo of benzene. It appears from the Bombay Supplement to the Indian Sea Customs Manual, published by the Government of India, that in accordance with the Act the Oil Pier, Pir Pau, has been appointed a wharf for the landing of dangerous and non-dangerous petroleum in bulk. The bulk oil installation depots, Bombay Port Trust Sewree and Wadala Estates, have also been appointed for the same purpose. From the time the ship was tied to the Pier and until the bulk of her cargo was discharged completely, the Preventive Officers of the Customs Department of Bombay were on board the ship supervising the discharge of the cargo. The tanks containing the cargo of benzene were opened under a special permit from the Collector of Customs, Bombay, granted to James Mackintosh & Co. under Section 59 of the Act, to break bulk on arrival of the vessel before receipt of the import general manifest. They also signed the undertaking required by Section 64 of the Act to which I will refer subsequently. The plaintiffs say that on opening the tanks containing the cargo of benzene ullages were taken by the officers of the vessel on board which showed that there were 1897-9 tons of benzene in the tanks at the Pir Pau Pier. This is not admitted by the defendant who contends that ullages even if so taken do not for various reasons give, nor are capable of giving, an accurate or any approximate indication of the true quantity of benzene in the tanks of the ship.
3. It is not in dispute that the discharge of the cargo of benzene commenced at 5-30 p.m. on April 21, 1933, under the direct supervision' of the Customs Preventive Officers. The benzene was discharged by connecting the tanks of the vessel with the pipe line which leads from the Pir Pau Pier to the installation of the receivers at Sewree at a distance of about four-and-a-half to five miles from the pier, and the benzene was pumped from the tanks of the vessel into the installation tanks at Sewree through the pipe line. The discharge was completed at 10-40 p.m. on April 22, 1933, and after completion of the discharge the tanks were examined and found dry and were also steamed and gas-freed before the vessel was permitted to leave the pier. The cargoes of diesel and mazout oil were discharged at the Alexandra Dock wall on April 24 and 25, and the vessel left Bombay on April 26, 1933. Measurements of the quantity of the oil actually discharged into the receivers' tanks at Sewree were taken by the Customs Officer in charge of the installation in the presence of the installation manager on April 27, when the quantity of benzene was computed at 1828-3225 tons. The manifested quantity of benzene being 1907-25 tons, the Customs authorities found that there was an actual shortage or deficiency of 78-9275 tons. Allowing for a shortage of one percent, of the cargo permitted under the rules made under the Act, there was according to the Customs authorities a shortage of 59.8550 tons. By his letter dated May 10, 1933, the Assistant Collector of Customs called upon James Mackintosh & Co. to give a satisfactory explanation of this shortage or to pay a penalty of Rs. 11,536-112-0 on the equivalent of the shortage in gallons under Section 167(77) of the Act. No satisfactory explanation having been received as alleged, an order was made on September 13, 1933, for payment of the penalty, and the sum was paid under protest on September 25, 1933. On November 20 plaintiffs appealed through James Mackintosh & Co. under the Act to the Collector of Customs, but the appeal was dismissed on November 30, 1933. On January 19, 1934, an application for review of the Collector's order was made to the Governor General in Council under the Act, but it was rejected on February 12, 1934.
4. The plaintiffs contend that the imposition and collection of the penalty was wrongful and illegal on the grounds alleged in para. 26 of the plaint, namely, that no measurements were taken and no investigation was made by the Customs Officers on board the vessel at the Pir Pau Oil Pier or at any other place to ascertain the quantity of benzene on board the vessel, that the Customs Officers had at no time found any shortage of benzene on board the vessel, that on some measurements taken at the receivers' installations at Sewree the Assistant Collector had wrongfully alleged that there was a shortage of 59 odd tons of benzene on board the vessel, and that therefore there was no adjudication as to what quantity of benzene was found on board. That is the plaintiffs' cause of action as set out in para. 26 of the plaint. In answer the defendant states that it was ascertained and found as a fact by the Customs Officers that the quantity of benzene on board the vessel was less than that entered in the import manifest, that there was in fact an adjudication as to the quantity found on board, as a result of which it was ascertained that there was a deficiency, and the deficiency was not accounted for to the satisfaction of the Officer in charge of the Custom House.
