9911796707
TMI Blog1989 (12) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the said consignment within the meaning of the Major Port Trusts Act, 1963, as amended in 1974. The plaintiffs further say that the defendants were liable to take delivery and clear the same within seven clear days from the date of landing thereof and to pay wharfage, demurrage and other charges which accrued thereon for the period during which the goods remained on the docks. The defendants failed and neglected to clear the said consigment. It appears that by an order dated February 28, 1976, passed by the Collector of Customs, the said consignment was ordered to be confiscated under Section 111(d) of the Customs Act, 1962 read with Section 3(2) of the Imports and Exports (Control) Act, 1947. The plaintiffs received the order of confiscation for the First time on or about April 7, 1976. Since, the defendants failed and neglected to take delivery and/or to remove the said consignment, the plaintiffs became entitled to recover the charges in respect of the said consignment for the period from the date of landing of the said consignment till the date previous to the said order of confiscation (exclusive of the free days) amounting to Rs. 1,58,545.10/- under Section 48(d) read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quested the plaintiffs to take charge of such goods. In the present case there has been no such request from the defendants. 6. The defendants say that they had not imported the goods. One M/s. Laxmi Engineering Compay of Haryana held two licences authorising them to import stainless steel tubes and in pursuance thereof the said M/s. Laxmi Engineering Company imported the said goods. Because the said M/s. Laxmi Engineering Company were in Haryana and the goods were to be imported at Bombay they, for the purpose of such import, obtained from the Joint Chief Controller of Imports and Exports, two letters of authority dated February 26, 1974 in respect of the said licences in favour of the first defendants in accordance with the provisions of the relevant import policy. Under the said import policy the said two letters of authority constituted the first defendants an agent of the said M/s. Laxmi Engineering Company for the limited purpose of import policy and the goods imported were, and remained, the properly of M/s. Laxmi Engineering Co. up to clearance and subsequent thereto. It was also one of the conditions of each of the said import licences that the goods imported remained th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistaken belief that since the plaintiffs made a claim from the defendants it was the defendants' liability to pay the same and the said letters were written without the defendants being then aware of the correct legal position in the matter. They submit that under the law the plaintiffs could not have had any claim against them and they were not liable and were under no obligation to pay the sum of Rs. 1,58,545.10/- or any part thereof. In these circumstances, they submit that the suit is liable to be dismissed. 9. On the basis of these pleadings, the following issues were framed and settled. 1. Whether the suit is barred by the law of limitation? 2. Whether the defendants were the importers and/or owners of the goods mentioned in para 4 of the plaint, as alleged in para 6 of the plaint? 3. Whether the plaintiffs were not entitled to take charge of the consignment mentioned in the plaint except on the request of the owners of the goods as provided under the Major Port Trust Act? 4. Whether the defendants were under an obligation or were bound to apply for and take delivery of the said goods and to clear the same within seven clear days as alleged in paras 6 and 9 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the goods had contained the mark containing the initials of the first defendants. He denied the suggestion that the defendants endorsed the bill of lading in favour of the clearing agents. According to him M/s. C.C. Shah Sons were the clearing agents of M/s. Laxmi Engineering Co. He finally admitted that the first defendants did endorse the bill of lading in favour of M/s. C.C. Shah Sons. He also stated that he did not remember who paid the charges of the clearing agents. He also stated that the defendants might have paid the charges of the clearing agents. The defendants also submit the bill of entry for clearance of the goods. The defendants were also served with a show cause notice by the Customs authorities. A reply to that was also given by the defendants. An order of confiscation was also addressed to the defendants. Issue No. 1. 