Case Briefs
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Chairman, Board of trustees, Cochin port trust V. M/s Arebee Maritime Agencies Pvt. Ltd


Author: Deepa, student at Lloyd law college, Meerut.

Citation: (2018) 4 SCC 592

Date of Decision: 05 Aug 2020

Original Copy: here 

Issues in Question: 

Whether the liability to pay ‘ground rent’ on containers unloaded at Cochin Port, which is not taken by the importers/ consignees and port authority refuses to destuff the containers on the basis of inadequate space of storage, can be imposed on the owners of the vessel/ steamer agents beyond the period of 75 days which is fixed by the Tariff Authority of Major Ports, section 47-A of the Major Port Trust Act 1963.

 

Background of the Case:

  • The issue started at Cochin Port in 1998, where a container lays on the port for more than 75 days, which on the record says import with synthetic woolen rags on the Cochin Port Trust premises. When the containers were destuffed and the empty containers were returned to the steamer agents but then the main issue came that the stuff occupied more space than earlier. Thereafter the items on paper were different and on the original ground the item was different. On taking back the items the provision was different as per the Custom Department which extent the liability to be imposed on the consignee. 
  • When it talks about the liability which turns toward the consignee/importer to satisfy the port and other authorities. The consignee did not clear the debt as they were lying on the premises of the port for a very long period of time. In turn the port authorities charged ‘ground rent’ from the steamer agents/owner of the containers.
  • After then setting out the relevant provisions of the Major Port Trust Act, 1963 were as follows:
    1. Port of Madras v. K.P.V Sheik Mohamed Rowther & Co 1963 ‘Rowther-1’ 
    2. Port of Madras v. K.P.V Sheik Mohd. Rowther & Co P.Ltd ‘Rowther-II’ 
    3. Port of Bombay v. Sriyansh Knitters.
    4. Forbes Forbes Campbell & Co v. Port of Bombay ‘Forbes-II’ 
    5. Rasiklal Kantilal & Co. v. Port of Bombay.  

Judgement: 

  • In 1963, a Constitution Bench in the Trustees of the Port of Madras v KPV Sheik Mohamed Rowther & Co ‘Rowther-I’upheld the power of the Board to collect rates/charges from the steamer agent. 
  • Decision of a three judges Bench of this Court in Trustees of the Port of Madras v. KPV Sheik Mohd. Rowther & Co. Pvt Ltd ‘Rowther-II’ upheld the goods remained in the custody of the Port Trust for a long time till they were ultimately confiscated by the Customs Authorities. It was held that only the consignee was liable to pay the damages charges. 
  • The decision in Port of Bombay v. Sriyansh Knitters was based on the interpretation of the term ‘owner’ under section 2(o) of the MPT Act . In relation to goods to include any consignee, consignor, shipper or agent for the sale, custody, loading of such goods this is owned by the real owner of the goods. 
  • A Bench of two Judges of this court heard the matters and in Forbes Forbes Campbell & Co. Ltd v. Board of Trustees, Forbes-II dealt with the liability of the steamer agent to pay the port charges. 
  • In Rasiklal Kantilal & Co. v. Board of Trustee of Port of Bombay, a bench of two judges of this Court observed that it is reasonable to interpret that only the ship and its agent are liable to pay the rates for these services.
  • The bench came to the decision that the 1st respondent would be entitled to enforce its rights from the shipowner and the 1st respondent against the consignee to recover the  expenses. 

Critical Analysis: 

  • The decision in Rowther -I, Roether -II, Sriyansh Knitters, Forbes-II and Rasiklal are not same as in judgement to whom is liable for the charges to the Port Trust. 
  • In Rowther-I, The constitution bench holds that when Port Trust takes charges of the goods from the ship-owner,the shio-owner is the bailor and the Port Trust is the bailee. But in Saryanesh Knitters case holds that there comes into existence the relationship of bailor and bailee between the consignee and the Port Trust. 
  • While the decision in Sriyansh Knitters was based on the interpretation of the term “owner”  but Rasiklal does not go with the term. 
  • The decision in Forbes-II disagrees with the view of Sriyansh Knitters Rasiklal that enquiry into such a relationship is irrelevant in determining the rights of a port trust to recover its dues. 
  • In Rowther-II, it was upheld that once the goods are handed over to the Port Trust by the steamer and the steamer agents have duly endorsed the bill of lading or issued the delivery order, their obligations to deliver the goods personally to the owner ends.
  • The consequence is that the sub-bailee would be entitled to enforce its right from the bailment between the shipowner and the sub-bailee against the consignee and recover expenses incurred by the consignee. 

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