Madras High Court
The Board Of Trustees Of The Port Of ... vs Shaw Wallace And Company Ltd. And G.B. ... on 6 December, 2007
Author: S. Tamilvanan
Bench: S. Tamilvanan
JUDGMENT S. Tamilvanan, J.
1. This appeal has been preferred against the judgment and decree dated 29.11.1991 made in O.S. No. 1228 of 1990 on the file of the learned VII Assistant Judge, City Civil Court, Chennai.
2. The brief facts of the case are as follows::
It is not in dispute that the first respondent herein/first defendant was a Steamer agent of the ship viz., "Indian Goodwill", which arrived at the Madras Port on 17.03.1986. A consignment of "One Steal Flat" under mark "GOEL STEEL CO MADRAS" was landed against line No. 101 of the manifest. The second respondent herein/second defendant was the consignee of the imported goods and carrying on business at Chennai.
3. It is seen that the appellant herein/plaintiff had given notice to both the respondents for clearance of the consignment. It is also not in dispute that even after receipt of the notice, the second respondent/second defendant, the consignee did not take steps to clear the goods from the Madras Port Trust. Hence, an application was made to the customs for the sale of the goods under Sections 61 and 62 of the Major Port Trusts Act. The first respondent/first defendant, the Steamer agent has sent his reply disputing that the liability to pay the demurrage charges on the ground that it had been the duty of the second respondent being the consignee to clear the goods as per law from the Port Trust premises. As there was no response from the second respondent, it is seen that the appellant/plaintiff caused the consignment to be listed for the auction held on 25.09.1986. As it could not be sold on that day subsequently, it was sold in the private offer on 23.12.1986 as lot No. 1526/86 and a sum of Rs. 1,18,100/- was realised.
4. As per the claim of the appellant/plaintiff, the Port Trust had rendered services from 25.03.1986, the date of expiry of free days upto 23.12.1986, the date on which the consignment was sold and accordingly, the appellant/plaintiff had claimed Rs. 42,533/- with interest and costs against the respondents 1 and 2 towards demurrage charges.
5. In support of the appellant's contention, the shed Master of the appellant-Port Trust was examined as P.W.1. Another official of the Port Trust was examined as P.W.2, apart from marking the documents Exs.A.1 to A.24. On the side of the respondents, no witness was examined and no document was marked.
6. The Trial Court considering the oral and documentary evidence and also the arguments advanced by both the learned Counsel, held that the second respondent being the consignee alone is responsible to pay the demurrage charges as claimed by the appellant/plaintiff and accordingly, the suit was decreed only as against the second respondent and the suit against the first respondent was dismissed by the Court below. Aggrieved by which, this appeal has been preferred by the Appellant-Port Trust, plaintiff in the suit.
7. Against the judgment and decree passed by the Court below, the second respondent/second defendant has not preferred any appeal or cross appeal.
8. Mr. K. Bijai Sundar, the learned Counsel appearing for the first respondent submitted that being the consignee of the imported goods, the second respondent alone is liable to pay the demurrage charges to the appellant-Port Trust. The first respondent being the steamer agent of the ship need not pay any demurrage charges to the appellant-Port Trust. In support of his contention, the learned Counsel also relied on the following decisions viz., 1) (Board of Trustees of the Port of Madras v. Southern Shipping Corporation Private Ltd., Madras and Anr.) 2) (the Board of Trustees of the Port of Bombay v. Sriyanesh Knitters), 3) AIR 1998 SC 92 (Sun Export Corporation v. Board of Trustees of the Port of Bombay) and unreported judgments of this Court in A.S. No. 70 of 1994 dated 01.02.2007 and A.S. No. 298 of 1995, dated 06.08.2007.
9. Mr. R.G. Rajan, learned Counsel appearing for the appellant/plaintiff has not disputed the fact that the second respondent herein was the consignee of the imported goods and the first respondent herein was only the steamer agent of the ship.
