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Hamilton Industries (Pvt.) Ltd. Vs. Board of Trustees of the Port of Bombay - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtMumbai High Court
Decided On
Case NumberSuit No. 930 of 1976
Judge
Reported inAIR1983Bom248; 1984(1)BomCR316
ActsBombay Port Trust Act, 1879 Sections 43B(2) and 87; Major Port Trust Act, 1963 - Sections 53 and 120
AppellantHamilton Industries (Pvt.) Ltd.
RespondentBoard of Trustees of the Port of Bombay
Appellant AdvocateA.M. Hidayatullah,;Virag V. Tulzapurkar and P.J. Shah, Advs. i/b/ Shah and Sanghavi
Respondent AdvocateJ.M. Gokoni,;B. State Bhesania, Advs.,;i/b/ Mulla and Mulla and Crigie and Blunt and Caroe
Excerpt:
a) the case dealt with the suit filed for recovery of demurrage and wharfage charges that were illegally recovered - the court ruled that the limitation would commence from the date on which the application for remission was rejected.;b) the case dealt with the discretion in remission of rates or charges under section 53 of the major port trusts act, 1963 - the court ruled that the policy or the graduated scale could not be termed as a fetter on the discretion to be exercised by the port trust authorities under section 53 of the act. - - value of the good was rs. the said good belonging to the plaintiff were detained by the customs authorities due to import trusts control formalities with regard to the acceptance of the licence. the plaintiffs by their letter dated 28th august 1974 gave.....order1. the plaintiff in this suit seek decree against the defendants fro sum of rs. 55,950/- or such other sum as this court may deem fit, together with interest on the said sum at the rate of 18 per cent per annum form the date of filing of the suit till judgment and thereafter at the rate of 6 per cent per annum till payment. the plaintiff also pray for costs of the suit.2. in their plaint, the plaintiff have stated that they were a company registered under the companies act. the defendants were a statutory body incorporated under the major port trusts act, 1963 as amended, by the major port trusts (amendment) act, 1974. the plaintiffs imported from japan rubber plasticizers under their import licence no. pl 2683652 of 23-11-1973 though their local agent messrs. r. state. kandalkar and.....
Judgment:
ORDER

1. The Plaintiff in this suit seek Decree against the Defendants fro sum of Rs. 55,950/- or such other sum as this Court may deem fit, together with interest on the said sum at the rate of 18 per cent per annum form the date of filing of the suit till judgment and thereafter at the rate of 6 per cent per annum till payment. The plaintiff also pray for costs of the suit.

2. In their plaint, the plaintiff have stated that they were a company registered under the Companies Act. The defendants were a statutory body incorporated under the Major Port Trusts Act, 1963 as amended, by the Major Port Trusts (amendment) Act, 1974. The Plaintiffs imported from Japan rubber plasticizers under their import Licence No. PL 2683652 of 23-11-1973 though their local agent Messrs. R. State. Kandalkar and Colonial. The goods, were shipped to the Plaintiff by steamer S. S. 'State of Bihar:'. The C. I. F. value of the good was Rs. 52,182.29p. The said steamer S. S. 'State of Bihar' arrived in Bombay on 16th June 1974. The date entered for Home Consumption was 26th June 1974.

3. The Plaintiff stated that according to the law and procedure in force in the Bombay customs, the Bombay Port Trust authorities would not deliver goods to a consignee unless and until all the Customs formalities were completed, the Customs duty assessed, and paid the Import Bills of entry were produced before the Bombay Port Trust authorities. The said good belonging to the plaintiff were detained by the Customs authorities due to Import Trusts Control formalities with regard to the acceptance of the Licence. In the month of August 1974, the Appraise of the Custom, Department questioned the validity of the Plaintiffs' Import Licence. The Plaintiffs by their letter dated 28th August 1974 gave the necessary information and explained in details to how the said good fell within category of rubber plasticizers. The case was then put up before the Deputy Collector of Customs. The plaintiff explained all the facts to the Deputy Collector of Customs. However, the Deputy collector by his Order No. State/10-183/74 dated 7th December 1974 levied a penalty of Rs. 21,000/- on the plaintiff.

4. Thereafter the plaintiff filed an Appeal to the Appellate Collector of Customs on or about 15th January 1975. The appellant Collector of Customs, after hearing the arties, by his Order dated 7th July 1975 held that the material imported by the plaintiff viz. Rubber Plasticizers were within the meaning of the entry in the list attached to the relative Import Licence and, therefore, allowed the Plaintiffs' said Appeal and waived, the penalty levied by the Deputy Collector of Customs.

5. Thereafter the goods were released without penalty or even a caution Memo. The plaintiff applied for and obtained from the Collector of Customs, Bombay full Detention Certificate for the period from 20-7-1974 to 19-7-1975 against the Bill of Entry bearing No. 242/206 dated 16th May 1974 for the good which had arrived by S. S. 'State of Bihar'.

