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2024 DIGILAW 251 (GUJ)

Goodrich Maritime Pvt. Ltd. v. Kandla Port Trust Thro. Its Chairman

2024-02-06

ANIRUDDHA P.MAYEE, SUNITA AGARWAL

body2024
JUDGMENT : SUNITA AGARWAL, J. 1. This Letters Patent Appeal has arisen out of the judgment and order dated 02.09.2006 passed by the learned Single Judge in dismissing the writ petition on the premise of an order passed by this Court in Letters Patent Appeal No.104 of 2000 wherein it was opined that the dispute with regard to payment of container storage charge/ground rent would require recording of evidence and cannot be summarily adjudicated in exercise of writ jurisdiction of this Court. The petitioner therein had been relegated to approach the Civil Court. 2. The dispute in the writ petition was with regard to action of the respondent authority namely Kandla Port Trust in levying container storage charges vide bills bearing Nos.244362 and 244357 both dated 06.06.2006 and 26.06.2006; respectively, and the demand of ground rent by respondent No.2 namely Central Warehousing Corporation, Container Freight Station, Kandla vide letter dated 3/4.05.2006. A further prayer is to direct the respondents to release the containers of the petitioner. The petitioner, as per the statement made in the writ petition is a private limited company incorporated under the provisions of the Companies Act, 1956 and is an agent of International Shipping Line M/s.Vasco Maritime Pte. Ltd., Singapore. It is engaged in the business of international ocean trade and is merely the carrier of the consignments which were transported in their containers to the specified destination. Upon execution of the contract of carriage, the petitioner is entitled to the return of the empty containers which belong to them. 3. It was argued by the learned counsel for the petitioner that the transaction lies between the consignees and the respondent port and in the event of any dispute arising with regard to the consignments, which may lead to the consignee not taking the delivery and possession of their consignments, the respondents have a right to pursue the matter with the consignees only. They cannot detain the containers belonging to the carrier of the consignments. It was argued that despite repeated requests made by the petitioner, the respondents had not released the containers and instead levied the bills levying container storage charges on the premise that the petitioner did not remove the containers and as such, they are liable for the ground rent. 4. It was argued that despite repeated requests made by the petitioner, the respondents had not released the containers and instead levied the bills levying container storage charges on the premise that the petitioner did not remove the containers and as such, they are liable for the ground rent. 4. The undisputed facts of this case as brought before us are that two containers shipped through vessel M.V. Orient Patriot arrived on 30.07.2004 and 19.05.2005 at the Kandla port. The consignee/importer did not clear the cargo which remained lying in the port area for more than sixty days and hence, the petitioner wrote a letter dated 30.09.2004 to the Traffic Manager, Kandla Port Trust that as per the provisions of TAMP order TAM/ 88/99, the petitioner was authorized to issue a letter of abandonment, if the consignee was not issuing the abandonment letter. It was, thus, communicated that the petitioner was authorized to ask the competent authority of Kandla Port Trust to proceed with the auction procedures under the provisions of Section 62 of the Major Port Trusts Act, 1963 (‘the MPT Act’ in short). It was also requested that the date and place where the containers have to be moved to enable the petitioner to arrange the transportation and get the containers destuffed be intimated. When no response was received, another letter dated 20.07.2005 was sent to the Manager, Central Warehousing Corporation, Container Freight Station, Kandla with the same request. The contention is that both the communications were not responded by the officers and the respondent did not destuff the cargo and also did not release the containers. 5. It is contended by the learned counsel for the appellant that it was the obligation of the respondent to release the containers after destuffing the same if the goods were not cleared within a period of two months as per the provisions of Section 61 read with Section 62 of the MPT Act, 1963. No ground rent /container storage charges can be levied upon the appellant after the appellant had issued the letter of abandonment dated 30.09.2004 as the liability to dispose of the goods was that of the Board of Trustees constituted under the Act for the Kandla port as per the provisions of Section 62. No ground rent /container storage charges can be levied upon the appellant after the appellant had issued the letter of abandonment dated 30.09.2004 as the liability to dispose of the goods was that of the Board of Trustees constituted under the Act for the Kandla port as per the provisions of Section 62. It was the duty of the Port Trust, by virtue of Sections 61 and 62 of The Major Port Trust Act, 1963 (In short the MTP Act, 1963) that the cargo is not stored in the port premises beyond a period of two months. In any case, the appellant cannot be held liable for the inaction on the part of the Port Trust. 