: 1 : IN IN IN THE THE THE HIGH COURT OF JUDICATURE AT BOMBAY HIGH COURT OF JUDICATURE AT BOMBAY HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION SUIT SUIT SUIT NO.2527 NO.2527 NO.2527 OF 1989 OF 1989 OF 1989 The Board of Trustees of the Port of Bombay, a body corporate constituted under the provisions of the Major Port Trusts Act, 1963 as amended by the provisions of the Major Port Trusts Amendment Act, 1974 and having their office at Vijay Deep, Shoorji Vallabhdas Marg, Ballard Estate, Bombay - 400 038 .. Plaintiffs. Versus 1. Nav Bharat Trading Company, a firm carrying on business at Naya Bazar, Delhi 2. Forbes Gokak Ltd., a Company incorporated under the Companies Act, 1960 and carrying on business at Forbes Bldg. Charanjit Rai Marg, Fort, Bombay - 400 001 .. Defendants. : 2 : Mr.U.J.Makhija i/b.Motiwalla & Co. for plaintiffs. None for defendant No.1. Mr.S.Daver i/b.C.Bayley & Co. for defendant No.2. CORAM CORAM CORAM : : : R.Y. GANOO, J. R.Y. GANOO, J. R.Y. GANOO, J. DATE DATE DATE : 11th July, 2008. : 11th July, 2008. : 11th July, 2008. ORAL ORAL ORAL JUDGEMENT :- JUDGEMENT :- JUDGEMENT :- 1. Heard Mr.U.J.Makhija, learned Advocate i/b.Motiwalla & Co. for the plaintiffs and Mr.S.Daver i/b.C.Bayley & Co. for the defendants. 2. The Board of Trustees of the Port of Bombay are the plaintiffs and they have filed the present suit against defendant No.1, who was an importer in regard to 9 containers containing 4050 bags of Yellow peas. The suit came to be filed originally against defendant No.2 viz.Forbes Forbes Campbell & Co. Ltd. being the agent of the vessel s.s.Dhaulagiri. On account of certain transactions between the said original defendant No.2 and Forbes Gokak Limited, the name of the defendant No.2 came to be amended and Forbes Gokak Limited came to be substituted as defendant No.2. The plaintiffs have filed this suit to recover from the defendants Rs.4,90,024.38 alongwith interest @15% per annum on the sum of : 3 : Rs.4,88,618.77 from the date of filing of the suit till realisation and for costs. The suit is filed to recover the deficit charges of Port Trust charges said to be payable by Defendant Nos.1 and 2. 3. Brief facts of this case are as under :- 4. According to the plaintiffs, defendant No.1 imported 9 containers containing 4050 bags of Yellow peas (hereinafter referred to as the said cargo) under consignment Item No.26 of the Import General Manifest No.2845 dated 29.11.1985 through the vessel s.s.Dhaulagiri of which defendant No.2 were the agents. The said cargo was discharged by the said vessel into the docks in the custody of the plaintiffs and the general landing date and the last free date of the cargo of the said vessel were 2.12.1985, 5.12.1985 and 11.12.1885 respectively. 5. According to the plaintiffs, the defendant No.1 and/or defendant No.2 did not take the delivery of the said cargo for a period of more than 2 months and, therefore, plaintiffs by their letter dated 2.8.1986, addressed to defendant Nos.1 and 2 informed the defendant Nos.1 and 2 that if the said cargo is not cleared on payment of charges of the plaintiffs within 10 days, the said cargo would be sold by public auction under Section 61 and 62 of The Major Port Trusts Act, 1963 (hereinafter : 4 : referred to as the said "Act"). According to the plaintiffs, none of the defendants cleared the said cargo though such a notice was sent and that is how, the said cargo was sold by public auction on 11.8.1986 under Lot No.A/1462 for Rs.,4,21,966/-. According to the plaintiffs, the said sale resulted in deficit of Rs.9,17,550.77 and the port trust charges as is being referred to in regard to the said cargo amounted to Rs.8,47,083.40. According to the plaintiffs, the expenses for the sale amounted to Rs.63,501.37 and the I.T.C. fine was to the tune of Rs.4,28,932/-. At this juncture itself, it is required to be mentioned that the plaintiffs in this suit have not claimed the aforesaid amount of ITC fine. According to the plaintiffs the sale proceeds to the tune of Rs.4,21,966/- were adjusted by the plaintiffs as against the expenses for the sale to the tune of Rs.63,501.37 and balance amount was adjusted towards port trust charges i.e. the charges which could be recovered by the plaintiffs in accordance with the provisions of law to the tune of Rs.3,58,464.63. According to the plaintiffs that left the deficit of Rs.4,88,618.77. According to the plaintiffs, the defendants were liable to pay the said charges to the plaintiffs. The plaintiffs claimed that by letter