Case: MAHESHWARY HANDLING AGENCY PVT. LTD Vs. BOARD OF TRUSTEES OF KANDLA PORT TRUST AND ORS

Traffic Manager or any other officer on his behalf, failing which the occupation would be treated as unauthorised and the person in unauthorised occupation would be liable for penalty rent under Note 1. Thus, for authorised occupation and usage of space/area, permission from the Traffic Manager was required. Further, the Traffic Manager or an officer appointed on his behalf, was empowered to issue notice for vacation of space allotted to a user, failing which the use of the space was to be treated as unauthorised and the person in violation was liable to pay double the rent as penalty.12. Regulation 128 reads as follows: ?128. Quays, etc. to be under the authority of the Traffic Manager: The quays, sheds, gates and the land within the Port boundaries shall be in the charge of the Traffic Manager who shall direct and manage all operations connected with the landing and shipping of goods, and with their storage in the shed and in the open. He shall have proper custody of all goods lying in the Port and taken whatever steps he may consider necessary for the proper maintenance of order.? The Traffic Manager of the Port is obligated to control and manage the port operations, check obstructions to traffic movement and remove hinderance for efficient and proper use of berths, landing and shipping of goods and storage in the sheds and open area. Regulation 64 quoted in paragraph 9 above stipulates that loading and unloading of vessels was subject to control of the Traffic Manager who had the discretion to prohibit discharge of goods which are likely to obstruct traffic, cause congestion or hinder convenient movement at the Port.13. It is clear from the Notes that the Notification had empowered and left it to the Traffic Manager to deal with the question of unauthorised occupation, including the time limits or period during which the goods could be authorised to be stored. The Notification had not specified when and in what circumstances use of the storage area would be treated as unauthorised as this was left to the wisdom of the Traffic Manager who was the person in-charge and responsible for efficient and proper functioning of the port operations and mandated to take the need based decisions on the basis of prevalent facts and circumstances. This latitude was necessary as the schedule of rates fixed vide Notification dated 4 th November, 1993 were applicable till a new Notification or amendment was made by following the procedure prescribed vide Section 52 of the Port Trusts Act, which would require approval from the Central Government.14. Prescribing different slabs or rates for storage of cargo for different periods was meant to fix rates for the rent payable and not to deny or curtail the power of the Traffic Manager to authorise and permit use of sheds and space for storage of cargo/containers. As per the Notes, the Traffic Manager, on an application by the owners or their agents was to grant permission for authorised storage. Storage without the permission or contrary to the permission was unauthorised. Further, the space allotted was to be vacated on notice from the Traffic Manager. On failure to comply, and vacate the space, the use was treated as unauthorised occupation and the person in default was liable to pay double the rent for unauthorised use.15. It is obvious that the first portion of the Notification prescribing escalating rates for use of open area and sheds did not vest any right to occupy such space for unlimited period of time. This, we hold, is the exact purport of the Notes, which have been read harmoniously with the first portion of the Notification. The Traffic Manager had authority and discretion for allotment of space for storage on rent and to withdraw allotment of space depending on the availability and to ensure that the port operations were not hindered and obstructed due to congestion and shortage of space. We, therefore, would reject the contention that the Traffic Manager was not competent to fix time limit for storage. The contention is unacceptable and would be contrary to the Notes and the powers vested and given under the Regulations to the Traffic Manager.16. We are in this case not required to examine whether delegation of powers to the Traffic Manager in the Notification was excess or invalid, for this issue or contention has not been raised. As noted earlier, validity of the Notification is not questioned and under challenge. Read in this manner, we do not think levy of penalty for unauthorised occupation of the space for period beyond sixty days of storage as fixed vide the impugned circular would be illegal and invalid. In fact, it would be in conformity and in consonance with the Notification and in particular Notes 1, 4 and 5 thereof. The circular had brought about uniformity, clarity and transparency in the use of storage facilities at the Kandla Port. The circular though issued on 31 st August, 1998 was made effective and applicable from 1 st October, 1998. Therefore, the parties were given time to take steps to avoid the usage of the storage facility from being declared as unauthorised.17. Other contention of the appellant as to absence of data indicating the details of congestion is an afterthought as this contention was not raised and argued before the High Court. The impugned circular specifically recorded that there was congestion at the Port which had necessitated issuance of the circular stipulating that storage of goods beyond the period of sixty days would be treated as unauthorised occupation. The said circular ensured uniformity and equal treatment without discretion as upper time limit of sixty days was prescribed for storage of goods failing which penalty was payable. Period of sixty days is sufficient and long and cannot be termed as unreasonable and violating Article 14 of the Constitution. The aforesaid reasoning would take care of the other arguments raised by the appellants, which we would reiterate were not argued before the High Court.