The Board of Trustees of the Port of Bombay v. Britannia Industries Ltd. & Anr.

Order

- 2 . This is a suit by the Bombay Port Trust for recovery of a sum of Rs.1,85,83,877.74 with interest on this sum at the rate of 15% p.a. from the date of the suit till payment.

2. The suit is filed on 21st February 1987. The first defendants to the suit is Britania Industries Ltd., a public limited company. First defendant Britania is termed as "Importer/owner of the consignee" by the plaintiffs. Second defendant are impleaded in their capacity as shipping Agent. They are carrying on business as shipping and clearing Agents. The plea raised in the plaint is that the second defendant is also liable in its capacity as importer/owner of the goods.

3. This is a suit for recovery of the port trust charges. The plaint proceeds to allege that at all material times, the plaintiffs have been the owner of the docks at Bombay. Under the 3 provisions of Major Port Trust Act, 1963, as amended, (for short "Act"), the plaintiffs are required to take charge of the goods landed from the ship coming to Mumbai. Under the provisions of the said Act, the plaintiffs are entitled to charge and levy wharfage, demurrage and other charges in respect of the goods landed and stored by the plaintiffs in the docks at Mumbai, According to the scale of rates duly prescribed, published and brought into force under the provisions of the said Act and to realise the charges of sale of the consignment in respect of which the charges have accrued.

4. In or about December, 1982, A consignment of 47 coils steel sheets landed at the Port. The coils were part of a consignment landed at Mumbai. The same was booked by parties to whom a reference will be made in the subsequent paragraphs. The said consignments were manifested as Excess in the Import General 4 Manifest No.1110 of December 1981, of the vessel S.S.Arica. The General Landing date and the last free day of the cargo of the vessel were 29th December 1981 and 1st January 1982 respectively. The said consignment was outturned by the Assistant Manager, Indira Dock on 2nd April 1982 as excess landed.

5. The plaintiffs state that the said consignments were discharged by the said vessel upto the docks at Mumbai. The said consignment were lying uncleared for a protracted period of time. The same were listed for sale and sold in two different lots after completing all the statutory requirements as follows:- (a) 22 coils steel sheets were sold under Lot No.F-2703 on 27/7/1983 and 1/8/1983 out of which a sum of Rs.11,15,271.71 was realised; 5 (b) 25 coils steel sheets were sold under Lot No.F-2703-A on 19/10/1983 and 24/10/1983 for Rs.11,67,759.60. The aforesaid sales were made in both the lots on the aforesaid respective dates after completing all the statutory requirements.

6. The defendants are importers and/or owners of the said consignment within the said Acts, as such importers/owners the defendants were bound and liable to take delivery of and clear the said consignments within 7 clear days from the date of landing thereof and to pay wharfage, demurrage and other charges which accrued due thereon and were payable to the plaintiffs for the period during which the said consignment remained on the premises of the plaintiffs.

7. The plaintiffs state that as the said 6 consignment which was imported by the aforesaid vessel was uncleared for over two months from the date of landing thereof, the plaintiffs by their letter dated 29th June 1982 informed defendant No.2 that as the said consignment of 47 coils steel sheet lying uncleared for over two months from the date of landing thereof, the same were being put up for sale and under the provisions of Sections 61 and 62 of the said Act, and the proposed sale would be held on the proposed date mentioned in the said letter or any other subsequent date without further notice unless the same was cleared on payment within 10 days of the receipt of the letter. The plaintiffs further stated that the said consignments were liable to be sold either by public auction or by private agreement or by tenders without further notice. The 2nd defendants by their letter dated 22nd April 1982 addressed to the Docks Manager, inter alia, confirmed that the said two consignments of 47 coils were landed and delivered as excess 7 cargo.

8. The clearing agent, M/s.Orient Transport company on behalf of defendant No.1, the consignees of the said two consignments collected the ADO from defendant No.2 and noted the bill of entry for 47 coils in the customs house under Additional Entry No.7. The said coils were valued at Rs.9,87,345/- and the same were released by the customs on payment of customs duty amounting to Rs.5,45,968.35. The said clearing agents had by their letters dated 5th April 1982, applied for concessional levy of Port Trust charges but the same was rejected by the Assistant Accountant Revenue, Audit by his letter dated 12th July 1982.

9. It is the case of the plaintiffs that the consignment remained uncleared for a period over two months from the date of landing. In such circumstances, a notice was published in the 8 newspapers dated 28th June 1982 so also in Maharashtra Government Gazette on 1st July 1982 for sale of 47 coils. However, the sale took place in lots. In the first lot, 22 coils were sold and a sum of Rs.11,15,271.76 was realised, after deduction of several charges as specified more particularly in para 9 of the plaint. Thus, insofar as the first lot is concerned, a sum of Rs.18,69,254.37 towards Port Trust dues/charges remained in deficit.

10. The second lot of 25 coils was sold which fetched a sum of Rs.11,67,759.60 as stated in para 10 of the plaint, after deduction of expenses. Insofar as second lot is concerned, the deficit was computed at Rs.1,05,14,623.47.

On 14th July 1983, the plaintiffs intimated in writing to the defendants about sale of two consignments and requested the defendants to forward documents in respect of the goods to 9 enable the plaintiffs to ascertain the accrued charges. Finding that there is no response, two letters were addressed on 19th July 1986. The plaintiffs called upon the defendants to pay the sum as computed in respect of the consignment with interest. There was a reminder on 21st July

1986. However, it is the case of the plaintiffs that the defendants failed and neglected to give any reply to these letters.

12. In the light of the above, the present suit was filed. It is contended in the plaint that sums as computed are due and payable with interest. The suit has been filed in this Court because the consignments landed and were stored in Mumbai. The charges became due and payable in Mumbai and the entire cause of action has arisen in Mumbai. The suit claim is within limitation because the charges were crystalised after the consignments were sold. 10

13. After the institution of the suit, the writ of summons was duly served and thereupon the written statements are filed by both the defendants. Insofar as first defendant is concerned, the stand is that it is not liable to pay any sums much less as demanded. Apart from the objections on the ground of misjoinder/nonjoinder of proper and necessary parties, the suit claim being barred by limitation so also lack of privity it is contended that some time in June 1982, the second defendants, as the vessel’s agents represented to these defendants that the said 47 coils being excess landed from the said vessel, were lying in the BPT Docks without any one claiming the same. The aforesaid official documents as contained in Exh.1, 2 and 3 issued by the plaintiffs were also shown by the 2nd defendants to the 1st defendants to indicate that the said 47 coils were in fact excess landed and were lying in the docks without any claimant. The 1st defendants were also told 11 that the demurrage, if any, payable to the plaintiffs would be only about 1/8th of the normal demurrage charges, in view of the fact that the said 47 coils were excess landed and lying in the docks without any claimant. Relying on these representations officially confirmed by the plaintiffs by their official documents vide Exh.1, 2 and 3 above, that the said 47 coils were excess landed from the said vessel and lying uncleared in the BPT docks and since the 2nd defendants were looking for a buyer to purchase the said 47 coils and that the demurrage, if any, payable to the plaintiffs would be only 1/8th of the normal demurrage charges, these defendants offered to purchase the said 47 coils for a lumpsum price of Rs.2,00,000/- and in fact paid to the 2nd defendants deposit of Rs.25,000/- as advance. The letter dated 3rd June 1982 and the second defendants’ confirmation letter dated 5th June 1982 which also acknowledges the receipt of the sum of Rs.25,000/- as advance. The second 12 defendants by a certificate dated 5th June 1982 confirmed that there was no claim on the said 47 coils since these were excess landed from the said vessel and that the only charge for the clearances would be the customs duty, penalty and BPT charges. The second defendants by their letter dated 5th June 1982 addressed to the plaintiffs’ Docks Manager, requested them that the said 47 coils may be withdrawn from the auction proposed to be held by the plaintiffs in July 1982, since the 2nd defendants proposed to deliver the said 47 coils to the 1st defendants. The first defendants were also informed that the customs duty would be only Rs.5,45,968.35, apart from the demurrage, if any, payable to the BPT, being 1-8th of the normal demurrage charges. The first defendant accordingly made an advance deposit of Rs.5,45,958.35 as duty with the Customs Authorities.