dated 4.8.1989, the defendant Nos.1 and 2 were informed about the said sale which took place on 11.8.1986 and about adjusting Rs.4,21,966/- from the sale of the cargo and called upon the defendants to pay to : 5 : the plaintiffs provisional deficit amount of Rs.9,17,550.77 alongwith interest @15% per annum. Since defendants did not respond to this letter dated 4.8.1989, the plaintiffs sent final letter dated 5.8.1989, demanding the amount mentioned earlier. According to the plaintiffs, defendants failed to pay the monies demanded pursuant to notice and that is how, the plaintiffs claim that the defendants are liable to pay to the plaintiffs Rs.4,88,618.77 being the deficit in the port trust charges alongwith Rs.1,405.61 being the interest @15% per annum from 4.8.1989 till the filing of the suit. It is in these circumstances, the plaintiffs have prayed for a decree to the tune of Rs.4,88,618.77 and interest thereon @15% per annum from the date of filing of the suit till realisation. 6. The defendant No.1 was served with the writ of summons. Defendant No.1 has not filed written statement. Defendant No.2 has filed written statement and has contested the claim of the plaintiffs. Defendant No.2 has contended that they have acted as the agents of the vessel and that they were not the owners of the said cargo and as such they are not liable to pay the amount claimed by the plaintiffs. Defendant No.2 has contended that the institution of the suit in the year 1989 was barred by the period of limitation, keeping in view the relevant dates, namely, the arrival of the cargo, the sale of the cargo : 6 : and the date of filing of the suit. It has been the stand of the defendants while opposing the prayers of the plaintiffs with reference to time element. According to the defendants, if at all, it was the case of the plaintiffs that defendant No.1 or defendant No.2 have not cleared the cargo within the period of 2 months, it was necessary for the defendants to attend to the said cargo, soon after the period of 2 months is over and it was not open for the plaintiffs to wait till August, 1986 and exhibit negligence in attending to the matter. According to the defendant No.2, if the cargo would have been sold in time, the said cargo would have fetched a good market price. Defendant No.2 have denied all the averments mentioned in the plaint and have denied all the allegations levelled against them and have contended that they are not liable to pay any amount to the plaintiffs. 7. On the basis of the pleadings aforesaid, issues came to be framed on 28.11.2007 and they are as under :- 1) Whether the suit is misconceived and not maintainable as stated in para 2 of the Written Statement? .. In the negative. .. In the negative. .. In the negative. 2) Whether the suit is barred by limitation as stated in para 3 of the Written Statement? ...... In In In the negative. the negative. the negative. 3) Whether the plaintiffs prove that the original defendant No.2 were the owners/bailors of the consignment and liable to pay wharfage, demurrage and other charges accrued thereon as stated in paras 2 and 5 of the plaint? .. In the .. In the .. In the affirmative affirmative affirmative as Bailor and not liable on merits. as Bailor and not liable on merits. as Bailor and not liable on merits. : 7 : 4) Whether the plaintiffs prove that the defendant No.2 are liable for the property undertaking assets of the original defendant No.2 as stated in para (2) of the plaint? .. In the .. In the .. In the affirmative. affirmative. affirmative. 5) Whether the plaintiffs prove that they are entitled to recover from the defendant No.2, a sum of Rs.4,90,024.38 with further interest on the sum of Rs.4,88,618.77 at the rate of 15% per annum from the date of the suit till payment and/or realisation and costs of the suit as stated by the plaintiffs in prayer (a) of the plaint? .. In .. In .. In the the the negative. negative. negative. 6) To what reliefs are the plaintiffs entitled to as against the defendants? .. Not Not Not Entitled. Entitled. Entitled. 8. My answer to each of the issue is mentioned as against the respective issues. 9. At trial, the plaintiffs had initially filed evidence affidavit duly affirmed by one Mr.Sanjay Sawant, who was then in the employment of the plaintiffs. It is seen that the said Mr.Sanjay Sawant left the job and that is how the plaintiffs were required to search a new witness and have thereafter filed evidence affidavit of one Mr.Santosh Dighe, Assistant Docks Manager in support of their case. This witness has been cross-examined by the defendant No.2. No further witness was examined on behalf of the plaintiffs. No witness was examined on behalf of any of the defendants. 