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]10. We have already quoted the scales fixed by the Notification dated 4 th November, 1993 as well as the Notes in the Notification. This Notification was not under challenge in the Special Civil Application or in appeal filed before the High Court. The Notification is not under challenge before us. The appellant also accepts that they were liable to pay the scales Civil Appeal No. 5277 of 2 specified in the Notification till the new tariff was notified pursuant to the constitution of the Tariff Authority, which it is accepted was notified and applicable with effect from 29 th January, 2001. Therefore, for the period prior to 29 th January, 2001, the appellant would be liable to pay tariff as per the scales and terms of the Notification dated 4 th November, 1993.In our opinion, the answer to the question would be in favour of the first and second respondents. The Notification dated 4 th November, 1993 had specified rent/usage charges for open space, covered space, containers, office accommodation, etc., which charges were payable dependent upon the space and the length of time used for storage. Note 1 to the Notification stated that a person wanting to use the rental space was required to make an application for storage of goods to the Traffic Manager. It was also specified that any unauthorised occupation of rented space shall make the person liable to pay double the rent as penalty. Note 1 did not specify when and in what circumstances occupation of the rented space would be treated as unauthorised occupation. Note 2 had specified that storage charges would be paid in advance and penal interest @ 18% would be payable on the amount due and not paid from the date when the amount had become due till the date of actual payment. Note 4 had specified that the space cannot be allotted without permission of the Traffic Manager of the Port. Note 5 had stipulated that the space allotted would be vacated on notice from the Traffic Manager or any other officer on his behalf, failing which the occupation would be treated as unauthorised and the person in unauthorised occupation would be liable for penalty rent under Note 1. Thus, for authorised occupation and usage of space/area, permission from the Traffic Manager was required. Further, the Traffic Manager or an officer appointed on his behalf, was empowered to issue notice for vacation of space allotted to a user, failing which the use of the space was to be treated as unauthorised and the person in violation was liable to pay double the rent as penalty.It is clear from the Notes that the Notification had empowered and left it to the Traffic Manager to deal with the question of unauthorised occupation, including the time limits or period during which the goods could be authorised to be stored. The Notification had not specified when and in what circumstances use of the storage area would be treated as unauthorised as this was left to the wisdom of the Traffic Manager who was the person in-charge and responsible for efficient and proper functioning of the port operations and mandated to take the need based decisions on the basis of prevalent facts and circumstances. This latitude was necessary as the schedule of rates fixed vide Notification dated 4 th November, 1993 were applicable till a new Notification or amendment was made by following the procedure prescribed vide Section 52 of the Port Trusts Act, which would require approval from the Central Government.14. Prescribing different slabs or rates for storage of cargo for different periods was meant to fix rates for the rent payable and not to deny or curtail the power of the Traffic Manager to authorise and permit use of sheds and space for storage of cargo/containers. As per the Notes, the Traffic Manager, on an application by the owners or their agents was to grant permission for authorised storage. Storage without the permission or contrary to the permission was unauthorised. Further, the space allotted was to be vacated on notice from the Traffic Manager. On failure to comply, and vacate the space, the use was treated as unauthorised occupation and the person in default was liable to pay double the rent for unauthorised use.15. It is obvious that the first portion of the Notification prescribing escalating rates for use of open area and sheds did not vest any right to occupy such space for unlimited period of time. This, we hold, is the exact purport of the Notes, which have been read harmoniously with the first portion of the Notification. The Traffic Manager had authority and discretion for allotment of space for storage on rent and to withdraw allotment of space depending on the availability and to ensure that the port operations were not hindered and obstructed due to congestion and shortage of space. We, therefore, would reject the contention that the Traffic Manager was not competent to fix time limit for storage. The contention is unacceptable and would be contrary to the Notes and the powers vested and given under the Regulations to the Traffic Manager.16. We are in this case not required to examine whether delegation of powers to the Traffic Manager in the Notification was excess or invalid, for this issue or contention has not been raised. As noted earlier, validity of the Notification is not questioned and under challenge. Read in this manner, we do not think levy of penalty for unauthorised occupation of the space for period beyond sixty days of storage as fixed vide the impugned circular would be illegal and invalid. In fact, it would be in conformity and in consonance with the Notification and in particular Notes 1, 4 and 5 thereof. The circular had brought about uniformity, clarity and transparency in the use of storage facilities at the Kandla Port. The circular though issued on 31 st August, 1998 was made effective and applicable from 1 st October, 1998. Therefore, the parties were given time to take steps to avoid the usage of the storage facility from being declared as unauthorised.17. Other contention of the appellant as to absence of data indicating the details of congestion is an afterthought as this contention was not raised and argued before the High Court. The impugned circular specifically recorded that there was congestion at the Port which had necessitated issuance of the circular stipulating that storage of goods beyond the period of sixty days would be treated as unauthorised occupation. The said circular ensured uniformity and equal treatment without discretion as upper time limit of sixty days was prescribed for storage of goods failing which penalty was payable. Period of sixty days is sufficient and long and cannot be termed as unreasonable and violating Article 14 of the Constitution. The aforesaid reasoning would take care of the other arguments raised by the appellants, which we would reiterate were not argued before the High Court.