6. The plaintiff submitted the relevant Bills of Entry along with the said Detention Certificate to the Bombay Port Trust authorities for calculation of the Port Trusts charge. The charge as calculated by the Bombay Port Trust authorities already included demurrage charges on the said goods instead of giving full benefit of demurrage charges under the Detention Certificate. The Bombay Port Trust authorities, however, gave a concession of only about rupees. 8000/- and demanded a sum of Rupees. 50,004-70P. as demurrage charges. Under these circumstance, the plaintiff were compelled to pay the said charges vide Bombay Port Trust Dock's receipts for 50,004-70P. dated 25th August 1975.

7. Being aggrieved by the levy of the demurrage charges, the plaintiff filed an Appeal of the Chairman of the Bombay Port Trust in the moth of October 1975. The Chairman by his letter dated 13th January 1976 rejected the Plaintiff's Appeal for the refund of the said illegal demurrage charges.

8. The Plaintiff stated, that the consignment consisted of goods liable to duty under Section 20 of the Customs Act as it was in force at the relevant period. The Plaintiffs stated that the said consignment was detained by the Customs Department due to the operation of the Import Trade Control procedure. The period of such detention was not attributable to any fault or negligence on the part of the Plaintiffs. The Defendants were, therefore, not justified in charging demurrage charges from the Plaintiffs for the period of such detention. The Defendants had wrongfully demanded from the Plaintiff's demurrage charges in respect of such periods and wrongfully recovered from the plaintiff the said sum of Rs. 50,004-70P. on 25th August 1975.

9. The Plaintiffs stated that in demanding and recovering such demurrage charge, the Defendants had take advantage of their own wrong and so had, failed to discharge the statutory duty imposed upon them by the said Act and had acted wrongfully and unjustifiably and contrary to the provisions of the said Act. The Plaintiff submitted, that the Defendants were bound and liable to pay to the Plaintiff the said sum of Rs. 50,004-70P. Which the Plaintiffs were compelled to deposit with the Defendants in order to take delivery of the said consignment containing the goods which and arrived, the per vessel S. S. 'State of Bihar'.

10. By their Advocate's letter dated 12th March 1976 the Plaintiffs served a statutory notice on the Defendants of their intention to file a suit. The Defendants had acknowledged receipt thereof, but did not care to reply to the same. The Plaintiffs, therefore, filed the present suit with the prayers as aforesaid.

11. The Defendants in their written statement have firstly submitted that the suit was barred by limitation under Section 87 of the Bombay Port Trust Act, 1879 and/or Section 120 of the Major Port Trusts Act, 1963 as amended by the Major Port Trusts (Amendment) Act, 1974.

12. The Defendants stated that no responsibility attached to the Defendants in respect of the goods in question after 7 days of the landing of the said goods in charge of the Defendants, by reason of the provisions of Section 61A (2) of the Bombay Port Trust Act, 1897 and/or by reason of the provisions of Section 4 of the Regulation dated 1st February 1975, viz. the Port of Bombay (Responsibility for Goods) Regulation made by the Central Government in exercise of the power conferred by Section 126 read with Section 42 and 43 of the said Act. The Defendants submitted that the Plaintiffs had not give a proper and valid notice setting out the cause of action in favour of the Plaintiffs in respect of the goods in the suit as required by Section 87 of the Bombay Port Trust Act, 1897 and/or Section 120 of the Major Port Trusts Act, 1963, as amended by the Major Port Trusts (Amendment) Act, 1974 (hereinafter referred to as the said Act). The Defendants stated that for the reasons aforesaid, the suit was not maintainable and was liable to be dismissed. Without prejudice to their aforesaid submission, the Defendants set out the further Written statement.

13. The Defendants states that a consignment of 46 drums said to contain 'Sorbitol' was imported by the Plaintiffs Ex. S. S. 'State of Bihar' which arrived at Bombay on 16th May 1974. The General Landing Date and the Last Free Day for the cargo of the said ship fell on 7th June 1974 and 13th June 1974 respectively. The said goods were landed at b on 13th June 1974. Messrs. R. S. Kandalkar and Co., Plaintiff Clearing Agents, noted the relative Bill of Entry with the Customs authorities as late as 26th June 11974. Delivery of the said god was not applied for by the Plaintiff until the Customs released the said goods on 19th July 1975.

