Case: THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST Vs. M/S AREBEE STAR MARITIME AGENCIES PVT. LTD. &amp; ORS

from the harbour. They are always fixed in such a way that they would make it unprofitable for importers to use the port premises as a warehouse. It is necessary to do so because congestion in the ports affects the free movement of ships and the loading and unloading operations. As stated earlier, the Port Trust shows concession to the party concerned in certain types of cases. 80. As a matter of fact, the Division Bench in Rasiklal (supra) seems to have put the cart before the horse, on a ground based in equity. The Court stated: 60…Denying such a right on the ground that the person claiming delivery of the goods acquired title to the goods only towards the end of the period of the bailment of the goods with the first respondent would result in driving the first respondent to recover the amount due to it from the bailor or his agent who may or may not be within the jurisdiction of the municipal courts of this country (by resorting to a cumbersome procedure of litigation). The first submission is, therefore, rejected. 81. As has been pointed out by us, no such right has been denied on a correct reading of the MPT Act. The importer, the consignee and the consignor, or their agents, can all be held liable to pay demurrage charges. However, since Rasiklal (supra) does not involve either the owner of the vessel or its agent, we leave open the question as to whether the Port Trust, as sub-bailee, is entitled to recover its dues from the original bailor – the consignor, and persons claiming through it, given the statutory scheme of the MPT Act, as has already been indicated in paragraph 66 above. 82. Based on the above discussion, our answers to the questions framed in the reference order are as follows: 1. The point of time at which title to the goods passes to the consignee is not relevant to determine the liability of the consignee or steamer agent in respect of charges to be paid to the Port Trust; 2. and 3. The bill of lading being endorsed by the steamer agent is different from the bill of lading being endorsed by the owner of the goods. In the first case, the endorsement leads to delivery; in the second case, the endorsement leads to passing of title. For the reasons mentioned in the judgment, both stages are irrelevant in determining who is to pay storage charges – we have held that upto the point that the Port Trust takes charge of the goods, and gives receipt therefor, the steamer agent may be held liable for Port Trust dues in connection with services rendered qua unloading of goods, but that thereafter, the importer, owner, consignee or their agent is liable to pay demurrage charges for storage of goods; 4. As per paragraph 24 of our judgment; 5. The answer to question number 5 is really in two parts: first, as to whether carrying goods in a container would make any difference to the position that only the owner of the goods or person entitled to the goods is liable to pay for demurrage; and second, as to whether the Port Trust is obliged to destuff containers that are entrusted to it and return empty containers to the shipping agent. The answer to the first question is contained in paragraphs 45 to 51 of our judgment. The answer to the second question is that a container which has to be returned is only a receptacle by which goods that are imported into India are transported. Considering that the container may belong either to the consignor, shipping agent, ship-owner, or to some person who has leased out the same, it would be the duty of the Port Trust to destuff every container that is entrusted to it, and return destuffed containers to any such person within as short a period as is feasible in cases where the owner/person entitled to the goods does not come forward to take delivery of the goods and destuff such containers. What should be this period is to be determined on the facts of each case, given the activities of the port, the number of vessels which berth at it, together with the volume of goods that are imported. While it does not lie in the mouth of the Port Trust to state that it has no place in which to keep goods after they are destuffed – as in the facts in the present case – yet a court may, in the facts of an individual case, look into practical difficulties faced by the Port Trust. This may lead to the short period in the facts of a particular case being slightly longer than in a case where a port is less frequented, and goods that are stored are lesser in number, given the amount of space in which the goods can be stored. 83. Having answered the questions that have been posed before this Court, we do not, on the facts of this case, think that the justice of the case demands that we should interfere with the impugned High Court judgment. The steamer agents themselves did not dispute liability to pay ground rent upto 75 days before the High Court, and have admittedly paid the said charges long ago. As a matter of fact, the steamer agents paid ground rent even beyond the period of 75 days – the High Court having ordered the Appellant Port Trust to recompute the liability of the steamer agents, and return the balance to the parties concerned within two months from the date of receipt of a copy of the impugned judgment. To order a refund of ground rent paid for 75 days to the steamer agent, and direct the Board to then recover the same from the importer, consignor and/or the owner of the goods at this late stage of the proceedings would not be in the interest of justice.

