The Chairman, Board of Trustees, Cochin Port Trust vs M/s Arebee Star Maritime Agencies Pvt. Ltd. & Ors.

Major Port Trusts Act, 1963 – s.2(o) – “owner” – Held: When s.2(o) defines “owner”, it defines owner in relation to goods separately from owner in relation to any vessel – In s.2(o)(i), 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.

Maxims – noscitur a sociis – When not applicable– Held: As the definition of “owner” is inclusive, the non-mention of the shipowner in the first part of the definition makes no difference – It would be incongruous that the shipowner’s 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 – Major Port Trusts Act, 1963 – s.2(o).

Major Port Trusts Act, 1963 – ss.42(3), (5), (6) – Held: ss.42(5) and (6) have no application to the Board, as they apply only to the “person” authorised u/s.42(3) by the Board to perform services mentioned in sub-section (1).

Contract Act, 1872 – Bailor-bailee relationship – Held: Observations made in paragraphs 23 and 25 of Port of Bombay v. Sriyanesh Knitters (1999) 7 SCC 228 that the consignee is the bailor of the goods, with the Port Trust being the bailee thereof, are not correct law and are overruled – Major Port Trusts Act, 1963. Answering the reference, the Court

HELD: 1. Questions framed in the reference order are-

(1) 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;

(2) 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;

(3) 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;

(4) What are the principles which determine whether a Port Trust is entitled to recover its dues, from the steamer agent or the consignee; and

(5) 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 destuff every container that is entrusted to it and return the empty containers to the shipping agent. [Para 2]726F-H; 727-A-C]

2.1 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-owner’s agent. However, considering the fact that the definition is an inclusive definition, and that loading or unloading of goods can take place by the steamer’s agent, as was held in Rowther-I (supra), it is difficult to accept the contention on behalf of the steamer’s agent that such persons would not be included within the definition of “owner” under the MPT Act. the definition of “owner” under the MPT Act. In the present case, there is no lack of clarity in the expression “agent for the…loading or unloading of such goods”, as including persons who may be the vessel’s agent involved in unloading goods. As the definition of “owner” is inclusive, 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 ship owner’s 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. This becomes even clearer when section 42 is perused. 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 Board’s 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 vessel’s 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. [Paras 14, 16 and 17][748C-E; 749-G; 750-A-H]

2.2 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 subsection (1). Again, under section 48, a distinction is made between landing of goods from a vessel, and storage or demurrage charges in respect of goods – see section 48(1)(b), as contrasted with section 48(1)(d). When it comes to services performed on vessels, sections 49A, 49B, 50, 50A and 50B make it clear that the services rendered to vessels for which dues have to be paid by vessels are entirely separate and distinct from services rendered insofar as goods that are landed are concerned. Coming to section 59, it becomes clear that for all rates leviable under the MPT Act, which includes rates leviable for storage of goods, the Board shall have a lien on such goods, and may, after custody of such goods is taken by the Port Trust, then seize and detain the same until such rates are fully paid. [Paras 18- 20][751-A-D]

2.3 Section 60 is also important, in that the ship-owner’s lien for freight and other charges is recognised if, at or before the time of landing of any goods from such vessel, such freight or other charges have not been paid. Under section 60(2), the goods shall be retained in the custody of the Board at the risk and expense of the owners of the goods until such lien is discharged. Most importantly, godown or storage rent shall be payable by “the party entitled to such goods” for the time during which they may be so retained. This section is of crucial importance, as it makes it clear that godown or storage rent is payable only by the party entitled to such goods, which can never be the ship-owner or the ship-owner’s agent after the goods have been landed, and the vessel has sailed away from the port. Further, under section 61, after two months from the time goods have passed into the Board’s custody, the Board may, if it thinks fit, sell – by the modalities laid down – such goods or so much thereof as may be necessary to recover the rates payable to the Board which remain unpaid. Sub-section (3) of section 61 is very important, in that before making such sale, if the address of the “owner of the goods” which has been stated on the manifest, or in other documents that have come into the hands of the Board, or is otherwise known, notice of such sale must be given to such owner. Section 62 speaks of the disposal of goods that have not been removed from the premises of the Board within time, and speaks of their removal by the “owner or other person entitled thereto”. Under sub-section (2) of section 62, where such goods are proposed to be removed or sold, a notice may also be served on the “agents of the vessel by which such goods were landed”. This is for the reason that the vessel’s agents may have indicated that the ship-owner has a lien for freight and other charges, which must be satisfied out of the sale of such goods. The important point to be noted is that a clear distinction is made between an “owner or other person entitled” to goods, and agents of the vessel. Further, under sub-section (3) of section 62, it is only if the owner or person entitled to goods does not comply with the requisition in the notice, that the Board may, at any time after the expiration of two months from the date on which such goods were placed in its custody, then sell the goods in the manner indicated. The scheme of section 62, therefore, is that when it comes to sale of goods which are lying stored in the premises of the Board, notice is to be given only to the owner, or other persons who are beneficially entitled to the goods, who must then comply with the requisition given and remove the goods. At this juncture, the ship-owner or its agents are not persons who have to comply with such requisition, as they are neither persons who are the owner, or other persons entitled to the goods. The notice issued to the agent of the vessel is only for the limited purpose as aforesaid. This again indicates that goods that are stored on the premises of the Board have a nexus only with the owner or other persons entitled to those goods, and not with the agent of the vessel or the vessel itself. Section 63 is again very important. When goods have been sold and a surplus exists, the surplus shall be paid to only three persons or their agents, namely, the “importer”, “owner” or “consignee” of the goods. In this subsection, namely, 63(2), as in the case of “owner’ under section 61(3), the owner of the goods is obviously not the “owner” as defined under section 2(o), as the context of section 63(2) indicates otherwise. There would have been no need to add “importer” or “consignee” in this sub-section, as they are already subsumed within the wider definition of “owner” in relation to goods under section 2(o). Secondly, what is conspicuous by its absence is mention of the vessel or any agent for loading or unloading goods. As a matter of fact, when it comes to recovery of rates and charges against the vessel, a separate remedy is provided for in sections 64 and 65 of the MPT Act. [Paras 2123][751-D-H; 752-A-H]