5. The penalty was imposed upon the vessel under Section 167(77) of the Act which provides that if any goods entered in the import manifest of a vessel are not 'found on board of the vessel', or if the quantity ' so found is short', and if such deficiency is not accounted for to the satisfaction of the officer in charge of the Custom House, the master of the vessel shall be liable to the penalty provided for in the Section. There has been considerable discussion as to the meaning of the words in the first column of Section 167 (17) which I have just cited. According to the second column of the1 Schedule the Section s of the Act to which the offence under Section 167(27) has reference are Section s 55 and 64 of the Act. Under Section 55 every manifest which has to be delivered to a pilot or Customs officer or any other person duly authorised to receive the same, shall be signed by the master, and shall specify inter alia all goods imported in a vessel and shall be made out in such form as the Chief Customs Officer may from time to time direct... Under Section 57 no vessel arriving in any Customs port shall be allowed to break bulk until the manifest has been delivered, but notwithstanding anything contained in Section 57 the Customs Collector may grant prior to receipt of the manifest and to the entry inwards of the vessel a special pass permitting the bulk to be broken. Such special pass was granted to James Mackintosh & Co., the ship's agents in Bombay. Under Section 64 the Customs Collector may refuse port clearance to any vessel until the conditions mentioned in the Section are fulfilled. One of these under Section 64(c) is that the ship's agent must deliver to the Customs officer a declaration in writing to the effect that he will be liable for any penalty imposed under Section 167(17), and furnish security for the discharge of the same, A ship's agent delivering a declaration under Section 64(c) shall be liable to pay all penalties which might be imposed on the master under Section 167 (17). The necessary undertakings under this Section were signed by James Mackintosh & Co. in respect of the vessel ' Hamlet'. Under an agreement dated April 21, 1933, the day the vessel arrived, the ship's agents inter alia agreed to pay all port dues and other charges and penalties due or to become due by such vessel or by the owner or master thereof and all duties payable in respect of any goods shipped therein. By their declaration, also dated. April 21, 1933, the ship's agents, in consideration of port clearance being granted to the vessel, declared under Section 64 that they would be liable for any penalty under Section 167(17) with respect to any goods entered in the import manifest of the vessel. These are exhibits A and A1. They amount to a, guarantee given by the ship's agents as agents to accept liability for any penalty that may be imposed under Section 167(17).
6. Section 85 of the Act empowers the Customs Collector upon the terms therein mentioned to permit the master of a vessel to discharge the cargo of such vessel or any portion thereof into the custody of the ship's agents if the agents are willing to receive the same. James Mackintosh & Co. had given a general undertaking dated October 29, 1921, to the Assistant Collector of Customs, which is exhibit 1, to the effect that in consideration of their being permitted to break bulk in accordance with Section 59 of the Act and to receive the cargo or part thereof into their custody or into the custody of their agents under Section 85 of the Act for the purpose of landing the same at a notified wharf or landing place, they undertook inter alia to accept liability under Section 85 of the Act for all duties or penalties that would or might have been recoverable in respect of missing or deficient goods ' if the cargo had been examined on board '. There is a comma after the word ' board' in the original which seems to be a mistake. In my opinion the words ' if the cargo had been examined on board ' mean ' had the cargo been examined on board '. The words seem to indicate that it was understood that the cargo on board was not to be examined on board. This undertaking was in force in 1933 according to the plaintiffs' witness Javeri. It was said that there was no document regarding the vessel ' Hamlet ' which has reference to this general undertaking, but William Clarke, the defendant's witness, stated that permits were granted to James Mackintosh & Co. from time to time on the strength, of this undertaking. An application was made by James Mackintosh & Co. as agents for the vessel ' Hamlet' to the Assistant Collector on April 13, 1933, before the vessel arrived, which is part of exhibit No. 2, requesting that a special pass be granted to them under Section 59 of the Act for the vessel to break bulk on arrival before receipt of the import general manifest and entry inwards and also for permission under Section 85 of the Act to land all her cargo. According to the endorsement made on the application by the witness such permission was granted. A question was put to him whether the benzene in question ever came physically in charge of James Mackintosh & Co., and his answer was that so far as the Act was concerned it was in their possession. He also stated that they gave delivery of the benzene to the receivers. The oil was pumped straight from the ship through the pipe line into the installation tanks of the receivers, presumably under some arrangement between the Port Trust authorities and the receivers of the oil according to which the oil was discharged from the vessel into the Port Trust line for being conveyed to the installation. Mr. Clarke, however, clearly stated that the oil would not have been allowed to be pumped unless the two letters exhibit A and exhibit Al, and the letter exhibit 1, were handed over to the Customs authorities.
