Calcutta High Court
The Board Of Trustees vs India Trident Maritime (Pvt.) Ltd. & Ors on 30 June, 2016
Equivalent citations: AIR 2017 (NOC) 480 (CAL.)
Author: Arijit Banerjee
Bench: Manjula Chellur, Arijit Banerjee
In The High Court At Calcutta
Civil Appellate Jurisdiction
In Appeal From Its Constitutional Writ Jurisdiction
Original Side
APO 36 of 2016
GA 3796 of 2014
With
OCOT 10 of 2014
WP 1936 of 1995
The Board of Trustees, For the Port of Calcutta & Ors.
-Vs.-
India Trident Maritime (Pvt.) Ltd. & Ors.
Before : The Hon'ble The Chief Justice Dr. Manjula
Chellur
&
The Hon'ble Justice Arijit Banerjee
For the Appellant : Mr. S. K. Roychowdhury, Sr. Adv.
Ms. Kum Kum Das (Dutt), Adv.
For the Respondent : Mr. Pradip Kumar Ghose, Sr. Adv.
Mr. S. K. Das, Adv.
Mr. S. Dasgupta, Adv.
Mr. T. K. Sen, Adv.
Heard On : 18.03.2016 & 22.03.2016
CAV On : 22.03.2016
Judgment On : 30.06.2016
Arijit Banerjee, J.:
(1) This appeal is directed against the judgment and order dated 25 June, 2014 passed by the Learned First Court, whereby WP No. 1936 of 1995 was disposed of. The question that arises for determination is as to what extent the Kolkata Port Trust (in short 'KPT') is entitled to recover demurrage charges from the respondent no. 1/writ petitioner in respect of containers in which poppy seed was imported by the respondent company from Karachi to Kolkata on route to Nepal. The respondent no. 1 has also filed a cross-objection against the judgment and order under challenge.
Facts of the Case:-
(2) Between July, 1994 and September, 1994 the writ petitioner, Indian Trident Maritime (P) Ltd. (in short 'ITM') as steamer agent brought 125 containers of 20 feet length loaded with poppy seed from Karachi to Kolkata by ship and the same were landed at the Kolkata Port in transit to Nepal. The consignee of the cargo was resident in Nepal.
(3) By reason of delay on the part of the consignee to take delivery of the cargo, ITM's containers remained blocked causing commercial loss and inconvenience to ITM. Accordingly, ITM wrote a letter dated 8 September, 1994 to the Customs Authorities requesting them to allow ITM to destuff the containers and store the cargo in the port sheds or any other place as directed by the Customs Authorities. This was followed by a letter dated 24 September, 1994 written by ITM requesting the Customs Authorities to keep the cargo in their custody and release the containers.
(4) In the first week of January, 1995, ITM sought KPT's permission to destuff the containers. By a letter dated 14 January, 1995, KPT advised ITM to obtain 'No Objection' from the Customs Authorities for allowing destuffing of the containers in the docks. (5) By a letter dated 2 March, 1995, The Additional Collector of Customs intimated ITM that the Customs Authorities had no objection to the containers being destuffed provided suitable shed was allocated by KPT and the cargo was secured consignment wise. (6) By a letter dated 13 March, 1995, ITM requested KPT to allot suitable shed within the port area for destuffing of the containers. (7) BY a letter dated 16 March, 1995, KPT permitted ITM to destuff 5 containers for the time being at 13 Netaji Subhas Docks. (8) By a letter dated 29 March, 1995 KPT requested M/s. Nepal Transit and Warehousing Co. Ltd. (in short 'NTW') to allow destuffing of containers at the portion of the KPD shed which was under the control of NTW as destuffing of the containers at the KPD sheds was blocking valuable transit space and hampering smooth operation in the docks. This was followed by a letter dated 4 April, 1995 written by ITM to NTW making a similar request.
