M/S Central Warehousing Corp. & ... vs M/S Bhartiya Plastic Udgyog & Ors
2008 Latest Caselaw 1690 Del

*                 IN THE HIGH COURT OF DELHI AT NEW DELHI


+                                  LPA 446/2003


                                               Reserved on : 27.08.2008
%                                              Date of decision:22.09.2008


M/s CENTRAL WAREHOUSING CORP. & ANR.                     ..... .....APPELLANTS

                   Through:   Mr.K.K.Tyagi, Advocate.


                                     Versus


M/s BHARTIYA PLASTIC UDGYOG & ORS                   ..    .. ...RESPONDENTS

                   Through:   Mr. Kamal Mehta, Advocate for R-1 and R-2.
                              None for R-3.


CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE MOOL CHAND GARG

1.        Whether the Reporters of local papers
          may be allowed to see the judgment?            Yes

2.        To be referred to Reporter or not?             Yes

3.        Whether the judgment should be
          reported in the Digest?                        Yes

SANJAY KISHAN KAUL, J.

1. The refusal by the appellant to deliver the subsequent

consignment to respondent nos.1 and 2 on account of a

dispute about the non payment of warehousing charges for

the first consignment had given rise to the present

litigation. It is an undisputed fact that there was no

controversy of any alleged dues in respect of the second

consignment. A connected question arising for

consideration is whether such detention was possible even

if the consignment was warehoused without the consent of

the consignee to the warehousing corporation.

2. The respondent no.1 imported acrylic scrap in pursuance to

a bill of entry dated 29.10.1992 in three containers of a

declared value of USD 240 per metric ton. However, on

their import into India, the custom authorities assessed the

price of the goods at USD 475 per metric ton resulting in

notices being issued by custom authorities for adjudication.

The goods were not cleared and were warehoused with the

appellant. It is during the pendency of this dispute that a

second consignment of respondent no.1 vide a bill of entry

dated 06.09.1993 was received in India. The bill of entry

was presented for home consumption and on inspection of

the goods, the custom authorities assessed the total duty of

Rs.5,41,016/- which was duly deposited on 17.09.1993.

The delivery of the goods was, however, not given to the

petitioner by the appellant on the ground that a sum of

Rs.1,60,000/- was due to the appellant as warehousing and

insurance charges in respect of the first consignment as on

17.09.1993. The same was the fate of yet another

consignment imported by the respondent no.1 vide a bill of

entry dated 03.08.1993.

3. These actions of the appellant resulted in filing of

WP(C)4480/1993 by respondent nos.1 & 2, respondent

no.2 being the Managing Director of respondent no.1.

4. In the proceedings of the said writ petition, interim orders

were passed on 05.11.1993 on account of the Court

observing that prima facie it was of the view that the

respondent nos.1 was not liable to pay the storage charges

of the appellant, but respondent no.1 agreed to furnish the

bank guarantee for the amount claimed by the appellant.

The second consignment was thus directed to be released

by the appellant without payment of any further charges.

Insofar as the third consignment was concerned, a direction

was passed that respondent no.1 could get it cleared on

payment of the custom duty (which was stated to have

been paid) and warehousing charges till date of delivery.

Respondent no.1 took delivery of the four containers

covered by the second consignment, but insofar as the

third consignment was concerned, respondent no.1 was not

agreeable to pay the warehousing charges on the ground

that the goods were not warehoused by the respondent

no.1 but were detained by the appellant of their own

because of non payment of warehousing and insurance

charges of the first consignment. It is in this context that

the question arose whether the appellant at all could have

detained the third consignment even assuming that they

were entitled to detain any subsequent consignment on

account of the previous non payment.