7. The offence for which the penalty was imposed is described in the first column of Section 167(17). The first part refers to the goods not being ' found on board of the vessel '. The word ' found ' means actually or physically existingJ on board. This part refers to a case where all the goods on the board have disappeared or are non-existent. The second part of the first column with which we are concerned deals with the case where ' the quantity so found is short ', that is to say, the quantity existing on 'board the vessel is short or deficient, and the deficiency is not accounted for to the satisfaction of the Customs officer. The word ' found ' in the second part must have the same meaning as in the first part of the column, and cannot here mean ' ascertained ' or ' measured'. The deficiency must be in the quantity of the goods on board, but the principal point of dispute is as to the place where the deficiency, if any, must be ascertained. Plaintiffs' counsel argued that a deficiency in goods found on board must and can only be determined on board the vessel and at no other place, and that a determination of the deficiency which was not made on board was contrary to the provisions of the Act, and any penalty based on such deficiency was wrong and illegal. According to the third column of the Schedule it is the master of the vessel who is liable for the penalty, and 'master' is defined in Section 3(h) of the Act as the person, except a pilot or harbour-master, having command or charge of the vessel. Counsel argued that as the penalty has to be imposed on the master primarily, the deficiency must be measured and ascertained in his presence on board the vessel where the goods are under his control in order to fix any liability upon him. There is, however, nothing in the Section to indicate that the measurements must be taken only on board the vessel, and nowhere else. The Section does not refer to any place of measurement at all. Under Section 80 of the Act the Customs Collector may require that goods stowed in bulk and brought by sea shall be weighed or measured on board ship before landing and may levy duty according to the result of such weighing or measurement. According to the plaintiffs the ship's officers measured the oil in the tanks on board and took the ullages, but these were not taken in the presence of, nor checked by, any Customs officer that went on board as soon as the vessel was tied to the pier. There is no evidence that a Customs officer was asked to be present when the ullages were taken, and that he refused. The plaintiffs do not rely on the figures of the ullages taken on board by the ship's officers to show that there was no deficiency. It was even said that those figures were immaterial. Their case is that the quantity of the oil in the tanks on board having been measured five miles away from the ship cannot under any circumstances be a measurement of the oil on board the vessel when it arrived, because the Act requires a measurement of what goods are on board and not of what are landed.
8. Is there anything in Section 167(17) which prohibits a measurement of the goods on board being taken at another place? In my opinion a measurement at another place is not prohibited either by the terms of the Section or by implication. To hold otherwise will be to put a very narrow interpretation upon the words of the Section. Such a narrow interpretation may sometimes lead to inconvenient and unsatisfactory results, for cases may arise where the goods have to be measured at places other than on board, and it is not necessary that in every case the goods on board must be measured only on board, and at no other place. There is nothing to prevent the measurement of the quantity on board being made at another place and at a later date, provided the time and place are sol reasonably arranged as to ensure that for the purposes of the Act the measurement is a measurement of the goods on board. It does not necessarily follow that a measurement of goods landed can never be a measurement of the goods on board. If, however, a measurement not taken on board is wrong and illegal under any circumstances, the fact that that has been the practice followed by the Customs authorities for thirty years, or the fact that other companies like the Standard Vacuum Oil Co. also take measurements of the oil imported by them according to the same practice; or the fact that at the port of loading the oil was also conducted to the vessel through pipe lines from the reservoirs of the exporters which appears from the loading certificate, exhibit 6, will not legalise an illegal measurement taken at the port of discharge. It is, however, significant that the practice should have-been followed for thirty years according to the plaint, or at least for twenty years according to the evidence of William Clarke, and that during that period only three or four complaints including the one in suit should have been made with regard to the measurements taken according to that practice. It was not alleged by the plaintiffs' witness Javeri, the manager and constituted attorney of James Mackintosh & Co., that they were unaware of the practice followed by the Customs authorities. It was argued that the ship's agents could not anticipate a shortage, and were therefore not bound to say or do anything; regarding the practice before the measurements were taken. At the same time they cannot be heard on behalf of the ship to object to the practice after the result of the measurement had shown a deficiency. The measurements at the installation are made primarily for the sake of levying duty on the goods imported, and the penalty is imposed only in the event of there being a deficiency.
9. Plaintiffs' counsel further argued that even under the practice followed there cannot be an adjudication of the goods on board, as no notice was given to any representative of the ship to be present when such measurements were taken, and that therefore the adjudication of the penalty made under Section 182 (a) of the Act was illegal. That is not the allegation in the plaint. The only allegation is that the measurements not having been taken on board the vessel, there is no adjudication of the quantity of the goods on board. Counsel said that when the plaintiffs alleged that there was no adjudication, it was implied that all the elements that go to make up a valid and binding adjudication were absent. An allegation of this nature, namely, that a rule of natural justice was not followed, because the adjudication was not made in the presence of the ship's representative or officer, being an important allegation, should be specifically made in order to enable the defendant to answer it. Counsel's next argument was that there was no adjudication of the quantity of oil by the Assistant Collector, because in his letter of May 10, 1933, he refers to the 'outturn' of benzene and not to the benzene found on board. Reading] the letter as a whole, it is clear that by ' outturn ' he meant the quantity of oil on board the vessel which was discharged through the pipe line into the installation tanks. The mazout and diesel oils were also measured, according to that letter, by the quantities discharged. It is by comparing the quantity discharged with the manifested quantity that the deficiency is ascertained, and the penalty is based on the calculation of the figures which are checked and sent to the Assistant Collector by the Customs Inspector who makes the cal-culation. It must be remembered that the ship's general import manifest is not on board the vessel for comparison when it arrives. It is put in by the ship's agent after it arrives, and the very object of Section 59 is to get a permit to break bulk before receipt of the manifest. Moreover, it is not necessary that the Assistant Collector should do everything personally, and there was nothing wrong in his obtaining his materials vicariously through his officials for calculation : see Local Government Board v.Arlidge  A.C. 120 He assumed the amount of shortage after himself checking the calculations. Moreover, in reply to the letter of May 12 James Mackintosh & Co. stated that they were making enquiries from the owners of the vessel to assist them ' in satisfactorily accounting for the said discrepancy in the outturn '. Later on, however, by their letter of July 14, 1933, they alleged for the first time that the penalty was not justified on the ground that the vessel had no control over the cargo once it had left its tanks, and that it was not possible to know what transpired in the miles of pipe line or at the receivers' installation. The Assistant Collector, being of opinion that the deficiency was not satisfactorily accounted for, asked the ships agents to pay the penalty by his letter and order of September 13, 1933. The amount was, as I stated before, paid under protest on September 25, 1933.