(9) By a letter dated 11 August, 1995 ITM informed NTW that 37 containers had been destuffed in the KPD shed but KPT could not accept any further cargo due to lack of space. ITM requested NTW to allow destuffing of the remaining containers in the Nepal transit shed. (10) By a letter dated 22 August, 1995 ITM informed KPT that it was in constant touch with the NTW officials for their permission to destuff the remaining containers in the Nepal transit shed but till such permission was granted, KPT should accept some of the cargo in its sheds.
(11) In November, 1995 ITM filed WP No. 1936 of 1995 before the Ld. Single Judge praying for a direction on the KPT and the Customs Authorities to release 78 containers belonging to ITM upon allocating suitable space for storage of the cargo contained therein and for refund of the ground rent debited by KPT to ITM's marine account. (12) By a judgment and order dated 12 February, 1996 Altamas Kabir, J. (as His Lordship then was) allowed the writ application without calling for affidavits and directed the KPT and the Customs Authorities to allow the petitioners to destuff the cargo in the 78 containers and to allow the petitioners to remove the containers for their use. The court reserved liberty to the KPT to take recourse to the provisions of Sections 61 and 62 of the Major Port Trusts Act, 1963 in respect of the cargo of poppy seeds or to take such other steps as they may be entitled to in law to recover their rents and rates in respect thereof from the persons liable to pay the same. KPT was also directed to refund to the petitioners the ground rent debited from their marine A/c. No. 1-33 (13) On an appeal preferred by KPT against the said judgment and order, by an interim order dated 19 February, 1996 the operation of the order appealed against was stayed.
(14) On 28 March 1996 an order was passed by the Appel Court directing the writ petitioners to deposit Rs. 5.5 lacs and an indemnity bond for Rs. 8.5 lacs with KPT. Further, Central Warehousing Corporation (in short 'CWC') was directed to allow destuffing of 78 containers at their premises at the cost of the writ petitioners. (15) By a judgment and order dated 4 December, 1996 the Appeal Court disposed of the appeal by remanding back the matter to the Ld. First Court for being heard on affidavits. ITM was directed to deposit a further sum of Rs. 14 lacs with its Advocate on record as security for demurrage charges. KPT was directed to destuff the containers in question within 15 days at its own cost at the first instance subject to the outcome of the order to be passed at the final hearing of the writ petition. ITM was directed to arrange for removal of the destuffed cargo from the port premises at its own cost subject to the final decision in the writ application. The destuffed cargo was directed to be kept in customs or other bonded warehouse for a period of one month. The Customs Authorities were granted liberty to recover the charges for keeping the cargo in their warehouse by sale of the cargo.
If the goods were not claimed within four weeks from the same being stored in the warehouse the Customs Authorities were granted liberty to dispose of the same. It was further recorded by the Appeal Court that the parties had agreed that the writ petitioner would not be made liable for any claim that any of the Authorities may have against the owner of the destuffed cargo in question.
(16) On 16 December, 1996, ITM's Advocate on record wrote to the Advocate on record for the Customs Authorities that as per the order dated 4 December, 1996, the Customs Authorities were to inform ITM about the godown where the goods would be kept but no such intimation had been sent to ITM. By a letter dated 17 December, 1996, ITM's Advocates informed the Customs Authorities that the Advocates of KPT had informed ITM that destuffing of the containers would be made on and from 20 December, 1996 and unless the godown was specified by the Customs Authorities, ITM would be unable to remove the goods from the port premises after destuffing all the containers.
(17) A letter dated 20 December, 1996, was issued by the Customs Authorities stating that in terms of the order of the Division Bench, space for storage of the destuffed goods was available at CWC, Howrah.
(18) Destuffing of the containers was commenced by KPT on 20 December, 1996.
(19) By a letter dated 21 December, 1996 ITM's Advocates informed KPT's Advocates and the Advocate for the Customs that the poppy seeds that ITM removed from the Port premises were not accepted by the CWC godown.
(20) The matter was brought to the notice of the Appeal Court. The Appeal Court by an order dated 23 December, 1996 recorded that the Customs had committed contempt of Court by not complying with the order dated 4 December, 1996. However, time for destuffing the containers was extended by a period of 24 hours and the Customs Authorities were directed to comply with the order dated 4 December, 1996 and to ensure that the goods were warehoused within 24 hours. (21) By a letter dated 24 December, 1996 the Customs Authorities informed ITM's Advocate that space for storage of the goods had been arranged in the three customs bonded warehouses in the West Bengal State Warehousing Corporation.
