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[Cites 17, Cited by 0]

Madras High Court

Exclusive Marine Inc vs The Board Of Trustees Of on 21 April, 2008

Author: P.Jyothimani

Bench: P.Jyothimani

       

  

  

 
 
 IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 21.04.2008

CORAM;

THE HONOURABLE MR. JUSTICE P.JYOTHIMANI

W.P.Nos.33899 and 37348 of 2007 and connected M.Ps.


WP. No. 33899 of 2007

Exclusive Marine Inc.,
Trust Company Complex,
Ajeltake Island, Majuro,
Marshall Island, MH 96960
rep. by its Power of Attorney Agent
Bijesh Thomas, No.B-6 Satheyam Homes,
Jeganathapuram 2nd New Street,
Chetpet, Chennai.31.						..Petitioner

-Vs-

The Board of Trustees of
 Port of Chennai Having
its Administrative Office,
At Rajaji Salai, Chennai 600 001
rep. by its Chairman						..Respondent


WP. No. 37348 of 2007:-

M/s. Olam International Limited,
No. 9 Temasek Bouleward,
11-02, Suntee Tower Two,
Singapore, 038989 rep. by
its Manager Mr. S. Umesh,
No. F 33, Spring Blossom,
Anna Nagar East, Chennai.102. 				     .. Petitioner 



-Vs-

1. Chennai Port Trust,
   rep. by its Chairman,
   having his office at 
   Port Trust, Chennai-1.

2. The Traffic Manager,
   Chennai Port Trust,
   Chennai-1. 							.. Respondents

	Writ Petition in W.P. No.33899 of 2007 is filed under Article 226 of the Constitution of India for the issuance of writ of Certiorarified Mandamus  calling for the records of the respondent culminating in the communication dated 22.10.2007 bearing No. S2/1166/2007/M addressed to the Power of Attorney Agent of the Petitioner, quash the same and forbear them from demanding or recovering Additional Berth Hire Charges or any other penal charges in respect of the Vessel m.v.SIN GIORGIO I Consequently direct the respondent their men, servants and agents to permit the petitioner to operate the vessel m.v. Sain Giorgio I in any manner they choose including by selling the said vessel or sail her out of Chennai after collecting Berth Hire Charges at the normal rate without insisting upon payment of Additional Berth Hire Charges or any other charges of penal nature. 

	Writ Petition in W.P. No. 37348 of 2007 is filed under Article 226 of the Constitution of India for the issuance of writ of Certiorarified Mandamus  calling for the records of the first respondent  insofar as it pertains to the proceedings of the first respondent in his reference No.S2/1166/2007/M dated 18.5.2007 and quash the said order and direct the respondents to release the entire Cargo comprising of 12,800 Cubic Meters of Transport longs, discharged from the Vessel M/s. M.V.San Georgio and kept in the Chennai Port to the petitioner forthwith without any precondition any damages, rent, Berth Charges or claim towards demurrage.

	     For petitioner 
	     in WP No.33899/2007   	: Mr.S.Raghunathan

	     For petitioner 
             in WP No.37348/2007   	: Mr.J.Raja Kalifullah

	     For respondents 
             in both Wps. 		  	: Mr.P.Wilson 
						  Asst. Solicitor General of India 
.....
					
C O M M O N  O R D E R

While the writ petitioner, in WP No. 33899 of 2007, is the owner of the ship called Vessel m.v. San Giorgio 1", the writ petitioner in WP No. 37348 of 2007 is the owner of the cargo comprising 12800 Cubic meters of timber logs stated to have been discharged from the Vessel M/s. M.V. San Giorgio and kept in the Chennai Port.

2. According to the owner of the ship represented through his power agent, the petitioner is a company registered in Marshall Island and the vessel is now lying in Chennai Port under an order of arrest passed by the Bombay High Court. The respondent- Port Trust is a statutory authority created under the Major Port Trusts Act for rendering services like loading and discharging of cargo passing through the Chennai Port in the course of import and export of cargo as well as the various vessels calling at Chennai. The above said Vessel was a time chartered to one Azelie Corporation, Saint Helier, Jersey under a Charter party dated 26.5.2006 and in turn Sub chartered to a company called Olam International Limited, Singapore, which is the petitioner in WP No. 37348 of 2007. There was some dispute between the then owner on the one hand and the Azelie Corporation and Olam International Limited on the other hand. The mortgagee of the Vessel, who had a claim against the vessel, has filed A.S.No. 13 of 2007 in Bombay High Court in which the Bombay High Court passed an order of arrest on 22.3.2007. The petitioner in W.P.No. 37348 of 2007 M/s. Olam International Ltd., joined in the said proceedings and supported the mortgagee. It was consequent to the order of arrest passed in the above said proceedings, the vessel now lying at Chennai Port since March/April 2007. There was an agreement between the Mortgagee of the vessel viz., Bank of Beirut (UD) Ltd., M/s. Olam International Limited and Azelie corporation on 19.6.2007 agreeing to sell the vessel "as is where is" basis and the sale proceeds to be deposited in an interest bearing escrow account and the claims of all the parties would be referred to Arbitration.

3. When the petitioner through its representatives have met the chairman of the Chennai Port Trust, who was also interested in acting as per the agreement, the respondent has informed that Berth Hire Charges in respect of the vessel has been paid fully at the normal rate upto 10th August 2007 and the petitioner was willing to pay such charges for the subsequent period upto the date of sailing of the vessel from Chennai. The petitioner later understood that the respondent apart from collecting the Berth Hire Charges at the regular rate, would also demand additional Berth Hire Charges in the form of penal charge and that the vessel would not be permitted to sail out of Chennai, unless, the Additional Berth Hire Charges were paid. The Additional amount payable on such basis was more than US $ 700,000.

4. The case of the petitioner is that the vessel had to remain in the Chennai Port only pursuant to the orders of the Bombay High Court and the place where the vessel is in berth is of not in regular use and therefore, there was no justification on the part of the respondent in claiming Additional Berth Hire Charges. Since the respondent has not allowed the vessel to sail unless the Additional Berth Charges are paid, the petitioner filed W.P. 28588 of 2007, which was disposed of by this Court on 30.8.2007 directing the petitioner to make a written representation on or before 3.9.2007 regarding waiver of Berth Hire Charges to the Board of Trustees of the respondent and also directing the respondent to consider the same and pass orders. Based on that order, the petitioner made a written representation on 11.9.2007 before the Chairman of the respondent explaining the circumstances under which the vessel is compelled to remain in the Chennai Port requested to give up the claim of Additional Berth Hire Charges and by the time, the petitioner has paid an amount of Rs.51,63,823/- as normal Berth Hire Charges and the claim of the respondent to pay penal Berth Hire Charges at the rate of US $ 330 per hour would be more than 50% of the value of the vessel itself. In addition to the representation of the petitioner, the Receiver of the Mortgagee  M/s. Olam International Limited, Singapore have also represented to the Chairman of the respondent on 11.10.2007 requesting waiver of Additional Berth Hire Charges. The petitioner received on 1.10.2007 a letter dated 29.9.2007 rejecting the request for waiver of Additional Berth Hire Charges without assigning any reason.