2.4 The statutory scheme of the MPT Act now becomes crystal clear. Until the stage of landing and removal to a place of storage, the steamer’s 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. [Para 24][753-A-C]

3. At this juncture, the Customs Act, 1962 also becomes relevant. Under section 2(26), “importer” is defined as including any owner, beneficial owner or any person holding himself out to be the importer. Though this definition does not ipso facto apply to the MPT Act, it is important that the two Acts be read together, as both Acts deal with goods that are imported into the country from abroad, and their storage and disposal thereafter. In any event, the expression “importer” that occurs in section 63(2) of the MPT Act would certainly include a beneficial owner of the goods. Under section 29 of the Customs Act, the person-in-charge of a vessel when it carries cargo can land only at a “customs port” (as defined), unless otherwise permitted by the Central Board of Excise. Under section 30, the person-in-charge of a vessel carrying imported goods shall deliver to the “proper officer”, i.e. a customs officer, an import manifest of the vessel within the time prescribed, which would indicate the nature of the goods carried by the vessel, and the consignee or other owner of the goods. Under section 33, no such imported goods can be unloaded at any place other than the place approved for unloading of such goods in the customs port, customs airport or coastal port. Under section 45(1), all imported goods unloaded in a customs area shall remain in the custody of such person as approved by the Principal Commissioner of Customs or Commissioner of Customs until they are cleared for home consumption or are warehoused or transhipped. Section 46(1) is extremely important in that it speaks of a bill of entry for home consumption or warehousing in such form and manner as may be prescribed. Section 46(2) then states that a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. Under section 48, if any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transhipped within 30 days from the date of the unloading, such goods may, after notice to the “importer” and with permission of the proper officer, be sold by the person having the custody thereof. Under section 49, imported goods may, pending clearance or removal, be permitted to be stored in a public warehouse for a period not exceeding 30 days, or such other extended period that the Principal Commissioner or Commissioner of Customs may permit. The Customs Act, therefore, also contains parallel provisions for authorities under that Act to take charge of, store, and sell imported goods, in the circumstances mentioned therein. 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. 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-owner’s agent, or to the person who owns such container. [Paras 25-27, 29 and 39][753-C-H; 754-A-C; 754-EF; 760-D-E] Garden Silk Mills Ltd. and Anr v. Union of India and Ors. (1999) 8 SCC 744 : [1999] 3 Suppl. SCR 295 – relied on.

4. In fact, the Bill of Entry (Forms) Regulations, 1976 (as amended up to date) contain forms in which a Bill of Entry is to be presented by an importer of goods for home consumption, or for warehousing, or for ex-bond clearance for home consumption. Form I, which speaks of a Bill of Entry for home consumption, contains a declaration to be signed by an importer, clause 6(b) of which is important. The same declaration is contained in Forms II and III. 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. Rules 2(1)(d) and (f) of these Rules are relevant. Rule 4 deals with the transaction value of “identical goods”, and Rule 5 deals with the transaction value of “similar goods”. 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. Likewise, when it comes to “computed value”.Rule 10 deals with “costs and services. 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. Further, to make matters clear beyond doubt, General Exemption No. 170, speaks of ‘Exemption to containers of durable nature. A clarification by the Central Board of Indirect Taxes and Customs dated 25th October, 2002, clarified as to what is meant by “containers of durable nature”. A reading of the aforesaid also goes to buttress the conclusion reached in the previous paragraph of this judgment. The Customs Tariff Act, 1975 also throws considerable light on containers fit for repetitive use. The First Schedule deals with general rules for interpretation of “this Schedule”. This 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. [Paras 40-51][760-E-F, G-H; 761D-F; 762-F-G; 764-A-B, G-H; 765-A-C; 766-D; 767-B-C]

5.1 Rowther-II has made it clear that Rowther-I 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 is clearly contrary to Rowther-I. Rowther-I 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 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 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. Section 1 of the Indian Bills of Lading Act, 1856 is also important. 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, 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 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. [Paras 58, 59, 61, 62][772-E-G; 773-C-F; 774-E-F, G-H; 775-A-B]

Port of Madras v. K.P.V. Sheik Mohamed Rowther & Co. [Rowther-I] [1963] 2 Suppl. SCR 915 – followed. Port of Madras v. K.P.V. Sheik Mohd. Rowther & Co. P. Ltd. [Rowther-II] (1997) 10 SCC 285 – explained.

