IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.881 OF 1989 The Board of Trustees of the Port of Bombay .. Plaintiff Versus M/s.Shah & Co & Ors. .. Defendants Mr.Y.J.Makhija i/by Motiwala & Co for the plaintiff. Ms.N.S.Sumnani i/by Bhatt & Saldhana for defendant no.2. CORAM CORAM CORAM : A.S.OKA, J. : A.S.OKA, J. : A.S.OKA, J. DATE DATE DATE ON WHICH JUDGMENT IS RESERVED :17th December 2008. ON WHICH JUDGMENT IS RESERVED :17th December 2008. ON WHICH JUDGMENT IS RESERVED :17th December 2008. DATE DATE DATE ON WHICH JUDGMENT IS PRONOUNCED:21st January 2009. ON WHICH JUDGMENT IS PRONOUNCED:21st January 2009. ON WHICH JUDGMENT IS PRONOUNCED:21st January 2009. JUDGMENT: JUDGMENT: JUDGMENT: . The plaintiffs have filed this suit for recovery of sum of Rs.92,665.26/- with interest on the amount of Rs.92,323.79/- at the rate of 15% per annum from the date of suit till the payment or realisation of the amount. 2. The plaintiffs are the owners of the Docks at the Bombay. The plaintiffs have been constituted under the provisions of the Major Port Trust Act, 1963. As per the provisions of the said Act of 1963, the plaintiffs are required to take charge of the goods landed from the ships coming to the Port at Bombay. 2 Under the provisions of the said Act of 1963, the plaintiffs are entitled to charge and levy wharfage, demurrage and other charges in respect of goods landed and stored by the plaintiffs in the Docks at Bombay. According to the plaintiffs they are entitled to recover aforesaid charges in accordance with the scale of rates duly prescribed, published and brought into force under the provisions of the said Act of 1963. 3. According to the case of the plaintiffs the 1st defendants are carrying on business. In April 1984 the 1st defendants imported the consignment of 92 drums containing Sorbitol which was manifested at item No.34 of the Import General Manifest No.3047 dated 16th April 1984 of the vessel s.s.J.Matejko. The general landing date and last free day of the consignment were 28th April 1984 and 03rd May 1984 respectively. According to the case of the plaintiffs, out of the manifested quantity of 92 drums, one drum was short-landed and 5 drums were empty. It is alleged that the 1st defendants are the importers/owners/consignees of the said consignment. It is alleged that the 2nd defendants were at all material times the agents of the aforesaid vessel and are the owners of the goods within the meaning of clause (O) of section 2 of the said Act of 1963. It is alleged that the 2nd defendants are the bailors of the 3 consignment having discharged the same into the custody of the plaintiffs. It is contended that the defendants were bound and liable to take delivery of the consignment within seven clear days from the date of landing. It is stated that the defendants failed and neglected to clear the said consignment and the same remained in custody of the plaintiffs. 4. As the consignment was not cleared for a period of about two months from the date of landing, by letter dated 03rd January 1986 the plaintiffs informed the 1st and 2nd defendants that the consignment was lying uncleared at Haji Bunder Dump for over two months and the same was liable to be put up for sale under the provisions of sections 61 and 62 of the said Act of 1963. The 1st and 2nd defendants were informed that the sale was proposed to be held on 20th January 1986 or on any other subsequent date without further notice unless the consignment was cleared on payment of accrued wharfage, demurrage and other charges within ten days from the receipt of the letter. A similar communication was issued by the plaintiffs on 01st March 1986 to the defendants informing that the consignment would be sold on 17th March 1986 or on any subsequent date without further notice unless the same was cleared on payment of accrued charges within a period of ten days from the 4 receipt of the letter. 