14. The second defendants by a delivery order 13 dated 5th June 1982 requested the plaintiffs’ Docks Manager to deliver the said 47 coils to the first defendants. However, when the first defendants’ clearing agents, Orient Transport Co., approached the plaintiffs for clearing the said 47 coils, the plaintiffs, without prior notice and for no apparent reason changed their stand and refused to deliver the said 47 coils as excess landed cargo by accepting 1/8th demurrage charges and demanded full demurrage charges. The plaintiffs by their letter dated 13th July 1982 purported to record that, after careful scrutiny of the Import General Manifest and other relevant documents, they had come to the conclusion that the cargo was not at all excess landed from the said vessel and purported to demand full demurrage charges. By a letter dated 13th July 1982 the plaintiffs’ Deputy Manager informed the plaintiffs’ Assistant Manager (Sales) that if the consignment was not cleared within ten days from the date of the receipt of the said letter, the 14 said 47 coils should be sold by public auction. If the cargo was manifested and not excess landed the suit ought to have been directed against the person who is named in the manifest and not these defendants.

15. In substance, the argument is that defendant No.1 agreed to purchase 47 coils only because the plaintiffs had initially confirmed and certified that the said 47 coils were excess landed from the vessel and lying uncleared in the docks. However, plaintiffs represented that in respect of these 47 coils, which is excess landed cargo, demurrage would be computed at the rate of 1/8th of the normal charges. Thus, on this basis that the first defendant agreed to purchase 47 coils. However, these defendants were prevented by the plaintiffs from lifting the said cargo because, suddenly and without any notice, the plaintiffs changed their stand. Plaintiffs stated that the status of the Cargo is not 15 "excess landed" but "manifested cargo". Therefore, placing reliance upon the letter dated 13th July 1982, it is contended by the first defendant that the plaintiffs demanded full demurrage charges. Once this demand was made, the first defendants intimated to the second defendants that they are not interested in the said cargo any longer. Once such an intimation was given, then, there is no question of first defendant paying any sums much less the sum demanded. Consequently, they prayed for dismissal of the suit.

16. The second defendant has filed written statement and more or less similar contentions are raised. Additionally, it is contended that these defendants by a delivery order dated 5th June 1982 requested the plaintiffs’ Docks Manager to deliver the said 47 coils to the first defendants. However, when the first defendants’ clearing agents, Orient Transport Co. approached 16 the plaintiffs for clearing the said 47 coils, the plaintiffs, without prior notice and for no apparent reason changed their stand and refused to deliver the said 47 coils as excess landed cargo by accepting 1/8th demurrage charges and demanded full demurrage charges. The plaintiffs by their letter 13th July 1982 purported to record that, after careful scrutiny of the Import General Manifest and other relevant documents, they had come to the conclusion that the cargo was not at all excess landed from the said vessel and purported to demand full demurrage charges. After relying upon a letter of the plaintiffs dated 13th July 1982 addressed to the agent of first defendant, the second defendant states that by the said letter plaintiffs’ Dy.Manager informed plaintiffs’ Assistant Manager (Sales) that if the consignment was not cleared within ten days from the date of the receipt of the said letter, the said 47 coils would be sold by public auction. If the cargo was manifested and not 17 excess landed the suit ought to have been directed against the person who is named in the manifest and not the second defendants. Further the second defendant took steps to clear the 47 coils by giving the offer to the first defendants and the first defendant has accepted the offer of second defendants and also taken steps to clear the goods. On account of the action of the plaintiff, the sale is not finalised otherwise this situation would not have arisen. There was no occassion to sell the said goods in auction sale. If the plaintiff had disclosed the name of importer of said 47 coils, these defendants would have taken appropriate steps in the matter and would have informed the importer to clear his consignment from plaintiffs but the plaintiffs have failed to give the name of importer of the consignment and for the said reason this situation has arisen and not because of any fault on the part of these defendants. The plaintiffs have dragged these defendants in these 18 proceedings and are raising a claim against them which is illegal, bad in law and is Time barred.

17. The second defendants have denied their liability on the ground that they are agents of the vessel on which the cargo was loaded. They have nothing to do with the cargo. Consequently it cannot be stated that the second defendants are liable to pay the port trust charges. This plea is raised in para 15 of the written statement by contending that the second defendant could not have taken delivery of the said consignments.

18. After the pleadings were complete, this Court passed the following order framing issues:- ". Heard both sides. Perused the pleadings of both parties. The following issues are framed:- 19 Whether the plaintiffs (1) prove that the first defendants are the importers/owners of the suit consignment and that the first defendants imported a consignment of 47 coils of the steel sheets in or about December 1982? (2) Whether the plaintiffs prove that the suit consignment of 47 coils of steel sheets were lying in their docks for a protracted period of time and/or that they complied with all the statutory requirements before they sold the suit consignment? (3) Whether the plaintiffs prove that from the sale of the 22 coils of steel sheets the total amount realised was Rs.11,15,271.76 and/or that there remained a deficit of Rs.80,69,254.37 as Port Trust charges in respect of the said 22 coils and/or that the alleged sale deficit became due and payable by the first defendants to the plaintiffs? (4) Whether the plaintiffs prove that from the sale of 25 coils of steel sheets the amount realised was Rs.11,67,759.60 and/or that there remained a deficit of Rs.1.05,14,623.37 as Port Trust charges in respect of the said 25 coils and/or that the alleged sale deficit became due and payable by the first 20 defendants to the plaintiffs? (5) Whether the plaintiffs prove that they are entitled to recover interest at 15% p.a. or at any other rate on the sum of Rs.1,85,83,877.74 from the first defendants from the date of the suit till payment or realisation? Whether (6) defendants prove that the suit is bad in law for nonjoinder of proper and necessary parties, the plaintiffs having failed to join or implead the importers and/or consignees and/or the consignors of the suit consignment as party defendant to the suit, the said importers and/or consignees and or consignors being proper and necessary party of the suit? Whether (7) defendants prove that the plaintiffs’ suit claim is barred by the law of limitation? Whether (8) defendants prove that the plaintiffs are guilty of gross negligence and delay in the discharging of their dues in respect of the suit consignment as statutory bailees under the provisions of Major Port Trusts Act, 1963 read with the provisions of Indian Contract Act? (9) Whether 21 defendants prove that they offered to purchase the suit consignment of 47 coils of the steel sheets because the plaintiffs had officially confirmed and certified that the said 47 coils were excess landed from the vessel S.S.ARION and lying uncleared in the plaintiffs’ Docks in which case the demurrage, if any, payable by the first defendants in respect of the said 47 coils as excess landed cargo would have been only 1/8th of the normal demurrage charges? Whether the plaintiffs (10) are entitled to any reliefs as prayed for in the plaint as against the first defendants? (11) What order and decree? Issue No.7 be decided as preliminary issue. The suit be placed for deciding preliminary issue and/or for recording of evidence after six weeks. In the meantime, parties to exchange affidavits of documents, if any, and complete inspection and discovery." 22

19. Although, this order proceeds to state that Issue No.7 be decided as preliminary issue, it appears that parties led evidence and ultimately, agreed that all issues be taken up and decided together. However, it further appears that on 27th November 2003, additional issues were framed and settled. That order reads thus:- ". Advocates for the plaintiffs, defendant No.1 and defendant No.2 are present. Defendant No.2 has filed his written statement in September 2003 and therefore, though the issues have already been framed and settled, following issues are added:- (1) Whether the plaintiffs proves that the defendant No.2 is liable to pay the deficit amount as prayed? (2) Whether the plaintiffs 23 prove that the amount as prayed is legally permissible and they can charge and claim from the defendants and particularly defendant No.2? Whether the (3) defendant No.2 proves that the consignment in question was of manifested cargo and was not excess cargo? "It appears that while framing issues earlier, this Court has directed that issue No.7 be decided as a preliminary issue. All the Advocates however, agree that since the suit is pending since 1987 all the issues should be decided simultaneously and issue No.7 need not be decided as a preliminary issue. Therefore, earlier order to that extent is modified. "Parties to file affidavit of documents and complete discovery and inspection before 18th December 2003. Plaintiffs to file affidavit of evidence before 18th 24 December 2003. S.O. 18th December

2003."

20. Plaintiffs examined one Sanjeev Kumar, their Assistant Docks Manager. His affidavit in lieu of examination in chief is marked as Exh.P-1. He deposes that in or about December 1981, the vessel "S.S.Ariom" arrived at port of Mumbai and discharged at the port the cargo intended to be landed at the Port. Import General Manifest (for short IGM) was filed on behalf of the owners of the vessel by Defendant No.2, who were agents of the owners of the said vessel. The same was filed with the Customs Department and a copy thereof was furnished to the plaintiffs. In IGM total 802 coils of steel sheets pertaining to four items in the Import General Manifest viz., 1, 3, 4 and 5 were shown as being brought for discharge at the port of Mumbai. All the 802 coils were discharged in December 1981/ January 1982. The General Landing 25 date and the last free day of the cargo of the said vessel fell on on 29th December 1981 and 1st January 1982.

