((-1-)) mst IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.384 OF 1989 The Board of Trustees of the Port of Bombay, ‘Vijay Deep’, Shoorji Vallabhdas Marg, Mumbai 400 038. Plaintiff versus 1. Gandhi Sons, 232, Samuel Street, Mumbai. 2. Forbes Forbes Campbell & Co; Forbes Building, Chiranjit Rai Marg, Mumbai 400 001. Defendants Mr.U.J.Makhija i/by Mulla & Mulla & CBC for plaintiff. Mr.M.L.Palan a/w Devyani Vanjara i/by B.R.Oza for defendant no.1. Mr.K.R.Shriram for defendant no.2. CORAM : A.S.OKA, J. DATE OF RESERVING THE JUDGEMENT : 26.11.2008 DATE OF PRONOUNCING THE JUDGEMENT : 07.01.2009 JUDGEMENT :- 1. The plaintiff is a body corporate constituted under the provisions of the Major Port Trusts Act, 1963 (hereinafter referred to as "the said Act"). The plaintiff has filed this suit for recovery of a sum of ((-2-)) Rs.1,10,000/- together with further interest on the amount of Rs.92,478=30 @ 15% p.a.. 2. According to the case of the plaintiff, the first defendants are carrying on the business at the address mentioned in the cause title of the plaint. The second defendant is a company duly registered under the Companies Act, 1956. According to the plaintiff, the second defendant company is the owner/agent of the vessel "s.s.Dhaulagiri" (hereinafter referred to as "the said vessel"). 3. The plaintiff is the owner of the Docks at Mumbai. As per the provisions of the said Act, the plaintiff is required to take charge of the goods imported from the vessels coming to MUmbai Port. Under the provisions of the said Act, the plaintiff is entitled to levy and charge wharfage, demurrage and other charges in respect of the goods landed and stored by the plaintiff in the docks at Mumbai, according ot the scale of rates duly prescribed, published and brought into force under the provisions of the said Act. 4. According to the case of the plaintiff, in ((-3-)) or about October 1985 the first defendants imported 200 bags containing Basmati Rice (hereinafter referred to as "the said consignment") which was manifested at item no.61 in the Import General Manifest No.2408, dated 7th October 1985 of the said vessel. The general landing date and the last free day of the cargo of the said vessel fell on 8th October 1985 and 11th October 1985 resectively. 5. According to the plaintiff, the first defendants were the importers/owners/consignees of the said consignment within the meaning of said Act and the second defendant were the bailor thereof having discharged the same in the custody of the plaintiff. According to the plaintiff, as such importers, consignees and/or the owners and bailors respectively of the said consignment, the defendants were bound and liable to take delivery of the said consignment within seven clear days from the general landing date. According to the case of the plaintiff, the defendants were liable to pay to the plaintiff wharfage, demurrege and other charges agreed and payable for the period during which the said consignment remained on the premises of the plaintiff. According to ((-4-)) the plaintiff, the amounts were payable as per the scale of rates duly prescribed and published. The case of the plaintiff is that the defendants failed to clear the said consignment and the same continued to remain on the premises of the plaintiff. By order dated 28th August 1986 the Additional Collector of Customs ordered confiscation of the said consignment under the provisions of Section 111(d) of the Customs Act, 1962. A copy of the said order was served on the plaintiff. 6. The case of the plaintiff is that the defendants failed and neglected to take delivery of and/or to remove the said consignment. Therefore, the said consignment incurred port trust charges from the last free day till the day prior to the date of order of confiscation. According to the plaintiff, a sum of Rs.92,478=30 was payable by the defendants on the said account. 7. The case of the plaintiff is that by letter dated 1st July 1987 addressed to the first defendants, the plaintiff informed the said defendants of the confiscation order and called upon the said defendants to pay a sum of ((-5-)) Rs.92,478=30 being the amount payable u/s. 48(d) read with section 59 of the said Act as per the working sheet enclosed therewith. The plaintiff claimed interest @ 15% p.a. if the amount remained unpaid for a period of fifteen days. The first defendants replied by their letter dated 5th August 1987 contending that they were not at all concerned with the said consignment and they had not imported the same. Reliance has been placed by the plaintiffs on letter dated 3rd December 1987 sent to the first defendants by which the said defendants were called upon to pay the aforesaid amount with interest. The advocates for the defendants replied by letter dated 7th December 1987 and denied the liability. 8. By letter dated 11th August 1987, the plaintiff informed the second defendants of the said confiscation order and called upon the second defendant company to pay the aforesaid amount of Rs.92,478=30 with interest. By reply dated 8th October 2007, the second defendant company informed the plaintiff that the liability to pay the charges was that of the first defendants being the importers/ consignees of the said consignment. Reliance ((-6-)) is placed on one more letter dated 7th December 1987 addressed by the plaintiff to the second defendants calling upon the said defendants to pay the said amount with interest. As the amounts were not paid by both the defendants, the present suit has been filed for recovery of a sum of Rs.92,478=30 together with interest thereon of Rs.17,521=70 @ 15% p.a. from 1st July 1987 till 3rd October 1988. The plaintiff has prayed for further interest on the principal amount @ 15% p.a.. 9. The first defendants