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TMI Blog1982 (8) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of S. 111(d) of the Customs Act, 1962, but the order of confiscation gave an opportunity to imports to get the goods released on payment of fine. Some of the importers preferred appeals against the order passed by the Customs authorities confiscating the goods, but it is not necessary to refer to appellate orders. As the imported goods reminded in the Docks till the order of confiscation, the appellants issued notices to the respondents demanding the demurrage charges. The importers denied their liability and thereupon the Port Trust Authorities instituted various suits to recover wharfage and demurrage charges. These suits filed on the Original Side of this court are still pending decision. 3. After the institution of the suits, the respondents imported Acrylic Fibre under the Import Licences held by them and after the consignments arrived in Bombay Port, the respondents filed Bills of Entry for clearance of the goods for home consumption. The respondents secured the requisite permission from the Customs authorities and thereupon called upon the Board to release the goods in their possession. The appellants refused to permit the respondents to remove the goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such as wharfage, carnage, storage, demurrage or any other dues in respect of any consignments imported by them. 4. The respondents, realising that the appellants would not release the consignments in view of the advice contained in the Circular, preferred petitions on the Original Side of this Court on November 14, 1979, under Article 226 of the Constitution of India. By these petitions, the respondents sought a declaration that the circular dated October 2, 1979, is ultra vires the Major Port Trusts Act, 1963 and in violation of Articles 14, 19, 265 and 300A of the Constitution of India. The respondents also sought a Writ of Prohibition restraining the appellants from taking any steps or proceedings in furtherance or in implementation of the Circular. A Writ of Mandamus was also sought directing the appellants to withdraw or cancel the Circular and to deliver the consignments of goods imported by the respondents and detained under the Circular. The petitioners were set down for admission before the learned single Judge on December 12, 1979, and were duly admitted and by an interim order, the appellants were directed to release the consignments of Acrylic Fibres on the undert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ignee. The trial Judge accepted the submission advanced on behalf of the respondents that the rights available under S. 171 of the Indian Contract Act are not available and the claim of general lien was unsustainable. The trial Judge further recorded a finding that there was no implied Contract between the Port Trust and the consignee. The trial Judge accepted the submission advanced on behalf of the respondents that the rights available under S. 171 of the Indian Contract Act , even assuming that there was Contractual relationship between the Port Trust authorities and the consignee, are excluded by the provisions of the Major Port Trusts Act, 1963 as amended in the year 1975. It was further held that the bailment if created debtors the Contract, then such bailee cannot claim a right of general lien as such right is not recognised in India or in England. Finally the trial Judge held hat the general lien, if any available can be exercised only of wharfage charges and the appellants would not be entitled to recover the charges for keeping the chattel on which the lien is exercised. On the strength of this finding, the trial Judge accepted the petition and issued a Writ of Mandamus d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be levied for the landing, shipping, wharfage, carnage, storage or demurrage of goods, and for permission for vessels or boat to approach or to be alongside, or on any Government Bounder, Wharf or landing place. The Act provides that Officers appointed to levy fees under the Act shall have same powers for collecting and enforcing the payment of fees as exercised by the Commissioner of Customs in Bombay. This Act was followed by Bombay Port Trust Act I of 1873. The Act received the assent of His Excellency the Governor on March 3, 1873 and the assent of the Governor-General on May 24, 1872 and was published on June 26, 1873. The preamble of the Act reads that whereas it is expedient to consolidate and amend the law relating to the harbour and foreshore of the Port of Bombay, and to make further provision for the regulation conservancy, and improvement of the said Port, the Act was enacted. The Act repeals the earlier Central Act No. XXII of 1855 and the provisions which were inconsistent with the provisions of the Act. It also repealed Section 1 of Act XXXI of 1857, and the Bombay Act V of 1871. 10. The Act of 1873 is a forerunner of the subsequent enactments relating to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made applicable to the Port of Bombay, Madras and Calcutta only from February 1. 