9911796707
TMI Blog1987 (1) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... nts was 20th January, 1986 and the last free date in respect of them was 23rd January, 1986. Thereafter the said consignments were incurring demurrage. The bills of entry were submitted by the 1st respondent to the customs authorities in the same month. Disputes arose between the 1st respondent and the customs authorities with regard to the basic Customs duty payable in excess of 32.50% (as goods were imported from the Republic of Korea which was a developing country), with regard to loading the assessable value with customs duty for calculation of the additional duty and with regard to loading the CIF value with the landing charges. Not being satisfied with the contentions of the customs authorities the 1st respondent filed a writ petition in Writ Petition No. 122 of 1986 for the issue of certain directions to the customs authorities with regard to the levy of customs duty. In that writ petition of Jan. 21, 1986 the High Court passed an interim order which directed the customs authorities not to insist on payment of the customs duty in dispute pending hearing and disposal of the writ petition on the 1st respondent furnishing a bank guarantee to the extent of the 90 per cent of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he customs authorities for the issue of a writ directing them to issue a detention certificate in respect of all the 5 consignments. On the 24th April, 1986 the learned single Judge passed a final order directing the customs authorities to issue a detention certificate to the 1st respondent on the 1st respondent giving an undertaking to the Court that it would pay the amount, if it failed in Writ Petition 122 of 1986. Pursuant to the order, dated 24th April, 1986 passed in Writ Petition No. 1007 of 1986 the 1st respondent gave an undertaking to the Court that it would pay the amount upon its not succeeding in Writ Petition No. 122 of 1986. On the 21st May, 1986 the Port Trust received a letter, dated 19th May, 1986 from the Assistant Collector of Customs in which it had been stated inter alia that five detention certificates had been sent along with the said letter. Actually no enclosures were received along with the said letter. But later on they received two detention certificates in respect of two out of the five consignments on that day. They related to two bills of entry bearing Nos. 3133/219 and 3133/220. On the same day the Docks Manager of the Port Trust received a letter f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling by their Advocates, the 1st respondent threatened the Port Trust with contempt proceedings by its letter, dated 20th June, 1986. Immediately after the receipt of the said letter, the Port Trust lodged the Appeal No. 512 of 1986. By an order, dated 26th June, 1986 the appeal filed against the order, dated 2nd April, 1986 passed in Writ Petition No. 1007 of 1986 was summarily dismissed. The said order, however, stated as under :- "It is, however, clarified that it is clear from the impugned order, dated 24-4-1986 that the undertaking pertains to the demurrage charges payable to the Port Trust, if the respondents Nos. 1 and 2 (petitioners) failed in Writ Petition No. 122 of 1986 on the footing that no valid detention certificate could have been issued in that event. Mr. Chinoy contends that the detention certificate could not be issued, if in the adjudication proceedings the petitioners are found at fault and the question of the petitioners giving an undertaking to provide for this does not appear to have been present in the mind of the learned Judge when the order was passed. Liberty to the appellants to seek further clarification and/or orders on this question from the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in not making a similar order directing the 1st respondent to furnish a bank guarantee in respect of the wharfage and demurrage charges payable to the Port Trust in the event of the 1st respondent being ultimately held as the party in default. 6. The Port Trust is constituted under the Major Port Trusts Act, 1963 (hereinafter referred to as "the Act"). Under Section 5 of the Act every Board constituted under it is declared to be a body corporate having perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold or dispose of property and it may, by the name by which it is constituted, sue or be sued. The affairs of the Port Trust are managed by the Board of Trustees and committees appointed by it in accordance with the provisions of the Act. It is thus an independent statutory body and not just a department of Government. Under Chapter VI of the Act the Board of Trustees of a Port Trust is empowered to impose and recover rates at ports, for services rendered by the Port Trust or other persons at the port under its jurisdiction. Sections 48 to 65 of the Act which are in Chapter VI of the Act deal with the said power of the Board of Trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent indicated in paragraph 4.10 of the note which is enclosed as Ext. "B" to the Special Leave Petition (Civil) No. 8466 of 1986. It reads thus : "4.10 - The best course seems to be to charge a rate per day which corresponds to our minimum charge for handling, storage, care and custody of the goods after the expiry of the free days. Wharfage constitutes handling costs plus storage charges for a period of four days. Deducting handling costs, the balance represents storage charges for a period of four days. It is estimated that, excluding the handling costs, storage charges per day are equal to 20% of total wharfage. It is, therefore, suggested that for the entire period of certified detention we may retain per day 20% of the wharfage to cover the services referred to herein." 7. The above concession is extended by the Port Trust in appropriate cases where detention certificates are issued by the customs authorities. The customs authorities have laid down the procedure for issue of detention certificates and the current procedure in regard to the issue of detention certificates is embodied in the Bombay Customs House Public Notice No. 111, dated 29th July, 1985. Paragraph 2 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value in terms of Section 14 of the Customs Act." 8. It is agreed between the customs authorities and the Port Trust that no detention certificate would, however, be issued by the customs department if there has been any default on the part of the importer or exporter. It is thus clear that in the event of the importer or exporter being at fault, he would not be entitled to any concession in the matter of demurrage charges. He has to pay whatever is payable in accordance with the "scale of rates" charged at the docks as fixed by the Port Trust. 9. The power of a Port Trust to fix rates of demurrage and to recover the same from an importer or exporter (although the question of an exporter paying demurrage arises rarely) under law and to show concession as regards demurrage charges in certain specified cases is recognised by this Court in the Trustees of the Port of Madras v. M/s. Aminchand Pyarelal & Others 1976 (1) S.C.R. 721 and in the Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co. 1977 (3) S.C.R. 343. These decisions are no doubt based on the relevant laws which were in force at the material time. But the decisions are still relevant insofar as cases ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order which affects its interests prejudicially is passed. This case serves as an illustration to what is stated above. The Port Trust has been asked to permit the clearance of goods in respect of which demurrage charges of Rs. 3,53,514.75 paise are payable in the event of the 1st respondent being held liable in law to pay the full demurrage charges. The orders passed by the High Court in the proceedings to which the Port Trust was not a party which had the effect of prejudicially affecting the interests of the Port Trust would not be binding on it in view of the violation of the principles of natural justice. the High Court erred in not imposing any condition on the 1st respondent for protecting the interests of the Port Trust even in the writ petition to which it was a party. The impugned orders are contrary to the public notice issued by the customs authorities as well as the rules of the Port Trust. 12. Having regard to the peculiar circumstances of this case in which the goods have already been cleared, the orders of the High Court of Bombay against which these appeals are filed, therefore, to be modified appropriately in order to protect the interests of the Port Trust. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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