THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S AREBEE STAR MARITIME AGENCIES PVT. LTD. & ORS.

A The Judgment of the Court was delivered by R. F. NARIMAN, J.

1Copy pinpoint1. This batch of appeals arises out of a reference order made by a Division Bench of this Court dated 07.03.2018 reported as (2018) 4 SCC 592.The learned Division Bench stated as to how these proceedings B arose before it as follows: “1. These proceedings have arisen from a judgment dated 27-9-2011 [Arebee Star Maritime Agencies (P) Ltd. v. Cochin Port Trust, Original Petition No. 21041 of 1999, decided on 27-9-2011 (Ker)] of a Division Bench of the Kerala High Court in C a batch of writ appeals and original petitions, preferred by various shipping agents.

2Copy pinpoint2. The question before the High Court was whether the liability to pay “ground rent” on containers unloaded at Cochin Port, but not cleared by the consignees/importers and refused to be destuffed D by the Port, on the ground of inadequate storage space, can be imposed on the owners of the vessel/steamer agents beyond the period of 75 days, fixed by the Tariff Authority of Major Ports [TAMP], a statutory body constituted under Section 47-A of the Major Port Trusts Act [MPT Act], 1963.

3Copy pinpoint3. The facts of the case are summarised in the following extract of the judgment of the High Court: “The sequence of events that led to the stalemate refers to the incidents which happened in 1998 when there (sic) imports synthetic woollen rags (in containers) in the Cochin Port Trust F premises. The said containers were destuffed to facilitate Customs examination and to return the empty containers to the steamer agents. The destuffed cargo occupied much larger space and was not promptly cleared by the consignees in view of the hurdles placed by the Customs stating that the cargo actually did not constitute old woollen rags as declared, but mostly were brand G new clothes which could not have been cleared. The “modus operandi” of the consignees/importers attracted wide attention of all concerned and taking note of the probable extent of liability to be imposed by the Customs Department, and the liability to be satisfied to the Port and others concerned, the consignees did not H

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 725 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

turn up to clear the goods and they were lying idle in the Port A premises for quite long.” The Port Trust charged “ground rent” from the steamer agents/ owners of the containers.”

2. After then setting out the relevant provisions of the Major Port Trusts Act, 1963 [“MPT Act”] and the relevant portions of five decisions B of this Court, namely,Port of Madras v. K.P.V. Sheik Mohamed Rowther & Co. 1963 Supp. (2) SCR 915 [“Rowther-I”]; Port of Madras v. K.P.V. Sheik Mohd. Rowther & Co. P. Ltd. (1997) 10 SCC 285 [“Rowther-II”]; Port of Bombay v. Sriyanesh Knitters (1999) 7 SCC 228; Forbes Forbes Campbell & Co. v. Port of C Bombay (2015) 1 SCC 228 [“Forbes-II”] and Rasiklal Kantilal & Co. v. Port of Bombay (2017) 11 SCC 1,the Division Bench then stated: “23. Analysing the above judgments, the following position emerges: 23.1. The decisions in Rowther-I, Rowther-II, Sriyanesh D Knitters, Forbes-II and Rasiklal do not seem to follow a consistent line about whom the Port Trust has to fasten the liability for payment of its charges; 23.2. The Constitution Bench judgment in Rowther-I holds that when Port Trust takes charge of the goods from the shipowner, the shipowner is the bailor and the Port Trust is the bailee. While the Bench of two Judges in Sriyanesh Knitters holds that there comes into existence the relationship of bailor and bailee between the consignee and the Port Trust, the decision in Forbes- II disagrees with this view of Sriyanesh Knitters. Rasiklal opines that enquiry into such relationship is irrelevant in determining the right of a Port Trust to recover its dues; 23.3. While the decision in Sriyanesh Knitters was based on the interpretation of the term “owner” under Section 2(o) of the MPT Act, the judgments in Forbes-II and Rasiklal do not find the question of interpretation of the term “owner” to be relevant; 23.4. While Forbes-II reliesupon the Constitution Bench decision in Rowther-I to come to its conclusions, Rasiklal does not find Rowther-I to be an authority for the proposition that until the title in goods is passed to the consignee, the liability to pay various H