1975, in view of the passing of Act No. 29 of 1974. S. 3 of this Act provides for constitution of Board of Trustees and Section 5 provides that every Board constituted under the Act shall be a body corporate having perpetual succession and a common seal with power to acquire, hold or dispose of the property. S. 33 of the Act enables the Board to enter into or perform any contract necessary for the purpose of its functions under the Act, while S. 34 if the Act lays down the mode of executing such contracts on behalf of the Board. Chapter V of the Act deals with works and services to be provided at Ports and S. 41 lays down that when any dock, berth, wharf, quay, stage, getty, or pier for receiving, landing, or shipment of goods or passengers from or upon vessels, has been made and completed, the Board may after obtaining the approval of the Collector of Customs, published in three consecutive issues of the Official Gazette declare that from the date of the publication of the order it shall not be lawful for any vessel to land or ship any goods at any place within the limits so specified except at such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel is that the general lien as claimed by the Board is available under the Provisions of the Major Port Trusts Act, 1963 itself. In support of this submission, reliance was placed on the provisions of S. 59 (1) of the Act. Sub-section (1) of S. 59 of the Act reads as under:-- For the amount of all rates leviable by a Board under this Act in respect of any goods, and for the rent due to the Board for any buildings, plinths, stacking areas, or other premises on or in which any goods may have been placed, the Board shall have a lien on such goods, and may seize and detain the same until such rates and rents are fully paid . Strong reliance was placed on the words in respect of any goods appearing in this sub-section to claim that the Board's lien is not restricted only to the specific goods but is available in respect of any goods which come into the custody of the Board. It is not possible to accept this submission. The plain reading of sub-section (1) of S. 59 of the Act indicates that the expression in respect of any goods has be read in connection with the expression the amount of all rates leviable by the Board. The sub-section provides that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onferred upon the Board to apply the proceeds of the sale to any other sum due to the Boards , it cannot be inferred that the Board can exercise general lien in respect of each and every goods imported by the respondents. Clause (e) to sub-section (1) of S. 63 of the Act merely enables the Board to set off the amount due to it on conversion of the goods but it can by no stretch of imagination enable the Board to retain any goofs. In our judgment. the submission urged by Shri Zaiwala that the general lien is available to the Board under the provisions of the Act cannot be accepted. 14. The second submission urged by Shri Zaiwala is that there is contractual bailment when the Board undertakes to perform certain services as contemplated under S. 42 of the Act and, therefore, the provisions of S. 171 of the Contract Act are attracted S. 171 of the Act reads as under:-- Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain, as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them. unless t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the Supreme Court in the case of The Trustees of the Port of Madras v. M/s. Aminchand Pyarelal and especially on the contents of paragraph 22 of the judgment. In our judgment, the submission is not correct and cannot be accepted for more than one reason. The submission of Shri Zaiwala that under sub-section (2) of S. 42 if the Act, the Board undertakes the services on the request made by the owner and for performing such services issues a receipt and such receipt amounts to an agreement between the application parties and from the receipt, a contract is spelt out as to enable the Board to claim the advantage of S. 171 of the Contract Act, is misconceived. The receipt under S. 42 if the Act can by no stretch of imagination be claimed to be agreement between the parties. The receipt is issued by the Board only in acknowledgment of the fact that it has undertaken the services which are required to be performed under sub-section (1) of S. 42 of the Major Port Trusts Act, 1963. By consent of the parties, we have taken on record in this appeal a form of receipt issued by the Board under sub-section (2) of S. 42 of the Act and have marked the document as Ex. 1 in appeal. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of sub-section (3) of S. 34 if the Act, but it would bind the owner of the goods. We are afraid we cannot entertain this submission because it is futile to claim that the receipt issued by the Board is, in the first instance, an agreement or contract and would create contractual relationship between the importers and the Board. In our judgment, the receipt issued under sub-section (2) of S. 42 of the Act cannot be considered as an agreement or contract as it is executed in the mode provided under S. 34 if the Act. Thursday, the 12th August 1982. 17. In this connection, Shri Desai, the learned counsel appearing on behalf of the respondents, submitted that even assuming that the receipt issued by the Board under sub-section (2) of S. 42 is considered or treated as an agreement, still such an agreement is not between the Board and the consignee but the agreement is only between the Board and the carrier or the ship-owners, The learned counsel, in support of this submission that the expression owner referred to in sub-section (2) of S. 42 if the Act has a limited or a restricted meaning confining it only to the carrier of the ship-owners, placed strong reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort Trust authorities, therefore, claimed that the liability is of the carrier of the ship-owner and there is no privity of contract between the consignee and the Board. The petition was dismissed by the learned single Judge of the Madras High Court but on appeal, the appellate Bench reversed the order and allowed the petition and issued a writ of mandamus as prayed. The appellate Bench took the view that the services rendered by the Board must be deemed to be the services to the consignee. The trustees carried an appeal before the Supreme Court and the appeal before the lowed and the decision of the appellate Bench was reversed and that of the trial Judge was restored. 