5. According to the plaintiffs a notice of sale was published in Maharashtra Government Gazette dated 06th March 1986 and also in Times of India as well as Indian Express on 04th and 05th March 1986 respectively. According to the plaintiffs, on 17th March 1986 the consignment was sold under the Lot No.T/2126 for the sum of Rs.03,45,906.80/-. According to the plaintiffs they incurred a sum of Rs.80,614.08/- on the process of sale. According to the plaintiffs, a sum of Rs.01,91,483.45/- was payable on the consignment by way of customs duty and Port Trust Charges of Rs.01,10,701.51/- were payable on the said consignment. The plaintiffs claimed that a sum of Rs.86.305/- was payable as I.T.C fine. The case of the plaintiffs is that after adjusting the sale proceeds towards the aforesaid charges, deficit of Rs.01,23,197.24/- remained. The plaintiffs stated that after deducting balance of I.T.C fine which was not being claimed by the plaintiffs, total amount remained payable by the defendants was Rs.92,323.79/-. 6. By letter dated 08th March 1989 the plaintiffs informed the 1st and 2nd defendants about the sale of the consignment and called upon the defendants to pay the deficit amount with interest at the rate of 15% per 5 annum. By a further letter dated 09th March 1989 the plaintiffs again called upon the defendants to pay the deficit amount failing which legal action will be taken. As the amount was not paid, the present suit has been filed. Apart from the sum of Rs.92,323.79/- being the deficit amount, the plaintiffs claim interest of Rs.341.47/- at the rate of 15% per annum on the said amount from the date of notice of demand till the date of filing of the suit. 7. The suit was contested by the 1st defendant by filing written statement. The contention of the 1st defendants is that the plaintiffs failed to give inspection of the goods and failed to comply with the request made by the 1st defendants to give three months time to clear the goods. It was contended that the plaintiffs were not entitled to charge I.T.C fine in as much as the said fine is levied if there is a violation of import licence under which goods are imported. The 1st defendant denied that five drums out of 91 drums were empty. It was contended that all 91 drums were fully loaded when the same arrived at the Port of Bombay. The 1st defendants alleged that due to negligence on the part of the plaintiffs, the goods in the five drums have been misappropriated. The 1st defendants prayed for dismissal of the suit. 6 8. The 2nd defendants filed written statement and contested the suit. It was submitted that there was no cause of action against the original defendants M/s.Khemka and Company (Agencies) Pvt Ltd. It is submitted that the plaintiffs have not rendered any services to the original 2nd defendants. It was submitted that the suit was barred by limitation. It was contended that the original 2nd defendants were merely the agents at Bombay of the said vessel and they were not the owners of the goods within the meaning of clause (O) of Section 2 of the said Act of 1963. It was contended that the 2nd defendants were not the consignees or bailors or agents for the custody of the said consignment. It was contended that there was no relationship of bailee and bailors between the plaintiffs and the 2nd defendants. It was contended that in any event, the plaintiffs were not entitled to recover the I.T.C fine and customs duty. The 2nd defendants submitted that the suit be dismissed. 9. The issues were settled on 22nd November 2007 which reads thus: 1. Whether the plaintiffs prove that the 1st defendants are the importers and/or 7 owners and/or consignees of the suit consignment within the meaning of section 2(o) of the Major Port Trust Act as alleged by the plaintiff in paras 2 and 3 of the plaint? 2. Whether the plaintiffs prove that the 2nd defendants are the bailors/owners of the suit consignment within the said Act as stated in para 5 of the plaint? 3. Whether the plaintiffs prove that the defendants were bound and liable to take delivery of and clear the said consignment and pay wharfage, demurrage and other charges which accrued thereon by the plaintiff in para 5 of the plaint? 4. Whether the plaintiffs prove that they are entitled for the sum of Rs.92,665.26 with interest on the sum of Rs.92,323.79 at the rate of 15% per annum from the date of the suit till payment and/or realization and cost of the suit as stated by the plaintiff in prayer (a) of 8 the plaint? 4A. Whether the suit is barred by law of limitation as alleged by defendant no.2 in para 5 of its written statement? 4B. Do the plaintiffs prove that they are entitled to charge wharfage, demurrage and other charges in respect of goods landed and stored in the docks and realise the said charges by sale of the suit consignment? 