1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.434 OF 1990 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. M/s.Seer India, a firm carrying on ] business at 51, Rani Jhansi Road, ] New Delhi ] ] 2. Shri Vidya Agro Chemicals, ] a firm carrying on business at ] C/o C. Chemicals & Co., 53, Latif House ] 4th Floor, Sant Tukaram Road, ] Bombay – 400 009 ] ] 3. Pol India Agencies Ltd. ] A Limited Company Incorporated ] under the Companies Act, 1956 and ] carrying on business at Botawala ] Building, 2nd floor, Foom No.1, 7/10, ] Horniman Circle, Fort, ] Bombay – 400 023. ] .. Defendants. 2 Mr.U.J.Makhija with Ms.Preeti Shah i/by M/s.Motiwala & Co. for the Plaintiffs. None for the Defendants. CORAM : R.M.SAVANT, J DATED : 18th DECEMBER 2008 JUDGMENT :- 1. The Plaintiffs are a statutory corporation constituted under the provisions of the Major Port Trusts Act, 1963, as amended by the provisions of the Major Port Trusts Amendment Act 1974 (hereinafter referred to as “the said Act”). Under the provisions of the said Act, the Plaintiffs are required to take charge of the goods landed from the ships coming to Bombay and are entitled to charge and levy wharfage, demurrage and other charges in respect of the goods landed and stored by the Plaintiffs in the Docks at Bombay according to the scale of rates duly prescribed, published and brought into force under the provisions of the said Act and to realize the charges by sale of consignment in respect of which the charges accrued. 2. In or about December 1984, the 1st and 2nd Defendants 3 imported a consignment of 186 drums of mono Propylene Glycol which was manifested at Item Nos.149, 151, of the Import General Manifest No.1879 dated 5th December 1984 of the vessel s.s.Jurata which consignment was discharged by the said vessel into the Docks at Bombay. The General Landing date and the Last Free day of the cargo of the said vessel were 17th December 1984 and 20th December 1984 respectively. As the importers / consignees / owners/ bailors, the Defendants were bound and liable to apply for completed documents and to take delivery of the said consignment within 7 days from the date of landing thereof and to pay wharfage, demurrage and other charges which accrued due thereon and were payable to the Plaintiffs for the period during which the said consignment remained with the Plaintiffs according to the scale or rates duly prescribed, published and brought into force under the provisions of the said Act . The Defendants, however, failed and neglected to clear the said consignment and the same remained in the custody of the Plaintiffs at the risk and expenses of the Defendants. As the said consignment had not been cleared for over 2 months from the date of landing thereof, the same was put up for sale by public auction in terms of the 4 procedure prescribed under Sections 61 and 62 of the said Act. The list of packages to be sold, including the said consignment was published in the Maharashtra Gazette dated 29th May 1986 and also in the news papers “Times of India” in its issue dated 6th June 1986 and “Indian Express” in its issue dated 26th May 1986. The said consignment was thereafter sold on 5th January 1987 under Lot No.T/4179 for Rs.8,97,525.55 and the sale of the said consignment has resulted in a deficit of Rs.4,43,221.60. According to the Plaintiffs, the Port Trust Charges accrued on the said consignment amount to Rs.1,93,209.10, Customs duty amounted to Rs.4,96,845.32, expenses for sale amounted to Rs.61,426.73 and I.T.C. Fine amounted to Rs.5,89,266/-. The sale price of Rs.8,97,525,55 was adjusted by the Plaintiffs against the expenses of sale, customs Port Trust Charges and I.T.C. Fine leaving a deficit of Rs.69,727.56 towards Port Trust Charges and Rs.3,73,494.04 towards L.T.C Fine. The above suit has been filed for recovering the deficit of 69,813.52 with further interest on the sum of Rs.69,727.56 at the rate of 15% per annum from the date of the suit till payment of realization and costs of the suit. 5 3. The above Suit has been withdrawn against the Defendant No.3 on 3rd June 2008. It has, therefore, been proceeded only against the Defendant Nos.1 and 2. Defendant No.1 has filed its Written Statement. The case of the Defendant No.1 in the said Written Statement was that the said consignment was sold by the said Defendant to the Defendant No.2 on High Sea Sale basis as permissible under the relevant laws then prevailing and, the said High Sea Sale procedure being lawfully followed, the 2nd Defendant, who has purchased the said consignment, has become the owner of the said consignment and is, therefore, bound and liable to clear the goods from the Plaintiffs' premises and pay the charges accrued thereon. It is further the case of the Defendant No.1 that the Plaintiffs had failed and neglected to exercise their powers and realise their charges by diligently selling the goods and and had negligently sold the goods after the lapse of more than two years due to which demurrage charges unnecessarily multipled and mounted and, therefore, the Plaintiffs cannot be permitted to claim the charges which had accrued solely due to their negligence and dereliction of 6 duty. 4. On the basis of aforesaid pleadings, the following Issues were framed. ISSUES :- 1] Whether the Plaint discloses no cause of action against Defendant No.1 as alleged in para (1) of the written statement of defendant No.1 ? 