Board Of Trustees Of The Port Of ... vs International Trading ...
2002 Latest Caselaw 237 Bom

JUDGMENT

J.G. Chitre, J.

1. The Board of Trustees of the Port of Bombay, a statutory corporation incorporated under Major Port Trusts Act, 1963 (hereinafter referred to as the petitioner for convenience) are hereby assailing the correctness, propriety and legality of the order which has been passed by the Additional Chief Judge of Small Causes Court, Bombay, in context with F.C.A. No. 22 of 1988 which can be quoted as under :

"This application for rule nisi presented by the Appellant (Org. Plaintiff) on the grounds mentioned therein and coming on for admission on this 21st day of March 1988, before Shri V. B. Mhasde, Addl. Chief Judge and Shri J. D. Kulkarni, Judge in the presence of Shri J. J. Jadeja Advocate for the applicant (Orig. Plaintiffs) it is ordered that there be no rule. No, Rule."

The petitioners contend that the Bench of Small Causes Court passing the said order in F.C.A. No. 22 of 1988 dealing with Regular Suit No. 1545 of 1988 should have admitted it for final hearing and should have issued the notices to the present respondents while exercising the jurisdiction in view of provisions of Section 42 Sub-section (4) of the Presidency Small Causes Court Act, 1882 (hereinafter referred to as "the Small Cause Courts Act" for convenience).

2. The present petitioners filed a suit in Small Causes Court at Bombay which was numbered as Summary Suit No. 1545 of 1983. In the said suit petitioners averred that respondent No. 1 imported 21 cartons artificial jewellery which was carried through ship "S. S. Robert-E-Lee" Manifested in the Import General Manifesto No. 1024 of 29th August, 1978 at item No. 247. The General Landing date of the cargo was 22-9-1978 and the Last Free Date of the clearance was 27-9-1978. Respondent No. 1 had appointed. Respondent No. 2 as shipping agent for getting a permission of landing of the said ship in the wharf of the present petitioner. The said cargo was unloaded and stored in the warehouse

belonging to petitioner. The merchandise was not cleared till 26-4-1979. Therefore, a notice was sent by the petitioner to respondent No. 1 as well as to respondent No. 2 by registered post. Respondent No. 2 by their letter dated 15-5-1979 informed the petitioners that they were not "importers". They also informed the petitioners that they had requested the consignee to clear the consignment. Respondent No. 2 denied the obligation which was indicated towards them by virtue of the said notice. By letter dated 19-5-1979, respondent No. 1 acknowledged the receipt of the said notice and confirmed that the consignment under reference was exported cargo which was reshipped to them. The said notice indicated the sale of the cargo. The respondent No. 1 had requested the petitioners for withdrawal of the goods from the sale. The plaintiff replied to this letter by their letter dated 20-5-1979. The suit consignment was not cleared by respondent No. 1 or 2 and hence the petitioner published a notice for sale in Maharashtra Government Gazette on 26-5-1979 which was also published in the newspaper dated 21-6-1979. Ultimately, the consignment was sold on 12-11-1980 for Rs. 777/- under Lot No. M-862 and the said sale was confirmed on 17-11-1980.

3. After the sale, the petitioners found that they were to recover amount of Rs. 43,834.05 paise from the respondents towards customs duty, I. T. C. fine, balance port trust charges, etc. The petitioners claimed the said amount from the respondents with interest when the respondents did not pay the said amount. Therefore, the petitioners were required to file the suit. While filing the said suit, the petitioners gave up the claim which was to the tune of Rs. 341.78 paise and restricted their claim to Rs. 10,000/- only inclusive of interest as per the particulars of the claim annexed to the plaint and marked as Exhibit A.

4. The respondent No. 1 did not file the written statement. However, respondent No. 2 filed the written statement and denied the liability of paying the said amount to the petitioners. They contended that they were not the owner of the consignment and, therefore, they were not liable to pay the said amount to the petitioners.

5. The petitioners examined witness namely, Ramanlal Kanjibhai Barot for substantiating their case. Respondent No. 1 and 2 did not examine any witness. The learned trial Judge after appreciating the evidence in the light of the submissions advanced by the counsel appearing for the contesting parties recorded his findings holding that the suit was not barred by limitation. The learned Judge held that only respondent No. 1 was liable to pay the said amount to the petitioners. He exonerated respondent No. 2 from the liability of paying the said amount to the petitioners and, therefore the petitioners filed F.C.A. No. 22 of 1988 which was dismissed without admitting for final hearing.