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A charges payable to a Port Trust, for its services in respect of goods, falls exclusively on the steamer agent; 23.5. In Rowther-II, it was held that once the goods are handed over to the Port Trust by the steamer and the steamer agents have duly endorsed the bill of lading or issued the delivery order, their obligation to deliver the goods personally to the owner or the endorsee comes to an end. The decision in Rasiklal, which has been delivered after the reference of Forbes-I was disposed of, takes a contrary view that in cases where the consignee does not come to take delivery of goods, the position of law laid down by Rowther-II would result in a situation that the Port Trust would incur expenses without any legal right to recover such amount from the consignor, with whom there was no contractual obligation; and 23.6. The Bench of two Judges in Rasiklal opined that it agrees with the conclusions recorded in Rowther-II and Forbes-II that D a Port Trust could recover the rates due, either from the steamer agent or the consignee. However, the holding in Rowther-II finds only the consignee to be liable.

24. Taking note of the above inconsistencies in the judgments which have been delivered after the pronouncement by the E Constitution Bench in Rowther-I, we are inclined to the view that the following issues need to be resolved by a larger Bench: 24.1. Whether in the interpretation of the provision of Section 2(o) of the MPT Act, the question of title of goods, and the point of time at which title passes to the consignee is relevant to determine the liability of the consignee or steamer agent in respect of charges to be paid to the Port Trust; 24.2. Whether a consignor or a steamer agent is absolved of the responsibility to pay charges due to a Port Trust, for its services in respect of goods which are not cleared by the consignee, once the bill of lading is endorsed or the delivery order is issued; 24.3. Whether a steamer agent can be made liable for payment of storage charges/demurrage, etc. in respect of goods which are not cleared by the consignee, where the steamer agent has not issued a delivery order; if so, to what extent; H

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 727 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

24.4. What are the principles which determine whether a Port A Trust is entitled to recover its dues, from the steamer agent or the consignee; and 24.5. While the Port Trust does have certain statutory obligations with regard to the goods entrusted to it, whether there is any obligation, either statutory or contractual, that obliges the Port B Trust to destuff every container that is entrusted to it and return the empty containers to the shipping agent.

25. The larger Bench may deal with any additional issues relevant to the context, as it deems necessary.”

3. The impugned judgment dated 27.09.2011 of a Division Bench C of the Kerala High Court decided a limited question that was argued before it, namely: “Whether liability to pay ‘Ground Rent’ in respect of the containers unloaded in the Cochin Port, lying uncleared by the Consignees/ Importers and refused to be destuffed by the port, for inadequate D storage space, can be mulcted on the owners of the Vessel/Steamer Agents beyond 75 days, in view of the Scheme of the Statute (Major Port Trusts Act 1963 – in short ‘MPT Act’) and the contents of the TAMP (Tariff Authority for Major Ports) Orders dated 10.11.1999, 19.07.2000, and 13.09.2005, is the point.” E

4Copy pinpoint4. The impugned judgment came to be passed as a number of writ appeals had been preferred by shipping agents, the Port Trust, and one consignee against the judgment dated 16.09.2002 of a single Judge of the Kerala High Court. A writ petition, namely, W.P. (C) No. 32191 of 2004, was also disposed of by the impugned judgment, as it raised a F similar question of law. The facts involved in these appeals and writ petition were briefly stated in paragraphs 4 and 5 of the impugned High Court judgment as follows: “4. Goods involved in all the cases, imported as ‘FCL’ (Full Container Loads) mainly consist of ‘synthetic woollen rags’, except G in W.P. (C) No. 32191 of 2004, where it is VCD players. The period of import is during August 1998 to March 1999. All the Containers now stand returned after destuffing, pursuant to common judgment in the Original Petitions and the interim orders passed in the Appeals. H

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5Copy pinpoint5. Some of the goods imported earlier in the Cochin Port, titled as “woollen rags” were actually found to be “brand new clothes” on inspection by the Customs Department, which attracted heavy duty, penalty and such other charges. The dispute between the Consignees and the Customs went on for an indefinite period and in the said circumstances, the consignees did not turn up to clear the goods in respect of the subsequent transactions as well, presumably knowing the probable outcome and the huge liability to be satisfied under different heads including the Port charges and other dues because of the delay. So also, no action was taken by the Port Trust to destuff the goods and they retained the containers for their own reasons.”