5. Learned Single Judge vide the impugned order dated

29.04.2003 allowed the writ petition and directed the

release of the consignment imported vide bill of entry dated

03.08.1993 without claiming any warehousing or insurance

charges from respondent no.1. It is this judgment which

is sought to be challenged by the appellant. The appeal

was finally admitted on 22.09.2003 and interim directions

were passed for the respondent nos.1 and 2 to pay the

insurance charges, handling charges and entry fee, but no

directions were made for payment of the warehousing and

service tax. The interim application was finally disposed of

on 21.05.2004 when the learned ASG appearing for the

appellant submitted that the appellant was prepared to

release the goods, but the parties would ultimately abide by

the decision of this Court and this was acceptable to

learned counsel for respondent nos.1 and 2. Thus, the

appellant was permitted to withdraw the amount deposited

by respondents on release of goods.

6. Learned counsel for respondent nos.1 and 2 conceded

before the learned Single Judge that there was absence of

any provisions in the Indian Customs Act, 1962 ('the

Customs Act' for short) entitling the custom officers to

prohibit the owner of the space, where the imported goods

have been stored from levying the demurrage charges. In

such an eventuality, the levy of demurrage charges for non

delivery of the goods would be as per the terms and

conditions of contract and thus a valid levy. However, it was

simultaneously pleaded that if the goods are illegally

detained which prevented the importer from getting the

goods released, it is the custom authorities which would be

bound to bear the demurrage charges in the absence of

any provision in the Customs Act as there was nothing in

the Customs Act which absolved the custom authorities

from the liability to make such a payment. The plea in sum

and substance was that since such goods were illegally

detained by the Warehousing Corporation without there

being any authority in them to detain the same for non

payment of warehousing charges of the first consignment,

respondent nos.1 and 2 were not liable to pay the

warehousing charges in respect of the third consignment.

Learned counsel had drawn strength from the judgment of

the Supreme Court in Shipping Corporation of India Ltd. v.

C.L.Jain Woollen Mills and Others; (2001) 5 SCC 345.

7. In the factual matrix of the aforesaid case, an order of

confiscation and penalty was passed in respect of the

imported goods, which was quashed by the Supreme Court.

The Warehousing Corporation warehousing the goods was

not impleaded in the proceedings and the High Court

directed that it had already absolved the owner to pay any

demurrage charges with the result that if such charges

arose, the same would be the liability of the custom

authorities. It was this part of the order which was sought

to be challenged before the Hon'ble Supreme Court. In that

context, it was observed by the Hon'ble Supreme Court that

the custom authorities had power and control over the

imported goods without whose permission, it could not be

cleared, but they had no power to restrain charging of

demurrage charges. The custom authorities were,

however, held bound to pay the demurrage charges in the

absence of any provisions in the Customs Act absolving

them of that liability.

8. The counsel for respondent nos.1 and 2 thus pleaded that

the detention of the goods by the appellant was illegal in

the absence of any provisions either in the Warehousing

Corporation Act, 1962; the Contract Act, 1972 or in the

Customs Act, 1962 permitting the Warehousing Corporation

to have such a lien over the goods, which had not been

warehoused or stored with them, merely because there was

a dispute in respect of the amount payable under another

consignment.

9. Learned Single Judge proceeded to discuss the provisions of

the Customs Act. A reading of Sections 48 and 63 of the

Customs Act shows that while giving authority to the

custom authorities to sell the goods in their custody, an

obligation has been cast upon the importer to pay the

charges for warehousing of the goods. The authorities

further gave power even to the warehouse keeper to sell

the part of the goods for realization of its dues sufficient to

meet its liability. A reading of the provisions thus gave

rise to a conclusion that the lien, if any, of the warehouse

keeper, would only be in respect of the goods which had

been stored with the consent of the owner and not on any

other goods.

10. Learned counsel for the appellant before the learned Single

Judge sought to advance the plea that since the goods in

question of the first consignment were under adjudication

of the custom authorities, they could not have been

auctioned by the appellant. The goods unloaded in a

custom area remain in the custody of such persons as may

be approved by the Commissioner of Customs until they

are cleared for home consumption or are warehoused or

transshipped in accordance with the provisions of Chapter

VIII of the Customs Act in terms of the authority conferred

under Section 45 of the Customs Act. It is in this context

that the plea was raised that the appellant was the

custodian of the Customs Department under Section 45 of

the Customs Act. The aforesaid plea was rejected by the

learned Single Judge in the absence of any statutory

provision. It has been specifically noted that the admitted

case of the parties was that the goods imported as per the

second and third bills of lading/entry were not warehoused

or stored with the appellant and only warehoused goods

could be disposed of by auction.

