Bombay High Court
Nkd Maritime Ltd vs The Board Of Trustees Of The Port Of ... on 12 February, 2021
Equivalent citations: AIRONLINE 2021 BOM 2347
Author: S.C. Gupte
Bench: S.C. Gupte, Surendra P. Tavade
sat 65. comapl 1577-2021.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL APPEAL (L) NO. 1577 OF 2021
IN
INTERIM APPLICATION (L) NO. 6531 OF 2020
IN
SHERIFF'S REPORT NO. 53 OF 2020
IN
COMMERCIAL ADMIRALTY SUIT (L) NO. 3579 OF 2020
The Board of Trustees of the Port of Mumbai ...Appellant
vs.
M/s.NKD Maritime Ltd. & Ors. ...Respondents
ALONG WITH
CROSS OBJECTION (L) NO. 2057 OF 2021
IN
COMMERCIAL APPEAL (L) NO. 1577 OF 2021
IN
INTERIM APPLICATION (L) NO. 6531 OF 2020
IN
SHERIFF'S REPORT NO. 53 OF 2020
IN
COMMERCIAL ADMIRALTY SUIT (L) NO. 3579 OF 2020
NKD Maritime Ltd. ...Cross objector
In the matter between
The Board of Trustees of the Port of Mumbai ...Appellant
vs.
M/s.NKD Maritime Ltd. & Ors. ...Respondents
Mr.Umesh Shetty with Ajai Fernandes and Sneha B. Pandey i/b. Motiwalla
& Co. for Appellant.
Mr.Prathamesh Kamat with Vikrant Shetty i/b. Gurdeep Singh Sachar for
Respondent No.1.
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sat 65. comapl 1577-2021.doc
CORAM : S.C. GUPTE &
SURENDRA P. TAVADE, JJ.
DATE : 12 FEBRUARY 2021
ORAL ORDER (Per S.C. GUPTE, J.) :
This commercial appeal challenges an order passed by a learned Single Judge of this court on an interim application in a Sheriff's report filed in a commercial admiralty suit. The controversy concerns the bill of charges raised by the Appellant herein (original defendant No.2 and Respondent No.2 in the interim application), who is the Board of Trustees of the Port of Mumbai, for port dues and anchorage charges against Respondent No.1 herein (original Applicant), who is an auction purchaser of the defendant vessel. The parties to this appeal are hereinafter referred to by their nomenclature in the interim application out of which the present appeal arises.
2 The defendant vessel arrived within the port and harbour of Mumbai and was docked at Y1 anchorage on 23 March 2020. After 2 June 2020, it was shifted to Port Lighterage Anchorage and then, from 13 June 2020 onwards, it was at V1/Y anchorage. It remained at this anchorage by the time the vessel, originally arrested on the orders of the Admiralty Court, was ordered to be sold. The Applicant was the successful auction purchaser. The defendant vessel was sold on "as is where is" basis, but free of all encumbrances to the Applicant on 9 November 2020. The Applicant took its delivery on 11 November 2020 and caused the vessel to sail out on 20 November 2020. For the period between the date of delivery of its possession and till it sailed out (i.e. for 11 days), Respondent No.2 (MbPT) raised a bill inter alia for port dues and anchorage charges. The Applicant, 2/8 sat 65. comapl 1577-2021.doc being dissatisfied with the quantum of the charges, prayed for issuance of a rectified bill. In particular reference to the anchorage charges, it was the Applicant's case that the vessel was at the anchorage during the time of the Applicant's ownership only for a period of 11 days and for which MbPT could only have charged a rate applicable upto 30 days and not the rate applicable beyond 30 days. The learned Single Judge ordered rectification of the bill as claimed by the Applicant.