6. Placing the guidelines dated 19.07.2000 prepared by the Tariff Authority for Major Ports namely TAMP order TAM/86/99-Miscellaneous, issued by the Chairman, Tariff Authority for Major Ports, it is pointed out that the storage charges on the abandoned containers was limited upto the date of receipt of intimation of abandonment in the harbour office in writing or two months from the date of landing of the containers, whichever is earlier. However, referring to the Calcutta Port Trust order dated 10.11.1999, it was noted therein that in effect the order only requires the port trust to exercise the power given under Sections 61 and 62 and to act expeditiously to clear congestion at the ports and to minimize the loss suffered by the shipping lines. It was prescribed that earlier a period of two months for levying of storage charges on abandoned FCL containers was prescribed and on expiry of two months from the time when the goods have passed into the custody of the port trust, it could sell such goods by auction which have not been cleared by the said period. However, Section 61(2) of the MPT Act, 1963 prescribes ten days notice before such sale and further a grace period of five days was to be given for coordinating with the Customs and other agencies, it was, thus, decided that instead of the two months time limit prescribed in the earlier order, the time limit of seventy five days (75 days) be prescribed, beyond which storage charges on containers shall not accrue. A clarification was issued that the intention of the order of the Calcutta Port Trust dated 10.11.1999 is to return containers to the lines after the stipulated time limit as they need not to suffer for the default on the part of the consignee. 7. Further, on an another issue as to who can issue the letter of abandonment whether the shipping lines or the importer, noticing that a shipping line technically remains as owner of the cargo till delivery order is issued in favour of the consignee, it was clarified that the shipping line can issue an abandonment letter provided it will take back the custody of the container and remove it from the port premises, and further that the shipping lines will have to pay all the port charges accrued on the container and the contained cargo from the date of landing to the date of clearance from the port premises. It was further clarified that this does not entitle a shipping line to issue a letter of abandonment without waiting for the assignee to respond, as it is for the assignee to issue a letter of abandonment. It was provided that even without a letter of abandonment, a shipping line can resume custody of a container at any time before issuance of the delivery order, but in such cases, the ground rent will continue to be paid till such time all necessary actions are taken by the shipping lines for destuffing of cargo. 8. The decision of the Apex Court in Kutch Shipping Agency Private Limited vs. Board of Trustees, Kandla Port Trust, being Civil Appeal No.4537 of 2001, decided on 24.07.2001 has been placed before us to assert that in similar situation the Apex Court noticing that the port trust authorities were required to act diligently and within reasonable time, had directed them to comply with the provisions of Sections 61 and 62 of the MPT Act, 1963 as well as the order passed by the Tariff Authority of Major Port dated 19.07.2000 clarifying the above-noted issues. The port authority was held entitled to recover storage charges for containers till the date consignee of the cargo therein had issued a letter abandoning their cargo. The port authority was held entitled to recover storage charges for containers till the date consignee of the cargo therein had issued a letter abandoning their cargo. Further, noticing that the containers were destuffed and some goods were auctioned, direction was issued therein to the respondent to deliver the possession of the containers to the shipping line on payment of the amount towards container storage charges without interest. 9. Having noted the above, we have gone through the affidavit-in-reply filed on behalf of respondent No.1 namely Kandla Port Trust in the instant appeal, as no reply could be filed before the writ Court for the reason that the writ petition was dismissed at the admission stage itself. The deponent of the said affidavit filed in the month of October, 2006 in the present appeal would submit that in the present case, the container was lying in port area as uncleared container since landing and no abandonment letter was submitted by the consignee/importer. About the request made by the appellant herein namely the shipping line to the port authority to destuff the containers by letters dated 30.09.2004 and 20.07.2005, it was stated that no willingness was shown by the appellant to move the containers outside the port area. The willingness shown by them in the aforesaid letters was to move the containers within the port area and because the port authority is supposed to carry out its activities within the port area and not outside the port area, in absence of compliance of the required formalities, nothing could be done further by the Port trust. 