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1993 DIGILAW 539 (KER)

Luga Bay Shipping Corporation v. Board of Trustees Port of Cochin

1993-11-25

K.SREEDHARAN, M.JAGANNADHA RAO

body1993
Judgment :- Sreedharan, J. These Original Petitions have come before us on a reference made by a learned Single Judge. The short question that arises for decision in these petitions is whether the Cochin Port Trust is entitled, under the Major Port Trust Act, the Indian Ports Act and the Regulations made thereunder, to demand an unconditional cash deposit from the owner of a ship which caused damage to the property of the Port Trust. 2. Short facts necessary for the decision of these petitions are as follows:- Petitioner in O.P.5822/1984 is a foreign company, which owns the vessel M/T LARNACA. Petitioner in O.P.6986/1984 is the agent of the vessel M/T LARNACA Vessel M/T LARNACA reached outer rods of Cochin Harbour on 2-6-1984. She entered the harbour on 6-6-1984 and was berthed at No. 2 berth in the Cochin Shipyard. She was shifted from that berth to North Tanker Berth, as required by the Cochin Shipyard, on 14-6-1984. While she moved to the North Tanker Berth, she was under the control of Pilot Captain C.V- lose, provided by the Cochin Port Trust. At the time of berthing the vessel at the North Tanker Berth, it is stated that it dashed against the northern side of the RCC platform on which gravity fenders are suspended and also caused damage to the platform. On 16-6-1984, the vessel was again shifted from the North Tanker Berth to the Dry Dock in the Cochin Shipyard for repairs. Not of the damage caused to the RCC platform of the North Tanker Berth was given to the petitioners on 20-6-1984. In the reply to the notice issued by the Port Trust, the Master repudiated liability. Statement of the Master was recorded by the Port Trust of 25-6-1984. On 29-6-1984, Ext. P6 notice was served, calling upon the petitioners to make cash deposit of Rs. 33.82 lakhs being the estimated cost of demolishing the concrete top structure, removing of piles, etc., and to do the reconstruction of the damaged fender dolphin. Petitioners contend that the Port is note titled to fix a arbitrary amount towards damages and that the petitioners were ready and willing to furnish a bank guarantee in the amount demanded, subject to determination of the quantum and liability. Petitioners contend that the Port is note titled to fix a arbitrary amount towards damages and that the petitioners were ready and willing to furnish a bank guarantee in the amount demanded, subject to determination of the quantum and liability. Their further contention is that the Port Trust cannot arbitrarily demand payment of an amount as damages unless the quantum and liability ate determined in accordance with law or by agreement between parties. 3. Along with Original Petition 6986/1984, petitioner moved C.M.P-.21799/1984 praying for stay of enforcement of condition No. 6 of notification dated 8-1-1980, Scale of Rates and Statement of Conditions for levy of charges by Cochin Port Trust, till final disposal of the Original Petition. This Court on 21-8-1984 granted interim stay as prayed for until further orders. That order still continues to be in force and so, the bank guarantee furnished by the petitioner has not been encased till date. 4. The fact that M/T LARNACA was berthed in the North Tanker Berth at about 3.00 P.M. on 14-6-1984 is the common case of the parties to this proceeding. According to the petitioners, the berthing was normal and nothing abnormal about the berthing was communicated to the petitioners or their agents. On the other hand, the stand of the Port Trust is that while berthing the vessel M/T LARNACA, it caused extensive damage to the North Tanker Berth and after an extensive examination, damages was assessed by the Port Chief Engineer at Rs. 33.82 Lakhs. Second respondent thereupon requested the k>ca! agents of the vessel to deposit that amount. They were also informed that the vessel will be allowed to sail from the Port only after the amount is deposited. 5. It is the case of the Cochin Port Trust that the Deputy Conservator reached a final decision regarding the damages on the basis of an enquiry conducted by him. During the course of enquiry, statements were recorded from the Master of the vessel, Pilot on duty, Deputy Wharf Superintendent and Engineering Personnel on duty. According to the respondent, the Indian Ports Act, read in conjunction with S.116 of the Major Port Trusts Act, provides that the owners or Master of a vessel is responsible for any loss or damage caused by the vessel. Rs. According to the respondent, the Indian Ports Act, read in conjunction with S.116 of the Major Port Trusts Act, provides that the owners or Master of a vessel is responsible for any loss or damage caused by the vessel. Rs. 33.82 Lakhs was assessed as the damages caused by Mf I LARNACA, on the basis of the estimate prepared by the Ports Chief Engineer. The assessment of that amount as damages was properly made and petitioners, if want to challenge the same, have to approach the civil court. It is also contended that this Court, under Art.226 of the Constitution, is not to adjudicate upon the quantum of damages in this proceedings. 