: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.2926 of 1990 SUIT NO.2926 of 1990 SUIT NO.2926 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 Trust (Amendment) Act, 1974 and having their officer at Vijay Deep, Shoorji Vallabhdas Marg, Ballard Estate, Bombay - 400 038 .. Plaintiffs. Versus M/s.Shalimar Paper Mills Ltd., a limited company incorporated under the Companies Act, 1956 and carrying on business at Royrhere Rd., Muzaffar Nagar, Uttar Pradesh .. Defendants. Mr.U.J.Makhija i/b.Motiwala & Co. for the plaintiffs. None for defendants. CORAM : R.Y. GANOO, J. CORAM : R.Y. GANOO, J. CORAM : R.Y. GANOO, J. DATE : 16th September, 2008. DATE : 16th September, 2008. DATE : 16th September, 2008. JUDGEMENT :- JUDGEMENT :- JUDGEMENT :- 1. The plaintiffs are a statutory corporation established under the provisions of the Major Port Trust Act, 1963 (hereinafter referred to as the said "Act"). Defendants are the owners/importers/consignees in respect of the suit cargo covered by the present suit. The plaintiffs have instituted the present suit for recovery of Rs.3,78,571.15 alongwith interest @15% per annum on : 2 : Rs.3,73,749.04 from the date of filing of the suit till realisation. This amount is claimed by the plaintiffs towards recovery of what may be referred to as the port trust charges i.e. wharfage and demurrage. 2. According to the plaintiffs, defendants imported in all 7 containers i.e. 215 packages of MSLKC Paper Scrap Waste. (The said 215 packages shall hereinafter be referred to as the suit "cargo"). The said cargo was manifested at Item No.120 of Import General Manifest (for short "I.G.M.") No.1939 dated 8.9.1986 of the vessel m.v.Dhaulagiri and that the suit cargo was discharged by the said vessel in the docks at Bombay. According to the plaintiffs, the general landing date was 5.9.1986 and the last free date of the cargo was 8.9.1986. According to the plaintiffs, the defendants as importers were required to take charge of the goods and clear the consignment within 7 days from the date of landing and they were required to pay wharfage and demurrage and other charges accrued thereon. According to the plaintiffs, defendants did not clear the cargo for a longtime and, therefore, the plaintiffs were required to sell the cargo in accordance with the provisions of the said Act and accordingly, plaintiffs decided to sell the cargo. The plaintiffs : 3 : claim that they had sent notice to the defendants asking them to pay the port trust charges and final notice to the defendants being notice dated 23.4.1987 informing the defendants that if the port trust charges are not paid by them, the cargo would be sold. According to the plaintiffs, the defendants did not pay port trust charges and, therefore, the cargo was required to be sold as per the provisions of Section 61 and 62 of the said Act. The plaintiffs published the said notice in the Maharashtra Government Gazette of 30.4.1987 at Exhibit-P-3 and P-8 Exhibit-P-3 and P-8 Exhibit-P-3 and P-8 as well as in the newspaper, namely "Times of India" on 30.4.1987 at Exhibit-P-4. Exhibit-P-4. Exhibit-P-4. According to the plaintiffs, 2 containers were sold under Lot No.AA-3841 and the sale proceeds were to the tune of Rs.36,957/-. It is also the case of the plaintiffs that 7 containers were sold under Lot No.AA-4379 and the sale proceeds were to the tune of Rs.1,04,941.50. 3. The plaintiffs appropriated the sale proceeds towards expenses of sale, customs duty and a part of the port trust charges. The plaintiffs had calculated the total port trust charges from the last free date upto the date of the sale, namely, 11.6.1987 on the basis of Docks Scale of Rates. After appropriating the sale proceeds : 4 : towards the expenses of sale and other items as mentioned aforesaid, a sum of Rs.1,13,200.72 was found payable in respect of first lot and a sum of Rs.3,11,539.32 was found payable in respect of the second lot of 7 containers towards the port trust charges. The plaintiffs claim that suitable communications were addressed to the defendants at Exhibit-P-5 and P-9 Exhibit-P-5 and P-9 Exhibit-P-5 and P-9 respectively, calling upon the defendants to make the said demand. The plaintiffs have instituted the present suit for recovery of the deficit port trust charges as mentioned aforesaid. 4. The defendants have filed the written statement and contested the claim of the plaintiffs. The defendants have denied the case of the plaintiffs as regards the import of the said cargo by the defendants and the liability of the defendants to pay the wharfage as well as demurrage charges. The defendants have also clarified that the defendants could not take the delivery in respect of the said cargo and that the defendants are not liable to pay the port trust charges. In substance, the defendants have contended that they are not liable to pay the port trust charges. 