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State cannot act in a Shylockian manner and squeeze money from its citizens: Kerala HC [READ JUDGMENT]

State cannot act in a Shylockian manner and squeeze money from its citizens: Kerala HC [READ JUDGMENT]
The Kerala High Court bench comprising of Justice N. Nagaresh on Tuesday ( February 3, 2021) stated that “The State and its authorities could not act in a Shylockian manner and squeeze money from its citizens” while observing State’s failure to return the money paid twice for a certain due by the Petitioners in the case of M/s. Seahorse Ship Agencies Pvt. Ltd. Vs. Union of India & Ors.


The petitioner who was a shipping Agent of the vessel M. V. Cape Chronos, was seeking an intervention from the Court in order to obtain a refund for a payment made twice by them for certain ‘light dues’ to the Director General of Lighthouses and Lightships (DGLL). 

According to the agent, an online payment was made on the first attempt, but the web portal failed to generate a receipt and so the petitioner believed that the first payment made was not successful. The Petitioner manually paid the amount in the second attempt believing that the first online payment was not successful. On the following day the Petitioner received a receipt confirming the online payment. The Petitioner had made duplicate payments in 2016 but efforts to recover the same were made in 2018 and so the DGLL refused to refund the amount as it was beyond the period of limitation. Hence the Petition filed a writ petition to recover the amount Of 6,33,144 rupees paid twice by them.


The counsel for the petitioner submitted that the dual payment made by the petitioner cannot be treated as excess payment as contemplated under Section 9 of the Lighthouse Act, 1927. Therefore, statutory limitation for claiming excess payment would not be applicable to the case. According to the petitioner, the payment made by them was not excess payment. The claim of the petitioner is for reimbursement of “Amount paid twice.” 

The respondents are therefore compellable to make repayment of the amount inadvertently paid by the petitioner.


The respondents argued that they petitioners had made an excess payment and that they were barred by the law of limitation from asking for a refund of their money.

According to the respondent, the Director General of Lighthouses and Lightships does not have any role on the subject and stated that the petitioner is not legally entitled to any relief.


The Court distinguished an excess payment from a double payment of light dues. The HC explained that Light dues were collected from shipping companies/agents when ships entered a certain port for the maintenance of lighthouses along the coast. The dues paid related to the tonnage of the ship, which shipping companies/agents were expected to accurately measure.

The Bench emphasized that the petitioner’s payment was only a dual or duplicate payment, a result of the web portal’s failure to generate a receipt when the payment was paid online. Therefore, it could not be subject to the limitation for applying for the recovery of excess payments under S.19 of the Lighthouse Act, 1927.


“If Section 19 does not apply to the dual payment made by the petitioner, then there is no question of a period of limitation under the Customs Act for making an application for refund of the dual payment,” the bench stated.


The Court further stated that the amount towards light dues was properly remitted by the petitioner, and the only reason for the duplicate payment was a system failure. Therefore, the State could not hold on to the amount, the court concluded.

The State could not hold on toerroneous, forced or inadvertent payments by bringing in the defence of limitationhighlighting which the writ petition was allowed.




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