10. The figures of the measurements given by the Customs authorities are not disputed. A copy of what is called the ' Outturn Statement' is affixed to the import general manifest. What is disputed is that the practice followed and the method, adopted in computing the figures are illegal on the ground that Section 167(17) contemplates a measurement of the deficiency only on board the vessel. I have already expressed my opinion that a measurement, not taken on board, is not precluded by the Section. What is necessary is that the method adopted must be such as to ensure a proper measurement of the goods on board. Evidence was led on behalf of the defendant to show what was the process of pumping the oil into the installation tanks over the Port Trust pipe line, what was the routine usually followed in measuring the quantity of oil discharged into those tanks, and what was actually done in respect of the measurements of the benzene discharged from the vessel, ' Hamlet', into those tanks. Plaintiffs' counsel said that the evidence was irrelevant, because if the measurement could be taken only on board the vessel and nowhere else, evidence of any practice and method of measuring elsewhere, however good and efficient, was irrelevant. Defendant's counsel argued that the evidence would be irrelevant only in the sense that the Court could not go into the merits of the measurement actually made, provided the measurement taken elsewhere was not precluded by the Section. The evidence was, however, led to show that there was an adjudication in fact as to the shortage according to the practice and the method always adopted, and it was then argued that such an adjudication was an adjudication under the Act and binding upon the plaintiffs. The witnesses called were Herbert Powell, the Oil Pipe Line Pumping Foreman in the employ of the Port Trust, William Clarke, Inspector of Customs, who in 1933 was in charge of the oil calculations in the head Customs office, Frank Simons, a retired Customs Inspector who at the material dates in 1933 was in charge of the installations at Sewree, Wadala and Wadi Bunder, Madhavrao Worliker, an Inspector in the Public Works Department, Bombay, who prepared the calibration tables for the oil tanks of the Western India Oil Distributing Co. at Sewree along with one H. R. Desai, an Assistant Engineer in the Public Works Department, since deceased. The last witness was Henry Fox, the Operations Manager of the Standard Vacuum Oil Co., Bombay, which has also installation tanks at Sewree, and who deposed to the practice of his company in taking measurements at the installation tanks. He said that ullages taken on board the ships of the company or ships chartered to the company were not accurate, but were merely taken as rough checks, and that the calibration tables on the ships were not up to date. In appreciating the evidence of the three officers called it must be remembered that they were giving evidence in 1939 of events that happened more than six years ago, and that under the circumstances it could not be expected that their memory would be accurate and exact in all details.
11. The evidence in substance showed that the pipe line connecting the ship from the Pir Pau Pier to the installation at Sewree is about four and a half to five miles long, that it is mostly above ground and is owned and supervised by the Port Trust right up to the installation walls of the different installations. The receivers of the oil connect the Port Trust pipe line to the vessel by means of rubber hoses. There are two pipes running side by side along the line, one of eight inches and another ten inches, one used for carrying petrol and fine kerosene oil, and the other for carrying inferior kerosene. There are Port Trust men that patrol the whole line up to the installation wall. There are 'chowkies' or watching-places with telephones at a distance of a thousand feet each along the line. There is also a telephone connection put up on the ship to communicate with the men at the installations. There are branch lines connected with the main line leading up to the installations, one of which leads to the installation of the Standard Vacuum Oil Co. and the Western India Oil Distributing Co. Not more than one vessel is tied at a time to the pier, and the pipe line is tested a day before the arrival of the vessel carrying the oil. When the oil is to be pumped into a particular installation, certain valves in the main line are closed to see that all the oil goes to the particular installation, and after the oil has gone into the tank a piece of pipe line is also removed as a precaution against the oil going back from the installation into the pipe line. The Port Trust men are in charge of the connecting and disconnecting of the pipe line with the branch lines and closing the valves. There are also valves in the inlet pipe, namely, the pipe leading from the installation wall to the installation tanks, and these regulate the flow of the oil into the proper tanks of the particular installation. The Western India Oil Distributing Co. in April 1933 had, and still have, two storage tanks for benziene, which is petrol, at their installation at Sewree. The witness William Clarke deposed from his experience to the general routine followed for discharging the oil from the tanks of the ship into the installation tank. Sea water is first pumped into the pipe in order to clear off all impurities. The dirty water full of impurities is discharged into a sump or a sort of a tank and later is discharged from the sump into the sea. The water is pumped into the pipes from the ship end until the receivers' man and the Customs officer at the installation end are satisfied that the pipe is clean and that clear water has begun to come in. The pumping of the water takes about three to four hours. When a telephone message is sent from the installation to the ship, the pumping of the water ceases and the pumping of the oil begins. But even after the pumping of the oil begins from the ship end, water is allowed to run into the sump from the pipe for about a couple of hours, after which the valve leading the water into the sump is closed, and the water is diverted into the tanks. To let the oil run into the tanks the drain cocks at the bottom of the tank are closed and sealed. After the oil has run in, all the tank valves, the outlet as well as the inlet valves, are also closed and sealed, and the seals remain on the valves until the oil is measured. After the pumping of the oil is finished, water is pumped in again to clear the pipe of the oil, and