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TMI Blog2016 (7) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... dered opinion, KPT has to look towards the consignee of the cargo in question for recovering its dues. It is not disputed that under the Major Port Trusts Act, the port trust authorities are entitled to frame scale of rates regarding the port rent, harbour charges, wharfage etc. and the port authorities have a statutory right to recover the same from the person liable to pay the same. In the facts of this case, the person liable is the consignee. Hence, the remedy of KPT is against the consignee. What happens if the consignee disappears from the scene, abandons the consignment in question or evinces no intention to clear the goods after clearing the port charges? In such situations the Port Authority’s claim is protected and secured by Sections 59, 61 and 62 of the MPT Act. Section 59 recognizes a statutory lien of the KPT on any goods which may have been placed on any port premises for the amount of all rates leviable under the Act in respect of the goods and for the rent due to the port authorities. Such lien of the port authorities have priority over all other liens and claims except for general average and ship owner’s lien on the said goods for freight and other charges. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t KPT s permission to destuff the containers. By a letter dated 14 January, 1995, KPT advised ITM to obtain No Objection from the Customs Authorities for allowing destuffing of the containers in the docks. (5) By a letter dated 2 March, 1995, The Additional Collector of Customs intimated ITM that the Customs Authorities had no objection to the containers being destuffed provided suitable shed was allocated by KPT and the cargo was secured consignment wise. (6) By a letter dated 13 March, 1995, ITM requested KPT to allot suitable shed within the port area for destuffing of the containers. (7) BY a letter dated 16 March, 1995, KPT permitted ITM to destuff 5 containers for the time being at 13 Netaji Subhas Docks. (8) By a letter dated 29 March, 1995 KPT requested M/s. Nepal Transit and Warehousing Co. Ltd. (in short NTW ) to allow destuffing of containers at the portion of the KPD shed which was under the control of NTW as destuffing of the containers at the KPD sheds was blocking valuable transit space and hampering smooth operation in the docks. This was followed by a letter dated 4 April, 1995 written by ITM to NTW making a similar request. (9) By a letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its Advocate on record as security for demurrage charges. KPT was directed to destuff the containers in question within 15 days at its own cost at the first instance subject to the outcome of the order to be passed at the final hearing of the writ petition. ITM was directed to arrange for removal of the destuffed cargo from the port premises at its own cost subject to the final decision in the writ application. The destuffed cargo was directed to be kept in customs or other bonded warehouse for a period of one month. The Customs Authorities were granted liberty to recover the charges for keeping the cargo in their warehouse by sale of the cargo. If the goods were not claimed within four weeks from the same being stored in the warehouse the Customs Authorities were granted liberty to dispose of the same. It was further recorded by the Appeal Court that the parties had agreed that the writ petitioner would not be made liable for any claim that any of the Authorities may have against the owner of the destuffed cargo in question. (16) On 16 December, 1996, ITM s Advocate on record wrote to the Advocate on record for the Customs Authorities that as per the order dated 4 December, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of ₹ 6,84,849.80 is payable to the KPT on account of costs of destuffing of 78 containers in terms of the order of the Division Bench. (25) The writ petition was ultimately disposed of by the judgment and order dated 25 June, 2014 which is impugned in the present appeal, the operative portion whereof is as follows:- The position that emerges on the facts in this case is the Port Authority should have sold the goods within two months from 12th February, 1996 being the date of the said earlier order wherein the submissions made on behalf of the Customs were recorded, that their detention of the goods had been set aside by this court upon being challenged. The Port Authority having had collected demurrage charges from the petitioners by debiting their marine account till then, had two months therefrom to sell the goods or in any event cause the 78 containers to be released thereafter. At least it was not brought to the notice of this court that any sum on account of demurrage charges was outstanding as had not been debited to the petitioners marine account for the period prior to filing of the writ petition. The period beyond in which the goods were kept in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd., (1997) 10 SCC 285, Om Shankar Biyani-vs.-Board of Trustees, Port of Calcutta, (2002) 3 SCC 168 and Natvar Parekh Industries Ltd.-vs.-Board of Trustees for the Port of Calcutta, (2008) 1 CHN 198 were wrongly relied upon by the Learned Single Judge in passing the impugned judgment and order. Those cases have no manner of application to the facts of the present case. Those cases related to recovery of demurrage charges in respect of the cargo and not in respect of the containers carrying such cargo. (29) Learned Counsel then submitted that the Learned Judge completely misconstrued Sections 61 and 62 of the MPT Act and erred in holding that KPT should have sold the cargo within two months from 12 February, 1996 being the date of the order passed by Altamas Kabir, J. (as His Lordship then was). (30) Mr. Roychowdhury referred to the Supreme Court decision in the case of Om Shankar Biyani (supra). He referred to paragraph 17 of the judgment wherein the Hon ble Apex Court observed as follows:- 17. Statutorily the 1st Respondent is entitled to claim payment of all demurrage charges before the goods were cleared. The Appellants never offered to pay the demurrage charges. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In all other situations where the bill of lading has not been endorsed or delivery orders have not been issued and therefore the consignee is yet to surface, the following observations of the Constitution Bench in K.P.V. Sheik Mohamed Rowther Co. and Others (supra) will have to prevail. Section 40 speaks of the responsibility of the Board for the loss, destruction or deterioration of the goods of which it has taken charge as a bailee under Ss. 151, 152 and 161 of the Indian Contract Act. Section 148 of the Contract Act states that a bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the bailor and the person to whom they are delivered is called the bailee. It is clear therefore that when the Board takes charge of the goods from the ship-owner, the ship-owner is the bailor and the Board is the bailee, and the Board's responsibility for the goods thereafter is that of a bailee. The Board does not get the goods from the consignee. It cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no further liability in respect of the cargo in question. On the extent and nature of obligation of the steamer agents, Ld. Counsel relied on the Supreme Court decision in the case of Trustees of The Port of Madrasvs.- K.P.V. Sheikh Mohd. Rawther Co. Pvt. Ltd. (supra). In that case, the question was whether the demurrage charges, harbour dues etc. payable to the Port Trust of Madras were to be recovered from the consignee of the goods or from the steamer agent. The High Court held that it was the consignee who was liable to pay the charges. The Hon ble Supreme Court affirmed the reasoning and the judgment of the High Court. It was held that once the goods are handed over to the Port Trust by the steamer and the steamer agents have duly endorsed the bill of lading or issued the delivery order, the obligation to deliver the goods personally to the owner or the endorsee comes to an end. The subsequent detention of the goods by the Port Trusts as a result of the intervention by the Customs Authorities cannot be said to be on behalf of or for the benefit of the steamer agents. Generally, if there is a delay in taking delivery of the goods by the consignee within a reasonable time, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that the Division Bench order dated 4 December, 1996 directed the KPT to bear the costs of destuffing of the containers at the first instance which will be subject to the outcome at the final hearing of the writ application. Learned Single Judge erroneously directed ITM to pay to KPT the destuffing charges amounting to ₹ 6,84,848/- without deciding the liability of the writ petitioner. Further, Learned Judge failed to take into consideration the Division Bench order regarding the agreement between the parties that the writ petitioners cannot and will not be made liable for any claim that any of the Authorities may have against the owner of the destuffed cargo in question. (37) Mr. Ghosh finally submitted that the Learned Single Judge failed to appreciate the true import and effect of the judgment of the Hon ble Apex Court in the case of K.P.V. Sheikh Mohd. Rowther (supra) and fell in error in directing ITM to pay the costs of destuffing of ₹ 6,84,848/- and detention charges of 78 containers amounting to ₹ 22,92,912/- although KPT had agreed that ITM shall not be liable to pay any charge which is payable by the cargo owner. ITM did not volunta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 6,84,849.80 is claimed by KPT on account of cost of destuffing 78 containers. The question is whether is KPT is entitled to recover the said sums from the writ petitioner no. 1? (41) It is settled law that the liability of a carrier is not unlimited. In the case of carriage of goods by ship, the duty of the carrier and of the steamer agent comes to an end once the goods are off-loaded from the ship at the destination port, delivery order is issued and the bill of lading is endorsed in favour of the consignee or its agent. From the point of time when the bill of lading is endorsed in favour of the consignee, it is he who is liable for the port charges incurred on account of storing of the goods in the port premises. Under a contract of carriage by sea which is evidenced by the bill of lading, the obligation of the steamer/carrier or its agent is limited to carrying the cargo in question to the port of discharge, unload the cargo, endorse the bill of lading and issue delivery order in favour of the consignee or his agent. Once this is done, the carrier or its agent stands discharged of his obligations. If the delivery of the cargo is not taken by the consignee or his agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, KPT was not entitled to debit the Marine A/c. of ITM to the tune of ₹ 22 lakhs approximately nor is it entitled to claim or recover from ITM any further sum as mentioned above. The liability of the de-stuffing charges amounting to ₹ 6.84 lakhs approximately can also not be imposed on ITM since the obligation of de-stuffing the containers is on the consignee or its agent. (43) The question then arises is what happens to the claim of KPT? In our considered opinion, KPT has to look towards the consignee of the cargo in question for recovering its dues. It is not disputed that under the Major Port Trusts Act, the port trust authorities are entitled to frame scale of rates regarding the port rent, harbour charges, wharfage etc. and the port authorities have a statutory right to recover the same from the person liable to pay the same. In the facts of this case, the person liable is the consignee. Hence, the remedy of KPT is against the consignee. (44) What happens if the consignee disappears from the scene, abandons the consignment in question or evinces no intention to clear the goods after clearing the port charges? In such situations the Port Authority s claim i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or for any other use and as such is of nil value as of date, it is the KPT who is responsible for the same. By its tardy conduct, KPT has allowed the cargo over which it has statutory lien, to become completely useless and valueless waste products. (47) It was sought to be argued on behalf of the KPT that ITM is liable for the rent or demurrage charges in respect of the containers. We are unable to accept such argument. It was not that ITM failed, neglected or refused to remove the containers from the port premises. It was not possible for them to remove the containers without first destuffing them. Had the Port Authorities been diligent in granting permission to ITM to empty the containers, it would have been a different story altogether. It was only through intervention of this Court that the balance 78 containers could be de-stuffed in February, 1997. We would have understood if empty containers belonging to the writ petitioner no. 2 were stacked on port premises. In that case no doubt, the writ petitioners would have been liable for rent/rates. However, that is not the case here. Further, we having held that the writ petitioners are not liable for any port charges once ..... X X X X Extracts X X X X X X X X Extracts X X X X
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