10. The learned Counsel relied on the decision of the Hon'ble Supreme Court (the Board of Trustees of the Port of Bombay v. Sriyanesh Knitters), wherein it has been held as follows:
Section 2(o) contains the definition of "owner". In relation to goods the said section states that the word "owner" includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods. By referring to this sub-section this Court in Sun Export Corporation v. Board of Trustees of the Port of Bombay AIR 1998 SC 92 held that in the case of imports the liability to pay demurrage, on the endorsement being made on he bill of lading, would be that of the consignee. This is in consonance with the provisions of the Bills of Lading Act, 1856. The preamble of this Act provides that by the custom of merchants a bill of lading of goods being transferable by endorsement, the property in the goods may thereby pass to the endorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner and, therefore, it is expedient that such rights should pass with a property, Section 1 of the Bills of Lading Act provides that rights under bills of lading vest in the consignee or endorsee and reads as under:
1. Rights under bills of lading to vest in consignee or endorsee. - Every consignee of goods named in a bill of lading and every endorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.
11. In the aforesaid judgment, the Hon'ble Supreme Court has further held that The High Court was not right in holding that the contract was between the ship-owner and the Port Trust. The correct position is that the contract is between the Port Trust and the holder of the bill of lading which, in this case, would be the consignee. It is the consignee which is the bailor with the Port Trust being the consignee (sic bailee).
As per this decision, it is clear that the contract is between the Madras Port Trust and the holder of the bill of lading, the consignee/the second respondent herein. In fact the second respondent being the consignee is the bailor and the Port Trust, the appellant is the bailee and further, the consignee of the goods named in the bill of lading for the purpose, under the Port Trust Act.
12. The learned Counsel relied on the decision of the Hon'ble Supreme Court (The Board of Trustees of the Port of Bombay and Ors. v. Sriyanesh Knitters), wherein, it has been held as follows:
25. Section 2(o) contains the definition of "owner". In relation to goods the said section states that the word "owner" includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods. By referring to this sub-section this Court in Sun Export Corporation v. Board of Trustees of the Port of Bombay ) held that in the case of imports the liability to pay demurrage, on the endorsement being made on he bill of lading, would be that of the consignee. This is in consonance with the provisions of the Bills of Lading Act, 1856. The preamble of this Act provides that by custom of merchants a bill of lading of goods being transferable by endorsement, the property in the goods may thereby pass to the endorsee, but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner and, therefore, it is expedient that such rights should pass with a property. Section 1 of the Bills of Lading Act provides that rights under bills of lading vest in the consignee or endorsee and reads as under:
1. Rights under bills of lading to vest in consignee or endorsee. - Every consignee of goods named in a bill of lading and every endorsee of a bill of lading to whom the property in the goods herein mentioned shall pass, upon or by reason of such consignment or endorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.
The provisions of Section 2(o) of the MPT Act regards, in relation to goods, the consignee as the owner thereof. Reading the same along with the Bills of Lading Act the consignee of the goods named in the bill of lading or every endorsee of the bill of lading, for the purpose of MPT Act is regarded as the owner of the goods and it is from that owner that the appellant is entitled to recover charges under the MPT Act in respect of the said goods. The High Court was not right in holding that the contract was between the ship owner and the Port Trust. The correct position is that the contract is between the Port Trust and the holder of the bill of lading which, in this case, would be the consignee. It is the consignee which is the bailor with the Port Trust being the consignee.
13. As per Section 151 of the Indian Contract Act, 1872, in all cases of bailment, the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and values as the goods bailed.
14. Therefore, the contract is between the Port Trust, the appellant herein and the consignee, holder of the bill of lading, who is the second respondent in this appeal. The consignee is the bailor and the Port Trust is the bailee. The second respondent being the consignee of the goods was bound to clear the goods from the Port Trust premises by producing the bill of lading and after having adopted all legal formalities that are required for clearing the goods from the premises of the appellant, Port Trust whereas, the first respondent is only the steamer agent of the ship, who is nothing to do with the clearance of the imported goods kept in the premises of the Port Trust and therefore, only the second respondent, the consignee of the goods is liable to pay demurrage charges, being the owner of the goods as held by the Hon'ble Supreme Court in a decision and also as per the decision of this Court .
15. In the light of the above decisions rendered by the Hon'ble Supreme Court and this Court on the facts and circumstances, I am of the view that there is no error or infirmity in the impugned judgment passed by the Court below, which would warrant interference of this Court.
16. In the result, confirming the judgment and decree passed by the Trial Court, this appeal is dismissed. However, there is no order as to costs.