5. The petitioner has made a further proposal for settlement without prejudice and in the meantime, the petitioner understood that the respondent is taking steps to bring the vessel for sale by virtue of the power conferred under the provisions of the Major Port Trust Act. The petitioner has also written a letter to the Chairman of the respondent on 11.10.2007 stating that when the proposal for compromise is pending, it is not proper on the part of the respondent to bring the vessel for sale. By letter dated 22.10.2007, the respondent has demanded unconditional payment of Rs.2,55,72,000/- with an undertaking that the petitioner would not dispute the levy of Additional Berth Hire Charges by the respondent on a later date and the petitioner should also furnish an unconditional irrevocable bank guarantee for further claim towards Additional Berth Hire Charges payable up to the date of sailing of the vessel from Chennai. It was only on that payment, the petitioner's request for waiver will be considered.

6. The case of the petitioner is that while rejecting the request for waiver, the respondent has permitted the release of the cargo discharged from the said vessel although a large amount was also claimed towards demurrage charges in respect of the cargo. Therefore, according to the petitioner, the conduct of the respondent in taking two different stand between the owner of the vessel and the cargo is arbitrary. The claim of the respondent  port trust is more than 60% to 70% of the value of the vessel and therefore, admiralty proceedings in the Bombay High Court entered with other claimants by the petitioner will be disturbed. In these circumstances, the petitioner being the owner of the vehicle has filed the present writ petition challenging the communication of the respondent dated 22.10.2007 and forbear the respondent from demanding or recovering Additional berth Hire Charges or any Penal charges in respect of the vessel m.v. Saint Giorgio I and also direct the respondent to permit the petitioner to operate the said Vessel including by selling the vessel or sail her out of Chennai after collecting Berth Hire Charges at the normal rate without insisting upon payment of Additional Berth Hire Charges.

7. The challenge to the impugned order is on various grounds including that it is arbitrary and illegal, that the berth of the vessel in Chennai was due to the order of arrest passed by the Bombay High Court and the place of berth is not used by the respondent  port trust, that in the public interest, the petitioner should be allowed to sail the vessel after paying normal berth hire charges, that the conduct of the respondent being statutory authority is discriminatory taking inconsistent stand with different port users apart from other legal grounds.

8. The respondent  port trust has filed the counter affidavit. While denying the various averments made by the petitioner, it is the case of the respondent  port trust that the writ petitioner in W.P.No. 37348 of 2007 M/s. Olam International Limited approached the respondent to berth the ship and discharge the cargo claiming themselves to be the representative of the vessel carrying cargo of 12800 CBM of timber logs and the owners of the cargo on board and assuring the port trust to pay all the charges and demurrages that would be incurred as a result of the berth of the vessel in the port of Chennai. M/s. Olam International Limited has also executed indemnity bond on 16.4.2007. On the basis of the same, the respondent has allowed to berth the ship. It was later informed to the respondent port trust that the ship was also arrested by the Bombay High Court's order dated 17.4.2007.

9. It is the case of the respondent that earlier, the Bombay High Court issued an order of arrest on 22.3.2007 when the ship was on the way to Tuticorin and subsequently, the ship was brought to Chennai, the writ petitioner in W.P. No. 37348 of 2007 viz., M/s. Olam International Limited has moved Bombay High Court and the Bombay High Court has permitted them from moving the Tuticorin Port authorities for discharge and permitted the port authorities to grant permission in accordance with law with liberty to obtain safeguard. Thereafter, when the vessel had a berth at Chennai Port Trust on 17.4.2007, a warrant was issued by the Bombay High Court for arrest of the vessel. All these facts were not brought to the notice of the Chennai port trust . Since the petitioner has admitted that M/s. Olam International Limited is a sub charterer, the petitioner being the owner, is equally liable along with M/s. Olam International Limited. According to the respondent  Port Trust, the fact of the arrest of the ship was suppressed by M/s. Olam International Limited who is the representative of the petitioner and therefore, the order of the Bombay High Court is not an unexpected contingency and knowing fully well about the same, the ship was brought to Chennai Port Trust. The arrest of the vessel by the Bombay High Court does not take away the statutory duty imposed for recovering the port charges. The vessel related charges including Additional berth Hire Charges payable as on 20.1.2008 is Rs.11,62,23,218/-. When the vessel overstays more than a permitted time, the port trust is entitled to levy Additional Berth Hire Charges for the said overstay which is a statutory levy.

10. It is also the case of the respondent that the vessel is occupying the valuable commercial space but for which, the port trust normally will earn. The purpose of imposing Additional Berth Hire Charges is that the vessel operators/importers/exporters cannot use the space of the Chennai Port Trust as their godown or ware house and the concept of Additional Berth Charges has been approved by the Apex Court. The Additional Berth Charges are levied on the vessel at the rate of 378 US$ per hour or part thereof. It is, as per the Berth Hire Charges of the Trust's scale of rates, payable by the ship if she does not call for pilot for sailing within the period of four hours after completion of discharge of loading. There is no provision for exemption of Additional Berth Hire Charges. A reply was sent by the respondent on 29.9.2007. Only on completion of discharge of cargo on 5.5.2007, it has been shifted from one vacant berth to another. The power agent of the petitioner was informed by letter dated 5.10.2007 that

(i) in order to consider the proposal of the approval of Competent Authority, the owner of the vessel should pay an amount of Rs.2,55,72,000/- (at the rate of Rs.42.62 per doller) in advance without the condition of reserving the right of the owners to dispute the levy of Additional Berth Hire Charges at a later date and for the balance amount payable till the sailing of the vessel, an unconditional irrevocable Bank guarantee valid for a period of six months, extendable for a further period may be given.

(ii) To produce the release orders from the High Court of Bombay and complete the legal formalities;

(iii) Compliance with requirements of the Mercantile Marine Department; and

(iv) Submit valid documents of ownership of the vessel and authority from the Department with regard to the owners.

11. According to the respondent, M/s. Olam International Limited  petitioner in WP No. 37348 of 2007 have agreed to the conditions of port trust to pay the full vessel related charges, vacation of the berth by the vessel soon after completion of unloading the cargo and executed an indemnity bond to that effect also to safeguard the interest of Port. Since the cargo owner has executed the indemnity bond as desired by the Port trust, the Steamer Agent of Olam International Limited viz., M/s. Hari & Co, Chennai remitted a sum of Rs.35 lakhs and thereafter, the vessel was permitted berth at WQ1 at 17.50 hrs. on 17.4.2007 to unload the cargo. The unloading process was started on 19.4.2007 and completed on 5.5.2007 and the entire cargo was discharged on 5.5.2007. A quantity of 621 logs out of 2865 logs was removed by the cargo owner from the port. Since the cargo owner has not adhered to the undertaking given by them, the delivery of cargo to the cargo owner was suspended from 5.5.2007. As against port dues, which works out to 41.17 lakhs, the steamer agent M/s. Hari & co deposited Rs.77.99 lakhs which includes a security deposit of Rs.30 lakhs. According to the respondent, it does not include the additional berth hire charge amount of Rs.3.31 crore as on 1.8.2007.

