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.628 of 1992. SUIT NO.628 of 1992. SUIT NO.628 of 1992. 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 Major Port Trusts (Amended) Act, 1974, having its principal place of business at "Vijay Deep" Shoorji Vallabhai Marg, Bombay 400 038 ..Plaintiff versus 1. M/s. Vijay Paper & Board Mills a firm carrying on business at Chalode Taluka, Dholke, Ahmedabad. 2. Corporation Bank, a Banking Company under the Banking Companies (Acquisition & Transfer of Undertaking) Act, 1970 having a branch besides Post Office, Navrangpura, Ahmedabad 380 013. 3. Greenway Shipping Agencies (Pvt.) Ltd., A Company under the Indian Companies Act, having its Office at Suite 7/9, 1st floor, Elphistone House, 17 Murzban Road, Bombay 400 001 ..Defendants Mr.U.J. Makhija i/b. Mulla & Mulla for the plaintiffs None for the defendants. CORAM : R.Y.GANOO, J. CORAM : R.Y.GANOO, J. CORAM : R.Y.GANOO, J. DATED : 9th February, 2009. DATED : 9th February, 2009. DATED : 9th February, 2009. ORAL JUDGMENT ORAL JUDGMENT ORAL JUDGMENT -2- 1. The plaintiffs i.e. the Board of Trustees of the Port of Bombay have filed the suit for recovery of Rs.6,13,921.92 and have also prayed for interest at the rate of 15% per annum from the date of filing of the suit till realisatioin on 6,01,318.92. They have also prayed for costs of the suit. The plaintiffs, who are governed by the provisions of Major Port Trust Act ( hereafter referred to as the said Act) had occassion to receive the cargo in the nature of four containers S.T.C. Old corrugated carton paper press cuttings which according to the plaintiffs was imported by defendant No.1 being the actual importer and defendant No.2 i.e. Corporation bank. Defendant No.3 is said to be the agent of the defendant No.1. According to plaintiffs the said cargo landed at Bombay Port as per the item No.47 IGM 989 on 10.4.1987 through vessel M.V.Unifortune. The General landing date was 11.4.1987. The last free date was 16.4.1987. The plaintiffs by their letter dated 5.3.1988 intimated defendant Nos.2 and 3 that the said cargo would be put up for sale and copy of the same was sent to defendant No.1. The IGM is at Exhibit P-1, which shows the name of the defendant -3- Nos.1 and 2. In order to sell the said cargo notification was published in the Government of Maharashtra Gazette on 10.3.1988 which is at Exhibit P-2. Notice was also issued in the newspaper "Times of India" dated 7.3.1988 which is at Exhibit P-3. The plaintiffs have come out with the case that the cargo was sold on 25.4.1988 for Rs.1,58,629/-. The plaintiffs by their letter dated 2.3.1991 called upon the defendant Nos.1 to 3 to pay port trust charges to the tune of Rs.6,64,618.92 . A similar notice was sent on 4.3.1991. As there was no response from the defendants the suit came to be filed on 24.4.1991. 2. The plaintiffs have not claimed ITC fine to the tune of Rs.63,300/-. According to the plaintiffs, out of the sale proceeds Rs.13,896.58 were appropriated towards expenses for sale. Rs.1,34,196.34 were appropriated towards the payment of the Custom duty and Rs.10,536.08 were appropriated towards payment of wharfage and demurrage charges as is commonly referred to as Port Trust Charges and that is how the plaintiffs claim that they are entitled to claim from defendants balance of Port Trust Charges. -4- Plaintiffs have also claimed Rs.110/- by way of carting charges and Rs.6589 as sale warehousing charges. 3. No written statement is filed by the defendant Nos.1 and 2. Written statement came to be filed by the defendant No.3. According to defendant No.3 the suit was barred by period of limitation and that defendant No.3 were agent of the vessel and not the owner of the goods and as such they are not liable to pay Port Trust Charges. It was also the case of the defendant No.3 that plaintiffs were negligent in disposing of the said cargo and that is how the plaintiffs are not entitled to recover the Port Trust Charges. 4. Issues came to be framed on 8.7.2008. They are as under. My answer to each of the issue is mentioned against the respective issue. Issues i. Do the plaintiffs prove In the affirmative that the defendant sold as regards sale consignment on 25.4.1998 for proceeds and as Rs.1,58,629/- and after per final order -5- adjustment of sale resulted in as regards port deficit in Port Trust charges trust charges of Rs.6,01,318.92? payable by defendant No.1 2. Do the plaintiffs prove that the defendant No.3 is In the liable to pay to plaintiffs a affirmative as sum of Rs.6,01.318.92 being per the final deficit charges together with decree. Rs.12,603/- being the interest thereon at 15% per annum from 4.3.1991 to 24.4.1991 amounting to Rs.6,13,921.92? 3. Is the suit barred by law of limitation? In the negative 4. Is the suit bad for misjoinder of parties? In the negative 5. Does the defendant NO.3 prove that plaintiffs are In the negative guilty of gross delay and negligence in disposing of the -6- suit consignment under the provisions of Major Port Trust Act, 1963? 6. Do the defenedant No.3 prove that they were not In the negative importers/owners/bailors of the suit consignment? 7. Do the plaintiffs prove that the defendant No.3 is the In the affirmative importer/owner/bailor of the suit consignments? 