1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1997 OF 1999 APL (I) Pvt.Ltd. .. Petitioners V/s The Jawaharlal Nehru Port Trust & Ors. .. Respondents Mr.S.Venkateswaran Sr.Advocate with Mr.K.R.Shriram, Ms.Subra Karmarkar and Mr.Xavier Thomas for the Petitioners. Mr.S.A.Bhalwal with Mr.Singh i/by M/s.Vyas & Bhalwal for Respondent No.1. CORAM: D.K.DESHMUKH & N.D.DESHPANDE, JJ. DATE: 22nd October, 2010. P.C.: 1. The facts which are material and relevant for deciding this petition are as under:- The Petitioners are the Company registered under the Companies Act and carry on business. The petitioners are the agent of APL Co.Pvt.Ltd., Singapure, a foreign shipping company. One Seven Seas LLC, PO Box 1677, CPO SEEB-III Sultanate of Oman (shipper), shipped 24/ 40’ reefer containers said to contain sea food on board the petitioners vessel at Port of Sultan Qaboos, Muscat for delivery at the Port of Nhava Sheva. The Cargo in 2 the said containers was said to contain frozen fish and was shipped on CY to CY basis. The containers were FCL containers (Full Container Loads) wherein the shipper, stuffs and seals the containers and offers the same to the carrier for carriage. The said consignment was to the order of Bank of India, 70/80, M.G.Road, Mumbai 400 023 and the Notify Party was one Sudesh Seafoods Ltd. (Importer). The consignment was covered by four Bills of Lading, and the said Bills of Lading were endorsed to the said importer and in lieu thereof they were entitled to take delivery of the said containers. The said containers arrived at the port of Nhava Sheva on or about 29th June, 1998. Since the containers were reefer containers and contained frozen fish which were perishable, the petitioners as agents of APL plugged in these 24 containers to electric panel within the Port of Nhava Sheva in order to maintain the temperature and preserve the cargo contained in the said containers. The said importer did not immediately come forward to take delivery of the containers, which remained in port. Out of the said 24 containers, the importer cleared three containers on or about 3rd August, 1998 by issuing cheque for Rs.4,89,426/- towards the container detention 3 charges of those three containers to the petitioners, and the plug- in charges for the three containers were paid by the said importer directly to the Port Trust Authorities. As regards balance 21 containers, said importer never came forward to take delivery. 2. On 24th September, 1998 the Respondent No.1 issued notice to the consignee M/s.Sudesh Seafoods Limited. The subject of the notice was “Final Notice of Sale of uncleared containers from Containers Yard of Jawaharlal Nehru Port”. It was stated that the goods which have been consigned to the noticee are lying uncleared in the Containers Yard, and if the goods are not cleared within two months from the date of arrival of the goods at Port, then the reference was made to the provisions of section 61 & 62 of the Major Port Trust Act, 1963, and it was stated that the Port Trust is entitled to sell those goods. It was further stated that this is final notice given to the consignee, and if the consignment is not cleared forthwith, the same will be sold under the provisions of section 61 & 62 of the Major Port Trust Act without any further notice. 3. According to the petitioners, though the Respondent No.1 issued this notice and the notice was not challenged by anybody and that 4 there was no impediment in the way of the Port Trust in proceeding further and selling the goods which would have resulted in clearing the containers and clearing the space which was occupied by the containers and would have also stopped consumption of electricity, the Port Trust did not take any steps to sell the goods. 4. On 14th October, 1998 the Customs Authorities wrote to the petitioners that they are investigating the case against the consignee M/s.Sudesh Seafoods Pvt.Limited and that the imports made by the said party which have not been cleared so far should be kept under detention and clearance should not be allowed without the written permission of the Customs Authorities. However, by letter dated 26th October, 1998 addressed to the consignee M/s.Sudesh Seafoods Pvt.Limited, the Customs Authorities permitted M/s.Sudesh Seafods Pvt.Limited to clear the goods to their bonded warehouse. But, the consignee did not clear the goods. In the meantime, the containers of the petitioners continued to be with the Port Trust Authorities. In March, 1999 the Port Trust Authorities issued notice to the petitioners for removal of badly smelling container and the Port Trust was 5 demanding charges from the petitioner towards the demurrage and consumption of electricity. 5. In this background the petitioners approached this Court by filing this petition for release of containers. In this petition, an interim order was made on 18.8.1999. This court directed that if the petitioners make an application for waiver of the charges within two weeks from the date of that order, the request made by the petitioners should be sympathetically considered by the Port’s Board of Trustees. In the order dated 27th October, 1999 this Court noted that though the request for waiver was made pursuant to the order dated 18.8.1999, no order has been made on that request. This Court, therefore, made an interim order directing the petitioners to deposit ground rent charges payable for the period between 29.6.1998 to 30.9.1998 and to pay all the electricity charges upto 5th May, 1999 and it was directed that on these charges being deposited, the containers will be de-stuffed and the containers shall be returned to the petitioners. 6. The petitioners accordingly deposited the total amount of Rs. 1,34,20,412/- with the Port Trust and it is the common ground before us that thereafter the containers were de-stuffed and 6 returned to the petitioners. Presently, the above referred amount is lying with the Trust and the question to be decided in the present petition is whether the Port Trust is justified in demanding the ground rent and electricity consumption charges from the petitioners, or whether the petitioners are entitled to refund of charges. 