drive all the oil in the pipe into the tanks. All this water, so long as there is any trace of oil in it, is allowed to go into the tanks. When the water becomes clear, a telephone message is sent to the vessel, and the pumping is stopped. About twenty-four hours are allowed for the) water at the bottom of the tank to settle. The measurements are taken by means of instruments tested from time to time, and with the help of calibration tables prepared by the Public Works Department. A graduated rod is let down into the dip hole at the top of the tank. The depth of the water at the bottom, the depth of the entire liquid consisting of the oil and water together, and the specific gravity and temperature of a sample of the oil, are taken and noted down by the Customs officer in a note book in the presence of the installation manager. A dip statement is prepared for each tank, and signed by the Customs officer and the manager of the particular installation. Then a calculation-statement is prepared for each tank. These are sent on for being checked to the Customs Inspector, and were in 1933 checked by William Clarke who assessed the duty payable. He makes his report, and along with his report sends the calibration tables as well as the dip-statements and the calculation statements to the Assistant Collector. It is the Assistant Collector who levies the duty or the penalty in case of a deficiency, if the deficiency is not satisfactorily accounted for. This is the general routine that is followed, and according to the evidence of Frank Simons, the Customs Inspector in charge of the installation of the Western India Oil Distributing Co. at the time in question, this routine was followed in respect of the cargo of benzene in question. He supervised the arrangements inside the installation after the water had been pumped on April 21. He left the installation and came back about the time of the pumping of the oil into the tanks had finished. He was present when the pumping of the oil had finished, and water was pumped in again to drive the oil into the tank. After the pumping of the water had finished, he closed the inlet valves of the tanks and saw to it that all the valves of the tanks were properly sealed. The measurements were taken after the installation manager had given him notice to come and take the same. According to. the dip-statements the measurements were taken on April 27, and the dip-statements in respect of both the tanks 'were prepared from the figures in his note book. He said he did not remember whether he was present when the oil was diverted from Tank No. 1 to Tank No. 2, but he stated that there was a man at the top of the tank to see that the diversion from one tank to the other was made in time. He further said that there was a spray at the top of the tank, from which water was sprayed on its sides in order to keep the temperature of the oil down.
12. I accept this evidence substantially as a whole, and but for the fact that the witnesses were deposing mostly from memory to what happened more than six years before they gave evidence and might not have remembered some details, I rely upon the evidence to show that there was an adjudication in fact of the oil discharged into the tanks and of the amount of the deficiency. As there was a deficiency, it was for the master of the ship or the ship's agents or any representative on behalf of the ship in the absence of the master to account for the deficiency to the satisfaction of the officer in charge of the Custom House under Section 167 (17). Plaintiffs contend that by reason of the measurements not having been taken on board the vessel there was no adjudication, and therefore no deficiency had to be accounted for. That I take is the meaning of the words used in the appeal to the Collector that ' the shortage which the Assistant Collector alleges exists was in fact non-existent and has thus been satisfactorily accounted for '. If the plaintiffs are right that the measurements can be taken only on board and nowhere else, the defendant is out of Court. If, however, the measurements of the goods on board need not be taken only on board, but can, as I have held, be taken at another place, within of course the limits of the port of Bombay, as Sewree is, there was a deficiency, and the onus was on the plaintiffs to show how the adjudication was wrong or illegal. Plaintiffs led no evidence to account for the deficiency, but their counsel cross-examined the defendant's witnesses to show that it was possible that through some negligence or incompetence of the men in charge of the pipe line or some undetected breakage, there was a leakage or an overflowing of the oil or any unusual evaporation of the oil conducted over the pipe line on the days in question. Counsel also relied on certain figures given in the calibration tables (part of exhibit 7) as to the depth of Tank No. 1, and the depth of the oil recorded in the dip-statement, and on certain figures given by the witness Simons as to the amount of water drained off from that tank before measurement of the oil, in order to show that the tank might have overflowed before the oil was diverted into Tanki No. 2. The witness Simons denied that there was any overflowing, and the witness Powell stated that the log book kept under his supervision showed that there was no leakage on the material dates. Moreover, the figures relied on by counsel were not put to the witness Simons for any explanation. The log book, however, showed that pumping was stopped for four hours on April 22 and then: resumed. The witness Powell could not remember why the pumping was stopped, but it is denied in paragraph 15 of the written statement that any orders to stop pumping and discharging the benzene were issued by and at the instance of the Customs authorities. It is quite probable that the stoppage might have been ordered by the receivers to suit their own convenience and arrangements. It is not suggested that the stoppage was due to overflowing or leakage, and in fact no leakage nor overflowing has been shown. In my opinion, therefore, there was an adjudication of the deficiency under the Act, and it was not satisfactorily accounted for. The fact that the measurements were taken about three or four days after the water in the tanks was allowed to settle down would make no difference in the measurement, having regard to all the pre-cautions taken. Any diminution of the quantity due to evaporation from the time of loading until the time of discharge would come within the allowance of one per cent, according to the rules made under the Act.
