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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 ..... challenge. Facts of the Case:- (2) Between July, 1994 and September, 1994 the writ petitioner, Indian Trident Maritime (P) Ltd. (in short 'ITM') as steamer agent brought 125 containers of 20 feet length loaded with poppy seed from Karachi to Kolkata by ship and the same were landed at the Kolkata Port in transit to Nepal. The consignee of the cargo was resident in Nepal. (3) By reason of delay on the part of the consignee to take delivery of the cargo, ITM's containers remained blocked causing commercial loss and inconvenience to ITM. Accordingly, ITM wrote a letter dated 8 September, 1994 to the Customs Authorities requesting them to allow ITM to destuff the containers and store the cargo in the port sheds or any other place as directed by the Customs Authorities. This was followed by a letter dated 24 September, 1994 written by ITM requesting the Customs Authorities to keep the cargo in their custody and release the containers. (4) In the first week of January, 1995, ITM sought 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be entitled to in law to recover their rents and rates in respect thereof from the persons liable to pay the same. KPT was also directed to refund to the petitioners the ground rent debited from their marine A/c. No. 1-33 (13) On an appeal preferred by KPT against the said judgment and order, by an interim order dated 19 February, 1996 the operation of the order appealed against was stayed. (14) On 28 March 1996 an order was passed by the Appel Court directing the writ petitioners to deposit Rs. 5.5 lacs and an indemnity bond for Rs. 8.5 lacs with KPT. Further, Central Warehousing Corporation (in short 'CWC') was directed to allow destuffing of 78 containers at their premises at the cost of the writ petitioners. (15) By a judgment and order dated 4 December, 1996 the Appeal Court disposed of the appeal by remanding back the matter to the Ld. First Court for being heard on affidavits. ITM was directed to deposit a further sum of Rs. 14 lacs with 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were warehoused within 24 hours. (21) By a letter dated 24 December, 1996 the Customs Authorities informed ITM's Advocate that space for storage of the goods had been arranged in the three customs bonded warehouses in the West Bengal State Warehousing Corporation. (22) By an order dated 24 December, 1996, the Appeal Court extended the time for destuffing of the containers till 3 January, 1997. Subsequently, by an order dated 8 January, 1997 the Appeal Court extended the time fixed by the earlier orders by four weeks. (23) Between 23 December, 1996 and 17 February, 1997, 78 containers were removed by the writ petitioners from the port premises after destuffing the same. (24) According to KPT, a sum of Rs. 49,30,140/- plus interest is due and payable by the writ petitioner to KPT on account of demurrage charges for the containers after giving credit to Rs. 22,92,912/- already realized up to 14 August, 1995. Additionally, a sum of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory duties under the Major Port Trusts Act, 1963 (in short 'MPT Act'). He submitted that under the provisions of the MPT Act, the KPT is entitled to realize rents and/or demurrage charges in respect of the goods including containers that are landed in its premises until the same are removed therefrom. (27) Learned Sr. Counsel then submitted that KPT exercised lien over the containers for recovery of its claim on account of demurrage charges in respect of the containers and not the cargo inside the containers. No claim was ever raised by KPT in respect of the cargo inside the containers. The claim of KPT was on account of demurrage charges in respect of the containers. ITM being the owner of the containers, it is liable for such rent/demurrage charges. (28) Mr. Roychowdhury then submitted that the decisions in the cases of Trustees of The Port of Madras-vs.-K.P.V. Sheikh Mohd. Rawther & Co. Pvt. 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 judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 above question the liability to pay demurrage charges and port rent would accrue to the account of the Steamer Agent if a contract of bailment between the Steamer Agent and the Port Trust authority can be held to come into existence under Section 42(2) read with Section 43(1)(ii) of the Act of 1963. For the reasons already indicated the decision in Sriyanesh Knitters (supra) with regard to existence of a relationship of bailor and bailee between the consignee and the Port Trust authority instead of the Steamer Agent and the Port Trust authority cannot be understood to be a restatement of a general principle of law but a mere conclusion reached in the facts of the case where the consignee had already appeared in the scene. