1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.894 OF 1990 The Board of Trustees of the ) Port of Bombay, ) a body corporate constituted ) under the provisions of the ) Major Port Trust Act, 1963 ) as amended by the provisions ) of the Major Port Trusts ) Amendment Act, 1974 and ) having their office at Vijay ) Deep, Shoorji Vallabh- ) das Marg, Ballard Estate, ) Bombay – 400 038 ).... Plaintiffs. V/s 1 M/s Indian Express Newspaper ) (Bombay) Pvt. Ltd., a Pvt. Ltd. ) Company incorporated under the ) Companies Act of 1956 and ) carrying on business at Express ) Towers, Nariman Point, Bombay - ) 400 021. ) 2 Shipping Corporation of India ) Ltd., a Ltd. Company incorporated ) under the Companies Act of 1956 ) and having its registered office ) at Shipping House, 245, Madam ) Cama Road, Nariman Point, ) Bombay- 400 021. ) .... Defendants. ---- Mr. U.J. Makhija with Ms. Preeti Shah, i/b Motiwala & Co. for plaintiffs. Mr. Vinayak Shete i/b Ms. Poorvi Kamani for Defendant No.1. 2 Ms. N. Sumnani i/b Bhatt & Saldhana for Defendant No.2. ---- CORAM: V. M. KANADE, J. DATE : 5th March, 2010 ORAL JUDGMENT: 1. Plaintiffs are statutory Corporation constituted under the provisions of the Major Port Trust Act, 1963 as amended by the Major Port Trust Amendment Act, 1974 (hereinafter referred to as “the said Act”). The 1st Defendants are a Private Limited Company incorporated under the Companies Act, 1956 and carrying on business at the above address. According to Plaintiffs, 1st Defendants are importers/owners/consignees of the 89 reels containing Glazed News Print. The 2nd Defendants are a Limited incorporated under the Companies Act, 1956 and they were agents of the Vessel “Vishva Apurva” and, according to Plaintiffs, , therefore, were also the owners within the meaning of the expression “owner” as contained in section 2(o) of the said Act. 2. According to Plaintiffs, they are entitled to charge and 3 levy wharfage, demurrage and other charges in respect of the goods landed and stored by Plaintiffs in the Docks at Bombay according to the scale of rates duly prescribed by the provisions of the said Act and to realize the charges by sale of the consignment if the said amount is not paid and if any deficit remains after sale of the consignment, they are entitled to claim the said amount from Defendants. 3. Plaintiffs have filed this suit for recovery of an amount of Rs 3,21,369.45 being the deficit in the port trust charges which remained to be paid even after sale of the 1st, 2nd and 3rd lots of the said consignment alongwith interest. 4. Brief facts are as under:- 5. According to Plaintiffs, some time in or about September, 1984 the 1st Defendants imported the consignment of 89 reels containing Glazed News Print. The said consignment was shown at Item No.72 of the Import General Manifest No.1199 dated 17th September, 1984 of the vessel “s.s. Vishva Apurva” and it was discharged by the 4 said vessel after it came into the Docks at Bombay. The General Landing date and the Last Free day of the cargo of the said vessel were 1st October 1984 and 8th October, 1984 respectively. Out of the total number of 89 reels which were imported, 81 reels of the said consignment were listed for sale and sold in three different lots. The first lot of 16 reels was sold under Lot No.AA/406 on 8th December, 1986. The second lot of 55 reels was sold under Lot No.AA/412 on 8th December, 1986 and the third lot of 10 reels was sold under Lot No.AA/413 on 8th December, 1986. (The said lots are hereinafter referred to as “first lot”, “second lot” and “third lot”). 6. According to Plaintiffs, balance 8 reels were lying in the Docks and were to be sold if the deficit charges were not recovered after sale of the said three lots. According to Plaintiffs, the 1st Defendants were importers/owners/consignees of the said three lots and the 2nd Defendants were agents of the said vessel and also bailers /owners of the said consignment and, therefore, both of them were liable to take delivery and clear the said three 5 lots within 7 days from the date of landing and to pay charges which accrued and were payable to Plaintiffs for the period during which the said thee lots remained in the custody of Plaintiffs in accordance with the rules. It is the case of Plaintiffs that the Defendants failed and neglected to clear the consignment and, as such, the said consignment remained in the custody of Plaintiffs. 