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2022 DIGILAW 351 (CAL)

Fairmacs Shipping and Transport Service Private Limited v. Lieutenant Governor

2022-03-04

JAY SENGUPTA

body2022
JUDGMENT : Jay Sengupta, J. 1. This is an application challenging an order dated 12.11.2021 passed by the Manager (Cargo Operations), Port Management Board, A & N Administration, Port Blair and for directing the respondent authority not to impose demurrage charges upon the petitioner for utilising the open space so allotted by the respondent authorities to the petitioner and its subsidiary company. 2. The writ petitioner is a company which used to stack river sand in the open space belonging to Port Management Board on the basis of allotment order issued by the Port Management Board and after paying necessary license fee. The respondent alleged that the petitioner was in unauthorised occupation of an excess area of 2922.1 Sq. Mtrs at the Junglighat terminal. Subsequent to an enquiry by the Anti Corruption Unit, the respondent authorities decided to impose demurrage charges on the writ petitioner. On 15.11.2021 the writ petitioner received an order whereby a sum of Rs.229,39,29,784/- was decided to be recovered from the writ petitioner on the ground of illegal occupation of open spaces at the Junglighat and the Haddo wharves. 3. Mrs. Anjili Nag, learned counsel appearing on behalf of the writ petitioner submitted as follows. No show cause notice was issued to the writ petitioner before passing the order dated 12.11.2021. As such, no opportunity of hearing was afforded to the writ petitioner before passing the order. As the impugned order resulted in civil consequences, an opportunity of hearing was a must. First, the notice dated 29.06.2021 issued to M/s. Fairmacs Shipping Trading Company and the reply submitted by the writ petitioner being M/s. Shipping Transport Services Private Limited on 02.07.2021 could not act as a substitute for a proper show cause notice. For one, the notice was not addressed to the writ petitioner. Secondly, the said notice was for the period of 01.02.2021 to 30.09.2021 whereas the impugned order the relevant period was from 23.06.2017 to 15.07.2021. Moreover, the authorities regularized the alleged illegal possession by imposing license fee and by receiving the said amount. Besides, the authorities did a wrong calculation for the purported demurrage charges inasmuch as the same was calculated for the entire land including the allotted land. The authorities could not claim demurrage charges in respect of any land towards which license fee had been paid by the petitioner. The calculations anyway did not have any basis. Besides, the authorities did a wrong calculation for the purported demurrage charges inasmuch as the same was calculated for the entire land including the allotted land. The authorities could not claim demurrage charges in respect of any land towards which license fee had been paid by the petitioner. The calculations anyway did not have any basis. By filing an affidavit in opposition the respondent authorities clearly showed their intention of not changing their decision. Reliance was placed on the decision in Gurmej Singh Vs State of Punjab & Anr. 2009 (12) SCC 440 , H.L. Trehan Vs. Union of India 1989 (1) SCC 764 , Shekhar Ghosh Vs Union of India & Anr. 2007 (1) SCC 331 , Rajesh Kumar & Ors. Vs. D.C.I.T. & Ors. AIR 2007 SC 181 , Gajraj Singh Vs State of U.P. and others Writ petition No. 981 of 2005. 4. Mr. S. Chakraborty appearing with Mr. R. Agarwal represented the respondent authorities and submitted as follows. The writ petition suffered from procedural defects. First, it was filed on the strength of an affidavit affirmed by a person who claimed to be the power of attorney of the Managing Director of the petitioner company. The power of attorney itself did not authorise the filing of the application before this Court. Although the defect was sought to be rectified by filing a supplementary affidavit on 13.12.2021, the same could not be cured retrospectively. On merits, it was an admitted case that the Port authority was the sole arbitrar for calculation of demurrage charges. Indisputably, the demurrage charges were calculated in the instant case as per the rates specified by the statute. Interest was also accordingly charged. The status of the petitioners as unauthorised occupants stood admitted by virtue of the petitioner comply with the notice dated 21.06.2021 asking the petitioner to make payment for occupation charges. A demand notice was surely issued to the petitioner as would be apparent from the response of the petitioner by its letter dated 02.07.2021. The demand notice was evidently dated 29.06.2021. It is now a settled principle of law that where the statute did not contain a mandatory provision providing for hearing, the requirement of hearing or natural justice would be read in by the court only where denial of such opportunity of hearing would cause prejudice to the complaining party. The demand notice was evidently dated 29.06.2021. It is now a settled principle of law that where the statute did not contain a mandatory provision providing for hearing, the requirement of hearing or natural justice would be read in by the court only where denial of such opportunity of hearing would cause prejudice to the complaining party. Reliance was