14. The Defendants then stated that under the provisions of Section 61A (1) of the Bombay Port Trust Act, 1879, which were in force at the material time, the Trustees were enjoined to take into their custody the goods landed by the ships coming into the Port of Bombay. Accordingly the Trustees took charge at the said consignment when landed. The goods were stored by the Defendants in the Docks pending delivery thereof and the owners were expected to take delivery from the Defendants on companies of the Customs formalities within seven days of their landing. The Defendants could not deliver the consignment to the owner thereof until the consignment was placed out of Customs charge. The goods landed in the custody of the Defendants, however, remained in the Docks at the risk and expense of the owners of the goods if they were to removed from the premises of the Defendants within Seven clear days of the landing thereof by the ship,. The consignment in Suit was not cleared and removed by the Plaintiffs from the premises of the Defendants within seven clear. days from the landing thereof and under the provisions of Section 61A (2) of the Bombay Port Trust Act, the goods in the Suit remained with the Trustees at the sole risk and expense of the Plaintiffs. The Defendants stated that they were not aware of the real reasons for which the said goods were not removed by the Plaintiffs from the premises of the Defendants, except that the Defendants were subsequently informed that the goods were detained from Trade Control formalities by the Customs.

15. The Defendants, however, admitted that the consignment in Suit was detained by the Customs for Import Trade Control formalities for a period, form 20th July 1974 to 19th July 1975. The Defendants admitted that the Collector of Customs, Bombay , issued the Detention Certificate (copy of which was annexed as Ex. 'A' to the Plaint) for the period from 20th July 1941 1975, endorsed on the Bill of Entry as referred to by the Plaintiffs.

16. The Defendants stated that in view of the Detention Certificate and as resolved, by the Trustees, the Plaintiffs were allowed remission in the demurrage charge on a graduated scale limited to 150 days from the Last Free Day of the ship's cargo i. e. up to 10th November 1974. Under the relevant Resolution of the Defendants' predecessors on the subject, 1/6th only of the demurrage rate was leviable for the first two month after the landing of the consignment from the Last Free Day of the ship's cargo. Thereafter 1/3rd demurrage was charged for the next one month, thereafter 1/2 demurrage was leviable for further one month and 2/3rd demurrage of the remaining period up to an aggregate of 150 days. Thereafter full demurrage charge were levied. In respect of the consignment in Suit since the detention period started after 36 days from the Last Free Day of ship's cargo, demurrage at 1/6th of the full rate was charge for the nest 24th days and thereafter charges at the graduated scale aforesaid were levied up to 150 days from the Last Free Day. Thereafter full rate of demurrage because chargeable. The Defendants stated that the Plaintiff were not entitled to full remission of demurrage charge despite the said Detention Certificate. The remission due to the plaintiff was duly granted to them in respect of the said consignment and a sum of Rs. 50,004-70P. remained to be paid by the Plaintiffs. The said sum of Rs. 50,004-70P. was due for the wharfage charges of Rs. 128-50, and demurrage charges Rs. 49,874-20P. which remained due and payable by the Plaintiffs. The Plaintiffs' Clearing Agents, after availing of the said remission on the graduated scale, paid the said charges of Rs. 50,004-P. due on the said consignment on 23rd August 1975 and cleared 42 drums on 25th August 1975 and 4 drums on 1st September 1975, the latter on payment of further charges of Rs. 131-27 P. due thereon. The said charges were levied according to the scale in force and the Defendants in the discretion conferred on them under Section 52 of the said Act (corresponding to Section 43B (2) of the Bombay Port Trust Act, 1879) allowed the said remission in demurrage charges according to the graduated scale aforesaid and the charges due were duty paid by Plaintiffs..

17. The Defendants then stated that there was no cause for the Plaintiff being aggrieved on account of the levy of the said charge and the same were levied according to law. The Defendants stated that the Plaintiffs appealed to the Chairman of the Bombay Port Trust in October 1975. the Chairman of the Bombay Port Trust by his letter dated 13th January 1976 rightly and justifiably rejected the said appeal for the refund of demurrage charges. The Defendants denied that the demurrage charges required by the Defendants to be paid were illegally recovered or were illegal charges, as alleged.

18. The Defendants did not admit that the period of detention of the said goods by the Customs Authorities was not attributable to any default or negligence on the part of the Plaintiffs. The Defendants ants stated, without prejudice, that the period of detention on account of Trade Control formalities was duly taken into account by the Defendants, and in exercise of the powers vested in the Defendants under Section 53 of the said Act, the Defendants granted remission as aforesaid on a graduated, scale as resolved upon by them. The Defendants denied, that they were not justified in taking demurrage charges from the Plaintiffs form the period of detention for Trade Control formalities. The Defendants denied that they wrongfully demanded from the Plaintiffs demurrage charges in respect of the period of detention for Trade Control purpose and wrongfully recovered a sum of Rs. 50,004-P. from the Plaintiffs on 25th August 1975.

