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1997(9) Supreme 264
SUPREME COURT OF INDIA
(From Bombay High Court)
Dr. A.S. Anand & K. Venkataswami, JJ.
Sun Export Corporation & Anr. -Appellants
versus
Board of Trustees of the Port of Bombay -Respondents
Civil Appeal No. 655 of 1994
Decided on 23-10-1997
Counsel for the Parties :
For the Appellants, Parag P. Tripathi, Ms. Rakhi Ray & Ms. Bina Gupta, Advocates.
For the Respondent, R.F. Nariman, Sr. Advocate & Mrs. A.K. Verma, Advocate for M/s. J.B. Dadachanji & Co. Advocates.
Held : Bare reading of the definition of the expression "owner" under both the Acts, goes to show that the expression includes a "consignee" as also an "agent for sale or custody" of such goods. Thus, both under the Bombay Port Trust Act as well as under the Major Port Trusts Act, the expression "owner" includes an "agent for the custody of such goods". Therefore, irrespective of the question whether the expression "owner" could only imply the title holder in the goods as canvassed by Mr. Tripathi, from the definitions noticed above it follows that the expression "owner" would include within its ambit a "consignee" as well as the "agent for the custody of the goods" in question. We are in agreement with the view of the Division Bench of the High Court that on the endorsement made by the "consignee" on the Bill of Lading, the appellant No. 1 became the "consignee" and in view of the Letters of authority issued to it, appellant No. 1 was obliged to clear the goods as an "agent". Appellant No. 1 would therefore squarely fall within the definition of an "owner" both under the Bombay Port Trust Act as also under the Major Port Trusts Act, more particularly since it is not disputed that appellant No. 1 had secured an endorsement on the Bill of Lading with a view to obtain custody of the consignment. It is, therefore, not available to Mr. Tripathi to contend that the appellants could not be considered even to be the "agents for the custody" of the consignment. This being the fact situation, the liability to pay demurrage and other charges to the Port Trust would squarely lie on the party who was obliged to remove the goods from the warehouses but failed to do. (Para 13)
The expression "demurrage" has not been defined under the Port Trusts Act. In the context of the goods remaining in the wharfage, it implies the charges which the Port Trust can levy at a particular rate if the goods remain on the docks beyond a specified time. The Port Trust with a view to recover those dues would ordinarily have a lien on the goods and can refuse to deliver the goods till the demurrage charges are paid. This, however, presupposes that the Port Trust continues to hold the goods, but where the goods have been confiscated by the Customs Authority, it cannot be said that the Port Trust had any hold over those goods after their `confiscation . The obligation to pay the charges of the Port Trust, till the confiscation of the goods as already observed, that of the party which had the duty to remove/receive the goods and had failed to do so. In the instant case it was the appellants, who admittedly had acted as holders of the Letters of authority and were the licensee s agents for clearance of the consignment from the customs and entitled to receive the goods which they failed to receive and clear. They could therefore be fastened with the liability to pay charges by way of demurrage etc. to the Port Trust. (Para 13)
Further held : The goods, as already noticed, stood confiscated by the Customs Authority vide order dated 28th February, 1976 under Section 111(d) of the Customs Act, 1962 read with Section 3(2) of the Import and Export (Control) Act, 1947. The option to redeem the goods on payment of fine/penalty of Rs. 2 lakhs in lieu of such confiscation under the provisions of Section 125 of the Customs Act, 1962 was to be exercised by the appellants, to whom notice was issued by the Customs Authority within a fortnight to redeem the goods. That option was never exercised. Since, the goods stood already confiscated, the submission that those goods could have been sold to off-set the demurrage charges is fallacious. The goods confiscated by the Customs Authority were not available to the Port Trust for appropriation towards their dues. Section 63 of the Major Port Trusts Act, 1963, in the facts and circumstances of this case, does not come into play at all. (Para 14)
JUDGMENT
Dr. Anand, J.-Appellant No. 1 a sole proprietory concern of appellant No. 2, imported 10 cases of stainless steel tubes in July, 1974. The import of the consignment was effected against two Import Licences dated 13th November, 1973 and 1st February, 1974 which were held by a firm running under the name and style of M/s. Laxmi Engineering Company, District Sonipat, Haryana. The said firm obtained from the Joint Controller of Imports and Exports two letters of authority dated 20th February. 1974 whereunder the first appellant was to clear the goods in respect of those two licences. The consignment landed by vessel s.s. "JALA VEERA" on July 26/27, 1974 at Indira Docks. The consignment was to be cleared by the first appellant from the warehouse at Indira Docks. That, however, was not done. The Collector of Customs vide his order dated 28th February, 1976 found that the goods covered by the consignment were liable to confiscation under Section 111(d) of the Customs Act, 1962 for various reasons detailed in the order. Option to redeem the goods was, therefore, given to the appellant on payment of Rs. 2,00,000/- as penalty.
2. Since, the goods were not recovered from the warehouse at Indira Docks, the respondent, Bombay Port Trust authorities, served a notice on appellant No. 1, on April, 19, 1976, informing it about the non-clearance of the consignment and calling upon it to do the needful and pay the dues of the Port Trust. Appellant No. 1 informed the Port Trust on May 24, 1976 that the Bill of Entry was being completed and that the goods would be cleared and at the time of clearance, charges would also be paid. Since, the goods had not been cleared, on October 6, 1976, the Port Trust informed respondent No. 1 that demurrage charges amounting to Rs. 1,58,545.10 ps. were due upto the date of confiscation and called upon appellant No. 1 to remit the said amount. Since, there was no response, the Port Trust sent a reminder to appellant No. 1 on November 10, 1976 also for remitting the due amount. On December 3, 1976, appellant No. 1 informed the Port Trust that it had merely opened a Letter of credit and that the licence holder was liable to pay the costs and charges, who had failed to do so and 45 days time was, therefore, sought by appellant No. 1 to arrange necessary finance for payment of the dues. Since, appellant No. 1 failed to pay the charges and dues, the Port Trust instituted Suit No. 394 of 1979 on the Original Side of the High Court of Judicature at Bombay on November 26, 1979 for recovery of Rs. 1,58,545.10 with interest thereon @ 12% per annum from the date of the said suit till realisation. Appellants resisted the suit and various pleas were raised. It was claimed that the suit was barred by limitation. On merits the contention of the appellants was that since they were not the importers or owners of the goods, they were consequently not liable for the wharfage and demurrage charges. It was asserted that M/s. Laxmi Engineering Company of Haryana, being the licence holders for the import of stainless steel tubes, who had imported the said goods were the owners of the goods within the meaning of the expression "owner" under the Bombay Port Trust Act as well as under the Major Port Trusts Act, 1963 and as such that firm alone was liable to pay the dues of the Port Trust and since the Port Trust had failed and neglected to recover their dues from M/s. Laxmi Engineering Company, they were estopped from claiming demurrage and other charges from the appellants. From the pleadings of the parties, the following issues were framed:-
"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 go
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