5. The learned Senior Advocate who led the arguments on behalf of the shipping agents before the High Court made one important concession, namely, that the shipping agents do not propose to press the contention as to their liability in satisfying ground rent, except that they ought not to be mulcted with any such liability beyond the period of 75 days, which was set out in the relevant Tariff Authority for Major Ports (“TAMP”) Orders. At the point of time that the Division Bench delivered its judgment, a Division Bench of this Hon’ble Court in Forbes Forbes Campbell & Co. Ltd. v Board of Trustees, Port of Bombay (2008) 4 SCC 87 [“Forbes-I”], had referred the following three questions to a E larger Bench: “9. The questions of law of public importance in this appeal are as follows:

1. Whether a steamer agent can be construed as owner of the goods carried in his principal’s vessel within the definition of “owner” in relation to goods under Section 2(o) of the Major Port Trusts Act, 1963?

2. Whether a steamer agent at all can be made liable for payment of storage charges/demurrage, which are uncleared by the consignee, even where steamer agent has not issued delivery order?

3. In the event a steamer agent is held liable, to what extent he is liable and whether it absolves the respondent from acting promptly under Sections 61 or 62 of the Act? H

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 729 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

6Copy pinpoint6. Since this reference had not yet been answered by the larger A Bench at the time the impugned proceedings were ongoing, the learned Senior Advocate representing the shipping agents before the High Court clarified that the High Court may go on to decide only the question as to the extent of liability of the shipping agents,i.e. whether liability could extend beyond the 75 days mentioned in the relevant TAMP Orders. B

7Copy pinpoint7. In answering the question raised before it, the impugned judgment referred to the fact that the shipping agents repeatedly requested the Port Trust to destuff the containers which were lying at the port, but that the Port Trust stated that they cannot do so for inadequacy of space.The impugned judgment therefore held that because of the lapse on the part of the consignee on the one hand in not lifting the goods, and the Port Trust on the other in not destuffing containers, the shipping agents were caught in between, and were being made “to pay through their nose”. This being the case, the impugned judgment went on to construe sections 61 and 62 of the MPT Act, by which aBoard “may”, after the expiry of two months from the time when any goods passed into its custody, sell such goods under certain circumstances. The impugned judgment went on to hold that the expression “may” in the said provisions must be read as “shall”, as a duty is cast on the Port Trust to get rid of the goods as soon as possible in a fact situation where the consignee does not lift such goods.Ultimately, the impugned judgment concluded: E

“44. In the above facts and circumstances, this Court finds that, there is no rationale on the part of the Port Trust in contending that they are entitled to collect ‘Ground Rent’ charges in respect of containers indefinitely. The course pursued by them without causing the goods to be destuffed, despite the specific request, on F the failure of the Consignee/Importer to have it cleared and by proceeding against such goods for causing the same to be sold in the public auction, realising the funds, to be apportioned in the manner specified under Section 63, cannot but be deprecated. This Court holds that the respondent Port Trust can demand G ‘Ground Rent’ only to a maximum period of ‘75 days’ as specified by the Tariff Authority for Major Ports as per the relevant TAMP Orders discussed above.”

8Copy pinpoint8. Shri Ritin Rai, learned Senior Advocate appearingon behalf of the Appellant Port Trust, referred to various provisions of the Customs H