3 Briefly, the controversy may be stated thus : In exercise of powers under Sections 48, 49 and 50 of the Major Port Trusts Act, 1963, Tariff Authority for Major Ports has issued a notification notifying inter alia scale of rates for major ports. Clause 2.15 of this notification provides for a schedule of anchorage fees. Any vessel or self propelled barge, except lash barge or dumb barge, remaining at any anchorage point shown in this schedule attracts anchorage fees in accordance with the rate shown in it. For anchorage point V1/Y, with which we are concerned in the present case, the rate per GRT (Gross Registered Tonnage) per hour or part thereof for a foreign going vessel is 0.0047 USD from first day onwards and upto 30 days. If the vessel is docked at such anchorage point for more than 30 days, the applicable rate beyond the 30 th day is 0.0118 USD. In this case, the vessel was at V1/Y anchorage with effect from 13 June 2020. More than 30 days had already elapsed, since it was brought to this anchorage, by the time the vessel was sold under orders of this court and purchased by the Applicant under bill of sale dated 9 November 2020. At the time of its sale, the vessel was already paying anchorage fees at the rate applicable beyond 30th day. MbPT, accordingly, charged the Applicant for anchorage at the rate of 0.0118 USD per GRT, which was the applicable rate beyond 30 th day. The Applicant disputes the rate applied on the ground that the vessel 3/8 sat 65. comapl 1577-2021.doc was at the concerned anchorage point at its instance only between 11 November 2020, when it obtained its possession and 20 November 2020 it caused the vessel to sail out of anchorage. MbPT, on the other hand, claims that the vessel being at the anchorage point for over 30 days, the applicable rate was the rate beyond 30th day, i.e. 0.0118 USD per GRT, and it is that rate which they have claimed in the bill raised on the Applicant. The learned Single Judge was called upon to decide which was the correct rate applicable for anchorage of the vessel as between 11 November 2020 and 20 November 2020. He ruled in favour of the rate applicable for upto 30 days.
4 It is submitted by the Applicant, relying on Section 8 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 ("Admiralty Act"), that on the date of its sale to the Applicant by this court in exercise of its admiralty jurisdiction, the vessel vested free from all encumbrances, liens, attachments, registered mortgages and charges of the same nature on the vessel. Learned Counsel for the Applicant submits that the charge beyond 30th day of anchorage is in the nature of a penalty; it is attracted by reason of prior docking of the vessel at the anchorage point. Learned Counsel submits that the penal rate beyond 30 th day is, thus, in the nature of an encumbrance, of which the Applicant must be spared by reason of Section 8 of the Admiralty Act.
5 The argument has no merit. It is quite far fetched to suggest that prior anchorage of the vessel under sale and the rate that it attracts as a result of such prior anchorage, are in the nature of encumbrance for the purposes of anchorage fees to be applied after the date of bill of sale and till the vessel sails at the instance of the purchaser. It is rather a matter 4/8 sat 65. comapl 1577-2021.doc pertaining to the condition of the vessel. When the vessel was sold under orders of the court, its condition included its having been docked at the particular anchorage point. The purchaser took the vessel on "as is where is" basis, that is to say, with this condition. If as a result of such condition, namely, its having been docked at the particular anchorage point for more than 30 days, the vessel attracts a particular rate under the scale of rates fixed by the Tariff authority, it is for the purchaser to pick up the tab. By no means, this can be described as an encumbrance on the vessel. It is only the charges which accrued for anchorage of the vessel till the date of bill of the sale and the lien created in favour of MbPT as a result of such charges, which are in the nature of an encumbrance. And that encumbrance is not what is sought to be enforced here against the purchaser. What MbPT is recovering from the purchaser is charges accruing from anchorage of the vessel after the date of bill of sale and delivery of its possession unto the purchaser. If as a result of the vessel being docked at a particular anchorage point for over 30 days at the point of its sale, a particular rate is attracted for further anchorage, such rate is a concomitant of the vessel's condition rather than its encumbrance. Section 8 of the Admiralty Act, thus, has no application here.