5. Based on the pleadings, issues came to be framed : 5 : on 5.6.2008 and they are as follows :- I S S U E S I S S U E S I S S U E S i) Whether the plaitniffs prove that they are entitled to recover the amount claimed from the defendants? .. In the affirmative. .. In the affirmative. .. In the affirmative. ii) Whether the plaintiffs prove that the suit is filed within limitation? .. In the .. In the .. In the affirmative. affirmative. affirmative. iii) Whether plaintiffs prove that the defendant is importer/owner/consignee of the consignment? .. In the affirmative. .. In the affirmative. .. In the affirmative. iv) Whether defendants prove that they are agent of the disclosed principal and hence not liable to pay the wharfage, demurrage charges etc.? .. In the negative. .. In the negative. .. In the negative. v) Whether plaintiffs are entitled to decree as prayed for? .. As per the operative part. .. As per the operative part. .. As per the operative part. vi) What relief? .. As per the operative .. As per the operative .. As per the operative part part part. 6. My answer to each of the issue is mentioned against respective issue. 7. At trial, plaintiffs examined only one witness by name Mr.Santosh Dighe, who is styled as P.W.No.1. No witness was examined on behalf of the defendants. The defendants remained absent at the time of trial and that is how plaintiffs’ witness was not cross-examined. 8. Learned Advocate Mr.Makhija appearing on behalf of : 6 : the plaintiffs had taken me through the entire record to submit that the decree as prayed for should be passed. 9. Learned Advocate Mr.Makhija had drawn my attention to the I.G.M. at Exhibit-P-1 Exhibit-P-1 Exhibit-P-1 and had submitted that the defendants had imported 215 packages in 9 containers and that the said packages had landed on the property of the plaintiffs. He had also drawn my attention to the notice at Exhibit-P-2 Exhibit-P-2 Exhibit-P-2 as well as Exhibit-P-5 Exhibit-P-5 Exhibit-P-5 by which the plaintiffs called upon the defendants to clear the cargo otherwise the said cargo would be put up to sale. Learned Advocate Mr.Makhija had also pointed out that as the cargo was not cleared by the defendants, plaintiffs decided to sell the cargo and a Notification at Exhibit-P-3 Exhibit-P-3 Exhibit-P-3 as well as Exhibit-P-8 Exhibit-P-8 Exhibit-P-8 were shown to point out that provisions as regards the sale of the cargo set out in the said Act were duly complied with. Mr.Makhija had also pointed out that the defendants were called upon to pay the port trust charges incurred to the 2 lots covering 9 containers as set out in demand notice at Exhibit-P-5 and P-9 Exhibit-P-5 and P-9 Exhibit-P-5 and P-9 to the plaint. Mr.Makhija had submitted that the plaintiffs were entitled to appropriate the sale proceeds towards the expenses for the sale as well as customs duty and port trust charges. He had drawn my attention to the demand : 7 : notice received from the Customs Department at Exhibit-P-13 Exhibit-P-13 Exhibit-P-13 colly. as regards the customs duty payable by them to the tune of Rs.14,562/- and Rs.84,295/- respectively. He had also drawn my attention to the lot wise documents titled as lot wise showing therein the amount of sale proceeds, the expenses for sale incurred to the 2 lots, namely, lot No.AA-3841 and lot No.AA-4379 to the tune of Rs.3,113.50 and Rs.8,840.97 respectively. Learned Advocate Mr.Makhija had, therefore, submitted that the exercise carried out by the plaintiffs as regards the sale of the suit cargo and appropriating the sale proceeds towards the expenses for sale, customs duty and port trust charges was within the provisions of the said Act and that the plaintiffs are entitled to recover from the defendants, the deficit of the port trust charges and as such plaintiffs filed the present suit and are entitled to the said claim as the evidence of plaintiffs’ witness Mr.Dighe, P.W.No.1 has gone unchallenged. Learned Advocate Mr.Makhija had clarified that the plaintiffs are not claiming ITC fine to the tune of Rs.14,562/- and Rs.36,429/- as regards the 2 lots respectively. 