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A Act, 1962 and the MPT Act, and argued that once responsibility for the goods is taken over by the Port Trust, the Port Trust becomes a bailee of the goods delivered to it by the ship-owner, who in turn is relieved of its liability for loss or damage to the goods during the period when the goods are in the custody of the Port Trust. Thus, the Port Trust is entitled to recover, from the shipping agents, demurrage and other dues for the period until a delivery order is issued by the shipping agent to the consignee, and for this purpose is entitled to exercise a lien over the goods for realisation of such demurrage. He added that where a delivery order is withheld or withdrawn, disabling the consignee from getting delivery of the goods, the position remains as if no delivery order was issued at all.In such a case, the liability for payment of demurrage and other dues of the Port Trust will continue to be with the shipping agent. According to the learned Senior Advocate, the different strands of the judgments of this Court can all be reconciled to reach the conclusion canvassed for by the learned Senior Advocate. He argued that the submission that upon landing and discharge of the goods from the vessel, the Port Trust becomes a sub-bailee of the shippers/consignors, and that the Port Trust can therefore recover its dues only from the consignors, or the consignee who steps into the consignor’s shoes upon endorsement of the bill of lading pursuant to section 1 of the Indian Bills of Lading Act, 1856, is wholly incorrect. He dealt with the decision of the Privy E Council in “The K.H. Enterprise” [1994] 1 Lloyd’s Law Reports 593, and distinguished the said decision from the present case, stating that the decision nowhere relates to the obligations of the bailee to the sub- bailee for services undertaken by it at the bailee’s request. He went on to argue that in any case, the sub-bailee in K.H. Enterprise (supra) was entitled to payment for its services from the bailee pursuant to the agreement between them, and not from the bailor/shipper. Analogously, therefore, the Port Trust (sub-bailee) would be entitled to payment for its services from the shipping agent (bailee). He was at pains to argue that the passing of title to the goods is immaterial when it comes to the Port Trust collecting its dues, as the Port Trust has no means of ascertaining when such title has passed. In any event, Shri Rai contended that the correct reading of the MPT Act leads to the conclusion that the passing of title is in any case wholly irrelevant. He stressed the fact that containers belonging to the shipping agents are required to be returned to them upon destuffing, as a result of which they are liable for ground rent. He strongly supported the decision in Rasiklal (supra) which laid H

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 731 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

this proposition down as a matter of law. He also strongly deprecated the impugned judgment of the Kerala High Court, stating that the discretion that has been given under sections 61 and 62 of the MPT Act to the Port Trust cannot be converted into a mandatory obligation, and that “may” must be read as “may”, and not “shall”.

9Copy pinpoint9. Shri Prashant S. Pratap, learned Senior Advocate appearing on behalf of Respondent No.1, a shipping/steamer agent, was at pains to point out that endorsement on the bill of lading by the shipping agent, and a delivery order being given by the shipping agent, does not pass title to the goods. The endorsement on the bill of lading by the consignor in favour of a notified party or a consignee, when read with section 1 of the Indian Bills of Lading Act, 1856, is the endorsement that passes title to goods, and must not be confused with his client’s endorsement on the bill of lading. He relied heavily on the Privy Council judgment in K.H. Enterprise (supra), stating that the decision applied on all fours to the present case, and that therefore the Port Trust as a sub-bailee of the goods steps into the shoes of the bailee,i.e. the ship-owner/ship-owner’s D agent, and must therefore sue the bailor i.e. the consignor/shipper, and not the original bailee. This was also because implied consent has been given by the consignor to handover the goods to the Port Trust at the port of despatch for delivery to the consignee, the Port Trust being fully aware that the goods are not the property of the carrier, namely the vessel, who is the bailee. He argued that on a conjoint reading of the provisions of the MPT Act, and on a reading of section 158 of the Indian Contract Act, 1872, the bailor must repay to the bailee “necessary expenses” incurred by it for the purposes of the bailment. This would, therefore, enable the Port Trust to recover storage charges from the bailor who is always the owner of the goods, whether consignor or consignee, but never from the ship-owner, who is never the bailor. Shri Pratap argued that the MPT Act itself makes a clear distinction between the steamer agent, who is the agent of the vessel, and other agents, namely those of the consignor/consignee, under section 62 of the MPT Act. Further, upon sale of goods under section 63, the excess must be returned only to the owner.Such excess can never be paid to the ship- G owner or the steamer’s agent. He further went on to argue that a clear distinction is made in section 2(o) of the MPT Act between “owner” in relation to the goods, and “owner” in relation to the vessel, and that the steamer agent – who is the agent of the vessel – can never be said to be the ‘‘owner” of goods. He relied strongly on the judgment in Sriyanesh H