contested the suit by filing their written statement. The first defendants denied that they were the importers of the said consignment. The case of the first defendants is that they were not at all concerned in any manner with the said consignment. Their case is that they had a transaction with M/s.Coupey & Sons at Sanfrancisco in U.S.A.. The said M/s.Coupey & Sons had placed an order for 200 bags of Basmati Rice in India to the defendants. According to the first defendants, they complied with the export order and they received the payment of price of 200 bags of Basmati Rice in U.S.Dollers. The first ((-7-)) defendants accordingly shipped the goods to M/s.Coupey & Sons under bill dated 10th April 1985 by the vessel known as "Makalu-V Voyage 267" The first defendants, therefore, prayed for dismissal of the suit. 10. The second defendant company filed written statement. The contention of the second defendant is that the plaintiff had a right to auction the said consignment in the event of the said consignment not having cleared for a period of over two months from the date of landing and in the event of the port trust and other charges in respect thereof not having been paid for the said period of two months. The case of the second defendants is that the plaintiff negligently and wrongly allowed the said consignment to lye at its warehouse for unreasonably long period thereby allowing the said consignment to incur demurrage. It is submitted that if the plaintiff had been diligent in exercising its right and had the plaintiff sold the consignment within a reasonable period after expiry of the period of two months, the entire charges could have been recovered out of the sale proceeds. The contention of the second defendant is that the ((-8-)) plaintiff was not diligent as the consignment was not sold by the plaintiff within a reasonable period. Another contention raised in the written statement is that the plaintiff negligently allowed the goods to lye in the warehouse for unreaonably long period. The second defendant denied that the said company was the consignees or bailors or owners of the said consignment. The second defendant prayed for dismissal of the suit. 11. Issues were settled on 23rd August 2007. The settled issues read thus :- 1. Whether the suit is bad for mis-joinder and non-joinder of necessary parties as alleged in paragraph 1 of the Written Statement of Defendant no.2? 2. Whether the suit is barred by the Law of Limitation as stated in paragraph 2 of the written statement of the defendant no.2? 3. Whether Defendant no.1 is the importer/owner/consignee of the suit consignment as alleged in paragraph 5 of the plaint? 4. Whether Defendant no.2 is not the Owner/Agent of the Suit Consignment as alleged in paragraph 6 of the Written Statement of Defendant No.2? 5. Whether the confiscation of suit consignment incurred pre-confiscation port trust charges of Rs.92,478.30 as stated in paragraph 8 of the plaint? ((-9-)) 6. Whether the Defendant no.1 is not concerned with the confiscation of the Suit Consignment and are therefore not liable to pay the Plaintiffs dues as alleged in paragraph no.7 of the Written Statement of Defendant no.1? 7. Whether the plaintiffs are entitled to recover the amount of Rs.92,478.30 being the pre-confiscation port trust charges in respect of Suit Consignment together with a sum of Rs.17,521.70 paise being interest @ 15% p.a. from 1.07.1987 till 3.10.1988 aggregating to Rs.1,10,000/- as stated in paragraph 15 of the Plaint? 8. To what reliefs, are the Plaintiffs entitled? 9. What order and generally?" 12. The plaintiff examined one Mr.Elias John Almeida by filing his affidavit in lieu of evidence. The first defendants examined one Mr.Harshad D. Gandhi as a witness who is a partner of the first defendant firm. No evidence has been adduced by the second defendant company. 13. The learned counsel appearing for the plaintiff submitted that the defence of the first defendants that they had not imported the said consignment is utterly false. He pointed out that the import general manifest of the said vessel has been duly proved. He pointed ((-10-)) out that in the import general manifest the name of the first defendants is appearing as importers/consignees. He pointed out that Mr.Harshad D. Gandhi, a partner of the first defendants admitted that the bill of lading given by the second defendant company showed the name of the first defendants as consignees/notified party. He pointed out that admittedly before the confiscation of goods by the Customs Department, the said department had issued notice to the first defendants. He pointed out that Mr.Harshad D. Gandhi admitted the said fact and also stated that the first defendants did not appear before the Customs Department. He admitted that the first defendants did not give any writing that the first defendants were not concerned with the said consignment. He also admitted that the first defendants did not inspect the goods sought to be confiscated. The witness also admitted that the first defendants had received a telegram from the second defendants in which the details of bill of lading were given. The learned counsel for the plaintiff pointed out that the witness conceded that he had not produced any documents to prove earlier shipment of Basmati Rice by the first ((-11-)) defendants. 