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TMI Blog2018 (3) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... l No. 2525 OF 2018, [Arising out of SLP (C) No.4683 of 2012] - - - Dated:- 7-3-2018 - Mr. R K Agrawal And Dr D Y Chandrachud JJ. CIVIL APPEAL NO.2526 OF 2018, SLP(C) No. 5034/2012, CIVIL APPEAL NO.2527 OF 2018, SLP(C) No. 5270/2012, CIVIL APPEAL NO.2530 OF 2018, SLP(C) No. 7636/2012, CIVIL APPEAL NO.2529 OF 2018, SLP(C) No. 7716/2012, CIVIL APPEAL NO.2528 OF 2018, SLP(C) No. 7600/2012, CIVIL APPEAL NO.2531 OF 2018, SLP(C) No. 7809/2012, CIVIL APPEAL NO.2532 OF 2018, SLP(C) No.7813/2012, CIVIL APPEAL NO.2533 OF 2018, SLP(C) No. 7864/2012, CIVIL APPEAL NO.2534 OF 2018, SLP(C) No. 8165/2012 AND CIVIL APPEAL NO.2535 OF 2018, SLP(C) No.8126/2012 For the Petitioner(s) : Mr. V. K. Monga, AOR For the Respondent(s) : Mr. Vikas Mehta, AOR, Mr. M. P. Vinod, AOR, Mr. Arvind Kumar Sharma, AOR, Mr. M. T. George, AOR, Mr. B. Krishna Prasad, AOR, Mr. Senthil Jagadeesan, AOR, Mr. O. P. Gaggar, AOR And Mr. Aditya Gaggar, Adv. JUDGMENT Dr. D.Y. CHANDRACHUD, J 1 Leave granted. 2 These proceedings have arisen from a judgment dated 27 September 2011 of a Division Bench of the Kerala High Court in a batch of writ appeals and original petitions, preferred by various s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of goods of which it has taken charge. 6 Section 2(o) defines an owner , in relation to goods, to include any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods ; and in relation to any vessel or any aircraft making use of any port, to include any part-owner, charterer, consignee, or mortgagee in possession thereof . Section 42 authorises the Board to undertake certain services. Sub-section (2) of Section 42 provides that a Board may, if requested by the owner of the goods, take charge of the goods for the purpose of performing services. Section 42(7) provides that after goods have been taken charge of and a receipt given for them under the Section, no liability for any loss or damage which may occur to them shall attach to any person to whom a receipt has been given or to the master or owner of the vessel from which the goods have been landed or transhipped. Chapter VI of the Act provides for imposition and recovery of rates at ports. The right to prescribe the scale of rates for services performed by the Board or other persons and to prescribe the statement of conditions under which the premises of the Board can be u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storage charges/demurrage in respect of the goods, which are uncleared by the consignee, has been referred by a Bench of two learned Judges of this Court to a larger Bench in Forbes Forbes Campbell and Co. Ltd. v Board of Trustees, Port of Bombay (2008) 4 SCC 87 [Forbes- I] . This Court had then framed the following questions of law of public importance: a) Whether a steamer agent can be construed as owner of the goods carried in his principal s vessel within the definition of owner in relation to goods under Section 2(o) of the Major Port Trusts Act 1963; b) Whether a steamer agent can be made liable for payment of storage charges/demurrage in respect of goods, which are uncleared by the consignee, even where the steamer agent has not issued a delivery order; and c) In the event that a steamer agent is held liable, to what extent is he liable and whether it absolves the Port Trust from acting promptly under Sections 61 or 62 of the Act? In view of the above reference, the High Court did not deal with these specific issues. However, the High Court observed that the reference did not cover: (i) The scope and the power of TAMP (with effect from 9 January 1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority and power to prescribe the scale of rates and conditions under Sections 48 and 49 of the MPT Act stands vested exclusively with TAMP with effect from 9 January 1997. It held that the Port Trust can demand ground rent only for a maximum period of 75 days, under the orders issued by TAMP. The High Court rejected the contention of the Port Trust, that there was no obligation cast upon it, to have destuffed the goods when the containers landed. 9 Relevant to the present context, there is a line of judicial precedent. In 1963, a Constitution Bench in The Trustees of the Port of Madras v K P V Sheik Mohamed Rowther Co. (1963) Supp. 2 SCR 915 [Rowther- I] upheld the power of the Board to collect rates/charges from the steamer agent: There is no doubt that the shipowner is the bailee of the shipper, the consignor, and that he is responsible for the delivery of the goods to the consignee or a transferee according to the terms of the bill of lading. This duty the ship-owner discharges only when he has delivered the goods to the consignee or such person who is entitled to take delivery in accordance with the endorsements on the bill of lading. Delivery to the Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the steamer agent . In this case, the goods remained in the custody of the Port Trust for a long time till they were ultimately confiscated by the Customs authorities. It was held that only the consignee was liable to pay the demurrage charges. The learned Judges approved the reasoning of the Madras High Court 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, their obligation to deliver the goods personally to the owner or the endorsee comes to an end Even though the consignee is not a party to