6. Shri Makhija assisted by Shri H. A. Shah, Advocate, submitted that the learned trial Judge committed the error of appreciating the evidence and the error which been committed by the learned trial Judge falls under the category of gross error of law. He submitted that he committed the gross error of law in interpreting the evidence, oral as well as documentary, on record and landed in the gross error of law in recording his conclusions which, were inconsistent with the evidence on record. He further submitted that when F.C.A. was very much deserving the admission for final hearing, the learned Bench of Small Causes

Court without applying the judicial mind committed the gross error of law in passing the order which is the subject matter of challenge in this writ petition.

7. Mr. Makhija submitted that when the Major Port Trusts Act, 1963 (hereinafter referred to as the MPT Act for convenience) was silent about the status of the petitioner as "bailee", it was necessary for the learned trial Judge to read the provisions of Section 171 of Indian Contract Act, 1872 (hereinafter referred to as Contract Act for convenience) and come to the conclusion that the petitioners fall in the category of "wharfingers" and, therefore, they were having the general lien over the consignment in question and were having the right to retain the said consignment as a security for a general balance account as bailee and, therefore, they were entitled to recover the amount so claimed not only from respondent No. 1 but from respondent No. 2 also. Shri Makhija further pointed out that in view of provisions of Section 2(o) which gives the definition of the word "owner", the respondent No. 2 was also liable to pay the said amount to the petitioners. In that context he pointed out the Bye Laws of Bombay Port Trust. Bye Law No. 3 provides that the shipping agent has to submit a written application for entry of a ship in dock. He invited the attention of this Court to said bye law which reads :--

"Written application in respect of every vessel desiring to enter port shall be made in advance to the Docks Manager by the master, owner or agent stating the name of such vessel, cargo carried or whether in whallast."

He submitted that the said vessel could get the entry in the dock only on account of the written application which was submitted by shipping company who had appointed respondent No. 2 as their agents and, therefore, both respondents No. 1 and 2 cannot deny the liability of paying the amount claimed to be recovered by the petitioners. Shri Makhija placed reliance on two judgments of the Supreme Court, (1) Trustees of the Port of Madras through its Chairman v. K. P. V. Sheikh Mohd. Rowther and Co. Pvt. Ltd., and Anr., and (2) Board of Trustees of the Port of Bombay and Ors. v. Sriyanesh Knitters, for substantiating his submissions.

8. The respondents have been served but they are absent and none present for them to put up their case. Writ Petition pertains to the year 1988 and has been mentioned in the Board as fixed for final hearing. Therefore, this Court is deciding this writ petition finally treating them ex-parte.

9. Section 2(o) of the M.P.T. Act reads "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, chatterer, consignee, or mortgagee in possession thereof. Therefore, respondent No. 2 who happens to be appointed as the agent for unloading of cargo which was carried through the above mentioned ship would assume the status of "owner" as indicated by provisions of Section 2(o) of the M.P.T. Act.

10. In the matter of Trustees of Port of Madras, etc., (supra) though the Supreme Court has held that goods which happened to be in custody of Port Trust and when throughout liable of paying the demurrage charges, harbour dues, etc., payable to Port Trust, the same was to be recovered from consignee and not from "Steamer Agent". It was so observed in light of the facts and

circumstances of that particular case in which the steamer agent had "endorsed" the bill of lading to one endorsee.

11. In the matter of Board of Trustees of Port of Bombay and others (supra), the Supreme Court held that the M.P.T. Act is not an exhaustive and comprehensive code and has to be read together with other Acts and wherever it is silent in respect of any matter. The Act itself refers to other statutes which clearly indicates that it is not a complete code. Whenever any departure has to be made from other laws specific provision to that effect has been made in the Act. Bombay Port Trust does have a right of general lien as wharfingers under Section 171 of the Contract Act and was competent to recover the amount of wharfage, demurrage and other charges which were due to them. It further held that services which are undertaken under Section 42 of M.P.T. Act have to be paid for and any amount due in respect thereof will be regarded as "general balance of account". Supreme Court held that reading Section 42 of the M.P.T Act shows that the services required to be performed by the Board are not only of loading and unloading of cargo but would also include storing and delivering the goods. Under Sub-section (2) if the Board is requested by the owner to take charge of the goods then it is required to give a receipt in such form as the Board may specify. Sub-section (6), inter alia, states that responsibility of any such person who takes charge of such goods shall be that of a bailee under Sections 151, 152 and 161 of the Contract Act. Sub-section (7) absolves the person to whom receipt is given of any liability for any loss or damage which may occur to the goods. The responsibility of the Board for the loss of goods is provided for in Section 43 of the MPT Act.