(22) By an order dated 24 December, 1996, the Appeal Court extended the time for destuffing of the containers till 3 January, 1997. Subsequently, by an order dated 8 January, 1997 the Appeal Court extended the time fixed by the earlier orders by four weeks. (23) Between 23 December, 1996 and 17 February, 1997, 78 containers were removed by the writ petitioners from the port premises after destuffing the same.
(24) According to KPT, a sum of Rs. 49,30,140/- plus interest is due and payable by the writ petitioner to KPT on account of demurrage charges for the containers after giving credit to Rs. 22,92,912/- already realized up to 14 August, 1995. Additionally, a sum of Rs. 6,84,849.80 is payable to the KPT on account of costs of destuffing of 78 containers in terms of the order of the Division Bench. (25) The writ petition was ultimately disposed of by the judgment and order dated 25 June, 2014 which is impugned in the present appeal, the operative portion whereof is as follows:-
"The position that emerges on the facts in this case is the Port Authority should have sold the goods within two months from 12th February, 1996 being the date of the said earlier order wherein the submissions made on behalf of the Customs were recorded, that their detention of the goods had been set aside by this court upon being challenged. The Port Authority having had collected demurrage charges from the petitioners by debiting their marine account till then, had two months therefrom to sell the goods or in any event cause the 78 containers to be released thereafter. At least it was not brought to the notice of this court that any sum on account of demurrage charges was outstanding as had not been debited to the petitioners' marine account for the period prior to filing of the writ petition. The period beyond in which the goods were kept in the containers requiring them to be detained was at the instance of the Port Authority when it had no lien and demurrage charges for that period cannot be fastened on the petitioners.
The petitioners having admitted their liability to pay de-stuffing charges to the tune of Rs.6,84,849.80/- on account of cost of de-stuffing 78 containers in terms of the said order dated 4th December, 1996, there will be a direction upon the learned Advocate on record of the petitioners to pay the said sum to the Port Authority alongwith demurrage charges payable in respect of 78 containers for a period of two months commencing on and after 12th February,1996, at the relevant prescribed rate out of the proceeds of the short term fixed deposit kept renewed from time to time which the said learned Advocate on record will encash. The said learned Advocate will also work out the ratio of the aggregate amount to be paid as directed above in relation to the principal sum of Rs.14 lakhs deposited and pay to the Kolkata Port Trust the proportionate amount out of the total interest accrued on the said principal sum kept deposited by applying the said ratio.
The writ petition is disposed of with the above directions."
Contention of the KPT:-
(26) Appearing on behalf of the KPT, Mr. S. K. Roychowdhury, Learned Sr. Advocate submitted that the Learned Single Judge erred in preventing KPT from releasing its statutory dues specially when KPT was not at fault in discharging its statutory duties under the Major Port Trusts Act, 1963 (in short 'MPT Act'). He submitted that under the provisions of the MPT Act, the KPT is entitled to realize rents and/or demurrage charges in respect of the goods including containers that are landed in its premises until the same are removed therefrom. (27) Learned Sr. Counsel then submitted that KPT exercised lien over the containers for recovery of its claim on account of demurrage charges in respect of the containers and not the cargo inside the containers. No claim was ever raised by KPT in respect of the cargo inside the containers. The claim of KPT was on account of demurrage charges in respect of the containers. ITM being the owner of the containers, it is liable for such rent/demurrage charges. (28) Mr. Roychowdhury then submitted that the decisions in the cases of Trustees of The Port of Madras-vs.-K.P.V. Sheikh Mohd. Rawther & Co. Pvt. Ltd., (1997) 10 SCC 285, Om Shankar Biyani-vs.-Board of Trustees, Port of Calcutta, (2002) 3 SCC 168 and Natvar Parekh Industries Ltd.-vs.-Board of Trustees for the Port of Calcutta, (2008) 1 CHN 198 were wrongly relied upon by the Learned Single Judge in passing the impugned judgment and order. Those cases have no manner of application to the facts of the present case. Those cases related to recovery of demurrage charges in respect of the cargo and not in respect of the containers carrying such cargo. (29) Learned Counsel then submitted that the Learned Judge completely misconstrued Sections 61 and 62 of the MPT Act and erred in holding that KPT should have sold the cargo within two months from 12 February, 1996 being the date of the order passed by Altamas Kabir, J. (as His Lordship then was).