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A Knitters (supra), stating that the Port Trust is a bailee on behalf of the consignee who is the bailor, on a consideration of section 1 of the Indian Bills of Lading Act, 1856, and submitted that Forbes-II (supra) is wholly incorrect and deserves to be overruled. He dealt with the judgment in Rowther-I (supra) in great detail, and distinguished it from the present case, stating that the judgment does not concern demurrage or storage charges post landing of the goods, and after the Port Trust takes custody of the goods and issues the receipt, and is thus not applicable to the facts of the present case. Further, according to him, Rasiklal (supra), insofar as it agrees with Forbes-II (supra) is incorrect. Insofar as Rasiklal (supra) notes the legal position that the Port Trust is a sub-bailee of the goods bailed by the consignor (bailor) to the ship-owner (bailee), it is absolutely correct and must be followed. So far as Rowther-II (supra) is concerned, the learned Senior Advocate stated that the portion of Rowther-II (supra), which mixes up endorsement by the steamer agent with the endorsement by the consignor, cannot be said to be good law. He also contended that the issuance of a delivery order to the consignee is irrelevant, and has no bearing on the liability to pay storage charges.He further argued that to the extent that the judgment states that the vessel and its agent cannot be mulcted with the charges, the judgment is absolutely correct and must be followed. Insofar as goods carried by containers is concerned, Shri Pratap contends that the Port Trust itself states that the charges claimed by the Port Trustare in respect of goods, and not in respect of the container in which the goods are stuffed.Thus, the container cannot be said to be “goods” as defined which would incur storage charges. He also relied upon the counter affidavit filed by the Port Trust before the High Court, in which the Port Trust admitted that if the goods were imported as bulk cargo, the liability to satisfy demurrage would not be on the steamer agent but on the consignee. The mere fact that they are carried in a container can therefore make no difference. He argued that since all questions were now open before this Court, he was not constrained by the predecessor counsel (including himself) in the High Court, stating that as a reference was then pending to a larger G Bench of this Court, they did not argue the larger question as to whether the steamer agent is at all liable. There is no estoppel in any case in law, and the correct position has to be determined by this Court.

10Copy pinpoint10. Shri Rahul Narichania, learned Senior Advocate appearing on behalf of Respondent No.6 (The Container Shipping Lines Association), H who is an Intervenor in these proceedings, argued that the definition of

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 733 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

‘‘owner” in section 2(o) of the MPT Act differentiates between owner of the “vessel”, and owner of the “goods”, and that a steamer agent does not come within the first part of section 2(o) if the doctrine of noscitur a sociis is applied. He argued that a steamer agent is an agent of a disclosed principal, i.e. the ship-owner, and therefore cannot be made liable for demurrage charges.It is only an agent for loading and unloading of cargo, i.e. an agent of the consignor or consignee who can be made so liable. He went on to argue that a steamer agent must be distinguished from a stevedoring agent, and is not involved in loading and unloading cargo. He referred to various provisions of the MPT Act, and argued that section 48(1)(d) therein does not contemplate any liability on a steamer agent. This section has to be contrasted with section 49(1)(c), C which expressly contemplates liability on a steamer agent, but only with respect to land that is taken on lease from the Port Trust by the steamer agent. He relied heavily upon sections 61 to 63 of the MPT Act to argue that when the goods are sold by the public auction, a steamer agent has to be notified only because the vessel owner may have a lien on such goods, which can be enforced in its favour under section 60 of the MPT Act. Further, he argued that it is made clear that if there is a surplus from the sale proceeds, such surplus shall be paid only to the importer, owner or consignee of the goods or their agent, from which list of persons the ship-owner and its agent are conspicuously absent, making it clear that it is the owner of the goods alone, or persons entitled to the goods, that the Port Trust must chase for demurrage charges incurred after landing. He then argued that the passing of title under section 1 of the Indian Bills of Lading Act, 1856 makes it clear that it is either the consignor (before title passes) or the consignee (after title passes) that can alone be made liable for payment of such charges. He also argued that the obligation to clear goods imported which have been stored in a warehouse are that of the importer, and for this he relied heavily on section 49 of the Customs Act, 1962. He argued that this would also make it clear that the steamer agent therefore does not come into the picture. He further argued that the steamer agent has no bailor-bailee relationship with the Port Trust, and joined Shri Pratap in relying upon G Sriyanesh Knitters (supra) and overruling of Forbes-II (supra).To the extent that Rasiklal (supra) has made observations against steamer agents, it is incorrect in law and should be overruled to this extent.