13. Even if the Customs authorities were wrong in their view of Section 167(17) of the Act, that is in adjudging the deficiency of benzene at the installation tank of the receivers, on the basis of which the penalty was imposed, the question arises whether this Court has jurisdiction to entertain the suit having regard to the provisions of Section 106(2) of the Government of India Act, 5 & 6 Geo. V, c. 61, otherwise known as the Government of India Act of 1915. Section 106 deals with the jurisdiction of the High Courts of India, and it is provided by Section 106(2) that
The high, courts have not and may not exercise any original jurisdiction in any :matter concerning the revenue, or concerning any act ordered or done in the collection thereof according to the usage and practice of the country or the law for the time being in force.
That is the first issue in the suit. It is not in dispute that the words ' may not exercise ' have the same force as ' shall not exercise '. The history of the earlier legislation on the subject has been set out by Lord Campbell in his judgment in Spaoner v.Juddow (1850) 4 M. I.A. 353 and it is not necessary to repeat it here. Section 106(2) has been re-enacted as Section 226(7) of the Government of India Act of 1935, 25 & 26 Geo. V, c. 42. That Section provides as follows :-
Until otherwise provided by Act of the appropriate Legislature, no High Court shall have any original jurisdiction in any matter concerning the revenue, or concerning any act ordered or done in the collection thereof according to the usage and practice of the country or the law for the time being in force.
The question is whether the imposition of the penalty under the third column of Section 167 (17) is a 'matter concerning the revenue' or 'concerning any act ordered or done in the collection thereof according to the usage and practice of the country or the law for the time being in force '. Plaintiffs' counsel argued that the imposition of the penalty was not a matter of revenue, nor an act done in the collection of revenue, and had nothing to do with revenue at all. It was, as the term indicated, a penalty for an offence. I do not think anything turns on the mere use of the word ' penalty', any more than on the use of the expression ' penalty duty' used by the Assistant Collector of Customs in his letter of May 10, 1933. The deficiency for which the penalty is levied is arrived at by deducting the quantity discharged at the receivers' tanks from the manifested quantity of the oil. If the manifested quantity, which according to the bill~of4ading the owners of the vessel undertook to bring in good order and condition to Bombay, had been imported in full, subject to the allowance of one per cent., the Customs would have received so much more by way of customs duty. By reason of that quantity being deficient the amount of duty which would have been leviable on the deficient goods is lost to the customs. The collection of customs is a collection of revenue, and is under the Government of India. Where the deficient goods are dutiable, as benzene is, the penalty according to the Section shall not exceed twice the amount of the duty chargeable on the deficient goods. As a matter of fact the penalty imposed was of a sum equivalent to the duty which would have been paid on the deficient goods, if they had been landed. The object of the penalty seems to be primarily to compensate the Government for the loss of so much revenue to them. The amount of the penalty is paid to the Customs and goes to the revenue. The object of the penalty is not merely to compensate the Government, but also to deter other persons from committing the same offence and thereby preventing or hindering the collection of revenue. In Govinda-rajulu Naidu v. Secretary of State I.L.R. (1926) Mad. 449 which was a decision of the Appeal Court, Coutts Trotter C.J. held at p. 455 that an order confiscating goods smuggled into British India without payment of duty lawfully leviable was ' a matter affecting the collection of revenue though it be in the nature of a penalty '. According to the judgment of Beasley J. at p. 460 it was admitted by plaintiff's counsel ' that penalties in the shape of double or treble duties imposed on smuggled goods would be revenue', and the learned Judge refers to this admission in his judgment with approval.
14. In my opinion the adjudication of the penalty is an adjudication of a matter concerning the revenue, and its collection is an act ordered in the collection of revenue. If it is only an act ordered in collection, the question arises whether the act ordered in collection is according to the usage and practice of the country or the law for the time being in force. It was argued that the adjudication and imposition of the penalty were not in accordance with the law of the country, namely, the Sea Customs Act, and that the construction put by the Customs authorities on Section 167(77) was erroneous and not in accordance with the law, and therefore the jurisdiction of the Court was not taken away. This aspect of the Section was considered by Rangnekar J. in Dewarkhmd Cement Company, Limited v. Secretary of State (1938) 41 Bom. L.R. 297 a case regarding the amount of stamp payable on a mining lease under the Indian Stamp Act (II of 1899). It was pointed out by the learned Judge at p. 302 that if an act was done in accordance with law no statutory protection was needed, and it could never give rise to any cause of action against the officers in question, or the Secretary of State. It is only when the act purports to have been done under the law that an act done by mistake or an illegal act is protected by the statute. As pointed out by Lord Campbell in Spocner v. Juddow (1850) 4 M. I.A. 353:-.there can be no rule more firmly established, than that if parties bona fide and not absurdly believe that they are acting in pursuance of Statutes, and according to law, they are entitled to the special protection which the Legislature intended for them, although they have done an illegal act.
