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K.P.V. Shaik Mohammed Rowther and Company Private Limited Vs. the Trustees of the Port of Madras, Represented by the Chairman, Madras Port Trust and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai High Court
Decided On
Reported in(1992)1MLJ117
AppellantK.P.V. Shaik Mohammed Rowther and Company Private Limited
RespondentThe Trustees of the Port of Madras, Represented by the Chairman, Madras Port Trust and anr.
Cases ReferredPort of Madras v. Aminchand Pyarelat
Excerpt:
- .....arrived at madras on march 11,1967 and after the goods were manifested in the normal way, the port trust took statutory charge of the goods from the vessel on the same day, but it transpires that in or about april 11,1967 the goods were seized undersection 110 of the customs act and were removed to the confiscated goods warehouse by the customs department. the investigations by the customs department into the validity and regularity of the import took some time and in the meanwhile the harbour dues and demurrage charges with reference to the imported goods were mounting up by leaps andbounds. the port trust even in the year 1967 and before the customs could pass the usual confiscation order on their satisfaction that the import was illegal which they did on january 2, 1968, was.....
Judgment:

Ramaprasada Rao, J.

1. The 2nd Defendant in C.S.No.48 of 1970 who are the Steamer Agents of the vesselS.S. Vishva Kalyan are Appellants. The Trustees of the Port of Madras filed a suit against two defendants, the 1st being the named consignee of goods which were imported from broad and the 2nd Defendant being the Steamer Agent of t he vessel which carried such goods. The Vessel arrived at Madras on March 11,1967 and after the goods were manifested in the normal way, the Port Trust took statutory charge of the goods from the Vessel on the same day, but it transpires that in or about April 11,1967 the goods were seized underSection 110 of the Customs Act and were removed to the confiscated goods warehouse by the Customs Department. The investigations by the Customs Department into the validity and regularity of the import took some time and in the meanwhile the harbour dues and demurrage charges with reference to the imported goods were mounting up by leaps andbounds. The Port Trust even in the year 1967 and before the Customs could pass the usual confiscation Order on their satisfaction that the import was illegal which they did on January 2, 1968, was corresponding with either of the defendants or both in the matter of taking over of the goods from the Trust premises under a threat of auction of the same, if it is not so removed, under Section 56 of the Madras Port Trust Act. The plaintiffs case is that neither of the Defendants would satisfy the demands made on them for harbour dues and demurrage charges which on the date of confiscation as aforesaid to wit 2.1.1968 rose up to Rs. 63,912.58. As the amount was not paid by the defendants, they issued a suit notice on 2.3.1970 and filed the present action for the recovery of the said sum and sought for interest on the same at 6% p.a. from the date of plaint till date of payment. The 1st Defendant remained ex parte. The 2nd defendant, Steamer Agent, took up the plea that he was not responsible for the demurrage charges and the claim if any could be projected only as against the named consignee. He would also plead that in the circumstances of the case, the theory of the continuing liability of the carrier would not apply and he was not liable either in equity or otherwise for the suit claim. Various legal contentions were raised and counsel agreed that it would not be necessary for us to trace the pleadings orthodoxically as it would be seen presently, the matter is more or less covered by authority excepting on a question of fact which we addressed ourselves with reference to the documents on record to find Whether the ratio of the decision rendered by a Division Bench of this Court inK.P.V. Shaik Mohammed Rowther and Company Private Limited v. The Trustees of the Port Trust of Madras, Appeal No. 813 of 1967, would apply in all force to the facts of this case. The Learned Judge who tried the case accepted the plaintiff's claim and gave a decree both against the Consignee and as against the Steamer Agent. It is against this, the present appeal has been filed.

2. Mr. V.K.T. Chari, learned Counsel for the appellant (2nd defendant) wanted to contend that the general principle invoked by the Port Trust in similar matters claiming harbour dues and demurrage charges as against Steamer Agents is on the general assumption that the Steamer Agents' status continues as a Bailor until otherwise snapped by an endorsement on the Bill of Lading made by the Steamer Agents or a specific Delivery Order given to the consignee or the endorsee enabling them to take delivery of the goods directly from the Port Trust.

