Orissa High Court
M/S. Sawstik Stevedores Pvt. Ltd vs State Of Odisha & Another .... Opp. ... on 15 October, 2025
IN THE HIGH COURT OF ORISSA AT CUTTACK
OJC NO.128 OF 1999
In the matter of an application under Articles 226 & 227 of the
Constitution of India
M/s. Sawstik Stevedores Pvt. Ltd., .... Petitioner
Cuttack
-Versus-
State of Odisha & Another .... Opp. Parties
Advocates appeared in this case:
For Petitioner : Mr. Banshidhar Baug, Sr. Advocate with
M/s. M. R. Baug, G.R. Sahoo & H. Sahu,
Advocates
For Opp. Parties : Mr. D. Lenka,
Addl. Government Advocate
[OP. No.1]
Mr. S.K. Padhi, Sr. Advocate with
M/s. (Ms.) D. Mohapatra & S. Parida,
Advocates
CORAM:
THE HON'BLE MR. JUSTICE DIXIT KRISHNA SHRIPAD
JUDGMENT
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Date of hearing & judgment : 15.10.2025
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PER DIXIT KRISHNA SHRIPAD,J.
Petitioner has structured his prayer as under:
"It is therefore humbly prayed that this Hon'ble Court be
graciously pleased to admit this writ petition, call for record, issue
rule nisi calling for the opp.parties to show cause as to why the rule
issued will not be made absolute and on receipt of show cause
sufficient/in sufficient be pleased to pass the following:
1.Declare the action of opp.party in making the illegal
demand of Rs.5,07,407/- towards demurrage charge vide
Annexure-7 as illegal.
2.Pass appropriate writ/writs directing the opp.party no.2 to
not to interfere the with shifting/supply of CARE FOOD
material meant for 11 lakhs poor people of the State of
Orissa in any manner.
3. Issue appropriate order declaring annexure-8 and 9 as
illegal and direct the opp.party no.2 to not to give effect to
the order dtd.1.2.1999 as available at Annexure-13.
4. And to pass such other order/orders as may be deemed fit
and proper."
The essential grievance of the Petitioner is as to the demand for
demurrage charges for not lifting the cargo from harbor dock to the
designated places for a period exceeding 45 days.
3. Counsel for the Petitioner submits that there is no privity of
contract between his client and the OP No.2-Paradip Port Trust, which
is a statutory authority under the Major Port Trusts Act, 1963. He also
submits that the cargo belongs to the OP No.1- State and the
demurrages are payable for keeping the cargo beyond the specified
time limit; if demurrage is not paid ordinarily under the Law of
Admiralty, the cargo is liable to be auctioned or forfeited, as the case
may be, and in that event, the looser is the State and not the Courier.
Lastly, he submits that the arrangement between the State and the
Petitioner whereunder arguably the liability is on the Petitioner cannot
be enforced by the Port Trust, as has been observed in Chitty on
Contracts.
4. Learned AGA-Mr. Lenka appearing for OP No.1 and learned
Panel Counsel appearing for OP No.2-Port Trust make submission in
justification of the demand for payment of demurrage and resist the
petition contending that it is the duty of Petitioner to discharge the
liability and therefore, no relief can be accorded to it, more particularly,
in the light of agreement between the State & the Petitioner, which has
the effect of fastening the liability on the Petitioner in favour of the Port
Trust. Both the Panel Counsel and the AGA draw attention of the Court
to some record in support of their contention.
5. Having heard learned counsel for the parties and having perused
the petition papers, this Court is inclined to grant indulgence in the
matter as under and for the following reasons:
5.1. It has been a long settled position in the law that contracts bind
parties thereto subject to all just exceptions and therefore, in the
absence of privity of contract, a non-party cannot enforce contractual
obligation resisting on parties. Admittedly, the Port Trust is not a party
to the contract entered into between the Petitioner on the one side and
the State on the other. No interest or obligation is created in the
instrument, in favour of the Port Trust to make it an exception to the
doctrine of privity of contract.
5.2. Learned counsel for the Petitioner is right in drawing attention of
the Court to the order dated 08.07.1998 made in OJC No.6881 of 1998
& M.C. No.8274 of 1998, wherein the State had contended "it is further
stated that because of delay in non-clearing, demurrage is being
charged which would ultimately be borne by the State......". Therefore,
there is enough material on the record of earlier proceedings to which
the State and the Port Trust were also parties. The stand taken by the
State in judicial proceedings operates as estoppel in pais and therefore,
Petitioner cannot be saddled with the liability to pay demurrage
charges. The State also cannot take up a contention to the contrary, the
battle lines having been drawn up between the parties herein in the
earlier legal proceedings.
5.3. It is brought to the notice of Court that the State itself had made
request to OP No.2-Port Trust to waive the demurrage liability and that
was favoured to the extent of 80%. That itself shows that the State was
liable and therefore, it had sought for such a waiver, there being no
contra indication in the record. The OP No.2-Port Trust is liable to
refund any amount recovered from or deposited by the Petitioner, in
terms of interim order dated 07.01.1999 within a reasonable time.
In the above circumstances, this petition is allowed and a Writ of
Certiorari issues quashing the impugned demand dated 08.12.1998 at
Annexure-7 qua the Petitioner. It is made clear that the Port Trust may
proceed against the State, if it so chooses, in accordance with law. It is
also made clear that the State may proceed against the Petitioner, in
accordance with law after discharging the demurrage liability, as
provided. All contentions of the parties are kept open.
Now, no costs.
Web copy of this order to be acted upon by all concerned.
Dixit Krishna Shripad,
Judge
Orissa High Court, Cuttack
The 15th day of October, 2025/Madhusmita
Location: HIGH COURT OF ORISSA, CUTTACK