19. The Defendants denied that in demanding and recovering the demurrage charges, the Defendants had taken advantage of their own wrong or had failed to discharged the statutory duty alleged to be imposed upon them by the said Act. The Defendants stated that the Plaintiffs had not given any particulars of the wrong alleged to have been done by the Defendants or the advantage of their own wrong vaguely alleged to have been taken by the Defendants. The Defendants stated that the Plaintiffs had also not given or pointed out any or the provisions of the said Act which imposed a statutory duty upon the Defendants not to charge demurrage when the goods were detained, for the Trade Control Regulation. The Defendants stated that the allegation made by the Plaintiffs were vague and ought to be disregarded. The Defendants denied that they were bound to pay to the Plaintiffs the sum of Rs. 50,004-70P. The Defendants stated that the charges demanded by them were in accordance with law and the provisions of the Bombay Port Trust Act and of the said Act. The Defendants denied that they were bound to pay to the Plaintiffs the said sum of Rupees 50,004-P. or any other sum. The Defendants stated that there was no question of depositing the said sum purported to be wrongfully and falsely made out by the Plaintiffs. The Defendants stated that the said amount was not taken as and by way of deposit as purported to be wrongfully and falsely made out by the Plaintiffs. The Defendants denied that the Plaintiffs were compelled to deposit the said amount. The Plaintiffs were bound and liable to pay the said charges before they could take delivery of the said goods from the Defendants and the Plaintiffs clearing Agents had paid the amount to the Defendants.

20. The Defendants stated that under the provisions of the Bombay Port Trust Act and the said Act, the Scale of Rates for demurrage charges was duly prescribed under the provisions thereof and the Plaintiffs were bound and liable to pay the demurrage charges, except the amount which in the discretion of the Defendants, under the provisions of Section 53 of the said Act, the Defendants though fit to remit. The Defendants had permitted the sum of Rs. 8,352-50P. on the Scale aforesaid in their discretion to the Plaintiffs and the Plaintiffs were not entitled to claim any further remission. The Defendants stated that remission was not a matter of right in the Plaintiffs , but the remission was granted in the discretion of the Defendants which the defendants exercised according to the principles laid down by them. The Defendants denied that the Plaintiffs were entitled to the sum of Rs. 50,044-70P. or any interest thereon. The Defendants stated that suit was false and vexatious and should be dismissed with costs.

21. On the above pleadings, the following six Issues were raised:--

1. Whether the Suit is barred by limitation under Section 87 of the Bombay Port Trust Act and/or Section 120 of the Major Port Trusts Act as alleged in Paragraph 1 of the Written Statement.

2. Whether the Plaintiffs have not given a valid and proper notice to the Defendants under Section 87 of the Bombay Port Trust Act, 1879, as alleged in paragraph 3 of the Written Statement.

3. Whether the Defendants have charged demurrage and wharfage charges from the Plaintiffs in respect of the Suit consignment in accordance with the provisions of the Bombay Port Trust Act, 1879.

4. Whether the Plaintiffs are entitled to remission of the demurrage and wharfage charges completely or at all as demanded by them?

5. Whether the Defendants have illegally recovered the Bombay Port Trust charge from the Plaintiffs, as alleged? and

6. Whether the Plaintiffs are entitled to recover a sum of Rs. 50,004-70P or any other amount as alleged?

22. Neither the Plaintiffs nor the Defendants have led any evidence in this Suit. Both learned Counsel appearing in this matter have chosen to argue on the basis of the document produced.

23. Issue No. 1: On the Issue of limitation, Mr. Kokani, learned Counsel appearing on behalf of the Defendants, pointed out the provisions of Section 120 of the Major Port Trusts Act, 1963, which laid down:--

'120. No suit or other proceeding shall be commenced against a Board or any member of employee thereof fro anything done, or purporting to have been done, in pursuance of this Act until the expiration of one month after notice in writing has been given to the Board or him stating the cause of action, or after six months after the accrual of the cause of action'.

The question which, therefore, arises for decision is as to when the cause of action accrued to the Plaintiffs. According to Mr. Gokani, the cause of action accrued to the Plaintiffs on 25th August 1975 i. e. on the date on which the plaintiff were called upon to pay the sum of Rs. 50,004-70P. and the Plaintiffs ought to have filed the Suit within six months of that date i. e. by 25th February 1976. Since the suit was filed by the Plaintiffs on 28th April 1976, the Suit was beyond the period of limitation and on this ground alone, ought to be dismissed. On the analogy of Article 24 of the Schedule to the Limitation Act, Mr. Gokani argued that the cause of action accrued on the date when the money was paid by the Plaintiffs to the Bombay Port Trust authorities i. e. on 25th August 1975. Mr. Gokani relied upon the observations of the Supreme Court in the case of A. Vekata Subbarao v. The State of Andhra Pradesh, reported in : [1965]2SCR577 . It will be sufficient to recite the Head-note of this case.

