Kandla
Port Trust Vs. Goodrich Maritime Pvt. Ltd.& ANR. [2010] INSC 446 (6 July
2010)
Judgment
CIVIL
APPELLATE JURISDICTION CIVIL APPEAL NO. 4905 OF 2010 (Arising out of SLP(C)
No.7084 of 2007) Kandla Port Trust ......Appellant Versus Goodrich Maritime
Pvt. Ltd. and another ......Respondents WITH
CIVIL APPEAL NO.4951 OF 2010 (Arising out of SLP(C) No.9730 of 2007)
G.S.
Singhvi, J.
1.
Leave granted.
2.
These appeals are directed against order dated 27.11.2006 passed
by the Division Bench of Gujarat High Court whereby it allowed the letters
patent appeals preferred by respondent No.1 and quashed the demand of container
storage charges and ground rent.
3.
Respondent No.1 is said to be an agent of international shipping
line which is engaged in the business of carrying consignments in containers to
various destinations. In 2004, respondent No.1 transported goods belonging to
different consignees in eight containers under 3 bills of lading in which the
final place of destination was shown as Kandla Port. The description of the
goods as given in the bills of lading was "Heavy Metal Scrap" (seven
containers) and Hollow Section Tubes (eighth container), though, in fact, all
the containers contained war material/explosives such as artillery shells, etc.
The
containers were shipped to Kandla Port on the vessel of M.V. Orient Patriot and
were off-loaded in the months of October and December, 2004.
4.
Since the goods were not as per the description given in the bills
of lading, the same were confiscated by the Customs Department. Respondent No.1
made representations to the appellant for release of the containers after
de-stuffing the goods. The appellant sent communications to Superintendent of
Police, Bhuj and General Staff Officer, 11 Infantry Division, APO, Ahmedabad to
take possession of the war material/explosives but both the authorities
declined to do so by citing the grounds of lack of power to do so or non
availability of resources. On 6.6.2006, the appellant issued bills to
respondent No.1 for levy of container storage charges and ground rent.
Respondent
No.1 challenged the same in Special Civil Application 3 Nos.17403/2006 and
17404/2006. The learned Single Judge summarily dismissed both the special civil
applications by relying upon an order passed by the Division Bench in Letters
Patent Appeal No.104 of 2000, wherein it was observed:
"...
It is required to be noted that the goods arrived in containers which were
loaded in the ship by the exporter. It was the duty of the importer to take the
delivery of cargo in the container. There is no contract between the
petitioner-appellant and the shipping company or the Kandla Port Trust. In absence
of this, in our opinion, the learned Single Judge has rightly arrived at a
conclusion that the dispute involved would require recording of evidence and
cannot be summarily executed upon exercise of writ jurisdiction of this court.
In our opinion, the learned Single Judge has rightly observed that the proper
remedy for the petitioner would be to approach the Civil Court for claim of
containers. ..."
5.
Respondent No.1 questioned the correctness of the order of the
learned Single Judge by filing letters patent appeals. In response to the
notice issued by the Division Bench, separate counter affidavits were filed on
behalf of the appellant in both the appeals. For the sake of reference,
paragraphs 4 and 5 of the counter affidavit filed by Shri P. Suresh Babu,
Deputy Traffic Manager, Kandla Port Trust in Letters Patent Appeal No.1107/2006
are reproduced below:- "4. With reference to para-2(a) of the LPA, it is
submitted that the learned Single Judge has passed the order after considering
the order dated 05.04.2000 passed by this Hon'ble Court in LPA No. 104/2000 and
also the order passed by the Hon'ble the Supreme Court in Civil Appeal
No.4537/2001. It 4 is submitted that so far as the facts of the present case
are concerned, on merits, they are different and, therefore, cannot be
intermingled in this case. However, as in both the cases i.e.
before
the Hon'ble Single Judge in the present case and before the Hon'ble Division
Bench, issue of disputed questions of fact is involved and, therefore, on that
count, the petition is rightly rejected by the learned Single Judge after
relying upon the above-referred decision. However, in the present, the
consignee/importer of the involved containers have not abandoned and,
therefore, the learned Single Judge has rightly appreciated the facts of the
case on which the Hon'ble Apex Court passed the order dated 24.7.2001. In that
case, the consignees of the cargo contained in the container issued a letter
abandoning their cargo. Here in the present case, no such letter of abandonment
has been issued by the consignees. In that view of the matter, the learned
Single Judge has rightly relied upon and interpreted the TAMP Order No. 120
dated 28 th August, 2000 issued through the Government Notification published
in Part-III Section 4 of the Gazette of India, Extra Ordinary being Tariff
Governing Body for all major ports.
