1999 (7) TMI 127 - SC - Customs

Whether the appellant - Board of Trustees of the Port Trust constituted under the Major Port Trusts Act 1963 have a general lien for their dues over the present or future consignments imported by the importers at the Bombay Port when the said dues are in respect of the past imports made by the said importers? Held that - There is no reason to give a restricted meaning to the expression general balance of account to mean only wharfage charges which according to the respondents would imply the charges for loading or unloading of goods and would not include demurrage. Once goods are taken charge of by the appellants as a wharfingers then in respect of the services rendered as contemplated by Section 42 if there is any amount which is due and payable to it the same would be regarded as general balance of account in respect of which it has a general lien over the goods bailed to it. Thus the circular dated 2nd October 1979 issued by the appellants was valid and the appellants could retain the goods which were in their possession as bailees as security for realisation of the amount of wharfage demurrage and other charges which were due to them. Appeal allowed of assessee.

Issues Involved:
1. General lien of the Port Trust under the Major Port Trusts Act, 1963 (MPT Act) and Section 171 of the Indian Contract Act, 1872.
2. Validity of the circular dated 2nd October 1979 issued by the Port Trust.
3. Applicability of the MPT Act as a complete code.
4. Relationship between the Port Trust and the consignee.
5. Scope of "general balance of account" under Section 171 of the Indian Contract Act.

Issue-wise Detailed Analysis:

1. General lien of the Port Trust under the MPT Act and Section 171 of the Indian Contract Act:
The primary question was whether the Port Trust had a general lien for their dues over current or future consignments for past dues under the MPT Act or Section 171 of the Indian Contract Act. The Supreme Court held that Sections 59 and 61 of the MPT Act do not provide for a general lien but only a specific lien on goods for which dues are outstanding. The Court stated, "Sections 59 and 61(1) give a lien on those goods in respect of which amount is claimed or due under Section 59." Therefore, the MPT Act does not confer a general lien.

2. Validity of the circular dated 2nd October 1979:
The circular issued by the Port Trust stated they could exercise a general lien under Section 171 of the Indian Contract Act. The High Court had declared this circular ultra vires of the MPT Act. However, the Supreme Court disagreed, holding that the MPT Act does not exclude the applicability of Section 171 of the Contract Act. The Court concluded, "The general lien of the type contemplated by Section 171 in respect of the past dues is not provided for by the MPT Act." Thus, the circular was valid.

3. Applicability of the MPT Act as a complete code:
The respondents argued that the MPT Act was a complete code, excluding the applicability of other laws. The Supreme Court rejected this argument, stating that the MPT Act is not exhaustive and must be read together with other laws where it is silent. The Court observed, "The MPT Act is not, in our opinion, an exhaustive and comprehensive code and the said Act has to be read together with other acts wherever the MPT Act is silent in respect of any matter."

4. Relationship between the Port Trust and the consignee:
The High Court had held that the contract was between the ship owner and the Port Trust, not the consignee. The Supreme Court disagreed, stating that the consignee, as the holder of the bill of lading, is regarded as the owner of the goods under Section 2(o) of the MPT Act. The Court noted, "The correct position is that the contract is between the Port Trust and the holder of the bill of lading, which, in this case, would be the consignee."

5. Scope of "general balance of account" under Section 171 of the Indian Contract Act:
The respondents contended that the general lien under Section 171 should be limited to wharfage charges only. The Supreme Court rejected this narrow interpretation, holding that the "general balance of account" includes all charges due for services rendered by the Port Trust as wharfingers. The Court stated, "Once goods are taken charge of by the appellants as wharfingers then in respect of the services, rendered, as contemplated by Section 42, if there is any amount which is due and payable to it the same would be regarded as 'general balance of account' in respect of which it has a general lien over the goods bailed to it."

Conclusion:
The Supreme Court allowed the appeals, setting aside the High Court's judgment and upholding the validity of the circular dated 2nd October 1979. The Port Trust was entitled to exercise a general lien under Section 171 of the Indian Contract Act for past dues on current consignments. The writ petitions filed by the respondents were dismissed, and the appeals were allowed with costs throughout.

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