Wellman Carbo Metalicks (india) Ltd. v. Board Of Trustees For The Port Of Kolkta
2020-03-03
HIRANMAY BHATTACHARYYA, SANJIB BANERJEE
body2020
DigiLaw.ai
JUDGMENT 1. The Court : Sufficient grounds have been made out as to why the appellant was not represented on December 20, 2019 when the appeal was dismissed for default. The appeal is readmitted and taken up for immediate consideration. 2. The restoration application, GA No.183 of 2020, is allowed. 3. The appeal arises out of the rejection of a petition under Article 226 of the Constitution by an order dated July 28, 2017. There is no dispute that the writ petitioner through its agent applied for a licence to be granted on monthly basis to occupy space within the Port area at the Kidderpore docks. Two separate areas were allotted to the writ petitioner appellant: one at Dock-II and one at the coal berth. The licence in respect of Dock-II commenced on June 23, 2010 for a month; in respect of the coal berth it commenced on August 23, 2010 for a month. In respect of the area occupied at Dock-II, upon requests being made for renewal of the tenure, the licence for an original period of a month was extended for a second month and even a third month upto October 22, 2010. In respect of the licence at the coal berth, a one-time renewal was granted till October 22, 2010. 4. On or about August 24, 2010, Resolution 89 came to be passed by the Board of Trustees for the Port of Kolkata to levy additional charges on licences who overstayed the tenure of the licence. The relevant resolution provided for three times the prevailing scale of rates to be charged for the first 30 days of the overstay; five times the prevailing scale of rates be charged for the next 30 days; and, ten times the prevailing scale of rate be charged for the period beyond 60 days from the date of expiry or termination of licence till the area was vacated. 5. It is evident that the writ petitioner and its port agent were aware of the charges that the writ petitioner was liable to pay and, indeed, under cover of its agents letter of December 6, 2010, the payment at normal rate and the payment at the enhanced rate were tendered for the area occupied at Dock-II.
5. It is evident that the writ petitioner and its port agent were aware of the charges that the writ petitioner was liable to pay and, indeed, under cover of its agents letter of December 6, 2010, the payment at normal rate and the payment at the enhanced rate were tendered for the area occupied at Dock-II. Similarly, in respect of the coal berth, the charges at the normal rate and charges at the enhanced rate were tendered under cover of another letter dated December 6, 2010. 6. It further appears that though the renewed period of licence for Dock-II ran out on October 22, 2010 and the writ petitioner paid enhanced charges at three times the normal rate for the period October 23, 2010 to November 10, 2010, at the request of the writ petitioner, the tenure of the licence was extended by a further period of a month from November 11, 2010 and, thus, till December 10, 2010 the writ petitioner was liable to pay at the normal rate in respect of its occupation of the space at Dock-II. Similarly, in respect of the space at the coal berth, the renewed tenure ran out on October 22, 2010 and for the period October 23, 2010 to November 10, 2010, the writ petitioner paid at three times the normal rate. Again, upon the writ petitioners request, an extension of another month was granted at the coal berth from November 11, 2010 to December 10, 2010 for which the normal rate was applied. However, since the writ petitioner did not remove its goods either from Dock-II or from the coal berth upon the expiry of its tenure at either place by December 10, 2010, the writ petitioner became liable to pay at the higher or penal rate as per Resolution 89. 7. By a notice dated February 14, 2012, the Port demanded a sum of about Rs.1.09 crore from the writ petitioners agent in respect of the occupation at Dock-II and a sum of about Rs.36.54 lakh for the writ petitioners occupation at the coal berth. Such notice of February 14, 2011 came to be challenged in this Court by way of the present proceedings. 8.
