INTERNATIONAL AIRPORTS AUTHORITY OF INDIA ETC. E'fC. v. MIS GRAND SLAM INTERNATIONAL AND ORS. ETC. ETC.

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A CA. No. 4227/92 · The goods of the first respondent in this appeal were stored, pending their clearance by the Customs auth.orities, at the Container Freight Station of the appellant, the Central Warehousing Corporation at Patparganj, Delhi. The Central Warehousing Corporation is established under the B provisions ·of the Warehousing Corporations Act, 1962. The provisions of the Warehousing Corporations Act are substantially similar to those of the International Airports Authority Act, 1971, and the Major Port Trusts Act,·

1963. What has been said above in regard to the International Airports Authority applies as well to the Central Warehousing Corporation. c In the result, the appeals (CA. Nos. 798/92, 3971/92 and 4227/92) are allowed. The judgments and orders under appeal are set aside. The writ petitions filed by the first respondents in each of the appeals are dismissed.

There shall be no order as to costs. D VENKATACBALA, J. The important question which is required to be considered and answered in deciding the above civil appeal is, whether the Collector of CUstoms empowered under sub-section (1) of section 45 .. _ of the CUstoms Act, 1962 - "the Act" to approve persons to be custodians of imported goods in customs areas until they are cleared as provided for E therein, ,,bile approving the International Airports Authority of India - "the IAAI" to be the custodian of such imported goods in the customs area of Indira Gandhi International Airport, New Delhi and Central Warehousing Corporation - "the CWC" to be the custodians of such imported goods received at the customs area - the Container Freight Station, ewe Com- F plex, Pragati Maidan, New Delhi, by issue of public notice or otherwise in that regard, if by such notice or otherwise directs such custodians not to collect custody charges from the consignees of such goods - "the Cargo". because of detention certificates.issued by him or his delegatee, will he be acting within the powers conferred upon him under the Act, its Rules or its Regulations, and, if not, can such direction be enforced against the custodians?

Divergent views are expressed on the said question by my revered brethren R.M. Sahai and S.P. Bharuchl!., JJ. in their separate judgments, the drafts of which I had the advantage of going through. The said question being of considerable importance I propose to 'consider it .independently,

JNIBRNATIONALA!RPORTA!JIHORJTYv. GRAND SLAM INil!RNATIONAL[\IENKATACHALAJ.) 189

express my view thereon. and decide the present appeals accordingly. A

Civil Appeal No. 798 of 1992 arises out of the Judgment dated 24.9.1991 of the High Court of Delhi in Civil Writ No. 554of1991, by which the IAAI was directed to release the goods to respondent-I here (petitioner in the Writ Petition) without collecting any demurrage charges for the period for which the detention certificate had been issued by the Assistant Collector of Customs. Such direction was issued by the High Court because of its view that the IAAI when was the custodian of the goods at the instance of the Collector of Customs, the IAAI was not entitled to recover demurrage charges from the petitioner in the Writ Petition (respondent-1 in the appeal) - the consignee, for the period covered by the detention certificate issued by the Collector of Customs or i his delegatee. Such view was taken by the High Court, following its earlier DiviSion Bench judgment in M/s. Trishul Impex v. Union of India, (1991) 2 Delhi Lawyer 1.

D Civil Appeal No. 3971 of 1992 arises out of the Judgment dated 3.2.1992 of the High Court of Delhi in Civil Writ Petition No. 3235 of 1989, whereby the IAAI - the appellant herein, was directed to refund demurrage charges which it had collected in respect of the goods of the petitioner therein - respondent-1 herein, despite the detention certificate issued in respect of such goods by the Asstt. Collector of Customs. Such direction, E according to the High Court, was issued following its earlier Division Bench judgments in M/s. Trishul Impex (supra) and Grand Slam Interna- tional v. Union of India, - C.W. .554 of 1991 decided on 21st September,