4C. If the answer to issue No.4B is in affirmative, do the plaintiffs prove that the said charges are recoverable from the ship-owners and/or their agents? 4D. Whether suit against defendant no.2 is not maintainable for the reasons averred in paras 4, 6 and 16 of its written statement? 4E. Whether the defendant no.2 prove that defendant no.1 being the sole 9 owner/importers/consignees of the suit consignment, are alone liable for the plaintiff’s claim as averred in para of its written statement? 4F. Whether the defendant no.2 prove that they not being the owners of the suit consignment, they could not have cleared the consignment from the custody of the Port Trust as averred in para 12 of its written statement? 4G. Whether the plaintiff proves that the sale was valid and/or concluded in accordance with law? 4H. If answer to issue no.8 is in the affirmative, whether the plaintiff proves that the suit consignment was sold on 17th March 1986 for Rs.3,44,906.80 and the sale resulted in the deficit in Port Trust charges of Rs.1,23,197.24 as averred in para of the plaint? 5. To what reliefs are the plaintiffs 10 entitled as against the defendants? 10. The plaintiffs examined one Mr.Sanjay Sawant as their witness by filing his affidavit in lieu of examination in chief. The plaintiffs produced several documents alongwith a list of documents. Both the defendants have not adduced any oral or documentary evidence. 11. The learned counsel appearing for the plaintiffs submitted that the 2nd defendants have not disputed that they were the agents of the vessel. He submitted that in view of the settled position of law, the 2nd defendants are the bailors and in absence of any evidence adduced to show that they had issued delivery order in favour of the 1st defendants the 2nd defendants are liable to pay Port Trust charges. He submitted that the st defendants have not adduced any evidence. He submitted that the 1st defendants are admittedly the importers and/or consignees of the consignment. He submitted that the 1st defendants have not adduced any evidence to show that all 91 drums were full of the material imported by the 1st defendants. He submitted that there is no defence available to the defendants and therefore the decree must follow. 11 12. The learned counsel appearing for the 1st defendants did not appear and argue the matter. The learned counsel appearing for the 2nd defendants submitted that the plaintiffs have not proved that as agents of the vessel in Bombay, the 2nd defendants were liable to pay the Port Trust charges. She submitted that the plaintiffs have not proved that the 2nd defendants are the bailors. She further submitted that the plaintiffs have not established the factum of sale by producing any documents. She submitted that the plaintiffs have not established their claim. 13. I have given careful consideration to the submissions. It will be necessary to refer to the evidence of Mr.Sanjay Sawant who was examined on behalf of the plaintiffs. The plaintiffs have proved in evidence an office copy of letter dated 03rd January 1986 addressed by them to the 1st defendants. The said letter is at Exhibit P5. The plaintiffs have also produced postal acknowledgment of the said letter. The plaintiffs have also produced the office copy of similar letter dated 03rd January 1986 (Exhibit P1) addressed by them to the 2nd defendants. The plaintiffs have also produced acknowledgments of the said letter signed by the 1st defendants as well as M/s.Khemka and Company 12 (Agencies) Pvt Ltd (predecessors of the 2nd defendants). From the record it appears that M/s.Khemka and Company (Agencies) Pvt Ltd were the original 2nd defendants and by carrying out amendment, the name of the 2nd defendants has been changed to M/s.POL India Agencies Ltd. The plaintiffs have also produced office copies of similar letters dated 01st March 1986 addressed by them to the 1st and 2nd defendants respectively. The said letters have been marked as Exhibit P6 and Exhibit P2 respectively. The separate acknowledgments of the said letters duly signed by the 1st and 2nd defendants have been produced on record. In the aforesaid letters, the consignment has been described as 91 drums out of which five were empty and 86 were filled in by