'Where, therefore, the money was received as tax by the defendants-Sate from the Plaintiffs which the plaintiff was not bound in law to pay but which he was compelled or forced to pay because of the threats of apprehension of legal process: Held, notwithstanding that the receipt by the defendants purported to be for his own benefit still was money which at the very money of the receipt in justice and equity belonged to the plaintiff, rendering its receipt a receipt by the defendant to the use of the plaintiff and the suit claiming refund would be governed by Art. 62. (of the old Act)'

24. Mr. Gokani also relied upon the observation of the Supreme Court in the case of The Trustees of Port of Bombay v. The Premier Automobiles Ltd. reported in : [1974]3SCR397 , wherein their Lordship observed (at p. 941) :--

'The staring point of limitation is the accrual of the cause of action. Two components of the 'cause' are important, the date when the plaintiff came to now or ought to know with reasonable diligence that the goods had been landed from the vessel into the port. Two clear, though not conclusive indications of when the consignee ought to know are

(i) when the bulk of the goods are delivered, there being short delivery leading to a suit,

(ii) 7 days after knowledge of the landing the goods suggested in Section 61A. whichever is the later date ordinarily sets of the running of limitation.

Letter or assurances that the missing packages are being searched for cannot enlarge limitation, once the goods have landed and the owner has come to know of it. To rely on such an unstable date as the termination of the search by the bailee is, apt to make the law uncertain, the limitation liable to manipulation and abuses of other type to seep into the system.'

25. Mr. Gokani, therefore, urged that in this case the period of limitation commenced from the date on which the Plaintiffs wee compelled to pay the demurrage charges i.e on 25th August 1975. Since the Suit had not been filed within six months from that date, the Suit was barred under Section 120 of the Major Port Trusts Act, 1963.

26. Mr. Hidayatullah, learned Counsel appearing or behalf of the Plaintiffs submitted that in the instant case, the cause of action was one under Section 53 of the Major Port Trusts Act, 1963 and under Section 43B (2) of the Bombay Port Trust Act, 1879, both the sections being pari materia. Mr. Hidayatulla submitted that the Suit being on under Section 53 of the said Act, the cause of action accrued only when the Board refused to exercise its discretion to remit the whole or any part of the demurrage charge which had been paid by the Plaintiffs. Mr. Hidayatullah submitted that the Plaintiffs by their letter dated 13th October 1975 made out a special case under which the Defendants were called upon exercise their discretion under Section 53 of the said Act and to remit the whole or part of the demurrage charges which the Plaintiffs had paid to the Defendants. The Defendants by their letter dated 13th January 1976 rejected the application of the Plaintiffs for further remission. Therefore, according to Mr. Hidayatullah, the period of limitation commenced only from 13th January 1976.

27. I am of the view that there is considerable substance in Mr. Hidayatullah's could not have commenced from 25th August 1975, as urged by Mr. Gopkani, for the reason that the Plaintiffs were not aware not that day Plaintiffs were not aware on that day whether the Defendants would grant their prayer for remission or not. On that day the Defendants had not rejected the application for remission under Section 53 made by the Plaintiffs. It was only when the Plaintiffs made such an application on 13th October 1975 that the Defendants by their letter dated 13th January 1976 categorically rejected the application of the Plaintiffs. The Defendants, therefore, had refused to exercise their discretion under Section 53 only on 13th January 1976. Mr. Hidayatullah is, therefore, justified in his submission that the cause of action in this case accrued only on 13th January 1976. If that be the case, then the Suit which was filed on 4th May 1976, would be well within time. I, therefore, answer the first Issue in the negative and hold that the Suit was not barred under Section 120 of the Major Port Trusts Act, 1963 or under Section 87 of the Bombay Port Trust Act, 1879.

28. Issue No. 2 ' Issue No. 2 related to whether the plaintiff had not give a valid and proper notice to the defendants under Section 87 of the Bombay Port Trust Act. Section 87 of the Bombay Port Trust Act lays down that no suit or other proceeding shall be commenced against any person for any thing done, or purporting to have been done, in pursuance of that Act, without giving to such person one month's previous notice in writing of the intended suit or other proceeding. and of the cause thereof, nor after six months from the accrual of the cause of such suit or other proceeding. The answer to this Issue depends mainly upon the outcome of Issue No. 1 with regard to limitation. Mr. Gokani pointed out that the notice in the instant case was given by the Plaintiffs on 12th March 1976 and since according to him, the cause of action accrued on 25th August 1975, the notice was invalid, inasmuch as it was given six months after the accrual of the cause of action I have already decided, whilst considering Issue No. 1, that the cause of action in this case accrued only on 13th January 1976. I am, therefore, of the view that the notice given by the plaintiff to the defendants on 12th March 1976 is a valid and proper notice. In the result, I answer Issue No. 2 in the negative.