(30) Mr. Roychowdhury referred to the Supreme Court decision in the case of Om Shankar Biyani (supra). He referred to paragraph 17 of the judgment wherein the Hon'ble Apex Court observed as follows:-
"17. Statutorily the 1st Respondent is entitled to claim payment of all demurrage charges before the goods were cleared. The Appellants never offered to pay the demurrage charges. They sought to misuse the Order of the Court and take the goods out of the custody of the 1st Respondent without payment of their charges. The 1st Respondent was fully justified in refusing to allow such clearance. The Appellate Court was right in concluding that the 1st Respondent was entitled to recover all charges till the date the goods remained with it."
(31) Mr. Roychowdhury then referred to a Supreme Court decision in the case of Forbes Forbes Campbell & Co. Ltd.-vs.-Board of Trustees, Port of Bombay, AIR 2015 SC 1150, wherein at paragraphs 10 and 11 of the judgment the Hon'ble Apex Court, inter alia, observed as follows:-
"10. While it is correct that the liability to pay demurrage charges and port rent is statutory, in the absence of any specific bar under the statute, such liability can reasonably fall on a Steamer Agent if on a construction of the provisions of the Act such a conclusion can be reached. Determination of the aforesaid question really does not hinge on the meaning of the expression "Owner" as appearing in Section 2(o) of the Act of 1963, as has been sought to be urged on behalf of the appellant though going by the language of Section 2(o) and the other provisions of the Act especially Section 42, an owner would include a ship owner or his agent. Otherwise it is difficult to reconcile how custody of the goods for the purpose of rendering services under Section 42 can be entrusted to the Port Trust authority by the owner as provided therein under Section 42(2). At that stage the goods may still be in the custody of the ship owner under a separate bailment with the shipper or the consignor, as may be. Even de hors the above question the liability to pay demurrage charges and port rent would accrue to the account of the Steamer Agent if a contract of bailment between the Steamer Agent and the Port Trust authority can be held to come into existence under Section 42(2) read with Section 43(1)(ii) of the Act of 1963. For the reasons already indicated the decision in Sriyanesh Knitters (supra) with regard to existence of a relationship of bailor and bailee between the consignee and the Port Trust authority instead of the Steamer Agent and the Port Trust authority cannot be understood to be a restatement of a general principle of law but a mere conclusion reached in the facts of the case where the consignee had already appeared in the scene. In all other situations where the bill of lading has not been endorsed or delivery orders have not been issued and therefore the consignee is yet to surface, the following observations of the Constitution Bench in K.P.V. Sheik Mohamed Rowther & Co. and Others (supra) will have to prevail.
"Section 40 speaks of the responsibility of the Board for the loss, destruction or deterioration of the goods of which it has taken charge as a bailee under Ss. 151, 152 and 161 of the Indian Contract Act. Section 148 of the Contract Act states that a bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the bailor and the person to whom they are delivered is called the bailee. It is clear therefore that when the Board takes charge of the goods from the ship-owner, the ship-owner is the bailor and the Board is the bailee, and the Board's responsibility for the goods thereafter is that of a bailee. The Board does not get the goods from the consignee. It cannot be the bailee of the consignee. It can be the agent of the consignee only if so appointed, which is not alleged to be the case, and even if the Board be an agent, then its liability would be as an agent and not as a bailee. The provisions of Ss. 39 and 40, therefore, further support the contention that the Board takes charge of the goods on behalf of the ship- owner and not on behalf of the consignee, and whatever services it performs at the time of the landing of the goods or on their removal thereafter, are services rendered to the ship."