1991. . F Civil Appeal No. 4227 of 1992 arises out of Judgment dated 22.1.1992 again of the High Court of Delhi iii C.W. No. 1751 of 1991, by which it directed the ewe to release the goods of the petitioner therein without 1- collecting the demurrae charges from the petitioner therein in respect of the period covered by the detention certificate issued by the Asstt. Collec- G tor of Customs. Such direction, it is said in the judgment, was issued following its Division Bench judgment in M/s. Trishul lmpex (supra), wherein it was held that the custodian of the goods under section 45 of the Customs Act being· the custodian on behalf of the Customs authorities, it was bound to release the goods in favour of the consignee when once a detention certificate had been issued by the Customs authorities. H

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A It would be convenient to consider and answer the aforesaid question with reference to Civil Appeal No. 798 of 1992 and Civil Appeal No. 3971 of 1992 in which the appellant, "the IAAI" is common and dispose of the appeals accordingly, in that, the answere to be given to the said question, would be sufficient to dispose of Civil Appeal No. 4227 of 1992 as well.

B M/s. Trishul Impex case (supra), has been relied upon by the High Court in giving the directions to the IAAI, in its judgments under appeals, not to collect demurrage charges in respect of the periods covered by the detention certificates issued by the Customs authorities. As has already C be.en pointed out, a Division Bench of the same Court had, in the case, expressed its view that when the container Corporation concerned there, was the'-custodian on behalf of the Custqms authorities under section 45(1) of thi Act, it ~as under an obligation 'to release the goods in its custody without coilecting demurrage charges in respect of the period covered by ~ the detention certificate issued by the Customs authorities. In Mis. Grand D Slam International (supra), which is another decision of the Division Bench of the same Court relied upon by it in its judgment in C.A. No. 3971 of 1992, the view taken is that the goods for which demurrage charges were levied by the custodian, if was solely on account of the fault of the Customs authorities the liability for the same would be of those Customs authorities and not of the consignee. But, when once the Customs authorities issued the detention certificate in respect of such period of detention of goods, the custodian who had the custody of goods on behalf of Customs authorities had no option but to release the goods to the consignee. Therefore, the directions given by the High Court in the judgments under apj>eals to release the goods in its custody to the consignees w!thout collecting demurrage charges from them in respect of the periods covered by the detention certificates issued by the Customs authorities is based on its view that when, the goods of the consignee had been kept by the custodian for and on behalf of the Customs authorities, the consignee cannot be made liable to make goods such demurrage charges in respect c: of the periods of such detention for which detention certificates were issued by the Customs authorities, which was taken following the view ". r already taken in similar matters by its Division Benches. At the sus- tainability of the said view of the High Court is under challenge in the present appeals, the question adverted to at the outset is required to be ff considered and answered for rendering a proper decision in them.

' INll!RNATIONALAIRPORTAlJIHORlIYv. GRAND SLAMINIERNATIONAL[VENKATACHAIA,J.) 191

The provision in sub-section (1) of section 45, which bears on the A -( question required to be considered, reads thus :

"45. Restrictions on custody and removal of imported goods. - (1) Save as otherwise provided in any law for the time being in force, all imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Collector of B Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII." < As becomes clear from the above sub-section all imported goods unloaded in customs areas shall remain in custody of such person as may c be approved by the Collector of Customs until they are cleared for the .( purposes indicated therein. Therefore, under the above provision the Col- lector of Customs is the person who is empowered to approve the persons that should. be in custody of goods unloaded in customs areas. The Collec- tor or Customs, New Delhi who has issued Notice No. 30/86, has by clause D (d) of that Notice approved the IAAI as the custodian of cargo to be stored in Cargo Terminal, New International Terminal Complex - "the CTNITC", obviously exercising the powers conferred upon him by sub-section (1) of Section 45 of the Act. But, the Collector of Customs who has approved the IAAI as custodian of the cargo to be stored in its CTNITC by the said clause (d) requires IAAI to comply with condition (vii) imposed against it thereunder, thus :

"(vii). In case of goods detained/seized etc. by customs, the ) warehousing/storage charges shall be calculated by M/s. IAAI for the period due minus the charges for the period of detention at the instance of Customs as certified by the Assistant Collector of Customs."

