: 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.913 of 1992 SUIT NO.913 of 1992 SUIT NO.913 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 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 Vikas Spinners, a firm carrying on business at T/9137, Industrial area, Panipat (Himachal Pradesh) .. Defendants. Mr.U.J.Makhija with Ms.Preeti Shah i/b.M/s.Mulla & Mulla for the plaintiffs. : 2 : None for the defendants. CORAM : R.Y. GANOO, J. CORAM : R.Y. GANOO, J. CORAM : R.Y. GANOO, J. DATE : 14th November, 2008. DATE : 14th November, 2008. DATE : 14th November, 2008. JUDGEMENT :- JUDGEMENT :- JUDGEMENT :- 1. Plaintiffs have instituted this suit for recovery of Rs.2,11,638.81 alongwith interest @15% per annum from the date of the suit till payment or realisation on Rs.1,97,581.17 and for costs. 2. Plaintiffs being the statutory corporation constituted under the provisions of the Major Port Trusts Act, 1963 (hereinafter referred to as the "Said Act") had engaged themselves in operations at the port at Bombay in regard to the goods which are imported in India and about to be received at Bombay port. 3. According to the plaintiffs, defendants imported 125 bales of old woollen rags under Item No.82 of the I.G.M.No.2540 of 17.11.1986 through ship s.s.Kamnik. The general landing date was 24.11.1986 and the last free date was 27.11.1986. According to the plaintiffs, defendants : 3 : being owners and consignees were required to relieve the goods from the premises of the plaintiffs within 7 days from the date of the landing and in default of such relieving of the goods, defendants were liable to pay what may be referred to as wharfage, demurrage and other port trust charges. According to the plaintiffs, defendants did not relieve the goods and as such demurrage and wharfage charges became payable. Plaintiffs have come out with a case that the plaintiffs issued a notice in the Maharashtra Government Gazette on 16.3.1989 at Exhibit-P-4. Exhibit-P-4. Exhibit-P-4. Notice was published in the newspaper, namely, Times of India of 11.3.1989 at Exhibit-P-3. Exhibit-P-3. Exhibit-P-3. According to the plaintiffs, this was done with a view to comply with the provisions of Sections 61 and 62 of the said Act for the purposes of recovering of demurrage, wharfage and other port trust charges. It is the case of the plaintiffs that the goods came to be sold on 29.3.1989 and a sum of Rs.1,11,055.80 was recovered. According to the plaintiffs, the total port trust charges payable at that time were Rs.2,76,697/-. According to the plaintiffs, expenses for sale were to the tune of Rs.9,728.97, customs duty was Rs.22,211/- and ITC fine was Rs.60,375/-. The plaintiffs have adjusted the amount of customs duty, expenses for sale and a part of the port : 4 : trust charges to the tune of Rs.79,115.83 from and out of the sale proceeds and according to the plaintiffs, after adjustment, Rs.1,97,581.17 at that time was the deficit in the port trust charges. Plaintiffs have clarified that ITC fine is not being recovered by the plaintiffs in the present suit. Plaintiffs have contended that before putting up the goods for sale, letter dated 13.3.1989 at Exhibit-P-2 Exhibit-P-2 Exhibit-P-2 was sent to the defendants, cautioning the defendants that if the port trust charges set out in the said notice are not paid, the goods would be sold. It is also the case of the plaintiffs that after the goods were sold by Notice dated 5.10.1991 at Exhibit-P-5, Exhibit-P-5, Exhibit-P-5, the defendants were told to pay for the deficit port trust charges. Plaintiffs by their final notice dated 24.10.1991 at Exhibit-P-6, Exhibit-P-6, Exhibit-P-6, called upon the defendants to pay the deficit port trust charges and also warned them that if the said notice is not complied with, suit would be filed. Defendants did not comply with this demand notice and hence, this suit has been filed by the plaintiffs. 