Such notice of February 14, 2011 came to be challenged in this Court by way of the present proceedings. 8. According to the writ petitioner appellant, the principal plank of its challenge to the enhanced rates demanded by the Port is that the Port had no authority to fix any tariff since the power to do so rested exclusively with the Tariff Authority for Major Ports (TAMP) constituted under the Major Port Trusts Act, 1963. The writ petitioner refers to Section 49 of the Act and the consummate authority of TAMP to fix rates under Chapter VI of the Act which is intituled 'Imposition and Recovery of Rates at Ports'. 9. The further ground urged by the writ petitioner is that the Port in this case arbitrarily exercised its statutory lien over the goods stored by the writ petitioner and the Port purported to auction the same at a gross undervalue despite the writ petitioners protest. 10. The petition failed before the writ court. In the judgment of July 28, 2017, the writ court referred to the contract being a non-statutory contract and, as such, not capable of being challenged under Article 226 of the Constitution. Further, the writ court was not satisfied that there were any TAMP rates which had been overwritten by the Port. The writ court reasoned that the Act of 1963 could not be construed to mean that where TAMP rates are not available, nothing could be realised by a port authority for letting out its space for commercial purpose. The writ court also noticed that the writ petitioner had not contested the imposition of the rates and charges contemporaneously and that it did not challenge the board resolution or the authority to pass such resolution. 11. However, it does not appear that some of the material relevant for a more wholesome decision in the matter may have been brought to the notice of the writ court. The Port in this case has relied on a notification of March 21, 2005 issued by TAMP appending a set of 'Guidelines for Regulation of Tariff'. According to the Port, in view of several clauses of the Guidelines, particularly, Clauses 2.16.1, 2.17.1, 2.17.2 and 2.17.3, a major port had due authority to fix rates and tariff during the interregnum and till rates therefor were decided upon by TAMP.
According to the Port, in view of several clauses of the Guidelines, particularly, Clauses 2.16.1, 2.17.1, 2.17.2 and 2.17.3, a major port had due authority to fix rates and tariff during the interregnum and till rates therefor were decided upon by TAMP. The Port also refers to the 2011 publication of the TAMP rates. Clause 19 of the notes to the 2011 TAMP rates reflects the exact decision which forms the basis of Resolution 89 taken by this Port on August 24, 2010. Clause 19 of the notes provides that after the expiry of a licence, which would be for a duration of 30 days, if the licensee continued to occupy the space, it would be liable to pay three times the normal rate for the first 30 days of overstay; five times the normal rate for the next 30 days; and, ten times the normal rate thereafter. 12. The Port submits that even though the writ petition was amended in the year 2014, there was no challenge to the TAMP rates of 2011 or the notes appended thereto by which enhanced charges could be obtained from short-term licensees who overstayed their welcome at any premises at a major port. 13. The writ petitioner seeks to question the authority of the Port notwithstanding the notification of March 31, 2005. According to the writ petitioner, the notification was issued in exercise of policy directions issued by the Central Government under Section 111 of the Act of 1963. The writ petitioner refers to Section 111 of the Act and suggests that the authority thereunder does not cover the fixation of any rate or tariff. It is the further contention of the writ petitioner that Clause 7 of the preamble to the Guidelines notified on March 31, 2005 indicates the very limited purpose of the Guidelines. The writ petitioner also refers to Clauses 1.3 and 1.4.1(ii) of the Guidelines to suggest that such guidelines could not have been the appropriate authorisation for arbitrary penal charges to be imposed by the Port. 14.
The writ petitioner also refers to Clauses 1.3 and 1.4.1(ii) of the Guidelines to suggest that such guidelines could not have been the appropriate authorisation for arbitrary penal charges to be imposed by the Port. 14. In the absence of the notification of March 31, 2005 or the Guidelines notified thereby, there may have been sufficient doubt as to whether the Port, in the absence of any direction issued by TAMP in such regard, could have fixed any tariff or any enhanced rate for continued occupation of its premises by short-term licensees after the expiry of their tenures. However, the notification of March 31, 2005 and the express words of the Guidelines, particularly, the clauses relied upon by the Port, gave the Port sufficient authority to fix the rate and even enhanced rates for continued occupation of licensed areas by licensees beyond the tenure of their licences. TAMP was set up to provide for uniform rates and tariff at all major ports. Once TAMP was constituted, major ports could no longer decide on such rates. At a time when TAMP was constituted but it had not finalised the rates, it was well within the authority of TAMP, in view of the Central Governments instructions under Section 111 of the Act, to provide for a temporary arrangement till the rates for different purposes were finalised by TAMP. The authority of the Port here to pass Resolution 89 must be seen in such light. In any event, notwithstanding the exclusive authority of the TAMP to fix rates and tariffs at major Ports, Section 49(3) of the Act permits the board at a major Port to lease any land or shed belonging to it or in its possession for occupation at a rate higher than provided for by TAMP if such lease is by auction or upon inviting tenders therefor. Though the authority exercised in this case in passing Resolution 89 and implementing the same may not be traceable to Section 49(3) of the Act , the Guidelines of 2005 issued by TAMP expressly provided for the same and no question arises of the Port not having the jurisdiction or the power to demand the enhanced charges as done by the impugned notice in this case. 15.