3. In the view, that we intend taking and having regard to the felicitous Judgment rendered by a Division Bench of this Court already referred to, we are not inclined to retrace the argument but confirm ourselves to the only question whether in the facts and circumstances of this case the Port Trust are right when they contend that the continuing liability on the part of the Steamer Agents still continues notwithstanding Customs Authorities exercising jurisdiction under Section 110 of the Customs Act and that the jural relationship of Bailor and Bailee as between the Steamer Agents and the Port Trust continued till 2.1.1968 when the goods were confiscated under Section l11 of the Customs Act. The Division Bench which considered similar circumstances after having examined the relative contentions of the parties made certain succinct observations which we cannot do better than by excerpting them. The learned Judges said:

(a) There is no provision in the Act which gives a recourse to the Port Trust against the Ship Owner or the Steamer Agents for the demurrage charges which it had incurred while the goods Were in its custody;

(b) it is true that as Bailors who entrusted the goods with the Port Trust the Steamer Agents are liable to pay its dues if their instructions regarding delivery cannot be carried out and the goods are to be returned to them;

(c) the Steamer Agents have no right in the goods after they have duly endorsed the Bill of Lading or issued a Delivery Order to the consignee or endorsee enabling them to take delivery of the goods from the Port Trust.

(d) it cannot therefore be said that when the consignees named in the Bill of Lading is known and he has been authorised to take delivery of the goods by the Steamer Agents, the demurrage charges which become due by the default of such Consignee not satisfying the Customs Authorities are payable by the Steamer Agents. In the ultimate analysis the learned Judges accepted the contention of the Steamer Agents in that case that they were not liable for the demurrage charges. Mr. R.G. Rajan, learned Counsel for the Port Trust rightly pointed out that the ratio in the above decision turned on its merits and particularly he drew attention to the factual finding of the fact that there was proof of the issuance of a Delivery Order to the consignee in that case and the entire judgment therefore revolved on the said finding. His contention there is that in the absence of such proof or substitute for such proof in such cases of the right of the consignee to obtain a delivery of the goods from the Port Trust direct, without the intervention any more of the Steamer Agents, the Steamer Agents would still continue to be liable for the demurrage on the principle that they were the original Bailors and as such Bailors, the continuing liability would run until they are discharged from it in a manner known to law.

4. Mr. R.G. Rajan, is right when he says that the relationship which was forged as between the Steamer Agents and the Port Trust at or about the time when the goods were taken custody of by them within port precincts from the quay side is that of a bailor and bailee. He would also fairly concede having regard to our Division Bench judgment which undoubtedly binds at this stage that if there is proof of an endorsement on the Bill of Lading or the issuance of a Delivery Order by the Steamer Agents to the named consignee, which by itself would enable him to approach the Port Trust and obtain delivery of the goods, then the principle of continuing liability on the part of the bailor would not longer be applicable and the Port Trust would be compelled and constrained to look to the named consignee for the recovery of charges like harbour dues and demurrage relatable to the imported goods. There is high authority for the proposition that it is only the consignee who should pay the demurrage charges if he otherwise satisfies, the port trust that he is the proper person who could demand delivery from it (vide: Port of Bombay v. I.G. Supplying Co. A.I.R. 1967 S.C. 1622, and Trustees of the Port of Madras v. Aminchand Pyarelat : [1976]1SCR721 . The only question therefore that arises for consideration in the instant case is whether there is any substitute for the proof that is required to show that the named consignee viz., the 1st defendant did ever secure either expressly or by necessary implication the right to obtain delivery of the imported goods from the Port Trust. If there is evidence aliunde to show that the consignee had obtained such a right from the steamer agents and there is also contemporaneous record to prompt a reasonable person to gain the impression that the Port Trust has knowledge about such a vested right in the consignee and above all if the port trust deals with him with such knowledge and under that impression, then it cannot be said that the Port Trust can mechanically rely upon the original theory of continuing liability on the part of the bailor viz., the steamer agents and still project a claim against him without having recourse against the consignee whom they have recognised as a person entitled to receive the goods from them. The learned judges of the Division Bench, Ramanujam, and V. Ramaswami, JJ. in the excerpt cited have made this proposition clear. It is therefore necessary for us to look into the record to find whether the conduct and the dealings between the Port Trust and the named consignee in the instant case after the removal of the goods to the Confiscated Goods Warehouse on 11.4.1967 under Section 110, and after its confiscation on 2.1.1968 under Section 111 did acquire by necessary implication a right to obtain the goods from the Port Trust. Under Ex P-2 dated 7.7.1967 the Madras Port Trust wrote to the Assistant Collector of Customs as follows:

As required in the letter first cited in packages have been removed to the Unclaimed Confiscated Goods Warehouse ('W' Warehouse). However, it is noted that no formal confiscation order has been made. As such the packages are being listed for sale in the next auction to be held by the Trust. It is requested that the confiscation order if any, may be sent and importer directed to clear the packages quickly.

(sd/..)

Copy to:- U.C.C. to issue sale notice to the Steamer Agents and also to M/s.Bheru Mfg.Co., Madras-21 and to list the packages for sale in the auction.

