IMPORTANT POINT
Under the provisions of the Major Port Trusts Act, the Board has a statutory lien and it is entitled to retain the goods until all amounts payable to it are paid.

Headnote:Major Port Trusts Act-Sections 58 and 59-Port charges obligation to pay-Board s lien for rates-Appellant imported into India, from Singapore, a consignment of bearings-Goods assessed by Customs and valued at Rs. 1,24,691-Appellant submitted a Bill of Entry for home consumption for clearance of goods-Seizure Order u/s. 110 Customs Act-Writ petition-Interim Order-Appellant permitted to clear goods on payment of duty as assessed on basis of CIF value-Order challenged-Customs Authorities opposed clearance of goods-Court directed that goods could be stored in a bonded warehouse of Customs Authorities-Port Authorities were directed not to raise any objection-High Court merely accepting undertaking from appellants to pay all charges as well as custom duty upon an effective adjudication of matter-Whether order of High Court was sustainable?-(No)-Charges of Port Authorities were to be paid before goods were removed.
       Held : The High Court seriously erred in permitting removal of the goods without payment of the port charges. To be noted that it was never disputed that the charges were payable. The 1st Respondent was not concerned with the dispute as to who had to pay the charges. It was the Appellant who was interested in clearance of the goods. It was for him to have paid the charges and cleared the goods. Even if it was the Appellants case that the Customs Authority had to pay the charges, the Appellant should have first cleared the goods by paying charges due to the 1st Respondent and then claimed reimbursement from the Customs Authority. (Para 6)
       Statutorily the 1st Respondent is entitled to claim payment of all demurrage charges before the goods were cleared. The Appellants never offered to pay the demurrage charges. They sought to misuse the Order of the Court and take the goods out of the custody of the 1st Respondent without payment of their charges. The 1st Respondent was fully justified in refusing to allow such clearance. The Appellate Court was right in concluding that the 1st Respondent was entitled to recover all charges till the date the goods remained with it. (Para 14)
       In our view, the 1st Respondent should have sold off the goods at that stage. They are a statutory body. Merely because there is no obligation to sell does not mean that they can allow the goods to lie around. By this time the 1st Respondent well knew that the Appellant was not paying the charges. Now the Court had permitted them to take recourse to such action as was available in law. Sale is contemplated in the Major Port Trusts Act itself. In our view the 1st Respondent should have now sold the goods. Apart from the fact that demurrage charges would have stopped running, valuable godown space would also have become available to them. On facts of this case, we feel that it would be just and proper that the 1st Respondent not be allowed to charge demurrage charges after 10th January, 1992. (Para 19)

JUDGMENT

S.N. Variava. J.-Leave granted.

Heard the learned counsel for the parties.

This Appeal is against an Order dated 27th July, 2000.

2. Briefly stated the facts are as follows:

The Appellant had imported into India, from Singapore, a consignment of bearings. The said consignment landed at the Port of Calcutta on 13th July, 1989. The Appellant submitted a Bill of Entry for home consumption for clearance of the said goods. The said goods were assessed by the Customs and valued at Rs. 1,24,691/-. However, on 1st August, 1989 before the goods could be cleared by the Appellant the Customs Authorities passed a seizure order under Section 110 of the Customs Act. The Appellant then filed a Writ Petition in the High Court of Calcutta. To this Writ Petition the 1st Respondent was not a party.

3. On 27th September, 1989 an interim order was passed, whereunder the Appellant was permitted to clear the goods on payment of duty as assessed on the basis of the CIF value as appearing in the invoice. However, the Appellant had to furnish to the Customs Authorities a bank guarantee to pay the difference between the duty found payable on a proper assessment and the duty being then paid by the Appellant. The Customs Authorities were also allowed to take a sample of the goods for necessary testing. This interim order did not provide that the Appellant could clear the goods without payment of the charges due to the 1st Respondents. Thus the Appellant could have cleared the goods only after payment of the charges payable to 1st Respondent.

4. The Customs Authorities then applied to the Calcutta High Court for modification of the earlier order. The Customs Authorities opposed clearance of the goods. On 15th December, 1989 the earlier order was modified. It was directed that the goods could be stored in a bonded warehouse of the Customs Authorities. To be noted that at this sage also the 1st Respondents are not a party to the Writ Petition. Therefore the goods could be cleared from custody of the 1st Respondent only on payment of all charges payable to the 1st Respondent.

5. Taking advantage of the order dated 15th December, 1989 the Appellant sought to remove the goods and put them into the bonded warehouse without payment of the charges due to the 1st Respondent. This was not allowed by the 1st Respondent. The Appellant then joined the 1st Respondent as a party to the Writ Petition. On 2nd February, 1990 the High Court passed an Order, in the presence of the 1st Respondent, permitting the Appellant to remove the goods to the bonded warehouse without payment of the port charges. The 1st Respondent was directed not to raise any objection. The High Court merely accepted an undertaking from the Appellants to pay all charges as well as the custom duty upon an effective adjudication of the matter.

6. At this stage it would be appropriate to note certain provisions of the Major Port Trusts Act. Section 58 of the said Act reads as follows:

"58. Time for payment of rates on goods.-Rates in respect of goods to be landed shall be payable immediately on the landing of the goods and rates in respect of goods to be removed from the premises of a Board, or to be shipped for export, or to be transhipped, shall be payable before the goods are so removed or shipped or transhipped. (emphasis supplied)"

Thus the charges of the 1st Respondent are to be paid before the goods are removed. The High Court seriously erred in permitting removal of the goods without payment of the port charges. To be noted that it was never disputed that the charges were payable. The 1st Respondent was not concerned with the dispute as to who had to pay the charges. It was the Appellant who was interested in clearance of the goods. It was for him to have paid the charges and cleared the goods. Even if it was the Appellants case that the Customs Authority had to pay the charges, the Appellant should have first cleared the goods by paying charges du

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2002 Supreme(SC) 265

IMPORTANT POINTUnder the provisions of the Major Port Trusts Act, the Board has a statutory lien and it is entitled to retain the goods until all amounts payable to it are paid.

Cases Referred (1)

IMPORTANT POINT
Under the provisions of the Major Port Trusts Act, the Board has a statutory lien and it is entitled to retain the goods until all amounts payable to it are paid.