21. In paras 3, 6, 7 and 9 the witness states thus:- "3. After furnishing the Import General Manifest showing that 802 coils of steel sheets were being discharged at the port, the second defendants amended the Import General Manifest with the customs authorities showing total of 755 coils against item Nos. 1, 3, 4 and 5 of the Import General Manifest. In view of the said amendment since 802 coils were discharged into the custody of the plaintiffs an outturn report was drawn by the Central Documentation office of the plaintiffs showing 755 coils as against item Nos. 1,3, 4 and 5 as manifested 26 were discharged by the said vessel and 47 coils were excess landed by the vessel because the same could not be connected to any other items of import general manifest. The second defendants by their letter dated 22nd April 1982 addressed to the Docks Manager of the plaintiffs confirmed that 47 coils were excess landed by the said vessel and that they had removed the same to Haji Bunder Dump. I produce the said letter dated 22nd April 1982." "6. By a letter dated 29th June 1982 the plaintiffs informed the second defendants that the said 47 coils were lying uncleared for over two months and they were being put up for sale and would be sold on the date mentioned therein unless the said coils were cleared on payment of charges within ten days from 27 the date of receipt of the said letter. I produce a copy of the said letter dated 29th June 1982 addressed by the plaintiffs to the second defendants." "7. M/s.Orient Transport Company acting on behalf of the first defendants as clearing agents had by their letter dated 5th April 1982 addressed to the plaintiffs applied for concessional levy of Port Trust Charges. That application was however rejected by the plaintiffs by their letter dated 13th July 1982. I say that the original letter from Orient Transport Company is misplaced. I however, produce a copy of the plaintiffs letter dated 13th July 1982 addressed to the said M/s.Orient Transport Company. A copy of the said letter was also endorsed to and served upon the second defendants." 28 "9. After the consignments were advertised for sale by a letter dated 10th July 1982, M/s.Orient Transport Company - Clearing Agents of the first defendants requested the plaintiffs to withdraw the said coils from sale. By another letter dated 10th July 1982 M/s.Orient Transport Company again requested the plaintiffs to withdraw the consignment from sale since application for remission made by them on behalf of the first defendants was pending. By a letter dated 3rd August 1982 addressed to the said M/s.Orient Transport Company the plaintiffs wrote to them that they were withdrawing the consignment from sale and that the consignment would be put up for sale on 25th August 1982. I produce the said letters dated 10th July 1982 and 28th July 1982 addressed by the said 29 M/s.Orient Transport Company to the plaintiffs and copy of letter dated 3rd August 1982 from the plaintiffs to the said M/s.Orient Transport Company."

22. The P.W.1 thereafter confirms the plaint allegations and proves documents annexed to the plaint, including the letters. The plaintiffs compilation of documents was tendered and about 13 documents have been marked as Exhibits. Reference would be made to their contents at the relevant places.

23. This witness was cross examined by firstly the defendant No.1. In the cross, the witness states thus:- "2. I have not seen the Import General Manifest No.1110 in respect of the said vessel S.S. Arion. The said 30 document is not traceable. I am deposing to the details of the Import General manifest No.1110 on the basis of out-turn report. I produce the out-turn report. The same is taken on record and marked as Exh.P-15. The shipping agents files Import General Manifest with the Customs. A copy is filed with Port Trust. The second defendant files the Import General Manifest. Original of the supplementary out-turn report was issued to the Customs and copies thereof to the shipping agents i.e. second defendants and to the Port Trust. It is not true that the contents in paragraph 2 of my affidavit are not in conformity with the out-turn report, Exh.P-15. Supplementary out-turn report was issued to finalise the out-turn of item Nos. 1, 3, 4 and 5. The supplementary out-turn report is based on the application made by the second 31 defendant to amend the report." "3. Only the name of the Consignee or Importer is shown in the Import General Manifest. I cannot say whether the name of the first defendant is not shown as Importer or consignee in the Import General Manifest in respect of any goods from this vessel. The original out-turn report is not available. Shown xerox copy of the document dated 2nd April

1982. This is a copy of the amended out-turn report. This is another out-turn report. This supplementary out-turn report was issued to show the 47 coils as excess landed from the vessel. The same is produced. The same is taken on record and marked as Exh.D-1. This was also issued to the second defendant as the agent of the vessel." 32

23. When asked as to whether the bill of entry was filed by the clearing agents or not, the witness states that the bill of entry filed by the clearing agents of the first defendants mentions the fact that first defendants are owners of the consignment of 47 coils. However, upon being questioned as to whether he has seen the bill of entry, witness states that he does not have a copy of the bill of entry nor has he personally seen the same. However, he states from the records that the clearing agent of the first defendant has filled the bill of entry under Additional Entry No.7. He denies suggestion including that bill of entry does not mention name of first defendant as owners of 47 coils. He places reliance upon a letter dated 13th July 1982.

24. Naturally the witness is asked as to whether this letter demonstrates in any manner that first defendant is owner of 47 coils and 33 witness fairly states that this letter does not say so. His attention is invited to the letter dated 5th April 1982 and 19th July 1983 and all that he states that the letter was addressed on the basis of the averments in the plaint.

25. The witness very fairly states that in the supplementary out-turn report dated 2nd April 1982, the Port Trust has certified 47 coils as excess landed from the vessel because there was no consignment of the said 47 coils. The 47 coils are not shown in the IGM after amendment. The witness states that they were included in the original IGM but not shown against any particular broker or consignee. The witness is asked about the procedure and he fairly states that if the name of the importer or consignee or the owner of the manifested goods was known to the plaintiff from the Import General Manifest, then, the 47 coils would not have been shown as excess landed goods. He also fairly states that demurrage 34 payable on excess landed cargo is 1/8th of normal demurrage. This rate is applicable only upto last date of the vessel’s out turn report. Thereafter, the normal demurrage is charged. The port trust scale of rates was produced and the said document was taken on record and marked as Exh.D-3. The letter dated 5th April 1982 was marked as D-4. Further, the letter of 2nd June 1982 was also marked as D-5. The said letter was marked because it also shown the 47 coils as excess landing from the vessel.

26. The witness admits that by letter dated 31st July 1982, the first defendant’s clearing agent requested the plaintiffs to return their file along with all relevant documents and to instruct customs authorities that the cargo is not excess but is manifested cargo. The witness states that he is not aware as to whether the plaintiffs instructed customs department accordingly or not. In para 14 of the deposition 35 he states thus:- "14. ... It is true that by the said letter second defendants requested the plaintiffs to amend the out-turn report and to submit an amended out-turn report at the earliest. The letter is taken on record and marked Exh.D-9. The amended out-turn report is not available in our records. It is true that the plaintiffs did not issue an amended out-turn report because the 47 coils was not a manifested item but the excess landed cargo from the vessel." In para 17 of the deposition, the witness states thus:- "17. (shown copy of the letter dated 6th August 1986 addressed by the Advocate for the 1st defendants to the 36 plaintiffs). The original of this letter is not found in the records of the plaintiffs. The letter is taken on record and marked "Y" for identification. The consignee or the importers of the 806 coils, shown in the Import General Manifest are M/s.Steel Authority of India in respect of Item Nos. 1 and 3 and M/s.Jain Tubes Ltd. in respect of Item Nos.4 and 5. The last day free-date for clearance of the consignment was

1.1.1982. Q: Why were the 47 coils not sold immediately after the expiry of two months from this date? A: The delay in selling of the consignments was procedure. It is not true that the delay was due to negligence on the part of the plaintiffs." 37

27. The witness has stated that the cargo was sold in two lots. First lot on 27th July 1983 and other lot on 24th October 1983. The second defendant also cross examined this witness and the cross is more or less on identical lines.

28. The first defendant examined Mr.Ashutosh Halbe as their witness. He was cross examined by the plaintiffs. The witness very clearly stated that he was never concerned with importation of goods and clearance from the customs. He also admits that he has not seen any of the records of the company before the affidavit in lieu of examination in chief was filed by him. He fairly stated that the statements therein are based upon the averments in the written statement of defendant No.1.

29. This witness also fairly states that he has never dealt with port trust in any capacity 38 and he is not aware of the practice prevalent thereat. He is not aware of the concept of out turn report. All that he states that he knows the meaning of the term "excess landed". According to him the term means, if there are no claimants for the imported material, then, the plaintiffs make out-turn report stating that the material is excess landed.