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

Explanation:
1[ds]14. A perusal of the relevant provisions of the MPT Act would show that when section 2(o) defines owner, it defines owner in relation to goods separately from owner in relation to any vessel. In sub-clause (i) of section 2(o), when owner is defined in relation to goods, the definition is an inclusive one. Secondly, it includes persons who are owners of the goods, or persons beneficially entitled to the goods, such as the consignor, consignee and the shipper and then also includes agents for sale, custody, loading or unloading of such goods. Ordinarily, agents for the sale or custody of goods would relate only to agents of the owner or persons beneficially entitled to such goods, which would certainly exclude the ship-owner and the ship-owners agent. However, considering the fact that the definition is an inclusive definition, and that loading or unloading of goods can take place by the steamers agent, as was held in Rowther-I (supra), it is difficult to accept the contention on behalf of the steamers agent that such persons would not be included within the definition of owner under the MPT Act.15. For these reasons, it is not possible to apply the doctrine of noscitur a sociis to the definition of owner under section 2(o), as was contended by the learned Senior Advocates appearing on behalf of the steamer agents.16. In the present case, we find no lack of clarity in the expression agent for the…loading or unloading of such goods, as including persons who may be the vessels agent involved in unloading goods. As the definition of owner is inclusive, as stated hereinabove, the non- mention of the ship-owner in the first part of the definition makes no difference, as it would be incongruous to hold that the shipowners agent is included in the latter part of the definition, but not the ship- owner itself, which would indicate that the maxim noscitur a sociis cannot apply.Under section 42(1), a Board shall have power to undertake services insofar as landing, shipping or transhipping goods between vessels in the port and the wharves, piers, quays or docks belonging to or in the possession of the Board, referring clearly, therefore, to services rendered to the vessel (see section 42(1)(a)). Insofar as receiving, removing, shifting, or transporting goods is concerned, these could be services to both the vessel as well as the owner/person entitled to the goods. The moot question is, when it comes to storing goods brought within the Boards premises, whether such service could be said to be a service rendered to the vessel or its agent (see section 42(1)(b)). Some of the pivotal provisions of the MPT Act, insofar as the present questions are involved, are contained in sections 42(2), 42(7) and 43 of the Act. Under section 42(2), a Board may, if so requested by the owner, take charge of the goods for the purpose of performing services, and shall give a receipt in such form as the Board may specify. It is obvious that if the ship-owner or its agent are not owners, the Board cannot take the charge of the goods from the ship-owner or its agent for the purpose of performing services, a result which would lead to startling consequences. Secondly, under sub-section (7), once goods have been taken charge of and a receipt given for them, no liability for any loss or damage which may occur to them shall attach to any person to whom a receipt has been given (this would include any of the persons mentioned in section 2(o)(i), including the vessels agents), or to the master or owner of the vessel from which the goods have been landed or transhipped. This would again make it clear that the master or owner of the vessel and their agents, from this point on, have been absolved from liability for loss or damage to the goods, as the Board has now taken over the custody of the goods from such master or owner of the vessel. From this point on, therefore, the master or owner of the vessel and their agents cease to have any liability qua the goods, inasmuch as the Port Trust has now taken them over. Concomitantly, under section 43(1)(ii), the responsibility of the Port Trust for loss, destruction or deterioration of goods of which it has taken charge from this point of time onwards now becomes that of a bailee under sections 151, 152 and 161 of the Indian Contract Act, 1872, omitting the words in the absence of any special contract in section 152 of the Contract Act. This responsibility attaches only after a receipt is given by the Board, and notice of loss or damage has been given, after expiry of such period (as may be prescribed) from the crucial date on which the Port Trust takes charge of the goods.18. At this juncture, it is important to state that arguments have been made based on observations contained in various judgments in which sections 42 (5) and (6) of the MPT Act have been referred. Sections 42(5) and (6) have no application to the Board, as they apply only to the person authorised under section 42(3) by the Board to perform services mentioned in sub-section (1).24. The statutory scheme of the MPT Act now becomes crystal clear. Until the stage of landing and removal to a place of