10. It was contended by the learned counsel appearing for the respondent - Kandla Port Trust that so long as the containers remained in the port area, the ground rent is chargeable. A dispute was also raised that it was not possible for the port trust to conduct auction for initial period of seventy five days (75 days) and that the Port trust is not liable to auction the goods as the goods remained in the custody of the shipping line, which is a courier service till containers are removed from the port area. As importer did not give abandonment letter, the Port trust could not destuff the goods and auction it. 11. As importer did not give abandonment letter, the Port trust could not destuff the goods and auction it. 11. Before proceeding further, we may record that this appeal was earlier allowed vide judgment and order dated 27.11.2006 quashing the demand of ground rent or container storage charges vide impugned bills herein. In Civil Appeal No.4905 of 2010 arising out of SLP (C) No.7084 of 2007 filed by the Kandla Port Trust against the order of the Division Bench dated 27.11.2006, the matter has been remitted back to this Court for fresh disposal. The sole ground to set aside the order passed by the Division Bench as noted in remittal order of the Apex Court was that the Division Bench while allowing the instant appeal vide judgment and order dated 27.11.2006 did not go through the relevant statutory provisions as also the orders issued by the Tariff Authority for Major Port Trust. The writ petition initially was summarily dismissed by the learned Single Judge and hence, the Division Bench was duty bound to consider the contents of the counter affidavit filed in the Letters Patent Appeal to decide the issue relating to liability of the shipping line namely respondent No.1 herein, to pay container storage charges and ground rent in the backdrop of the fact that the containers together with their contents had been confiscated by the Customs Department on the ground that war material/ explosives were smuggled in the country under the garb of importing heavy metal scrap and hollow section tubes. The issue agitated before the Apex Court as noted in the order of remittal dated 06.07.2010 was that the rule of not charging storage charge/ground rent for seventy five days (75 days) would not apply if the goods are seized and later on confiscated by the Customs Authorities or any other competent authority on the ground that war material/explosives were clandestinely brought in the country. It was held that the Division Bench was not justified in deciding the matter without examining the issue in the above noted perspective, solely on the ground that the representations made by the respondent for release of containers after destuffing the goods were not decided. 12. It was held that the Division Bench was not justified in deciding the matter without examining the issue in the above noted perspective, solely on the ground that the representations made by the respondent for release of containers after destuffing the goods were not decided. 12. Having gone through the observations made in the judgment and order dated 06.07.2010 passed by the Apex Court in Civil Appeal No.4905 of 2010, i.e. the order of remittal in the instant Letters Patent Appeal, we have again looked to the affidavit dated 04.10.2006 of the Deputy Traffic Manager, Kandla Port Trust, Port and Customs Building, New Kandla, which is the only affidavit filed on behalf of respondent No.1 herein namely Kandla Port Trust in the instant Letters Patent Appeal. At the outset, it is stated in the said affidavit that the affidavit-in-reply on behalf of the respondent No.1 was being filed for the purpose of opposing admission and grant of ad-interim relief/interim relief in favour of the appellant. It is contended therein that no letter of abandonment had been issued by the consignee and that the containers were lying in the port area and remained uncleared due to non-issuance of abandonment letter by the consignee/importer; the port authority could not have auctioned the goods by destuffing the containers and moreover, as the shipping line did not show its willingness to move the containers outside the port area and never resumed the custody to take back the containers with the cargo to the port originated, the ground rent is chargeable, in absence of the compliance of requisite formalities. It is contended that the above noted letters dated 30.09.2004 and 20.07.2005 written by the shipping line are not the letters of abandonment. Apart from the said statement and that the order passed by the Apex Court in Civil Appeal No.4537 of 2001 cannot be relied by the appellant in this appeal, nothing has been stated in the affidavit-in-reply dated 04.10.2006. There is no averment in the affidavit of the respondent No. 1 in the instant appeal about seizure or confiscation of goods by the Custom Authority. It seems that the abovenoted observations were made by the Apex Court in view of the averments in the affidavit filed in the connected appeals decided by the common judgment and order dated 27.11.2006 passed by the Division Bench. 13. It seems that the abovenoted observations were made by the Apex Court in view of the averments in the affidavit filed in the connected appeals decided by the common judgment and order dated 27.11.2006 passed by the Division Bench. 