12. The petitioner in W.P. No. 37348 of 2007 M/s. Olam International Limited filed an application in A.No.6392 of 2007, in this Court to permit them to remove and transport 12800 Cubic Meter of cargo discharged from the vessel without any pre-condition or claim. This Court vide its order dated 11.10.2007 directed the Trust to release the cargo without pre-condition and directed to adjust an amount of Rs.9,57,273/- from the security amount of Rs.30 lakhs. The charges accrued on the cargo is Rs.9.75 crore which is called cargo related charges which includes demurrage and penal demurrage till 22.10.2007 payable by M/s. Olam International Limited. The trust filed an appeal on 22.10.2007 against the single Judge's order dated 11.10.2007.

13. It is the case of the respondent that taking advantage of the order of this Court, M/s. Olam International Limited  writ petitioner in WP No. 37348 of 2007 suggested the Trust to detain the cargo worth Rs.9.75 crore as a security deposit towards the total demurrage payable and release the balance cargo. The said M/s. Olam International Limited has also informed their inability to execute the bank guarantee and in the meantime, the Trust has allowed the cargo to M/s. Olam International Limited from 27.10.2007 by detaining the cargo worth 9.75 crore. According to the respondent, the respondent  Trust has not taken any inconsistent stand. The claim of Additional Berth Hire Charges is not arbitrary.

14. The case of the petitioner in WP No. 37348 of 2007, is that it is the owner of the cargo comprising 12800 CBM of timber logs. They have purchased the cargo from West Africa which was transported under a Charter Party agreement dated 26.5.2006. entered with one M/s. Sandele Navigation Corporation and M/s. Azeile Corporation for carrying the cargo from the port of Overndo to the Port of Tuticorin to be delivered to the consignee. The vessel sailed out on 15.7.2006 and the entire cargo was to be delivered within 30 days at Tuticorin Port. However, M/s. Sandele Navigation Corporation sold the vessel to M/s. Exclusive Marine INC, Ajeltake road, Ajel Islands after the charter party agreement was entered into. When the vessel was on her way to Tuticorin, the vessel developed certain engine problem while in the mid-sea of Indian Ocean. The owners of the Vessel M/s. Sandele Navigation Corporation and subsequent purchaser M/s. Exclusive Marine INC Trust Company abandoned the said vessel and refused to take any steps to either repair the vessel or to bring the vessel to the nearest port. The vessel was towed to Port Victoria at Seychelles for repairs at the instances of the cargo owner  the petitioner in the above writ petition. There was a dispute between the master and crew against the owner of the vessel along with the financier Bank who obtained an order of attachment of the vessel in the Supreme Court of Seychelles. The petitioner filed intervening application in the Supreme Court of Seychelles which by its order dated 5.2.2007 directed the owners of the vessel to carry out the repairs and take steps to sail the vessel to Tuticorin and also directed that in the event of the owners failing to comply with the direction, it is open to the M/s. Azeile Corporation and the petitioner to carry out the repair. The owners did not take any step to get the vessel repaired. The petitioner, who was unable to rectify the defects, towed the vessel to Tuticorin port and thereafter at the instance of the port authorities towed it to Chennai Port. Owners of the vessel filed an application under Section 9 of the Arbitration Act before this Court in A.No. 3637 of 2007 claiming that the petitioners in both the writ petitions have taken the vessel stealthily without the knowledge of the owners and claimed exorbitant amount as damages and also obtained an order of attachment of Cargo in A.No. 561 of 2007 on 23.4.2007. Meanwhile, the Bank of Beirut, the martgagee of the vessel, who had advanced substantial amount on the security of the vessel, filed a suit before the High Court of Mumbai and obtained an order of attachment of the vessel on 22.3.2007. On information about the order, the petitioner moved the Mumbai High Court to permit them to move the Chennai Port Authorities for removal of the cargo. In the meantime, since this Court passed an order of attachment of cargo in A.No. 561 of 2007, the petitioner being the owner of the cargo, has filed the counter affidavit and prayed for raising the attachment order. After hearing the parties on 27.4.2007, the attachment order was raised and thereafter, the petitioner has requested the respondent- Port Trust to discharge the cargo. The port Trust has permitted the petitioner to discharge the cargo from 1.5.2007 and the same was completed on 10.5.2007. When the petitioner was making arrangement for transporting the cargo, the port trust by letter dated 5.5.2007 refused permission claiming that till the vessel is removed, the cargo cannot be removed. The Chennai Port Trust by letter dated 18.5.2007 informed that the vessel gained entry into the port on the written assurance to move the vessel outside the port limit soonafter unloading the cargo, therefore, directed to retain the cargo and both the petitioners are liable to pay demurrage and other related charges.

15. According to the petitioner, the second respondent in WP No. 37348 of 2007  Port trust having received the order of attachment from Bombay High Court and effected the attachment and took custody of the vessel has not imposed the condition to remove the vessel as pre-condition for removing the cargo and the said condition is in contempt of the order of the Bombay High Court. The petitioner in WP No. 37348 of 2007 stated that the respondents under threat of auctioning the cargo have coerced the petitioner to pay Berth charges, even though they are not liable to pay as the vessel is under attachment on orders of Court. In view of the threat, the petitioners are paying Rs.35,000/- every day towards berth charges for the vessel. Both the petitioners have paid Rs.90 lakhs towards berth charges apart from Rs.30 lakhs as security deposit and heavy amounts for unloading the cargo from the vessel. According to the petitioners, the respondents are bound to refund the entire amount with interest. As the cargo was getting deteriorated, the petitioners moved an application in A.No. 6392 of 2007 in O.A.No. 561 of 2007 to permit them to remove the cargo from the Chennai port without any precondition and an orders was passed on 11.10.2007 permitting to remove the cargo after notice to Chennai Port Trust, on certain conditions. Instead of allowing removal as per the order of the Court, the Port Trust has raised a new plea that on 16.4.2007 that when the vessel was berthed in the Chennai Port, the petitioner in WP No. 37348 of 2007 has agreed to remove the vessel before removing the cargo and hence they are bound to remove the vessel and pay vessel related charges before removing the cargo. Since the vessel is under the order of attachment of the Bombay High Court, there is no question of payment of vessel related charges by the petitioner. In the meantime, the Chennai Port Trust has also filed an application before the Bombay High Court claiming demurrage charges and vessel related charges and prayed for sale of vessel and recovery of the amount and the same is pending. After passing of the order dated 11.10.2007 by this Court directing the removal of cargo, the respondents were claiming 9.83 crore towards demurrage or bank guarantee for the said amount. After persuasion, the petitioners were permitted to remove the part of cargo viz., 50% of the cargo till the demurrage amount is paid, inspite of the fact that this Court by and order dated 27.4.2007 has lifted the attachment without any condition. Even after the direction of this Court to the respondents to retain 9.75 lakhs apart from 30 lakhs and permitted the petitioner to remove the cargo, the port trust is denying the same. However, on the filing of a memo by the Chennai port trust, this Court has recalled the earlier order dated 11.10.2007 by subsequent order dated 6.11.2007 holding that the Section 9 application was already disposed and no order can be passed. On an appeal filed against the said order in O.S.A.No. 387 of 2007, the Division Bench of this court ordered notice to Chennai Port Trust and posted the matter on 10.12.2007 and on 12.12.2007. The Division bench concurred with the learned Single Judge order and disposed the appeal giving liberty to the petitioners to move before the appropriate forum. The cargo was loaded in the vessel in July 2006 and even after 18 months, the petitioners are unable to get the cargo valued over Rs.18 crores. According to the petitioners, Chennai Port Trust is not entitled to retain the cargo having permitted the petitioner in WP No. 37348 of 2007 to unload the same. In these circumstances, the writ petition in WP No.37348 of 2007 is filed by the petitioner being the owner of the cargo, challenging the proceedings of the respondents dated 18.5.2007 and also for directing the respondents to release the entire cargo comprising 12800 CBM of transport logs discharged from the vessel M.V.San GEORGIO and kept in the Chennai Port to the petitioner without any precondition any damages, rent, Berth charges or claim towards demurrage.