2] Whether the Plaintiffs' claim in suit is barred by law of limitation as alleged in para (3) of the written statements of both defendant No.1 and 3 ? 3] Whether the suit is barred by misjoinder of parties as alleged in para (4) of written statement of defendant No.1 ? 4] Whether defendant No.1 are not liable for payment of plaintiffs dues as they lawfully sold the goods to defendant No.2 on high sea sale basis as alleged in paras (5) and (6) of the written statement of defendant No.1 ? 7 5] Whether plaintiffs exercised their powers contrary to sections 61, 62, 63 of the Major Port Trust Act, 1963 as alleged in para (8) of the written statement of defendant No.1 ? 6] Whether the suit is misconceived, bad in law and not maintainable as alleged in para (2) of the written statement of defendant No.3 ? 7] Whether suit is not maintainable against defendant No.3 as there is no privity of contract between the plaintiffs and defendant No.3 and as agents of the said vessel they are not liable to pay the plaintiffs dues as alleged in para (4) of written statement of defendant No. 3 ? 8] Whether plaintiffs prove that defendant Nos.1 and 2 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 as stated in paras (2) and (5) of the Plaint ? 9] Whether the Plaintiffs prove that defendant No.3 were the bailors/owners of the said consignment as stated in para (5) of the plaint ? 8 10] Whether plaintiffs prove that the defendants were bound and liable to take delivery of and clear the said consignment and that they failed to do so as stated in para (5) of the plaint ? 11] Whether the Plaintiffs prove that the defendants are liable to pay wharfage, demurrage and other charges which accrued thereon as stated in para (5) of the plaint ? 12] Whether the plaintiffs prove that they are entitled to the sum of Rs.69,813.52 with interest @ 15% per annum on the sum of Rs.69,727.56 from the date of the suit till payment and/or realization and cost of the suit as stated by the plaintiffs in prayer (a) of the Plaint? 13] To what relief, if any, the plaintiffs are entitled to as against the defendants ? 4. The Plaintiffs have examined two witnesses, viz. Mr.Santosh Dighe and Mr.Suresh Janu Valanj, both are the Assistant Docks Manager, in support of their claim and have also filed 9 compilation of documents inter alia incorporating the following documents which are under :- 1] Copy of Import General Manifest of vessel “S.S.Jurata” bearing No.1879 dated 5/12/1984. (Exhibit “A Colly”) 2] Letter dated 27/5/1986 from the Plaintiffs, addressed to the original 3rd Defendant alongwith acknowledgment. (Exhibit “B Colly) 3] Copy of “Maharashtra Government Gazette”, dated 29th May, 1986. (Exhibit “C”) 4] Copy of advertisement in “Indian Express” in its issue dated 26th May, 1986. (Exhibit “D”) 5] Demand Notice dated 1/01/1990 from the Plaintiffs addressed to the 2nd Defendants. (Exhibit “E”) 6] Demand Notice dated 1/01/1990 from 10 the Plaintiffs, addressed to the original 3rd Defendant. (Exhibit “F”) 7] Final Notice dated 2/01/1990 from the Plaintiffs, addressed to the 2nd Defendant. (Exhibit “G”) 8] Final Notice dated 2/01/1990 from the Plaintiffs, addressed to the original 3rd Defendant. (Exhibit “H”) 9] Working sheet and Allocation Sheet. (“X” for identification) The Documents which are marked Exhibit “J-Colly” are :- 10] Docks Scale of Rates 11] Copy of Cash Memo dated 07/01/1987 12] Proforma `B' i.e. Report on goods sold and cleared by Purchasers to the Plaintiffs. 13] Letter dated 21/01/1987 from K.C.Chem (the Auction Purchaser) to the 11 Plaintiffs. 14] Working Sheet of Claim for Short Delivery dated 23/01/1987 15] Letter dated 23/01/1987 addressed from the Sr. Accounts Officers Sales Audit Branch to the Asst. Manager, Sale Branch. 16] Customs Show Cause Memo dated 17/07/1987 17] Lot wise statement maintained by the Plaintiffs. 18] Certified page of the Sale Warehouse Register. 5. The Defendant Nos. 1 and 2, except Defendant No.1, beyond filing its written statement, have not appeared in the above Suit and have not lead any evidence. 12 FINDINGS :- 6. As to Issue Nos.1, 2, 3, 4, 5 and 6 :- The burden of proving the said Issues was on the 1st Defendant. But the 1st Defendant has not discharged this burden and, therefore, the said Issues would have to be answered against the Defendant No.1. 