This construction put on the words of a protective statute has, as pointed out by Coutts Trotter J. in Best & Co., Ltd. v. Collector of Madras, : (1918)35MLJ23 never been departed from. It has not been suggested that the Customs authorities or the Secretary of State in this case did not act bana fide, or, that they, to use the words of Coutts Trotter J. in the same case at p. 27,
purported to seek the protection of the statute with the full knowledge that all that was being done was to commit a mere act of aggression. Whether they were right or wrong, they thought clearly and honestly that they were taking advantage of the provisions which the statute allowed them to take advantage of....
Nor is there anything to show that the Customs authorities absurdly believed, that they were acting according to the law, or proceeded on some strange or novel method of their own without a shadow of a right. Even assuming that they had fallen into a mistake or without bad faith had committed an excess in executing the duties of their office, they would still be within the protection of the statute, unless the act was clearly ultra vires. Under the circumstances I am of opinion that this Court's jurisdiction is gone, and I hold on the issue in the negative.
15. The next issue is whether the suit is maintainable having regard to the provisions of the Act. It is provided by Section 182 inter alia that in every case, except in the cases particularly mentioned, in which any person is liable to a penalty, such penalty may be ' adjudged ', by a Customs Collector. Section 187 provides that all offences against the Act, other than those cognizable under Section 182 by officers of Customs, may be tried summarily by a Magistrate. It follows therefore that the offence under Section 167(27) is to be tried or adjudged by an officer of the Customs. Under Section 188 any person aggrieved by a decision or order of an officer of the Customs may, within three months from the date of the decision or order, appeal to the Chief Customs authority, and every order passed in appeal under that Section shall, subject to the power of revision conferred by Section 191, be final. Under Section 191 the Central Government may, on the application of a person aggrieved by any decision or order passed under the Act by the Chief Customs authority, and from which no appeal lies, either reverse or modify such decision or order. Reading all these Section s together it is clear that a special tribunal is provided by the Sea Customs Act, and that special tribunal is competent to try an offence under Section 167(17) : see Ganesh Mahadev v. The Secretary of State for India I.L.R. (1918) 43 Bom. 221. If the special tribunal operates as provided by the Act and gives a fair hearing to both sides, the Government can claim immunity from a civil suit. It is not necessary that the enquiry should be in the nature of a judicial trial. It was argued that the plaintiffs had not a fair hearing in the origin of the enquiry, as the measurements were taken in their absence, or in the absence of the ship's agents, at the receivers' installation. As I have already pointed out, that is not the case in the plaint. There was also nothing to prevent any one representing the ship from being present at the time of the measurement, by arrangement, if he wanted to. Nor could it be said that there was no fair hearing on both sides before the Assistant Collector of Customs, and before the Collector, and on application to the Central Government. The full case of the plaintiffs has been set out in the letter of July 14, 1933, which was written to the Assistant Collector. An elaborate case was prepared by the plaintiffs' attorneys on appeal to the Customs Collector, and on review, and the question of illegality was raised. It has nowhere been alleged, neither in the correspondence nor in the plaint, that the plaintiffs were not granted an opportunity of a fair hearing before the Assistant Collector or the Customs Collector, and I do not see how it can be said that the Collector never applied his mind to the question at all. It was said that the decision of the Central Government was 'curt', because it is said in the order that the Governor General in Council found no reason to interfere with the order passed by the Collector and rejected the application. A curt decision is no less an adjudication than a summary dismissal of a suit or of an application in Court, after the two sides have been heard. I answer issue No. 2 in the negative.
16. The third issue in the suit is whether the plaint discloses a cause of action. The defendant's allegation is that even if this Court has jurisdiction to try the suit, the plaintiffs cannot maintain the suit as the Assistant Collector of Customs called upon James Mackintosh & Co. to pay the penalty and the penalty was paid under protest by them. It is clear, however, that that was not a personal liability imposed upon them. They paid as the ship's agents. The agreement and the declaration dated April 21, 1933, respectively were signed by them as agents, and even the. earlier general undertaking of October 29, 1921, was also given in their capacity as agents of the ship. The penalty referred to in Section 64 (c), as being imposed under Section 167(17) of the Act, is a penalty imposed upon the master of the vessel, and the penalty so imposed upon the master of the vessel is one for which the ship's agents by virtue of that declaration bind themselves to be liable as agents. The object of the Legislature in enacting Section s 64 and 85 of the Act is to authorise the Customs authorities to release the; ship if there is some person within the jurisdiction who will be answerable for the claims which the vessel or its master would have been answerable for, if the vessel had remained within the jurisdiction. But the liabilitly of such person is not personal, but is that of an agent for the ship. Further, the moneys were paid by James Mackintosh & Co. by cheque on September 25, 1933, ' without prejudice to all the rights which we and the owners may have by appeal or otherwise to recover the said amount' from the Collector of Customs or from Government. It is in evidence that the ship's agents recovered the moneys which they paid from Messrs. Assurance Foreningen Skuld in which company the name of the vessel was entered by the plaintiffs as its owners for the purpose of protection and indemnity on the basis of mutual assurance. The money having been refunded to them by the plantiffs, the plaintiffs would be entitled to sue the defendant, assuming that this Court had jurisdiction to try the suit.