11. In the grounds of the appeal, the appellant has pleaded that

the consideration of Section 48 r/w Section 63 of the

Customs Act by the learned Single Judge is erroneous. The

storage is obligated by law. The first consignment was

detained by the custom authorities on account of the

alleged mis-declaration of value though the goods were

subsequently released. The appellant was entitled to

detain the second and third consignments. A further plea

raised is that the learned Single Judge failed to take notice

of Section 171 of the Indian Contract Act ('the Contract Act'

for short) which gives such a right to the wharfinger to

exercise powers of lien as the unpaid service. It may be

noticed that learned counsel for the appellant conceded

that this plea was never urged or argued before the learned

Single Judge but contended that the same being a question

of law ought to be examined by this Court.

12. Learned counsel for the appellant before us pleaded that

the appellant had issued a number of notices to the

respondent nos.1 and 2 to take delivery of the first

consignment which was subject matter of custom

adjudication, but the respondent nos.1 and 2 failed to do

so. However, it cannot be disputed before us that since the

duty payable under the consignment was under

adjudication, the goods could not have been taken delivery

of by respondent nos.1 and 2 until and unless the

respondent nos.1 and 2 were willing to pay the full duty as

sought to be imposed by the custom authorities. Learned

counsel for respondent nos.1 and 2 has pointed out that the

adjudication by the custom authorities regarding the first

consignment was in their favour and thereafter the delivery

was taken by respondent no.1 after payment of the

crystallized demand of Rs.5,30,455/-. It is only when such

adjudication took place that there was crystallization of the

demand and the respondent no.1 had never abandoned the

goods, which could create any apprehensions in the mind of

the appellant.

13. The only point really urged before us by learned counsel

for the appellant is the right claimed in view of the

provisions of Section 171 of the Contract Act, a point never

argued or urged before the learned Single Judge. The only

plea was that same being a legal question, could be raised

at any time.

14. In our considered view, the appellant ought to have laid the

foundation of this case in terms of the factual matrix in

order to really plead the benefit of the provisions of Section

171 of the Contract Act. No such plea was laid before the

learned Single Judge. Despite this fact, we have considered

it appropriate to analyze this plea within the limited context

of the undisputed facts and the provisions of the said

Section. The Section reads as under:

"171. General lien of bankers, factors, wharfingers, attorneys and policy- brokers.

Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain, as a security for a general balance of account any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to the effect."

15. Learned counsel for the appellant has strongly relied upon

the judgment of the Hon'ble Supreme Court in Board of

Trustees of the Port of Bombay v. Sriyanesh Knitters; (1999)

7 SCC 359. It is thus pleaded that the Board of Trustees of

the Port Trusts constituted under the Major Port Trusts Act,

1963 ('the MPT Act' for short) are the owners of the wharf

and are wharfingers who not only provide space at the port

for loading and unloading of the goods, but also provide for

storage of goods till the same are removed. Thus a general

lien of wharfingers in respect of the past dues is available

as contemplated under Section 171 of the Contract Act for

retention of the bailed goods as security. Demurrage

would form a part of the "General Balance of Account". The

appellant claims to be maintaining a Container Freight

Station which is nothing but a dry port and thus it is

pleaded that all the principles in respect of the Board of

Trustees of the Port of Bombay would equally apply to the

appellant-Corporation. To support this plea, learned

counsel relied upon the judgment of the Supreme Court in

International Airports Authority of India & Ors. v. Grand

Slam International & Ors.; (1995) 3 SCC 151 where it was

held that the provisions of the MPT Act and International

Airport Authority Act, 1971 are similar to that of Central

Warehousing Corporation Act, 1962 and the principle

applicable would thus be the same.

16. Learned counsel for the appellant, in order to get over the

plea of the question not being raised before the learned

Single Judge, has relied upon the observations of the

Hon'ble Supreme Court in State of Tamil Nadu v.