7. It is the Plaintiffs’ case that since the first lot was not cleared for over two months from the date of landing, by letter dated 27th October, 1986 addressed to Defendant Nos. 1 and 2 Plaintiffs informed the Defendants that the said first lot was lying uncleared for over two months from the date of landing and, therefore, it was liable to be put up for sale under sections 61 and 62 of the Act and it would be sold in the sale which was proposed to be held on 10th November, 1986 or on any subsequent date without further notice if the said charges which had accrued are not paid within 10 days from the receipt of the said letter. 6 8. Accordingly, the list of packages being sold including the first lot was published in the Government Gazette dated 30th October, 1986 and also in local news-paper “Times of India” in its issue dated 28th October, 1986 as required by the provisions of the Act and, thereafter, the first lot was sold on 8th December, 1986 for an amount of Rs 74,195/-. Accordingly, Plaintiffs adjusted sale price against the port trust charges. Thereafter, according to Plaintiffs, by letter dated 01/12/1989 addressed to Defendant Nos. 1 and 2, Plaintiffs informed the Defendants that the first lot had been sold on 08/12/1986 and the Defendants were called upon to pay the deficit which was arising after adjusting the sale price. Similarly, since the second and third lot was not cleared, letters were issued by Plaintiffs to Defendants informing them that under the provisions of sections 61 and 62 of the Act the said lots would be sold and they were also informed about the sale proposed to be held on the date mentioned in the notice or at any time thereafter without issuing further notice and the said second and third lots were sold and, in spite of sale, there remained deficit and, accordingly, Defendants were called upon to pay the deficit 7 amount and since the said amount was not paid, the present suit has been filed. 9. Defendant No.1 filed their Written Statement and in the Written Statement it is alleged that the Plaintiffs have no cause of action against them since they had never directed Defendant No.2 to import any news print or any other material. Further, it is alleged that the suit is barred by limitation since the said consignment had arrived at Bombay in September, 1984 and the suit has been filed belatedly in December, 1989. It is further stated that though Defendant No.1 had asked Plaintiffs by their letter dated 10th October, 1991 to supply necessary details and particulars, no details were furnished by Plaintiffs. It is further denied that Defendant No.1 were importers or owners of the consignee of the consignment . It is further contended that Defendant No.1 were not aware of the list of packages sold by Plaintiffs. Defendant No.1 denied their liability towards the alleged deficit in port trust charges. 10. Defendant No.2 also filed their Written Statement and 8 contended that the Plaintiffs have no cause of action against the said Defendants. It is contended that the 2nd Defendant were only concerned with the carriage of the consignment into India and upon consignment being discharged, their connection ceased. It is contended that the services rendered by Plaintiffs were for the benefit of Defendant No.1 and, therefore, Defendant No.2 were not liable. Defendant No.2 also claimed that the suit is barred by limitation since the cargo had landed in or about September, 1984 and, therefore, the suit which has been filed in 1989 is barred by law of limitation. It is also contended that the demurrage accrued for more than four months after the date of landing falls outside the scope of section 63 of the said Act. Defendant No.1 further denied that they were owners of the said consignment under the Major Port Trusts Act or any other Act. Further, it is contended that Defendant No.2 were carrying their contractual obligations for taking charge of the goods for carriage and there was no relationship of bailor and bailee as between Defendant No.2 and Plaintiffs. Defendant No.2 also denied that Plaintiffs had sold the said goods in three lots and that there was a deficit as alleged by 9 Plaintiffs. It is also contended that in view of section 63 of the said Act, claim against Defendant No.2 was not maintainable. 11. Thereafter, this Court framed the following issues by order dated 06/12/2007:- ISSUES 1. Whether the suit is misconceived and not maintainable as alleged in para (1) of the written statement of defendant No.1? 2. Whether the plaintiffs’ claim in suit is barred by law of limitation as alleged in para (5) and para (2) of the written statements of both defendant No.1 and 2 respectively? 