Sorbitol. By both the letters, the defendants were called upon to clear the consignment within a period of ten days failing which the said defendants were informed that the consignment would be sold under sections 61 and 62 of the said Act of 1963. There is no reply sent by both the defendants to the said letters. The witness examined by the plaintiffs has referred to office copies of notices of demand dated 08th March 1989 (Exhibit P7 and Exhibit P3) and 09th March 1989 (Exhibit P8 and Exhibit P4) which were addressed separately to both the defendants. In the cross examination of the said witness the defendants have not given any suggestion 13 that the said communications/notices were not received by them. In fact in the written statement there is no denial of the receipt of the said communications/notices. In the said notices there is a specific reference to the auction sale conducted on 17th March 1986 and the sale price received. Even the said notices refer to the fact that five drums were empty. There is no reply issued to the said letters by both the defendants. Infact the advocate for the 2nd defendants by their letter dated 17th December 2007 (Exhibit D2) addressed to the advocate for the plaintiffs have admitted to have received the aforesaid letters and notices. Therefore, now the defendants cannot dispute that on 17th March 1986 the consignment was sold at the price of Rs.03,45,906.80/-. The defendants have not shown that the sale is illegal. 14. The working sheet containing calculations of the amounts claimed by the plaintiffs has been duly proved and the same has been marked as Exhibit P11. It will be necessary to refer to paragraphs 3 to 6 of the deposition of the only witness examined by the plaintiffs. The said paragraphs read thus: "3. The wharfage and demurrage charges are charged on the basis of Docks Scale Rates (DCR) 14 fixed by Tariff Authority of Major Port Trusts. The expenses of sale are also included while effecting recovery. In addition to these charges, we also recover customs duty and Import Trade Control (ITC) fine. 4. We prepare working sheet for calculations of port trust charges. In the present case, working sheet was prepared. My department has prepared this working sheet. After preparation of the working sheet, it is verified by the audit section. The working sheet was audited by the Auditor Mr.Chakraborty. However, I cannot identify his signature which is on the working sheet. I have personally verified the calculations of the working sheet. According to me, charges are correctly calculated. The working sheet now shown to me is the same. The said working sheet is marked as Exhibit "P-11". 5. Amounts are recoverable on following heads:- (i) On account of wharfage charges, Rs.418.61; 15 (ii) demurrage charges Rs.1,09,617.90 and (iii) Sales W/House carting charges Rs.662.20 6. The charges are calculated for a period of six months from the General Landing Date (GLD). For first 30 days, charges are charged at the rate of Rs.15/- per day and from 31st day onwards, at the rate of Rs.22.50 ps. per day and from the 61st day onwards, at the rate of Rs.30/- per day. The suit claim is only for six months from the General Landing Date (GLD)." 15. Perusal of the cross examination of the said witness by 1st and 2nd defendants shows that there is hardly any challenge to the version of the said witness in paragraphs 3 to 6. As far as monetary claim of the plaintiffs is concerned, the same is set out in Exhibit C to the plaint. The break-up given by the plaintiffs read thus: "Amount Recoverable Lot No.T/T2126 1. Expenses of Sale Rs. 80,614.08 2. Customs duty Rs.01,91,483.45 16 3. I.T.C.Fine Rs. 86,395.00 4. P.T.Charges Rs.01,10,701.51 --------------- Total Rs.04,69,104.04 Less Sale Proceeds Rs.03,45,906,80 Prov.Deficit Rs.01,23,197.24 Less Balance of I.T.C.Fine not claimed Rs. 30,873.45 Deficit in P.T.Charges Rs. 92,323.79 Net Deficit in P.T.Charges Rs. 92,323.79 Add interest @ 15% p.a. from the date of demand notice till filing of suits Rs. 341.47 --------------- Total Claim Rs. 92,665.26 ===============" 16. In view of the document at Exhibit P11 and the failure of the defendants to dispute the contents of demand notices dated 08th March 1989 and 09th March 1989 by sending reply, the claim made for principal amount by the plaintiffs will have to be accepted. 