IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE CHIEF JUSTICE MR.J.CHELAMESWAR & THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 27TH SEPTEMBER 2011 / 5TH ASWINA 1933 WA.No. 2549 of 2002(E) ---------------------- ( AGAINST THE JUDGEMENT IN OP.9730/2000 Dated 16/09/2002 ) .................... APPELLANT/ PETITIONER ------------------------ M/S.APL (INDIA) PVT.LTD., BRISTOW ROAD, W/ISLAND, KOCHI-3, AGENTS OF AMERICAN PRESIDENT LINES REP.BY ITS DISTRICT MANAGER, MR.G.K.N.PRABHU S/O.M.RANGANATHAN, AGED 29 YEARS, DISTRICT MANAGER BY ADV. SRI.E.VENKITESWARAN (SR) SRI.V.J.MATHEW, SENIOR ADVOCATE SRI.SABU P.JOSEPH SMT. S. PRIYA & SHRI K.R. SHRIRAM RESPONDENTS/ RESPONDENTS -------------------------- 1. THE CHAIRMAN, COCHIN PORT TRUST, W/ISLAND, KOCHI-9. 2. BOARD OF TRUSTEES, COCHIN PORT TRUST, W/ISLAND, KOCHI-3 REP.BY ITS CHAIRMAN. 3. THE COMMISSIONER OF CUSTOMS (IMPORTS) CUSTOMS HOUSE, KOCHI-9. 4. UNION OF INDIA, REP.BY ITS SECRETARY, MINISTRY OF FINANCE, NEW DELHI. 5. M/S. A.P.INDUSTRIES, OPP.GALI KUPLAN, GURU BAZAR, AMRITSAR, REP.BY CAFCO SYNDICATE, C & F AGENTS, DOOR NO.XXIV/1557, HANDICRAFTS, BUILDING, INDIRA GANDHI ROAD, COCHIN-682 003. WA.No. 2549 of 2002(E) 6. M/S. M.K.WOOLLENS, 10671 OLD OCTORI POST SULTAN WIND ROAD, AMRITSAR, REP.BY CAFCO SYNDICATE, C & F AGENTS, DOOR NO.XXIV/1557, HANDICRAFTS BUILDING, INDIRA GRANDHI ROAD, COCHIN - 682 003. 7. M/S. FALCON WOOLLEN MILLS (P) LTD., 95/48 DADA MIAN COMPOUND, BECON GANJ, KANPUR, REP.BY CAFCO SYNDICATE, C & F AGENTS, DOOR NO.XXIV/1557, HANDICRAFTS BUILDING, INDIRA GANDHI ROAD, COCHIN - 682 003. 8. M/S.R.A.SPINNING MILLS (PVT.) LTD., 3 JAIL ROAD, AMRITSAR, REP.BY CAFCO SYNDICATE, C & F AGENTS, DOOR NO.XXIV/1557, HANDICRAFTS BUILDING, INDIRA GANDHI ROAD, COCHIN 682 003. 9. M/S.SAHARA IMPEX, A1-49 SECTOR 5, VISHAM CHOWK, ROHINI, DELHI V.85 REP.BY CAFCO SYNDICATE, C & F AGENTS, DOOR NO.XXIV/1557, HANDICRAFTS BUILDING, INDIRA GANDHI ROAD, COCHIN - 682 003. 10. M/S. ENKAY TEXTILES, D-23 G & JU BLOCK, TOP FLOOR, PITAMPURA, NEW DELHI REP.BY CAFCO SYNDICATE, C & F AGENTS, DOOR NO.XXIV/1557, HANDICRAFTS BUILDING, INDIRA GANDHI ROAD, COCHIN 682 003. 11. M/S GOLBAL IMPEX, 188 AZAD MARKET, DELHI REP.BY CAFCO SYNDICATE, C & F AGENTS, DOOR NO.XXIV/1557, HANDICRAFTS BUILDING, INDIRA GANDHI ROAD, COCHIN-682 003. 12. M/S.MATHRUKRUPA TEXTILES PVT.LTD. 229 A KRANTIVEER RAJ GURU MARG, GIRGAUM, MUMBAI, REP.BY M/S. COCHI CLEARING HOUSE, C & F AGENTS, BRISTOW ROAD, P.B.NO.516, W/ISLAND, KOCHI-3. 13. M/S. TEX WOOL TRADERS, B-2/221 PASCHIM VIHAR, NEW DELHI, REP.BY M/S.COCHIN CLEARING HOUSE C & F AGENTS, BRISTOW ROAD, P.B.NO.516, W/ISLAND, KOCHI-3. 14. M/S.RADHA TEXTILES, 229 A KRANTIVEER RAJ GURU MARG, GIRGAUM MUMBAI, REP.BY M/S.COCHIN CLEARING HOUSE, C & F AGENTS, BRISTOW ROAD, P.B.NO.516, W/ISLAND, KOCHI-3. WA.No. 2549 of 2002(E) 15. CAFCO SYNDICATE, C & F AGENTS, DOOR NO.XXIV/1557, HANDICRAFTS BUILDING, INDIRA GANDHI ROAD, COCHIN 682 003. 16. M/S.COCHIN CLEARING HOUSE, C & F AGENTS BRISTOW ROAD, P.B.NO.516, W/ISLAND, KOCHI-3. R1 & R2 BY ADV. SHRI A.K. JAYASANKAR NAMBIAR. BY SRI.P.PARAMESWARAN NAIR,ASG OF INDIA R3 AND R4 BY ADV. SRI.P.K.RAMKUMAR, ADDL.CGSC R3 & R4 BY ADV. SMT.TOJAN J. VATHIKULAM. R5 TO 12 & 15 BY SRI.GEORGE POONTHOTTAM R16 BY SRI.P.K.SURESH KUMAR, SENIOR ADVOCATE THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28/07/2011, ALONG WITH W.A NO. 2564 OF 2002 AND CONNECTED CASES , THE COURT ON THE 27/09/2011 DELIVERED THE FOLLOWING: J. CHELAMESWAR, CJ & P.R. RAMACHANDRA MENON, J. .............................................................................. W.A. Nos. 2549, 2564, 2565, 2567, 2569, 2576, 2611, 2783 and 2791 OF 2002, O.P. 21041 OF 1999 & W.P. (C) No. 32191 OF 2004 ......................................................................... Dated this the 27th September , 2011 P.R. Ramachandra Menon, J: Whether the liability to pay 'Ground Rent' in respect of the containers unloaded in the Cochin Port, lying uncleared by the Consignees/Importers and refused to be destuffed by the Port, for inadequate storage space, can be mulcted on the owners of the Vessel/Steamer Agents beyond 75 days, in view of the Scheme of the Statute (Major Port Trusts Act 1963- in short 'MPT Act')) and the contents of the TAMP (Tariff Authority for Major Ports) Orders dated 10.11.1999, 19.07.2000 and 13.09.2005, is the point. 