30. The first defendant also examined one Raji Vishwanathan, their Assistant Legal Manager. In paras 4 and 5 of her deposition in chief she states thus:- "4. The first defendants’ had not imported the 47 coils of defective HR Steel sheets viz., the suit consignment. The said 47 coils were not imported by the first defendants at all. The first defendants were not the owners or importers or consignees or consignors or 39 shippers of the said 47 coils. In fact, to my knowledge nobody imported only the said 47 coils." "5. In the instant case, the local agents of the ship m.v.ARION were 2nd defendants. They had filed the IGM for the said vessel with the customs authorities as well as with the plaintiffs. In the said IGM for the said vessel, the first defendant’s name was not mentioned in any capacity at all. This is because the plaintiffs did not import any cargo on the said vessel and because the first defendants were not the importers or consignees or owners of any cargo or consignment discharged in the plaintiffs docks from the said vessel. The plaintiffs are fully aware of the same." 40

31. She further states that the plaintiffs certified the cargo as excess landed and that is how the second defendants in June 1982 represented to the first defendant. On that basis, the second defendants informed first defendant that once the out-turn report and certificate shows the cargo as excess landed, then, the normal demurrage charges could not be levied. Demurrage charges would be collected at 1/8th of the normal rate. Relying upon this representation and the clarification of the plaintiffs that the first defendant showed their interest and made an offer to purchase 47 coils for a lumpsum price of Rs.2 lakhs. They paid deposit of Rs.25,000/- to second defendants as advance. Offer was made on 3rd June 1982. The offer was made by the clients of the first defendant M/s.Unique Drums and D.V.Vijay & Company. The quotation was recorded by the second defendants in their letter dated 5th June

1982. She has, therefore, stated that once there 41 was a change of stance, the agreement of the first defendant with the second defendant became null and void. The second defendant refunded the advance of Rs.25,000/-.

32. Despite this, after four years, the plaintiffs wrote two letters and demanded the sums. She states that in the light of the aforesaid and considering the fact that the goods discharged from the ship can be cleared only by the consignee/importer or the owner, the first defendant cannot be said to be liable.

33. She has been cross examined by plaintiff’s counsel and in her cross she has stuck to the stand of the first defendant that they had agreed to purchase the goods on certain terms and conditions and once the plaintiffs were claiming full demurrage, the first defendant was not interested. 42

34. Insofar as the second defendant is concerned, one Vazirani, their Director was examined. He has reiterated the stand of second defendants as reflected in their written statement.

35. It appears that his cross examination was recorded by a Commissioner duly appointed by this Court. He admitted that the IGM was filed by defendant No.2. He admits that it is the duty of the second defendants who are vessel agents to mention about the name of importer to IGM. However, he states that he is unable to answer the question as to whether the second defendants issued the Delivery orders of the coil to the first defendants.

36. This is the oral evidence. Documentary evidence, as would be relevant for the purpose of decision of the suit is (a) letter dated 22nd April 1982 (Exh.P-2) addressed by defendant No.2 43 to the Docks Manager of the plaintiffs and the notice of sale of uncleared goods/cargo, wherein particulars have been set out of the goods as IGM-Item No. and date 1110/Excess/December 1981. The number of packages are 47 coils more particularly elaborated as steel sheets. The Gazette Notification so also the Newspaper publication of the sale notice are also on record. Thereafter, a reference is made to a letter dated 13th July 1982 from plaintiffs to Orient Transport Company. It is stated in Exh.P-16 that the consignment of 47 coils has been detained. However, plaintiff’s reply to the communication of Orient Transport is that the Managing Director, Indira Docks on a careful scrutiny of the IGM and other relevant documents concluded that the cargo is not at all excess landed. Therefore, the request to charge 1/8th demurrage cannot be acceded to. The Orient Transport Company was called upon to pay full charges and effect clearance of consignment. The 44 other documents are once again the sale notice and Exh.P-9 reads thus:- . M/s.Orient Transport, Bombay. Dear Sirs, Sub: Additional entry for 47 coils ex.s.s. "Arion" IGM No.1110 of 14.9.1981 A.D.No.7. ". In view of your letter dated

31.7.1982, addressed to the Docks Manager, requesting him to return the Bill of Entry and other relevant documents, I have been directed to return the said documents on proper acknowledgement. 45 . Please collect the said documents from this office after issuing proper acknowledgement."

37. This is in response to the request of M/s.Orient Transport Company to return the documents. The documents that are produced by Defendant No.1 include the out-turn report dated 2nd April 1982, Dock Certificate dated 15th April 1982 and the correspondence between the defendant No.1 and 2 including the delivery order dated 5th June 1982 from the second defendant to the Docks Manager (D-7).

38. Wherever necessary, reference would be made to other eight documents so also their contents in detail.

39. Mr.Makhija, learned Counsel appearing for plaintiffs submits that the claim of plaintiffs arises out of the deficit/short fall of the sale 46 proceeds of the imported consignment which is uncleared. He submits that one of the consignment was cleared. There is no question of any issues being raised with regard to compliance with the procedure prescribed in law for sale/disposal of the cargo which was unclaimed. He submits that the first defendants are also liable inasmuch as they are the importers. Second defendant is vessel agent who is liable on account of the definition of the term as appearing in section 2(o). He submits that the suit is within the limitation because the claim arises out of deficit/shortfall from sale proceeds. He submits that the consignment was sold on 8th February 1984. The suit is filed on 3rd February 1987. He relied upon a decision of the Division Bench of this Court in the case of Board of Trustees of Port of Bombay Vs. M/s.Jayantilal L. Gandhi reported in A.I.R. 1979 Bombay 12 in that behalf. He submits that insofar as defendant No.2 is concerned, they are 47 liable because they are the agents of vessel. However, he invites my attention to paras 6 and 8 of the written statement and submits that the agency and bailment is admitted by defendant No.2. He submits that para 10 of the written statement would show that the case of the plaintiffs is that defendant No.2 are the agent of the vessel, they are the bailors and until they give delivery order to the consignee, they continue to remain liable for Port Trust charges. The burden is on the defendant No.2 to show that they issued delivery order. He submits that burden is not discharged inasmuch as the issues framed are clear. Mr.Makhija refers to the examination in chief of plaintiff’s witness. He refers to the cross examination by defendant No.1. He submits that nothing has been extracted by the defendant No.1. He submits that the practice of B.P.T. has been placed on record. Mr.Makhija was at pains to point out that the facts are not disputed. The consignments are not 48 manifested. In other words, the manifest consignee has not been identified. The goods have landed. In such circumstances, the liability continues. Mr.Makhija has submitted that the goods landed in December 1981. After they landed, notice of sale was issued on 13th April 1982 (P-2). There is no unreasonable, unexplained delay as alleged. He submits that the vessel agent’s letter is 22nd April 1982. He invites my attention to para 3 of the plaint and submits that the second notice of sale was deferred because of the request of agent of the vessel. He submits that transactions between defendant Nos.1 and 2 led to postponment of sale. It is submitted by Mr.Makhija that this postponment was to enable the defendant No.1 to take delivery. Delivery was not taken thereafter. Customs permission/clearance is obtained, valuation for the purposes of fixation of reserve price is taken. This process takes time. He submits that there is no question posed 49 or even a suggestion is made to the witness in his cross examination with regard to attempts made to sell the consignment earlier. Mr.Makhija submits that the liability of defendants is thus clear. The liability is continuing until the delivery order is issued. He submits that liability has to be taken over by somebody. He relied upon a decision of the Supreme Court in the case of Trustees of the Port of Madras Vs. K.P.V.Sheikh Mohd. Rowther & Co. reported in A.I.R. 1995 S.C. 1922. He submits that defendant No.2 is liable. He submits that B.P.T. is statutory bailee inasmuch as it cannot refuse to take delivery. Until delivery order is issued, property is not passed. Defendant No.1 was entitled to take delivery and taking back documents is irrelevant. It is also irrelevant as to whether there is any direct representation to defendant No.1 or not. Defendant No.1 cannot avoid the consequences. 50

40. Mr.Makhija thereafter submits that any alterations in the bill of lading or delivery order has to be proved. He submits that once compliance is made with By-laws, then, plaintiffs cannot refuse to give delivery. Then the question remains of recovery of port charges. In that behalf, he submits that defendant No.1 is liable because it approached plaintiffs claiming to be the owner. It paid customs duty and produced the Bill of lading and delivery order. Hence, it is liable. The custody is on their behalf. He has referred to section 148 of the Contract Act and 60 of Major Port Trust Act. He has also referred to definition of the term "owner" and contended that it is inclusive definition. The concept in common parlance would not be applicable. Defendant No.1 took back the documents. The documents were returned. No delivery order exists after that date. The liability, according to Mr.Makhija ceases after the delivery order is handed over. Mr.Makhija 51 has relied upon paras 9 and 10 of the plaint, particulars of claim and contended that there is no substance in the submission that the goods are worth Rs.2 lakhs and odd. In this behalf, he submits that para 23 of the written statement of defendant No.1 is relevant. He submits that the statutory charges must be commensurate with the value of the goods.