Rangaswamy & Ors.; JT 2002 (8) SC 192 to the effect that a

pure question of law can be raised at any stage.

17. In order to appreciate the plea of the learned counsel for

the appellant, the judgment in Board of Trustees of the Port

of Bombay v. Sriyanesh Knitters' case (supra) has to be

examined in depth. The dispute in that case arose when

the Port Trust refused to release certain goods being acrylic

fibre imported by the consignee on the ground that the

claim in respect of the wharfage and demurrage was still

due to them for consignments of woolen rags imported

earlier by the same consignee. The consignment of the

woolen rags had remained at the docks for a certain period

which ended when the dispute between the consignee and

the custom authorities was resolved. The consignment of

woolen rags had been released and the Port Trust had

demanded demurrage charges for which the consignee

disputed the liability. The Port Trust had filed several suits

for recovery of the amount. It is thereafter that the

consignment of acrylic fibre arrived which was refused to

be released.

18. The Hon'ble Supreme Court observed that though there

was no provision of general lien in the MPT Act, that Act

does not exclude operation of other laws which may be

applicable. In the absence of provisions for general lien

under the MPT Act, the Port Trust had relied upon the

provisions of Section 171 of the Contract Act which was

held to be permissible. It was further explained that the

general lien contemplated under Section 171 of the

Contract Act only enabled retention of the bailed goods as

security and not the power to sell the goods. The

wharfingers would have to take recourse to other

proceedings in accordance with law for securing the order

which would then enable the goods to be sold for

realization of the amount due to it including filing of a suit.

19. The Supreme Court also explained that Section 171 of the

Contract Act was in two parts. The statutory right of lien

was available only to five categories - bankers, factors,

wharfingers, attorneys and policy brokers - subject to their

contracting out of Section 171. The second part made it

clear that this benefit was not available to any other person

i.e. unless there was a express contract to that effect.

20. As to what is a wharf and who is a wharfinger has been

discussed by the Supreme Court in para 19 and 20 of the

aforesaid judgment which are re-produced below for

convenience:

"19. Wharf is defined in Jowitt's Dictionary of English Law, 2nd Edition as being "a broad plain place, near some creek or haven, to lay goods and wares on that are brought to or from the water". In Webster's Dictionary wharf is defined as "a structure of masonary or timber erected on the shore of a harbor, river, or the like, alongside which vessels may lie to load or unload cargo, passengers etc.: also, any landing place for vessels, as a pier or quay". Ramanatha Aiyar's The Law Lexicon, 2nd Edn. defines wharf as "a landing stage built especially along the shore for loading or unloading vessels". The MPT Act contains an inclusive definition of wharf in Section 2(za) and provides that wharf includes any wall or stage and any part of the land or foreshore that may be used for loading or unloading goods, or for the embarkation or disembarkation of passengers and any wall enclosing or adjoining the same.

20. Wharfinger is not defined in the Act but in Jowitt's Dictionary of English Law wharfinger is defined as the occupier of wharf and it is further stated that "as a rule, wharfingers have a general lien for the balance of their account". In Ramanatha Aiyar's The Law Lexicon wharfinger is defined as meaning "the occupier of a wharf" or "a person who owns a wharf"."

21. The Supreme Court observed that the Port Trust was the

owner of the wharf at Bombay and the services rendered by

the Port are not only of loading or unloading of the cargo,

but would also include storing and delivering of goods.