11. From the above, the position of law which appears to emerge is that once the bill of lading is endorsed or the delivery order is issued it is the consignee or endorsee who would be liable to pay the demurrage charges and other dues of the Port Trust authority. In all other situations the contract of bailment is one between the Steamer Agent (bailor) and the Port Trust Authority (bailee) giving rise to the liability of the Steamer Agent for such charges till such time that the bill of lading is endorsed or delivery order is issued by the Steamer Agent."
(32) Finally Mr. Roychowdhury referred to the Supreme Court decision in the case of International Airports Authority of India-vs.-Grand Slam International, (1995) 3 SCC 151, wherein at paragraph 32 of the judgment the Hon'ble Apex Court after referring to its earlier decisions held that the Board of Trustees of a port was, under the statute that created it, entitled to charge demurrage even in respect of period during which the importer was unable to clear goods from its premises for no fault or negligence on his part. The Hon'ble Court further held that the Boards were entitled to charge demurrage even in respect of periods during which the importer was unable to clear the goods because of the detention thereof by the Customs Authorities or the authorities under the Import Trade Control Regulations, which detentions were thereafter found to be unjustified. (33) Relying on the aforesaid submissions Mr. Roychowdhury prayed for setting aside of the order of the Learned Single Judge. Contention of ITM:-
(34) Appearing on behalf of ITM, Mr. Pradip Kumar Ghosh, Ld. Sr. Counsel submitted that upon delivery order being issued by ITM as the Steamer Agent in September, 1994 and upon endorsement of the bill of lading in favour of the clearing agent, the steamer agent had no further liability in respect of the cargo in question. On the extent and nature of obligation of the steamer agents, Ld. Counsel relied on the Supreme Court decision in the case of Trustees of The Port of Madras-
vs.-K.P.V. Sheikh Mohd. Rawther & Co. Pvt. Ltd. (supra). In that case, the question was whether the demurrage charges, harbour dues etc. payable to the Port Trust of Madras were to be recovered from the consignee of the goods or from the steamer agent. The High Court held that it was the consignee who was liable to pay the charges. The Hon'ble Supreme Court affirmed the reasoning and the judgment of the High Court. It was held that once the goods are handed over to the Port Trust by the steamer and the steamer agents have duly endorsed the bill of lading or issued the delivery order, the obligation to deliver the goods personally to the owner or the endorsee comes to an end. The subsequent detention of the goods by the Port Trusts as a result of the intervention by the Customs Authorities cannot be said to be on behalf of or for the benefit of the steamer agents. Generally, if there is a delay in taking delivery of the goods by the consignee within a reasonable time, the steamer or its agent can warehouse the goods. In such an event the warehouseman has an independent claim against the consignee or endorsee for the demurrage charges. The position of the Port Trust is the same as that of a warehouseman whose responsibility to the goods is also said to be that of a bailee. It cannot be said that the steamer agents have undertaken any responsibility for the custody of the goods after the transit has come to an end and after the bill of lading has been endorsed or a delivery order issued. By the endorsement of the bill of lading or the issuance of a delivery order by the steamer agents, the property of the goods vests in the consignee or the endorsee and the steamer or the steamer agents are not responsible for the custody of the goods after the property in the goods passes to the consignee or the endorsee. The steamer which had entered into a contract of carriage of goods for a reward cannot be said to have undertaken the responsibility of safeguarding the goods or keeping them at their risk till the goods are actually cleared from the Customs and taken delivery of by the consignee. That will be imposing a too erroneous and unexpected responsibility on the steamer which is only a carrier. If they are submitted to such a responsibility, in most cases where the goods are detained without delivery in the hands of the Port Trust at the instance of the customs, the steamer or steamer agents have to pay a storage or demurrage charge which would be quite disproportionate to the freight they collect for the carriage of the goods. No carrier will undertake such a risk and responsibility. The provisions of the Port Trusts Act cannot be so construed as to impose an additional liability or obligation on the carrier which was not contemplated by the contract it had entered into with the shipper. Having regard to the functions and obligations which a steamer has undertaken with the shipper under the contract, it cannot be said that the steamer has undertaken the responsibility for the safety of the goods till the goods are cleared by the Customs and taken delivery of by the consignee.