11Copy pinpoint11. Shri Kavin Gulati, learned Senior Advocate appearing on behalf of Hapag-Lloyd India Pvt. Ltd., a shipping agent and also an Intervenor H

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A in these proceedings, reiterated the submissions made by the predecessor counsel, and further stressed on sections 29, 30, 33, 45, 48 and 150 of the Customs Act. He also argued that once goods have been landed, a ship-owner’s agent can never be made liable for demurrage charges, which should be to the account of the owner or the beneficial owner of the goods. B

12Copy pinpoint12. Having heard the learned Senior Counsel on behalf of all parties, it is necessary to first set out the relevant provisions of the MPT Act. “Section 2. Definitions.-In this Act, unless the context otherwise requires,- C (f) “dock” includes all basins, locks, cuts, entrances, graving docks, graving blocks, inclined planes, slipways, gridirons, moorings, transit-sheds, warehouses, tramways, railways and other works and things appertaining to any dock, and also the portion of the sea enclosed or protected by the arms or groynes of a harbour; xxx xxxxxx (h) “goods” includes livestock and every kind of movable property; xxx xxxxxx (n) “master”, in relation to any vessel or any aircraft making use of any port, means any person having for the time being the charge or control of such vessel or such aircraft, as the case may be, except a pilot, harbour master, assistant harbour master, dock master or berthing master of the port; (o) “owner”, F (i) in relation to goods, includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods; and (ii) in relation to any vessel or any aircraft making use of any port, includes any part-owner, charterer, consignee, or mortgagee in G possession thereof; xxx xxxxxx (v) “rate” includes any toll, due, rent, rate, fee, or charge leviable under this Act; H xxx xxxxxx

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 735 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

(z) “vessel” includes anything made for the conveyance, mainly by water, of human beings or of goods and a caisson;” “42. Performance of services by Board or other person.— (1) A Board shall have power to undertake the following services:— (a) landing, shipping or transhipping passengers and goods between vessels in the port and the wharves, piers, quays or docks belonging to or in the possession of the Board; (b) receiving, removing, shifting, transporting, storing or delivering goods brought within the Board’s premises; C (c) carrying passengers by rail or by other means within the limits of the port or port approaches, subject to such restrictions and conditions as the Central Government may think fit to impose; (d) receiving and delivering, transporting and booking and despatching goods originating in the vessels in the port and intended D for carriage by the neighbouring railways, or vice versa, as a railway administration under the Indian Railways Act, 1890 ( 9 of 1890); (e) piloting, hauling, mooring, remooring, hooking, or measuring of vessels or any other service in respect of vessels; and E (f) developing and providing, subject to the previous approval of the Central Government, infrastructure facilities for ports. (2) A Board may, if so requested by the owner, take charge of the goods for the purpose of performing the service or services and shall give a receipt in such form as the Board may specify. F (3) Notwithstanding anything contained in this section, the Board may, with the previous sanction of the Central Government, authorise any person to perform any of the services mentioned in sub-section (1) on such terms and conditions as may be agreed upon. G (3A) Without prejudice to the provisions of sub-section (3), a Board may, with the previous approval of the Central Government, enter into any agreement or other arrangement (whether by way of partnership, joint venture or in any other manner) with, any body corporate or any other person to perform any of the services and H

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A functions assigned to the Board under this Act on such terms and conditions as may be agreed upon. (4) No person authorised under sub-section (3) shall charge or recover for such service any sum in excess of the amount specified by the Authority, by notification in the Official Gazette. B (5) Any such person shall, if so required by the owner, perform in respect of goods any of the said services and for that purpose take charge of the goods and give a receipt in such form as the Board may specify. (6) The responsibility of any such person for the loss, destruction or deterioration of goods of which he has taken charge shall, subject to the other provisions of this Act, be that of a bailee under sections 151, 152 and 161 of the Indian Contract Act, 1872 (9 of 1872). (7) After any goods have been taken charge of and a receipt given for them under this section, no liability for any loss or damage which may occur to them shall attach to any person to whom a receipt has been given or to the master or owner of the vessel from which the goods have been landed or transhipped.