4. The defendants have filed the written statement and they have basically denied the allegations levelled against them as regards the import of the suit goods. : 5 : They have also contended that the plaintiffs have not complied with the provisions of Sections 61 and 62 of the said Act towards the sale of the suit goods. They have also contended that the plaintiffs are not entitled to appropriate the customs duty from the sale proceeds and even otherwise, plaintiffs are not entitled to recover customs duty from the defendants. The defendants have also disputed the rate of interest claimed by the plaintiffs. As such, the defendants have disputed the claim of the plaintiffs. 5. On the basis of the pleadings as aforesaid, issues came to be framed on 24.6.2008. The said issues are as follows :- I S S U E S I S S U E S I S S U E S (i) Whether the plaintiffs prove that the suit has been filed within limitation? .. In the .. In the .. In the affirmative. affirmative. affirmative. (ii) Whether the defendants prove that the suit is bad for mis-joinder of parties? .. In the .. In the .. In the negative. negative. negative. (iii) Whether the defendants prove that the plaintiffs have exercised their power contrary to provisions of Section 61, 62 and 63 of the Major Port Trust Act, 1963 and for the reasons stated in the para 6 of the Written Statement? .. In the .. In the .. In the negative. negative. negative. : 6 : (iv) Whether the plaintiffs prove that the defendants are the importers and/or owners and/or consignees of the suit consignment within the meaning of Section 2(o) of the Major Port Trust Act? .. In the affirmative. .. In the affirmative. .. In the affirmative. (v) Whether the plaintiffs prove that the defendants are liable to pay wharfage, demurrage and other charges which accrued thereon as stated by them in the plaint? .. In the affirmative and .. In the affirmative and .. In the affirmative and as per the operative part of the judgement. as per the operative part of the judgement. as per the operative part of the judgement. (vi) Whether the plaintiffs prove that they are entitled for the sum of Rs.2,11,638.81 with further interest on the sum of Rs.1,97,581.17 at the rate of 15% per annum from the date of the suit till payment and/or realisation as stated by the plaintiffs in prayer (a) of the plaint? .. .. .. In the affirmative and as per the operative part In the affirmative and as per the operative part In the affirmative and as per the operative part of the judgement. of the judgement. of the judgement. (vii) To what reliefs, if any, are the plaintiffs entitled as against the defendants? .. .. .. As per the operative part of the judgement. As per the operative part of the judgement. As per the operative part of the judgement. 6. My answer to each of the issue is mentioned against the respective issue. 7. At trial, on behalf of the plaintiffs Mr.Santosh Dighe was examined as P.W.No.1. No other witness was examined on behalf of the defendants. Defendants remained absent at the time of recording of evidence and no other witness has been examined on behalf of the plaintiffs. 8. I have heard learned Advocate Mr.Makhija appearing on behalf of the plaintiffs. : 7 : Issue No.(i) :- Issue No.(i) :- Issue No.(i) :- =============== =============== =============== 9. The plaintiffs had put up the goods for sale on 29.3.1989 and the present suit came to be filed on 20.3.1992. My attention was drawn by learned Advocate Mr.Makhija to the judgement in the case of Trustees of Trustees of Trustees of Port of Bombay v/s. Jayantilal L. Gandhi reported in AIR Port of Bombay v/s. Jayantilal L. Gandhi reported in AIR Port of Bombay v/s. Jayantilal L. Gandhi reported in AIR 1979 Bom.12 1979 Bom.12 1979 Bom.12 to submit that the port trust charges would be determinable only on the date of the sale and, therefore, the period of limitation would commence from the date of the sale and the period of limitation would be three years in accordance with the provisions of Article 113 of the Indian Limitation Act. I have perused the judgement mentioned above as also the provisions of Article 113 of the Indian Limitation Act. Once the goods are sold, the deficit in the port trust charges can be determined and the date of the sale would be the date when the auction took place and considering the provisions of the said Article, institution of the suit within three years will have to be treated as proper and accordingly, plaintiffs have proved that the suit was filed within the period of limitation and as such Issue No.1 is answered in the affirmative. : 8 : Issue No.