(35) Mr. Ghosh, Learned Counsel, also relied on the decision of the Hon'ble Supreme Court in the case of Forbes Forbes Campbell & Co. Ltd. (supra) and in particular on paragraph 11 of the said judgment which has been extracted above.
(36) Learned Counsel further submitted that the Division Bench order dated 4 December, 1996 directed the KPT to bear the costs of destuffing of the containers at the first instance which will be subject to the outcome at the final hearing of the writ application. Learned Single Judge erroneously directed ITM to pay to KPT the destuffing charges amounting to Rs. 6,84,848/- without deciding the liability of the writ petitioner. Further, Learned Judge failed to take into consideration the Division Bench order regarding the agreement between the parties that the writ petitioners cannot and will not be made liable for any claim that any of the Authorities may have against the owner of the destuffed cargo in question.
(37) Mr. Ghosh finally submitted that the Learned Single Judge failed to appreciate the true import and effect of the judgment of the Hon'ble Apex Court in the case of K.P.V. Sheikh Mohd. Rowther (supra) and fell in error in directing ITM to pay the costs of destuffing of Rs. 6,84,848/- and detention charges of 78 containers amounting to Rs. 22,92,912/- although KPT had agreed that ITM shall not be liable to pay any charge which is payable by the cargo owner. ITM did not voluntarily pay the detention charges of the 78 containers to KPT. On the contrary, ITM claimed refund of the said amount in the writ petition which was illegally debited to the marine A/c. of ITM. (38) On the basis of the aforesaid submission Mr. Ghosh prayed that the appeal be dismissed and the cross-objection be allowed. Our View:-
(39) Two questions fall for determination in this appeal. Firstly, what is the extent of the right of KPT to recover rent, harbour charges, etc. in respect of goods unloaded and stored in the port premises?
Secondly, what is the extent of liability of a carrier or steamer agent in respect of the rent and other port charges that may be incurred in connection with stowing of goods in port premises? (40) It is not in dispute that ITM is not the owner of the poppy seeds that were imported from Karachi to Kolkata in transit to Nepal. ITM is admittedly the steamer agent and handling contractors of the writ petitioner no. 2 in India. The writ petitioner no. 2 is a ship owner and owner of the containers in which the consignment of poppy seeds was imported. Between 24 July, 1994 and 28 August, 1994 a total of 125 containers, each 20 feet long reached the port of Kolkata and were unloaded from the vessel onto the port premises. It is also an admitted fact that the consignee of the goods abandoned the goods. Since the containers belonging to the writ petitioner no. 2 were stuck at the port of Kolkata, the writ petitioner no. 1 entered into regular correspondence with the port and customs authorities seeking permission to de-stuff the containers on the port premises so that the empty containers could be put back into circulation in the business of carriage of goods. The details of the correspondence exchanged between the parties have been recorded above. It will be seen from the said correspondence that the containers were ultimately removed by the writ petitioners from the port premises between 23 December, 1996 and 17 February, 1997. The KPT debited the Marine A/c. of the writ petitioner no. 1 to the tune of Rs. 22,92,912/- for the period up to 14 August, 1995 on account of rent in respect of the containers that were stacked in the port premises. Additionally, KPT claims that a sum of Rs. 49,30,140/- plus interest is payable by the writ petitioner no. 1 to KPT on account of ground rent for the containers. Further, a sum of Rs. 6,84,849.80 is claimed by KPT on account of cost of de- stuffing 78 containers. The question is whether is KPT is entitled to recover the said sums from the writ petitioner no. 1? (41) It is settled law that the liability of a carrier is not unlimited. In the case of carriage of goods by ship, the duty of the carrier and of the steamer agent comes to an end once the goods are off-loaded from the ship at the destination port, delivery order is issued and the bill of lading is endorsed in favour of the consignee or its agent. From the point of time when the bill of lading is endorsed in favour of the consignee, it is he who is liable for the port charges incurred on account of storing of the goods in the port premises. Under a contract of carriage by sea which is evidenced by the bill of lading, the obligation of the steamer/carrier or its agent is limited to carrying the cargo in question to the port of discharge, unload the cargo, endorse the bill of lading and issue delivery order in