storage, the steamers agent or the vessel itself may be made liable for rates payable by the vessel for services performed to the vessel. Post landing and removal to a place of storage, detention charges for goods that are stored, and demurrage payable thereon from this point on, i.e. when the Port Trust takes charge of the goods from the vessel, or from any other person who can be said to be owner as defined under section 2(o), it is only the owner of the goods or other persons entitled to the goods (who may be beneficially entitled as well) that the Port Trust has to look to for payment of storage or demurrage charges.29. Under the Customs Act, 1962, customs duties are levied on goods imported into India. Import has been defined in section 2(23) of the Customs Act as the bringing into India from a place outside India. Thus, import of goods can only be said to be complete after they cross into the territorial waters of India, and become part of the mass of goods within India.31. However, another line of judgments deals with what was called the original package doctrine laid down by Chief Justice Marshall of the US Supreme Court in Brown v. State of Maryland 25 U.S. 419 (1827). This judgment laid down that while the goods imported remained the property of the importer in the original form of packaging in which it was imported, a tax upon it would be imposts or duties on imports without the consent of the Congress, violating section 10(2) of Article I of the US Constitution. In addition, any such impost or duty would also violate the Commerce clause under section 8(3) of Article I of the said Constitution, which grants power to the Congress to regulate commerce with foreign nations. Thus, a State legislature has no power to impose an impost or duty upon the first sale of the commodity so long as it remained in the importers hands .32. This doctrine has been the subject-matter of comment in a variety of different situations.This doctrine has no place in the customs law of India, the judgments of this Court concentrating on when an import can be said to be complete on an analysis of the Customs Act.39. Given the aforesaid judgments under the Customs Act, a container, being a receptacle in which goods are imported, cannot be said to be goods that are imported as it does not become part of the mass of goods within the country on the facts of these cases. Thus, once destuffing takes place, the container has to be returned either to the ship-owners agent, or to the person who owns such container.A perusal of the aforesaid Forms prescribed under the said Regulations would show the difference between goods that are imported, which have reference to the bill of lading/invoice presented by the importer which contains the number and value of the goods imported, and payments by way of costs and services other than those declared in the invoice, which includes costs of containers under Rule 10(1)(a)(ii) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and packing costs under Rule 10(1)(a)(iii) of these Rules.45. A perusal of these Rules would show that the value of imported goods shall be the transaction value of identical goods, as defined, or similar goods, as defined – whichever rule applies to the facts of each particular case. It is clear that whether identical goods or similar goods are taken into account, the price of the container never enters, as the only goods that are to be looked at are the goods that are imported, i.e. goods that are stuffed in the containers.47. A reading of Rule 10(1)(a)(ii) would lead to the same result, as imported goods are differentiated from containers. Further, for the purposes of customs valuation, addition to the transaction value of the imported goods is made only when the cost of containers is treated as being one with the goods in question. Even in such a situation, what is then imported is the goods and the container – the container not having to be destuffed, and therefore being cleared along with the goods contained therein for home consumption. In such a case, where containers do not have to be returned, but are imported along with the goods contained within it, after the Board takes custody of such container and the goods within it, the vessel or steamer agent is no longer liable – even containers that do not need to be destuffed will then incur demurrage along with the goods contained within it, which are then payable by the importer, owner, consignor or agent thereof.48. Further, to make matters clear beyond doubt, General Exemption No. 170, which speaks of Exemption to containers of durable nature (Notification No. 104/94 dated 16.03.1994 as amended by Notification No. 101/95 and 43/17.)48. Further, to make matters clear beyond doubt, General Exemption No. 170, which speaks of Exemption to containers of durable nature (Notification No. 104/94 dated 16.03.1994 as amended by Notification No. 101/95 and 43/17.), states as follows:In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts containers which are of durable nature, falling within the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from, -(a) the whole of the duty of customs leviable thereon under the said First Schedule; and(b) the whole of the