16. In the counter affidavit filed in the said writ petition, it is the case of the Chennai port trust that a quantity of 621 logs out of total extent of 2865 logs were permitted to be removed by the petitioners. According to the respondents, the petitioner in the letter dated 3.4.2007 has given an undertaking as a representative of the vessel carrying cargo and as the owner of the cargo undertaking to pay all charges/demurrages that would be incurred as a result of the vessel being brought into the port of Chennai. According to the respondents, the petitioner even though is the owner of the cargo, inasmuch as he is a sub charterer, he should be treated as the owner of the vessel and he should also be entitled to pay the entire amount. After giving undertaking and indemnity, the petitioner in WP No. 37348 of 2007 cannot shirk its responsibility. Since the respondents have got a claim over the vessel as well as cargo. The respondent can only make such a claim in respect of the left over cargo and the petitioner is liable to pay demurrage as on 31.12.2007 to the extent of 13,18,86,211/-. Apart from that, the vessel related charges remains to be paid is Rs.11,62,23,218/- as on 20.1.2008 and as per 61 and 62 of the Major Port Trust Act, the port is entitled to dispose of the goods to collect the statutory dues. It is also stated that the port trust magnanimously given allotment of open space measuring 4059.50 sq.mts. at N1 WH for storage of the detained timber logs (1156 pieces) to be kept under security. It is also stated that the port trust invoking section 61 and 62 of the Act decided to sell the goods after two months if the dues are not paid within the time limit. The case of the respondents is that the petitioners cannot take advantage of the order of this Court dated 11.10.2007 which was subsequently recalled on 6.11.2007. The prayer in the writ petition amounts refusal to pay port charges to the extent of 13,18,86,211/- which is statutory levies and is not sustainable in the light of the undertaking dated 3.4.2007 as well as indemnity bond given by the petitioner in WP No. 37348 of 2007.

17. Mr.S.Raghunathan, learned counsel appearing for the petitioner in W.P.No.33899 of 2007 would submit that the petitioner is the owner of the vessel and the vessel containing the cargo was to be discharge at Tuticorin Port. His contention is that due to a snag developed in the ship, it was taken to Tuticorin Port and thereafter, it was taken to Chennai Port. The writ petitioner who is not a party to the agreement dated 18.06.2007, has offered to pay US$ 600,000/- to the Port Trust and in spite of it, the Port Trust has claimed US$ 3,000,000/- and the case of the petitioner is that he is prepared to pay the normal berthing charges, since the ship is berthed in an idol berth. The dispute by the petitioner is only in respect of the claim of the Port Trust regarding Additional Berth Hire Charges. According to the learned counsel as per the Major Port Trust Act, 1963, Section 42 contemplates that when once the consigned goods reaches the Port, it is the duty of the consignor to transfer the goods to the consignee and thereafter the owner's liability comes to an end. His further submission is that even under Section 39 of the Major Port Trust Act, which enables the Port to charge penalty, it has no right to charge additional berthing charges. His further submission is that even assuming that the ship was otherwise under the order of arrest by the Bombay High Court and the order of arrest still continues, the owner of the ship cannot be made liable for any such additional berthing charges. He would also submit that in any event charges claimed by the Port Trust must be in consonance with service rendered and in as much as there is no additional service rendered by the Port Trust, the claim for additional berthing charges is not proper. He would submit that even the place where the ship is berthed is an idol berthing area called Chokani and there is no loss to the Port Trust in retaining the ship in the said particular place. His further submission is that as the ship owner, the petitioner is not liable to pay any demurrage charges. His further submission is that even under Section 53 of the Major Port Trust Act, the Port Trust has got power to grant exemption in respect of rates or charges which should be exercised in a reasonable manner. To substantiate his contention that Port Trust must act in a reasonable manner being a public authority, he would rely upon some of the Judgments including the Judgment in C.S.No.915 of 1993, AIR 1989 Calcutta 212 and another order passed in W.P.No.11747 of 1995 etc. batch and contended that at the most Section 39 can be resorted to and he made it clear that the petitioner may be permitted to pay the normal rates.

18. Mr.J.Raja Kalifullah, learned counsel appearing for the petitioner in W.P.No.37348 of 2007 would submit that the writ petitioner is the owner of the cargo. When snag has developed, the owner has abandoned the ship and the petitioner drove it to Tuticorin Port, since there is no facility in the said said Port, the ship was taken to Chennai Port Trust and in the meantime, as per the order of the Bombay High Court, the ship was arrested and till date the arrest order continues. The petitioner has filed an application under Section 9 of the Arbitration Act, before this Court, for removal of cargo. His further submission is that as the owner of the cargo, in as much as there is no due in respect of the cargo, the petitioner is not liable to pay the berthing charges. The letter of the petitioner given to the Port Trust dated 18.10.2007, is only a temporary arrangement and it cannot be taken as an undertaking. It is his further submission that the indemnity given by the petitioner in 2007 was relating to the vessel and not in respect of the cargo and in the event of any mishap which may happen due to grounding and or damaging any fixed or floating objects or any other Port Trust properties. His further submission is that in any event being the owner of the cargo, the Port Trust has no authority to claim any amount regarding the berthing charges of the vessel from him. It is also his further case that the Bombay High Court has passed order of arrest and the vessel was kept in the Chennai Port Trust for quite a long time which resulted in the cargo of the petitioner being detained in the Port Trust and is likely to be damaged even though it is admitted that the petitioner has removed 1708 cubic meters of timber and balance of 1157 cubic meters of timber is remaining. According to the learned counsel even under Section 64 of the Act, wherein in the event of the Master of the vessel refusing or neglecting to pay the rates or penalties, the power of the Board is only to distrain or arrest the vessel and the tackle, apparel and furniture belonging thereto and that does not enable the Port Trust from distraining the cargo or goods. He would also refer to the order of the Bombay High Court for sale of the vessel and in such circumstances, according to the learned counsel for the petitioner, the claim of the Port Trust against the petitioner for payment of demurrage and other related charges for retaining the ship by the Port Trust is not permissible as per law.

19. On the other hand Mr.P.Wilson, learned Assistant Solicitor General of India appearing for the Port Trust would submit that the writ petitions are not maintainable and there is no cause of action for the writ at all. If the owner of the vessel is aggrieved, he can always make a representation to the Port Trust under Section 53 of the Act for the purpose of exemption. His further submission is that it is not correct to state that the berthing of the ship is in an idol berth place. The impugned communication dated 22.10.2007, has not given any cause of action to the petitioners to approach this Court hurriedly. He would submit that additional berth hire charges calculated is a statutory levy and in such circumstances, the remedy for the petitioner is not by way of filing writ petition under Article 226 of the Constitution of India, since the quantum of levy involves factual assertions and that cannot be decided by this Court while exercising power under Article 226 of the Constitution of India. He would also refer to various documents to show as to how statutory charges are arrived at. According to him, the term owner under Section 2(o) of the Major Port Trust Act, includes even a charterer and in as much as the petitioner in W.P.No.37348 of 2007 is concerned, as the owner of the cargo, admittedly, he has chartered the ship when the ship was abandoned by the owner of the vessel and therefore, being a public authority the Port Trust is entitled to claim from both the writ petitioners.