(ii) :- Issue No.(ii) :- Issue No.(ii) :- ================ ================ ================ 10. Sofar as Issue No.(ii) is concerned, the burden was on defendants to prove that the suit is bad for mis-joinder of parties. Except raising the contention in the written statement, no material is placed before the court in respect of such a stand. Hence, the defendants have not discharged the burden cast on them and as such defendants have failed to show that the suit was bad for mis-joinder of necessary parties. Accordingly, Issue No.(ii) is answered in the negative. Issue No.(iv) :- Issue No.(iv) :- Issue No.(iv) :- ================= ================= ================= 11. The plaintiffs have come out with a case that the defendants are the importers / owners / consignees. The Import General Manifest (I.G.M.) produced by the plaintiffs at Exhibit-P-1 Exhibit-P-1 Exhibit-P-1 would clearly go to show that defendants are shown as consignees in the said I.G.M. If this be so, the stand of the plaintiffs that the defendants were importers / owners / consignees is required to be accepted with reference to the provisions of Section 2(o) of the said Act. Accordingly, Issue No.(iv) is answered in the affirmative. : 9 : Issue Nos.(iii), (v) and (vi) :- Issue Nos.(iii), (v) and (vi) :- Issue Nos.(iii), (v) and (vi) :- ================================ ================================ ================================ 12. The plaintiffs claim that they are entitled to recover from the defendants wharfage, demurrage and carting charges. For this, the plaintiffs have relied upon what may be referred to as the working sheet as well as allocation sheet at Exhibit-P-7. Exhibit-P-7. Exhibit-P-7. The Docks Scale of Rates prescribes the rates for the wharfage, demurrage and carting charges. It is produced at Exhibit-P-8. Exhibit-P-8. Exhibit-P-8. The plaintiffs have produced a letter from the Customs Department at Exhibit-P-9, Exhibit-P-9, Exhibit-P-9, calling upon the plaintiffs to arrange to recover the customs duty from the defendants to the tune of Rs.22,211/-. The plaintiffs have relied upon the document at Exhibit-P-1 Exhibit-P-1 Exhibit-P-1 as being the statement showing the amount fetched in the sale as well as the expenses incurred for the sale. To that extent, the plaintiffs have made out a case that they are entitled to recover from the defendants customs duty as well as the expenses incurred for sale. 13. Sofar as the port trust charges, namely, wharfage and demurrage are concerned, the calculation sheet goes to indicate that as to how the plaintiffs have calculated the wharfage and demurrage and the same is calculated upto : 10 : 23.11.1987 though the goods were sold on 29.3.1989. To that extent, the claim of the plaintiffs will have to be accepted. 14. I have perused the evidence of Mr.Santosh Dighe, P.W.No.1. The plaintiffs have made out a case that the plaintiffs are entitled to recover port trust charges and have given calculations as to how the port trust charges are ranging to the tune of Rs.1,97,581.17 after the sale proceeds are adjusted towards customs duty, expenses for sale and a part of the port trust charges. The plaintiffs will be entitled to recover from the defendants, the unpaid port trust charges. 15. The plaintiffs have claimed Rs.456.40 towards carting charges. Learned Advocate Mr.Makhija had drawn my attention to the Docks Scale of Rates whereby carting charges are recoverable by the plaintiffs @Rs.28/- per ton. He has submitted that the plaintiffs have calculated the said carting charges as set out in the calculation sheet at Exhibit-P-7. Exhibit-P-7. Exhibit-P-7. Insofar as this carting charges are concerned, Docks Scale of Rates clearly indicate that the carting charges are recoverable from the sale proceeds. In the present case, while approaching the court, the : 11 : plaintiffs have not appropriated the carting charges from the sale proceeds and have sought to recover the same under separate head in addition to the demurrage and wharfage. Such a procedure followed by the plaintiffs is not in conformity with the Docks Scale of Rates and to that extent, the plaintiffs would not be entitled to recover from the defendants the carting charges to the tune of Rs.456.40. 