integrated tax leviable thereon under sub-section (7) of section 3 of the said Customs Tariff Act:Provided that the importer, by execution of a bond in such form and for such sum as may be specified by the Assistant Commissioner of Customs or Dy. Commissioner of Customs binds himself to re-export the said containers within six months from the date of their importation and to furnish documentary evidence thereof of the satisfaction of the said Assistant Commissioner and to pay the duty leviable thereon in the event of the importers failure to do so:Provided further that in any particular case, the aforesaid period of six months may, on sufficient cause being shown, be extended by the said Assistant Commissioner for such further period, as he may deem fit.A clarification by the Central Board of Indirect Taxes and Customs dated 25 th October, 2002 (Circular No.69/2002-Customs.) , clarified as to what is meant by containers of durable nature as follows:Notification No.104/94-Cus., exempts containers which are of durable nature from the whole of the duty of customs and additional duty subject to the condition that such containers are re-exported within 6 months from the date of importation and documentary evidence is furnished to the satisfaction of the Assistant Commissioner. As per the meanings assigned to the words durable and container in various Dictionaries, it would appear that any goods (containers) used for packaging or transporting other goods, and capable of being used several times, would fall in the category of containers of durable nature.A reading of the aforesaid also goes to buttress the conclusion reached in the previous paragraph of this judgment.51. This paragraph again clearly differentiates between containers which go along with the goods contained therein suitable for long-term use, from containers suitable for repetitive use, thus making it clear that the containers of the latter type cannot be classified with the goods contained therein for payment of customs duty.58. Rowther-II (supra) has made it clear that Rowther-I (supra) concerned itself with Port Trust dues at the time of landing of the goods, and their removal thereafter to custody of the Port Trust. These were charges wholly distinct from demurrage charges, which are incurred only after the goods have been landed and have been taken charge of by the Board. To the extent that the High Court lays this down as a proposition of law, there can be no exception. However, it goes on to state that when the steamer agent endorses the bill of lading or issues a delivery order for effecting delivery to the consignee, it is at this stage that the property in the goods passes to the consignee. This part of Rowther- II (supra) is clearly contrary to Rowther-I (supra), which had stated:In the present case, it was further contended that as between the master of the ship and the consignee, the Act made it obligatory that the consignee gets his goods from the Board and not direct from the master of the ship, and that therefore the Board acts as the agent of the consignee. We have not been referred to any provision in the Act which supports this contention. Assuming, however, that the consignee cannot take delivery of the goods at the quay from the ship direct, it does not follow that the Board receives the goods as the agent of the consignee. The only reasonable conclusion in the circumstances can be that the place of delivery is shifted from the side of the ship to the warehouses where the Board stores the goods till the consignee appears to take delivery on the basis of the delivery order by the steamer agent which is usually an endorsement on the bill of lading, and the quay be considered a part of the ship.(Page 946.. Rowther-I (supra) clearly lays down that the endorsement of the bill of lading by a steamer agent is for the purpose of delivery of the goods, and, accordingly, cannot be for the transfer of title to the goods. Rowther-II (supra) cannot, therefore, be said to be good in law when it speaks of endorsement on the bill of lading and issuance of delivery order by the steamer agent passing title of the goods to the consignee. Once this is made clear, the ratio of Rowther-II (supra) is to be understood thus: since charges for storage or demurrage are after goods are removed and placed in the custody of the Board, the steamer agent cannot be made to pay the same, as it would impose a too onerous and unexpected responsibility on the steamer, which is only a carrier, and not owner, of the goods.61. Section 1 of the Indian Bills of Lading Act, 1856 is also important62. Under this section, the endorsement referred to is the endorsement made by the consignor or owner of the goods in favour of such endorsee on the bill of lading, so that title to property is then transferred to the endorsee. This endorsement is very far removed, as has been correctly stated in Rowther-I (supra), from the endorsement on the bill of lading by a steamer agent indicating that the goods have been delivered. Therefore, shorn of the confusion that has arisen as a result of mixing-up the two types of endorsement, the ratio of Rowther-II (supra) that, after goods are taken charge of by the Port Trust