43. Responsibility of Board for loss, etc., of goods.—(1) E Subject to the provisions of this Act, the responsibility of any Board for the loss, destruction or deterioration of goods of which it has taken charge shall,— (i) in the case of goods received for carriage by railway, be governed by the provisions of the Indian Railways Act, 1890 (9 of F 1890); and (ii) in other cases, be that of a bailee under sections 151, 152 and 161 of the Indian Contract Act, 1872 (9 of 1872), omitting the words “in the absence of any special contract” in section 152 of that Act: G Provided that no responsibility under this section shall attach to the Board— (a) until a receipt mentioned in sub-section (2) of section 42 is given by the Board; and

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 737 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

(b) after the expiry of such period as may be prescribed by regulations from the date of taking charge of such goods by the Board. (2) A Board shall not be in any way responsible for the loss, destruction or deterioration of, or damage to, goods of which it has taken charge, unless notice of such loss or damage has been given within such period as may be prescribed by regulations made in this behalf from the date of taking charge of such goods by the Board under sub-section (2) of section 42.” “48. Scales of rates for services performed by Board or other person.—(1) The Authority shall from time to time, by notification in the Official Gazette, frame a scale of rates at which, and a statement of conditions under which, any of the services specified hereunder shall be performed by a Board or any other person authorised under section 42 at or in relation to the port or port approaches— D (a) transhipping of passengers or goods between vessels in the port or port approaches; (b) landing and shipping of passengers or goods from or to such vessels to or from any wharf, quay, jetty, pier, dock, berth, mooring, stage or erection, land or building in the possession or occupation E of the Board or at any place within the limits of the port or port approaches; (c) cranage or porterage of goods on any such place; (d) wharfage, storage or demurrage of goods on any such place; F (e) any other service in respect of vessels, passengers or goods. (2) Different scales and conditions may be framed for different classes of goods and vessels.” “59. Board’s lien for rates.—(1) For the amount of all rates leviable under this Act in respect of any goods, and for the rent G due to the Board for any buildings, plinths, stacking areas, or other premises on or in which any goods may have been placed, the Board shall have a lien on such goods, and may seize and detain the same until such rates and rents are fully paid.

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A (2) Such lien shall have priority over all other liens and claims, except for general average and for the ship-owner’s lien upon the said goods for freight and other charges where such lien exists and has been preserved in the manner provided in sub-section (1) of section 60, and for money payable to the Central Government under any law for the time being in force relating to customs, other than by way of penalty or fine.

60. Ship-owner’s lien for freight and other charges.—(1) If the master or owner of any vessel or his agent, at or before the time of landing from such vessel any goods at any dock, wharf, quay, stage, jetty, berth, mooring or pier belonging to or in the occupation of a Board, gives to the Board a notice in writing that such goods are to remain subject to a lien for freight or other charges payable to the ship-owner, to an amount to be mentioned in such notice, such goods shall continue to be liable to such lien to such amount. D (2) The goods shall be retained in the custody of the Board at the risk and expense of the owners of the goods until such lien is discharged as hereinafter mentioned; and godown or storage rent shall be payable by the party entitled to such goods for the time during which they may be so retained. E (3) Upon the production before any officer appointed by the Board in that behalf of a document purporting to be a receipt for, or release from, the amount of such lien, executed by the person by whom or on whose behalf such notice has been given, the Board may permit such goods to be removed without regard to such lien, provided that the Board shall have used reasonable care in respect to the authenticity of such document.

61. Sale of goods after two months if rates or rent are not paid or lien for freight is not discharged.—(1) A Board may, after the expiry of two months from the time when any goods have passed into its custody, or in the case of animals and perishable or hazardous goods after the expiry of such shorter period not being less than twenty-four hours after the landing of the animals or goods as the Board may think fit, sell by public auction or in such cases as the Board considers it necessary so to do, for reasons to be recorded in writing, sell by tender, private H

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 739 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

agreement or in any other manner such goods or so much thereof A as, in the opinion of the Board, may be necessary— (a) if any rates payable to the Board in respect of such goods have not been paid, or (b) if any rent payable to the Board in respect of any place on or in which such goods have been stored has not been paid, or B