20. Heard Mr.S.Raghunathan and Mr.J.Raja Kalifullah learned counsel appearing for the respective petitioners and Mr.P.Wilson, learned Assistant Solicitor General of India appearing for the Port Trust and perused the records.

21. Some of the facts which are not in dispute are as follows:

The ship called San Giorgio I which is owned by Exclusive Marine Inc., Trust Company Complex, Ajeltake Island, Majuro, Marshall Island who is the writ petitioner in W.P.No.33899 of 2007, was fixed by M/s. Olam International Limited, the writ petitioner in W.P.No.37348 of 2007 with Azelie Corporation for transportation of 12,800 CBM of Timber logs from West Africa to India on 28.05.2006. Since there was some repair to the ship, there was delay in sailing and the charterer of the ship Azelie Corporation has paid US$ 350,000/- towards wages for crew members. The logs are to be consigned to Tuticorin Port and the delay of arrival of the ship was informed by the ship Captain to the Towing agent. In the meantime, there has been main engine breakdown near Maldives and the vessel was pushed by ocean currents and the ship was drifted towards the Indian Ocean. The owner of the vessel has not informed to the charterer as well as the cargo owner viz., Azelie Corporation and Olam International Ltd., about the breakdown of the ship. Since the vessel owner was unable to pay off the amount to crew in November, 2006 a distress signal was sent out by the crew members as the stock of food, fresh water and diesel was exhausted. The ship had 22 officers and crew members. Since the representative of the owner of the ship visited Singapore in December, 2006 the Olam International the writ petitioner in W.P.No.37348 of 2007 who is the owner of the cargo on humanitarian ground paid US$250,000/- to the distressed vessel to be towed to safety to Port Victoria in Seychelles, even though it was the responsibility of the owner of the vessel who has abdicated his responsibility by abandoning the vessel. It is stated that the representative of the Olam International has also made arrangement for supply of provisions and fresh water on humanitarian grounds. On 01.02.2007, the ship San Giorgio I was arrested by the crew, who have claimed wages, by an order of the the Supreme Court of Seychelles. Thereafter, the Olam International has obtained orders from the Supreme Court of Seychelles to tow the vessel to Tuticorin. This was not objected to by the counsel who has appeared for the owner of the vessel. Therefore, the owner of the vessel was aware of the order of the Supreme Court of Seychelles. The officers and crew were fed up and paid for their repatriation to their respective home-towns by Olam International and in that way Olam International has incurred US$ 150,000/- towards crew's wages, towage charges and port dues. On 07.03.2007, the Supreme Court of Seychelles has lifted the order of arrest of the ship San Giorgio I. It was thereafter, the ship was towed out of Seychelles and the Olam International has incurred large amount to the tune of US$500,000/- to hire a Tug, Simoon to tow the vessel. On 21.03.2007, the ship San Giorgio I arrived outside Tuticorin Port. In the meantime, the Bank of Beirut obtained an order of arrest against the ship at Tuticorin Port from the Bombay High Court for non payment of loan by the owner of the vessel. The said order of the Bombay High Court was on 22.03.2007. Since the engine of the vessel has burnt, Tuticorin Port Authority refused entry to the ship. On 11.04.2007, the ship arrived outside Chennai Port. On 12.04.2007, the Olam International the writ petitioner in W.P.No.37348 of 2007, has requested the Port Trust to permit San Giorgio I to berth and discharge the cargo which has been paid for by various importers in India. On 16.04.2007, Olam Export (India) Ltd agreed to indemnify the Chennai Port Trust against any losses or damages in case of any untoward accident which may be caused by the vessel. On 17.04.2007, the ship was berthed at Chennai Port. The order of the Bombay High Court in arresting the ship at Chennai Port Trust was communicated and at the instance of Olam International the writ petitioner in 37348 of 2007, the Judge ordered that the arrest shall not preclude discharge of cargo.

22. According to the owner of the cargo viz., M/s. Olam International Limited, that once the goods are discharged and cleared from the ship, they have nothing to do with the vessel's obligations. It is the case of the owner of the vessel that Azelie Corporation and Olam International have not given the owner any opportunity to carryout the repairs and have taken control of the vessel on their own and towed it to India. The owner of the vessel obtained order of attachment of cargo and restrained Olam International from going on board of San Giorgio I. On finding that the condition of the ship and equipment are to be sub-standard, Mercantile Marine Department (Directorate General of Shipping) on 25.04.2007 had detained the vessel. The petition filed by the owner of the vessel before this Court was dismissed in April, 2007 permitting delivery of 12,800 CBM of cargo. In the meantime on 05.05.2007, the Port Trust wrote a letter to Olam International not to take delivery of the cargo till the vessel is removed from the Port. Olam International on 08.05.2007, has also served order of arrest through Bombay High Court for recovery of money spent towards repairs, payment of towage charges, crew's wages etc. On 26.07.2007, the Port Trust has refused the request to convert the yard into storage area as the area is in demand. In the meantime, on 24.08.2007, Olam International has urged the Port Trust to take decision on waiver of additional berth charges. On 11.10.2007, this Court has granted permission to Olam International to remove 12,800 CBM without any precondition. However, the said order came to be recalled on 06.11.07, since the Port was not a party in the original application. In the meantime, taking advantage of the original order of this Court dated 11.10.2007, M/s. Olam International has removed certain logs and the Port Trust has refused delivery claiming an amount of Rs.9.57 crores. The Port Trust has also issued notice dated 09.01.2008 to the representative of the Olam International viz., Hari & Co that the cargo is liable to be sold in public auction. On 29.01.2008, the Port Trust has called upon the Olam International to pay Rs.11.63 crores towards Additional Berth Hire charges and other Port dues stating that on 30.01.2008, Port published notice in the Tamil Nadu Government Gazette that the cargo will be sold on public auction on 20.03.2008.

23. The precise point that has to be decided in this case is as to whether the respondent Port Trust is entitled to claim Additional Berth Hire charges in respect of the vessel San Giorgio I and whether such charges or any damages, rent or demurrage can be claimed by the Chennai Port Trust from the petitioner in W.P.No.37348 of 2007 who is the owner of the cargo.