17. The plaintiffs have come out with a very specific case that the 1st defendants are the importers of the consignment and are owners and consignees thereof. The said case has been specifically made out in paragraphs 4 and 5 of the plaint. The averments made to that effect in paragraphs 4 and 5 have not been denied either generally or specifically by the 1st 17 defendants in the written statement. Therefore, the first issue will have to be answered in favour of the plaintiffs. 18. As far as the alleged status of the 2nd defendants as bailors is concerned, the 2nd defendants have not disputed that they were the agents of the vessel from which the consignment was brought to the Port. As far as this Court is concerned, the said issue is no longer res integra. In Suit No.2527 of 1989 (The Board of Trustees of the Port of Bombay Vs. Nav Bharat Trading Company and Another) by judgment and order dated 11th July 2008 (Coram: R.Y.Ganoo,J) held that the agents of the vessel through which cargo had landed on the premises of the Bombay Port Trust were the bailors. The same view has been taken by this Court in judgment dated 07th January 2009 in Suit No.384 of 1989. It is not in dispute that the 2nd defendants being the agents of the vessel had not issued delivery order to the 1st defendants and that the 1st defendants could not have taken delivery of the consignment without the 2nd defendants issuing the delivery order. Therefore, the 2nd issue will have to be answered in favour of the plaintiffs. 19. Under the provisions of section 48 of the said 18 Act of 1963 the plaintiffs are entitled to recover wharfage, demurrage and other charges accrued on the consignment. The 1st defendants being the owners and/or consignees and the 2nd defendants being the bailors will be jointly and severally liable to pay the aforesaid charges. Hence, issue nos.4B and 4C will have to be answered accordingly. 20. The 2nd defendants have raised the issue of bar of limitation. As stated earlier, the suit has been filed by invoking section 131 of the said Act of 1963. The landing date of the consignment is 28th April 1984. The sale of the consignment was effected on 17th March 1986 and the present suit has been filed on 16th March 1986 i.e within a period of three years from the date of accrual of cause of action. The suit has been filed by invoking section 131 of the said Act of 1963 for the recovery of the balance Port Trust charges after adjusting the sale proceeds. Therefore, the suit has been filed within a period of three years from the date of accrual of cause of action. Therefore, the issue of limitation i.e issue no.4A will have to be answered against the defendants. 21. Issue no.4(D) was framed regarding maintainability of the suit on the basis of contentions 19 raised by the 2nd defendants in the light of paragraphs 4, 6 and 16 of the written statement of the said defendants. It is not shown by the 2nd defendants as to how the suit is not maintainable. 22. In the circumstances, the plaintiffs have proved their entitlement to claim a sum of Rs.92,323.79/- from the defendants. The plaintiffs have claimed interest from the date of notice of demand till the date of institution of the suit in accordance with provisions of the Interest Act, 1978. In the present case the date of demand is 08th March 1989. Under section 3 of the said Act of 1978, interest can be granted at the prevailing rate. Considering the facts of the case, the interest will have to be granted at the rate of 12% per annum till the day prior to the date of institution of the suit. For the further period, considering the facts and circumstances of the case, interest deserves to be granted at the rate of 8% per annum. 23. The issues are answered accordingly and hence I pass the following order: (i) The defendants are ordered and decreed to pay a sum of Rs.92,323.79/- to the plaintiffs together with interest 20 thereon at the rate of 12% per annum from 08th march 1989 till the day prior to the date of institution of the suit. (ii) The defendants are ordered and decreed to pay to the plaintiffs interest at the rate of 8% per annum on the sum of Rs.92,323.79/- from the date of institution of the suit till realisation of the amount. (iii) The plaintiffs will be entitled to costs of suit from the defendants. (A.S.Oka,J)