3. Whether the plaintiffs prove that defendant No.1 are the importer and/or owners and/or consignees of the suit consignment within the meaning of section 2(o) of the Major Port Trusts Act as stated in paras (2) and (5) of the plaint? 4. Whether the plaintiffs prove that defendant No.2 were the bailors/owners of the said consignment as stated in para (5) of the pliant? 5. Whether the plaintiffs prove that the defendants were bound and liable 10 to take delivery of and clear the said consignment and that they failed to do so as stated in para (5) of the plaint? 6. Whether the plaintiffs prove that the defendants are liable to pay wharfage, demurrage and other charges which accrued thereon as stated in para (5) of the plaint? 7. Whether the sale of the consignment has resulted in a deficit of Rs. 3,20,447.62 as alleged in para (18) of the plaint? 8. Whether the plaintiffs prove that they are entitled to the sum of Rs. 3,21,369.45 with interest @ 15% per annum on the sum of Rs.3,20,447.62 from the date of the suit till payment and/or realization and cost of the suit as stated by the plaintiffs in prayer (a) of the plaint? 9. To what relief, if any, the plaintiffs entitled to as against the defendants? 12. I have heard the learned Counsel for Plaintiffs and Defendants at length. 13. Plaintiffs have examined two witnesses viz P.W. 1 – Santosh Dighe and P.W.2 – Chandrakant Patwade. Both these witnesses have been cross-examined by Defendants’ Counsel. No further witnesses were examined on behalf of 11 Plaintiffs and no witness was examined on behalf of any of the Defendants. 14. I now propose to deal with the aforesaid issues. Findings on Issues Nos. 1, 3 and 4: 15. The goods came to be transported to Mumbai through the vessel “Vishva Apurva”. The status of Defendant No.2 as agents is not disputed by them. According to Plaintiffs, 1st Defendant imported consignment of 89 reels containing Glazed News Print. The said consignment was mentioned at Item No.72 of the Import General Manifest No.1199 dated 17th September, 1984. According to Plaintiffs, 1st Defendants were importers/consignees/owners of the said goods and Defendant No.2 were agents of the vessel and also bailors/owners of the consignment since it was discharged by them in the custody of Plaintiffs. 16. Mr. Makhija, the learned Counsel appearing on behalf of Plaintiffs invited my attention to the definition of the 12 explanation “owner” as contained in section 2(O). He submitted that since Defendant No.2 were the agents of the vessel, they would also fall within the definition of section 2(O) and were equally liable like Defendant No.1 as they had imported the cargo. He relied upon the judgment of the Supreme Court in Trustees of The Port of Madras through its Chairman v. K.P.V. Sheikh Mohd. Rowther & Co.1 On the other hand, learned Counsel appearing on behalf of Defendant No.2 submitted that role of Defendant No.2 was limited and the liability of Defendant No.2 was over after they had delivered the goods to Plaintiffs and they were not concerned with the fact whether Defendant No.1 had taken delivery or not. It is, therefore, submitted that Defendant No.2 could not be made liable for the charges which would be payable by Defendant No.1. 17. In my view, there is much substance in the submissions made by the learned Counsel appearing on behalf of Plaintiffs. Section 2(o) defines the term owner. The said section 2(o reads as under:- 1 AIR 1995 SC 1922 13 “(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,” The ratio of the judgment of the Supreme Court in Trustees of The Port of Madras through its Chairman (supra) would squarely applies to the facts of the present case. The Apex Court, in the said case, after referring to definition of the terms “owner” in section 2(o), has clearly held that the agent of the vessel shall be treated as an owner and as long as deliver order is not handed over to Defendant No.1, Defendant No.2 would be responsible towards the said cargo and, therefore, liability of Defendant No.2 would be on par with Defendant No.1 in respect of payment of the port trust charges to Plaintiffs. In my view, therefore, it cannot be said that the suit is misconceived and is not maintainable against Defendant Nos. 1 and 2. 18. Issue No.1 is, therefore answered in the negative. However, for the reasons stated above Issue No.3 and 4 14 are answered in the affirmative. Findings on Issue No.2: 19. In order to decide this issue, it would be relevant to see particulars dates on which the goods were imported. According to Plaintiffs the following dates are, therefore, relevant:- DATES PARTICULARS 01/10/1984 General Landing date of the suit consignment alleged to have been landed. 