The court emphasized the power of the Board under Section 26(1)(g) of the Major Port Authorities Act, 2021 to consider exemption or remission from demurrage charges for goods in a bonded warehouse.

JUDGMENT

(Prayer: Writ Petition is filed under Article 226 of the Constitution of India to issue a

Writ of Certiorari, calling for the records relating to the impugned communication

No.Legal/577/2003/TC dated 30.10.2007 issued by the second respondent and quash

the same as illegal, arbitrary and unsustainable in law.)

1. This Writ Petition was filed challenging the impugned communication dated 30.10.2007 issued by the second respondent directing the petitioner to pay demurrage charges to the tune of Rs.73,22,231/-.

2. The case of the petitioner is that one Chokhani International Limited, Chennai, which was a 100% E.O.U was engaged in ship repairing business. For this purpose they had imported certain materials. The materials were stored in the bonded house. They had borrowed money and had defaulted in the repayment of the same. Hence, the concerned bank initiated proceedings before the DRT and ultimately all the properties belonging to the above said company was brought up for public auction.

3. The auction was conducted on 17.12.2002, and petitioner participated in the auction with regard to lot No.4 and the petitioner was declared as the highest bidder. The goods that were remaining in the bonded warehouse was sought to be removed and at that point of time, petitioner made a representation to the fourth respondent and the fourth respondent opened the godown. The raw materials that were found therein were classified as scrap and the fourth respondent conducted a survey and based on the survey report, the duty payable was assessed at Rs.6,65,152/- The petitioner paid the customs duty on 28.08.2007 and the fourth respondent permitted the petitioner to clear the bonded goods after paying the necessary service charges.

4. The petitioner thereafter approached the Port Trust for permission to clear the goods. The petitioner also provided with the payment of the customs duty and the fourth respondent also through their letter dated 15.05.2008 informed the Chennai Port Trust, that they do not have any hold/lien over the goods. When the petitioner requested for the clearance of the goods, the second respondent through letter dated 30.10.2007 directed the petitioner to pay a sum of Rs.73,22,231/- towards demurrage charges and thereafter remove the goods. Aggrieved by the same, the present Writ Petition was filed before this Court.

5. The second respondent has filed a counter affidavit. The relevant portions in the counter affidavit are extracted hereunder:-

3.The respondent submits that the Tribunal was pleased to direct the auction purchaser to remove the goods from the Port premises within a reasonable time. It is submitted that no specific order was issued by the DRT regarding the time limit for removing the materials of Lot No.IV since the sale of Lot No.IV was confirmed on 08.08.2003. The 6 months free period awarded in respect of Lot No.I & II for the clearance of auctioned materials from the date of purchase was further extended to 3 months by DRT and the same criteria had been followed in the Lot No.IV also. Hence, the free period of delivery of Lot No.IV was taken as 9 months and the demurrage was calculated after the date of expiry of free period in respect of Lot No.IV (i.e. 09.05.2004 to 31.10.2007). This respondent submits that the petitioner removed some part of Lot No.IV materials lying in the open yard on 15.11.2003 and 22.11.2003 under Special Vehicle Ticket by paying Port dues (i.e Wharfage alone) vide Account Voucher No.1313 dated 17.11.2003. It is submitted that with regard to the materials lying inside a sealed godown/shed the petitioner by letter dated 29.03.2004 had requested the Assistant Commissioner of Customs to open the shed to find out the conditions of the materials. It is learnt that when it is opened, it was found that the materials lying there were totally damaged and became junk. Hence, the petitioner has requested for conducting a fresh survey by the Customs authorized surveyor for the purpose of reassessme