14. The learned counsel for the plaintiff submitted that the bill of lading is a document of title to the consignment. He submitted that the bill of lading as well as import general manifest furnished by the second defendant company shows that the first defendants were the importers. He submitted that the plaintiff had to retain the custody of the said consignment from the date of landing untill the date of confiscation of the said consignment by the Customs Department. He submitted that the liability to clear the goods is of a consignee named in the bill of lading as well as in the import general manifest. He submitted that the liability to clear the consignment is also of the agents of the vessel. He submitted that the first defendants being the consignees are covered by the definition of ‘owner’ under section 2(o) of the said Act. He submitted that as the property in the said consignment vests in the first defendants, the said defendants cannot contend that they had not imported the said consignment. He submitted that assuming that the goods exported by the first defendants were wrongfully sent back by ((-12-)) their consignor, the remedy of the first defendants was against the said party. He submitted that in the present case, there was no dispute raised regarding quantum of the amount claimed by the plaintiff. 15. He submitted that the suit filed by the plaintiff was well within a period of three years from the date of confiscation of the said consignment. He pointed out that the confiscation order was passed on 26th August 1986 and the suit was filed on or before 6th October 1988. He submitted that the second defendant company is the Bailor of the said consignment being the vessel agents. He placed reliance on various decisions of this Court in support of his submissions. 16. The learned counsel appearing for the first defendants submitted that the first defendants had nothing to do with the said consignment and the said stand was specifically taken by the first defendants in their letter dated 5th August 1987 sent by way of reply to the plaintiff’s letter dated 1st July 1987. He pointed out that the first defendants shipped 200 bags of Basmati Rice to M/s.Coupey & Sons ((-13-)) at San Fransisco in U.S.A.. He submitted that though the Basmati Rice was shipped by the first defendants, for several months the first defendants did not hear anything from the consigner. He submitted that a consistent stand has been taken by the first defendants that they were not concerned with the said consignment. He submitted that as the said defendants were not concerned in any manner with the consignment, the first defendants did not appear before the customs authority. He submitted that the first defendants had no knowledge of the bill of lading. 17. The learned counsel appearing for the first defendants pointed out that the witness examined by the plaintiff admitted that a copy of the import general manifest was supplied by the second defendant company to the plaintiff. He pointed out that the said witness admitted that the plaintiff was not concerned with the bill of lading. He invited my attention to the evidence of Mr.Harshad D. Gandhi, a partner of the first defendants. He pointed out that the said partner stated that the Basmati Rice was exported by the first defendants to San Fransisco and the said consignment in dispute ((-14-)) had come from Oakland. The learned counsel pointed out that the said witness specifically stated that the first defendants did not get the original bill of lading from the Consignor and therefore, the first defendants had no title to the said consignment. He submitted that the plaintiff has failed to produce any documents to show that the first defednants were concerned in any manner with the said consignment. He submitted that the burden was on the plaintiff to establish that the first defendants were concerned with the said consignment. The learned counsel placed reliance on a decision of the Division Bench of this Court in the case of Board of Trustees of the Port of Bombay and others Vs. M/s.Sriyansh Knitters (AIR-1983-Bom-88). He also placed reliance on the decision of the Apex Court in the case of Trustees of Port of Madras by its Chairman Vs.Sheikh Mohammed Rowther and Co. (1963 Supp (2)-SCR-915). He relied upon the relevant observations of the decision of the Division Bench of this Court in the case of Shriyesh (supra) and submitted that this Court has held that the plaintiff takes charge of the goods on behalf of the ship owner and not on behalf of the consignee and the services ((-15-)) rendered by the plaintiff at the time of landing of the consignment is rendered to the ship owners. He submitted that the import general manifest shows that the consignment contained Basmati Rice. He submitted that it is a matter of common knowledge that Basmati Rice is the produce of India and there is no question of importing the same. He submitted that the plaintiff has no case against the first defendants. 18. The learned counsel appearing for the second defendant company has made detailed submissions. He submitted that the second defendant company being an agent of the vessel cannot be considered as the owner of the goods carried in his principal’s vessal. His submission is that the agent of the vessel cannot be the owner in relation to the goods under section 2(o) of the said Act. He submitted that a shipper entrusts the goods to the ship owner for transportation from Place-A to Place-B and as soon as the cargo is laden on the board the vessel, the ship owner issues a bill of lading. The bill of lading confirms that the cargo described therein is loaded on the board of the vessel named therein and is to ((-16-)) be discharged at a port named therein. He pointed out that a shipper is always named in the bill of lading and the bill of lading would contain either the name of the consignee or a notified party. He submitted that on arrival of the vessel at the port of discharge, the agent of the vessel advertises arrival of the vessel. He submitted that the master of the vessel has to file an import general manifest indicating the cargo, its quantity, the manifest number and the name of the consignee. He