Major Port Trust Act, 1963 – s. 2(o) – Liability of the consignee or steamer agent in respect of ground rent charges to be paid to the port trust – Determination of – Containers unloaded at port trust, but not cleared by the consignees or importers and refused to be de-stuffed by the Port, on the ground of inadequate storage space – Liability to pay ‘ground rent’, if can be imposed on the owners of the vessel/steamer agents beyond the period of 75 days, fixed by the Tariff Authority of Major Ports – Held: In view of the inconsistencies in the decisions in *Rowther-I, **Rowther-II, ***Sriyanesh Knitters, ****Forbes-II and *****Rasiklal as regards on whom the Port Trust has to fasten the liability for payment of its charges, matter referred to the larger Bench – Reference to larger Bench.
Synthetic woolen rags were imported in containers. The said containers were destuffed in the Cochin Port Trust premises to facilitate Customs examination. The destuffed-unloaded cargo occupied much larger space and was not promptly cleared by the consignees due to certain reasons. The goods were lying idle in the Port premises for quite long. The port trust charged ground rent from the steamer agents/owners of the containers. The same was challenged. The question arose before the High Court that whether the liability to pay ‘ground rent’ on containers unloaded at Cochin Port, but not cleared by the consignees/importers and refused to be de-stuffed by the Port, on the ground of inadequate storage space, can be imposed on the owners of the vessel/steamer agents beyond the period of 75 days, fixed by the Tariff Authority of Major Ports. The High Court held that there was no justification for the Port Trust to collect ‘ground rent’ charges in respect of the containers indefinitely; and that the Port Trust could demand ‘ground rent’ only for a maximum period of 75 days, under the orders issued by Tariff Authority of Major Ports. Hence the present appeals by the appellant-Port Trust.
Referring the matter to larger Bench, the Court HELD: 1.1 The decisions in *Rowther- I, **Rowther- II, ***Sriyanesh Knitters, ****Forbes-II and *****Rasiklal do not seem to follow a consistent line about whom the Port Trust has to fasten the liability for payment of its charges.
(ii) The Constitution Bench judgment in Rowther-I holds that when Port Trust takes charge of the goods from the shipowner, the ship-owner is the bailor and the Port Trust is the bailee. While the Bench of two Judges in Sriyanesh Knitters holds that there comes into existence the relationship of bailor and bailee between the consignee and the Port Trust, the decision in ForbesII disagrees with this view of Sriyanesh Knitters. Rasiklal opines that enquiry into such relationship is irrelevant in determining the right of a Port Trust to recover its dues.
(iii) While the decision in Sriyanesh Knitters was based on the interpretation of the term “owner” under Section 2(o) of the Major Port Trust Act, 1963, the judgment in Forbes-II and Rasiklal do not find the question of interpretation of the term “owner” to be relevant.
(iv) While Forbes-II relies upon the Constitution Bench decision in Rowther-I to come to its conclusions, Rasiklal does not find Rowther-I to be an authority for the proposition that until the title in goods is passed to the consignee, the liability to pay various charges payable to a Port Trust, for its services in respect of goods, falls exclusively on the steamer agent.
(v) In Rowther-II, it was held that once the goods are handed over to the Port Trust by the steamer and the steamer agents have duly endorsed the bill of lading or issued the delivery order, their obligation to deliver the goods personally to the owner or the endorsee comes to an end. The decision in Rasiklal, which has been delivered after the reference of Forbes-I was disposed of, takes a contrary view that in cases where the consignee does not come to take delivery of goods, the position of law laid down by Rowther-II would result in a situation that the Port Trust would incur expenses without any legal right to recover such amount from the consignor, with whom there was no contractual obligation.
(vi) The Bench of two Judges in Rasiklal opined that it agrees with the conclusions recorded in Rowther-II and Forbes-II that a Port Trust could recover the rates due, either from the steamer agent or the consignee. However, the holding in Rowther-II finds only the consignee to be liable. [Para 14] [212-B-C]
1.2 In view of the inconsistencies in the judgments delivered after the pronouncement by the Constitution Bench in Rowther-I, the following issues need to be resolved by a larger Bench:
(a) Whether in the interpretation of the provision of Section 2(o) of the MPT Act, the question of title of goods, and the point of time at which title passes to the consignee is relevant to determine the liability of the consignee or steamer agent in respect of charges to be paid to the Port Trust;
(b) Whether a consignor or a steamer agent is absolved of the responsibility to pay charges due to a Port Trust, for its services in respect of goods which are not cleared by the consignee, once the Bill of lading is endorsed or the delivery order is issued;
(c) Whether a steamer agent can be made liable for payment of storage charges/demurrage, etc. in respect of goods which are not cleared by the consignee, where the steamer agent has not issued a delivery order; if so, to what extent;
(d) What are the principles which determine whether a Port Trust is entitled to recover its dues, from the steamer agent or the consignee; and
(e) While the Port Trust does have certain statutory obligations with regard to the goods entrusted to it, whether there is any obligation, either statutory or contractual, that obliges the Port Trust to de-stuff every container that is entrusted to it and return the empty containers to the shipping agent. [Para 15] [213-D]
Forbes Forbes Campbell and Co. Ltd. v Board of Trustees,
Port
of
Bombay
[ForbesI]
(2008) 4 SCC 87 ; The Trustees of the Port of Madras v K P V Sheik Mohamed Rowther & Co. [1963] Suppl.
2 SCR 915 ; [Rowther- I] Trustees of the Port of Madras v K P V Sheikh Mohd. Rowther & Co. Pvt. Ltd.
[Rowther- II] (1997) 10 SCC 285 ; Board of Trustees of the Port of Bombay and Others v Sriyanesh Knitters (1999) 7 SCC 359 : [1999] 3 SCR 1238 ; Forbes Forbes Campbell & Co. Ltd. v Board of Trustees, Port of Bombay (2015) 1 SCC 228 : [2014] 12 SCR 337 ; Rasiklal Kantilal & Co v Board of Trustee of Port of Bombay [Rasiklal] (2017) 11 SCC 1 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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