It is seen from the above that a direction/or the issuance of a notice to the 1st defendant, consignee was also given. Under Ex.P-3 dated 18.6.1987, the Assistant Collector of Customs wrote to the Port Trust as under:

Please refer to your letter No. J.8/12952/67/ TC dated 7.7.1967 on the above subject. Show cause notices have been issued to the Importers' Clearing Agents, M/s. Sheriff & Sons, Madras and Shri Aleem, Managing Director of M/s. M.Sheriff & Sons, Madras in respect of the aforesaid consignment. 15 days time has been given to them to furnish their reply. The consignment may therefore be retained in your custody and may be deleted from the auction list. As soon as orders are passed, a copy of the same will be endorsed to you.

This letter obviously establishes that even the Customs Department were aware as to who were the clearing agents of the importer. Under Ex.P-4 dated 14.8.1967 the Port Trust wrote to the Steamer Agents as follows:

I have the honour to inform you that application is being made to the Collector of Customs for clearance of goods noted overleaf for sale under Sections 56 and 58-A of the Madras Port Trust Act, 190S. If the goods have already been cleared, this notice may be treated as cancelled.

The name and address of the consignee may please be furnished.

It is seen that this is only a threat of an auction sale and not as actual notice of auction. But what is significant in this letter is that the Port Trust is still pretending that it does not know the name and address of the consignee though as stated already under Ex.P-2 dated 7.7.1967, there is a direction for the issuance of a notice toM/s. Bheru Mfg. Co., Madras-21 who is indisputably the consignee of the packages. After writing this the Port Trust resolved to bring to sale the unclaimed goods. They issued a notice Ex.P-11 dated 19.8.1967 directly to the 1st defendant and not even to the Steamer Agents, running as under:

I have the honour to inform you as required under. Section 58-A of the Madras Port Trust Act, 1905 that the goods shown on the reverse will be sold by auction if the Port Trust charges recoverable thereon have not been paid and the goods not cleared within 10 days from the date of this notice. This notice may be treated as cancelled, if the goods have already been cleared.

To a question put by us to the counsel for the Port Trust, whether there is any proof of service of a similar notice on the Steamer Agents, we were not able to get any positive answer. The assumption therefore is that no such notice of auction was even sent to the Steamer Agents. It is seen from Ex.P-11 that the Port Trust dealt with the 1st defendant as a person who is entitled to take delivery of the goods from them and to be more specific entitled to the goods itself. If the 1st defendant had no right in the goods as its owner, one fails to see the significance of the notice under Ex.P-11. We may also refer to one other significant letter Ex. P-12 which was written by the 1st defendant directly to the Port Trust. He sought for a stoppage of public sale of the goods. He would also assure the Port Trust that as soon as the consignment is released by the customs, he shall take delivery by paying the charges. The letters as above read cumulatively give a reasonable impression that the Port Trust at all material points of time recognised a right in the 1st defendant to seek for delivery of the goods from them and did not maintain either in the correspondence or by any over act on their part that the continuing liability of the 2nd defendant as a bailor of the goods in question continued and that they looked upon the Steamer Agents as the other and only party who should be made liable for the demurrage charges which the goods might incur at some point of time later to the date when the Port Trust took custody of such goods. Approving the principle laid down by the Division Bench referred to above and having regard to our finding on the materials scrutinised by us that the Port Trust itself looked upon the 1st defendant as the person entitled to take delivery of the goods from them, there is enough and more evidence to conclude that the jural relationship of Bailor and Bailee as between the Steamer Agents and the Port Trust was snapped and the Port Trust cannot therefore on the presumption that it continued claim the demurrage charges from the Steamer Agents. We find as a fact that the Port Trust had knowledge that the 1st defendant alone was entitled to take delivery of the goods as consigned and the Steamer Agents by their conduct and treatment of the good divested themselves of their right as Bailor and transmitted it to the 1st defendant and it is in pursuance of such a vested right in him that the 1st defendant was acting and corresponding with the Port Trust and sought for delivery of the goods from them. Beings the known circumstances, the learned Judge ought not have decreed the suit as against the Appellant herein on the only ground that there is no endorsement on the Bill of Lading or a Delivery Order as it is popularly understood, which would enable the consignee to take delivery of the goods from the Port Trust. We find that there is substitute of such proof of the fact that the Appellant as Consignee wasentitled to the good sand take delivery of it and in this view the appeal has to be allowed. The appeal is, therefore allowed. There will be no order as to costs.

5. The judgment in so far as it provides for decree as against the 1st defendant shall stand.


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