13. Dealing with the rival contentions of the learned counsels for the parties, we may go through the provisions of Section 62 of the MPT Act, 1963, which reads as under :- “62. Disposal of goods not removed from premises of Board within time limit (1) Notwithstanding anything contained in this Act, where any goods placed in the custody of the Board upon the landing thereof are not removed by the owner or other person entitled thereto from the premises of the Board within one month from the date on which such goods were placed in their custody, the Board may, if the address of such owner or person is known, cause a notice to be served upon him by letter delivered at such address or sent by post, or if the notice cannot be so served upon him or his address is not known, cause a notice to be published in [the Port Gazette or where there is no Port Gazette, in the Official Gazette] and also in at least one of the principal local daily newspapers, requiring him to remove the goods forthwith and stating that in default of compliance therewith the goods are liable to be sold by public auction [or by tender, private agreement or in any other manner] : Provided that where all the rates and charges payable under this Act in, respect of any such goods have been paid, no notice of removal shall be so served or published under this sub-section unless two months have expired from the date on which the goods were placed in the custody of the Board. (2) The notice referred to in subsection (1) may also be served agents of the vessel by which such goods were landed. (2) The notice referred to in subsection (1) may also be served agents of the vessel by which such goods were landed. (3) If such owner or person does not comply with the requisition in the notice served upon him or published under subsection (1), the Board may, at any time after the expiration of two months from the date on which such goods were placed in its custody sell the goods by public auction 73[or in such cases as the Board considers it necessary so to do, for reasons to be recorded in writing sell by tender, private agreement or in any other manner] after giving notice of the sale in the manner specified in sub-sections (2) and (3) of section 61. (4) Notwithstanding anything contained in sub-section (1) or sub-section (3)- (a) the Board may, in the case of animals and perishable or hazardous goods, give notice of removal of such goods although the period of one month or, as the case may be, of two months specified in subsection (1) has not expired or give such shorter notice of sale and in such manner as, in the opinion of the Board, the urgency of the case requires; (b) arms and ammunition and controlled goods may be sold in accordance with the provisions of sub-section (4) of section 61. (5) The Central Government may, if it deems necessary so to do in the public interest, by notification in the Official Gazette, exempt any goods or classes of goods from the operation of this section.” 14. A careful reading of sub-section (1) of Section 62 indicates that upon landing, the goods placed in the custody of the Board/Port Trust, if not removed by the owner or other person entitled thereto, from the premises of the port trust within one month from the date on which such goods were placed in the custody of the trust, the Port Trust shall cause a notice to be served upon the owner or person known, through post or publication, requiring him to remove the goods forthwith and stating that in default of compliance therewith, the goods are liable to be sold by public auction (or by tender, private arrangement or in any other manner). The proviso to sub-section (1) states that all the rates and charges payable under the Act in respect to any such goods, if paid, no notice of removal shall be served or published under this sub-section, unless two months have expired from the date on which the goods were placed in the custody of the board. Sub-section (2) of Section 62 provides that such notice under sub-section (1) may also be served on the agents of the vessel by which such goods were landed. Sub-section (3) confers power on the Port Trust to sell the goods by public auction or any other approved method, if such owner or person does not comply with the requisition in the notice served upon him or published, after giving notice of the sale in the manner specified in sub-sections (2) and (3) of Section 61. 15. As noted hereinabove, the order dated 19.07.2000 of the Chairman, Tariff Authority for Major Ports clarified that a shipping line, the carrier of the cargo, which technically remains owner of the cargo till a delivery order is issued in favour of the consignee, can issue an abandonment letter and take back custody of the container after paying all port charges accrued on the container and the contained cargo from the date of landing to the date of clearance from the port premises. With regard to the issuance of the letter of abandonment, the following procedure provided therein is to be noted hereinunder :- “In other words, the following will be procedure for issue of letter of abandonment. (i) The consignee can issue letter of abandonment at any time. (ii) If the consignee chooses not to issue such letter of abandonment the line can also issue abandonment letter subject to the condition that, (a) the Line shall resume custody of the contained along with cargo and either take back it or remove it from the port premises and (b) the line shall pay all port charges accrued on the cargo and container before resuming custody of the container. In the absence of abandonment letter either from the consignee or the line subject to the conditions above a Line has no other option but to wait till expiry of 75 days for the Port Trust to act U/s. 61 of the MPT Act.” 16. In the absence of abandonment letter either from the consignee or the line subject to the conditions above a Line has no other option but to wait till expiry of 75 days for the Port Trust to act U/s. 61 of the MPT Act.” 16. It is, thus, clear that if the consignee chooses not to issue letter of abandonment, the shipping line was also entitled to issue abandonment letter subject to the above noted conditions. Only in case where there is no abandonment letter either from the consignee or the shipping line, subject to the above noted conditions, the Port Trust has no option but to wait till the expiry of seventy five days to proceed under Section 61 of the MPT Act, 1963, i.e. for sale of goods in accordance with the said provision. 