8. What Order? As per the operative part. 5. In the course of trial Mr.Santosh Dighe, Asst. Docks Manager was examined as P.W.1. No other witness was examined by the plaintiffs. The defendant Nos.1 to 3 did not participate in the trial and did not cross examine Santosh Dighe P.W.1. No witness was examined on behalf of any of the defendants. -7- Issue No.3 Issue No.3 Issue No.3 6. The plaintiffs have sold the goods on 25.4.1988 and the suit is filed on 24.4.1991. Argument advanced by learned Counsel Mr.Makhija for the plaintiffs that the plaintiffs could calculate the demurrage charges on the day when the goods were sold and the cause of action arose to the plaintiffs on the date of sale is required to be accepted. He had drawn my attention to the provisions of Article 113 of the Indian Limitation Act as also he had relied upon the judgment in the case of Trustees of Port of Bombay v/s. M/s. Trustees of Port of Bombay v/s. M/s. Trustees of Port of Bombay v/s. M/s. Jayantilal L. Gandhi 1979 Bom.12 Jayantilal L. Gandhi 1979 Bom.12 Jayantilal L. Gandhi 1979 Bom.12 to contend that the suit can be filed within a period of three years from the date of sale for the recovery of the Port Trust Charges. After having considered the relevant facts and the judgment mentioned aforesaid, I accept the argument advanced by the learned Counsel for the plaintiff and the suit filed on 24.4.1991 will have to be treated as within the period of limitation. Accordingly issue No.3 is answered in the negative. Issue No.4 Issue No.4 Issue No.4 -8- 7. The stand of the defendant No.3 that the suit is bad for misjoinder of parties is not placed before the Court in its proper perspective. Hence the issue will have to be answered in the negative. Accordingly issue No.4 is answered in the negative. Issue Nos.6 & 7. Issue Nos.6 & 7. Issue Nos.6 & 7. 8. The defendant NO.3 had taken a stand that they were the agent of the vessel and that they were not the importers. As against this the plaintiffs have taken the stand that the defendant No.3 will have to be treated as owner/bailors as they were concerned with the suit goods and to be termed as owners in accordance with the provisions of Section 2(o) of the said Act. Learned Counsel Mr. Makhija had relied upon the judgment in the case of Trustees of the Port of Madras through its chairman v/s. K.V.P.Sheikh Mohd. Rowther & Co. Pvt. Ltd. reported in AIR 1995 SC 1922 to contend that the agent of the vessel will have to be styled as the owner and the defendant No.3 will be liable to pay the Port Trust Charges. After having considered the submission across the bar, and the record, and the judgment cited above the -9- argument is required to be accepted. Hence issue Nos.6 is answered in the negative whereas issue No.7 is answered in the affirmative. Issue No.5 Issue No.5 Issue No.5 9. It has been the stand of the defendant No.3 that the plaintiffs were guilty of gross delay in the matter of disposal of the goods. The defendant No.3 has not cross examined the plaintiffs witness to bring on record the delay. The defendant No.3 has also not examined any witness to specifically explain their stand. The evidence on record led by Santosh Dighe, P.W.1 no doubt goes to show that the plaintiffs took steps to sell the goods in the month of March 1988 and actually disposed of the goods on 25.4.1988. The gap between the last free date and the actual sale is of about one year, In the absence of specific evidence brought on record at the hands of defendant No.3, this Court will not be able to hold that the plaintiffs took long time to dispose of the goods. If evidence would have been on record to contend that there was delay in disposing of the goods, the defence could have been accepted. The defendant No.3 has failed to -10- show that the plaintiffs have exhibited delay as regards disposal of the said goods. Accordingly, issue No.5 is answered in the negative. Issue No.1 Issue No.1 Issue No.1 10. The plaintiffs have approached the Court with a positive case that the cargo was sold on 25.4.1988 and the sale proceeds were to the tune of Rs.1,58,629/-. The plaintiff’s witness Santosh Dighe has given evidence in support of his case and there is no cross examination in so far as the said aspect is concerned. As a result of this, the evidence led by the plaintiffs as regards the date of sale and the amount received as per the sale proceeds has gone unchallenged and as such issue No.1 is answered in the affirmative. Issue No.2 Issue No.2 Issue No.2 11. The plaintiffs have claimed Port Trust Charges to the tune of Rs.6,13,921.92 upto the date of the filing of the suit and the principal amount is 6,01,318.92. The evidence of Santosh Dighe goes to indicate that one time wharfage to the tune of Rs.694.84 is charged. The plaintiffs have charged the Port Trust Charges upto 10.4.1988 -11- from the last free date ie. 16.4.1987 and the said charges turned out to be 6,02,893.00 making it together Rs.6,03,587.84. The plaintiffs have charged the wharfage as well as the demurrage charges as per the Docks scale of rates and the evidence on behalf of the plaintiffs to that extent has gone unchallenged. The plaintiffs would be entitled to recover from the defendants Rs.6,03,587.84 by way of Port Trust Charges, out of which the plaintiffs have already received Rs.10,536.08 which will mean that the plaintiffs would be entitled to recover from the defendants Rs.5,93,051.76. 