24. It is seen that the petitioner in W.P.No.33899 of 2007 who is the owner of the vessel, through its Power Agent, has made a representation to the Chairman, Chennai Port Trust, Chennai -1 on 05.10.2007 accepting a total amount of US$ 600,000/- towards the Berth Hire charges including Additional / Penal Beth Hire charges. The portion of the said proposal made on behalf of the above said petitioner is as follows:

In such circumstances, I have been instructed by my Principal to inform you that with a view to put a quietus to the whole issue and without prejudice to their right to dispute the liability, the owners of m.v. San Giorgio I are willing to pay the Chennai Port Trust an all inclusive sum of US$ 600,000/- to the Chennai Port Trust towards the Berth Hire Charges including the Additional / Penal Berth Hire Charges and all other charges demanded by / payable to the Port Trust. I am further instructed to inform you that they would be unable to pay anything more.
I would therefore request you to consider the offer to pay the said sum of US$ 600,000/- and convey your acceptance of such offer, as a matter of urgency, as expeditiously as possible and in any event, before close of business hours on Monday, the 8th October 2007. The owners are hopeful that the Board would appreciate their bonafide intention to resolve all the disputes to the satisfaction of everybody concerned and respond positively. Therefore, in effect the petitioner has sought for waiver of Additional Berth Hire charges, since it is not in much dispute that the petitioner as the owner of the vehicle has always been willing to pay the normal berth charges. The said letter has been followed by another letter dated 11.10.2007, informing the Chairman, Chennai Port Trust not to proceed with the sale of the vessel without considering the petitioner's request for waiver of Additional Berth Hire charges as per the letter dated 05.10.2007 and without any notice to the petitioner. It was pursuant to the said proposal given by the petitioner, the Chairman, Chennai Port Trust through the Deputy Conservator has written a reply dated 22.10.07, which is impugned in this writ petition. In the said letter, the petitioner, represented by its Power Agent, was informed to pay an advance amount of Rs.2,55,72,000/- (at the rate of Rs.42.62 per dollar) without reserving the right of the owners to dispute the levy of Additional Berth Hire charges at a later date and for the balance amount the petitioner has been directed under the impugned letter to give an unconditional irrevocable Bank Guarantee valid for a period of six months which is extendable. The said letter also contains another condition that the petitioner should produce the release order from the High Court of Bombay after completing all formalities and also complying with the requirements of the Mercantile Marine Department apart from producing valid documents of the ownership of the vessel and authority to the Power Agent to represent on behalf of the owners of the vessel. It is this letter dated 22.10.2007, which is challenged in this writ petition, of course with a direction to forbear the respondent from recovering Additional Berth Hire charges etc. The question is whether the reply given on behalf of the Chairman, Chennai Port Trust can be the subject matter of challenge under Article 226 of the Constitution of India.

25. Section 53 of the Major Port Trusts Act, 1963 enables the Board in special cases to exempt from the payment of any rate or of any charge leviable or to remit wholly or any portion of such rate. Section 53 of the Act reads as follows:

53. Exemption from, and remission of, rates or charges- A Board may, in special cases and for reasons to be recorded in writing, exempt either wholly or partially any goods or vessels or class of goods or vessels from the payment of any rate or of any charge leviable in respect thereof according to any scale in force under this Act or remit the whole or any portion of such rate or charge so levied. This power has been granted to the Board which is defined under Section 2(b) of the Act as  'Board', in relation to a port, means the Board of Trustees constituted under this Act for that Port.

26. Section 3 of the Act deals with the constitution of the Board of Trustees in respect of Major Ports. The constitution of the Board includes a Chairman, to be appointed by the Central Government, one or more Deputy Chairman, to be appointed by the Central Government. In addition to that, not more than 19 persons in case of each of the Ports including Madras, Bombay and Calcutta and not more than 17 persons in case of any other port, to be appointed by Notification in the Official Gazette of the Central Government, in whose opinion, the persons are capable of representing the interest of one or more of the following viz., Labour employed in the port, Mercantile Marine Department, Customs Department, the Government of the State in which the port is situated, Defence Services, Indian Railways and such other interests as, in the opinion of the Central Government, ought to be represented in the Board. In addition to that, the elected members of such bodies representing the ship owners, owners of sailing vessels, shippers and such other interests as in the opinion of the Central Government ought to be represented on the Board. The Board constituted by way of the Gazette Notification is treated as a Body Corporate under Section 5 of the Act.

27. Section 16 of the Act which deals with the meeting of the Board which specifically states in Sub-section (3) that all questions at the meeting of the Board shall be decided by a majority of the votes of the Trustees present and voting. Further, under Sub-section (4) it is made clear that any business shall be transacted at any meeting of the Board unless not less than five Trustees are present throughout the meeting. Therefore, a combined reading of the above said provisions along with Section 53 of the Act makes it clear that the power to exempt from or remission of rates or charges lies with the Board and not with the Chairman in his individual capacity. In the absence of any specific power given to the Chairman, Port Trust, the Board being a Body Corporate, the power to give exemption is available to the Board under Section 53 of the Act which has to be exercised only by the Board of Trustees.

28. As correctly submitted by the learned Assistant Solicitor General of India appearing for the respondent that in the absence of any application by the petitioner under Section 53 of the Act made to the Board, the letter impugned in this proceedings dated 22.10.2007, cannot be treated as an order passed under Section 53 of the Act. At the most it can be treated as a reply to the proposal given by the petitioner dated 05.10.2007 by imposing certain conditions. Even assuming that the impugned letter is as per the decision of the Board, which is not supported by any evidence, especially in the circumstances when the learned counsel for the respondent vehemently oppose such authority on the part of the Chairman to pass any such order under Section 53 of the Act, the said letter dated 22.10.2007, itself states only to consider the proposal of the petitioner dated 05.10.2007, for granting exemption from levying Additional Berth Hire charges if certain conditions as directed are complied with. Unless and until such conditions are complied with, it is not open to the petitioner, as a matter of right, to demand even the Board to grant exemption under Section 53 of the Act, since it is the discretionary power of the Board and the Board is expected to consider, while granting such exemption, various aspects including the interest of Port apart from the sufferings of the petitioner being the owner of the vehicle and the owner of the cargo.

29. One another situation which arises in this case namely, the owner of the cargo i.e., the petitioner in W.P.No.37348 of 2007, choses to state in the affidavit that the owner of the vehicle has abandoned the vehicle and failed to carryout necessary repairs and it was in those circumstances, as a sub-charterer under Azelie Corporation, the cargo owner has taken all steps by spending enormous amount to tow the vessel to Tuticorin and thereafter to Chennai and spent amount in respect of crew etc., On the other hand it is the case of the vessel owner i.e. the petitioner in W.P.No.33899 of 2007 that the cargo owner has not given any opportunity to the petitioner to rectify the defects and ultimately taken the ship out of the control of the owner of the vessel. Under such circumstances, when there is an inter se dispute between the owners of the vessel and cargo, which necessarily requires appreciation of evidence to find out as to who is in fault, I am of the considered view that the issue raised in these writ petitions cannot be decided by referring to the affidavits filed by the parties, while exercising writ jurisdiction under Article 226 of the Constitution of India. Further the question as to whether the owner of the vessel and the owner of the cargo are liable to pay Berth Hire charges, when the order of arrest has been passed by the Bombay High Court, wherein the case in respect of arrest of the vessel is still pending, is to be considered on evidence.

30. The term 'Owner' under Section 2(o) of the Act which speaks in relation to goods and in relation to vessel is not only an inclusive definition but also it has a larger scope. The said Section is as follows:

Section 2(o) Owner, (i) in relation to goods, includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods; and (ii) in relation to any vessel or any aircraft making use of any port, includes any part-owner, charterer, consignee, or mortgagee in possession thereof;
Even the term 'Owner' in relation to the vessel includes not only the charterer but also the consignee. In the present case, the writ petitioner in W.P.No.37348 of 2007, who is the owner of the cargo has taken charge of the vessel can be treated as a charterer or a consignee.