2. Altogether nine Writ Appeals have been preferred against the common judgment dated 16.09.2002 in O.P. 9730 of W.A. 2549 OF 2002 and connected cases 2 2000 and five other original petitions (total six original petitions). The above original petitions were filed by concerned Shipping Agents mainly for destuffing the cargo and to release the containers; to stop appropriation of any amount towards 'Ground Rent' from the 'pre-deposits' effected by them and also to refund the excess amount appropriated. O.P. 21041 of 1999 is a similar petition (as amended) filed by another Shipping Agent; which however was omitted to be tagged along with the connected cases, when they are heard and decided as per the common judgment dated 16.09.2002. 3. Writ Appeals 2549, 2564, 2565, 2567, 2569 and 2576 of 2002 have been preferred by the Shipping Agents; while Writ Appeals 2783 and 2791 of 2002 have been preferred by the Port Trust challenging the verdict in O.P. Nos. 9690 and 9648 of 2000 (in respect of the very same cause of action forming the subject matter of Writ Appeals 2569 and W.A. 2576 of 2002 respectively preferred by the concerned Shipping Agents). W.A. 2611 of 2002 has been preferred by the Consignee in respect of the W.A. 2549 OF 2002 and connected cases 3 verdict in O.P. 9730 of 2000 ( pertaining to the subject matter involved in W.A. 2549 of 2002 preferred by the Shipping Agent against the very same verdict). W.P.(C) No. 32191 of 2004 relates to a subsequent cause of action, involving a different commodity, but similar question of law. W.A. 2549 of 2002 is treated as the lead case. 4. Goods involved in all the cases, imported as 'FCL' (Full Container Loads) mainly consist of 'synthetic woollen rags', except in W.P.(C)No.32191 of 2004, where it is VCD players. The period of import is during August 1998 to March 1999. All the Containers now stand returned after destuffing, pursuant to the common judgment in the Original Petitions and the interim orders passed in the Appeals. 5. Some of the goods imported earlier in the Cochin Port, titled as “woollen rags” were actually found to be “brand new clothes” on inspection by the Customs Department, which attracted heavy duty, penalty and such other charges. The dispute between the Consignees and the Customs went on for an W.A. 2549 OF 2002 and connected cases 4 indefinite period and in the said circumstances, the consignees did not turn up to clear the goods in respect of the subsequent transactions as well, presumably knowing the probable outcome and the huge liability to be satisfied under different heads including the Port charges and other dues because of the delay. So also, no action was taken by the Port Trust to destuff the goods and they retained the containers for their own reasons. 6. The stand of the Customs Department was that arrangements for inspection had to be made by the Consignee and unless the goods were destuffed by the Port Trust, no inspection/valuation was possible and that they had not prevented the Port Trust from destuffing. Despite the inaction/ lapse of those concerned, including the Consignees/Importers, the Port Trust was conveniently appropriating 'Ground Rent' in respect of the containers from the 'pre-deposits' effected by the Shipping Agents, though the retention of containers was not because of any fault pointed out on the part of the Shipping Agents. This led to various writ petitions filed by the Shipping W.A. 2549 OF 2002 and connected cases 5 Agents, as aforesaid, culminating in the common judgment. 