29. Issue Nos. 3, 4 and 5: Issue Nos. 3, 4 and 5 can be clubbed together and conveniently disposed of at this stage. Issue No. 3 is whether the defendants had charged demurrage and wharfage charges from, the plaintiff in respect of the Suit consignment in accordance with the provisions of Major Port Trusts decree, 12963, Issue No. 4 is whether the plaintiff were entitled to remission of the demurrage and wharfage charges completely or at all as demanded by them, and Issue No. 5 is whether the Defendants had illegally recovered the Bombay Port Trust charges from the Plaintiffs as alleged. With regard to Issue No.3, I may state that Mr. Hidayatullah on behalf of the Plaintiffs has not impugned the right of the Bombay Port Trust to charge demurrage and wharfage from an Importer, nor has he challenged the right of the authorities. Mr. Hidayatullah's challenge has been mainly under Section 53 of the Major Port Trusts Act, 1963. In these circumstance, Issue No. 3 will have to be answered in favour of the Defendants and in the affirmative.

30. On the 4th and the 5th Issues, Mr. Hidayatullah's contention centres round and discretion to be exercised by the Board in the matter of remission. Under Section 53 of the Major Port Trusts Act, the Board was given a discretion in special cause and for reasons to be recorded in writing, to exempt either wholly or partially any goods or vessels or class of goods or vessels from the payment of any rate of or any charge leviable in respect thereof according to any scale in force under that Act or remit the whole or any portion of such rate of charge so levied. Now, the Board had considered the case of the Plaintiffs as a special case and had granted remission to the Plaintiffs to the extent of R. 8352-50 P. However, Mr. Hidayatullah's contention is that the Board had not properly exercised that discretion and that his clients would have been entitled to a larger amount by way of remission had that discretion been exercised in accordance with the provisions of Section 53 of the Act. Mr. Hidayatulla has placed three contentions for my consideration. Firstly, he stated that Section 53 of the Major Port Trusts Act conferred a discretionary power coupled with a duty to exercise that power in individual cases and on the merits of each case. Secondly, that the Resolution of the Trustees dated 13-11-1975 constituted a self-made Rule or Policy on the discretionary power under Section 53 and thirdly that the impugned decision dated 13-11-1976 having been passed admittedly without the discretion having been exercised by merely following the Policy, was ultra vires Section 53.

31. Mr. Hidayatullah submitted that the did not impugn the scale of rates fixed under Section 42B as being unreasonable, nor did he canvass the proposition that the Port Trust could not levy any demurrage charges even when there was no default on the part of the Importer. The proposition which he canvassed was that the provisions of remission contained in Section 53 could not be rendered nugatory by a self-made Rule of Policy. Learned Counsel further submitted that on a proper construction of the Policy, it was an attempt on the part of the Board of Trustees to rigidly fetter the discretion they were bound to exercise in the facts and circumstance of a special case. According to Mr. Hidayatullah, each case had to be considered on its own merit.

32. The Policy of the Bombay Port Trust has been formulated in Resolution No. 635 of 1975 which laid down a certain scale, which the authorities applied in a special case, for the purpose of exemption or remission under Section 53 of the said Act. The scale is as follows:--

(i) at 1/6th the normal rate of demurring form the date of the expiry of the Last Free Day up the 60th days;

(ii) at 1/3rd the normal rate form the 61st day up to the 90th day;

(iii) at half the normal rate from the 91st day up to the 120th day,

(iv) at 2/3rds the normal rate from the 121st day up to the 150th day;

(v) at the full rate thereafter.

Mr. Hidayatulla's objection has been directed in respect of this graduated scale which, according to him, fettered the discretion of the authorities granted under Section 53. Mr. Hidayatulla relied upon certain authorities in support of his submission to which I shall refer presently.

33. Mr. Hidayatullah, in the fist instance relied upon a vintage decision in the case of Frederic Guklder Julius v. The Right Rev. The Lord Bishop of Oxford, reported in (1880) 5 AC 214, wherein the House of Lord was placed to observe:--

'The question has been argued and has been spoken of by some of the learned Judges in the Court below as if the words 'it shall be lawful' might have a different meaning, and might be differently interpreted in different statutes, or in different parts of the same statues. I cannot think that this is correct. The words 'it shall be lawful' are not equivocal. They are plain and unambiguous. They are words merely making that legal and possible which there would otherwise be no right or authority to do. They confer a faculty or power, and they document not of themselves do more than confer a faculty or power. But there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done. something in the conditions under which it is to be done, something in the title of the person or persons from whose benefit the powers to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so.

... ... ... ... ...

And the words 'it shall be lawful' being according to their natural meaning permissive or enabling words only, it lies upon those, as it seems to me, who contended that an obligation exists to exercise this power, to show in the circumstance of the case something which, according to the principles I have mentioned, creates this obligation'.