and stored in its premises incurring demurrage charges thereon, the vessel or its agent cannot be made responsible, is unexceptionable.63. After extracting passages of the judgment of the High Court, this Court in Rowther-II (supra) then went on to extract a passage from International Airport Authority of India v. Grand Slam International (1995) 3 SCC 151 , by which it was made clear that demurrage charges are to be paid by the importer or consignee liable for the same (and not the vessel or the steamer agent thereof).64. Sriyanesh Knitters (supra) is the next judgment that has to be dealt with in chronological sequence. This was a judgment of two learned judges of this Court, in which the question that arose before the Court was stated thus:1. The common question involved in these appeals is whether the appellant Board of Trustees of the Port Trust constituted under the Major Port Trusts Act, 1963 (for short the MPT Act) have a general lien for their dues over the present or future consignments imported by the importers at the Bombay Port when the said dues are in respect of the past imports made by the said importers.65. The Court first found that a reading of sections 59 and 61(1) of the MPT Act made it clear that the lien spoken of is a lien qua the particular goods that are imported, and cannot extend to previous imports of similar goods made by the same party. The Court then went on to hold that the MPT Act is not a comprehensive code, and has to be read together with other Acts wherever the MPT Act is silent. It was then held that section 171 of the Indian Contract Act, 1872 speaks of a general lien which may be exercised by the Port Trust as it is a wharfinger within the meaning of said section. This being so, the Port Trust may continue to retain the goods bailed as security for past dues, but would have to have recourse to proceedings in accordance with law for securing an order, which would then enable the Port Trust to sell the goods to realise the amounts due to it. This could be done by filing a suit for recovery of the amount due to it under section 131 of the MPT Act.66. However, the judgment goes on to make certain observations, in particular in paragraph 23, stating that a relationship of bailor and bailee comes into existence, when the Board is required to store goods that have been imported, between the Board and the consignee of those goods. Apart from the fact that this is directly contrary to Rowther-I (see page 940), the consignee cannot be considered to be a bailor if the definition of bailor under the Indian Contract Act, 1872 is read. Under section 148 of the Contract Act, a bailor is defined as a person who delivers the goods to the bailee. In this case, the person who delivers the goods to the bailee is the vessel and not the consignee, as has been correctly stated in Rowther-I (supra). Therefore, the observations that the consignee is the bailor of the goods, with the Port Trust being the bailee thereof, made in paragraphs 23 and 25 of Sriyanesh Knitters (supra) cannot be said to state the law correctly, and are accordingly overruled. However, since we are not going into the point of sub-bailment as argued by Shri Pratap, we leave open the question as to whether the Port Trust, as sub-bailee, is entitled to recover its dues from the original bailor – the consignor, and persons claiming through it, given the statutory scheme of the MPT Act.67. However, Rowther-I (supra) was correctly distinguished by the Court in Sriyanesh Knitters (supra) in paragraph 24 thereof, and its ratio qua the MPT Act not being an exhaustive code has our concurrence.68. In Forbes-I (supra), two learned Judges of this Court doubted the correctness of Rowther-II (supra) and framed three questions (referred to earlier in this judgment) to be answered by a larger Bench.69. The matter then came back to a Bench of two Honble Judges of this Court, which delivered the judgment in Forbes-II (supra). In Forbes-II, the Court set out the question of law that arose before it as follows:1…The common question of law that arises in these appeals, though in different facts and circumstances, is with regard to the liability of the agent of a shipowner (hereinafter referred to as the steamer agent) to pay demurrage and port charges to the Board of Trustees of a Port (hereinafter referred to as the Port Trust Authority) in respect of goods brought into the port and warehoused by the said authority. Before proceeding to answer the aforesaid question it will be convenient to take note of the core facts in each of the appeals under consideration.70. Agreeing with the High Courts of Bombay and Calcutta that the steamer agent cannot be made liable for demurrage, the Court went on to hold:10. While it is correct that the liability to pay demurrage charges and port rent is statutory, in the absence of any specific bar under the statute, such liability can reasonably fall on a steamer agent if on a construction of the provisions of the Act such a conclusion can be reached. Determination of the aforesaid question really does not hinge on the meaning of the expression owner as appearing in Section 2(o) of the 1963 Act, as has been sought to be urged on behalf of the