7. As per the common judgment, the learned Single Judge turned down the contention of the Shipping Agents that they were not liable to satisfy the 'Ground Rent' in respect of the containers, holding that only on issuance of the 'Delivery Order', would the ownership over the goods stand transferred to the consignee, leaving the dispute between the consignee and the Shipping Agents to be decided by way of Civil Suit / Arbitration (however, ordering destuffing in a phased manner); which led to the appeals preferred by the Shipping Agents. In two cases (O.P Nos.9648 and 9690 of 2000), some wider relief was given, referring to the letters given by the Shipping Agents to cause destuffing and confining the liability till such date, which led to the appeals filed by both the concerned Shipping Agents and also by the Port Trust, to the extent they were aggrieved. The observation made by the learned Judge, that the dispute between the Consignee and the Shipping Agents had to be resolved by approaching the Civil Court or by invoking the remedy by way of W.A. 2549 OF 2002 and connected cases 6 Arbitration, based on the terms of the agreement in between, forms the subject matter of challenge in W.A. 2611 of 2002 filed by the Consignee. 8. In W.P. (C) 32191 of 2004, though Delivery Order was issued to the Consignee, the Customs Department confiscated the cargo of VCD players for mis-declaration. Lien notice was issued by the petitioner/Shipping Agent to the Port Trust for Ground Rent and other charges appropriated from their account. Interim order was passed in the Writ Petition directing to earmark a sum of Rs. 3.6 lakhs from the sale proceeds, if the cargo was 'sold in auction'. Later, the confiscation order was set aside by the CESTAT, Bangalore in the Appeal preferred by the Importer/Consignee and the goods were released to the Consignee, however without retaining the aforesaid Rs. 3.6 lakhs. Alleging violation of the interim order, Contempt Case No.515 of 2005 was filed, which however was closed, holding that, releasing the goods 'to the Consignee' would not amount to the violation of the interim order dated 18.11.2004 (since the cargo was “not W.A. 2549 OF 2002 and connected cases 7 auctioned”, but released to the Consignee). The issue that survives relates to return/refund of the Ground Rent charges appropriated from the account of the Shipping Agent. 9. Port Trust filed a Counter affidavit in O.P. 9690 of 2000. As revealed from paragraphs 8 and 9, the crux of the contentions is that, from the date of destuffing, till the date of clearance, Ground Rent charges are levied and collected from the Importer/Consignee and that the Port is not legally obliged under any Act, Rule or Regulation to effect an expeditious destuffing of containers immediately on their arrival at the Port premises. Due to compelling reasons, such as shortage of storage space, the Port will not be in a position to destuff the containers, on which situation, it is the Consignee/Importer, who, after obtaining the delivery orders from the Steamer Agents and permission from the Customs authorities usually removes the containers to bonded warehouses, to be destuffed there and release the containers to the Vessel Owners/Agents. If the Consignee does not turn up, Ground Rent Charges is payable in respect of the W.A. 2549 OF 2002 and connected cases 8 containers, treating the Vessel Owners/Agents as the 'owner' of the goods entrusted to the Port till delivery order is presented in favour of the Consignee (with liberty to seek reimbursement from the Consignee/Importer). The Port had denied permission to destuff the containers within the Port premises, solely because they were facing acute storage space and it was impossible to store destuffed cargo in the premises. It is also stated that the Port is empowered under the 'MPT Act' to prescribe the scale of rates for the services provided by it to the persons concerned. The Port filed an additional affidavit dated 12.11.2001 stating that, it was open for the Consignee or the Steamer Agents to destuff the cargo in bonded warehouses to minimise payment of Ground Rent Charges; however conceding that the Port was aware of the identity of