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e even in respect of period during which the importer was unable to clear goods from its premises for no fault or negligence on his part. The Hon'ble Court further held that the Boards were entitled to charge demurrage even in respect of periods during which the importer was unable to clear the goods because of the detention thereof by the Customs Authorities or the authorities under the Import Trade Control Regulations, which detentions were thereafter found to be unjustified. (33) Relying on the aforesaid submissions Mr. Roychowdhury prayed for setting aside of the order of the Learned Single Judge. Contention of ITM:- (34) Appearing on behalf of ITM, Mr. Pradip Kumar Ghosh, Ld. Sr. Counsel submitted that upon delivery order being issued by ITM as the Steamer Agent in September, 1994 and upon endorsement of the bill of lading in favour of the clearing agent, the steamer agent had 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disproportionate to the freight they collect for the carriage of the goods. No carrier will undertake such a risk and responsibility. The provisions of the Port Trusts Act cannot be so construed as to impose an additional liability or obligation on the carrier which was not contemplated by the contract it had entered into with the shipper. Having regard to the functions and obligations which a steamer has undertaken with the shipper under the contract, it cannot be said that the steamer has undertaken the responsibility for the safety of the goods till the goods are cleared by the Customs and taken delivery of by the consignee. (35) Mr. Ghosh, Learned Counsel, also relied on the decision of the Hon'ble Supreme Court in the case of Forbes Forbes Campbell & Co. Ltd. (supra) and in particular on paragraph 11 of the said judgment which has been extracted above. (36) Learned Counsel 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customs authorities seeking permission to de-stuff the containers on the port premises so that the empty containers could be put back into circulation in the business of carriage of goods. The details of the correspondence exchanged between the parties have been recorded above. It will be seen from the said correspondence that the containers were ultimately removed by the writ petitioners from the port premises between 23 December, 1996 and 17 February, 1997. The KPT debited the Marine A/c. of the writ petitioner no. 1 to the tune of Rs. 22,92,912/- for the period up to 14 August, 1995 on account of rent in respect of the containers that were stacked in the port premises. Additionally, KPT claims that a sum of Rs. 49,30,140/- plus interest is payable by the writ petitioner no. 1 to KPT on account of ground rent for the containers. Further, a sum of Rs. 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 steam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgo in question on port premises after the issuance of the delivery order or endorsing the bill of lading. Further, it would appear from the correspondence exchanged between the parties that ITM was running from pillar to post to persuade KPT to allow de-stuffing of the cargo from the containers on port premises. It was lack of diligence in the matter on the part of the KPT that forced ITM to approach this Court in its writ jurisdiction. The genesis of the litigation is clearly traceable and attributable to the indolence and inaction on the part of the KPT. There was no lack of effort or action on the part of ITM. Naturally, ITM could not remove the containers without de-stuffing the same as the cargo in the containers did not belong to ITM. The delay in de-stuffing the containers cannot in any manner be attributable to ITM. Hence, in our opinion, KPT was not entitled to debit the Marine A/c. of ITM to the tune of Rs. 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 Rs. 6.84 lakhs approximately can also not be imposed on ITM since the obligation of de-stuffing the contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , notice of removal may be served even prior to expiry of one month. (45) It will be seen from the above discussion that any claim of the port authorities on account of rent or rates or other port charges has been protected by the MPT Act. The port authorities have a statutory lien over the goods which are stored on its premises for the unpaid rent/rates and in exercise of such lien the authorities may sell the goods to recover their dues. (46) In the instant case, the port authorities could have exercised their statutory rights under Sections 61 and 62 of the MPT Act. However, they did not do so. They slept over their rights. Considering that the consignment in question was perishable in nature, the KPT ought to have acted diligently and with some sense of urgency. If the cargo in question has become unfit for consumption 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 resp ..... 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