appellant though going by the language of Section 2(o) and the other provisions of the Act especially Section 42, an owner would include a shipowner or his agent. Otherwise it is difficult to reconcile how custody of the goods for the purpose of rendering services under Section 42 can be entrusted to the Port Trust Authority by the owner as provided therein under Section 42(2). At that stage the goods may still be in the custody of the shipowner under a separate bailment with the shipper or the consignor, as may be. Even dehors the above question the liability to pay demurrage charges and port rent would accrue to the account of the steamer agent if a contract of bailment between the steamer agent and the Port Trust Authority can be held to come into existence under Section 42(2) read with Section 43(1)(ii) of the 1963 Act.11. For the reasons already indicated the decision in Sriyanesh Knitters with regard to existence of a relationship of bailor and bailee between the consignee and the Port Trust Authority instead of the steamer agent and the Port Trust Authority cannot be understood to be a restatement of a general principle of law but a mere conclusion reached in the facts of the case where the consignee had already appeared in the scene. In all other situations where the bill of lading has not been endorsed or delivery orders have not been issued and therefore the consignee is yet to surface, the following observations of the Constitution Bench in K.P.V. Sheik Mohamed Rowther & Co. [Port of Madras v. K.P.V. Sheik Mohamed Rowther & Co., 1963 Supp (2) SCR 915] will have to prevail: (SCR p. 940)Section 40 speaks of the responsibility of the Board for the loss, destruction or deterioration of the goods of which it has taken charge as a bailee under Sections 151, 152 and 161 of the Contract Act, 1872. Section 148 of the Contract Act states that a bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the bailor and the person to whom they are delivered is called the bailee. It is clear therefore that when the Board takes charge of the goods from the shipowner, the shipowner is the bailor and the Board is the bailee, and the Boards responsibility for the goods thereafter is that of a bailee. The Board does not get the goods from the consignee. It cannot be the bailee of the consignee. It can be the agent of the consignee only if so appointed, which is not alleged to be the case, and even if the Board be an agent, then its liability would be as an agent and not as a bailee. The provisions of Sections 39 and 40, therefore, further support the contention that the Board takes charge of the goods on behalf of the shipowner and not on behalf of the consignee, and whatever services it performs at the time of the landing of the goods or on their removal thereafter, are services rendered to the ship.12. From the above, the position of law which appears to emerge is that once the bill of lading is endorsed or the delivery order is issued it is the consignee or endorsee who would be liable to pay the demurrage charges and other dues of the Port Trust Authority. In all other situations the contract of bailment is one between the steamer agent (bailor) and the Port Trust Authority (bailee) giving rise to the liability of the steamer agent for such charges till such time that the bill of lading is endorsed or delivery order is issued by the steamer agent.13. In the orders of the Calcutta High Court under challenge, it is mentioned that Section 60 of the Act provides a remedy to the steamer agent to recover the dues from the consignee. Section 60 of the 1963 Act confers a limited lien on the shipowner for freight and other charges payable to the shipowner which expression does not extend to demurrage and other port charges. The High Court, therefore, does not appear to be correct in its conclusions. However, the said error would not be fundamental to the final conclusion reached by the High Court. In this regard we cannot help noticing the special provisions of Sections 61 and 62 of the Act which enable the Port Trust Authority to proceed against the goods within its custody to recover the charges which may be payable to the Port Trust Authority. Ordinarily and in the normal course if resort is made to the enabling provisions in the 1963 Act to proceed against the goods for recovery of the charges payable to the Port Trust Authority there may not be any occasion for the said authority to sustain any loss or even suffer any shortfall of the dues payable to it so as to initiate recovery proceedings against the shipowners.71. Paragraph 10 of the judgment does hold that the language of section 2(o) read with other provisions of the MPT Act, especially section 42, would include a ship-owner or his agent. We have already pointed out that the principle of noscitur a sociis cannot be applied to this definition clause, both on its plain language, as also the fact that it is an inclusive definition clause, which shows that this statement of the law is correct. However, the statement in this paragraph that even de hors the above question, the liability to pay demurrage charges and port rent would accrue to the account of the steamer agent because of the statutory