Suit for recovery of pre-confiscation Port Trust charges by the Board of Trustees of the Port of Mumbai against vessel agents. Court held agents liable as 'owners' under Major Port Trusts Act, 1963, and decreed suit with modified interest rate.
Suit decreed with interest at 6% per annum from date of suit.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
O. O. C. J.
SUIT NO.1467 OF 1988
The Board of Trustees of the Port of Mumbai Vs.
M/s. Burdwan Textiles and another
..Plaintiff.
..Defendants.
Mr. U.J. Makhija with Mr. Parag Khandhar i/b Mulla & Mulla & CBC for the Plaintiff.
Mr. Girish Desai i/b Bookwala & Co. for Defendant No.2.
CORAM : DR. D.Y. CHANDRACHUD, J.
1st September, 2009.
ORAL JUDGMENT :
of Mumbai for the recovery of pre-confiscation charges. The First Defendants were sued as importers / consignees / owners of the consignment on which Port Trust charges became payable. The Second Defendant has been sued as agent of a vessel, M.S. Mckinney Maersk.
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60 cartons and 20 cartons of Polyester Fabric were discharged by the
vessel on to the docks at Mumbai. The consignments were manifested under items 76 and 77 of Import General Manifest No.1700 dated 15th November, 1984. A copy of the Import General Manifest was furnished by the Second Defendant to the Plaintiff on behalf of the vessel. The general landing date and the last free day of the cargo fell on 15th November, 1984 and 19th November, 1984 respectively. The goods were confiscated on 1st December, 1986 in exercise of powers conferred by Section 111(d) of the Customs Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 by the Collector of Customs, Bombay.
The Plaintiffs issued two letters of demand on 8th August, 1987 and 26th August, 1987. The Second Defendants repudiated their liability
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in their letters dated 14th August, 1987 and 3rd September, 1987. Both
the letters of the Second Defendants described themselves as “agents : Maersk - Line”. The First Defendants were sued as importers / owners of the consignment. The Second Defendant has been sued as a bailor, having discharged the consignment into the custody of the Plaintiff.
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Defendants claimed that they had not delivered any cargo to the Plaintiff; that the cargo was delivered directly by the vessel and that there was a failure on the part of the Plaintiff to dispose of the cargo soon after the period of two months from the date of landing.
rate of 15% per annum as claimed in paragraph 14 of the Plaint;
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RE ISSUE No.1
turn on the interpretation of the expression “owner” for the purposes of the Major Port Trusts Act, 1963. Section 2(o) of the Act defines the expression “owner” as follows :
“(O) “owner”, (i) in relation to goods, includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods; and (ii) in relation to any vessel or any aircraft making use of any port, includes any part owner, charterer, consignee or mortgagee in possession thereof.”
parts. The first part defines the expression with reference to goods while the second part defines the expression in relation to a vessel or
a craft. For the purposes of the present suit, it is the first part that falls for interpretation. The first part includes within the purview of
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the expression “owner” (i) a consignor; (ii) a consignee; (iii) a shipper and (iv) an agent for the sale, custody, loading or unloading of goods.
custody, loading or unloading of such goods. The Plaintiff discharged the initial burden of establishing that the Second
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Defendants were the vessel agents, the vessel having discharged the consignment on to the Docks at Mumbai, by leading evidence of the Assistant Docks Manager. The Second Defendants chose not to lead any evidence in defence. This assumes significance because the defence which was sought to be made out in paragraph 9 of the written statement was that the cargo was delivered directly by the vessel and her officers and crew onto the Docks at Mumbai. The nature of the contract between the Second Defendants with the carriers and the obligations which the Second Defendants assumed under the contract were all facts which fell within the special knowledge of the Second Defendants. Evidently the Second Defendants chose to remain silent. An adverse inference has to be drawn by their failure to disclose the nature of the contract, in the sense that if the contract were to come before the Court, it would reveal the true nature of the obligations assumed by the Second Defendants towards the carriers.
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the expression “owner” under Section 2(O) of the Major Port Trust Act, 1963 in the Trustees of the Port of Madras v. M/s. K.P.V. Sheikh Mohd. Rowther & Co. Pvt. Ltd.1 . In the appeal which arose before the Supreme Court out of the judgment of the Madras High Court, the High Court held that once the goods are handed over to the Port Trust by the steamer and the steamer agent has duly endorsed the bill of lading or issued the delivery order, the obligation to deliver the goods personally to the owner or to the endorsee comes to an end. In other words, upon the endorsement of the bill of lading and the issuance of a delivery order, the property in the goods passes to the endorsee. The judgment of the Supreme Court contains the following extract from the judgment of the Madras High Court which was in appeal in that case :
“It cannot be said that the steamer or its agents have undertaken any responsibility for the custody of the goods after the transit has come to an end and after the bill of lading has been duly endorsed or a delivery order issued. By the endorsement of the bill of lading or the issue of a delivery order by the steamer agents, the property in the goods vests on such consignee or endorsee, and thus it appears to be clear that the steamer or the steamer agents are not responsible for the custody of the goods after the property in the goods passes to
1 AIR 1995 SC 1922.
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the consignee or endorsee till the customs authorities actually give a clearance.
2 1995(1) Scale 859.
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was a fictitious entity. In these circumstances, the first issue will have to be answered in the affirmative.
ISSUE NO.2
ISSUE NO.3
which the computation of the pre confiscation charges in the amount of Rs.2,15,851.80 was worked out. The working sheet was marked in evidence as Exhibit P-6 subject to cross examination. The witness for the Plaintiff was asked as to whether the working sheet was prepared under his supervision. The witness stated that he would not be able to tell the name of the person who had prepared it, but it was prepared by the bill supervisor working with the Plaintiff. The witness for the Plaintiff stated that he has gone through the record of
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the suit and was deposing to his affidavit in lieu of examination in chief on the basis of the record maintained by the Plaintiff. In paragraph 5 of his examination in chief the witness stated that he had personally verified the correctness of the working sheet which was produced by him. There was no cogent or tenable challenge to the correctness of the working sheet. Issue No.3 would therefore have to be answered in the affirmative.
3 issues framed by the court
Whether the Second Defendants, as agents of the vehicle, were bound and liable to pay Port Trust charges under definition of owner in Major Port Trusts Act, 1963.
Whether the suit consignment was confiscated by the Collector of Customs vide order dated 1st December, 1986.
Whether the Defendants are bound and liable to pay the sum of Rs.2,15,851.80 as Port Trust charges with interest.
Colour shows how this judgement treated each authority
Trustees of the Port of Madras v. M/s. K.P.V. Sheikh Mohd. Rowther & Co. Pvt. Ltd.Followed¶50
1 AIR 1995 SC 1922 · Who else cites this
International Airports Authority of India v. M/s. Grant Slam InternationalFollowed¶51
1995(1) Scale 859
The Board of Trustees of the Port of Mumbai
M/s. Burdwan Textiles
Second Defendant
DR. D.Y. CHANDRACHUD
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