the contract of carriage once the property in the goods had passed to him, he becomes liable to pay the storage or demurrage charges as owner of the goods to the shipowner. This Court also agreed with the conclusion of the High Court that the provisions of the MPT Act cannot be so construed as to hold that the steamer agent has undertaken the responsibility for the safety of the goods till they are cleared by Customs and taken delivery of by the consignee. The facts in Rowther II were distinguished from those in Rowther I . Rowther-I was distinguished in Rowther- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gent to pay demurrage and port charges to the Port Trust in respect of goods brought into the port and warehoused by the Port Trust Authority. This Court opined that: [W]hile it is correct that the liability to pay demurrage charges and port rent is statutory, in the absence of any specific bar under the statute, such liability can reasonably fall on a Steamer Agent if on a construction of the provisions of the Act such a conclusion can be reached. Determination of the aforesaid question really does not hinge on the meaning of the expression Owner as appearing in Section 2(o) of the Act of 1963, as has been sought to be urged on behalf of the appellant though going by the language of Section 2(o) and the other provisions of the Act especially Section 42, an owner would include a ship owner or his agent. Otherwise it is difficult to reconcile how custody of the goods for the purpose of rendering services under Section 42 can be entrusted to the Port Trust authority by the owner as provided therein under Section 42(2). At that stage the goods may still be in the custody of the ship owner under a separate bailment with the shipper or the consignor, as may be. Even de hors the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this regard . While addressing the issue about whom the Port Trust is entitled to collect charges from, the Court discussed Rowther-I , Rowther- II and Forbes-II . With reference to Rowther- I , this Court held: Rowther-I is not an authority for the proposition that a Board could collect rates due for the services rendered to goods only from the steamer agent. Nor did this Court deal with the question whether the title in the goods is a relevant factor for determining a Board s right to collect the rates... Rowther-I is no authority for the proposition that until the title in goods passed to the consignee the liability to pay various rates payable to a Board for the services rendered in respect of goods falls exclusively on the steamer agent. The Court opined that it agreed with the conclusions laid down in Rowther-II and Forbes-II , that a Board could recover rates due, either from the steamer agent or the consignee . However, the Court held that the question of title of the goods and the point of time at which the title passes to the consignee is irrelevant for determining the authority of a Board to recover the amounts due to it. The Court held: As r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng had been made with himself . Bill of lading is evidence of a contract between the shipper (consignor) and the owner of the ship by which the owner of the ship agrees to transport the goods delivered by the consignor to a specified destination and deliver it to the consignee. Delivery of goods pursuant to a bill of lading creates a bailment between the shipper and the owner of the ship. Obviously the legislature knew that a consignee under a bill of lading is a 3rd party to the contract but intrinsically connected with the transaction and thought it necessary to specify the rights and obligations of the consignee. Hence, the fiction under the 1856 Act, that the moment the property in goods passes to the consignee, the liabilities of the consignee in respect of such goods would be the same as those of the consignor, as if the contract contained in the bill of lading had been made with the consignee. The Bench came to the conclusion that: The consequence is that the 1st respondent (sub-bailee) would be entitled to enforce its rights flowing from the Bailment between the shipowner and the 1st respondent against the consignee and recover expenses incurred by it in connection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was based on the interpretation of the term owner under Section 2(o) of the MPT Act, the judgment in Forbes-II and Rasiklal do not find the question of interpretation of the term owner to be relevant; (iv) While Forbes-II relies upon the Constitution Bench decision in Rowther- I to come to its conclusions, Rasiklal does not find Rowther-I to be an authority for the proposition that until the title in goods is passed to the consignee, the liability to pay various charges payable to a Port Trust, for its services in respect of goods, falls exclusively on the steamer agent; (v) In Rowther-II , 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, their obligation to deliver the goods personally to the owner or the endorsee comes to an end. The decision in Rasiklal , which has been delivered after the reference of Forbes-I was disposed of, takes a contrary view that in cases where the consignee does not come to take delivery of goods, the position of law laid down by Rowther-II would result in a situation that the Port Trust would incur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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