,+-· No doubt, as to what obligations should the custodian - the IAAI ap- proved by the Collector of Customs under sub-section (1) of Section 45 by clause (d) of the said public Notice, perform, are specified in sub-section / (2) thereof which reads :

"45. Restrictions on custody and removal of imported goods. -

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A (2)The person having custody of any imported goods in a customs area, whether under the provisions of sub-section (1) or under any law for the time being in force, -

(a) shall keep a record of such goods and send a copy thereof to the proper officer; B (b) shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer."

C But, the said sub-section (2) of Section 45 as is seen therefrom, does not in any way impose an obligation on the custodian approved under sub-section (1) thereof not to collect charges leviable on the consignee by it according to Rules or Regulations made by the S'tatute creating it for keeping the imported goods in its custody.

D That is why, it is claimed on behalf of the IAAI, the appellant in the appeals that condition (vii) of clause (d) of the said public Notice has been imposed by the Collector of Customs without any power or authority conferred upon him in that regard under any provision of the Act or its Rules or its Regulations and hence unenforceable. E Learned counsel appearing for respondents were not able to invite ·Court's attention to any provision either i..11 the Act or the Rules or the Regulations made thereunder which empowered the Collector of Customs to impose by issue of public Notice the above condition (vii) in clause (d) thereof denying the IAAI which is approved as the custodian of imported .' ..,.

F . goods in Customs area, the right to collect the charges from the consignee for keeping his imported goods detained or seized by the Customs authorities nor my effort to find any provision in the Act or its Rules or its Regulations enabled me to find any provision which conferred such power of imposing such condition upon the IAAI merely because it is approved as the custodian of imported goods on behalf of Customs Department. However, as to whether the Parliament in enacting the Act intended that custodians to be approved thereunder to keep the goods coming into customs areas should relieve the owners (consignees) of such goods of their liability for payment of charges for such keeping or otherwise could be gathered froni the provision in section 63 of the Act, it is excerpted :

INIE&NATIONALAIRPORTAlTIHOR!IYv.GRANDsu.MNIBRNATIONAL(VENKAT~J.) 193

"63. Payment of rent and warehouse charges. - (10) The owner of any warehoused goods shall pay to the warehouse- keeper rent and warehouse charges at the i;ates fixed under any law for the time being in fo· or where no rates are so fixed, at such rates as may be fixed by the Collector of CUstoms. B (2). If any rent or warehouse charges are not paid within ten ~ays from the date when they became due, the warehouse-keeper may, after notice to the owner of the warehoused goods and with the permission of the proper officer cause to be sold (any transfer of the warehoused goods notwithstanding) such sufficient portion of the goods as the wa:ehouse-keeper may select." C "'; /

I When sub-section (1) above, does not relieve the owner of any warehoused goods to pay to the warehouse-keeper rent and warehouse charges at the rates fixed under any law for the time being in force or where no rates are so fixed, at such rates as may be fixed by the Collector of D Customs, although such goods were kept by the warehouse-keeper for and on behalf of the Customs Department and again when sub-section (2) enables the warehouse-keeper even to sell the warehouse goods with the permission of the proper officer for unpaid rent or warehouse charges, it is difficult to think that there could be any provision in the Act or the Rules B or the Regulations made thereunder \\'.bich confers on the Collector of Customs power to direct the release of the goods kept in the custody, as custodian of the Customs Department without demanding payment of keeping charges from the consignee of goods because of detention cel'ti!i- cates issued in that regard by the Customs authorities, inasmuch as, the said provision shows. the legislative intendment to be to the contrary. F

In fact, when the IAAI in exercise of its powers conferred by sub- section (1) of section 37 of the International Airports Authority Act, 1971 - "the IAA Act", and with the prior approval of the Central GovefllJllent have made regulations called the international Airport Authority (Storage G and Preservation of Goods) Regulations, 1980, regula~ levy of charges ·-< or surcharges, scale of charges and waiver of charges payable by the owner in case of warehoused goods. with the IAAI, those Regulations not only-do not come in conflict with the Act or its Regulations or its Rules but conform to the requirement of the provision of section 63 of the Act. When. H

SUPREMECOURTREPORTS . (1995]2S.C.R.