5.2 The judgment in Sriyanesh Knitters 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, 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. 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 cannot be said to state the law correctly, and are accordingly overruled. However, since this Court is not going into the point of sub-bailment, the question is left open 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. [Para 66][776-A-D]

Port of Bombay v. Sriyanesh Knitters (1999) 7 SCC

228 – partly overruled.

5.3 However, Rowther-I was correctly distinguished by the Court in Sriyanesh Knitters in paragraph 24 thereof, and its ratio qua the MPT Act not being an exhaustive code has this Court’s concurrence. [Para 67][776-E]

Port of Bombay v. Sriyanesh Knitters (1999) 7 SCC

228 – partly concurred.

5.4 Paragraph 10 of the judgment in Forbes II 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. This Court has 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 this Court’s 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. Insofar as paragraph 11 is concerned, this Court has already made it clear that Sriyanesh Knitters 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 has been overruled to this extent. Paragraph

12 of the said judgment contains the same confusion that is contained in Rowther-II, and cannot therefore be said to lay down the law correctly. The correct position in law is, as has been stated, 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. Paragraph 13 refers to one other aspect of the case that has been argued. 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. 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 before they are sold. [Paras71-74][779-E-H; 780-A-H]

Forbes Forbes Campbell & Co. v. Port of Bombay (Forbes-II) (2015) 1 SCC 228 : [2014] 12 SCR 337 – held not correct law.

Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay (1989) 3 SCC 293 : [1989] 2 SCR

751 – relied on.

5.5 Rowther-I 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 – 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. The importer, the consignee and the consignor, or their agents, can all be held liable to pay demurrage charges. However, since Rasiklal does not involve either the owner of the vessel or its agent, the question is left open 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. [Paras 79, 81][782-D-F; 783-E-G] Rasiklal Kantilal & Co. v. Port of Bombay (2017) 11 SCC 1 : [2017] 4 SCR 591 – held inapplicable.

Board of Trustees of the Port of Bombay v. Jai Hind Oil Mills Co. and Ors. (1987) 1 SCC 648 : [1987] 1 SCR

932 – referred to.

6. Anwers to the questions framed in the reference order are:

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 – it is 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 this 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 this 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. [Para 82][783-G-H; 784-A-H]

7. This Court, does not, on the facts of this case, think that the justice of the case demands that the impugned High Court judgment should be interfered with. 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. The impugned judgment is set aside on one question of law, namely, that the expression “may” in sections

61 and 62 of the MPT Act cannot be read as “shall”, subject to the caveat that as the “State” under Article 12 of the Constitution, a Port Trust must act reasonably, and attempt to sell the goods within a reasonable period from the date on which it has assumed custody of them. [Paras 83, 84][785-A-D]

J.V. Gokal and Co. (Pvt.) Ltd. v. Asst. Collector of SalesTax (Inspection) and Ors. [1960] 2 SCR 852 – followed. Forbes Forbes Campbell & Co. Ltd. v. Board of Trustees, Port of Bombay [Forbes-I] (2008) 4 SCC 87; Brindavan Bangle Stores and Ors. v. Asst. Commissioner of Commercial Taxes and Anr. (2000) 1 SCC 674 : [2000]

1 SCR 97; Mangalore Refinery & Petrochemicals Ltd.v. Commissioner of Customs (2016) 14 SCC 709 : [2015]

9 SCR 620; State of Bombay and Anr. v. F.N. Balsara [1951] SCR 682; Central India Spinning and Weaving and Manufacturing Company, Ltd. v. The Municipal Committee, Wardha [1958] SCR 1102; Gramophone

Company of India Ltd. v. Birendra Bahadur Pandey & Ors. [1984] 2 SCR 664; State of Kerala & Ors. v. Fr. William Fernandez Etc. (2017) SCC OnLine SC 1291; International Airport Authority of India v. Grand Slam International (1995) 3 SCC 151 : [1995] 2 SCR 149 – referred to.

The K.H. Enterprise [1994] 1 Lloyd’s Law Reports 593; Brown v. State of Maryland 25 U.S. 419 (1827); Province of Madras v. Boddu Paidanna & sons, A.I.R.

(29) 1942; Peterson v. Freebody & Co. [1895] 2 Q.B.D.

294 – referred to.