10. Learned Advocate Mr.Makhija had submitted that as the demand notice sent by the plaintiffs to the defendants : 8 : at Exhibit-P-5 and P-9 Exhibit-P-5 and P-9 Exhibit-P-5 and P-9 colly. refer to the interest @15% per annum, the plaintiffs are entitled to recover interest @15% per annum on the outstanding amount. He had submitted that this demand was made on the basis of the rate of interest prevailing at the relevant time. He had submitted that the interest @15% is being demanded as the nationalised banks were lending monies for the unsecured loans at the relevant time at about 14% to 17% and the prime lending rate was 12%. Mr.Makhija had also prayed that the costs of the suit should be granted to the plaintiffs. Mr.Makhija for the purposes of making aforesaid submissions taken me through the evidence of Mr.Dighe P.W.No.1. 11. I have considered the submissions of learned Advocate Mr.Makhija with reference to the documents referred to above as well as the evidence of Mr.Dighe P.W.No.1. As the evidence of Mr.Dighe P.W.No.1 was not subjected to cross-examination, his evidence has gone unchallenged. 12. I have perused the various documents. On the basis of the I.G.M. at Exhibit-P-1 Exhibit-P-1 Exhibit-P-1, it is clear that the defendants had imported the cargo, namely, 215 packages of : 9 : the Waste Paper. It is also the case of the plaintiffs that when the cargo was not cleared by the defendants which required the plaintiffs to dispose of the same for recovery of the port trust charges and the customs duty. The plaintiffs have come out with a case that the said cargo was sold on 11.6.1987 and considering the Gazette Notifications, it is clear that the procedure required for selling the goods was followed inasmuch as the plaintiffs had sent caution notice to the defendants that if the cargo is not cleared on payment of port trust charges, the same would be sold. The evidence of Mr.Dighe P.W.No.1 accounts for total port trust charges recoverable, appropriation of the sale proceeds towards expenses for sale, customs duty and a part of port trust charges. Evidence of Mr.Dighe P.W.No.1 also indicates what could be the term as "deficit" in the port trust charges in respect of both the lots. 13. A perusal of the evidence of Mr.Dighe P.W.No.1 would go to show that Lot No.AA-3841 was sold for Rs.36,957/- and this amount was appropriated towards expenses for sale to the tune of Rs.3,113.50, customs duty to the tune of Rs.29,792.22 and Rs.4,051.28 towards part of the port trust charges thereby keeping port trust : 10 : charges outstanding to the tune of Rs.98,638.72. Since plaintiffs are not claiming ITC fine of Rs.14,562/-, the same is not required to be considered. The second lot, namely, Lot No.AA-4379 was sold on 11.6.1987 and the sale proceeds were to the tune of Rs.1,04,941.50. A sum of Rs.8,840.97 was appropriated towards expenses for sale, Rs.84,295.85 were appropriated towards the customs duty and Rs.11,804.68 were appropriated towards part of the port trust charges, leaving Rs.2,75,110.32 as deficit in the port trust charges. Since ITC fine of Rs.36,429/- was not being claimed by the plaintiffs, no question arose sofar as that amount is concerned. 14. Taking the total of two figures, namely, Rs.98,638.72 and Rs.2,75,110.32 as unpaid port trust charges, the total port trust charges as claimed by the plaintiffs turns out to Rs.3,73,749.04. The plaintiffs have relied upon what may be referred to as the working sheet in respect of 2 containers at Exhibit-P-1 Exhibit-P-1 Exhibit-P-1 colly. which shows that plaintiffs are recovering Rs.326.20 as sale warehousing charges and Rs.1,281.50 as carting charges. The working sheet sofar as 7 containers at Exhibit-P-11 Exhibit-P-11 Exhibit-P-11 shows that the plaintiffs are claiming Rs.911.40 towards sale warehousing charges and Rs.3,580.50 : 11 : towards carting charges. As such plaintiffs are in all claiming Rs.1,237.60 as sale warehousing charges and Rs.4,862/- as carting charges. From the evidence of Mr.Dighe P.W.No.1 as well as the provisions of the said Act, no light is thrown by the plaintiffs as to how the plaintiffs could recover from the defendants sale warehousing charges as well as carting charges. In the absence of appropriate explanation, the plaintiffs would not be entitled to recover from the defendants, the aforesaid 2 amounts towards sale warehousing charges and carting charges respectively and as such from the total amount of Rs.3,73,749.04, Rs.1,237.60 towards sale warehousing charges and Rs.4,862/- towards carting charges will have to be reduced and that is how the total unpaid port trust charges would turn out to Rs.3,67,649.44. To that extent, the plaintiffs’ claim will have to be granted. 