2009 (8) TMI 773 - HC - Customs

Recovery of dues by ports Third party goods Right of lien of Port Trust to detain, seize or sell goods of third parties for realization of arrears pf rent due from tenants - third party who had no connection with the unauthorized occupier of the public premises cannot be asked to bear the burden of the mischief committed by such unauthorized occupier - The owner had imported the goods. They were kept on open ground for the purpose of sending the same to further destination. Clearly, therefore, KPT had no claim against the goods on account of rates and rents for services rendered under Section 42 of the MPTA. In such circumstances, the provisions of Section 59 and 61 of MPTA were not at all relevant for deciding the controversy between the parties.- Port trust not having general lien under Section 59 of Major Port Trust Act, 1963 to cover goods of party having no privity of contract with it and which were sought to be sold in execution proceeding under PPA, 1971 Section 59 and 61 of Major Port Trust Act, 1963 - the issue with regard to the ambit of Sections 59 and 61 has been correctly decided by the Division Bench in Indian Rayon Corporation Ltd. (1987 -TMI - 41874 - HIGH COURT AT CALCUTTA). reference to larger bench - Held that when a Single Judge makes a reference to the Chief Justice for constitution of a Larger Bench, it can only mean a reference to a Division Bench, consisting of two-judges. This is precisely the course adopted by the learned Single Judge. The direction issued by the learned Single Judge is to place the papers before the Chief Justice, for passing appropriate orders. This direction cannot be read in isolation. Earlier in the judgment (para 51) the Learned Single Judge noticed the observations made by the Special Bench in the case of Ahamed Hossain S.K. (supra) that if the decision of the Larger Bench is inconsistent with the law laid down by a Full Bench or the Supreme Court, the proper course to the Single Judge would be to refer the matter to the Division Bench

Issues Involved:
1. Interpretation of Section 59 of the Major Port Trusts Act, 1963 (MPTA).
2. Applicability of Sections 5 and 6 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (PPA) in relation to Section 59 of MPTA.
3. Legal validity of the lien by Kolkata Port Trust (KPT) on goods for unpaid rent.
4. Conflict between two Division Bench judgments of the Calcutta High Court regarding the scope of Section 59 of MPTA.

Detailed Analysis:

1. Interpretation of Section 59 of the Major Port Trusts Act, 1963 (MPTA):
The core issue revolves around the interpretation of Section 59 of the MPTA. The petitioners argued that the lien under Section 59 is limited to specific goods on which rates and rents have accrued. This interpretation was supported by the Division Bench judgment in the case of Indian Rayon Corporation Ltd., which stated that the lien is specific to goods for which dues are owed and cannot extend to goods of third parties. The Supreme Court in M/s. Sriyanesh Knitters also upheld this view, emphasizing that the lien under Section 59 is not a general lien but is limited to specific goods in respect of which the rates are due.

2. Applicability of Sections 5 and 6 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (PPA) in relation to Section 59 of MPTA:
The respondents relied on the judgment in Canoro Resources Ltd., which interpreted Section 59 of MPTA in conjunction with Section 6 of PPA, 1971. They argued that KPT has a lien over any goods lying on its premises for unpaid rent, regardless of the ownership of those goods. However, the petitioners contended that Sections 5 and 6 of PPA are procedural provisions aimed at eviction and cannot be intermingled with Section 59 of MPTA. The court agreed with the petitioners, stating that the provisions of the two Acts serve different purposes and should not be conflated.

3. Legal Validity of the Lien by Kolkata Port Trust (KPT) on Goods for Unpaid Rent:
The court examined whether KPT could exercise a lien on goods of third parties for unpaid rent owed by tenants. The petitioners argued that such an interpretation would lead to absurd results, making third parties liable for the defaults of tenants. The court found merit in this argument, stating that lien under Section 59 of MPTA is limited to specific goods and cannot extend to goods of third parties. The court also noted that the interpretation of Section 59 in Canoro Resources Ltd. was in conflict with the Supreme Court's ruling in M/s. Sriyanesh Knitters.

4. Conflict Between Two Division Bench Judgments of the Calcutta High Court Regarding the Scope of Section 59 of MPTA:
The court acknowledged the conflict between the judgments in Indian Rayon Corporation Ltd. and Canoro Resources Ltd. The former limited the lien to specific goods, while the latter extended it to any goods on KPT premises for unpaid rent. The court resolved this conflict by favoring the interpretation in Indian Rayon Corporation Ltd., which aligns with the Supreme Court's ruling in M/s. Sriyanesh Knitters. The court held that the view in Canoro Resources Ltd. was contrary to established law and could not be considered good law.

Conclusion:
The court concluded that the lien of KPT under Section 59 of MPTA is limited to specific goods in respect of which rates and rents are due. It cannot extend to goods of third parties. The interpretation in Indian Rayon Corporation Ltd. was upheld, and the conflicting view in Canoro Resources Ltd. was rejected. The court also affirmed the appropriateness of referring the matter to a Larger Bench to resolve the conflict between the two Division Bench judgments. The writ petition was directed to be placed before the Learned Single Judge for a decision on merits.

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