10. I now propose to deal with the various issues. : 8 : 11. Issue Issue Issue No.1 and Issue No.3 No.1 and Issue No.3 No.1 and Issue No.3 can be discussed together. 12. The goods came to be transported to Bombay through the vessel s.s.Dhaulagiri. The status of the defendant No.2 as the agent is not disputed by them. According to the plaintiffs, in view of the provisions of Section 2(o) of The Major Port Trusts Act, 1963, the defendant No.2 will have to be styled as owners and that is how defendant No.2 will be liable to pay the port trust charges to the plaintiffs. Learned Advocate Mr.Makhija appearing on behalf of the plaintiffs had taken me through the definition of the term "owner" "owner" "owner" as set out in Section 2(o) of the said Act and according to learned Advocate Mr.Makhija, the relevant portion of the said definition is as under :- "2. "2. "2. Definitions :- Definitions :- Definitions :- (o) : "owner", (i) in relation to goods, includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods; "...... 13. Learned Counsel Mr.Makhija submitted that since defendant No.2 were the agents of the vessel, they would fall within the definition of Section 2(o) as the "owners" "owners" "owners" and will be equally liable like defendant No.1, who had imported the said cargo. Learned Counsel Mr.Makhija in support of his contention submitted that the agent of the vessel is required to be treated as the "owner" under : 9 : Section 2(o) of the said Act and relied upon the judgement in the case of Trustees of the Port of Madras through its Trustees of the Port of Madras through its Trustees of the Port of Madras through its Chairman Chairman Chairman v/s. M/s.K.V.P. Sheikh Mohd. Rowther and Co. v/s. M/s.K.V.P. Sheikh Mohd. Rowther and Co. v/s. M/s.K.V.P. Sheikh Mohd. Rowther and Co. Pvt. Pvt. Pvt. Ltd. & Anr. reported in AIR 1995 S.C. 1922. Ltd. & Anr. reported in AIR 1995 S.C. 1922. Ltd. & Anr. reported in AIR 1995 S.C. 1922. He read to me relevant portion of the said judgement and submitted that in view of the law laid down by the Supreme Court, the agent of the vessel will be the owner within the meaning of the term "owner" under Section 2(o) of the said Act and he would be liable to pay the port trust charges to the plaintiffs. 14. Learned Counsel Mr.Daver appearing on behalf of the defendant No.2 tried to contend that the role of defendant No.2 was absolutely limited and defendant No.2 was not concerned with the factual aspects as to whether the defendant No.1 took the delivery of the cargo from the possession of the plaintiffs. According to him in the facts and circumstances of the case, defendant No.2 would not be liable to pay to the plaintiffs. 15. I have considered the rival submissions and I have gone through the record. I have also perused the judgement relied upon by the learned Counsel Mr.Makhija in the case of Trustees of the Port of Madras through its Trustees of the Port of Madras through its Trustees of the Port of Madras through its Chairman Chairman Chairman (supra). (supra). (supra). The reading of the said judgement would clearly go to show that the definition of the term "owner" appearing in Section 2(o) of the said Act would clearly go : 10 : to show that an agent of the vessel shall be treated as an owner. Learned Counsel Mr.Makhija had rightly pointed out that so long as the delivery order is not handed over to the defendant No.1, defendant No.2 would be responsible towards said cargo and that is how defendant No.2 will be on par with defendant No.1 sofar as the payment of the port trust charges to the plaintiffs are concerned. 16. After having considered the relevant submissions, I am inclined to observe that the plaintiffs were right in instituting the suit against the defendant No.2 as they were the agents of the vessel through which cargo had landed on the premises of the plaintiffs. It is in these circumstances, it cannot be said that the suit is misconceived and not maintainable against defendant No.2. 