15. The plaintiffs have claimed interest @15% per annum on the outstanding amount. Evidence given by the plaintiffs as regards the rate of interest which is set out in paragraph 16 of the evidence affidavit of Mr.Dighe P.W.No.1 is not supported by any documentary evidence. It is true that evidence of Mr.Dighe P.W.No.1 has gone : 12 : unchallenged. The rate of interest to be fixed in the present suit would depend upon the three dates, namely, the last free date i.e. 8.9.1986, the date on which the cargo was sold i.e. 11.6.1987 and the date on which the suit came to be filed i.e. 8.9.1990. Keeping in view the aforesaid dates, I am inclined to observe that if the rate of interest is fixed @12% per annum from the date of final notice dated 11.5.1990 up to the date of the filing of the suit i.e. 18.9.1990, it would meet the ends of justice. Sofar as the interest after the filing of the suit is concerned, as per the provisions of Section 34 of the Code of Civil Procedure, I am inclined to grant interest @6% per annum on the unpaid port trust charges as mentioned aforesaid. 16. Keeping in view the aforesaid discussion, I now proceed to answer the issues which have been framed in the aforesaid suit :- Issue No.1 :- Issue No.1 :- Issue No.1 :- ============= ============= ============= 17. Plaintiffs are entitled to recover from the defendants outstanding amount towards port trust charges and hence the Issue No.1 is answered as "In the "In the "In the affirmative" affirmative" affirmative" and the actual amount recoverable from the : 13 : defendants is mentioned in the operative part of this judgement. Issue No.2 :- Issue No.2 :- Issue No.2 :- ============= ============= ============= 18. The question to be decided by this Issue is whether the plaintiffs have filed the present suit within the period of limitation. Sofar as this Issue is concerned, one will have to take into consideration the judgement in the case of Trustees of the Port of Bombay Trustees of the Port of Bombay Trustees of the Port of Bombay v/s. M/s.Jayantilal L. Gandhi reported in AIR 1979 v/s. M/s.Jayantilal L. Gandhi reported in AIR 1979 v/s. M/s.Jayantilal L. Gandhi reported in AIR 1979 Bom.12 Bom.12 Bom.12 wherein, it is indicated that the port trust charges would get crystalised on the date when the suit cargo was sold and that the provisions of Article 113 of the Indian Limitation Act would be applicable that is to say the right to sue accrued to the plaintiffs and the suit was required to be filed within 3 years from the date when the right to sue accrued. Since the goods were sold on 11.6.1987, right to sue accrued on 11.6.1987 and the suit was filed on 7.6.1990 and as such the suit is filed within the period of limitation and hence the Issue No.2 is answered in the affirmative. Issue No.3 :- Issue No.3 :- Issue No.3 :- ============= ============= ============= : 14 : 19. The I.G.M. at Exhibit-P-1 Exhibit-P-1 Exhibit-P-1 would go to show that the defendants were the importers of the suit cargo and were the consignees. As such, Issue No.3 is answered in the affirmative. Issue No.4 :- Issue No.4 :- Issue No.4 :- ============= ============= ============= 20. The defendants had taken a stand that they were the agents of the disclosed principal and hence, they were not liable to pay. The defendants have not stepped into the witness box to discharge the burden cast on them. Sofar as this Issue is concerned, even otherwise, no efforts were made by the defendants to contend that they are the agents of the disclosed principal and as such the defendants have failed to discharge their burden and that is how, the defendants have failed to show that they are not liable to pay the wharfage as well as demurrage charges. Hence, Issue No.4 is answered in the negative. Issue No.5 & 6 :- Issue No.5 & 6 :- Issue No.5 & 6 :- ================= ================= ================= 21. I have already indicated that plaintiffs are entitled to recover from the defendants Rs.3,67,649.44 alongwith the interest @12% per annum and @6% per annum at : 15 : 2 different stages. Hence, appropriate decree in favour of the plaintiffs shall be passed. Accordingly, Issue Nos.5 and 6 are answered "as per the operative part". "as per the operative part". "as per the operative part". Plaintiffs will also be entitled to recover from the defendants costs of the present suit. 22. For the reasons mentioned aforesaid, I pass the following decree :- D E C R E E D E C R E E D E C R E E i) Defendants do pay to plaintiffs Rs.3,67,649.44. ii) Defendants do pay to plaintiffs interest @12% per annum from 11.5.1990 till 6.6.1990 on Rs.3,67,649.44. iii) Defendants do pay to plaintiffs interest @6% per annum from the date of the filing of the suit till realisation on Rs.3,67,649.44. iv) Defendants do pay to plaintiffs costs of the suit. : 16 : (R.Y. GANOO,J.) (R.Y. GANOO,J.) (R.Y. GANOO,J.)