2022 (9) TMI 997 - SC - Indian Laws

Levy of anchorage charges claimed by the Port Trust - sale of vessel - levy of Light Dues Charges and/or Anchorage Charges from the date on which physical possession of the vessel was made over to NKD, i.e., 11th November 2020 - HELD THAT - The Division Bench rightly held that the argument was without merit. As held by the Division Bench, it is far-fetched to suggest that prior anchorage was of the Vessel under sale and the rate that it attracts as a result of such prior anchorage are in the nature of encumbrances for the purposes of anchorage fees to be applied after the date of Bill of Sale and till the Vessel sells at the instance of the purchaser. As held by the Division Bench, NKD purchased the Vessel on as is, where is basis free from encumbrances in the instant case, anchorage charges have been levied from the date of the sale. The rates were payable on the basis of the number of days for which the Vessel was docked. NKD, in its cross objection, contended that anchorage charges fall within the expression port dues under Section 50-B of the Port Trusts Act. Under Section 50-B, when a Vessel enters a port but does not discharge or take in any cargo or passengers, she is charged with port dues at a rate to be determined by the Authority, which, in any event, should not exceed half the rate with which she otherwise would be chargeable. The Division Bench rightly allowed the appeal and set aside the order of the Single Bench - Appeal dismissed.

Summary

Issues:
1. Dispute over Anchorage Charges and Light Dues Charges post Vessel sale.

Detailed Analysis:
The judgment involved a dispute regarding Anchorage Charges and Light Dues Charges after the sale of a vessel in an auction conducted by the Bombay High Court. The Vessel, M.V. Karnika, was sold to NKD Maritime Limited (NKD) in an Admiralty Suit against the backdrop of unpaid bunker charges supplied by Glander International Bunkering DMCC to the Vessel. The sale was conducted free from all encumbrances, as per the terms and conditions of the sale outlined by the High Court.

The main contention revolved around whether NKD, as the new owner of the Vessel, was liable to pay the Anchorage Charges and Light Dues Charges accrued prior to the sale. NKD argued that the charges levied by the Port Trust post-sale were not its responsibility, as the Vessel was sold free from all encumbrances. The Port Trust, on the other hand, claimed that the charges were valid as they were based on the period the Vessel spent at the anchorage before the sale.

The Division Bench analyzed the terms of the sale, which stated that the Vessel was sold on an "as is, where is" basis, free from encumbrances. The Bench concluded that the charges post-sale, such as Anchorage Charges, were not considered encumbrances under the sale terms. Additionally, the Bench highlighted that the rates for anchorage charges were based on the duration the Vessel remained docked, and NKD was liable to pay these charges from the date of sale onwards.

Moreover, the judgment delved into the interpretation of the Major Port Trusts Act and the definition of port dues. It was argued that the charges, including Anchorage Charges, fell under the broad umbrella of port dues, and the applicable rate was a point of contention. The Division Bench clarified that the issue was not whether the charges constituted port dues but rather the specific rate to be applied.

Ultimately, the Division Bench upheld that NKD was responsible for the Anchorage Charges and Light Dues Charges from the date of sale, dismissing the appeal filed by NKD against the order of the Single Bench. The judgment provided a comprehensive analysis of the legal principles governing the sale of vessels, encumbrances, and port charges, resolving the dispute between NKD and the Port Trust effectively.