11. Mr. Chinoy submitted that the suit is within the period of limitation inasmuch as the order of confiscation was dated February 28, 1976 and the period of limitation would start only from the date of confiscation and not earlier. In that connection he relied on a judgment given by Variava, J. on July 20/21,1988 in Suit No. 194 of 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This correspondence is followed by a letter dated November 10, 1976 to the same effect. It is stated in the said letter that if the amount was not remitted within fifteen days from the date of the receipt of the letter legal action will be taken to enforce recovery of the same at their entire risk and costs. To this letter the defendants replied by a letter dated December 3, 1976. In this letter the defendants stated that in order to assist the small-scale industry, at their specific request they opened a letter of credit and the licensees were under obligation to pay them in advance all costs and charges. But they failed to do so and that, therefore, the defendants were put to unforseen liabilities to make the payment of about Rs. 6,00,000/-. Therefore, they requested the plaintiffs to allow them about forty-five days time to arrange necessary finance for payment of duty and fine. They further requested that the plaintiffs should postpone any legal action for at least another sixty days during which they would endeavour to obtain clearance of the consignment. There is further correspondence and finally the plaintiffs had to file the present suit. 14. Mr. Chinoy submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the consignees or not or whether the defendants were agents of M/s. Laxmi Engineering Company or not, it would make no difference inasmuch as it could be said that the defendants were connected with the consignment and that the evidence shows that the defendants had financial interest in the goods. Mr. Chinoy, in particular, pointed out that the defendants' witness has categorically admitted that initially he invested about Rupees two to two-and-a-half lakhs and thereafter, he admitted that in all he invested about Rupees six lakhs in respect of this transaction. Mr. Chinoy submitted that excepting the bare words of the witness there is nothing to show that the defendants were reimbursed by the said M/s. Laxmi Engineering Co. In this connection he relied on certain judgments given by this Court in two or three matters wherein it has been slated that if a person is somehow connected with the goods or has financial interest in the goods, such a person could be considered as "owner" within the meaning of the Act. 19. As against this Mr. Patel submitted that it is an admitted position that his clients had a letter authority in terms of the Rules and Procedure of the relevant Import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd for clearance of the goods, the Port Trust can naturally sue the owner of the goods, inasmuch as it is his goods that are lying on the docks. Very often the owner could be an unknown person as far as the Port Trust is concerned. That is why the law in its wisdom has included two others, viz., the consignor or the consignee. Since the liability has to be fixed on the basis of the definition of "owner" itself, that will have to be construed strictly. The Port Trust is not concerned with any outside arrangement between the owner of the goods and any other person for purchase or for any other purpose. 22. In the present case it is an admitted position that the defendants were acting pursuant to the letter of authority issued to them in terms of the Rules and Procedure of the Import Trade Control Hand-book of 1972-73. Under para 268 a licensee who desires another party to indent the goods from abroad or open a letter of credit or make remittances or to import the goods on his behalf against any particular licence issued to him, should apply for a letter of authority in favour of such party in respect of that licence. Such application should be made to the licensing authority who is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agents as far as the particular import licence was concerned. If that is so, as per the conditions of the letter of authority that the goods imported shall be the property of licensee "both at the time of clearance through the Customs and subsequent thereto". The terms and conditions further require that the licensee will have to ensure that the goods on importation will be delivered to him and shall not be disposed of otherwise. He shall not cause or permit the holder of letter of authority to dispose of the goods. The letter of authority holder is also not entitled to any benefits or quota licence or quota certificate on the basis or such imports. Therefore, it is clear that as far as the defendants are concerned, they were agents within the meaning of para 272 of the said hand-book. They were not the agents for custody and they were not the agents for sale of the goods. 23. Mr. Chinoy submitted that if one looks at the bill of lading it could be said that the defendants were consignees of the said goods and, therefore, in any event, they would be the owners within the meaning of the said Act. The bill of lading has been exhibited as Ex. B in the suit. The same shows that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts if the defendants were to come forward for taking delivery they could have been agents for custody or for loading or unloading (under the Major Port Trusts Act) and could have been liable. But that is not so. They did not go to the Port Trust. It was C.C. Shah Sons, the dearing agents who were to take delivery of the goods. The Port Trust chose not to claim from the Bank, the consignees M/s. Laxmi Engineering Co., the licensee at whose instance the goods were imported, or from C.C. Shah and Sons, the agents for clearing, all on their own. 24. Mr. Chinoy in that connection sought to rely on Section 1 of the Indian Bill of Lading Act, 1856, to contend that every consignee of goods named in a bill of lading and every endorsee of a bill of lading to whom the property in the goods therein mentioned shall pass, can be considered as a