6. Section 116 of the Major Ports Trusts Act, 1963 states that if, through the negligence of any person having the guidance or command of any vessel any damage is caused to any jetty, the amount of such damage shall, on the application of the Board be recoverable, together with the cost of such recovery, by distress and sale, under a Magistrate's warrant, of a sufficient portion of the boats, masts, spares, ropes, cables, anchors or stores belonging to that vessel. It states that no Magistrate shall issue such a warrant until the master of the vessel is duly summoned to appear before him and if he appears, until he has been heard. No such warrant shall be issued if the vessel was at the time under the orders of a duly authorised employee of the Board and the damage caused was attributable to the order, act or improper omission of such employee. This provision, according to us, make it clear that the amount of damages is to be determined by the Board. The Section provides the manner in which the said amount is to be recovered. The Board need approach the Magistrate only for effecting the recovery of that amount. When the Port approaches the Magistrate for effecting the recovery, then Magistrate is to issue summons to the master of the vessel and hear him. This hearing is not in any way connected with the quantification of the damages. Similar provision is contained in S.74 of the Harbours, Docks and Piers Clauses Act, 1847. With reference to this Section in River Wear Comrs. v. Adamson, (1877) 2 App. Cas. This hearing is not in any way connected with the quantification of the damages. Similar provision is contained in S.74 of the Harbours, Docks and Piers Clauses Act, 1847. With reference to this Section in River Wear Comrs. v. Adamson, (1877) 2 App. Cas. 743, it was held that the owner or master was not liable under that Section where the vessel 7. Owner and master of vessel answerable for damage to works-Saving as to vessels la charge of licensed pilot: The owner of every vessel or float of timber shall be answerable to the undertakers for any damage done by such vessel or float of timber, or by any person employed about the same, to the harbour, dock, or pier, or the quays or works connected therewith, and the master or person having the charge of such vessel or float of timber through whose wilful act or negligence any such damage is done shall also be liable to make good the same; and the undertaker may detain any such vessel or float of timber until sufficient security has been given for the amount of damage done by the same: Provided always, that nothing herein contacted shall extend to impose any liability for any such damage upon the owner of any vessel, where such vessel shall at the time when such damage is caused be in charge of a duly licensed pilot whom such owner or master is bound by law to employ and put his vessel in charge of. had damaged a pier, being driven against it by the violence of the winds and waves, at a time when master and crew had been compelled to escape from on board and had no control over the vessel. This case was explained and distinguished in Great Western ly Co. v. Mostyn, (1928) AC 57, where it was held that there was liability under the above-mentioned section where, although there was no negligence, the vessel at the time of the damage was under the direction of the owner or his agent. From these, it is clear that the liability of the owner or master of the ship, as regards the damages to the Port is concerned, is absolute. From these, it is clear that the liability of the owner or master of the ship, as regards the damages to the Port is concerned, is absolute. Likewise, under S.116 of the Major Port Trusts Act, 1963, the liability of the master or owner of the vessel in regard to the damage caused to the dock, wharf, quay, mooring, stage, jetty, pier, etc. is absolute. 7. Section 131 of the Major Port Trusts Act states that without prejudice to any other action that may be taken under the Act, a Board may recover by suit any rates, damages, expenses, costs, or in the case of sale the balance thereof, when the proceeds of sale are insufficient or any penalties payable to, or recoverable by, the Board under the Act or under any regulations made in pursuance thereof. This Section gives a remedy by a suit to the Board to recover damages. 