41. Insofar as defendant No.2 is concerned, Mr.Makhija’s submission is that delivery order is returned to defendant No.2 which is also liable. That apart, defendant No.2 is bailor and its liability is irrespective of delivery order. Mr.Makhija relies upon a decision of the Supreme Court in the case of Om Shankar Biyani Vs. Board of Trustees, Port of Calcutta & Ors. A.I.R. 2002 S.C. 1217.

42. On the other hand Mr.Gomes, learned Counsel for defendant No.1, apart from submitting 52 that there is unreasonable and unexplained delay of one year and eight months in the sale of consignment, submits that the IGM is filed by the Agent of the ship i.e. defendant No.2. Even the declaration is furnished by defendant No.2. He has referred to the affidavit in lieu of examination in chief of defendant No.2 and more particularly, the portion where there is a mention with regard to privity of defendant No.1. He has also relied upon paras 4 to 8 of the examination in chief. He submits that the agents have nothing to do with the consignment. That apart, five documents issued by the plaintiffs described goods as excess landed. Once this is the position, then, the Dock By-laws prescribe that instead of normal/regular rate of demurrage, concessional rate of 1/8th is applied. Para 2 of the deposition of P.W.-1 and his cross examination at para 24 and 25 is referred to by Mr.Gomes to contend that the examination in chief is liable to be ignored inasmuch as sections 53 63(5) of the Act would apply. He submits that no evidence can be given by P.W.-1. Mr.Gomes relied upon the documents produced by the defendant No.1 i.e. D-1 (remarks column), D-4, D-5, D-7, D-8 and D-19.

43. He submits that once there is no dispute that the cargo landed was in excess and defendant No.1 does not come into picture as is clear from D-11, D-20 and D-21 so also defendant No.2 has approached defendant No.1, on that basis, then, the mere offer of defendant No.1 is of no consequence. The offer is to be seen in the light of the transaction with defendant No.2. Once the port trust has changed its stand and that led to cancellation of transaction, then, defendant No.1 is not liable at all. He has relied upon section 115 of Evidence Act and submitted that plaintiffs are estopped by their conduct from claiming any reliefs in the suit. It is not open to them to urge that the goods are 54 not excess cargo. Their representation is clear. There is repeated assertion that the cargo is excess. Both defendants have acted upon the certificate of plaintiffs. He has invited my attention to Exhibits P-15 and 16 so also Exh.P-6 and cross examination of plaintiff’s witness. For all these reasons, he urges that the defendant No.1 is not owner/importer, consignee of the consignment. The liability of defendant No.1, if any, could have been only if the transaction had gone through. Once the liability is seen in this light, then, claim of plaintiff against defendant No.1 must be rejected.

44. Mr.Gomes was at pains to point out that out of 802 packs total 755 were cleared by the consignees viz., Steel Authority of India and Jain Tubes Ltd. Forty seven coils were damaged and, therefore, not cleared. Hence, there is no privity insofar as plaintiffs and defendant No.1 with regard to recovery of these charges. He 55 submits that unless the importer is known, which in this case, is the position, the cargo is not shown as excess. In other words, notification of the cargo as excess is only after the details of importer are disclosed. He submits that the evidence of defendant No.2 also is material in this regard. Hence, being not a owner, defendant No.1 is not liable. There is no case made out against defendant No.1 and the suit be dismissed.

45. Mr.Gomes relied upon the following decisions:- (a) Appeal No.606 of 1994 in Writ Petition No.1540 of 1991 (The Board of Trustees of the Port of Bombay Vs. Samrat Shipping Co.Pvt.Ltd.) (b) Parekh Shipping Corporation Versus 56 Asstt.Collector of Customs (1995 (80) E.L.T. 781 (Bom)

46. Mr.Parab appears for Defendant No.2 and submits that even defendant No.2 is not liable and the suit should be dismissed.

47. Defendant No.2 is only the loading and unloading agent. Section 2(O) would not be applicable. He has relied upon para 17 of the deposition of the plaintiffs and contended that Steel Authority of India and Jain Tubes are the owners of the cargo. Excess cargo was offered to defendant No.1 on the basis of custody of goods. He submits that liability to pay demurrage charges is that of the consignee/owners or the shipper of the goods. That apart, there is complete negligence of the plaintiff. There is an unexplained and enormous delay in sale and disposal of the goods. He relies upon para 3 of 57 the plaint and contends that delay is attributable to plaintiffs alone. Once they sell the goods belatedly, then, there cannot be any recovery from defendant No.2. Merely because of the delay, which is attributable to the plaintiffs, there is a deficit and demurrage charges are not paid. Mr.Parab has also invited my attention to the cross examination of the witness of defendant No.1 and submits that this does not carry the matter any further. He submits that witness No.2 of defendant No.1 also has no personal knowledge. He was not an employee at the time of transaction. However, it is apparent that the defendant No.1 agreed to purchase the goods on certain terms and conditions and refusal to take delivery on account of claim for full demurrage charges is by defendant No.1. He has clarified that defendant No.2’s witness is none other than T.Vazirani. The written statement has been affirmed by his brother Bipin. Therefore, nothing turns on this 58 aspect of the matter. The defendant No.2, surprisingly, relies upon the same circumstances, viz., payment of customs duty by defendant No.1 and submits that in the light of the fact that defendant No.1 approached Port Trust and a request made by them that the demurrage was demanded from it. He submits that Exhibits D-8 and D-9 would show that when demurrage charges were demanded in full, defendant No.1 refused to take delivery and sought return of documents. Mr.Parab has invited my attention to Customs Act and more particularly sections 46(1), (2) and (4) and Section 47(1) thereof.

48. Mr.Gomes sought to clarify this aspect and submits that section 46 would not apply. He submits that the bill of entry is not seen by plaintiffs and that is an admission of P.W.-1. He submits that goods were never cleared for home consumption and that is why defendant No.1 is not an "Importer" within the meaning of section 47 of 59 the Customs Act.

49. For all these reasons, according to Mr.Gomes, defendant No.2 now cannot foist any liability on defendant No.1.

50. Insofar as the position in law is concerned, the reliance by Mr.Makhija on the three Judge Bench decision of the Supreme Court in the case of Trustees of Port of Madras through its Chairman Vs. M/s.K.P.V.Sheikh Mohd. Rawther & Co., appears to be appropriate. The Supreme Court was directly dealing with a question as to whether demurrage charges, harbour duty etc. payable to the Port of Madras were to be recovered from consignee of the goods or from the steamer agent.

51. High Court’s decision has been quoted with approval. The Supreme Court also relied upon its another decision with regard to the 60 provisions of Customs Act and observed that a custodian of the imported goods being an authority created under the Statute, it would be be entitled to charge and recover demurrage for the imported goods in its custody. It can make the importer or consignee liable even for the period during which they were unable to clear the goods from the Customs area.

52. The question before the Madras High Court was who bears the liability to pay demurrage charges in relation to goods, which were in the custody of Port Trust, till they were ultimately confiscated by the Customs Department. In other words, the liability falls on whom was the issue and the same has been answered thus:- ". ...It cannot be disputed that neither the ship owner or the steamer agent whose duty it is to deliver the cargo to the consignee as per the 61 contract with the shipper, cannot lay any claim of ownership to the goods. The obligation to deliver the goods to the consignee has been taken over by the Port Trust under the provisions of the statute and the shipowner is relieved of the liability for loss or damage to the goods from the moment the goods are taken charge of by the Port Trust as per Section 39 of the Act. 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 position of the Port Trust is the same as that of a warehouse man whose responsibility to the goods is also said to be a bailee. It cannot be said that the steamer or its agents have 62 undertaken any responsibility for the custody of the goods after the transit has come to an end and after the bill of lading has been duly endorsed or a delivery order issued. By the endorsement of the bill of lading or the issue of a delivery order by the steamer agents, the property in the goods vests on such consignee or endorsee, and thus it appears to be clear that the steamer or the steamer agents are not responsible for the custody of the goods after the property in the goods passes to the consignee or endorsee till the customs authorities actually give a clearance." ". ... We are here concerned with the demurrage charges after the goods have been landed and taken charge of by the Board and after the steamer agent had endorsed the bill of lading or issued a 63 delivery order for effecting delivery to the consignee that is after the property in the goods had passed to him. ...."