7. As to Issue Nos. 7 and 9 :- The said Issues do not survive as the Suit against the Defendant No.3 has been withdrawn. 8. As to Issue No.8 :- The burden of proving this Issue was on the Plaintiffs. The Plaintiffs were required to prove that the 1st and 2nd Defendants were importers and/or owners and/or consignees of the suit consignment. For proving the same, the Plaintiffs have relied upon the Import General Manifest bearing No.1879 dated 5th December 1984 in respect of the vessel “s.s. “Jurata” on which the said consignment 13 was brought. The said document has been marked as Exhibit “A” Collectively. This document is a official document as the same is also required to be submitted by the vessel agent to show which goods are intended to be landed by the vessel at the Port of Bombay. In the said Import General Manifest, the said consignment was manifested at Item Nos.149 and 151 and in the said entry, the 1st and 2nd Defendants were shown as importers/owners of the said consignment. The said document has gone unchallenged. The Plaintiffs have, therefore, proved that the 1st and 2nd Defendants were importers/consignees/owners of the suit consignment. The 1st Defendants, in fact, have admitted in their written statement that they were the importers and that they had sold the suit consignment to the 2nd Defendants on High Sea Sale Basis. However, the said case has not been substantiated by the 1st Defendant and 2nd Defendant by leading any evidence and, therefore, the said Issue No.8 is required to be answered in favour of the Plaintiffs. 9. As to Issue No.10 :- In paragraph 5 of the plaint, it is mentioned that the 14 Defendants were required to clear the suit consignment and take the delivery thereof within seven clear days from the date of landing thereof. This is as per the Regulations framed under the Major Port Trusts Act. Under Section 43(ii)(b) of the Major Port Trusts Act and Regulation 4, the importers/consignees are bound to take delivery within the period prescribed by the Regulations, the period prescribed is seven days and the Plaintiffs have, therefore, discharged their burden to prove the Issue No.10. 10. As to Issue Nos.11 and 12 :- Since it has been held that the 1st and 2nd Defendants were the importers/consignees, then they fall within the definition of “Owner” under Section 2(o) of the Major Port Trusts Act and if they are the owners, they are bound to pay the charges which are due to the Plaintiffs. Section 58 of the said Act provides that the charges are required to be paid when the goods are cleared from the Port Trust Premises. Since the goods were not cleared by the importers/consignees/owners of the goods, they were sold by the Plaintiffs and, therefore, the Plaintiffs become entitled to recover the 15 Port Trusts Charges accrued thereon under the provisions of law. The charges are claimed under the Docks Scale of Rates then in force. The goods were sold on 5th January 1987 and the rates are mentioned in the Affidavit in lieu of Evidence of Mr.Santosh Dighe. The carting charges and the removal charges are also as per the Docks Scale of Rates. Since there is no challenge to the claim made, the said charges would have held to be proved. The relevant documents showing the calculations of the charges are brought on record by the Plaintiffs' witnesses. The Issue Nos.11 and 12 are answered in the affirmative. 11. Though the burden of proving the Issue No.2 regarding limitation is cast on the 1st and 2nd Defendant, since the said Defendants are not appearing, it would be relevant to examine the said Issue. In case of sale by the Port Trust, the cause of action for filing the suit is under Section 131 of the Major Port Trusts Act, which entitles the Plaintiffs to file a suit for recovery of sale deficit. The cause of action arose on the sale taking place and the deficit in sale being ascertained. In the instant case, the sale took place on 5th 16 January 1987 and the above suit has been filed on 4th January 1990 i.e within the period of limitation. Useful reference would also be made to a Judgment of the Division Bench of this Court reported in AIR 1979 Bombay 12 in the matter of The Board of Trustees of the Port of Bombay v/s. M/s.Jayantilal L. Gandhi. The Division Bench in the said Judgment has held that in a suit for recovering sale deficit, the cause of action arises when the goods are sold and the suit filed within a period of three years from the date of sale is within limitation. The Issue No.2 would, therefore, have to be answered in the affirmative. 12. The Plaintiffs have, therefore, discharged the burden of proving their claim in the above suit. In the result, the following order:- :ORDER: The above Suit is decreed in terms of prayer clause (a) against Defendant Nos.1 and 2. 17 No order as to costs. Decree be drawn up accordingly [R.M.SAVANT, J]