THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST Vs. M/S AREBEE STAR MARITIME AGENCIES PVT. LTD.
LAWS(SC)-2020-8-9
SUPREME COURT OF INDIA
Decided on August 05,2020

The Chairman, Board Of Trustees, Cochin Port Trust Appellant
VERSUS
M/S Arebee Star Maritime Agencies Pvt. Ltd. Respondents


Referred Judgements :-

PORT OF BOMBAY VS. SRIYANESH KNITTERS [REFERRED TO]
MANGALORE REFINERY AND PETROCHEMICALS LTD. VS. COMMISSIONER OF CUSTOMS [REFERRED TO]
PROVINCE OF MADRAS VS. BODDU PAIDANNA AND SONS [REFERRED TO]
STATE OF BOMBAY VS. F N BALSARA [REFERRED TO]
CENTRAL INDIA SPINNING AND WEAVING AND MANUFACTURING CO LIMITED EMPRESS MILLS NAGPUR VS. MUNICIPAL COMMITTEE WARDHA [REFERRED TO]
J V GOKAL AND CO PRIVATE LIMITED J V GOKAL AND CO PRIVATE LIMITED J V GOKAL AND CO PRIVATE LIMITED J V GOKAL AND CO PRIVATE LIMITED VS. ASSISTANT: COLLECTOR SALES TAX INSPECTION :BOMBAY CHAMBER OF COMMERCE AND: INDUSTRY BOMBAY;:GILL AND: CO P LTD [REFERRED TO]
STATE OF BOMBAY VS. HOSPITAL MAZDOOR SABHA [REFERRED TO]
RADHA KISHAN BHATIA VS. UNION OF INDIA [REFERRED TO]
TRUSTEES OF PORT OF MADRAS VS. AMINCHAND PYARELAL [REFERRED TO]
BOARD OF TRUSTEES OF THE PORT OF BOMBAY VS. INDIAN GOODS SUPPLYING CO [REFERRED TO]
GRAMOPHONE COMPANY OF INDIA LIMITED VS. BIRENDRA BAHADUR PANDEY [REFERRED TO]
BOARD OF TRUSTEES OF THE PORT OF BOMBAY VS. JAI HIND OIL MILLS CO [REFERRED TO]
DWARKADAS MARFATIA AND SONS VS. BOARD OF TRUSTEES OF THE PORT OF BOMBAY [REFERRED TO]
INTERNATIONAL AIRPORTS AUTHORITY OF INDIA INTERNATIONAL AIRPORTS AUTHORITY OF INDIA CENTRAL WAREHOUSING CORPORATION DELHI VS. GRAND SLAM INTERNATIONAL :GULAB IMPEX ENTERPRISES LTD [REFERRED TO]
TRUSTEES OF THE PORT OF MADRAS VS. K RV SHEIKH MOHAMMAD ROWTHER AND CO PRIVATE LIMITED [REFERRED TO]
UNION OF INDIA VS. APAR PRIVATE LTD [REFERRED TO]
GARDEN SILK MILLS LIMITED VS. UNION OF INDIA [REFERRED TO]
BRINDAVAN BANGLE STORES VS. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES [REFERRED TO]
FORBES FORBES CAMPBELL AND CO LTD VS. BOARD OF TRUSTEES PORT OF BOMBAY [REFERRED TO]
BERNADO STEENHOLF ULTRICH VS. COLLECTOR OF CUSTOMSCOCHIN [REFERRED TO]
TRUSTEES OF THE PORT OFMADRAS BY ITS CHAIRMAN VS. K. P. V. SHEIK MOHAMED ROWTHER AND COMPANY [REFERRED TO]
FORBES FORBES CAMPBELL VS. BOARD OF TRUSTEES, PORT OF BOMBAY [REFERRED TO]
M/S. RASIKLAL KANTILAL & CO. VS. BOARD OF TRUSTEE OF PORT OF BOMBAY & OTHERS [REFERRED TO]


JUDGEMENT

R.F.NARIMAN, J. - (1.)This batch of appeals arises out of a reference order made by a Division Bench of this Court dated 07.03.2018 reported as (2018) 4 SCC 592. The learned Division Bench stated as to how these proceedings arose before it as follows:
"1. These proceedings have arisen from a judgment dated 27-9-2011 [Arebee Star Maritime Agencies (P) Ltd. v. Cochin Port Trust, Original Petition No. 21041 of 1999, decided on 27-9-2011 (Ker)] of a Division Bench of the Kerala High Court in a batch of writ appeals and original petitions, preferred by various shipping agents.

2. The question before the High Court was whether the liability to pay "ground rent" on containers unloaded at Cochin Port, but not cleared by the consignees/importers and refused to be destuffed by the Port, on the ground of inadequate storage space, can be imposed on the owners of the vessel/steamer agents beyond the period of 75 days, fixed by the Tariff Authority of Major Ports [TAMP], a statutory body constituted under Section 47-A of the Major Port Trusts Act [MPT Act], 1963.