53. The question before the Court is not only the liability of the defendant No.2 but that of defendant No.1 as well. The argument is that defendant No.2 may claim to be agent of the vessel but they are liable in terms of the definition of the term "owner" in Major Port Trust Act.

54. This Court had an occasion to go into this issue in several matters. Mr.Makhija invites my attention to a decision of learned Single Judge of this Court (Sathe, J) in the case of Board of Trustees of the Port of Bombay Vs. M/s.Durable Steel Products & Anr., Suit No.2026 of 1981 decided on 18th December 2003 and another decision of a learned Single Judge of this Court (R.S.Mohite, J) in the case of Forbes Forbes 64 Campbell & Co. Ltd. Vs. Board of Trustees of the Port of Bombay and Anr., in Writ Petition No.1732 of 1990 decided on 16th December 2005. Both these decisions deal with this aspect in some details. Mohite, J. was concerned with a question as to whether the judgement and decree in a suit, filed by the plaintiffs before him against defendant No.2 before the Trial Court, has been rightly rendered or not. The facts in that case were that defendant No.1 in that suit was the consignee of seven cartons of ball-bearings which landed in the Port of Bombay by a vessel. The last free date for clearance was stipulated. The vessel was owned by a foreign company. The vessel agent was defendant No.2 to that suit. The goods remained uncleared for a period of over two months from the date of landing. The plaintiff was then unaware of the name and address of the consignee and a request was made by the plaintiffs - Port Trust to the defendant No.2 in that suit who was vessel agent 65 to furnish name and addresses of the consignee. Since, there was no reply to this letter, a notice of sale was served upon defendant No.2 in that suit. Ultimately, a notice was sent to the vessel agent calling upon him to clear the goods failing which the same would be sold by public auction. The goods were sold, the amount realised was insufficient to match the demand. Since there was short fall, the suit was filed in the Court of Small Causes against the consignee as also vessel agent. The suit was not contested by the consignee but by the vessel agent alone who filed written statement denying the liability but a decree was claimed on the basis of the liability under the extended/inclusive definition. After conclusion of the trial, the trial court dismissed the suit but upon appeal by the Port Trust, the Appellate Bench allowed and decreed the suit. The original defendant No.2/vessel agent filed a writ petition under Article 227 of the Constitution of India and 66 after noticing the argument on behalf of the vessel agent in para 6 of the judgement, brother Mohite, J. referred to the earlier judgement rendered by brother Sathe, J and observed thus:- "7. On behalf of the original plaintiff, it was contended that the issue raised by defendant No.2 was no longer resintegra as by a judgement and order dated 18.12.2003, passed by the Single Judge of this Court (S.R.Sathe, J) in Suit No.2026 of 1981, it had been categorically held that Steamer agents (such as the present defendant No.2) were owners within the meaning of Section Judge in that case was considering a fact situation where a steamer agent had not issued any delivery order and it was held by the Single Judge that such a steamer agent could be said to be an agent with "custody" in respect of the goods prior 67 to the issuance of a delivery order. It was also held by the Single Judge that the steamer agent in that case was liable to pay demurrage charges. It is admitted before me that this issue is decided by this Court by the aforesaid judgement and order dated 18/12/2003. It was however, sought to be argued that the Single Judge delivered the said judgement without considering the scheme of the Major Port Trusts Act, 1963 and without referring to the relevant judgements of the Apex Court which governed the issue. Therefore, an attempt was made to persuade me to refer the matter to the larger bench if I disagreed with the judgement of the Single Judge.

8. After hearing both the sides, I am in respectful agreement with the view taken by the Single Judge of this Court 68 in Suit No.2026 of 1981. However, I propose to briefly outline in some detail, the reason as to why I choose to accept the view taken by the Single Judge and differ with the view taken by the Single Judge of Calcutta High Court in the case of M/s.Seahorse Shipping and Shipmanagement Pvt.Ltd. and Anr. Vs. The Board of Trustees for the Port of Calcutta (cited supra).

9. The definition of the term "owner" as contained in Section 2(o) of the Major Port Trusts Act, 1963 is in the following terms:- "2(o):- "owner" (i) in relation to goods, includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods; and (ii) in relation to any vessel or any aircraft making use of any port, includes any part owner, charterer, consignee, or mortgagee in possession thereof". 69 " It can be seen from the aforesaid definition that the definition is inclusive and includes any consignor or consignee, shipper or agent for the sale, custody, loading or unloading of such goods. From the above, it is clear that an agent for the sale, custody, loading or unloading of goods is a category by itself. The definition does not specify that the agent must be of a particular category of principal. Though a carrier would clearly be an agent of the shipper who has caused the goods to be shipped. Any agent who possessed the custody of the goods at any point of time or an agent appointed for loading or unloading of such goods would also fall within the term "owner" within the definition of the term under the Act. A Single Judge of this Court in the judgement cited supra 70 has held that steamer agent was a person who had the custody of goods and was therefore, an agent of the custody of the goods. On this reasoning the steamer agent was held liable to pay demurrage charges which were due to the port trust.

10. On a bare reading of the definition of the word "owner", it is clear that the term has a very wide import and is not restricted to person who had title over the goods in question. This can be inferred from the fact that agents who have mere custody are included in the term "owner" as are also agents appointed for loading or unloading the goods."

55. In para 11 of the said decision, brother Mohite, J. distinguished the judgement of Single Judge of Calcutta High Court and in paras 12 to 71 14 has observed thus:- "12. Once it is held that steamer would fall within the word "owner" under Section 2(o) of the Major Port Trusts Act, it is clear that on the landing of the goods, on the request made by him the Port Trust can take charge of the goods for the purpose of performing various statutory services. Under section 42(2), while taking such charge, the Port Trust is obliged to give a receipt, indicating the receipt of such goods, in the prescribed proforma and after such goods have been taken charge of and receipt given for them, no liability for any loss or damage can attach to any person to whom such a receipt has been given. Section 61 and 62 of the said Act then empower the board of the Port Trust to sell the goods in the two different 72 situations contemplated by the said sections. For example if the rates payable to the Board or any other charges, rent or any amount contemplated under section 61 is not paid then, after the expiry of two months from the time the goods have passed into its custody and in certain other situations contemplated by Section 61 goods can be sold for recovery of the due amount. Similarly, under section 62 if the goods placed in the custody of the Board are not removed by the owner or other person entitled thereto from the premises of the Board, within one month from the date on which such goods were placed in their custody, the goods in question can be sold after giving notice to the owner or person entitled to remove the same and if a default is committed by not removing the said goods. It is pertinent to note 73 that under section 62 of the said Act, notice is also required to be served upon the owner of the vessel. Then again under section 63 of the said Act, any amount in respect of which a ship owner has a lien under Section 60 of the Act is first required to be paid even before the dues of the port trust.

13. It is very clear from the aforesaid scheme that on the delivery of goods by the steamer agent to the port trust and on the issuance of a receipt under Section 42(2) of the Major Port Trust Act, 1963 the contract of bailment comes into existence under Section 148 of the Indian Contract Act, 1872. Under section 158 of the Indian Contract Act, 1872 the bailor is duty bound to repay to the bailee the necessary expenses incurred by him for the purpose of the 74 bailment. These expenses are inter alia in the nature of wharfage, or demurrage charges. In my view, it is only the steamer agent acting on behalf of the carrier who puts the goods into the custody of the Port Trust. It is the possession of such goods in their custody that gives rise to port charges. The goods in question remained in control of the steamer as the consignee or his endorsee cannot take away the said goods unless the steamer agent gives a delivery note or an endorsement on the bill of lading permitting the giving of delivery to the consignee or his endorsee. There appears to be no provision prohibiting a steamer agent from asking for the goods back at any point of time by surrendering the delivery note, subject to payment of all charges due to the port trust and other statutory authorities. 75

14. Both the parties have relied upon the judgement of the Apex Court in the case of Trustees of the Port of Madras through its Chairman Vs. M/s.K.P.V. Sheikh Mohd. Rowther & Co. Pvt.Ltd. and another (cited supra). On perusal of the facts of that case, it is clear that the present case can be distinguished on facts. In the case before the Apex Court, the steamer agent had in fact issued a delivery order and in such circumstances, the Apex Court held that once the goods were handed over to the Port Trust by the steamer agent and the steamer agent had duly endorsed the bill of lading or issued the delivery order, their obligation to deliver the goods personally to the owner or the endorsee came to an end. The subsequent detention of the goods by the Port Trust as a 76 result of the intervention by the customs authorities could not be said to be on behalf of or for the benefit of the steamer agents. In our case, the consignee failed to turn up. There was no delivery order issued by the steamer agents. Mr.Makhija fairly concedes that if it is proved that a steamer agent had duly endorsed the bill of lading for delivery or issued a delivery order, then from the date of such endorsement or issuance of the delivery order, port charges would not accrue against the steamer agent. Similarly, if in pursuance of any notice or otherwise, goods in question are removed by the steamer agent, after clearing all the dues and after obtaining clearance as required by law, then, the steamer agent would thereafter not be liable to pay the charges to the port trust. It is clear 77 therefore that the steamer agent who has given delivery of goods to the port trust can take back the goods at any time after paying all the dues and obtaining all necessary clearances and thus, minimise the loss which may be caused by the long warehousing of the goods."