16. Insofar as the quantum of the port trust charges recoverable from the defendants, the plaintiffs have claimed Rs.1,97,581.17. Since the carting charges to the tune of Rs.456.40 are being disallowed, the same will have to be deducted from the aforesaid figure of Rs.1,97,581.17. On doing that, a figure of Rs.1,86,124.77 is found towards the port trust charges. 17. The plaintiffs have sold the goods by relying upon the provisions of Sections 61 and 62 of the said Act. The plaintiffs have given Notification in the Maharashtra Government Gazette as well as in the newspaper as stated earlier. The defendants have challenged the act of the plaintiffs in regard to the sale of goods and, according to the defendants, the provisions of Sections 61 and 62 : 12 : are not complied with. The word of Mr.Santosh Dighe, P.W.No.1 as regards the publication of the notice in the newspaper as well as in the Gazette demanding of the sale is not challenged and defendants have not been able to show as to how the overact on the part of the plaintiffs is bad in law. The claim of the plaintiffs to that extent has gone unchallenged. 18. In view of the aforesaid discussion, the plaintiffs would be entitled to recover from the defendants Rs.1,86,124.77 as port trust charges. 19. The plaintiffs have claimed interest on the aforesaid amount of Rs.1,86,124.77 and that the rate of interest claimed by the plaintiffs is @15% per annum. In the evidence presented by Mr.Santosh Dighe, P.W.No.1, the plaintiffs have stated that the nationalised banks lend monies for the unsecured loans at about 14% to 17% as the prime lending rate (P.L.R.) is itself @13%. Except this averment, no material is placed before the court to show that the plaintiffs can justifiably ask for interest @15% per annum. To that extent, the case of the plaintiffs will have to be declined. In any case, the rate of interest will have to be considered on the basis of the : 13 : relevant dates, namely, the date on which the goods were sold i.e. 29.3.1989 and the date on which the suit was filed i.e. 20.3.1992. In my view, if interest @12% per annum is granted to the plaintiffs, it would meet the ends of justice. This, of course, shall be upto the stage of filing of the suit. After the filing of the suit, considering the provisions of Section 34 of the Code of Civil Procedure, the plaintiffs will be entitled to recover from the defendants interest @6% per annum from the date of the suit till realisation. Of course, the interest will have to be calculated on Rs.1,86,124.77. 20. The plaintiffs have claimed interest w.e.f. 5.10.1991 on the ground that the notice of demand for sale was issued on 5.10.1991 at Exhibit-P-4. Exhibit-P-4. Exhibit-P-4. The demand of interest with reference to above is proper and the plaintiffs can be granted interest w.e.f. 5.10.1991 @12% per annum upto the date of filing of the suit. 21. Keeping in view the aforesaid observations :- . Issue No.(iii) is answered in the negative. . Issue No.(v) is answered in the affirmative and as : 14 : per the operative part of the judgement. . Issue No.(vi) is answered in the affirmative and as per the operative part of the judgement. Issue No.(vii) :- Issue No.(vii) :- Issue No.(vii) :- ================= ================= ================= 22. The plaintiffs will be entitled to relief in terms of demurrage charges and the interest as mentioned aforesaid. Hence, Issue No.(vii) is decided as per the operative part of the judgement. 23. 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.1,86,124.77. ii) Defendants do pay to plaintiffs interest @12% per annum on Rs.1,86,124.77 from 5.10.1991 till 19.3.1992 i.e. upto the date of the filing of the suit (suit filed on 20.3.1992). : 15 : iii) Defendants do pay to plaintiffs interest @6% per annum on Rs.1,86,124.77 from the date of the suit till realisation. iv) Defendants do pay to plaintiffs costs of the suit. sd/- (R.Y. GANOO,J.) (R.Y. GANOO,J.) (R.Y. GANOO,J.)