12. The Supreme Court further held in the said matter that by reading Sections 59 and 61 of the MPT Act, it is clear, that the goods which can be sold in exercise of the lien under Section 59 are those goods in respect of which some amount is claimed or due under Section 59. In the said judgment, the Supreme Court further held that in view of Section 2(o) and Section 42(6) when the contract contained in a bill of lading is between the Port Trust and the holder of the bill of lading, the consignee is the bailor and the Port Trust is the bailee. Section 2(o) along with the Bill of Lading Act shows that the consignee of the goods named in the bill of lading, or every endorsee of the bill of lading, for the purposes of the Major Port Trusts Act is regarded as the owner of the goods and it is from the owner that the Board of Port Trust is entitled to recover the charges under the M.P.T. Act in respect of such goods.

13. When the shipping company appoints an agent for the entry of the ship in the dock, such lading agent acts as agent of the shipping company and there happens to be the contractual relations between the said agent, the assignee and the Board of the Port Trust, who after accepting the custody of the consignment assumes the status of "bailee". By virtue of such contractual relations, it becomes liable for the said custody of such consignment and, therefore, it is entitled to recover the demurrage, charges, other charges which the bailee is entitled to recover from the bailor. If the bill of lading is endorsed, then endorsee becomes entitled to get the possession of the consignment from the Port Trust Authorities. But when there is no such endorsement on bill of lading, the vessel agent is not exonerated of its legal liability to pay the amounts which are

recoverable by the Port Trust Authorities in context with demurrage charges and other incidental recoverable charges.

13A. The vessel agent can exonerate himself by endorsing the bill of lading as well as by issuing the delivery order. In that case, the Board of Trustees of Port Trust would be required to give the delivery of the assignment to such consignee. In that case the consignee and such assignee would be liable to pay the demurrage charges and other incidental charges which are lawfully recoverable.

14. In the present case, the evidence on record brought through the plaintiffs witness shows that respondent No. 2 did not endorse the said bill of lading and, therefore, it would not be exonerated from the liability incurred along with respondent No. 1 in view of the definition indicated by provisions of Section 2(o) of the M.P.T. Act. It assumes the status of "owner" of such merchandise which happens to be stored in the warehouse after loading of it from the concerned ship.

15. The Division Bench of the Small Causes Court should have considered all these things while applying the judicial mind to the facts of the present case. It should have adverted its attention to provisions of Section 2(o), Sections 42, 43, 59, 60 of M.P.T. Act and should have considered what could be the status of respondent No. 2 in respect of the said consignment of artificial jewellery which was unloaded through respondent No. 2 from the said ship which was assigned to respondent No. 1. It should have noted that the said bill of lading was not endorsed by either respondent No. 1 or 2 to anybody. It should have also noted that the said vessel got the entry in the dock on account of the written application which was submitted by respondent No. 2 to the present writ petitioners. But while doing that, the learned Bench of Small Causes Court passed the order which is not showing any application of judicial mind. It does not show that the learned Bench attempted to judge the strength and potentiality of the revision which was submitted before it for admission for final hearing.

16. Though the Bench of the Small Causes Court was exercising the revisional jurisdiction in dealing with that F.C.A., it was not precluded from focusing its attention to significant points arising out of the matter which has been discussed by this Court and quoted in the above paragraphs. When it was to consider the potentiality of the said revision petition for admission for final hearing, it was duty bound to consider all different facets of the matter which were involving the interpretation of law. The learned Bench was definitely having the jurisdiction to focus its attention to the legal points involved as quoted in the above paragraphs which were hovering around the status of respondent Nos. 1 and 2 in context with the provisions of M.P.T. Act. Had that been done, the learned Bench would not have come to the conclusion that the revision petition was liable to be dismissed.

17. The learned bench of Small Causes Court did not exercise the jurisdiction vested in it. The order of dismissal of revision petition passed by it instead of admitting it for final hearing was patently inconsistent with provisions of law. Thus, the order which has been passed by the learned Bench of the Small Causes Court and which has been assailed by this writ petition suffers from the incorrectness and illegality. What is incorrect and illegal, cannot be permitted to

survive and, therefore, this Court is required to set it aside by granting the writ of certiorari in favour of the petitioners by allowing this writ petition. Thus, the writ petition stands allowed and by a writ of certiorari the order which has been passed by the learned Bench of the Small Causes Court, Bombay, stands set aside. The Division Bench of Small Causes Court, Bombay should, after issuing notice of final hearing to the respondents, hear the said revision as early as possible and should dispose it of in accordance with the provisions of law as early as possible and positively within 8 months from the date of receipt of this Judgment. If needed, the said Bench is at liberty to make a prayer to this Court for extending the time. The observations made in this judgment shall not interfere with the decision of the Court at the time of final hearing of the revision petition. 18. Parties to act on an ordinary copy of this order duly authenticated by the Sheristedar of this Courts.