A in pursuance of. the said Regulations ·policy' directions are issued by the IAAI in supersession of earlier instriictions on the subject of waiver of demurrage charges on production of detention certificate issued by the Customs authorities showing that detention of goods was for no fault of comignce,it can be safely concluded that any directions issued by customs B Collector contrary to such Regulations and the policy_directions as those .issued without authority in law are ullTa virei bis powers: Therefore, I have no hesitation in holding that the aforesaid condition (vii) in clause (d) of the Customs Public Notice No. 30/86 directing the IAAI not to collect the custody charges in respect of the goods for which detention certificates c may be issued by the Collector of Customs or bis delegatee, has to be regarded as a condition imposed by the Collector of Customs without being conferred any power in that regard either in the Act o~ the Rules or the RcgulationS. If condition (vii) of cluase (d) of the Customs Public Notice No; 30/86 is regarded as that imposed by the Collector cif Customs without authority of liw, it having bCcn imposed ullTa vires bis powers under the Act or Rules or Regulations no Court can direct the IAAI to release the · goods of the consignee, without collecting from him demurrage chitrges levied according to its Regulations in respect of the goods, which it had taken care of as the custodian merely because there was a detention certificate of ihc Collccior of Customs or bis delegatee issued to the IAAI which had bCen approved as thC custodian of such goods by the Collector of Customs under sub- Sccti~ (1) of section 45 of the Act. As the above view expressed by me on condition (vii) under clause (d) of the Customs Public Notice No. 30/86 receives considerable support trom the decisions of this Court, where this Court while dealing with the . · liability.· of consignees of· imported goods\ or cargo· to pay· demurrage charges levied in respect of them according to scales of charges prescnl>cd · under Rules or Regulations made under respective Ports Acts because of their non-clearance from Customs areas in Ports, notwithstanding the fact that conccrncd Port Authority was the approved Custodian under the Customs Act, 1962 and tlicJact that Customs Collector or bis delegate had . issued .ktcntion certificates which made it clear that the goods were · detained for no· fault of the consignee and the goods shall be released . without collcction of dcmurrage charges, they shall be adverted to present- H ly•

NIER.NATIONAL AIRPORT AU'IHORITY "·GRAND SIAM NIER.NATIONAL (VENKATACHAl..A, J.) 195

Trustees of the Port of Madras v. Mis. Aminchand Pyarelal & Ors., A (1976) 1 SCR 721 is the first· of such decisions of this Court. That was a case, where imported goods of M/s Aminchand Pyarelal - 'the importer' were not cleared from the customs area of the Port of Madras by the Customs authorities before the expiry of free days. The goods, therefore, continued to be in the custody of Trustees of the Port of Madras • "the B Board", as approved custodian of such goods on behalf of the Customs authorities. However, a detention certificate was issued to the importer by the Customs authorities stating that the detention of the imported goods beyond the free days was not due to fault or negligence on tlte part of the importer. The Board, based on the detention certificate waived demurrage charges payable by the importer amounting to Rs. 3,20,951, and released the goods to the importer. Later, when the Customs authorities owned their f mistake of issuing the detention certificate wrongly, the Board, filed a suit against the importer, the Union of India and the Customs authorities for recovery of the demurrage charges which had not been recovered on account of the detention certificate. But, that suit was resisted by the importer on the plea that the delay in clearing the goods was due to fault on the part of the Customs authorities and hence there was no legal obligation on its part to pay the demurrage charges. The suit was dismissed by the High Court accepting the plea of the importer. When the Board brought up the matter before this Collrt in appeal, the provisions of the. E Madras Port Trust Act and the scale of rates fixed by the Board with the approval of tne Central Government pursuant to the provisions of the Act having been thoroughly examined, it was held that the High Court was in error in its conclusion that the Board had no power to charge demurrage ) wher~ goods were not removed from its premises not due to the fault or p negligence on the part of the importer, but due to fault of the Customs authorities.

Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co.,. [1977) 3 SCR' 343 is the second of such decisions of this Court, where G this Court examined the sustainability of scales of rates of demurrage of goods framed by the Board of Trustees of the Port of :aombay • "the -< Board", the provisions of which were in pari materia with the Madras Port Trust Act. This Court held that the case it was examining being in all force with the case of M/s. Aminchand Pyare Lal (supra) it had to be concluded on the basis of the decision rendered therein. Consequently; it reversed the H

196 SUPREME COURT REPORTS [1995) 2 S.C.R.

A judgment of the High Court in appeal by holding that the High ,Court was in error in its view that the importer of the goods could not be held responsible for any delay not attributable to his own fault and that the demurrage under the statute could never be imposed as long as goods were detained for the purpose of Import Trade Control Regulations.

B Board of Trustees of the Port of Bombay v. lai Hind Oil Mills Co. & Ors., (1987) 1 SCR 932 is the third of such decisions of this Court. There, the provisions of the Major Port Trust Act, 1963, which were under examination of this Court having been found to be in pari materia with the provisions of the Ports Act considered by this Court in Mis Aminchand C Pyare Lall(supra) and Indian Goods Supplying Co. (supra), by following the decisi~ rendered therein, it was held thus :

Thb -p~wer of a Port Trust to fix rates of demurrage and to :recover the same from an importer or exporter (although the question of an exporter paying demurrage arises rarely) under law and to show D concession as regards demurrage charges in certain specified cases is recognised by the Court in the Trustees of the Port of Madras v. M/s. Aminchand Pyarelal & Others, '(1976) l S.C.R. 721 and in the Board of Trustees of the Port of Bombay v. Indian Goods Supplying CO., (1977) 3 S.C.R~ 343. These decisions are no doubt based on · E the relevant laws which were in force at the material time. But the decisions are still relevant insofar as cases arising under the Act because the Aet also contains provisions more or less similar to the statutory provisions considered in the said decisions. Demur- rage charges are levied in order to ensure quick clearance of the cargo from the harbour. They are always fixed in such a way that F they would make it- unprofitable for importers to use the port premises as a warehouse. It is necessary to do so because conges- tion in the ports affects the free movement of ships and the loading and unloading operations. As stated' earlier, the Port Trust shows concession. to the party concerned in certain types of cases." G From the above decisions. of this Court it becomes clear that an authority created under a statute even if is _the custodian of the imported 'r goods because of the provisions of the ~ustoms Act, 1%1, would b~ entitled to charge demurrages for the imported goods in its custody and make the importer or consignee liable for the same even for periods during

' INIERNATIONALAJRPORT AlJIHORITY v. GRAND SLAMINIERNATIONAL[VENKATAOIALA. J.) 197

which he/it was unable to clear the goods from the Customs area, due to fault- on the part of the Customs authorities or of other authorities who might have issued detention certificates owning such fault.

Thus, the above decisions of this Court which uphold the power of Ports Trusts created under Ports Act to levy and collect demurrage charges for goods they keep as Custodians for Customs Department from the consignees notwithstanding the detention certificates issued by the Cus- toms Department clearly support the view I have taken that the IAAI, an authority constituted under the International Airports Authority Act, 1971, when is entitled to collect charges for keeping custody of the imported goods by regulations made thereunder and according to its policy, the C Collector of Customs or his delegatee could not direct the IAAI by issuance of a detention certificate to release the goods of the importer without collection of the charges liable to be paid in respect thereof, inasmuch as the Collector of Customs or his delegatee has not been empowered under the provisions of the Act or its Rules or its Regulations D to direct release of the imported goods without collection of keeping charges, for the keeping of which by the IAAI, charges are to be paid under the Rules made under the International All'Ports Authority Act, 1971.