favour of the consignee or his agent. Once this is done, the carrier or its agent stands discharged of his obligations. If the delivery of the cargo is not taken by the consignee or his agent thereafter, the rent/demurrage in respect of the cargo must be to the account of the consignee. To make the carrier or his agent liable for the rent/demurrage payable to the Port Trust even after endorsement of the bill of lading and issuance of delivery order would be imposing too onerous a burden on them and the same is not contemplated under the contract of carriage. If the cargo is kept on the port premises for an indefinite period of time, for no fault on the part of the carrier or his agent, in that event, making them liable for payment of the rent/demurrage would be unjust, unfair and inequitable. In the case of K. P. V. Sheikh Mohd. Rawther & Co. Pvt. Ltd (supra), the Hon'ble Apex Court clearly held that once the carrier/steamer agent endorsed the bill of lading or issued the delivery order, it is the consignee who would be liable to pay the port dues. Prior to endorsement of such bill of lading or issuance of delivery order, the position in law is that there would be a contract of bailment between the steamer agent (bailor) and the port trust (bailee) giving rise to the liability of the steamer agent for the port charges. However, such liability ceases as soon as the bill of lading is endorsed or the delivery order is issued. The aforesaid decision of the Hon'ble Supreme Court was followed by it in the subsequent case of Forbes Forbes Campbell & Co. Ltd (supra).
(42) In view of the aforesaid being the legal position, we have to hold that the ITM was not liable for the port charges incurred for storing the cargo in question on port premises after the issuance of the delivery order or endorsing the bill of lading. Further, it would appear from the correspondence exchanged between the parties that ITM was running from pillar to post to persuade KPT to allow de-stuffing of the cargo from the containers on port premises. It was lack of diligence in the matter on the part of the KPT that forced ITM to approach this Court in its writ jurisdiction. The genesis of the litigation is clearly traceable and attributable to the indolence and inaction on the part of the KPT. There was no lack of effort or action on the part of ITM. Naturally, ITM could not remove the containers without de-stuffing the same as the cargo in the containers did not belong to ITM. The delay in de-stuffing the containers cannot in any manner be attributable to ITM. Hence, in our opinion, KPT was not entitled to debit the Marine A/c. of ITM to the tune of Rs. 22 lakhs approximately nor is it entitled to claim or recover from ITM any further sum as mentioned above. The liability of the de-stuffing charges amounting to Rs. 6.84 lakhs approximately can also not be imposed on ITM since the obligation of de-stuffing the containers is on the consignee or its agent. (43) The question then arises is what happens to the claim of KPT? In our considered opinion, KPT has to look towards the consignee of the cargo in question for recovering its dues. It is not disputed that under the Major Port Trusts Act, the port trust authorities are entitled to frame scale of rates regarding the port rent, harbour charges, wharfage etc. and the port authorities have a statutory right to recover the same from the person liable to pay the same. In the facts of this case, the person liable is the consignee. Hence, the remedy of KPT is against the consignee.
(44) What happens if the consignee disappears from the scene, abandons the consignment in question or evinces no intention to clear the goods after clearing the port charges? In such situations the Port Authority's claim is protected and secured by Sections 59, 61 and 62 of the MPT Act. Section 59 recognizes a statutory lien of the KPT on any goods which may have been placed on any port premises for the amount of all rates leviable under the Act in respect of the goods and for the rent due to the port authorities. Such lien of the port authorities have priority over all other liens and claims except for general average and ship owner's lien on the said goods for freight and other charges.
Section 61 of the Act provides that the port authorities may, after the expiry of two months from the time when any goods have passed into its custody or in case of perishable goods, after the expiry of such shorter period not being less than 24 hours after the landing of the goods as the Board may think fit, sell by public auction or if necessary, by private agreement or in any other manner such goods or portion thereof for recovering the rates and rent payable to the Board. The procedure to be followed in such case is detailed in other sub- Sections of Section 61.
