T. Kochu Thommen, J.
1. The petitioner is a steamer agent, reprering its foreign principals, Messrs. V/O Sovfracht 2. 'Captain Hornblover' is a vessel operated by the petitioner's principals. She carried a bulk cargo of oil and discharged at Cochin 4144.478 metric tonnes. The Collector of Customs, the 1st respondent, by Ext. PI order dated 11-7-1969 found that there was a shortage of 101.321 metric tonnes of high speed diesel oil which ought to have been delivered at Cochin and that the petitioner representing its principals Was liable to pay a penalty of Rs. 62,353.29 under Section 116 of the Customs Act, 1962. This order was confirmed in appeal by the 2nd respondent by Ext. P2 order dated 15-4-1975, and, ject to a reduction of the penalty to Rs. 20,000/-, by the 3rd respondent by Ext. P4 order dated 18-11-1976. These orders are challenged by the petitioner.
2. Counsel for the petitioner, Shri Pathrose Mathai, submits that the impugned orders are invalid in so far as the authorities have failed to take into account certain relevant facts. Counsel points out that the total cargo mentioned in the bill of lading is an approximate quantity. The bill of Jading states : 'Say 10,329,911 kilos of High Speed Diesel Oil'. This quantity, counsel states, is not exact, and a reasonable margin should have been allowed to take into account the quantity liable to be lost for reasons such as evaporation, loss during discharge, etc.
3. The penalty is imposed under Section 116 of the Customs Act, which fe&ds; as follows:
'116. Penalty for not accounting for goods.-If any goods loaded in a conveyance for importation into India, or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload Or the deficiency is not accounted for to the satisfaction of the Assistant Collector of Customs, the person in charge of the conveyance shall be liable,-
(a) in the case of goods loaded in a conveyance for importation to India or goods transhipped under the provisions of this Act, to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported ;
(b) in the case of coastal goods, to a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported'. The Section imposes a strict liability upon the person incharge of the conveyance. He has to account for the shortage to the satisfaction of the Customs authorities.
4. Shri Pathrose Mathai refers to the decision of the Supreme Court in Hindustan Steel Limited v. State of Orissa-A.I.R. 1970 S.C. 253 and submits that in the absence of any evidence to show that the carrier acted 'deliberately in defiance of law, or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation,' the Customs authorities are not justified in imposing a penalty under Section 116.
5. The question which arose in A.I.R. 1970 S.C. 253 was whether the persons in charge of the affairs of a Company bona fide and justifiably believed that the Company was not a dealer. If their belief was honest and reasonable, the assessing authority was not justified in imposing penalty upon them for the failure of the Company to register itself as a dealer. The liability to pay penalty for failure to register oneself as a dealer arises only when one had no reasonable grounds to honestly believe that one was not a dealer.
6. Those considerations may not be applicable to cases governed by Section 116 of the Customs Act, which imposes a strict liability upon the person in charge of a vessel to pay penalty unless he is able to satisfactorily account for the shortlanded cargo. The liability arises when there is failure on his part to account for the shortage to the satisfaction of the Customs authority. The satisfaction of the officer is an objective satisfaction for he acts in a quasijudicial capacity when he imposes the penalty. If he unreasonably or irrationally or capriously fails to satisfy himself, notwithstanding resonable explanations rendered by the carrier, the penalty under the section cannot be validly imposed. On the other hand, if the order imposing penalty is reasonably based on a rational consideration of the relevant circumstances, this Court will not interfere with it in proceedings under Article 226 of the Constitution. The question really is, has the officer misunderstood or misapplied the law or failed to take into account matters which he ought to have done or has taken into account matters which he ought not to have done.
7. I am not satisfied that the impugned orders suffer from any such infirmity. The authorities took note of various facts. The quantity discharged at Kandla which was the earlier port of call was taken into account. The quantity which was liable to be lost for various reasons was given credit for by allowing 1.3 per cent reduction. Furthermore, the 3rd respondent, to cover the possibility of any excessive leakage, reduced the penalty imposed by the Customs Collector to Rs. 20,000/-. Thus the authorities had taken into account all the relevant facts and circumstances.
8. Shri Pathrose Mathai points out that Section 116 is not attracted unless the consignee himself has a case of short landing. In considering the question of penalty under Section 116, the satisfaction of the consignee, in my view, is of little relevance. The object of the provision is to prevent loss of revenue to the nation. The fact that the consignee or the consignor has no case that the goods were short landed does not impede the authorities from looking behind the satisfaction of the persons involved in the contract of carriage to determine for themselves as to whether any fraud has been played on the public revenue by the carrier either by himself or in cooperation with others. In the circumstances the penalty imposed upon the petitioner in its capacity as a steamer agent is perfectly valid in terms Section 116 read with Section 148 of the Customs Act. I see no reason to interfere with the impugned orders.
9. The O. P. is dismissed. The parties will, however, bear their respective costs.