7. Affidavit in reply has been filed on behalf of the Port Trust, wherein the Port Trust stated that as per the order passed by this Court pursuant to the request made for waiver by the Petitioners, the resolution has been passed by the Board of Trustees. That resolution reads as under:- “The Board of Directors of the Respondent No.1 read and considered the item regarding waiver of ground rent charges of the Petitioners containing 20 containers imported by M/s.Sudesh Seafood Ltd. That after discussion, consensus was that the Respondent No.1 may grant remission limiting the ground rent charges for the period from 29.6.1998 to 30.9.1998 and levying additional charges for electricity consumption as per actuals till the date of clearance of the cargo.” 8. Thus, according to the Port Trust, the petitioners are liable to pay the ground rent for the period from 29.6.1998 to 30.9.1998 and the additionally the petitioners are also liable to pay charges for electricity consumption till the said containers were de-stuffed 7 pursuant to the Court’s order. 9. We have heard learned counsel for the petitioners. Learned counsel for the petitioners submit that as the goods were perishable and they were not cleared by the consignee, the Port Trust rightly gave notice for sale of those goods on 24.9.1998. On record there is no explanation to be found as to why the goods were not sold as per that notice. Learned counsel relied upon the judgment of the Supreme Court in the case of Om Shankar Biyani V/s.Board of Trustees – 2002 (3) SCC 168, to contend that, after having given notice which was not objected to by anybody and there was no impediment in the way of Port Trust in going ahead with the sale, had the Port Trust performed its statutory duties the petitioners would have received their containers and the consumption of electricity would have stopped and the Port Trust could have been able to recover its charges. The Port Trust thus failed in performing its statutory duties and thus, it is not entitled to claim ground rent and electricity consumption charges from the petitioners. The petitioners also relied upon the judgment of the Supreme Court in the case of Trustees of the Port of Madras V/s.M/s.K.P.V.Skeikh 8 Mohd.Rowther & Co. Pvt.Ltd. - AIR 1995 SC 1922 to contend that the demurrage charges of the Port Trust are not recoverable from the Shipper or from the consignor once the delivery receipt is given by the Shipper to the consignee. 10.We have heard learned counsel appearing for the Port Trust. He is not in a position to give any explanation as to why, after the notice dated 24.9.1998 which was issued for sale of goods forthwith, the goods were not sold. Learned counsel tried to refer to the letter dated 14.10.1998 from the Customs Authorities and to contend that because of that letter, the goods were not sold. But that letter was addressed on 14.10.1998, and even that embargo was cleared on 26.10.1998 when the Customs Authorities permitted the consignee to remove the goods to the bonded warehouse. 11.Now in the light of these rival submissions, if the record is seen, it becomes clear that the petitioners had delivered goods to the Port Trust on 29.6.1998. On 13.7.1998 delivery order was given by the petitioners to the consignee. The consignee did not clear the goods for three months. The goods were also of perishable nature. Therefore the Port Trust issued notice on 24.9.1998. This notice 9 was in consonance with the provisions of Section 61 of the Major Port Trust Act. Nobody had raised any objection to this notice. Therefore there was no impediment in the way of the Port Trust in selling the goods forthwith as was stated in that notice. The reliance placed on the communication dated 14.10.1998 from the Customs Authorities, in our opinion, is also not proper, firstly because that letter came on 14.10.1998 i.e.about 20 days after the notice, and even the prohibitory order contained in that letter ceased to operate on 26.10.1998 when the Customs Authorities permitted the consignee to remove the goods to the bonded warehouse. In any case, the letter dated 14.10.1998 was not addressed to the Port Trust Authorities, and it did not prohibited the Port Trust Authorities from selling the goods. 12.The Supreme Court in paragraph No.22 of the judgment in the case of Om Shankar (supra) has observed thus: “In our view the 1st respondent should have sold off the goods at that stage. It is a statutory body. Merely because there is no obligation to sell does not mean that it can allow the goods to lie around. By this time the 1st respondent well knew that the appellant was not paying the charges. Now the Court had permitted it to take recourse to such action as was available in law. Sale is contemplated in the Major Port Trusts Act itself. In our view the 1st respondent should have now sold the goods. Apart from the fact that demurrage charges would have stopped running, valuable godown space would also have 10 become available to it. On facts of this case, we feel that it would be just and proper that the 1st respondent not be allowed to charge demurrage charges after 10.1.1992.” 13.In our opinion, once the notice is given u/s.61, it becomes statutory duty of the Port Trust to sell the goods. The sale of goods was not only in the interest of Port Trust, but was also in public interest because the sale of goods would have resulted in clearing the public place and in stopping the consumption of electricity which was unnecessarily consumed. In our opinion, in this case, there is clear failure on the part of the Port Trust to perform its statutory duties. We also find that the law which is clearly laid down by the Supreme Court in the judgment of M/s.K.P.V.Sheikh Mohd.Rowther & Co. (supra), that once the delivery order is delivered by the Shipper to the consignee, the shipper cannot be held liable for any demurrage charges. Thereafter it was for the consignee to clear the goods and therefore it was for the consignee to pay the electricity charges and the ground rent. The petitioners cannot in law be held liable for the same. 14.In this view of the matter, therefore, in our opinion, Port Trust was not justified in demanding the ground rent and electricity 11 consumption charges from the petitioners. Taking overall view of the matter, in our opinion, following order would meet the ends of justice. “Respondent-Port Trust shall refund to the petitioners the amount which has been deposited by the petitioners pursuant to the interim order passed by this Court, together with the accruals, if any. Rule is made absolute accordingly, with no order as to costs. Petition stands disposed of” (N.D.DESHPANDE, J.) (D.K.DESHMUKH, J.)