6 As the Supreme Court has clarified in the case of The Trustees of the Port of Madras vs. M/s. Aminchand Prarelal 1, anyone desiring to have the benefit of the Board's services in behalf of cranage or storage as specified in Clauses (c) and (d) of Section 42 is liable to pay for such services at the prescribed rates. These rates are in the nature of a contract between the Board and the user of these services. It is immaterial whether the services are, from the point of view of the user optional in the sense 1 (1976) 3 SCC 167 5/8 sat 65. comapl 1577-2021.doc that he may or may not require them or that he has no option except to avail himself of them. If these services are not paid for, the Board may exercise its statutory lien on the goods subject to such services themselves and enforce it. Even if the purchaser, in the present case, can be said to have been driven to make use of the Board's services with effect from the date of bill of sale inasmuch as it was not at his instance that the vessel was docked at the particular anchorage point, he would nevertheless have to pay for the services of anchorage offered by the Board and such payment would have to be at a rate fixed under the scale of rates by the Tariff authority for such services.
7 The learned Single Judge, in his impugned order, has proceeded on the basis of Section 8 of the Admiralty Act for ordering rectification of the bill of anchorage fees. As we have demonstrated above, Section 8 has indeed no role to pay in the matter of anchorage fees payable after the date of bill of sale. The impugned order, accordingly, cannot be sustained so far as it relates to ordering of rectification of anchorage charges.
8 The Applicant in the present case has filed a cross objection. The cross objection involves two submissions. Firstly, it is submitted that anchorage charges are subsumed within the expression "port dues" under Section 50-B of the Major Port Trusts Act. Under Section 50-B, when a vessel enters a port but does not discharge or take in any cargo or passengers, she is charged with port dues at a rate to be determined by the Authority, which, in any event, should not exceed half the rate with which she otherwise would be chargeable. Under this provision, it is submitted, MbPT could not have charged more than half the rate under the scale of 6/8 sat 65. comapl 1577-2021.doc rates for anchorage charges. Relying on Section 50-B, learned Counsel submits that port dues not having been defined under the Act, all charges payable within the premises of the port should be subsumed within the broad expression "port dues". Whether port dues within the meaning of Section 50-B of the Major Port Trusts Act include other charges leviable within the port premises (i.e. charges other than port entry charges) is beside the point. What we are concerned with in the present case is the scale of rates fixed by the Tariff Authority for use of services within the port premises, and that scale separately provides for port dues, which are a one time charge payable upon entry into port, in Clause 2.16 of the notification, whereas anchorage fees are separately provided for lying of the vessel at or alongside any particular anchorage point within the port premises, in Clause 2.15 of the notification. Dealings between parties as also pleadings respectively filed by them also indicate the same understanding on the part of both stakeholders; both MbPT and Applicant have understood port dues and anchorage fees as separate charges governed by separate individual clauses of the Tariff notification.
9 The second aspect of the cross-objection concerns pilotage charges, which is an insignificant part of the total bill raised by MbPT with the purchaser. The impugned order does not find any reference to pilotage charges. It is, however, submitted that the order provides for liberty reserved unto the Applicant to raise an issue concerning these charges in case an appeal is filed by MbPT challenging the impugned order. It is submitted that such liberty includes leave to file cross objection about pilotage charges. The liberty reserved for cross objection of the Applicant concerns the issue of charging of half anchorage fees under Section 50-B of the Act; there is no indication that any liberty was reserved on the issue 7/8 sat 65. comapl 1577-2021.doc concerning pilotage charges. We, therefore, find no merit even in this aspect of the cross objection.
10 Accordingly, the commercial appeal is allowed by quashing and setting aside the impugned order of the learned Single Judge. The amount deposited by the Applicant as a condition of interim relief in its favour may now be withdrawn by MbPT. Such withdrawal, however, shall not be made for a period of four weeks from today. The cross objection is dismissed. Costs to be costs in the cause.
(SURENDRA P. TAVADE, J.) (S.C. GUPTE, J.)
Digitally
signed by
Sanskruti Sanskruti A.
Thakur
A. Date:
Thakur 2021.02.25
13:27:07
+0530
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