3. The facts of the case are summarised in the following extract of the judgment of the High Court:

"The sequence of events that led to the stalemate refers to the incidents which happened in 1998 when there (sic) imports synthetic woollen rags (in containers) in the Cochin Port Trust premises. The said containers were destuffed to facilitate Customs examination and to return the empty containers to the steamer agents. The destuffed cargo occupied much larger space and was not promptly cleared by the consignees in view of the hurdles placed by the Customs stating that the cargo actually did not constitute old woollen rags as declared, but mostly were brand new clothes which could not have been cleared. The "modus operandi" of the consignees/importers attracted wide attention of all concerned and taking note of the probable extent of liability to be imposed by the Customs Department, and the liability to be satisfied to the Port and others concerned, the consignees did not turn up to clear the goods and they were lying idle in the Port premises for quite long."

The Port Trust charged "ground rent" from the steamer agents/owners of the containers."

(2.)After then setting out the relevant provisions of the Major Port Trusts Act, 1963 ["MPT Act"] and the relevant portions of five decisions of this Court, namely, Port of Madras vs. K.P.V. Sheik Mohamed Rowther and Co. 1963 Supp. (2) SCR 915 ["Rowther-I"]; Port of Madras vs. K.P.V. Sheik Mohd. Rowther and Co. P. Ltd. (1997) 10 SCC 285, ["Rowther-II"]; Port of Bombay vs. Sriyanesh Knitters (1999) 7 SCC 228; Forbes Forbes Campbell and Co. vs. Port of Bombay (2015) 1 SCC 228 ["Forbes-II"] and Rasiklal Kantilal and Co. vs. Port of Bombay (2017) 11 SCC 1, the Division Bench then stated:
"23. Analysing the above judgments, the following position emerges:

23.1. The decisions in Rowther-I, Rowther-II, Sriyanesh Knitters, Forbes-II and Rasiklal do not seem to follow a consistent line about whom the Port Trust has to fasten the liability for payment of its charges;

23.2. The Constitution Bench judgment in Rowther-I holds that when Port Trust takes charge of the goods from the shipowner, the shipowner is the bailor and the Port Trust is the bailee. While the Bench of two Judges in Sriyanesh Knitters holds that there comes into existence the relationship of bailor and bailee between the consignee and the Port Trust, the decision in Forbes-II disagrees with this view of Sriyanesh Knitters. Rasiklal opines that enquiry into such relationship is irrelevant in determining the right of a Port Trust to recover its dues;

23.3. While the decision in Sriyanesh Knitters was based on the interpretation of the term "owner" under Section 2(6) of the MPT Act, the judgments in Forbes-II and Rasiklal do not find the question of interpretation of the term "owner" to be relevant;

23.4. While Forbes-II relies upon the Constitution Bench decision in Rowther-I to come to its conclusions, Rasiklal does not find Rowther-I to be an authority for the proposition that until the title in goods is passed to the consignee, the liability to pay various charges payable to a Port Trust, for its services in respect of goods, falls exclusively on the steamer agent;

23.5. In Rowther-II, it was held that once the goods are handed over to the Port Trust by the steamer and the steamer agents have duly endorsed the bill of lading or issued the delivery order, their obligation to deliver the goods personally to the owner or the endorsee comes to an end. The decision in Rasiklal, which has been delivered after the reference of Forbes-I was disposed of, takes a contrary view that in cases where the consignee does not come to take delivery of goods, the position of law laid down by Rowther-II would result in a situation that the Port Trust would incur expenses without any legal right to recover such amount from the consignor, with whom there was no contractual obligation; and

23.6. The Bench of two Judges in Rasiklal opined that it agrees with the conclusions recorded in Rowther-II and Forbes-II that a Port Trust could recover the rates due, either from the steamer agent or the consignee. However, the holding in Rowther-II finds only the consignee to be liable.

24. Taking note of the above inconsistencies in the judgments which have been delivered after the pronouncement by the Constitution Bench in Rowther-I, we are inclined to the view that the following issues need to be resolved by a larger Bench:

24.1. Whether in the interpretation of the provision of Section 2(o) of the MPT Act, the question of title of goods, and the point of time at which title passes to the consignee is relevant to determine the liability of the consignee or steamer agent in respect of charges to be paid to the Port Trust;

24.2. Whether a consignor or a steamer agent is absolved of the responsibility to pay charges due to a Port Trust, for its services in respect of goods which are not cleared by the consignee, once the bill of lading is endorsed or the delivery order is issued;

24.3. Whether a steamer agent can be made liable for payment of storage charges/demurrage, etc. in respect of goods which are not cleared by the consignee, where the steamer agent has not issued a delivery order; if so, to what extent;

24.4. What are the principles which determine whether a Port Trust is entitled to recover its dues, from the steamer agent or the consignee; and

24.5. While the Port Trust does have certain statutory obligations with regard to the goods entrusted to it, whether there is any obligation, either statutory or contractual, that obliges the Port Trust to destuff every container that is entrusted to it and return the empty containers to the shipping agent.

25. The larger Bench may deal with any additional issues relevant to the context, as it deems necessary."

(3.)The impugned judgment dated 27.09.2011 of a Division Bench of the Kerala High Court decided a limited question that was argued before it, namely:
"Whether liability to pay 'Ground Rent' in respect of the containers unloaded in the Cochin Port, lying uncleared by the Consignees/Importers and refused to be destuffed by the port, for inadequate storage space, can be mulcted on the owners of the Vessel/Steamer Agents beyond 75 days, in view of the Scheme of the Statute (Major Port Trusts Act 1963 - in short 'MPT Act') and the contents of the TAMP(Tariff Authority for Major Ports) Orders dated 10.11.1999, 19.07.2000, and 13.09.2005, is the point."

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