17. In view of the aforesaid discussion, I hold that the suit is maintainable against defendant No.2 as well as defendant No.2 will have to be treated as the owners/bailors of the cargo. Insofar as the liability of the defendant No.2 is concerned, they would be liable to pay to the plaintiffs if the facts and circumstances would go to show that defendant No.1 as well as defendant No.2 are liable to pay. I am restricting my observations only with reference to institution of the suit against defendant No.2 and that is how the Issue No.1 is answered in the negative. Issue No.3 is answered in the : 11 : affirmative to the extent that defendant No.2 are the owners/bailors of the consignment. It is clarified that the question whether the defendant No.2 are liable to pay the port trust charges, will have to be answered when the discussion with reference to the entitlement of the plaintiffs as regards recovery of the port trust charges will be considered. Issue Issue Issue No.2 :- No.2 :- No.2 :- ============== ============== ============== 18. Defendants have contended that the suit was filed beyond the period of limitation. In order to discuss this, one may be required to consider certain dates. The cargo arrived at Bombay Port in November, 1985 and the last free date of the cargo was 11.12.1985. According to the plaintiffs, the goods were sold on 11.8.1986 and the suit came to be filed on 10.8.1989. Learned Counsel Mr.Makhija had drawn my attention to the fact that the present suit came to be filed against the defendants to recover what may be referred to as the deficit in port trust charges i.e. the amount which could not be recovered as a result of receiving less amount in the sale proceeds with reference to total charges recoverable from the defendants. The port trust has instituted the suit to recover such charges. Learned Counsel Mr.Makhija had submitted that since the suit was filed to recover what may be referred to as deficit in port trust charges, the plaintiffs would come to know what is the quantum of : 12 : deficit on the date of the sale i.e. in the present case is 11.8.1986. Learned Counsel Mr.Makhija had submitted that such institution of suit for recovery of deficit in port trust charges could be filed within a period of three years from the date of sale of cargo in view of the provisions of Article 113 of the Limitation Act. He pointed out that the suit came to be filed on 10.8.1989 and that is how the suit was filed well within the period of limitation. In support of his contention that what are the actual deficit charges would be known to the port trust on the date of the sale and the period of limitation can be counted from the relevant date of the sale, he relied upon the judgement in the case of The Trustees of The Trustees of The Trustees of the the the Port of Bombay v/s. M/s.Jayantilal L. Gandhi Port of Bombay v/s. M/s.Jayantilal L. Gandhi Port of Bombay v/s. M/s.Jayantilal L. Gandhi reported reported reported in AIR 1979 BOMBAY 12 in AIR 1979 BOMBAY 12 in AIR 1979 BOMBAY 12. Learned Counsel Mr.Makhija took me through the said judgement and pointed out that the relevant date for the purposes of deciding the period of limitation would be the date on which the auction took place and when the plaintiffs came to know about the deficit in port trust charges and the date when the suit came to be filed. 19. After having perused the judgement relied upon by the learned Counsel Mr.Makhija, I am inclined to accept the argument advanced by him that the institution of the suit on 10.8.1989 is well within the period of limitation. I am inclined to accept the argument advanced by : 13 : Mr.Makhija to hold that, to the facts of this case, the relevant Article would be Article 113 of the Limitation Act and that is how the suit is filed within a period of three years when the right to sue accrues i.e. when the deficit charges were made known to the plaintiffs. In view of the above, the suit is filed within the period of limitation and as such Issue No.2 is answered in the negative. Issue Issue Issue No.4 :- No.4 :- No.4 :- ============= ============= ============= 20. This relates to liability of present defendant No.2. The suit came to be filed initially against Forbes Forbes Campbell & Company Limited. According to the plaintiffs, at the relevant time, the said company was an agent of the said vessel. The plaint came to be amended and the name of the present defendant "Forbes Forbes Gokak "Forbes Forbes Gokak "Forbes Forbes Gokak Limited" Limited" Limited" came to be substituted in the place of "Forbes "Forbes "Forbes Campbell Campbell Campbell & Company Limited" & Company Limited" & Company Limited" on account of the amendment which was permitted. The plaint at para 2(a) mentions the relevant facts as to how it became necessary for the plaintiffs to delete the name of the Forbes Forbes Campbell & Company Limited and substitute the same in the name of the present defendant No.2, namely, "Forbes Gokak Limited". 