8. In exercise of the powers conferred by Ss.48, 49 and 50 of the Major Port Trusts Act, 1963, the Cochin Port Trust, with the previous sanction of the Central Government, made the Scale of Rates and Statement of Conditions for the levy of charges as per notification dated 8-1-1990. Clause 16 thereon provides for assessment and recovery of compensation for damages. It inter-alia states that the Conservator of Ports shall take the necessary steps to ascertain the amount of damages. A notice specifying such amount of damage so ascertained and demanding its payment shall be served on the master or owner of the vessel. Thereupon it will be lawful for the Conservator to seize the vessel which caused the damages and detain the same till the amount is paid. Conservator may also sell the vessel and out of such sale proceeds pay to the credit of the Cochin Port Trust the amount of damage, the cost of seizure, detention and sale. The Board has thus the right to detain the vessel in the Port until the amount is paid or security is furnished. These provisions, according to us, authorise the Board to estimate the damages and call upon the master or owner of the vessel to pay the same. In case of failure, they can detain the vessel. 9. Where master disputes the quantum of damages or the claim made by the Port, it is open to have the dispute resolved by a competent civil court. In case of failure, they can detain the vessel. 9. Where master disputes the quantum of damages or the claim made by the Port, it is open to have the dispute resolved by a competent civil court. This right of the master or the owner of the ship is not in dispute. 10. According to the learned counsel representing the petitioner, the unilateral action taken by the Port Trust in assessing the damages at Rs. 33.82 lakhs is in violation of the principles of natural justice and on that sole ground, the order issued by the Trust has to be set at naught. This argument though quite attractive, we are afraid, cannot be sustained. This is more so because the correctness or otherwise of the decision is open to challenge before the civil court. In the cases involving ships, which are to sail away, the decision has to be arrived at without any delay. In cases where the damages are to be ascertained only after complying with the principles of natural justice, vessels will have to be detained in the Port for sufficiently long periods. This will adversely affect the international trade. This is more so in circumstances where foreign ships are involved. They will have to sail away within the shortest time. If decision is not arrived at, the Port Trust would have no remedy to recover the damages. So also if the damage caused to the Port is not repaired with utmost speed, it will cause dislocation to the traffic. Port Trust will not be in a position to wait until the quantum of damages is determined by a Court or by complying with the principles of natural justice. As observed by the Supreme Court in Karnatqka Public Service Commn. v. B.M. Vijaya Shankar, (1992) 2 SCC 206, eventhough the procedure of affording hearing is as important as decision on merits yet urgency of the matter, or public interest at times require flexibility in application of the rule as the circumstances of the case and the nature of the matter required to be dealt with may serve interest of justice better by denying opportunity of hearing and permitting the person concerned to challenge the order itself on merits not for lack of hearing to establish bonafide or innocence but for being otherwise arbitrary or against rules. According to us, the case before us can safely be placed in this category, where natural justice, before taking an action, stood excluded. In the instant case, if the petitioner wants to question the quantum of damages fixed by the Port Trust, they can successfully do it by approaching a civil court. Before the civil court, a full review of the order on merit can be asked for. In such a situation, absence of a hearing prior to the decision taken by the respondent cannot in any way vitiate the said decision. In Charan LalSatm v. Union of India, AIR 1990 SC 1480, a Constitution Bench of the Supreme Court observed: - "The rules of natural justice can operate only in areas not covered by any law validly made. The general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not in terms exclude this rule or prior hearing but contemplates a post-decisional hearing amounting to a full review of the original order on merits then such a statute would be construed as excluding the audi alteram partam rule at the pre-decisional stage. If the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to the person affected the administrative decision after post-decisional hearing was good". In the instant case since the petitioner's right to question the correctness or otherwise of the quantum of damages fixed by the respondent before a Court of law is not taken away, the absence of hear igprior to the decision will not make that decision void or illegal. In view of what has been stated above, we find no merit in these Original Petitions. They are accordingly dismissed.