18. The Supreme Court after considering the ambit of Section 39 of the Madras Port Trust Act, which is similar to S. 61 (a) of the Bombay Port Trust Act and S. 42 of the Major Port Trust Act, observed that the performance of any of the services mentioned in sub-section (1) of S. 39 and taking of charge of the goods are consequent on the Board being required to do so by the 'owner' which is a general term including consignor, consignee, shipper or agent. The Supreme Court then proceeded to consider the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It can be the agent of the consignee only if so appointed, which is not alleged to be the case, and even if the Board bee an agent, then its liability would be as an agent and not as a bailee. The provisions of Ss. 39 and 40. therefore, further support the contention that the Board takes charge of the goods on behalf of the ship-owner and not on behalf of the consignee, and whatever services it performs at the time of the landing of the goods or on their removal thereafter, are services rendered to the ship . From the observation in the above quoted passages, it is clear that the Board does not get the goods from the consignee and it cannot be the bailee of the consignee. It cannot also be the agent of the consignee and it is obvious that the Board takes charges of the goods on behalf of the ship-owner and not on behalf of the consignee and whatever services it performs at the time of landing of the goods or no their removal are services rendered to the ship-owners. The Supreme Court turned down the contention that the Board was an agent of the consignee by observing at page 947 of the judgment:-- If the Board was an agent of the consignee, it was bound to deliver the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee by reference to the provisions of S. 1 of the Bills of Lading Act. The provisions of S. 1 of the Bills of Lading Act merely deal with the rights and liabilities of holder of bill of lading or his transferee in respect of goods mentioned there and cannot be so read as to spell out contractual relationship between the consignee and the Board in respect of services rendered on landing of goods and the payment of charges thereof. 20. The reliance by Shri Zaiwala on the decision of the Supreme Court in the case of the Trustees of the Port of Madras v. M/s. Aminchand Pyarelal to claim that all the services by the Board reflect or represent an agreement between the parties is also not correct. The question which came up for consideration before the Supreme Court was whether the scale of rates fixed by the Trustees of the Port of Madras is void on the ground that it is unreasonable. It was clear that the Board was empowered by Section 42 of the Madras Port Trust Act to frame the Scale of Rates and a statement of the conditions under which it shall perform the services specified in the section. The Board had exercised that power and the contention was that the scale of rates and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the parties, one offering its services at prescribed rates and other accepting the services at those rates must be read in its proper perspective. The observations are made in this context while considering whether the rule framed by local authority amounts to a bye-law. In our judgment, the contention of Shri Zaiwala that the Supreme Court by these observations had concluded that the offering of service by public authority on payment of price amounts to an agreement or a contract cannot be accepted. We are clearly of the view that the receipt issued by the Board under sub-section (2) of Section 42 of the Act in favour of the ship-owner does not amount to an agreement or contract and the services performed by the Board do not make the Board a contractual bailee as there is no contractual relationship in existence between the Board on the one hand and the consignee on the other. The provisions of Section 171 of the Contract Act are not attracted and it is not open for the Board to claim a general lien over the goods imported by the respondents from time to time. 21. Shri Zaiwala then urged that even assuming that there is no specific agreement between the Board and the consigne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract Act. Such a relationship may well be called as one arising out of an implied contract. But that does not justify the view of the High Court that an altogether new cause of action arose merely because a duty to take charge of the landed goods was cast on the Board under Section 61-A (1) and the Board's responsibility for them was defined in Section 61-B. By the very nature of that relationship which admittedly did not arise out of agreement between the parties, it was essentially a delicatal obligation. It was a civil wrong. for which the remedy was an action in damages and not by way of an action for breach of contract, as it is nobody's case that there was any such relationship between the parties. It may be that the obligation of the Board was of the nature of a quasi-contract, but that also would not justify the view that it arose merely because of the words of Ss. 61-S and 61-B as a statutory obligation quite apart from the sources of origin of obligation defined by Salmon (on Jurisprudence) twelth edition, page 452 as contractual, delicate, quasi-contractual and innominate. In fact as Halsbury has put it (third edition, Vol. 37, page 111) while dealing with the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by the Government of West Bengal for regulating the supply and distribution of cement, the transactions under which the appellants supply cement to persons who were issued permits by the authorities to obtain the commodity from the appellants involved element of volition or consensuality. The majority decision delivered by Shri Justice Chandrachud as he then was. observed in paragraph 31 