submitted that the bill of lading is a document of title to the goods. He submitted that normally the shipper endorses the bill of lading in favour of his bank and the bank endorses it in favour of the consignee on on the consignee paying for the goods as per the invoice. After collecting the bill of lading from the bank, the consignee is required to approach the agent of the vessel and it is the agent who issues the delivery order. He pointed out only on the basis of the delivery order that the cargo is delivered by the plaintiff to the consignee. He invited my attention to the decision in the case of the Trustees of Port of Madras through its Chairman Vs. K.P.V.Sheikh Mohd. Rowther & Co. ((-17-)) Pvt.Ltd. and another ([1997]10-SCC-285). He pointed out that the Apex Court held that even though the steamer agent comes within the definition of the ‘owner’, the definition of ‘owner’ cannot be applied without reference to the context in which the term has been used. 19. Inviting my attention to sub section 2 of section 63 of the said Act he submitted that if the steamer agent was to be included in the definition of clause (o) of section 2 of the said Act, the agent of the vessel can claim surplus amount. He relied upon the decision of Madras High Court in case of K.P.V.Sheikh Mohammed Rowther & Co. Vs. Madras Port Trust (ILR-1975-59) which was confirmed by the aforesaid decision of the Apex Court. His submission is that an agent can issue a delivery order only if the consignee approaches and surrenders the original bill of lading. He submitted that once the consignments are unloaded from the vessel, the plaintiff takes charge of the consignment as the agent of the consignee. He submitted that the agent of the vessel has no ownership of the consignment at any time. He submitted that the second defendant did not carry the said consignment to ((-18-)) the port or hand over the same to the plaintiff. He submitted that the property in the consignment vests either in the consignor or the shipper or the consignee or the endorsee of the bill of lading and not in the ship owner or its agent. He submitted that once the consignment is unloaded and put at a quay side, it is for the holder of the bill of lading to take the delivery. He invited my attention to section 42 of the said Act. He submitted that in any case a vessel agent cannot remove a consignment from the port area. He submitted that the importer or the owner of the consignment or the person who has title to the consignment can clear the consignment. He submitted that the word ‘agent’ in this context can only be an agent of the consignor or the consignee or the shipper. 20. He placed reliance on a decision of the Apex Court in the case of Om Shankar Biyani Vs. Board of Trustees, Port of Calcutta and others ([2002]-3-SCC-168). He, submitted that the second defendant company being an agent of the vessel is not liable to pay any charges to the plaintiff as the second defendant company is not included in the definition of ‘owner’ under ((-19-)) section 2(o) of the said Act. He lastly submitted that the second defendant was not a bailer of the goods. 21. The learned counsel for the plaintiff submitted that there is enough evidence on record to show that the second defendant is the bailor of the said consignment. He submitted that admittedly the second defendant company had never authorised the first defendant to take the delivery of the said consignment and, therefore, the liability to pay the charges to the plaintiff is jointly and severally that of the first defendants and the second defendant company. He submitted that in any case the second defendant has not adduced any evidence in rebuttal of the evidence adduced by the plaintiff. 22. I have given careful consideration to the submissions. It will be necessary to refer to the relevant provisions of the said Act. Sub section (o) of section 2 of the said Act defines ‘owner’ which reads thus :- "2(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 ((-20-)) (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." Under section 42 of the said Act, a Board (the Board of Trustees constituted under the said Act for that particular port) has power to undertake various services provided in the said section. The services mentioned in the section are of landing, shifting, trans-shipping the passengers and goods between the vessels in the port and the wharves, piers, quays or docks belonging to or in possession of the Board. Section 48 of the said Act provides that the tariff authority shall from time to time by notification in official gazette frame a scale of rates at which, and a statement of conditions under which any of the services specified in the said section shall be performed by the port or any other person authorised under section 42 of the said Act. Clause (b) of section 48 refers to landing and shipping of passangers or goods from such vessels to and from a port. 23. Section 59 of the said Act provides that for the amount of all the rates leviable under the said Act in respect of any goods, the Board ((-21-)) shall have a lien on such goods and such lien shall have priority over all other liens and claims. Section 61 of the said Act confers power in the Board to sell the goods. Section 61 provides that after expiry of two months from the time when any goods have been placed into its custody, the Board has power to sell the goods by public auction if in the opinion of the Board if any rates payable to the Board in respect of such goods have not been paid. Sub section 3 provides for issuing notice of sale. Section 62 of the said Act provides that where any goods placed in the custody of the port trust upon landing thereof are not removed by the owner or other person entitled thereto from