the importers, through the information furnished by the Clearing agents. The Port filed an additional counter affidavit dated 17.06.2002 as well, producing letters written by the Shipping Agents to retain the cargo till their consent was obtained/produced. W.A. 2549 OF 2002 and connected cases 9 10. The Customs has filed statement/counter affidavit in different cases, contending that destuffing of the goods is a matter which comes absolutely within the purview of the Port as stated by the petitioner; that the Customs had not prevented destuffing of the goods; that it is the responsibility of the Importer to arrange destuffing and present the goods for examination by the Customs; that the Customs actually wanted an earlier destuffing of the goods; that Exts.P5 and P6 Circulars issued by CBEC pertain to a situation where the cargo is detained by the Customs Department, which is not the position in the instant case, (as the goods have not been detained by the Customs); that no examination could be done as the goods were not destuffed for examination by the Port authorities and that the Customs have no objection in destuffing the cargo, which however is not the responsibility of the Customs. 11. It is contended by the Shipping Agents that without the consent of the Consignee, the containers cannot be shifted, nor can it be destuffed in the Warehouse at 'Pettah', as made clear W.A. 2549 OF 2002 and connected cases 10 by the Customs in Ext. P3 letter dated 26.07.1999 and further that bonding of the cargo is being permitted by the Customs House only at the instance of the Consignee. As mentioned above, since the goods were not destuffed and containers were not returned even after months of discharge, Ext. P1 letter dated 02.03.1999 was written by petitioner/Shipping Agent to the Port, to auction the cargo. The relevant portion reads as follows: “In this matter, we would request you to arrange to take custody of the cargo since these containers/cargo has been delinquent inside the Port for over 60 days and arrange to auction the Cargo as per the Port's Rules and Regulation.” The Port sent Ext. P4 reply dated 16.04.1999 stating that, in view of the nature of the cargo, the Customs will not allow the Port Trust to dispose of the cargo after destuffing and hence requested the petitioner to 'pressurise the Customs', to get it examined and auctioned. On receipt of the said reply, the petitioner sent Ext.P9 letter dated 20.05.1999 to the Customs for immediate auction. The relevant portion reads as follows: W.A. 2549 OF 2002 and connected cases 11 “In this matter we would request you to arrange to take custody of the cargo since these containers/cargo has been delinquent inside the Port for over 60 days and arrange to auction the cargo as per the Customs/Port Rules and Regulation.” This was followed by Ext.P10 letter dated 09.06.1999 addressed to Customs. The relevant portion reads as follows: “Even if you feel that these process is going to take a longer time, we would as an alternative, request you to permit us to move these containers to Pettah CWC-CFS and destuff the Cargo there.” The Customs sent Ext.P3 reply dated 26.07.1999 declining the request . The relevant portion reads as follows: “On verification of records it is noticed that Bills of Entry have been filed by importers in all these cases and hence your submission that the cargo is delinquent is not correct. As regards permission to move these containers to CWC-CFS , Pettah and to de- stuff the cargo there, same requires the concurrence of the importer” W.A. 2549 OF 2002 and connected cases 12 Based on the above proceedings, it is contended that all necessary steps were taken by the Shipping Agents, moving the Port and the Customs, to have the cargo destuffed, either in the Port premises or by taking out which was not agreed upon and that there was no fault or lapse on their part. Further, the Central Board of Excise and Customs, as per Circular 50/97/CUS dated 17.10.1997, had issued guidelines for disposal of