1997 (10) TMI 65 - SC - Customs

Whether the defendants were the importers and/or owners of2. the goods mentioned in Para 4 of the plaint, as alleged in Para 6 of the plaint? Whether the defendants are bound and liable to pay to the plaintiffs a sum of ₹ 1,58,545.10 as per exhibit B to the plaint or any part thereof either with interest at the rate of 12% per annum or at any other rate? To what reliefs are the plaintiffs entitled? Held that - The witness went on to admit that the order of confiscation was also addressed to appellant No. 1 by the Customs authorities. Mr. Nariman, on the basis of the evidence of this witness and the documents on the record, submitted that appellant No. 1 was the consignee or the owner or the agent for the goods in question and, therefore, the Port Trust was justified in fastening the liability of recovering demurrage charges from it. The obligation to pay the charges of the Port Trust, till the confiscation of the goods as already observed, 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 agents 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. No merit in the submission of Mr. Tripathi that the Port Trust could have put the goods in question to sale to off-set the demurrage since they had a lien over those goods before making any claim on the appellants. The goods, as already noticed, stood confiscated by the Customs Authority vide order dated 28th February, 1976 under Section 111(d) of the Customs Act, 1962 read with Section 3(2) of the Import and Export (Control) Act, 1947. The option to redeem the goods on payment of fine/penalty of ₹ 2 lakhs in lieu of such confiscation under the provisions of Section 125 of the Customs Act, 1962 was to be exercised by the appellants, to whom notice was issued by the Customs Authority within a fortnight to redeem the goods. That option was never exercised. Since, the goods stood already confiscated, the submission that those goods could have been sold to off-set the demurrage charges is fallacious. The goods confiscated by the Customs Authority were not available to the Port Trust for appropriation towards their dues. Section 63 of the Major Port Trusts Act, 1963, in the facts and circumstances of this case, does not come into play at all. Since, the obligation to clear the goods was that of the appellants and they had failed to clear those goods, they cannot escape their liability to pay the charges to the Port Trust including demurrage. The liability of the appellants in the facts and circumstances of the case, has been correctly fastened by the Division Bench of the High Court. Assessee appeal dismissed.

Summary

Issues Involved:
1. Whether the suit is barred by the law of limitation.
2. Whether the defendants were the importers and/or owners of the goods.
3. Whether the plaintiffs were entitled to take charge of the consignment except on the request of the owners.
4. Whether the defendants were under an obligation to apply for and take delivery of the goods within seven clear days.
5. Whether the defendants were liable to pay wharfage, demurrage, and other charges.
6. Whether the plaintiffs are entitled to claim demurrage and other charges for the period subsequent to one month from the date the goods were taken into custody.
7. Whether the plaintiffs abandoned, waived, or forfeited their claim and are estopped from making a claim.
8. Whether the defendants are liable to pay the plaintiffs a sum of Rs. 1,58,545.10 with interest.
9. To what reliefs are the plaintiffs entitled.

Issue-wise Detailed Analysis:

1. Whether the suit is barred by the law of limitation:
The learned Single Judge concluded that the suit filed by the Port Trust was not barred by limitation. This finding was not contested in the appeal, and therefore, it stands affirmed.

2. Whether the defendants were the importers and/or owners of the goods:
The appellants contended that they were not the importers or owners of the goods and thus not liable for the charges. However, the Division Bench of the High Court found that appellant No. 1, having secured an endorsement on the Bill of Lading and acting as an agent for the consignee, fell within the definition of "owner" under both the Bombay Port Trust Act and the Major Port Trusts Act. The Supreme Court upheld this finding, noting that the appellants had acted as agents for the consignee and were responsible for the custody and clearance of the goods.

3. Whether the plaintiffs were entitled to take charge of the consignment except on the request of the owners:
The Supreme Court did not specifically address this issue in detail, but it was implied that the Port Trust had the right to take charge of the consignment as the appellants had failed to clear the goods.

4. Whether the defendants were under an obligation to apply for and take delivery of the goods within seven clear days:
The appellants were under an obligation to clear the goods from the warehouse, as they had acted as agents for the consignee and had secured an endorsement on the Bill of Lading. Their failure to do so justified the Port Trust's claim for demurrage and other charges.

5. Whether the defendants were liable to pay wharfage, demurrage, and other charges:
The Supreme Court held that the appellants were liable to pay the charges to the Port Trust, including demurrage, as they had failed to clear the goods from the warehouse. The liability was correctly fastened by the Division Bench of the High Court.

6. Whether the plaintiffs are entitled to claim demurrage and other charges for the period subsequent to one month from the date the goods were taken into custody:
The Supreme Court found that the obligation to pay the charges to the Port Trust continued until the goods were confiscated by the Customs Authority. The appellants' failure to clear the goods justified the claim for demurrage and other charges.

7. Whether the plaintiffs abandoned, waived, or forfeited their claim and are estopped from making a claim:
The Supreme Court did not find any merit in the appellants' contention that the Port Trust had waived or forfeited their claim. The Division Bench's finding that the appellants were liable for the charges was upheld.

8. Whether the defendants are liable to pay the plaintiffs a sum of Rs. 1,58,545.10 with interest:
The Division Bench of the High Court decreed the suit filed by the Port Trust, awarding Rs. 1,58,545.10 with 12% interest per annum from the date of the suit till realization. The Supreme Court affirmed this decision, holding that the appellants were liable for the amount claimed.

9. To what reliefs are the plaintiffs entitled:
The Supreme Court upheld the relief granted by the Division Bench of the High Court, which included the amount of Rs. 1,58,545.10 with interest and the costs of the suit.

Conclusion:
The Supreme Court dismissed the appeal, affirming the Division Bench's judgment that the appellants were liable to pay the demurrage and other charges to the Port Trust. The appellants, acting as agents for the consignee and having secured an endorsement on the Bill of Lading, were considered "owners" under the relevant statutes and thus responsible for the charges incurred due to their failure to clear the goods from the warehouse. The appeal was dismissed with no costs.