bailment that comes into existence under section 42(2) read with section 43(1)(ii), is plainly incorrect, in view of our finding that after the Port Trust takes charge of the goods and issues a receipt therefor (at which point of time the statutory bailment comes into force), the vessel or the steamer agent cannot be held liable.72. Insofar as paragraph 11 is concerned, we have already made it clear that Sriyanesh Knitters (supra) cannot be said to reflect the correct position in law, insofar as a bailment between the consignee and the Port Trust is concerned, and thus Sriyanesh Knitters (supra) has been overruled by us to this extent.73. Paragraph 12 of the said judgment contains the same confusion that is contained in Rowther-II (supra), and cannot therefore be said to lay down the law correctly. The correct position in law is, as has been stated hereinabove, that after the Port Trust takes charge of the goods, and issues a receipt therefor, and thereafter stores the goods in a place belonging to it, such storage charge cannot be to the account of the vessel or an agent of the vessel.74. Paragraph 13 refers to one other aspect of the case that has been argued before us. It may be recalled that the impugned judgment of the Kerala High Court in the present case had held that the word may occurring in sections 61 and 62 of the MPT Act must be read as shall. This is not the correct position in law, as a discretion is vested in the Board to sell the goods in the circumstances mentioned in sections 61 and 62. However, such discretion cannot be exercised arbitrarily, as the Board is State within the meaning of Article 12 of the Constitution, and is therefore bound by the constraints of Article 14 of the Constitution of India (see Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay (1989) 3 SCC 293  at paragraph 22). Therefore while it may not be correct to say that may has to be read as shall in sections 61 and 62 of the MPT Act, yet in all future cases the Board is under a constitutional duty to sell the goods in its custody within a reasonable time from which it takes custody of those goods. Ordinarily, the time of four months from the date of landing of the goods mentioned in section 63(1)(c) of the MPT Act should be the outer-limit within which such goods should be put up for sale. If not put up for sale within such time, the Board must explain as to why, in its opinion, this could not be done, which explanation can then be tested by the Courts. If the explanation is found to be reasonable, and the owner or person entitled to the goods does not remove the goods thereafter, penal demurrage may then be levied and collected by the Board. To this extent, therefore, while overruling the impugned judgment of the Kerala High Court on the aspect of may being read as shall in sections 61 and 62 of the MPT Act, yet the hovering omnipresence of Article 14 over the Board must always be given effect to, and there must be a very good reason to continue detention of goods beyond the period of four months as mentioned hereinabove before they are sold.79. First and foremost, Rowther-I (supra) did hold that the Port Trust is a sub-bailee of goods bailed by the consignor to the ship-owner, but so held in order to distinguish an English judgment – as has been pointed out hereinabove – which would then lead to the proposition that once the goods are placed in the charge of the Board, it would amount to delivery to the consignee, which proposition was turned down by the Court. The question whether section 158 of the Contract Act can apply to a statutory bailment under the MPT Act is left open, given that the Port Trust is not limited only to recovering necessary expenses to be payable by the bailor, but is statutorily is entitled to recover, by way of levy of rates and expenses incurred for storage of the goods, together with something more – the something more being rates of storage higher than warehousing rates as a deterrent against keeping these goods in the Port Trust premises. This Court in Board of Trustees of the Port of Bombay v. Jai Hind Oil Mills Co. and Ors. (1987) 1 SCC 648  has observed:10. The power of a Port Trust to fix rates of demurrage and to recover the same from an importer or exporter (although the question of an exporter paying demurrage arises rarely) under law and to show concession as regards demurrage charges in certain specified cases is recognised by this Court in the Trustees of the Port of Madras v. Aminchand Pyarelal [(1976) 3 SCC 167] and in the Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co. [(1977) 2 SCC 649] . These decisions are no doubt based on the relevant laws which were in force at the material time. But the decisions are still relevant insofar as cases arising under the Act because the Act also contains provisions more or less similar to the statutory provisions considered in the said decisions. Demurrage charges are levied in order to ensure quick clearance of the cargo from the harbour. They are always fixed in such a way that they would make it unprofitable for importers to use the port premises as a warehouse. It is necessary to do so because congestion in the ports affects the free movement of ships and the