unclaimed/uncleared cargo and for sharing the sale proceeds on the basis of 50:50 between the Port and Customs in respect of the cargo landed prior to 31.12.1996. In view of severe congestion felt at all Ports, the same course was followed in respect of all the cargo landed till 31.12.1998 as well, as per Ext. P7 Circular, holding that no charge would be levied on the Shipping Companies. It was issued as an interim administrative arrangement, also alerting the course to be pursued with reference to Section 150(2) of the Customs Act. 12. Sri.Venkiteshwaran, the learned Senior Counsel, who led the arguments on behalf of the Shipping Agents, explaining W.A. 2549 OF 2002 and connected cases 13 the various provisions in different enactments connected with the issue and the binding judicial precedents on the point, asserted that the Port Trust was not justified in not destuffing the goods from the containers pursuing further steps within the stipulated time as provided under Sections 61 and 62 of the Major Port Trusts Act (as enhanced to 75 days as per the relevant TAMP Orders) while continuing to collect the Ground Rent charges on the containers from the running accounts maintained by the Steamer Agents beyond the above period. The learned Senior Counsel asserted that there was no much difference between the liability to satisfy 'demurrage' for the delay in clearing the goods which admittedly stands on the consignee and the liability sought to be satisfied in respect of the very same goods when it is kept in the containers lying in the Port premises, branding the same in a different name as 'Ground Rent'. The learned Senior counsel however submits that the concerned Appellants/Shipping Agents do not propose to press the contention as to the liability of the Steamer Agents in satisfying the Ground Rent; except the W.A. 2549 OF 2002 and connected cases 14 question that how long, can it be realised by the Port. With reference to Sections 61 and 62 and the contents of the relevant TAMP orders issued by the Tariff Authority for Major Ports, which is a statutory Body constituted under Section 47A of the Major Port Trusts Act , it is contended that the said liability can never exceed beyond 75 days and therefore there is no justification in raising further demand by the Port Trust and that the amount already collected in excess is liable to be refunded to the Steamer Agents. 13. Mr.Prasanth S. Prathap, the learned counsel appearing for the appellant in W.A No.2567 of 2002 sought to supplement the arguments made by the learned Senior counsel Mr.Venkiteshwaran and submitted that 'container' is only a device for storing and transporting the goods, which cannot by itself change the nature or obligation as to the liability to satisfy the rates payable in respect of the services rendered by the Port or in respect of the use of the premises/infrastructure made available by the Port. It was pointed out that the appellant, by their letter W.A. 2549 OF 2002 and connected cases 15 dated 12.02.2000 called upon the Port to sell the cargo as per the provisions of the Major Port Trusts Act, 1963, but no action was taken by the Port to destuff the containers and sell the cargo, which is contrary to the statutory duty on the Port to sell the goods by public auction which remained uncleared for a period exceeding 30 days. The learned counsel submitted that the provisions pertaining to cargo demurrage are clearly applicable here as well, since the services provided by the Port are in respect of the 'goods' kept in the containers, for which the Port is entitled to charge demurrage on the uncleared cargo as provided under Section 48(1) (d) of the Major Port Trusts Act; but not any Ground Rent charges, the container being only a device for the purpose of storage of cargo and the retention is only due to failure to clear the cargo and not due to failure to remove the container. The learned counsel further submits that it is the Bill of Lading in favour of the consignee or the endorsement thereon, that is relevant for deciding the ownership and not the delivery order; because the latter does not transfer W.A. 2549 OF 2002 and connected cases 16 any property in the goods. 