21. In my view, sofar as this aspect is concerned, it is clear on the basis of the evidence before the Court as : 14 : well as the stand of the present defendant No.2 that present Defendant No.2 are being joined as party defendant No.2 in their capacity as the agent of the said vessel as they have taken over from Forbes Forbes Campbell & Co. Ltd. As a result of this, Issue No.4 will have to be answered in the affirmative. It is clarified that by this, it is simply held that the suit could be instituted and prosecuted against the company by name Forbes Gokak Limited. Issue Issue Issue No.5 :- No.5 :- No.5 :- ============= ============= ============= 22. This issue relates to the claim of the plaintiffs against the defendants towards recovery of the port trust charges. After having perused the relevant Section of the said Act and the various factual aspects, it is clear that once the goods landed in the port of the plaintiffs, which is imported by the plaintiffs and if the goods are not cleared by the consignee within a stipulated period, the plaintiffs would be entitled to recover what may be referred to as demurrage and other charges leviable in accordance with the provisions of law. These charges are commonly referred to as the Port Trust’s charges. The plaintiffs have contended that as the delivery of the cargo was not taken up within a stipulated time, the plaintiffs had a right to deal with the said cargo for the purposes of recovery of the port trust charges because once the goods land at the port of the plaintiffs, if the : 15 : cargo is not received by the consignee, the charges become payable and plaintiffs had a right to deal with the said cargo for the purposes of recovery of the port trust charges. The provisions of Section 61 of the said Act enable the plaintiffs to sell the said cargo by tender/private agreement or in any other manner for the purposes of recovery of the port trust charges. The procedure set out in Section 61 of the said Act is elaborate and the plaintiffs can recover such port trust charges if the cargo is not cleared within a period of 2 months. The provisions of Section 61 of the said Act impose certain conditions such as giving notice to the consignee and other parties, publishing a notice concerning the sale in the Port Trust Gazette or in the Official Gazette and in one of the principal local daily newspaper. 23. It is the case of the plaintiffs that after the cargo landed at the port and after the lapse of last free date of the cargo, namely, i.e. 11.12.1985, the plaintiffs took up the task of disposing off the cargo for the purposes of recovery of port trust charges and that is how the plaintiffs gave notice to defendant No.1 as well as defendant No.2 by letter dated 2.8.1986. There doesn’t appear to be a serious dispute about sending of such a notice. Thereafter, the plaintiffs claim that the cargo was sold in a lot and Rs.4,21,966/- came to be received in : 16 : the said auction. The plaintiffs claim that in order to conduct the auction, expenses were required to be incurred and the said expenses are to the tune of Rs.63,501.37. In the plaint, the plaintiffs have given explanation as to how the sum of Rs.63,501.37 was adjusted from and out of the sale proceeds and as to how the balance sum of Rs.3,58,464.63 came to be adjusted towards the port trust charges. According to the plaintiffs, the port trust charges of the said cargo were to the tune of Rs.8,47,083.40 and that is how, according to the plaintiffs, after adjusting the sale proceeds, a sum of Rs.4,88,618.77 turned out to be what may be referred to as deficit charges and the present suit has been filed by the plaintiffs to recover this amount of Rs.4,88,618.77 alongwith interest on this amount to the tune of Rs.1,405.61, making it together the total claim of Rs.4,90,024.38. The plaintiffs have clarified that the ITC fine amount to the tune of Rs.4,28,932/- is not being claimed by the plaintiffs. 24. I now turn to the relevant evidence and try to ascertain whether the plaintiffs have made out a case to show that the total port trust charges were to the tune of Rs.8,47,083.40 and after adjustment of the sale proceeds, an amount of Rs.4,88,618.77 remained to be recovered. 25. In this connection, the plaintiffs have relied : 17 : upon what may be referred to as the working sheet and allocation sheet. This working sheet and