08/10/1984 Last Free day by which the suit consignment should have been removed free of any charges. 07/12/1984 The date after which Plaintiffs were free to sell the suit consignment since the period of two months would be over after that date. 30/10/1986 Date on which notice for public auction to be held on 10/11/1986 was given. 08/12/1986 Date on which actual sale took place. 07/12/1989 Date on which the suit is filed. 20. According to Plaintiffs, the suit was filed within three 15 years from the date on which Plaintiffs came to know the actual amount which was due and payable by Defendants towards the payment of various port trust charges payable to Plaintiffs. Counsel appearing on behalf of Plaintiffs submitted that Article 113 has laid down that period of limitation is three years. He submitted that though Plaintiffs were free to sell the suit consignment on 07/12/1984, as long as goods were not sold in public auction, Plaintiffs would not be in a position to know the actual deficit between the sale price of the goods and the port trust charges and, therefore, period of limitation would start from the date on which the auction sale took place which was 08/12/1986 in this case and, therefore, suit is filed within limitation. He relied upon the judgment of the Bombay High Court in The Trustees of the Port of Bombay v. M/s Jayantilal L. Gandhi1 21. On the other hand, Counsel appearing on behalf of Defendant No.1 submitted that no explanation was given as to why Plaintiffs did not sell the goods immediately after the date on which they became entitled to sell the consignment which date was 07/12/1984. It is, therefore, submitted that 1 AIR 1979 Bombay 12 16 the period of limitation would start running from 07/12/1984 and not from the date of actual sale. 22. In my view, there is much substance in the submissions made by the learned Counsel appearing on behalf of Plaintiffs. Article 113 of the Limitation Act reads as under:- ------------------------------------------------------------------------------------- Description of suit Period of Time from which Limitation period begins to run ----------------------------------------------------------------------------------- 113. Any suit for Three years When the right to which no period of sue accrues limitation is provided elsewhere in this Schedule 23. In the present case, the Port Trust has an authority to sell the goods which are unclaimed for a period of two months after the agent of the vessel delivered the goods to the Port Trust. If these goods are not cleared by the purchaser/owner/consignee, the Port Trust can sell the goods and recover port trust charges. Section 61 and 62 of the Major Port Trusts Act lay down the procedure for sale of the cargo. It is also laid down that in the event of the amount 17 recovered from the sale of cargo is not sufficient to recover the port trust charges, in that event the Port Trust has a right to recover the said amount by filing a suit. It is evident, therefore, that as long as the goods are not actually sold the Trust would not be in a position to calculate the exact deficit which has to be recovered from the owner. It is possible that after selling the cargo, the entire amount may be recovered towards the port trust charges in which event there would be no necessity for the Port Trust to file a suit for recovery of any amount from the owner. However, it it is found that even after the cargo, the sale proceeds of the cargo may not be sufficient for the purpose of making payment of the port trust charges. It is only at that time the Port Trust would be in a position to know the exact deficit which has to be recovered from the owner. The date on which, therefore, in this case, the Port Trust became aware of the deficit is the date of sale viz. 08/12/1986. 