Swastik Stevedors Vs State

“It is therefore humbly prayed that this Hon’ble Court be graciously pleased to admit this writ petition, call for record, issue rule nisi calling for the opp.parties to show cause as to why the rule issued will not be made absolute and on receipt of show cause sufficient/in sufficient be pleased to pass the following:

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1.Declare the action of opp.party in making the illegal demand of Rs.5,07,407/- towards demurrage charge vide Annexure-7 as illegal.

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2.Pass appropriate writ/writs directing the opp.party no.2 to not to interfere the with shifting/supply of CARE FOOD material meant for 11 lakhs poor people of the State of Orissa in any manner.

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3. Issue appropriate order declaring annexure-8 and 9 as illegal and direct the opp.party no.2 to not to give effect to the order dtd.1.2.1999 as available at Annexure-13.

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4. And to pass such other order/orders as may be deemed fit and proper.”

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The essential grievance of the Petitioner is as to the demand for demurrage charges for not lifting the cargo from harbor dock to the designated places for a period exceeding 45 days.

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Counsel for the Petitioner submits that there is no privity of contract between his client and the OP No.2-Paradip Port Trust, which is a statutory authority under the Major Port Trusts Act, 1963. He also submits that the cargo belongs to the OP No.1- State and the demurrages are payable for keeping the cargo beyond the specified time limit; if demurrage is not paid ordinarily under the Law of

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Admiralty, the cargo is liable to be auctioned or forfeited, as the case may be, and in that event, the looser is the State and not the Courier. Lastly, he submits that the arrangement between the State and the Petitioner whereunder arguably the liability is on the Petitioner cannot be enforced by the Port Trust, as has been observed in Chitty on Contracts.

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Learned AGA-Mr. Lenka appearing for OP No.1 and learned Panel Counsel appearing for OP No.2-Port Trust make submission in justification of the demand for payment of demurrage and resist the petition contending that it is the duty of Petitioner to discharge the liability and therefore, no relief can be accorded to it, more particularly, in the light of agreement between the State & the Petitioner, which has the effect of fastening the liability on the Petitioner in favour of the Port Trust. Both the Panel Counsel and the AGA draw attention of the Court to some record in support of their contention.

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Having heard learned counsel for the parties and having perused the petition papers, this Court is inclined to grant indulgence in the matter as under and for the following reasons:

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5.1. It has been a long settled position in the law that contracts bind parties thereto subject to all just exceptions and therefore, in the absence of privity of contract, a non-party cannot enforce contractual obligation resisting on parties. Admittedly, the Port Trust is not a party to the contract entered into between the Petitioner on the one side and

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the State on the other. No interest or obligation is created in the instrument, in favour of the Port Trust to make it an exception to the doctrine of privity of contract.

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5.2. Learned counsel for the Petitioner is right in drawing attention of the Court to the order dated 08.07.1998 made in OJC No.6881 of 1998 & M.C. No.8274 of 1998, wherein the State had contended “it is further stated that because of delay in non-clearing, demurrage is being charged which would ultimately be borne by the State......”. Therefore, there is enough material on the record of earlier proceedings to which the State and the Port Trust were also parties. The stand taken by the State in judicial proceedings operates as estoppel in pais and therefore, Petitioner cannot be saddled with the liability to pay demurrage charges. The State also cannot take up a contention to the contrary, the battle lines having been drawn up between the parties herein in the earlier legal proceedings.

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5.3. It is brought to the notice of Court that the State itself had made request to OP No.2-Port Trust to waive the demurrage liability and that was favoured to the extent of 80%. That itself shows that the State was liable and therefore, it had sought for such a waiver, there being no contra indication in the record. The OP No.2-Port Trust is liable to refund any amount recovered from or deposited by the Petitioner, in terms of interim order dated 07.01.1999 within a reasonable time.

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In the above circumstances, this petition is allowed and a Writ of Certiorari issues quashing the impugned demand dated 08.12.1998 at Annexure-7 qua the Petitioner. It is made clear that the Port Trust may proceed against the State, if it so chooses, in accordance with law. It is also made clear that the State may proceed against the Petitioner, in accordance with law after discharging the demurrage liability, as provided. All contentions of the parties are kept open.

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Now, no costs.

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Web copy of this order to be acted upon by all concerned.

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Dixit Krishna Shripad, Judge

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Orissa High Court, Cuttack The 15^th day of October, 2025/Madhusmita

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Signature Not Verified

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Digitally Signed Signed by: MADHUSMITA MALLICK Designation: Jr. Stenographer Reason: Authentication Location: HIGH COURT OF ORISSA, C UTT ACK Date: 16-Oct-2025 17:36:57

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Swastik Stevedors v. State

Case brief

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Swastik Stevedors v. State

Case brief

What is this about?

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