Port Cannot Enrich Itself from an Illegal Auction: Bombay High Court Orders Refund of Sale Proceeds to Foreign Firm After 30-Year Legal Battle

“When Document and Its Contents Are Admitted, No Further Proof Is Required”, In a significant ruling that blends commercial justice with procedural clarity, the Bombay High Court delivered judgment in a long-pending civil dispute over ownership of auctioned imported goods, directing the Board of Trustees of the Port of Bombay to refund the sale proceeds to UK-based company Seal International Ltd., along with interest. The Court found that the Port Trust had illegally auctioned the consignment in 1994, and having done so, could not claim any right over the proceeds.

Justice Jitendra Jain, allowing the appeal filed by Seal International, set aside the City Civil Court’s 2013 judgment, which had dismissed the plaintiff’s claim on the sole ground that ownership was not proved.

“The retention of sale proceeds by the Port Trust after an illegal auction is not only contrary to the statutory framework of the Major Port Trusts Act but amounts to unjust enrichment,” the Court held.

“Admissions Made Under Order XII of CPC Have Consequences – A Party Cannot Later Dispute What It Has Chosen to Admit”

The pivotal legal issue in the case concerned whether a document admitted by a party along with its contents—in this case, a letter from the plaintiff’s advocate asserting ownership—required formal proof during trial. The Port Trust had sought to argue that despite the plaintiff admitting the document, the Court was still bound to demand further proof.

Rejecting that contention, Justice Jain clarified:

“When a document and its contents are expressly admitted under Order XII Rule 2, and the Court does not invoke the proviso to Rule 2-A, the document stands proved. The party calling for admission is estopped from later denying its contents.”

The Court emphasised that Order XII of the Code of Civil Procedure was designed to streamline trials and avoid unnecessary duplication of issues already conceded by the parties. The document in question—a letter dated 5 September 1994 from the plaintiff’s advocate to the Port Trust—was admitted in entirety, including its contents, during evidence recorded on 4 August 2006.

“No objection was raised at the time of admission. There is no scope now for the Port Trust to dispute the plaintiff’s ownership recorded in that letter,” the Court held.

The Court relied on Section 58 of the Indian Evidence Act, reiterating that facts admitted during trial or by writing need no further proof, unless the Court specifically exercises its discretion to call for such proof—and no such direction had been issued

“Ownership Proven on Preponderance of Probabilities – No Other Claimant Has Emerged in 30 Years”

The Trial Court had previously rejected the plaintiff’s claim solely on the ground that the goods were shipped under the trade name “M/s Blackwell Enterprises” and not in the name of Seal International Ltd. The Port Trust had seized upon this distinction to argue that the plaintiff had not proved legal ownership.

However, the High Court took a holistic view of the evidence and background:

“The plaintiff explained, through its Managing Director, that ‘Blackwell Enterprises’ was a trading name used for business in India. There is no rival claimant even after three decades. The inference of ownership is inescapable on the test of preponderance of probabilities.”

The Court relied on the evidence of Mr. Andrew David, Managing Director of Seal International, who testified that the company had routinely used the trade name “M/s Blackwell Enterprises” to conduct its textile business in India. The involvement of their agents, consistent correspondence, and absence of any third-party claim further supported the ownership claim.

“Why would any stranger challenge the auction sale unless such person had an interest? The plaintiff’s challenge to the auction was accepted. That itself affirms their standing,” Justice Jain observed.

“Illegal Sale Invokes No Right – Section 63 of Major Port Trusts Act Inapplicable Without Lawful Auction”

The Port Trust had invoked Section 63 of the Major Port Trusts Act, 1963, claiming that since the goods were unclaimed, the proceeds lawfully vested in the Port. However, the Court found this untenable.

“Section 63 applies only to valid and lawful sales under Sections 61 and 62. Here, the auction was declared illegal. Therefore, the proceeds must go back to the rightful owner.”

The finding of the Trial Court that the auction violated statutory provisions had remained unchallenged, and was binding. In light of that, the Port Trust could not retain proceeds under the pretext of statutory entitlement. Instead, the Court labelled such retention as “unjust enrichment.”

Refund Ordered with Modified Interest and Partial Adjustments

While the plaintiff had claimed interest at 18% p.a., the Court held that there was no evidence to support this rate and awarded 6% p.a. interest from the date of the suit until the date of deposit.

It was also noted that the Port Trust had deposited ₹11,60,729 in compliance with an earlier High Court order. No interest was payable on this amount after that date. For the balance amount, the Court examined work sheets showing certain auction-related expenses and allowed recovery of ₹2,96,187 along with interest at 6% per annum.

“The plaintiff is entitled to ₹11,60,729/- already deposited along with interest accrued thereon, and ₹2,96,187/- for disallowed charges. However, customs duty paid by the Port cannot be recovered by the plaintiff since it was not contested in cross-examination.”

“Admissions Must Be Respected – Law Cannot Permit Parties to Play Fast and Loose with Procedure”

One of the most consequential legal observations in the judgment is the Court’s clarification on the effect of admitted documents, especially in commercial civil trials:

“The party that called upon the plaintiff to admit the document cannot later argue that ownership was not proved when the document and its contents were admitted without objection.”

The Court sharply distinguished its facts from those in Hiren P. Doshi v. State of Maharashtra, where the contents of the document had not been admitted, and therefore required proof. In contrast, the present case involved express admission of both the document and its contents.

“The doctrine of estoppel applies when a party acts upon a position and later seeks to disown it. That’s exactly what the Port attempted here,” the Court noted.

Judgment Concludes Decades-Long Dispute with Procedural Clarity and Substantive Justice

This case, dating back to 1994, when Seal International’s goods were illegally auctioned by the Port of Bombay, has finally reached its conclusion. The Bombay High Court not only restored the appellant’s rights but also offered much-needed clarity on the evidentiary weight of admissions, the interplay between Order XII CPC and Section 58 of the Evidence Act, and how ownership can be established in commercial disputes.

“The case stands as a reminder that technical objections cannot override admitted facts, and that courts must balance procedural rigour with commercial common sense,” the judgment implicitly conveys.

Date of Decision: 9 February 2026