17. The only other issue is one of limitation. According to the defendant the suit is barred under Article 14 of the Indian Limitation Act, assuming again the the Court has jurisdiction to try the suit. The article provides one year as the period of limitation to set aside any act or order of an officer of Government in his official capacity, not otherwise expressly provided for, from the date of the act or order. The article applies if the suit involves the setting aside of an order which must be at least of a quasi-judicial character and not a mere executive order : see Surannmna v. Secretary of State for India I.L.R. (1900) 24 Bom. 435 The order which the plaintiffs pray may be set aside is the order of February 12, 1934, issued by the Government of India, confirming the order of the Collector of Customs, and it was argued that a suit to set aside that order was not within the purview of Article 14 which contemplates an order made by an officer of Government in his official capacity. The order of the Central Government only confirms the order of the Collector of Customs, and the order of the Collector confirmed the order of the Assistant Collector dated September 13, 1933. That was the order imposing the penalty, and I am of opinion that it is the Assistant Collector's order of September, 1933, ordering the payment, which the plaintiffs have to set aside. Even if it be assumed, as was assumed, though not quite clearly, in Raghunath Prasad v. Kaniz Rasul I.L.R. (1902) All. 467 that the year under Article 14 ran from the date of the order of the Commissioner confirming the order of the Collector, this suit was beyond one year from the dates on which the Assistant Collector's order was confirmed by the Collector and by the Central Government. If, therefore, the plaintiffs wanted to have a' decision of the Court upon the legality or illegality of the order of the Assistant Collector, they should have put their plaint on the file within one year from its date : see Chhotubhai v. Secretary of State (1919) 22 Bom. L.R. 146 and Ganesh Shesho v. The Secretary of State for India. I.L.R. (1919) 44 Bom. 451 Excluding the period of the notice required to be given to Government under Section 80 of the Civil Procedure Code, which the plaintiffs under Section 15 (2) of the Indian Limitation Act are entitled to exclude, this suit filed on November 28, 1935, is out of time.
18. It was, however, contended on behalf of the plaintiffs that the claim for penalty based on measurements not taken on board the vessel but some miles away from the board was ultra vires, illegal and improper, that therefore the order imposing the penalty was made without jurisdiction and was a nullity, and it was not incumbent on the plaintiffs to file a suit to have it set aside : see Narendra Lal Khan v. Jogi Hari I.L.R. (1905) Cal. 1107 Dhanji v. The Secretary of State I.L.R. (1920) 45 Bom. 920 and Secretary of State v. Faredoon : AIR1934Bom434 . It is clear that the ' act' or ' order ' referred to in Article 14 does not mean an act or order which is a nullity. Plaintiffs' counsel contended that what was done was not within the statutory powers of the Customs officer which he purported to exercise. But on the record before me I cannot say that the Customs officer acted ultra vires or in excess of his statutory authority. It was an order made by an officer of Government in his official capacity, purporting to act under the law, and it was of a quasi-judicial character, and within his power. It has not been suggested that it was made mala fide, nor can it be said, as I have stated before, that the Customs officer 'absurdly believed' that he was acting in pursuance of the statute and according to the law. Moreover it was necessary to file a suit to have the order set aside, because it is clear that the second prayer of the plaint that the amount of the penalty should be refunded and a decree passed in favour of the plaintiffs for the amount could not be granted until the order of the Customs officer was set aside. The suit is not for a mere declaration, as was pointed out by the Privy Council in Secretary of State v. Parashram Madkavrao I.L.R. (1934) 58 Bom. 306 in which case the plaintiff was not seeking to set aside any act or order. Article 14 therefore applies, and the suit is barred by limitation.
19. In the result, the suit must be dismissed.
20. When the Advocate General wanted to lead evidence, an objection was taken that the evidence was unnecessary, and counsel took some time to consider whether it should be led. I did not wish to shut out any evidence at that stage, not knowing clearly what it would be about, but I offered to take a note, if both counsel were agreed, that no evidence was necessary and the case should be disposed of on the issues without evidence. Defendant's counsel, however, decided to lead his evidence. Now that it has been led and considered, I cannot say that it was unnecessary or irrelevant.
21. Under the circumstances the suit is dismissed with costs.