of the Judgment that the view taken in the case of Gannon Dunkerley , that a sale is necessarily a consensus transaction and if the parties have no violation or option to bargain, there can be no sale may be assumed to reflect correct legal position. Thereafter the Supreme Court proceeded to consider whether there was an agreement of consensuality between the parties. Reading the majority decision, we do no find that the Supreme Court had laid down that in absence of a consensual transaction where the parties have no violation or option to bargain, it can be claimed that the voluntary contract has come into existence. The submission of the learned counsel need not detain us even otherwise, because in the present case, there is no agreement whatsoever and, in any event, one between the Board and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased from the owners some timber stored at the Commercial Docks, and which was entered in the books of the Company in charge of Docks in the name of the broker. The Company refused to transfer the timber into the name of the plaintiff, on the ground that the broker was indebted to them for rent and charges in respect of other goods standing in his name in the books of the Company, although the plaintiff tendered to them the specific rents and charges due in respect of the goods purchased by him. The plaintiff claimed that he being the purchaser of the timber from the owner, he is entitled to the timber on paying the specific charges upon it and the Company has no lien upon it for all the charges due to them from the broker. The defendant Company, on the other hand, claimed that the wharfinger has general lien by the common law and that lien may extend to the general charges due from the individual dealing with him. Chief Justice Cockburn passed judgment in favour of the plaintiff and observed that assuming that some of the charges are wharfage charges the Company can have no general lien on these goods because the parties have dealt on the terms of the statutes which entitle the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding for statutory rights and liabilities, the provision of Section 171 of Contract Act which confers a general lien on the wharfinger cannot be resorted to by the Board is correct and deserves acceptance. Section 59 of the Act gives the Board specific lien over such goods in respect of which rents and rates are not fully paid, while Section 61 enables the Board to sell the said goods for recovery of the rates. Section 63 enables the Board to apply the sale proceeds in payment of the rates and if any amount is left out after satisfying the priorities mentioned in the section to apply the same in payment of any other sums due to the Board. In addition to these rights. Section 67A of the Bombay Port Trust Act provided for filing of suit by Board for recovery of tolls, dues, rents, rates, charges, damages, etc., Section 67A was included in the Bombay Port Trust Act, 1879 by Bombay Act I of 1899 and it reads as under :-- Not with standing anything contained in the seven sections last preceding and in Section 85, the Board may recover by suit any tolls, dues, rents, rates, charges, damages, expenses, costs, or in case of sale the balance thereof, when the proceeds of sale are insuff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the goods has not consented to their possession by the bailee at all : Palmer on Bailment, 1979 Edition page 2 There may thus be bailment when a wharfinger takes possession of goods unloaded at the quay side : (1970) 3 All ER 825. A bailment is not therefore technically and essentially subject to the limitations of an agreement, and the notion of privity need not be introduced in an area where it is unnecessary, for bailment, as we have said, arises out of possession, and essentially connotes the relationship between a person and the thing in his charge. It is sufficient if that possession is within the knowledge of the person concerned. It follows that a bailment may very well exist without the creation of a contract between the parties and it essentially gives rise to remedies which, in truth and substance, cannot be said to be contractual. That is why Palmer has made the assertion that bailment is predominantly a tortious relationship (Page 36), and the two are fundamentally similar. Shri Desai countered that submission by claiming that the right of general lien conferred on bankers, factors, wharfingers, attorneys of the High Court and policy brokers is available pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In fact, the authorities which are relied upon to establish this lien are of somewhat doubtful persuasion; not only because they are old, but because it is possible to view them as establishing a customary lien only in a particular locality rather than some universal custom peculiar to the trade in question. Certainly, the wharfinger's lien may still be refused in relation to a particular region, even if it can now be considered to be one of general acceptance. The burden of establishing a general customary lien is a heavy one it may be that outside the City of London the wharfinger cannot rely upon automatic judicial recognition of the relevant custom but must establish it independently in relation to his particular port or locality. Of course, a lien may be conferred by express contract or in special cases by statute . 28. It must be mentioned that Shri Zaiwala very fairly stated that the Board is not claiming the right of general lien under common law, nor by any custom or usage. It is indeed not in dispute that the right of general lien was never claimed by the Port Trust authorities prior to the issuance of the Circular dated October 2, 1979. In our judgment, it is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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