Since Central Warehousing Corporation created under Warehousing Corporation Act, 1962 stands in the same footing as that of the lAAI E created under the International Airports Authority Act, 1971 in the matter of keeping of goods as custodians on behalf of the Customs Department and. the entitlement of both of them under the respective Acts, Rules and Regulations to levy and collect demurrage charges from the owners or consignees of such goods, not being different, the view I have taken on the F entitlement of IAAI to levy and collect charges or demurrage charges for keeping gqods by it as custodian on behalf of the Customs Department, equally holds good for Central Warehousing Corporation.

Therefore, my answer to the question considered by me is in the negative i.e. the Collector of Customs empowered under sub- section (1) G of section 45 of the Customs Act, 1962 to approve persons to be custodians of imported goods in customs areas until they are cleared as provided for therein, while approving the International Airports Authority of India to be the custodian of such imported goods in the customs area of Indira Gandhi International Airport, New Delhi and Central Warehousing Cor- ·H

198 SUPREME COURT REPORTS (1995) 2 S.C.R.

A poration to be the custodians of such imported goods received at the customs area - the Container Freight Station, CWC Complex, Pragati Maidan, New Delhi, by issue of Public notice or otherwise in that regard, )- if by such notice or otherwise directs such custodians not to collect custody charges from the consignees of such goods - "the Cargo", because of B detention certificates issued by him or his delegatee, will not be acting within the powers conferred upon him under the Act, its Rules or its Regulations and hence directions given by the Customs Collector or his delegatees to release the goods of importers or consignees without collect- ing demurrage charges from tht:m cannot be enforced by Courts either against IAAI or ewe. -, i c The view I have so taken makes the judgment of High Court of Delhi under appeals unsustainable, for the view of its earlier decisions in M/s. Trishul Impex case (supra) and Grand Slam case (supra) which it has followed, also cannot be sustained.

D Civil Appeal No. 4227 of 1992 : , The Central Warehousing Corporation established under the \.._ provisions of the Warehousing Corporation Act, 1962 is a creature of statute as is the IAAI under the International Airports Authority Act, 1971. E Th~ entitlement of the ewe to recover demurrages for the goods of which it becomes the custodian under the provisions of the Act cannot ·be different from that of the IAAI, as indicated in the earlier judgment. If that be so, what I have said in the aforesaid appeals of the IAAI would equally apply to the CWC also. The High Court having directed the Customs F authorities to issue detention certificates in respect of the goods of which the ewe was the _owner has relieved the importer - respondent-1 in the appeal from his liability to pay demurragc charges. Because of the view I have taken in my judgment in the earlier appeals it has to be held that the High Court's direction relieving respondent-1 from his liability to pay demurrage charges cannot be sustained. G In the result, Civil Appeal Nos. 798 of 1992, 3971 of 1992 and 4227 of 1992 arc allowed. The judgments of the High Court under appeals arc set aside. The Writ Petitions filed by rcspondcnt-1 in each of the cases before the High Court are dismissed. In the facts of the present app~als, H there shall be no order as to costs.

IN"IE.RNATIONALAIRPORT A1JIHORII'YM. GRANDsu.MOOERNAlDNAL 1 199

• ORDER- A For reasons given by us in our separate judgments (R.M. Sahai, J. for dismissal of the appeals whereas S.P. Bharucha and N. Venkatachala, JJ. for allowing the appeals) the appeals succeed and are allowed. The orders passed by the High Court are set aside. And the Writ Petiton shall stand dismissed. But in the circumstances of the case, there shall be no , B order as to costs.

R.A. L. Appeals allowed.