placed on State of U.P. Vs Sudhir Kumar Singh, 2020 SCC Online SC 847; Luga Bay Shipping Corporation and Anr. Vs Board of Trustees of the Port of Cochin and Anr., (1997) 1 SCC 631 ; Ashit Shipping Services, Gandhiram and Anr. Vs Board of Trustee Kandia and Anr., AIR 2003 Guj 202 . In the instant case non hearing to the petitioner before issuing the impugned demand dated 12.11.2021 did not cause any prejudice to the petitioner for the reason that demurrage had been charged as per statutory rates and the respondent authorities had no subjective discretion in this matter. Imposition of demurrage by Port authority amounts to penal action. As opposed to the notice of 3 months indicated in the demand dated 29.06.2021 demurrage was imposed and action was taken after 4 1/2 months to the petitioner before raising the demand. In view of the above, there was more than sufficient compliance with the principles of natural justice, even though the respondent authority was not required to do so under the statutory provisions. It may be germane to point out that serious allegations of criminal and corrupt practices on the part of the writ petitioner have been investigated by the anti-corruption unit of the administration. In fact, an FIR was lodged against the petitioner as per directions of the Hon’ble Lieutenant Governor. Thus, the present case qualified as a case where public interest demanded that no pre-decisional hearing was granted to the petitioner and the lack of pre-decisional hearing did not vitiate the impugned order. On this reliance is placed on I.J. Rao, Assistant Collector of Customs Versus Bibhuti Bhushan Bagh and Another (1989) 3 SCC 202 . Considering the seriousness of the allegations and the conduct of the writ petitioner, the writ petitioner was undeserving of an equitable relief. 5. Although at the time of arguments these were not advanced as submissions, the following points were incorporated on behalf of the Administration in the written notes of submissions. Considering the seriousness of the allegations and the conduct of the writ petitioner, the writ petitioner was undeserving of an equitable relief. 5. Although at the time of arguments these were not advanced as submissions, the following points were incorporated on behalf of the Administration in the written notes of submissions. The petition did not contain mandatory averments as required under Rule 11 and Rule 20 of the Appellate Side Rules of this Court. Rule 11 provided that a paragraph should contain statements that on the same facts or cause of action no application was moved earlier. Rule 20 provided that a statement in the petition should contain information as to whether a demand for justice was made. 6. I heard the submissions of the Learned Counsel appearing on behalf of the writ petitioner and the respondent authorities and perused the petition, the affidavits and the written notes of submissions filed on behalf of the parties. Representation of the petitioner company through a power of attorney of the Managing Director: 7. The Administration has taken up a plea that the petitioner company cannot be represented by the executant. According to them, although the affidavit was affirmed by a person claiming to be a power of attorney of the managing director of the petitioner company, the power of attorney appended did not authorise the filing of an application before this Court and this defect could not be rectified by the supplementary affidavit filed in this regard. By a supplementary affidavit affirmed on 09.12.2001, the writ petitioner has placed on record a resolution of the board of directors of the company passed on 16.11.2021 authorising the executant to represent the company in a proceeding before this Court. It is claimed that the same could not be annexed with the writ petition due to the exigent manner in which the filing of the application had to be dealt with. It appears that the executant has been duly authorised by the board to represent the company. Therefore, I do not find any merit in the contention of the Administration that the writ petitioner has not been properly represented in this case. Adherence to Rules 11 and 20 of the Appellate Side Rules of the Calcutta High Court: 8. It appears that the executant has been duly authorised by the board to represent the company. Therefore, I do not find any merit in the contention of the Administration that the writ petitioner has not been properly represented in this case. Adherence to Rules 11 and 20 of the Appellate Side Rules of the Calcutta High Court: 8. The Administration has contended for the first time in its written notes that Rules 11 and 20 of the Appellate Side Rules have not been adhered to in the present application. First, these points ought to have been taken up during oral submissions. While Rule 11 requires a statement to be made that no application on the same facts or the same cause of action was moved earlier, Rule 20 provides that a statement should be made as to whether demand for justice was made. The Rules referred to herein are not substantive law, but are Rules of procedure. In the present case, it has not been claimed by anyone that a previous application was filed by the petitioner on the same facts or over the same cause of action. Besides, absence of a specific demand for justice does not denude this Court of its