loading and unloading operations. As stated earlier, the Port Trust shows concession to the party concerned in certain types of cases.. As a matter of fact, the Division Bench in Rasiklal (supra) seems to have put the cart before the horse, on a ground based in equity. The Court stated:60…Denying such a right on the ground that the person claiming delivery of the goods acquired title to the goods only towards the end of the period of the bailment of the goods with the first respondent would result in driving the first respondent to recover the amount due to it from the bailor or his agent who may or may not be within the jurisdiction of the municipal courts of this country (by resorting to a cumbersome procedure of litigation). The first submission is, therefore, rejected.. As has been pointed out by us, no such right has been denied on a correct reading of the MPT Act. The importer, the consignee and the consignor, or their agents, can all be held liable to pay demurrage charges. However, since Rasiklal (supra) does not involve either the owner of the vessel or its agent, we leave open the question as to whether the Port Trust, as sub-bailee, is entitled to recover its dues from the original bailor – the consignor, and persons claiming through it, given the statutory scheme of the MPT Act, as has already been indicated in paragraph 66 above.82. Based on the above discussion, our answers to the questions framed in the reference order are as follows:1. The point of time at which title to the goods passes to the consignee is not relevant to determine the liability of the consignee or steamer agent in respect of charges to be paid to the Port Trust;2. and 3. The bill of lading being endorsed by the steamer agent is different from the bill of lading being endorsed by the owner of the goods. In the first case, the endorsement leads to delivery; in the second case, the endorsement leads to passing of title. For the reasons mentioned in the judgment, both stages are irrelevant in determining who is to pay storage charges – we have held that upto the point that the Port Trust takes charge of the goods, and gives receipt therefor, the steamer agent may be held liable for Port Trust dues in connection with services rendered qua unloading of goods, but that thereafter, the importer, owner, consignee or their agent is liable to pay demurrage charges for storage of goods;4. As per paragraph 24 of our judgment;5. The answer to question number 5 is really in two parts: first, as to whether carrying goods in a container would make any difference to the position that only the owner of the goods or person entitled to the goods is liable to pay for demurrage; and second, as to whether the Port Trust is obliged to destuff containers that are entrusted to it and return empty containers to the shipping agent. The answer to the first question is contained in paragraphs 45 to 51 of our judgment. The answer to the second question is that a container which has to be returned is only a receptacle by which goods that are imported into India are transported. Considering that the container may belong either to the consignor, shipping agent, ship-owner, or to some person who has leased out the same, it would be the duty of the Port Trust to destuff every container that is entrusted to it, and return destuffed containers to any such person within as short a period as is feasible in cases where the owner/person entitled to the goods does not come forward to take delivery of the goods and destuff such containers. What should be this period is to be determined on the facts of each case, given the activities of the port, the number of vessels which berth at it, together with the volume of goods that are imported. While it does not lie in the mouth of the Port Trust to state that it has no place in which to keep goods after they are destuffed – as in the facts in the present case – yet a court may, in the facts of an individual case, look into practical difficulties faced by the Port Trust. This may lead to the short period in the facts of a particular case being slightly longer than in a case where a port is less frequented, and goods that are stored are lesser in number, given the amount of space in which the goods can be stored.83. Having answered the questions that have been posed before this Court, we do not, on the facts of this case, think that the justice of the case demands that we should interfere with the impugned High Court judgment. The steamer agents themselves did not dispute liability to pay ground rent upto 75 days before the High Court, and have admittedly paid the said charges long ago. As a matter of fact, the steamer agents paid ground rent even beyond the period of 75 days – the High Court having ordered the Appellant Port Trust to recompute the liability of the steamer agents, and return the balance to the parties concerned within two months from the date of receipt of a copy of the impugned judgment. To order a refund of ground rent paid for 75 days to the steamer agent, and direct the Board to then recover the same from the importer, consignor and/or the owner of the goods at this late stage of the proceedings would not be in the interest of justice.