56. Going by this reasoning and applying it to the facts of the present case what emerges is that the goods admittedly landed. The goods were not cleared and the same were put up for sale. Upon the sale concluding, the suit came to be filed for recovery of deficit amount in respect of port trust charges. Defendant No.2 before me are sued as shipping agents and the averment in the plaint is that they are also importers/owners of the consignment within the meaning of the definition "owner" in the Major Port Trust Act,

1963. 78

57. It is not possible to agree with Mr.Parab that the suit must be dismissed as against the defendant No.2. The burden, in the light of the law laid down by this Court consistently is on defendant No.2 to show that delivery order is issued. Delivery order authorises holder of bill of lading to take delivery. Defendant No.2 remains liable in terms of the Port Trust circulars. The circulars have also been referred to. If the arguments of Mr.Parab are considered in their entirety, it is clear that they proceed on the basis that defendant No.2 is the loading and unloading agent. The owner of the cargo is a different entity. If the cargo was excess landed and on that basis an offer was made to defendant No.1 by defendant No.2, does not mean that liability to pay port trust charges is accepted by defendant No.2. However, at the same time, plaintiffs are accused of negligence and delay in disposal of the goods. The defendant No.2 cannot raise a plea such as this when they do not accept 79 the liability to pay port trust charges. Therefore, implicit in this argument is the admission of liability to pay the port trust charges. That there was negligence and unexplained delay in disposal/sale of the goods is not proved by the defendant No.2. The evidence that is led on their behalf is not at all convincing and enough to prove this aspect. Much was made of the fact that the status of the cargo was changed from excess landed to manifested. However, there is no substance in the same. In para 4 of the written statement, the plea of negligence has been raised so also that of delay by the defendant No.2. However, para 5 of the plaint refers to the out-turn report dated 2nd April 1982 whereunder it was certified officially by the Trust that 47 coils of defective H.R.steel were excess landed from the said vessel. The defendant No.2 does not deny that they were steamer agent/local agents of the vessel. Their case is that if the cargo was 80 excess landed how the plaintiffs are claiming the dues from defendant No.2 and more particularly when they are not disclosing name of importers. However, that M/s.Steel Authority of India and Jain Tubes are owners of the cargo is the case set up by defendant No.2.

58. The entire case set up is that with regard to the excess landed cargo, Normal demurrage charges are not payable. It is in such circumstances that the defendant No.2 offered these coils for sale to defendant No.1. The advance amount was collected and a request was made by defendant No.2 to withdraw the cargo which is excess from the sale. It is in such circumstances that delivery order dated 5th June 1982 came to be issued by defendant No.2. The stand of plaintiffs changed thereafter, is the allegation and the plaintiffs refused to deliver the coils as excess landed cargo by accepting 1/8th demurrage charges. It is their allegation 81 that the plaintiffs demanded full demurrage charges. If the cargo was not excess landed but manifested, then, full demurrage charges were payable, but otherwise not is the case.

59. In my view, whether the cargo was excess landed or manifested is a matter which need not detain me as far as liability of defendant No.2. Assuming that the cargo was excess landed, the question is whether the liability of defendant No.2 as "owner" under the Major Port Trust Act can be enforced or not. Merely because plaintiffs changed their stand, does not mean that the liability of defendant No.2 ceases. The deficit charges are claimed by the plaintiffs on the basis that the consignment was sold in lots. All the 47 coils have been sold. Therefore the port trust charges are due and payable by defendant No.2.

60. I hold that defendant No.2 is liable to 82 pay port trust charges as claimed.

61. For this conclusion, I rely upon the deposition of the Assistant Docks Manager, who has proved the documents and figures from the Account statement as well. The Port Trust charges have been crystalised by him. The said witness has been cross examined by the defendant No.1. Insofar as defendant No.2 concerned, the cross examination is limited to some general questions and procedural aspects. Consignees’ name was sought from this witness and he answered that the consignee insofar as Item Nos. 1 and 3 of the IGM is Steel Authority of India. In respect of Item Nos. 4 and 5 consignee was Jain Tubes Ltd. A suggestion was put to the witness that the consignees did not clear the consignment. That was answered in the negative by pointing out that they cleared only 755 coils and 47 coils remained uncleared. The witness admits that these 47 coils could not be connected 83 to any other items in the IGM and excess cargo being landed. The witness very fairly stated that the reason for not filing IGM against these two consignments was that defendant No.2 subsequently amended quantity in Manifest Nos. 1, 3, 4 and 5 and reduced it from 802 coils to 755 coils. Once this was done, defendant No.2 becomes "owner" of the 47 coils was the reply of witness. Attention of the witness was invited to para 4 of the cross examination and other documents such as letters/application No.10th July 1982 etc.

62. The entire question is as to whether defendant No.2 is liable or not. Barring a suggestion that suit claim is false as far as defendant No.2 is concerned, there is nothing in the cross examination of this witness. It is rather surprising that the defendant No.2 stepped into the box through its Director and reiterated the case in the written statement. However, in 84 the cross examination of defendant No.2’s witness he admitted that he filed IGM with the plaintiffs. The answers to questions 5, 6, 7 and 8 would go to show that the liability was known and more or less admitted.

63. Thus, the specific case of the plaintiff has not been controverted insofar as the defendant No.2 is concerned. In such circumstances, it will not be proper to disallow the claim against the defendant No.2.

64. The cross examination of witness of plaintiffs by defendant No.1 would also be a pointer towards this aspect, inasmuch as, the cross examination proceeds on the basis that defendant No.2 offered the excess cargo to the clearing agent of the first defendant. In the cross examination by defendant No.1 in para 14, the witness states that the second defendant requested the plaintiffs to amend the out-turn 85 report and submit the amended report at the earliest. That was a letter of second defendant dated 2nd August 1982. This letter is exhibited as Exh.D-9. The witness admits that the plaintiffs did not issue amended out-turn report because 47 coils were not manifested item but excess landed cargo from the vessel. The cargo became excess because of customs amendment to Items 1, 3, 4 and 5 in IGM, according to the witness. However, the admission that no letters like Exh.P-3 and P-7 were addressed to defendant No.1 is an indication that defendant No.1 also suggests to the witness that liability in respect of port trust charges is only that of defendant No.2. Further, negligence and delay in selling the cargo is an issue which is raised during the cross examination of witness of plaintiffs by defendant No.1. This is certainly an attempt to show that the liability would be that of defendant No.2. 86

65. In view of the above, insofar as defendant No.2 is concerned, it can be concluded that they are liable.

66. Insofar as defendant No.1 is concerned, the argument is that the liability to pay the charges has to be taken over by somebody. The port trust is a bailee. In fact, the argument is that port trust is a statutory bailee. It cannot refuse to give delivery. Until delivery order is given title in the property is not passed. There is an entitlement to take delivery. Merely because the documents are taken back is irrelevant. Defendant No.1 in this case has not taken a direct route of approaching port trust but that is hardly material. It has taken route of approaching B.P.T. through defendant No.2. In such circumstances, there is no question of any estoppel. That is not an argument open for defendant No.1 either. One who takes an indirect route must bear the consequences. The sale is 87 postponed at the instance of defendant No.1. They had intimated that they were interested in the cargo which was lying at the Port. The custody of the port trust is on their behalf, atleast after the request was made to postpone the sale. Defendant No.1 approached Trust, claiming to be "owner". They paid customs duty. They produced bill of lading and delivery order. Hence, they are liable. My attention is invited to section 148 of the Contract Act and section 60 of the Major Port Trust Act. My attention is also invited to the definition of the term "owner". In such circumstances the liability ceases only after the delivery order. The sale was postponed to enable defendant No.1 to take delivery. They held out before customs that they are "owners". In such circumstances, it is their liability to pay the port trust charges till the date of delivery order, along with that of defendant No.2. 88

67. The stand of defendant No.1 is that it evinced some interest in the goods. Once it showed some interest does not mean that it is liable. Defendant No.1 has merely quoted or offered to buy the goods/cargo. It was on the basis of the representation of the port trust. Once the port trust changes its stand, the transaction got cancelled and, therefore, port trust cannot contend that the liability of paying its charges is of Defendant No.1.

