IMPORTANT POINTS
Once the bill of lading is endorsed or the delivery order is issued, the consignee or endorsee would be liable to pay demurrage charges and other dues of the Port Trust authority.
In all other situations the Steamer Agent will be liable for such charges till the bill of lading is endorsed or delivery order is issued by the Steamer Agent.

Headnote:(a) Major Port Trust Act, 1963 – Section 42(2) read with Section 43(1)(ii) – demurrage charges and other dues of the Port Trust authority – Once the bill of lading is endorsed or the delivery order is issued, the consignee or endorsee would be liable to pay demurrage charges and other dues of the Port Trust authority – In all other situations the Steamer Agent will be liable for such charges till the bill of lading is endorsed or delivery order is issued by the Steamer Agent. (Para 11)
       (1963) Supp. 2 SCR 915 – Relied upon
       (1999) 7 SCC 359 – Distinguished
       (b) Major Port Trust Act, 1963 – Sections 61 and 62 – Recovery of dues of Port Trust – Enabling Port Trust authority to proceed against goods within its custody to recover the charges payable to it – If resort made to these provisions in ordinary and normal course, Port authority may not sustain any loss requiring it to initiate recovery proceedings against ship owners. (Para 12)
       Facts of the case:
       The consignee of the goods not having either cleared the same or having responded to any of the notices issued, the goods were sold by public auction by the Port Trust authority after almost four years of receipt thereof.
       The amount fetched in the auction fell short of the total charges payable which led the said authority to file a suit against the Steamer Agent for the balance amount.
       The suit was dismissed.
       In appeal, the High Court reversed the decree holding the Steamer Agent to be liable.
       Finding of the Court:
       The impugned orders of the High Court of Bombay and Calcutta are affirmed.
       Result: Appeals dismissed.

JUDGMENT

RANJAN GOGOI, J.

1. Leave granted in SLP(C) No. 4221 of 2012.

2. The common question of law that arises in these appeals, though in different facts and circumstances, is with regard to the liability of the agent of a ship owner (hereinafter referred to as the “Steamer Agent”) to pay demurrage and port charges to the Board of Trustees of a Port (hereinafter referred to as “the Port Trust Authority”) in respect of goods brought into the port and warehoused by the said authority. Before proceeding to answer the aforesaid question it will be convenient to take note of the core facts in each of the appeals under consideration.

Civil Appeal No. 2134/2006 and Civil Appeal arising out of SLP(C) No. 4221/2012.

3. The consignee of the goods not having either cleared the same or having responded to any of the notices issued, the goods were sold by public auction by the Port Trust authority after almost four years of receipt thereof. The amount fetched in the auction fell short of the total charges payable which led the said authority to file a suit against the Steamer Agent for the balance amount. The suit was dismissed. In appeal, the High Court reversed the decree holding the Steamer Agent to be liable. In doing so, the High Court held that the ratio of the law laid down by this Court in Trustees of the Port of Madras Through Its Chairman Vs. K.P.V. Sheikh Mohd. Rowther & Co. Pvt. Ltd. and Another1 (hereinafter for convenience referred to as ‘the 1997 judgment’) to be not applicable to the present case inasmuch as in the 1997 case the Steamer Agent had endorsed the bill of lading in favour of the consignee thereby transferring the property in the goods to the consignee whereas in the present case the consignee had not attempted to clear the bill of lading and had also not responded to the notices issued.

4. The facts in Civil Appeal arising out of SLP(C) No. 4221/2012 are largely identical with what has been stated above.

Civil Appeal Nos. 7088/2002, 7092/2002, 7094/2002 and 802/2005

5. In all these cases a Resolution of the Board of Trustees for the Port of Calcutta dated 21.10.1982 was challenged by which it was, inter alia, resolved that rent on cargo transported in containers may be recovered from the marine account of the Steamer Agent from the 16th day from the date of landing of the container if de-stuffing thereof is not done within the free time of 15 days. The challenge to the aforesaid Resolution by the Steamer Agent before the High Court having been negatived the appeals in question have been preferred before this Court.

6. On behalf of the appellants it has been argued that under the provisions of the Major Port Trust Act, 1963 (hereinafter referred to as “the Act of 1963”); the byelaws of the Port Trust authority and the schedule of rates framed by such authority no liability is cast either on the ship owner or his agent for payment of demurrage and port charges. The liability to pay all rates/rents/port charges being statutory, in the absence of a statutory empowerment, the liability sought to be fastened on the Steamer Agents is without authority of law. Referring to the definition of “Owner” in Section 2(o) of the Act of 1963 it is contended that neither the ship owner nor his agent comes within the ambit of the said definition of “Owner”. Specifically, it is contended that the “Shipper” mentioned in Section 2(o) is not a “Ship Owner”; a Shipper is a mere courier to whom the consignor hands over his goods for dispatch and delivery to the consignee. A “Shipper” is also known as a slot charterer/slot hirer. The agent referred to in the first part of definition of “Owner” in Section 2(o) (i) is an agent of the shipper and not that of the ship owner. The provisions of Section 42 of the Act of 1963 have also been relied upon to contend that once the goods come in to the custody of the Port Trust authority, there is a relationship of bailor and bailee between the consignee and the Port Trust authority and there is

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2014 Supreme(SC) 856

Cases Referred (1)