14. Mr.Jayasankar Nambiar, the learned Standing Counsel appearing for the Port reiterated the submissions as given in the counter affidavit, that the liability to pay Ground Rent was upon the Steamer Agents, till the goods were destuffed; that the Port was not in a position to permit destuffing for want of sufficient storage space; that it was open for the Shipping Agents to have moved the Customs for taking the containers to bonded warehouses or elsewhere, as prescribed, to minimise the amount payable to the Port; that there was no duty or obligation on the Port to effect destuffing of the cargo immediately on landing of the containers in the premises of the Port and that the Port was not in a position to proceed with sale of the goods for want of proper abandonment letters issued in this regard. It is also stated that the various TAMP orders referred to and relied on by the Writ petitioners/Shipping Agents prescribing/limiting the extent of liability to pay Ground Rent charges to '60/75 days', deal with a situation on abandonment of containers, which is not W.A. 2549 OF 2002 and connected cases 17 applicable to the case in hand. 15. Sri.Venkiteshwaran, the learned senior counsel submitted that, the questions whether the Steamer Agent can be construed as 'Owner” of the goods carried in the vessel of their principal, coming within the purview of term 'owner' defined under Section 2 (o) of the MPT Act and whether a 'Steamer Agent' can be made liable for payment of storage charges/ demurrage in respect of the goods which are uncleared by the consignee, have already been referred by the Apex Court to be considered by a Larger Bench, as per the ruling rendered in Forbes Forbes Campbell & Co, Ltd. (2008 (4) SCC 87). The learned Senior Counsel submits that, the issue now pressed before this Court is not whether the appellants/Shipping Agents are bound to effect payment of any 'Ground Rent' charges for the failure on the part of the Consignee/ Importer to clear the goods, but to what extent the liability can be mulcted on the shoulders of the Shipping Agents, in the light of the relevant TAMP orders. 16. It is seen that the above case (2008 (4) SCC 87) W.A. 2549 OF 2002 and connected cases 18 originated from non-payment of Rs.4752/- which was still to be satisfied to the Port of Bombay (now Mumbai) in respect of the default in clearing the goods imported on 05.02.1972. Since the goods were not cleared, the Port issued letters to the Shipping Agent to furnish the name and address of the Consignee and since it was not responded, the Shipping Agent was informed of the proposed sale, requesting the same to be communicated to the Consignee. Since no further steps were taken by the Shipping Agent, in spite of further notice asking to clear the goods within 10 days, satisfying the charges payable to the Port, the goods were sold in public auction on 02.09.1976, realizing a sum of Rs. 62,000/, which was appropriated against the Port charges, Customs duty etc.; followed by filing a Civil Suit before the Court of Small Causes for realizing the balance amount of Rs. 4572/- wherein the Shipping Agent was arrayed as the second defendant. 17. The Trial Court exonerated the Shipping Agent (second defendant) which however was reversed in appeal, finally leading W.A. 2549 OF 2002 and connected cases 19 to the appeal before the Supreme Court. Though the amount involved was trivial, the Apex Court observed that, having regard to the question of law of public importance involved in the appeal, the matter required to be considered at depth. The questions of law of public importance framed by the Apex Court were given in paragraph 9, which is extracted below: 1. Whether a steamer agent can be construed as owner of the goods carried in his principal's vessel within the definition of “owner” in relation to goods