17. In the instant case, the letter dated 30.09.2004 addressed by the shipping line to the Traffic Manager, Kandla Port Trust is clearly a letter of abandonment which was issued as the consignee/importer did not clear the cargo for more than sixty days. A reminder was also sent on 20.07.2005 to the Manager, Central Warehousing Corporation, Container Freight Station, Kandla. There is no denial to the receipt of the aforesaid two communications by the respondents. Rather the assertion in paragraph ‘5’ of the affidavit-in-reply filed on behalf of respondent No.1 is that the containers were lying in the port as uncleared containers since landing in the port area and no abandonment letter was submitted by the consignee/importer in the present case. As regards the aforesaid communications, it is stated that the request made by the appellant - shipping line was to destuff the containers in their two letters dated 30.09.2004 and 20.07.2005 within the port area for the purpose of auction of the cargo, but no willingness was shown to move the containers outside port area. The assertion is that since the appellant shipping line did not resume the custody to take back the containers with cargo to the port originated, and the cargo was lying on the port land for long time, ground rent is chargeable. It is further stated that in absence of compliance of required formalities, the abovenoted two letters cannot be treated as abandonment letters having been issued in accordance with the guidelines provided by TAMP notification. It is further stated that in absence of compliance of required formalities, the abovenoted two letters cannot be treated as abandonment letters having been issued in accordance with the guidelines provided by TAMP notification. The justification has, thus, been made to the bill dated 06.06.2006 to levy the ground rent from 03.08.2005 to 31.05.2006. 18. From the above, it is evident that the Kandla Port Trust namely respondent No.1 in the affidavit filed by the Deputy Traffic Manager is trying to misdirect the Court. There is no substance in the contentions in the affidavit-in-reply filed on behalf of the Port Trust that the letters dated 30.09.2004 and 20.07.2005 were not the letters of abandonment issued by the appellant – shipping line. At the cost of repetition, it may be noted that there is no denial to the receipt of the said letters. It is evident that the concerned authority of the respondent – Port Trust did not respond to the letters written by the original petitioner – appellant herein, which were the letters of abandonment in accordance with the TAMP guidelines dated 19.07.2000. There was no reason for the respondents not to respond to the same. There is complete inaction on the part of the Port Trust authorities and it is evident that the containers remained in the Port Trust area on account of inaction on the part of the Port Trust Authority. 19. We are, therefore, of the considered view that the port trust authorities who were required to act in accordance with the provisions of Section 62 of the MPT Act, 1963 read with the order dated 19.07.2000, failed to act within a reasonable time and as such, it is not entitled for the ground rent/container storage charges beyond 30.09.2004. The demand of ground rent by the Port Trust Authority from the petitioner – shipping line after 30.09.2004 till 06.06.2006 was illegal. However, the destuffing charges, admittedly are required to be paid by the shipping line. It is clarified that the original petitioner – appellant herein is liable to pay ground rent/container storage charges till the letter of abandonment was given by it to the Port Authority. 20. However, the destuffing charges, admittedly are required to be paid by the shipping line. It is clarified that the original petitioner – appellant herein is liable to pay ground rent/container storage charges till the letter of abandonment was given by it to the Port Authority. 20. In view of the above, we quash both the bills dated 06.06.2006 pertaining to two containers, subject matter of dispute in the original writ petition, the details of which has been given in paragraph ‘3.1’ of the writ petition and provide that the respondent authorities shall issue fresh bill computing ground rent/container storage charges uptil 30.09.2004 and all other requisite charges such as destuffing charges etc. The revised bill shall be served upon the appellant within a period of three weeks from the date of receipt of the copy of this order by the competent authority and the appellant shall be obliged to pay the same within a further period of one week from the date of receipt of the bill. It is clarified that on payment of the charges towards ground rent/container storage charges as directed hereinabove, the original petitioner – appellant shall be entitled to claim the custody of the containers in question which shall be removed from the port area forthwith. 21. The instant appeal is disposed of, accordingly.