consignee. This argument has in fact been negatived by the Division Bench of our High Court in the case of Board of Trustees, Bombay Port v. Sriyansh Knitters, (A.I.R. 1983 Bombay 88) and the relevant passage is as follows: "It was urged by the learned counsel that the title to the goods passed in favour of the consignee on presentation of Bill of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etation of the definition of the word "owner" was sought to be given so as to include all persons who have a connection or interest in the goods. The learned Judge categorically held that in view of the order of confiscation and the findings given therein as also in view of the submissions made by defendant No. 2 before the Customs authorities it is not possible to say that the second defendants had no title to or interest in the suit goods, at all. The learned Judge further observed that if they had financed the purchase of these goods and admittedly had "an intention" to purchase them from the importers, they had sufficient interest in the goods to make them liable for the payment of demurrage charges to the Bombay Port Trust Authorities. Therefore, in my view, the learned Judge came to the said conclusion on the basis of the facts where it was clear that the first defendants as persons who had the import licence and the second defendants as persons who had agreed to purchase the goods were clearly liable and, therefore, they could be sued. 26. Mr. Chinoy then drew my attention to a judgment given by S.K. Desai, J. on February 22, 1983, in the case of The Trustees of the Port o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er comparing the same with the indent, second defendants handed them over to the first defendants along with the custom copy of the licence. From the evidence of the plaintiffs' witness it had also come to light that the Bill of Lading was in the name of the first defendants and that one M/s. Jeenah Co. acted as the clearing and forwarding agents of the first defendants. It is true that the learned Judge was not given a copy of the letter of authority issued by the second defendants to the first defendants. The learned Judge presumed that the general form of letter of authority was as per the form contained in Appendix 25 of the hand-book referred to above. With respect, the learned Judge's attention was not drawn to the fact that this being a case of canalisation of imports the letter of authority was subject to such terms and conditions as would be settled between the licensee and the party concerned. In fact para 274 of the hand-book relates to such letter of authority and it reads as follows : "274. Licences issued to agencies owned or controlled by the Central Government and which are entrusted with canalisation of imports - The Imports (Control) Order, 1955 has been ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the holder of letter of authority itself shows that he can place an order, open a letter of credit, and also make remittances to import goods and clear the same through the Customs, but all on behalf of the licensee. Just because he has invested some amount for clearance of the goods or for obtaining the necessary documents from the Bank, it does not mean that in law such a person can have any financial interest in the goods as such. If that is so, in my view, this suit as against the defendants is not maintainable at all. 31. Mr. Chinoy pointed out from the order of confiscation that the order has been passed against the defendants as also the others. The Collector of Customs has categorically stated that the goods have been imported without cover of a valid import licence and that all the three have been held to be liable. But I must say that the defendants had expressly contended before the Collector of Customs that they are only holders of the letter of authority and they have only imported the goods for the licence-holder. The order nowhere indicates that the defendants had any other interest in the consignment, as such. 32. Mr. Patel has also argued that under the law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case before me is decided mainly on the question as to whether a letter of authority holder, within the meaning of the Rules of the hand-book, can be considered as consignee or owner of the goods within the meaning of the Act. 34. Mr. Patel has also drawn my attention to the following passage in the case of Trustees, Port of Madras v. Aminchand Pyarelal, (A.I.R.1975 S.C. 1935) : "Facts must come before the law for legal principles cannot be applied in a vacuum. No oral evidence was led by the parties and we find it difficult on a mere perusal of documents to say that respondent No. l ought to be held liable to meet the appellants' claim. Documents do not prove themselves nor indeed is the admissibility of a document proof by itself of the truth of its contents Import Licence No. CL/53/3/02105-1 dated June 16, 1962, under which the goods were imported stood in the name of the State Trading Corporation of India. It issued an authorisation in favour of the 1st respondent which, as the documents go, was liable to deliver the consignment to the nominees of the Corporation. The 1st respondent, it would appear was only entitled to charge a commission for the work done by it in pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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