Therefore,
it cannot be said that the learned Single Judge has ignored the order of the
Hon'ble Apex Court. On the contrary, the Hon'ble Single Judge has come to the
conclusion that the decision of the Hon'ble Apex Court is in different set of
facts and has no application to the facts of the present case so far as it
involves claim of abandonment of the container for the purpose of levy of
ground rent by the Port Authority.
5. With
reference to para 2(b) of the LPA, it is submitted that the learned Single
Judge has considered the TAMP Notification referred to above and the order
passed by Hon'ble Division Bench and Hon'ble Apex Court in its proper
perspective. It is submitted that in the case of order passed by the Hon'ble
Supreme Court dated 24.7.2001, the containers were abandoned by the
consignees/importers whereas in the present case, container No. 1 i.e. YMLU
3101356 is lying in Port as un-cleared container since landing in port area and
no abandonment letter is submitted by the consignee/importer in the present
case. The appellant requested the port authority to de-stuff the container by
their letter dated 30.9.2004 and 20.7.2005 within the port area for the purpose
of auction of the 5 cargo and for that shown their willingness to move the
container within the port area, because the port authority is supposed to carry
out its activity within the port area and not outside the port area. Therefore
it is clear that the line has not shown their willingness to move the container
outside the port area to the CWC/CFS-1 and never resume the custody to take
back the container with cargo to the port originated, and therefore so long as
the containers remain on the port land, the ground rent is chargeable, in
absence of the compliance of the required formalities and in that view of the
matter the letters are not at all abandonment letters, and also not in
accordance with the guideline provided by the TAMP Notification, and clearly an
eye wash and therefore Bill No.244362 dated 6.6.2006 raised for port period
i.e. from 3.8.2005 to 31.5.2006 stands in order and also in line with Issue
No.(II) ii (a)(b) of TAMP Order dated 28th August, 2000 read with sections 61
and 62 of the Major Port Trusts Act, 1963 (MPT Act for short) which provides
Port Trust to start auction proceedings after expiry of 60/75 days in view of
both sections i.e. MPT Act and TAMP Circular and it is not mandatory on the
part of the Port Trust to auction the container within particular time and in
such a case issue No.(V) of TAMP Order shall apply to shipping Lines which read
as under:- ISSUE : (V) Actions to be taken by the Lines, if they want their
containers back before the stipulated period.
CLARIFICTION:-
Since the Lines are not the owner of the Cargo, they cannot abandon the
(containerized) cargo and take back their containers, whenever required. Since
the consignees are to issue the letter of abandonment and such instances are
very rare, the lines may look for ways and means to take back their containers
without waiting for the expiry of the stipulated period when only the Port
Trust can release the containers after arranging for auction of the cargo. The
Lines have two options.
They can
take back the (loaded) containers to the Port of Origin. Alternatively, the
Lines can resume custody of the containers and move such containers to any
outside private CFS and arrange for de-stuffing of cargo before taking back the
6 empty container. (In such cases, the responsibilities of the Port Trust as a
"bailee" will cease as soon as the Line resumes custody of the
containers) there are many approved private CFS's available in the vicinity of
a Port, and as per the contract carriage of goods a carrier can also dispose of
the goods by auction under certain circumstances. That being so, the lines need
not depend only on the ports to take action for release of the
containers."
Annexed
hereto and marked as ANNEXURE: "R-1" is the copy of the aforesaid
TAMP Order dated 28th August, 2000.
It is
submitted that based on the above clarification on Issue No.(V) of the TAMP
Order, the KPT used to issue request letters to concerned Line Agent requesting
to de-stuff long dwell containers (un-cleared containers) and release the empties.
It is also further requested to de-stuff the container in the CWS-CFS and
collect the empties, after complying with the required formalities as per TAMP
Order dated 19.7.2000.
However,
in the present case, it seems that the duties on the part of the Line Agent are
not performed timely and on getting pressure from their principal, the faults
of their own are thrown on Port Trust. In that view of the matter, it is
submitted that Bill No. 244362 dated 6.6.2006 issued on Line Agent is in order
and is also in consonance with the provisions of the MPT Act."
6.