22. Learned counsel for respondent nos.1 and 2 has sought to

distinguish the aforesaid judgment apart from raising the

ground of waiver of the plea under Section 171 of the

Contract Act as the same was not advanced before the

learned Single Judge. Learned counsel pleaded that the

appellant had failed to establish that it was a wharfinger

within the definition of the same as elucidated by the

Supreme Court and referred to aforesaid and in the

alternative it was pleaded that even if it be assumed that

the appellant was a wharfinger, the appellant was not

entitled to invoke the provisions of Section 171 of the

Contract Act as there did not exist any General Balance of

Account at the time of receipt of second and third

consignments for which the appellant could have retained

the consignments as security for the alleged charges of the

first consignment. On the date of receipt of the second

and third consignments, the adjudication was still pending

with the custom authorities and thus neither was the

appellant capable of deliverying the goods nor the

respondent no.1 was entitled to the delivery of goods of the

first consignment. It is only when the delivery was

capable of being made after adjudication, would the

charges become due and the same is as per normal

international trade practice. On the completion of the

adjudication process and payment of the custom duty,

respondent no.1 was issued a certificate for "goods passed

out of custom authority". It is thereafter that the delivery

of the goods was taken by respondent no.1. Respondent

no.1 had never refused to pay the crystallized demand of

the payment with respect to the first consignment nor it

was the case of the appellant that the respondent no.1 had

ever abandoned the goods. It was thus pleaded that the

appellant could not even have delivered the goods and thus

there was no question of detaining the second and third

consignments.

23. Learned counsel for the appellant referred to the provisions

of Section 48 of the Customs Act, which reads as under:

"Procedure in case of goods not cleared, warehoused, or transhipped within thirty days after unloading. - If any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transhipped within thirty days from the date of the unloading thereof at a customs station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer be sold by the person having the custody thereof:

Provided that -

1. animals, perishable goods and hazardous goods, may, with the permission of the proper officer, be sold at any time;

2. arms and ammunition may be sold at such time and place and in such manner as the Central Government may direct.

Explanation. - In this section, "arms" and "ammunition" have the meanings respectively assigned to them in the Arms Act, 1959 (54 of 1959)."

24. Learned counsel submitted that the aforesaid provision

contemplates the process of sale where the goods are

capable of being delivered and the importer despite being

entitled to take delivery does not lift his consignment and is

thus deemed to have abandoned the same.

25. A plea further raised by learned counsel for respondent

nos.1 and 2 was that the lien as a wharfinger under Section

171 of the Contract Act is only available as security with

respect of the General Balance of Account. The alleged

claim which had been raised was of Rs.1,60,000/- while the

value of the goods was Rs.10,00,000/-. The value of the

first consignment was thus good enough to satisfy any

claim but the appellant illegally detained the second

consignment worth the value of over Rs.9 lakhs as also the

third consignment of approximately the same value as

admitted in their own documents. Thus the total goods of

value of Rs.28 lakhs were detained for securing a meagre

amount of Rs.1,60,000/- which is not permissible in law. In

this context, a reference was also made to Section 63 of the

Customs Act, which reads as under:

"Payment of rent and warehouse charges. -

1. The owner of any warehoused goods shall pay to the warehouse-keeper rent and warehouse charges at the rates fixed under any law for the time being in force or where no rates are so fixed, at such rates as may be fixed by the Commissioner of Customs.

2. If any rent or warehouse charges are not paid within ten days from the date when they became due, the warehouse- keeper may, after notice to the owner of the warehoused goods and with the permission of the proper officer cause to be sold (any transfer of the warehoused goods notwithstanding) such sufficient portion of the goods as the warehouse- keeper may select."

26. The aforesaid provisions also envisage such charges which

have become due and not paid and goods of sufficient

portion are required to be dealt with. Thus only part of the

consignment so as to satisfy the claim of the warehousing

has to be detained or sold.

27. The important distinguishing factor on facts between the

present case and of Board of Trustees of the Port of

Bombay v. Sriyanesh Knitters' case (supra) is stated to be

that in the facts of that case the dispute was whether the

imported goods were woolen rags or woolen garments and

the importer had secured the release of goods on payment

of fine which resulted in adjudication process being over.