powers to exercise jurisdiction under Article 226 of the Constitution of India. The facts and circumstances here are such that a further demand for justice would have indeed been an empty formality. In view of the above, I do not find that the objections of the Administration regarding a strict adherence to the above Rules can be sustained in the present case. Whether any show cause notice was issued before imposing demurrage: 9. Although it was argued on behalf of the Administration that the demand notice was issued by the authorities to the petitioner on 29.06.2021, a careful reading of the same would show that it was meant for the period 01.02.2021 to 30.09.2021. However, the impugned order covers the period from 23.06.2017 to 15.07.2021. Therefore, the notice dated 29.06.2021 cannot be treated as a show cause notice for the impugned order/imposition of demurrage charges. Whether the petitioner ought to have been heard before the imposition of demurrage charges: 10. The prime contention of the writ petitioner is that before passing such an order which results in civil consequences, it is mandatory to give an opportunity of hearing. Whether the petitioner ought to have been heard before the imposition of demurrage charges: 10. The prime contention of the writ petitioner is that before passing such an order which results in civil consequences, it is mandatory to give an opportunity of hearing. Unless the petitioner is heard on this, it shall cause severe prejudice to the petitioner. Besides, the authorities made a wrong calculation for the purported demurrage charges inasmuch as the same was calculated for the entire land including the allotted land. Moreover, the authorities could not claim demurrage charge towards which licence fee had already been paid by the petitioner. Reliance was placed on certain decisions in this regard. In the present case the authorities have imposed demurrage charges to the tune of more than Rs. 300 crores upon the petitioner for allegedly stacking sand on some portions of land for which no allotment was made. Whereas, the prime contention of the Administration in this regard is that there is no requirement of a pre-decisional hearing for imposing such demurrage charges because the same was being done as per statutory norms. Reliance was placed on the decision in the case of I.J. Rao (supra). 11. If an order is passed which has civil consequences, as in the present case, it should be mandatory that the person against whom such an order is passed is heard. The decision relied on behalf of the decision in I.J. Rao (supra) does not help the Administration any bit. First, it does not lay down a ratio that a pre-decisional hearing is not required in such cases. Secondly, it is distinguishable on facts. There the issue was whether notice could be served upon the other side after passage of six months from the date of seizure. Among other things, it was held that if the statutory period lapsed and service could not be effected for some reason like the other side avoiding service, then the time of six months may be extended and the post decisional hearing can be given to the noticee. This has no manner of application in the present case. 12. The contention that as the demurrage charges were fixed as per statute, no hearing was required belies any logic. In any other case where any charge is levied, the same is usually according to certain statutory principles. This has no manner of application in the present case. 12. The contention that as the demurrage charges were fixed as per statute, no hearing was required belies any logic. In any other case where any charge is levied, the same is usually according to certain statutory principles. That does not mean that the person against whom such charges are imposed could not have any say on the issue. First, one may claim that such demurrage charges were not at all leviable. In the instant case, the petitioner contends that the irregularity was cured and further licence fees was accepted. It could also be contended here, as has been done, that the demurrage charges were erroneously imposed for the total land including the land which was earlier lawfully allotted to the petitioner. There can be other issues which could be raised by the noticee. These cannot be brushed aside simply on the score that demurrage charges were being levied at statutory rates. 13. In the conclusion, it becomes abundantly clear that the impugned order of imposition of demurrage charges was passed in haste and without following the principles of natural justice inasmuch as no opportunity of hearing was given to the writ petitioner before imposing the charges and this has caused serious prejudice to the petitioner. 14. In view of the above the impugned order imposing demurrage charges on the writ petitioner is quashed and set aside. 15. However, the respondent authorities shall be at liberty to initiate a proceeding for imposition of demurrage charges after issuing a fresh and proper show cause notice to the writ petitioner in this respect and after giving an opportunity of hearing to the petitioner in this regard. 16. With these observations, the writ application is disposed of. 17. Urgent photostat certified copies of this judgment may be delivered to the learned Advocates for the parties, if applied for, upon compliance of all formalities.