2017 Supreme(SC) 198

SUPREME COURT OF INDIA
J. CHELAMESWAR, ABHAY MANOHAR SAPRE, JJ.
M/S. RASIKLAL KANTILAL & CO. – Appellant
Versus
BOARD OF TRUSTEE OF PORT OF BOMBAY & OTHERS – Respondents
CIVIL APPEAL NO. 5968 OF 2011
Decided On : 28-02-2017

IMPORTANT POINTS
BOARD entitled to seize and detain goods until the rates and rents are fully paid.
Pure and substantial question of law can be raised in the Supreme Court for the first time.
Point of time when the property in the goods passes to the consignee is not relevant. Depending on the nature of the relationship between the consignor and consignee, the liability may befall either of them.
Obligation of the bailee to return the bailed goods after the purpose of bailment is accomplished and obligation of the bailor to pay the necessary expenses incurred by him for the purpose of the bailment to the bailee; Would attend every kind of bailment.
Liability of consignee would be the same as those of consignor from the moment the property in goods passes to the consignee.
Power of remission of demurrage is discretionary. Must be exercised rationally.

Headnote:(a) Major Port Trusts Act, 1963 – Section 48 – Section 48 authorises BOARDS to stipulate and collect rates for various services to be rendered – However, the Act is silent regarding persons from whom such rates could be collected. (Para 19)

       (b) Major Port Trusts Act, 1963 – Section 59, 61 and 62 – Lien on goods – BOARD entitled to seize and detain goods until the rates and rents are fully paid – BOARD can sold such goods by public auction without filing a suit for recovery of the amounts due. (Para 21, 23)

       © Major Port Trusts Act, 1963 – Section 59 – Regulation 2(g), International Airports Authority (Storage and Processing of Goods) Regulation, 1980 – Demurrage – Rate or amount payable to the airport by a shipper or consignee or carrier, for not removing the cargo within the time allowed – Chargeable on all goods left in Board’s transit sheds or yards beyond the expiry of the free days. (Para 26)

       (1976) 3 SCC 167; (1997) 11 SCC 343 – Relied upon

       (d) Constitution of India – Article 136 – Pure and substantial question of law can be raised in the Supreme Court for the first time. (Para 31)

       (e) Major Port Trusts Act, 1963 – Section 59 – A BOARD could recover the rates due, either from the steamer agent or the consignee – Point of time when the property in the goods passes to the consignee is not relevant – Also, the question is not who is liable – Depending on the nature of the relationship between the consignor and consignee, the liability may befall either of them. (Para 37, 39, 46)

       (1997) 10 SCC 285; (2015) 1 SCC 228 – Relied upon

       (1999) 7 SCC 359 – Referred

       (1963) Supp. 2 SCR 915 – Distinguished

       (f) Major Port Trusts Act, 1963 – Section 59(1) – Essence of bailment is possession – Consent of owner of the goods is not necessary. (Para 40)

       (1981) 1 SCC 228; AIR 1967 SC 1885 – Relied upon

       (g) Contract Act – Section 148 – Any person capable of giving physical possession of goods can enter into a contract of bailment and create bailment – Title to the goods is irrelevant. (Para 41)

       (h) Contract Act – Section 158 – Obligation of the bailee to return the bailed goods after the purpose of bailment is accomplished and obligation of the bailor to pay the necessary expenses incurred by him for the purpose of the bailment to the bailee – Would attend every kind of bailment. (Para 42)

       (i) Bills of Lading Act, 1856 – Section 1 – Bill of lading – Evidence of contract between shipper (consignor) and consignee – Liability of consignee would be the same as those of consignor from the moment the property in goods passes to the consignee – Consequently 1st respondent held entitled to enforce its rights against the consignee and recover expenses. (Para 44, 45, 48)

       (j) Major Port Trusts Act, 1963 – Section 53 – Remission of demurrage – Power discretionary – Must be exercised rationally – No cap – Guidelines permitting remission up to 80 % – Cap of 80% not absolute – Appellant claiming through consignor not entitled to claim any right of remission – Delay in clearing goods due to litigation – No ground to claim remission. (Para 49, 50, 53)

       (1995) 3 SCC 151 – Relied upon

       Facts of the case:

       During the period November 1991 to January 1992, 78 shipments of zinc ingots and copper iron bars were imported by 5 different consignees from one M/s Metal Distributors (UK) Ltd.; these consignments were landed at the Bombay Port. The consignees filed bills of entry for 37 out of the 78 consignments, but subsequently failed to lift the consignments and thus, they came to be stored at by the Port of Bombay.

       Facing a grave loss M/s Metal Distributors (UK) Ltd., requested the present petitioner, if they were interested in purchasing the goods. On 23.03.1992, the petitioner through his agent applied to the Customs Authorities to have the Bills of Entry substituted in their name for the 37 consignments for which the original consignees had filed Bills of Entry, and also applied to file Bills of Entry for the remaining 41 consignments lying unclaimed. The formal agreement between the M/s Metal Distributors (UK) Ltd. and the petitioner was entered subsequently, in April of 1992.

       That on 05.05.1992 the Clearing Agent of the petitioner sought an amendment of the IGM from the Customs Authorities so that the goods could be cleared. This was followed by a communication dated 03.06.1992 from the original exporter i.e. M/s Metal Distributors UK that the petitioner had agreed to buy the aforesaid consignments since the original importers had failed to clear the goods.

       On 09.09.1992 the petitioner was granted a detention certificate by the Customs Authority for the aforesaid 41 consignments signifying the period of detention as from 23.03.1992 to 09.09.1992.

       In the meantime the Port of Bombay levied a total of Rs.2,81,67,333 as demurrage charges, the total remission granted by the Port of Bombay was Rs.90,52,535, and therefore demanded a balance of Rs.1,91,14,798 on the ground that the petitioner was liable to pay demurrage for the period of 23.03.1992 till 09.09.1992, on the ground that no remission could be granted prior to date of noting.

       The appellant, filed WP and cleared the goods after making payment of the amount (claimed by the 1st respondent towards demurrage), under protest.

       The High Court dismissed the writ petition.

       Finding of the Court:

       Appellant is liable to pay demurrage.

       Result: Appeal allowed partly.