34. Mr. Hidayatulla next referred to a case of this Court, Herbert George Gell v. Taja Noora, reported in (1903) 5 Bom LR 133. In that case, the Commissioner of Police had directed that haiku victories had to conform to a certain model prepared by him. The Division Bench of this Court observed:--

'In this case the power given in to refuse a licence only when the Commissioner considers that the conveyance for which it is required is insufficiently found or otherwise unfit for the conveyance of the public, or that the applicant is open to certain objections. This clearly calls for the exercise of discretion in each particular case, and an exercise of the power in the fetters of self imposed rules, purporting to bind the authority in all case, would not be within the 'Act'. '

35. Mr. Hidayatullah then referred to a decision of the Supreme Court in the case of The Chief Controlling Revenue Authority v. The Maharashtra Sugar Mills Ltd., reported in AIR 1950 SC 218, wherein Their Lordships observed:--

'It does not appear, on principle, sound to hold that these difficult question should be left under the Stamp Act to the final decision of the appellant, and it the party affected by the assessment has a grievance there is no relief at all in law for him. The construction of a document is not always an easy matter and on the ground that it is substantial question of law, parties have been permitted to take the matter up to the highest Court. If so, it appears difficult to start with the assumption that because this is Revenue Act the decision of the appellant should be considered final and conclusive. The provisions of State. 56 (2) and State. 60 giving power to the Collector and the Court to send a statement of case to the appellant and the High Court respectively, in out opinion, instead of helping the appellant, go against his contention. In those who sections this power is given when the referring authority has a doubt to solve for himself. The absence of the words 'feels doubt as to the amount of duty to be paid in respect or an instrument' in State. 57 supports the view that the reference contemplated under that section is not for the benefit of the appellant only but enures also for the benefit of the party affected by the assessment. In our opinion, the power contained in State. 57 is in the nature of an obligation or is coupled with an obligation and under the circumstance can be demanded to be used also by the parties affected by the assessment of the stamp duty'.

36. Mr. Hidayatulla then referred to the decision Court of the Supreme Court in the case Commissioner of Police, Bombay v. Gorduhadas Bhanji, reported in : [1952]1SCR135 , wherein Their Lordships were pleased to observe (at pp. 20-21):--

'It is clear to us from a perusal of these rules that the only person vested with authority to grant of refuse a licence for the erection of a building to be used for purpose of public amusement is the Commissioner of Police. It is also clear that under R. 250 he has been vested with the absolute discretion at any time to cancel or suspend any licence which has been granted under the rules. But the power to do so is vested in him and not in the State Government and can only be exercised by him at his discretion. No other person or authority can do it'.

... ... .... ... ... 'We have held that the Commissioner did not in fact exercise his discretion in this case and did not cancel the licence he granted. He merely forwarded to the respondent an order of cancellation which another authority had purported to pass. It is evident from these facts that the Commissioner had before him objections which called for the exercise of the discretion regarding cancellation specifically vested in him by Rs. 250. He was therefore bound to exercise it and bring to bear no the matter his own independent and unfettered judgment and decision for himself whether to cancel the licence or reject the obligations.'

37. Finally, Mr. Hidayatulla relief upon the decision of this Court in the case of Binod Rao v. M. R. Masani, reported in : (1976)78BOMLR125 . After considering the various authorities, their Lordships laid down the following principles:--

'(1) The Court's scrutiny and review are not totally barred in a case where in exercise of statutory powers an authority is empowered to make an order in its discretion on its subjective satisfaction.

(2) An order made by an authority on its subjective satisfaction can be set aside by the Court on the following grounds:--

(a) to (e) ... ... ... ... (f) where the authority has disabled itself from applying its mind to the facts of each individual case by self-created rules of policy of in other manner. ... ... ... ... ...

38. Mr. Hidayatulla submitted that the authorities city by him supported him submission that where an authority having been granted a discretion restricted itself by self-made rules of policy, the Court would interfere in such a case to stick down that decision.

39. Now, it pertinent to state have that Mr. Hidayatulla does not impugn the scale of rates fixed by the Bombay Port Trust . Nor does he impugn the right of the authorities to levy demurrage charges even in cases where the default was not that of the imported. All that Mr.Hidayatulla challenges is the fact that the plaintiffs' case being a special case under Section 53, the Port Trust authorities had not exercised their discretion properly and that they had fettered their discretion by laying down a graduated scale of policy referred to by maintenance heretofore.

40. At this stage, it will be relevant to refer to the decision of the Supreme Court in the case of Trustees of the Port of Madras v. Aminchand pyarelal, reported in : [1976]1SCR721 , wherein the learned Judges held (at p. 1943):--

'It is the Board thus constituted that framed the State of Rates and Statement of conditions under which the services shall or may be performed by it. Every scale and every statement of conditions framed by the Board has to be submitted to the Central Government for sanction under Section 44 and it is only when it is so sanctioned that it has the force of law. The requirement of sanction by the Central Government is a restraint on unwise, excessive or arbitrary fixation Court rates. Section 44 (2) confers on the Board the power, in special case and for reasons to be recorded in writing, to remit the whole or any portion of rates or charges leviable according to any scale in favour under Section 44. Thus, the statue provides for the necessary safeguards, checks and counter-checks as an insurance against fixation and levy of harsh or unjust rates'

'Section 109 Court of the Act provides that nothing in the Act shall after any power vested in the Chief Officer of Customers under any law for the time being in force. Section 49 of the Customs Act, 1962 confers power on the Assistant Collector of Customs, if he is satisfied on the application of the importer that the goods cannot be cleared within a reasonable time, to permit that the goods may. pending clearance, be stored in a public warehouse and if such a facility is not available, then in a private warehouse. This provision together with S. 44 (2) of the Act constitutes a measure of mitigation. In fact of these considerations, it is impossible to characterise the scheme for the levy of rates as arbitrary or unreasonable.'