The consignment detained was received after that. In the

present case, the adjudication process was still pending

when the second and third consignments arrived and were

detained. Not only that in the other case, even for the

period for which the relevant goods had been detained, the

importer had refused to pay charges resulting in legal

proceedings for recovery by the Port Trust. It is only after

that the second consignment had been detained. Such an

eventuality never arose in the present case as the

adjudication process was on and it is not in dispute that

there were no dues outstanding against the first

consignment. There was no question of any demand

pending adjudication in that case. Learned counsel

emphasized that such different facts are material while

construing whether a particular judgment applies or not

and in that behalf has referred to the observations of the

Hon'ble Supreme Court in State of Rajasthan v. Ganeshi

Lal;(2008) 2 SCC 533 in para 11 and 12 as under:

"11. "12. ... Reliance on the decision without looking into the factual background of the case before it, is clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates: (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment. The enunciation of the reason or principle on which a question before a court has been decided is alone binding as a precedent. (See State of Orissa v. Sudhansu Sekhar Misra; AIR 1968 SC 647 and Union of India v. Dhanwanti Devi; (1996) 6 SCC

44) A case is a precedent and binding for what it explicitly decides and no more. The words used by Judges in their judgments are not to be read as if they are words in an Act of Parliament. In Quinn v. Leathem; 1901 AC 495 Earl of Halsbury, L.C. observed that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which are found there are not intended to be the exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are found and a case is only an authority for what it actually decides."†

12. "15. ... Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton 1951 AC 737 (at p. 761) Lord MacDermott observed: (All ER p. 14 C-D)

'The matter cannot, of course, be settled merely by treating the ipsissima verba of Willes, J., as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished Judge....'

16. In Home Office v. Dorset Yacht Co. Ltd;1970 AC 1004 Lord Reid said (at All ER p. 297g-h), 'Lord Atkin's speech ... is not to be treated as if it were a statutory definition. It will require qualification in new circumstances'. Megarry, J. in Shepherd Homes Ltd. v.

Sandham (No. 2)(1971) I WLR 1062 observed: (All ER p. 1274d-e) 'One must not, of course, construe even a reserved judgment of even Russell, L.J. as if it were an Act of Parliament;' And, in Herrington v. British Railways Board;

1972 AC 877 Lord Morris said: (All ER p.761c) 'There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case.'

17. Circumstantial flexibility, one additional or different fact may make a

world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper.

18. The following words of Lord Denning in the matter of applying precedents have become locus classicus: 'Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.

* * * Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it.' "

28. We have given our thought to the relevant contentions

advanced by learned counsel for the parties. There is no

doubt that the appellant did not raise the plea of Section

171 of the Contract Act before the learned Single Judge, but

then the same being only a legal plea has been taken note

of by us since that was the only plea which was really

sought to be advanced by learned counsel for the

appellant. This would, however, require the plea to be

dealt with in the context of undisputed facts since proper

ground has not been laid on the factual matrix vis-à-vis the

provisions of Section 171 of the Contract Act. It cannot be

seriously doubted that in view of the judgment of the

Supreme Court in the Board of Trustees of the Port of

Bombay v. Sriyanesh Knitters' case (supra) wharfinger has

a right to retain consignments received subsequently

towards due pending earlier unless parties have contracted

out of the same. The provision is restrictive in its

application as there are only five categories which are

covered under the said provisions. For the appellant to

succeed, he must establish A) that he is a wharfinger; B)

there is no contract to the contrary and C) the security is

for a General Balance of Account. As to who is a

wharfinger in turn is dependent on the definition of a wharf

which has been discussed in para 19 and 20 of the Board

of Trustees of the Port of Bombay v. Sriyanesh Knitters'

case (supra) as the wharf is a broad plain place, near some

creek or haven, to lay goods and wares on that are brought

to or from the water. It has to be a structure of masonary

or timber erected on the shore of a harbor. The containers

in question covered by the first consignment were shifted

by the appellant to the Patparganj which is certainly not a

place next to the sea. This is explained by stating that the

same is a transit place. In our considered view even if it is

accepted that the same was a transit place, the contention

that the appellant is a wharfinger has no force. The

appellant provides services which are those of a

warehouseman and not those which are of a wharfinger.

Section 171 of the said Act only contemplates giving a

general right of lien in respect of five categories of persons

and the appellant is not covered under any one of those.

29. There is undisputedly no contract to the contrary, but then

the relationship between the parties has to be one of

wharfingers.

30. The most important aspect in the present case is the

conclusion to be arrived at whether there was a General

Balance of Account.