68. There is no Privity of Contract is the argument. Defendant No.1 is neither "owner" nor it fits in any other definition of the Major Port Trust Act. Therefore, as against defendant No.1 suit must be dismissed.

69. In this behalf my attention is invited to section 172 of the Indian Contract Act. It is contended that the consignments were not booked by the defendant No.1. It is only when defendant 89 No.2 addressed a letter that the defendant No.1 came into picture. The payment is also towards customs duty and which payment/amount is now refunded.

70. In such circumstances, the liability is not that of defendant No.1. It is also contended that the plaintiffs cannot as a "Wharfinger" make any claim against defendant No.1. In identical situation, the claims have been rejected on the basis of lien contemplated under the Contract Act.

71. I have considered these contentions. The plaintiffs case in sofar as first defendant is concerned is based upon the communication with the clearing agent M/s.Orient Transport Company. It is stated that this Company was the clearing agent of the defendant No.1. It is pertinent to note that when the communication dated 5th April 1982 is referred to by P.W.1, at the same time, 90 he also refers to a letter dated 13th July 1982, by which the request of Clearing Agent of first defendant is rejected. In fairness, it must be stated that the original letter of the Clearing Agent (dated 5th April 1982) is misplaced. Then, there is a reference to the communication of 10th July 1982 and 20th July 1982 from Orient Transport Company, requesting plaintiffs to withdraw the consignment from sale. These letters are produced. However, it is common ground that on 31st July 1982, the request came for return of bill of entry and that was complied with inasmuch as the bill of entry in respect of 47 coils came to be returned to M/s.Orient Transport company.

72. In the cross examination of the witness examined by the plaintiffs, it has been fairly conceded that the IGM has not been seen. It has also been fairly conceded that only the name of consignee or importer is shown in IGM. To a 91 suggestion as to whether name of defendant No.1 appears in the IGM, the answer is that the name is not shown as importer or consignee. The letter dated 5th April 1982 is not traceable. In para 4 of the cross examination, the P.W.1 states thus:- "I say that Defendant No.1 are the owners of 47 coils, on the basis of the application made by their clearing agents M/s.Orient Transport Company."

73. The next question pertains to the bill of entry. P.W.-1 says that bill of entry shows the name of Defendant No.1 as owners of the consignment of 47 coils. However, it is admitted that neither bill of entry nor a copy thereof is available with the plaintiffs. P.W.-1 has not seen the bill of entry. However, he speaks from the records and states that defendant No.1 had filed it under additional entry No.7 and they had 92 approached the Trust for clearance of cargo. Bill of entry is once again referred to and the witness says that he speaks about the contents of the bill of entry on the basis of letter dated 13th July 1982.

74. I will come to the documents little later. However, the witness admits that the letter has not mentioned the name of defendant No.1 as owners. He is unable to substantiate the contents of paras 5 and 7 of the affidavit in lieu of examination in chief. He is also not sure as to whether the letter dated 14th July 1983 refers to the above aspect. Even that letter is untraceable in the records of plaintiffs. Thus, the averments in the plaint on the basis of which the affidavit in lieu of examination in chief was tendered are not substantiated. The cross examination and more particularly paras 4 and 5 thereof would go to show that the plaintiffs are unable to prove the 93 claim against defendant No.1. Merely because they requested that the bill of entry and other documents be returned, does not mean that that the plaintiffs have proved their case that defendant No.1 is the owner of the consignment. When the attention of the witness was invited to Exh.P-3 and P-7, he admitted that no such letters were sent to first defendants. He denies a suggestion that such letters were not sent because defendant No.1 were not the owners.

75. Now, the documents which are material insofar as the plea raised against the defendant No.1. M/s.Orient Transport Company has addressed a letter on 10th July 1982, requesting the plaintiffs to withdraw the consignment from sale on the basis that they have been duty paid. The reply thereto is that the cargo is not excess landed and, therefore, 1/8th demurrage cannot be charged and full demurrage charges will have to be paid. The letter of 20th July 1982 (Exh.P-17) 94 is also requesting withdrawal of the consignment. The request to return the bill of entry is complied with vide Exh.P-9.

76. In my view, the plaintiffs cannot be allowed to alter their stand that the goods in question are not excess cargo, after a clear assertion on the said lines in their correspondence. That is a stand is taken with a view to claim the charges pertaining to the said consignment from both defendants. However, that cannot be countenanced when all through out the cargo has been referred to as excess. The letter dated 31st July 1982 (Exh.D-10) addressed to the plaintiffs by the clearing agents of defendant No.1 reads thus:- " Ref: Letter No.ID/5-57/12382 of 82/83 dated 13/7.82 Sub: A/e of 47 coils of H.R. Coils. ". With reference to the above letter which already states that the 95 cargo offered by the steamer company to our client M/s.Britannia Industries Ltd. is not an excess cargo, but it is a manifested cargo. ". Under the circumstances we request you to kindly return our file along with our all relevant documents and instruct the custom authority to state that the cargo is not an excess landed, but it is an manifested cargo." It is in such circumstances that defendant No.1 through their Advocate replied to the notice claiming the amount in the present suit by contending that they have nothing to do with the cargo either as consignees, agents or carriers or agent of carriers. The said stand is consistent with Exh.D-4 which is a letter dated June 3, 1982 addressed by the defendant No.1 to defendant No.2. The transaction was between defendant No.2 96 and defendant No.1. The agreement between the parties was that Port Trust Charges, customs duty and penalties would be paid by defendant No.1. The letter dated 5th June 1982 Exh.D-6 is also addressed by defendant No.2 to the plaintiffs on behalf of defendant No.1 but not on the basis that they have accepted all liabilities. That being the case, there was no question of further correspondence being carried out on the subject of the cargo being excess landed or not with defendant No.2. It is after the correspondence ending at Exh.D-9 dated 2nd August 1982 that defendant No.2 returned the cheque of Rs.25,000/- deposited with them by defendant No.1 as advance.

77. Defendant No.1 has filed an affidavit in lieu of examination in chief of Mr.Ashutosh Halbe and asserting that they were neither owners or importers or consignees or shippers of 47 coils. The entire procedure is set out including the representation by the defendant No.2. In paras 97 11 to 13 of the affidavit in lieu of examination in chief the fact with regard to refund of advance amount, demand of plaintiffs after nearly four years and reply to that demand by the defendant No.1’s Advocate are extensively referred to. In para 14, it is asserted that the first defendant offered to purchase 47 coils because plaintiffs repeatedly certified them as excess landed and lying unclaimed in the docks and it is on that basis that the demurrage will be charged only at 1/8th of normal demurrage charges. However, the agreement could not be concluded and stood cancelled on account of plaintiffs sudden change of stand with regard to the cargo. Terming of the cargo as not excess landed and refusal to grant concession in Demurrage rate led to cancellation of contract. It is asserted that defendant No.1 could not have cleared the consignment and thus the claim against defendant No.1 is devoid of any merit. In sofar as, the cross examination of this 98 witness is concerned, beyond an admission that he was not personally handling the matter, nothing else is extracted. The second witness is also asserting the same position and the witness’s affidavit in lieu of examination in chief demonstrates this aspect. Insofar as cross examination is concerned, the same questions are asked. The claim is on the basis that defendant No.1 agreed to purchase the goods on certain terms and conditions and paid advance money.

78. In the above facts and circumstances, the claim of the plaintiffs stands decreed against defendant No. 2 but to the extent indicated above.

79. Issues framed above are answered as follows:- Issue No.1 Issue No.2 Negative Affirmative 99 Negative Negative Negative Does not arise Negative Affirmative Does not arise Negative As per order Affirmative Affirmative Negative Issue No.3 Issue No.4 Issue No.5 Issue No.6 Issue No.7 Issue No.8 Issue No.9 Issue No.10 Issue No.11 Additional Issue:- Issue No.1 Issue No.2 Issue No.3 In the result, there will be decree as prayed against defendant No.2. Office to draw decree accordingly.

80. At this stage the Counsel appearing for 100 defendant No.2 prays for stay of execution of the decree as against them. In the peculiar facts of this case and to enable second defendant to carry this judgement in appeal, the execution of decree is stayed for a period of sixteen (16) weeks from today. (S.C.DHARMADHIKARI, J)