41. I may also point out the same graduated scale contained in the policy laid down by defendants had come up for consideration of the Supreme Court in the case of Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co. reported in : [1977]3SCR343 , and referring to that scale their Lordships were pleased to observe (para 10):--

'It is no doubt true that before clearance is given by the Import Trade Control authorities and the Customs Department the goods cannot be cleared by the respondent . Neither can the Port Trust deliver the goods without the consent of the Import Trade Control authorities. Taking into account the hardship caused to the Importer because of the delay certain concession in demurrage levy which is 1/5th of the normal rate for the date of expiry of the free days up to the 60th day, 1/3rd of the normal rate after the expiry of the 60th day, up to the 90th day, half the normal rate after the expiry of the 90th day up to the 120th day, 2/3rd of the normal rate after the expiry of the 120th day up to the 150th day and at the full rate after the expiry of the 150th day. As the scale of rates are framed by virtue of the statutory powers conferred on the Board under State. 43 and as the rates have the force of law and cannot be questioned. Taking into account the hardship to the importers certain concession has been given but the legality of the rate which are being levied according to law cannot be questioned.'

42. It is, therefore, clear that the Supreme Court found nothing wrong or restrictive about the Scale laid down in the Policy of the Port Trust. In fact, the Supreme Court approved of the scale as laid down by the Bombay Port Trust authorities. It is relevant to point out that what the Plaintiffs seeks in this suit is that the Bombay Port Trust authorities should grant them a larger amount by way of remission. As I have pointed out heretofore, the Bombay Port Trust authorities have already exercised their discretion under Section 53 of the said, Act and granted a remission of Rupees 8352-30 P. It appears that the plaintiffs are not satisfied with that amount. According to them, if the discretion granted to the authorities under S. 53 had been properly exercised, they would have been entitled to a larger amount by way of remission. Since the Supreme Court has not found anything restrictive about the graduated scale laid down in the policy. I do not think that the argument of Mr.Hidayatulla at all survives. It appears to me that the policy laid down

by the Bombay Port Trusts is proper in the circumstance of a special case, being a yard-stick to be applied in special cases under Section 53. I do not think that the policy can be considered as restricted of the discretion granted to the authorities. In these circumstance, I must reject the submission made by Mr. Hidyatulla.

43. Mr. Hidayatulla attempted to differentiate the facts in the case of Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co. : [1977]3SCR343 from the facts in the instant case by stating that the question before the Supreme Court was one of absolute liability or on liability at all, and the Supreme Court held that the importer was liable to pay demurrage even though he was not at fault for the delay. Mr. Hidayatulla pointed out that the plaintiffs had not claimed absolute exemption from liability. They case before the Supreme Court concerned Section 42B (2) of the Bombay Port Trust Act, whereas the instant case was concerned with Section 53 of the Major Port Trusts Act. Mr. Hidayatulla is right in stating that the case before the Supreme Court was one under State. 43B (2) of the Bombay Port Trust Act, whereas the instant case was u/s, 53 of the Major Port Trusts Act. However, what is to be taken into consideration is the fact that the same graduated scale or policy was considered by Supreme Court in that case and their Lordship found nothing objectionable about it. In fact the learned Judges stated that the levy could not be questioned. I administration of the view that the policy or the graduated scale cannot to be exercised by the Port Trust authorities. The policy was laid down specifically in order or enable the Port Trust authorities to deal with 'Special cases' expeditiously, falling within the ambit of Section 53 of the said Act. Indeed, if such a Policy had not been enunciated an element of discrimination might creep in and it is for this reason that a uniform policy on a graduated scale was laid down by the Port Trust authority. I have already stated that in this case the discretion under Section 53 had been exercised by the authorities. Only the plaintiffs were dissatisfied with the amounts allowed by the authorities. That is a matter of subjective satisfaction of the authorities. This Court cannot interfere with the quantum. I see nothing objectionable about the graduated scale or policy.

44. My answers to the issues are the following:--

Issue No. 1 : In the negative'

Issue No. 2 : In the negative. The notice is valid and proper.

Issue No. 3 : In the affirmative;

Issue No. 4 : In the affirmative. The plaintiffs are entitled to remission, but not as demanded by them.

Issue No. 5 : In the negative;

Issue No. 6 : In the negative.

45. In the result, the suit is dismissed with costs.

46. Suit dismissed.


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