12. Plaintiffs have charged Rs.110/- by way of carting charges. They have also demanded Rs.6589/- as Sale Warehousing Charge. Perusing the evidence of Santosh Dighe, P.W.1 there is no material placed before the Court to come to the conclusion that plaintiffs can recover monies under the aforesaid two items and as such, I am inclined to reject the claim of the plaintiffs to that extent. 13. I now come to the question of interest -12- payable by the defendants to the plaintiffs. The plaintiffs have claimed interest at the rate of 15% per annum. However, there is no material placed before the Court in support of such claim except that the notice of demand says that the interest at the rate of 15% should be paid. In such a situation I am inclined to observe that the rate of interest will have to be considered on the basis of relevant date and keeping in view the relevant dates as 16.4.1987 being the last free date and the date when the goods came to be sold is 25.4.1988 and the lodgment of the suit is in the year 1991. I am inclined to observe that the if interest at the rate of 12% is granted from 4.3.2001 i.e. the date of demand upto filing of the suit on Rs.59,301.84 it would meet the ends of justice. So far as the interest after the filing of the suit, keeping in view the provisions of Section 34 of CPC the interest at the rate of 6% should be granted. The plaintiffs would ofcourse be entitled to the costs of the suit. 14. I now turn to the fixing of liability qua each of the defendant. The defendant No.1 is an importer and therefore defendant No.1 will be -13- liable to pay the Port Trust charges as indicated aforesaid. The defendant No.3 is the agent of the vessel and once he is treated as owner of the goods in accordance with the provisions of Section 2(o) of the said Act, defendant No.3 will also be liable to pay Port Trust Charges. Accordingly, decree will have to be passed against the defendant nos.1 & 3. 15. The question is whether the decree is to be passed against the defendant No.2, namely Corporation Bank. Learned Counsel Mr. Makhija pointed out to the Court that the IGM at Exhibit P-1 mentions the name of defendant No.1 as well as defendant No.2 Corporation Bank as the importers. He pointed out that the documents on the basis of which the cargo could be cleared by the importer were in the custody of defendant No.2 as the bankers and they were to be paid the amount covered by the Bill of Lading then they were to discharge the said bill of lading and then the goods could be retired. He, therefore submitted that Corporation Bank defendant No.2 having been shown as importer is liable to pay the Port Trust Charges. -14- 16. I have considered the submissions advanced by learned Counsel Mr. Makhija. It is true that in the IGM name of defendant No.2 is shown. It may also be accepted for a limited purpose that defendant No.2 is importer. However, I am of the view that merely because the name of defendant No.2 Corporation Bank is shown in the IGM, that by itself would not fasten the liability upon the defendant No.2 as regards payment of demurrage charges. It is well known that the Vendor arranges to send the documents through the bank and the bank hands over the document to the purchaser who is the importer and thereby ensures that the purchaser pays the costs of goods before he gets the documents on the basis of which goods can be obtained. In my view bank plays limited role and the bank has nothing to do with the actual import of the goods and have the benefit of the goods. May be the name of defendant No.2 is shown in the IGM. but, in my view, that has been done purely to show as to who are the bankers in the said import transaction. In my view, noting the role of defendant No.2 there will be no question of the defendant No.2 being liable to pay -15- to the plaintiffs Port Trust Charges as the bankers In my view, in the peculiar circumstances the defendant No.2 cannot be made to pay the Port Trust Charges. It is with this observation, I decline to accept the argument of learned Counsel Mr. Makhija that the defendant No.2 should be treated as owner of the goods. In view of the above, the claim against defendant No.2 will have to be declined and the suit will have to be dismissed so far as the defendant No.2 is concerned. 17. In view of the above, issue No.2 is answered to hold that the claim of the plaintiffs is being granted as per the operative part. Issue No.8. Issue No.8. Issue No.8. 18. Keeping in view the findings on issues Nos.1 to 7 appropriate decree shall be passed as under. Issue No.8 is decided as per the operative part. 19. For the reasons mentioned aforesaid, I pass the following decree. -16- i. Defendant Nos.1 and 3 jointly or severally do pay to plaintiffs Rs.5,93,051.76 ii. Defendant Nos.1 and 3 jointly or severally do pay to plaintiffs, interest at the rate of 12% per annum from 4.3.1991 upto the date of filing of the suit on Rs.5,93,051.76. iii. Defendant Nos.1 and 3 jointly or severally do pay to plaintiffs interest at the rate of 6% per annum from the date of filing of the suit till realisation on Rs.5,93,051.76. iv. Defendant Nos.1 and 3 jointly or severally do pay to plaintiffs costs of the suit. v. Suit is dismissed so far as defendant No.2 is concerned. There shall be no order as to costs so far as defendant No.2 is concerned. (R.Y.Ganoo, J.) (R.Y.Ganoo, J.) (R.Y.Ganoo, J.)