1977 (3) TMI 158 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the Port Trust is entitled to collect demurrage for the period during which goods were detained by Customs authorities for Import Trade Control formalities.
2. Whether the definition of "free days" includes the period of holidays or part of a holiday or Sunday in computing the number of free days.

Summary:

Issue 1: Entitlement to Collect Demurrage
The respondents, Indian Goods Supplying Co., imported three consignments of Chinese newsprint. The Port Trust claimed demurrage for the period from March 25, 1957, during which the goods were detained by Customs authorities for Import Trade Control formalities. The respondents disputed this claim, arguing that demurrage should not be charged for delays beyond their control. The City Civil Court, Bombay, decreed in favor of the respondents, awarding them Rs. 24,950 with interest. The Bombay High Court upheld this decision, stating that the importer cannot be held responsible for delays not attributed to their default. However, the Supreme Court reversed this decision, holding that the Port Trust is entitled to collect demurrage as the rates, approved by the Central Government, have the force of law. The Court cited the precedent set in Trustees the Port of Madras v. M/s. Aminchand Pyarelal & Ors., emphasizing that the Board's power to frame rates is not limited by the importer's fault or negligence.

Issue 2: Definition of "Free Days"
The respondents contended that the definition of "free days" should exclude the period during which Customs Duty may not be assessed or received, including the time taken for Import Trade Control formalities. The Supreme Court rejected this argument, clarifying that "free days" only exclude Sundays, holidays, and days when Customs Duty cannot be assessed, not the entire period of Import Trade Control formalities.

Conclusion:
The Supreme Court allowed the appeal, holding that the Port Trust is entitled to collect demurrage for the period during which goods were detained for Import Trade Control formalities. However, due to the concession made by the Port Trust's counsel, there was no order for the refund of the money already withdrawn by the respondents. The appellant also did not press the counterclaim, and there was no order as to costs in the appeal.