The Division Bench did not avert to the counter affidavits filed
on behalf of the appellant and allowed the appeals by simply making a reference
to the order passed by this Court dated July 24, 2001 in Civil Appeal No.4537
of 2001 - Kutch Shipping Agency Private Limited v. Board of Trustees, Kandla
Port Trust and observing that there was no reasonable basis for levy of
container storage charges or ground rent because letter addressed by respondent
No.1 to the Traffic Manager, Kandla Port 7 Trust for permission to remove the
containers to de-stuff the cargo was not attended by the concerned authority.
7.
Shri P.H. Parekh, learned senior counsel appearing for the
appellant relied upon Sections 48, 49, 59, 61 and 62 of Major Port Trusts
Act, 1963 (for short, `the 1963 Act'), Sections 11,
111(d) and 112 of the Customs Act, 1962 and orders dated 10.11.1999 and
19.7.2000 issued by the Tariff Authority for Major Port Trusts and argued that
the Division Bench of the High Court committed serious error by quashing the
demand of container storage charges and ground rent by relying upon order dated
24.7.2001 passed by this Court in Civil Appeal No. 4537 of 2001 - Kutch
Shipping Agency Private Limited v. Board of Trustees, Kandla Port Trust
ignoring that the containers were confiscated by the Customs officers on the
ground that in the garb of Heavy Metal Scrap and Hollow Section Tubes, the
consignors and consignees had tried to smuggle used and unused ammunitions in
the country. Learned senior counsel submitted that there is no provision in the
1963 Act under which the appellant can de-stuff the goods which are
seized/confiscated by the Customs authorities and, therefore, respondent No.1
cannot take advantage of the fact that representations made by it for release
of containers after de-stuffing the goods were not entertained.
8.
Learned counsel for respondent No.1 supported the impugned order
and argued that the Division Bench of the High Court rightly quashed the demand
for containers storage charges and ground rent because the appellant failed to
take action for release of containers within a reasonable time after
de-stuffing the goods. Learned counsel emphasized that respondent No.1 cannot
be blamed for attempted import of war material/explosives because its
functionaries had no knowledge about the clandestine operation, if any, carried
out by the consignors and consignees.
9.
We have considered the respective submissions and gone through the
relevant statutory provisions as also the orders issued by the Tariff Authority
for Major Port Trusts. Undisputedly, the special civil applications filed by
respondent No.1 were summarily dismissed by the learned Single Judge without
calling upon the appellant and respondent No.2 to file counter affidavits to
admit or controvert the averments contained therein. This being the position,
the appellant had a legitimate right to file counter affidavits in the appeals
preferred by respondent No.1 and the Division Bench of the High Court was duty
bound to consider the contents of the counter affidavits and then decide the
issue relating to liability of respondent No.1 to pay container storage charges
and ground rent in the backdrop of the fact that the containers together with
their contents had been confiscated by the Customs 9 Department on the ground
that war material/explosives were smuggled in the country under the garb of
importing Heavy Metal Scrap and Hollow Section Tubes. The question whether rule
of not charging storage charges/ground rent for 75 days would apply if the
goods are seized and later on confiscated by the Customs authorities or any
other competent authority on the ground that war material/explosives were
clandestinely brought in the country certainly called for serious
consideration, but without examining the issue in a correct perspective the
Division Bench of the High Court granted relief to respondent No.1 only on the
ground that representations made by the said respondent for release of
containers after de-stuffing the goods were not decided. In Kutch Shipping
Agency Private Limited v. Board of Trustees, Kandla Port Trust (supra), this
Court did not consider a question like the one raised in the counter affidavits
filed on behalf of the appellant.
Therefore,
the Division Bench was not justified in relying upon the order passed in that
case for the purpose of quashing the demand of container storage charges and
ground rent.
10.
In the result, the appeals are allowed. The impugned order is set
aside and the matter is remitted to the High Court for fresh disposal of the
letters patent appeals in accordance with law.
11.
Before parting with the case, we consider it appropriate to place
on record our deep appreciation for the efforts made by the learned Solicitor
General which made the concerned authorities of the Government of India to
realize potential threat to the national security due to import of war material
and explosives in the garb of heavy metal scrap etc., and a comprehensive
decision has been taken by the Ministry of Home Affairs to ensure strict
supervision of such imports.
12.
The Registry is directed to send the sealed envelope containing a
copy of the decision of the Government of India to the office of the learned
Solicitor General.
.............................J. [G.S. Singhvi]
..............................J. [Asok Kumar Ganguly]
New Delhi;
July 06, 2010.
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