31. Further in respect of the Major Port Act, a Tariff Authority has been constituted under Section 47A of the Act which is defined as 'Authority' under Section 2(aa) of the Act. The Tariff Authority which is constituted as per Section 47A of the Act is empowered, by issuing notification in the Official Gazette, to frame scale of rates for specific services to be performed by the Board. The performance of service by the Board is detailed under Section 42 which includes the landing, shipping or transshipping passengers and goods between vessels in the Port apart from receiving, removing, shifting, transporting, storing or delivering goods brought within the Board's premises. Thus, the Board has power to charge for such activities which are the service rendered by the Board. It is the case of the petitioner in W.P.No.37348 of 2007 that by virtue of the order of this Court Passed in Application No.6392 of 2007 in O.A.No.561 of 2007 dated 11.10.2007, permitting M/s. Olam International Limited, to remove the cargo discharged from the vessel San Giorgio I, certain quantity has been taken. The said order was subsequently recalled by this Court on 06.11.2007, by dismissing the Application No.6392 of 2007 in O.A.No.561 of 2007 with liberty to the applicant to work out its remedies in the appropriate forum.

32. It is seen that the said M/s. Olam International Limited after obtaining orders on 11.10.2007, directing the Port Trust to release the cargo, has in fact given a letter to the Chairman, Chennai Port Trust dated 18.10.2007, to permit them to remove the cargo leaving behind cargo to the value of Rs.9.57 crores which is stated to be the claim by the Port Trust against the vessel, for which the Chennai Port Trust in letter dated 26.10.2007, has directed M/s. Olam International Limited to give Bank Guarantee for Rs.9.57 crores as security till the appeal filed by the Chennai Port Trust in this Court is disposed of and ultimately the said M/s.Olam International Limited has refused to provide Bank Guarantee for Rs.9.57 crores as informed in its letter dated 29.10.2007 and in the meantime, by an order dated 06.11.2007, this Court has recalled the earlier order passed in Application No.6392 of 2007 in O.A.No.561 of 2007.

33. In such a factual situation, it cannot be said that the petitioners in both the writ petitions are not liable to pay the statutory levy. Whether the claim of Additional Berth Hire charge which is stated to be a statutory levy by the Port Trust is in accordance with any regulation or not, it is not for this Court to decide the same, especially in the light of the prayer in these writ petitions. That is also the conclusion that has to be arrived at in respect of the writ petition filed by the cargo owner in W.P.No.37348 of 2007. In that case, communication of the Chennai Port Trust through its Deputy Conservator, dated 18.05.2007, which is impugned, the Port Trust has made it clear that the entry into the Port is itself based on the written assurance given by M/s. Olam International to move the vessel out of the Port limit soon after unloading the cargo and it was in those circumstances, the Port Trust has informed the cargo owner that demurrage and other related charges for detention of cargo at the Port are applicable based on the statutory provisions. The contents of the said letter which is impugned is as follows:

The vessel SAN GIORGIO I was towed all the way from Seychelles and as such, it is most certain for the vessel to expect Port State control to issue orders for compliance with regard to safety measures. The instructions of the Mercantile Marine Department is not a bolt from the blue. It is all innate in the subject. Further, the vessel could be taken out to any other Port obtaining the approval of the MMD for the limited purpose of one time voyage. As to the written advice stated to have been given by the salvage association, it bears no relevance to the functioning of the port. It is reminded that the vessel gained entry into the port based on its written assurance to move outside the port limit soon after unloading of cargo. Citing the requirements of MMD and the so called advice of Salvage Association, Insurance and Oil Pollution are things extraneous to the issue.
Also, demurrage and other related charges for the detention of cargo at the Port are applicable as they are based on statutory provisions.

34. By virtue of the power conferred under the Act, various orders have been passed fixing charges for various services rendered by the Port Trust by the Tariff Authority for Major Ports. One such order is in Chapter-II which speaks about the vessel related charges, which stipulates Berth Hire Charges including Additional Berth Hire Charges in para 2 under the Head 'Berth Hire Charges' which reads as follows:

2.0 BERTH HIRE CHARGES A. Rate of Berth hire charges for Vessels called at the Port excluding Boat Basin & Timber Pond GRT Rate per hour or part thereof Foreign-going Vessel (in US$) Coastal Vessel (in Rs.) Any volume of GRT 0.00289 per GRT 0.0763 per GRT (1) All vessels of war flying the white ensign in the service of the Republic of India but including in times of war, mine sweepers and patrol vessels shall be exempted from the payment of berth hire charges when they occupy berth for a period not exceeding one month in any case and for a period exceeding one month if there are other moorings available for ordinary steamers, but becomes liable for payment of Berth Hire Charges when they occupy alongside berths. All other vessels belonging to the Central Government or State Government shall pay Berth Hire Charges as per the rates specified in the schedule above.

(2) A vessel after completion of discharge or loading or ballasting shall call for the Pilot for sailing within 4 Hours (or within such extension granted by the Chennai Port Trust in writing for stated reasons). If the vessel do not call for the Pilot for sailing within the period of 4 Hours after completion of discharge or loading or ballasting or within such extension granted by the Chennai Port Trust or officials authorized by it, the vessel shall pay Additional Berth Hire Charges at the rate of Rs.9983.73 per hour or part thereof for Coastal vessel and US$ 378 per hour or part thereof for Foreign going vessels for the period from the time of expiry of four hours or such extended time granted by Chennai Port Trust or officials authorized by it till the time of calling the Pilot.

(3) The Additional Berth Hire Charges specified in Note 2 shall not be charged for the following cases: 

	a. Vessel waiting for tide, draft etc, to sail for the 		    safety of the vessel.
	b. Strike by the Port employees.
	c. Loading arm disconnection problem
	d. Usage of idle berth with concurrence of Chennai 		    Port Trust or officials authorized by it.

35. In fact in the said order, while explaining about Other Charges in paragraph 4.0, Rate of Shifting charges have also been stipulated. Under such circumstances, it cannot be said as if the Port Trust has no authority to impose Berth Hire charges as well as Additional Berth Hire charges apart from other charges like Port dues, Inward Pilotage & Shifting etc., In any event, as I have stated above, as to what should be the quantum of Additional Berth charges and other charges and how to assess the same, based on various statutory orders issued are not for this Court to decide while exercising writ jurisdiction under Article 226 of the Constitution of India, especially in the light of the working sheet given by the Port Trust demanding an amount of Rs.11,62,23,210/- due as on 20.01.2008, which is as follows:

Vessel related charges as on 20.01.2008 Nature of charges Amount as on 20.01.08 (Rs.) Scale of Rate clause Rate per day (Rs.) Periods / No. of days Berth Hire Charges 90,26,676 (2.0) (A) 32,470 278 days (17.04.07 to 20.01.08) Additional Berth Hire charges 10,01,41,998 (2.0) (2) 3,86,648 259 days (06.05.07 to 20.01.08) Other charges:
Port Dues, Inward Pilotage & Shifting (7 cold moves  2008), Addl. Craft Tug, Ousting, Tug O/A 7,66,008
---
---
---
Total 10,99,34,682
---
---
---
Service Tax at 12% 1,31,92,162
---
---
---
Education cess at 3% 3,95,765
---
---
---
Total amount 12,35,22,609
---
---
---
Less: Amount already paid as on 20.01.08 excluding Security Deposit of Rs.30,00,000/- **72,99,391
---
---
---
Amount to be paid as on 20.01.2008 11,62,23,210
---
---
---