Section 62 of the Act provides that where any goods placed in the custody of the Board upon the landing thereof are not removed by the owner or other person entitled thereto from the port premises within one month, the Board may call upon the owner of the goods or the person entitled to the goods to remove the goods from the port premises and in default of such removal, the port authorities may sell the goods by public auction or by private agreement or in any other manner. In case of perishable goods, notice of removal may be served even prior to expiry of one month.
(45) It will be seen from the above discussion that any claim of the port authorities on account of rent or rates or other port charges has been protected by the MPT Act. The port authorities have a statutory lien over the goods which are stored on its premises for the unpaid rent/rates and in exercise of such lien the authorities may sell the goods to recover their dues.
(46) In the instant case, the port authorities could have exercised their statutory rights under Sections 61 and 62 of the MPT Act. However, they did not do so. They slept over their rights. Considering that the consignment in question was perishable in nature, the KPT ought to have acted diligently and with some sense of urgency. If the cargo in question has become unfit for consumption or for any other use and as such is of nil value as of date, it is the KPT who is responsible for the same. By its tardy conduct, KPT has allowed the cargo over which it has statutory lien, to become completely useless and valueless waste products.
(47) It was sought to be argued on behalf of the KPT that ITM is liable for the rent or demurrage charges in respect of the containers. We are unable to accept such argument. It was not that ITM failed, neglected or refused to remove the containers from the port premises. It was not possible for them to remove the containers without first de- stuffing them. Had the Port Authorities been diligent in granting permission to ITM to empty the containers, it would have been a different story altogether. It was only through intervention of this Court that the balance 78 containers could be de-stuffed in February, 1997. We would have understood if empty containers belonging to the writ petitioner no. 2 were stacked on port premises. In that case no doubt, the writ petitioners would have been liable for rent/rates. However, that is not the case here.
Further, we having held that the writ petitioners are not liable for any port charges once the bill of lading was endorsed or delivery order was issued, it would be preposterous to hold that the port authorities have a claim against the containers belonging to the writ petitioner no. 2.
It is also pertinent to note that in the order dated 4 December, 1996, the Appeal Court recorded the agreement of the parties that any of the Authorities would not make the writ petitioner liable for any claim they may have against the owner of the de-stuffed cargo. The only conceivable claim that the KPT could have against the owner of the cargo is on account of port charges by way of rent/demurrage. KPT expressly gave up all claims on that account against the writ petitioner as recorded by the Appeal Court. For that reason also KPT cannot recover the rent/demurrage or any other port charges in respect of the consignment in question from the writ petitioners for the period subsequent to endorsement of the bill of lading and/or issuance of delivery order by ITM in favour of the consignee. (48) In view of the aforesaid, we hold that any debit entry made by KPT in ITM's Marine A/c held with it on account of rent/demurrage charges for the period subsequent to endorsement of bill of lading and/or issuance of delivery order by ITM in favour of the consignee, is not sustainable in law and must be reversed. ITM is liable for rent/demurrage charges only up to the date of endorsement of bill of lading and/or issuance of delivery order. The sum of Rs. 6,84,849.80 on account of destuffing charges in respect of the 78 containers are not payable by the writ petitioners. The writ petitioners are at liberty to withdraw the sum of Rs. 14 lakhs deposited with their Advocate on record as per the earlier order of the Division Bench, along with interest accrued thereon. The KPT is at liberty to proceed against the consignee of the goods in question or against the cargo in question for recovery of its dues in accordance with law.
(49) The appeal and the cross-objection both are disposed of accordingly, without, any order as to costs.
(50) Urgent certified photocopy of this judgment and order, if applied, for be given to the parties upon compliance of necessary formalities.
I agree.
(Manjula Chellur, CJ.) (Arijit Banerjee, J.) Later: Stay of operation of the order is prayed for, but the same is rejected. (Manjula Chellur, CJ.) (Arijit Banerjee, J.)