31. The adjudicatory process of the custom authorities was

pending consideration and that is the reason why the goods

were not released to the respondent no.1. In fact, the

occasion for invocation of proceedings under Sections 45

and 63 of the Customs Act never arose because there was a

contested dispute pending before the custom authorities,

which is stated to have ultimately been adjudicated in

favour of respondent no.1. In the process of such

adjudication, no delivery could have been made. It is also

not in dispute that the goods were worth about Rs.10 lakh

of sufficient security and respondent no.1 had never

abandoned the goods. The appellant could not realize its

goods by sale under Section 63 of the Customs Act in view

of the pendency of the adjudicatory process which was also

the reason why neither the appellant could give delivery of

the goods nor could respondent no.1 take delivery of the

goods. On completion of the adjudicatory process, the

dues had been cleared and goods taken delivery of. Thus

the occasion to determine as to what is the amount payable

would have arisen only after the adjudicatory process was

completed including in respect of the demurrage.

32. The important distinguishing factor between the present

case and Board of Trustees of the Port of Bombay v.

Sriyanesh Knitters' case (supra), as rightly emphasized by

learned counsel for respondent nos.1 and 2, is that the

importer in Board of Trustees of the Port of Bombay v.

Sriyanesh Knitters' case (supra) after having paid the

custom duty and penalty, took delivery of the goods but

failed to clear the account. The Port Trust was, in fact,

compelled to file civil proceedings for recovery of the

amount and it is in that context that the second

consignment was detained by the Port Trust as a

wharfinger under Section 171 of the Contract Act.

33. In the present case, the adjudicatory process was still on

when the second and third consignments were received

and thus it cannot really be said that there was a General

Balance of Account for which second and third

consignments could have been detained as security within

the provisions of Section 171 of the Contract Act. We do

not even consider it necessary to aver the fact that in the

present case the adjudication process has been in favour of

respondent no.1 while in Board of Trustees of the Port of

Bombay v. Sriyanesh Knitters' case (supra), the importer

paid the duty and the penalty and got the goods released

as the same may not impact the quantification of liability

towards the storage charges. The importer failed to pay

the crystallized demand which would be the General

Balance of Account even after adjudicatory process and

that is why the detention of the second consignment can be

said to be within the parameters of Section 171 of the

Contract Act.

34. Respondent no.1 in the present case never objected to the

payment of the amount due on account of storage, but the

amount had not been crystallized as on the date of

detention of the second and third consignments as the

adjudicatory process was still on. On completion of

adjudicatory process, the amount was paid both towards

custom duty and for storage charges.

35. A reading of the provisions of Section 63 of the Customs Act

shows that the interest of the warehouse is sought to be

protected by giving liberty to detain or deal with such part

of the goods as is necessary to clear the liability towards

such storage charges. It is not given a blanket power to

deal with the goods. The end claim of the appellant was of

Rs.1,60,000/- while the goods imported were worth

Rs.10,00,000/-. The custom authorities were not saying

that the goods were of a lesser value, but of a much higher

value. The goods were of sufficient security for any

storage charges. The goods were not perishable in nature

being acrylic scrap. There was sufficient security available

with the appellant in respect of the first consignment and

on that account also there was no need for detention of the

second or third consignment. A judgment of the Court is

not like a statute and must thus be read in the context of

the facts in which it was given keeping in mind the

principles of law. It is this aspect which has been

emphasized in State of Rajasthan v. Ganeshi Lal's case

(supra). The aforesaid distinguishing facts make it clear

that the ratio of Board of Trustees of the Port of Bombay v.

Sriyanesh Knitters' case (supra) would not apply to the

facts of the case in question in view of there being a large

number of essential and divergent facts.

36. We cannot lose sight of the fact that the demurrage which

has accumulated is not on account of disputed consignment

but is sought to be claimed for storage of the goods on

subsequent consignments which were improperly detained

and it cannot be said that the appellant is entitled to

recover this amount from respondent nos.1 and 2.

37. We find no merit in the appeal and the same is dismissed

leaving the parties to bear their own costs.

SANJAY KISHAN KAUL, J.

SEPTEMBER 22, 2008 MOOL CHAND GARG, J.

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