15. It must also not be lost sight of that the challenge to the Ports authority to charge at an enhanced rate was by way of an afterthought and after the writ petitioner had already submitted to the same by accepting it as would be evident from its letters dated December 6, 2010. Once a party submits to a particular rate or an act without any reservation and acts in accordance therewith, it does not behove such party to question it at a subsequent stage unless it can make out a case of having adhered to the demand by mistake or it can demonstrate the complete lack of authority in the demand that would render it void ab initio. The quality of the writ petitioners challenge in this case is not as high as that. 16. Having repelled the principal challenge on the ground of lack of authority on the part of the Port to prescribe enhanced charges for a licensee overstaying its welcome at the Port premises, it is the second aspect now that has to be looked into: whether the Port could have withheld the goods that the writ petitioner had left behind and whether there was any anomaly in the sale of such goods by auction. 17. It is apparent that notices were issued both to the writ petitioners agent on November 18, 2011 and to the writ petitioner subsequent thereto that the consignment of soft coking coal left at the Port premises at Dock II and the coal berth by the writ petitioner was to be auctioned vide a sale notice dated November 16, 2011. Though no immediate auction took place since the writ petitioner came to Court, the auction was conducted sometime in 2014 and after a notice dated April 30, 2014 was issued by the Port to the agent of the writ petitioner. By such notice, the Port demanded that the writ petitioner pay a sum of Rs.4,11,11,325/- within seven days and take delivery of the 9135.85 MT of soft coking coal that was left behind at Dock-II and the coal berth. 18. The writ petitioners agent responded to the notice of April 30, 2014 by a letter of June 27, 2014. The only ground taken in such reply was that the valuation of the coal was not appropriate.
18. The writ petitioners agent responded to the notice of April 30, 2014 by a letter of June 27, 2014. The only ground taken in such reply was that the valuation of the coal was not appropriate. At the auction that was conducted between March and July, 2014, the initial highest bid received at the auction on March 27, 2014 was rejected since it did not meet the reserved price set at Rs.4500/- per MT. A second attempt was made on April 30, 2014 to have the material sold, but no bid was received. A third try resulted in a bid of about Rs.2.50 crore for the entire lot of 9135.85 MT of soft coking coal. Such bid had to be rejected since it was, technically, the second auction and at such second auction, the reserved price stood scaled down by 10%, implying that if 90% of the original reserved price was not quoted, the sale could not go through. Thus, the sale was carried over to the auction held on July 3, 2014 when an appropriate bid was received. The total amount that the sale fetched was about Rs.3.95 crore, which was above the threshold of 80 per cent of the reserved price since it was the third auction. 19. In terms of Section 62 of the Act of 1963 , the Port had the authority to dispose of the goods not removed from the premises of the Port within the appropriate time. In any event, no question was raised as to the Ports authority to sell the coal that was left behind by the writ petitioner; it was only the valuation that was questioned. As to the objection on the ground of valuation, the proof of the pudding, as they say, is in the eating. If the goods were valued higher than the price at which they were sold, the writ petitioner ought to have arranged an appropriate buyer to bid for the same. As would be evident from the events narrated hereinabove, no appropriate bidder was available till or about four months after the bidding process started and it was only at the third attempt that a bidder matched 80% of the reserved price for such bid to be accepted by the Port.
As would be evident from the events narrated hereinabove, no appropriate bidder was available till or about four months after the bidding process started and it was only at the third attempt that a bidder matched 80% of the reserved price for such bid to be accepted by the Port. There does not appear to have been any anomaly on the part of the Port, far less any recklessness, in conducting the sale of the goods over which the Port exercised its lien. 20. The order impugned does not call for any interference in the light of the discussion above. However, the material in support of the order may not have been made available to the writ court. Accordingly, the reasons in support of the impugned order are supplied in this appellate order. APO No.23 of 2018 is dismissed. The appellant will pay costs assessed at Rs.25,000/-. Urgent certified website copies of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.