24. In the present case, suit is filed on 07/12/1989 i.e within three years from the date of sale of the cargo which took place on 8/12/1986. Article 113 lays down that period of 18 limitation would be three years in cases where no period of limitation is prescribed elsewhere in the schedule. In my view, therefore, Article 113 would be clearly attracted in the present case. The ratio of the judgment on which reliance is placed by the learned Counsel appearing on behalf of Plaintiffs in The Trustees of the Port of Bombay v. M/s Jayantilal L. Gandhi1 would also clearly apply to the facts of the present case. In the said case, the cargo was sold in auction on 06/02/1964 and as the Defendants did not pay the amount of deficit, Plaintiffs filed a suit for recovery of the sum of Rs 33,082.86 on 20/03/1968. The Division Bench of this Court in para 13 of its judgment has observed as under:- “13. This is not a suit to claim wharfage and demurrage simpliciter. This is a suit to claim the balance of the amount which can be claimed by the appellants in respect of wharfage and demurrage charges after credit is given for the sale proceeds realized upon the auction of the goods and for such a suit clear provision is made in Section 67-A of the Act. It should not be overlooked that Section 67-A of the Act starts with a non obtante clause and its provisions are applicable ‘notwithstanding anything contained in the seven Sections last preceding and in Section 85’. As we have earlier stated, the deficit or the balance of 1 AIR 1979 Bombay 12 19 the amount claimable can only be ascertained after the auction sale is held therefore, it is not possible for us to accept the contention that the amount claimed in the present suit in respect of wharfage and demurrage charges should be regarded as one for which the cause of action accrues from day to day. Since the cause of action, in our opinion, for the first time, arose when the auction sale took place and that event took place after the Limitation Act, 1963, came into force, there is no question of the provisions of Section 30 of that Act being attracted at all. In that view of the matter, since the present suit has been filed after the expiry of the period of three years from the date of accrual of the cause of action, it is clearly barred by limitation under Article 113 of the Limitation Act, 1963. As a finding on the point of limitation is sufficient to dispose of the appeal, it is unnecessary for us to go into other questions which were agitated before the learned Judge in respect of which findings have been given against the appellants. It is, therefore, clearly held that period of limitation would begin from the date of sale of the cargo and the period of limitation would be three years as laid down under Article 113 of the Limitation Act. 25. In the result, there is no substance in the submission made by the learned Counsel appearing on behalf of 20 Defendant Nos. 1 and 2 that the suit is barred by limitation. Issue No.2 is, therefore, answered in the negative. Findings on Issue No.5 and 6: 26. Plaintiffs have examined two witnesses viz. P.W.1 – Santosh V. Dighe and P.W. 2 – Chandrakant N. Patwade. 27. P.W.1 in his evidence has stated that Defendant No.1 imported consignment of 89 reels containing Glazed Newsprint in or about September, 1984 which was shown at Item No.72 of the Import General Manifest bearing No.1199 dated 17th September, 1984 of the vessel s.s. “Vishva Apurva” which was discharged at the Docks at Bombay. The General Landing date and the Last Free day of the cargo of the vessel was were 1st October, 1984 and 8th October, 1984 respectively. He has stated that 1st Defendant were importers/consignees/owners of the said consignment within the meaning of the said Act and the 2nd Defendant were agents of the said vessel and also bailors/owners of the said consignment. He has stated that as 21 importers/consignees/owners and bailors/agents for loading and unloading of the said consignment, Defendants were bound and liable to take delivery and clear the said consignment within 7 days from the date of landing thereof and to pay wharfage and demurrage and other charges which had accrued thereon at the rates prescribed under the provisions of the Act. 28. P.W. 1 has been cross-examined by the advocate appearing on behalf of Defendant No.1. He has denied the suggestion that the Port Trust had carried out alterations in the Import General Manifest prepared by Defendant No.2. He has stated that the date of sale on the said letter was 27/11/1986 and it was corrected to show as 27/10/1986. The witness also denied the suggestion that the Port Trust had not dispatched the letters which were allegedly sent by Plaintiffs to Defendant No.1. He, however, stated that he was not in a position to produce the acknowledgment of the letters which were dispatched. 29. P.W. 1 was also cross-examined by the Counsel 22 appearing on behalf of Defendant No.2. Counsel appearing on behalf of Defendant No.2 adopted the cross-examination conducted by the advocate on behalf of Defendant No.1 30. The learned Counsel