36. As far as the liability of the cargo owner, petitioner in W.P.No.37348 of 2007, apart from the fact as the consignee, he could also be treated as owner under Section 2(o) of the Act. The Port Trust is entitled to recover the rates and charges by distraint of vessel as per Section 64 of the Major Port Trusts Act, which reads as follows:

Section 64. Recovery of rates and charges by distraint of vessel- (1) If the master of any vessel in respect of which any rates or penalties are payable under this Act, or under any regulations or orders made in pursuance thereof, refuses or neglects to pay the same or any part thereof on demand, the Board may distrain or arrest such vessel and the tackle, apparel and furniture belonging thereto, or any part thereof, and detain the same until the amount so due to be Board, together with such further amount as may accrue for any period during which the vessel is under distraint or arrest, is paid.
(2) In case any part of the said rates or penalties, or of the cost of the distress or arrest, or of the keeping of the same, remains unpaid for the space of five days next after any such distress or arrest has been so made, the Board may cause the vessel or other thing so distrained or arrested to be sold, and, with the proceeds of such sale, shall satisfy such rates or penalties and costs, including the costs of sale remaining unpaid, rendering the surplus (if any) to the master of such vessel on demand.

37. By a letter dated 03.04.2007, M/s. Olam International Limited, has specifically stated that on completion of discharge, the said M/s. Olam International Limited will take steps to remove the vessel from the Port limits and has also given undertaking in no uncertain terms, which is as follows:-

We confirm that we would be hiring a crew during the time the vessel is in Port Limits. We also confirm that on completion of the discharge we would make due arrangements to remove the vessel from the Port Limits. We would also be willing to give any suitable undertaking that the Port may require to protect its interests. It was based on the said undertaking, the petitioner was permitted to remove 621 logs out of the total number of 2865 logs. In the light of the undertaking given by the owner of the cargo, it cannot be said as if the petitioner in W.P.No.37348 of 2007 is not liable for payment of any amount to the Port Trust whether it is Berth Hire charges or Additional Berth Hire charges or demurrage as per the orders passed by the Authority under the Act. In addition to that, by a subsequent letter dated 12.04.2007 also, the said M/s. Olam International Limited has given specific undertaking, which is as follows:
As you are aware we have gone through considerable expense and effort to complete the voyage. We would request you to kindly allow MV San Giorgio I to berth and discharge her cargo at the earliest possible. We again confirm that we will remove the vessel from the berth as soon as the cargo has been offloaded.

38. In the Indemnity Bond dated 16.04.2007, given by the voyage charterers of the ship and owners of the cargo on board viz., the writ petitioners, it was specifically stated as a matter of Indemnity, which is as follows:

We the applicant indemnify and keep indemnified CHPT irrespective of values against all losses or damages that may be caused or suffered by the CHPT and or 3rd parties within the port limits of Chennai as a result of the vessel, being brought into the port of Chennai. We take full responsibility and shall not hold the CHPT responsible in any matter, whatsoever, in case of any untoward accident happens while the above operations is carried out, in case of any mishap due to the grounding and or damaging any fixed or floating objects or any other port trust properties, personnel, the Port trust will detain any vessel for security, till such time the cost of damages / salvage etc., are paid in full and apply if necessary detain & sell of vessel under Section 64 of the Major Port Trusts Act 1963.
It is confirmed that the MV.San Giorgio 1 is covered by liability and hull Insurance for all risks, including damage to fixed and floating objects and wreck remove.
We also take full responsibility for payment of all dues, charges, expenses accrued and accruing including loss of revenue to the port arising through berths / navigable approach channel not being available for use and any impediment caused for safe navigation / berthing of vessels through any mishap to the MV.San Giorgio 1.
The Indemnity herein contained is subject to Chennai Jurisdiction.

39. In the light of the said factual position, considering that the letter impugned by the cargo owner in W.P.No.37348 of 2007 dated 18.05.2007, is only a formal communication or a letter which cannot be questioned in a writ jurisdiction. I am of the considered view that the writ petition filed by the cargo owner too has no legs to stand in law. Further, in the light of the order of this Court in Application No.6392 of 2007 in O.A.No.561 of 2007 dated 06.11.2007, recalling the earlier order dated 11.10.2007, thereby not permitting the petitioner to remove the cargo. Therefore this Court cannot give any direction to the Port Trust to permit the petitioner to remove the cargo except giving liberty to the cargo owner viz., the petitioner in W.P.No.37348 of 2007 to workout his remedies in the manner known to law.

40. As it is held in Sun Export Corporation and another Vs. Board of Trustees of the Port of Bombay ((1998) 1 SCC 142) in the absence of the definition of the word 'demurrage' under the Act, it would mean the charges which the Port Trust can levy at a particular rate if the goods remain on the docks beyond the specified time. The relevant portion is as follows:

14. The expression demurrage has not been defined under the Port Trusts Act. In the context of the goods remaining in the Wharfage, it implies the charges which the Port Trust can levy at a particular rate if the goods remain on the docks beyond a specified time. The Port Trust with a view to recover those dues would ordinarily have a lien on the goods and can refuse to deliver the goods till the demurrage charges are paid. This, however, presupposes that the Port Trust continues to hold the goods, but where the goods have been confiscated by the Customs authority, it cannot be said that the Port Trust had any hold over those goods after their confiscation. The obligation to pay the charges of the Port Trust, till the confiscation of the goods as already observed, was that of the party which had the duty to remove/receive the goods and had failed to do so. In the instant case it was the appellants, who admittedly had acted as holders of the letters of authority and were the licensee's agent for clearance of the consignment from the Customs and entitled to receive the goods which they failed to receive and clear. They could therefore be fastened with the liability to pay charges by way of demurrage, etc. to the Port Trust.

41. The judgment relied upon by the learned counsel appearing for the petitioner rendered in W.P.No.11747 of 1994 batch etc, dated 28.08.2000, is not applicable to the facts and circumstances of this case. That was a case wherein the Port Trust has not provided sufficient space for storage at reasonable cost commensurate with the service. However, in the present case, it was only based on the undertaking given by M/s.Olam International Limited, the discharge has been effected as it is seen on facts.

42. In view of the same, the writ petitions are dismissed. However, with liberty to the writ petitioner in W.P.No.37348 of 2007 to workout its remedies in the manner known to law. In respect of W.P.No.33899 of 2007, it is open to the petitioner to make proper proposal to the appropriate authority as per Section 53 of the Act claiming exemption or remission in respect of payment of Additional Berth Hire charges and in the event of such proposal made by the petitioner within a period of two weeks from the date of receipt of a copy of this order, the Board shall consider the same in accordance with law and pass appropriate orders. The writ petitions are dismissed on the above terms. Consequently, the connected M.Ps are closed. No costs.

Ra / kk To

1. The Chairman, Chennai Port Trust, Chennai-1.

2. The Traffic Manager, Chennai Port Trust, Chennai 1