(c) if any lien of any ship-owner for freight or other charge of which notice has been given has not been discharged and if the person claiming such lien for freight or other Charges has made to the Board an application for such sale. C (2) Before making such sale, the Board shall give ten days’ notice of the same by publication thereof 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: Provided that in the case of animals and perishable or hazardous goods, the Board may give such shorter notice and in such manner as, in the opinion of the Board, the urgency of the case admits of. (3) If the address of the owner of the goods has been stated on the manifest of the goods or in any of the documents which have come into the hands of the Board, or is otherwise known notice shall also be given to him by letter delivered at such address, or sent by post, but the title of a bona fide purchaser of such goods shall not be invalidated by a reason of the omission to send such notice, nor shall any such purchaser be bound to inquire whether such notice has been sent. F (4) Notwithstanding anything contained in this section, arms and ammunition and controlled goods may be sold at such time and in such manner as the Central Government may direct. Explanation.—In this section and section 62— (a) “arms and ammunition” have the meanings respectively G assigned to them in the Arms Act, 1959 (54 of 1959); (b) “controlled goods” means goods the price or disposal of which is regulated under any law for the time being in force.

62. Disposal of goods not removed from premises of Board within time limit.—(1) Notwithstanding anything contained in H

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A 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 sub-section (1) may also be served on the agents of the vessel by which such goods were landed. E (3) If such owner or person does not comply with the requisition in the notice served upon him or published under sub-section (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 or in such cases as the Board considers F it necessary so to do, for reason 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- G 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 sub-section (1) has not expired or give such shorter notice of sale and in such manner as, in the opinion of the Board, H the urgency of the case requires;

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 741 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

(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.

63. Application of sale proceeds.—(1) The proceeds of every sale under section 61 or section 62 shall be applied in the following order— (a) in payment of the expenses of the sale; (b) in payment, according to their respective priorities, of the liens and claims excepted in sub-section (2) of section 59 from the priority of the lien of the Board; (c) in payment of the rates and expenses of landing, removing, storing or warehousing the same, and of all other charges due to the Board in respect thereof, including demurrage (other than penal demurrage) payable in respect of such goods for a period of four months from the date of landing; (d) in payment of any penalty or fine due to the Central Government under any law for the time being in force relating to customs; E (e) in payment of any other sum due to the Board. (2) The surplus, if any, shall be paid to the importer, owner or consignee of the goods or to his agent, on an application made by him in this behalf within six months from the date of the sale of the goods. F (3) Where no application has been made under sub-section (2), the surplus shall be applied by the Board for the purposes of this Act.

64. Recovery of rates and charges by distraint of vessel.— (1) If the master of any vessel in respect of which any rates or G penalties are payable under this Act, or under any regulations or orders made in pursuance thereof, refuses or neglects to pay the same or any part thereof on demand, the Board may distrain or arrest such vessel and the tackle, apparel and furniture belonging thereto, or any part thereof, and detain the same until the amount H

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A so due to the Board, together with such further amount as may accrue for any period during which the vessel is under distraint or arrest, is paid. (2) In case any part of the said rates or penalties, or of the cost of the distress or arrest, or of the keeping of the same, remains unpaid B for the space of five days next after any such distress or arrest has been so made, the Board may cause the vessel or other things so distrained or arrested to be sold, and, with the proceeds of such sale, shall satisfy such rates or penalties and costs, including the costs of sale remaining unpaid, rendering the surplus (if any) to the master of such vessel on demand. C

65. Grant of port-clearance after payment of rates and realisation of damages, etc.—If a Board gives to the officer of the Central Government whose duty it is to grant the port-clearance to any vessel at the port, a notice stating,— D (i) that an amount specified therein is due in respect of rates, fines, penalties or expenses chargeable under this Act or under any regulations or orders made in pursuance thereof, against such vessel, or by the owner or master of such vessel in respect thereof, or against or in respect of any goods on board such vessel; or

E (ii) that an amount specified therein is due in respect of any damage referred to in section 116 and such amount together with the cost of the proceedings for the recovery thereof before a Magistrate under that section has not been realised, such officer shall not grant such port-clearance until the amount so chargeable or due has been paid or, as the case may be, the damage and cost have F been realised.” “123. General power of Board to make regulations.—Without prejudice to any power to make regulations contained elsewhere in this Act, a Board may make regulations consistent with this Act for all or any of the following purposes, namely:— G xxx xxxxxx (c) for the form of receipt to be given under sub-section (2) of section 42; (d) for the period within which notice may be given under sub- H section (2) of section 43; xxx xxxxxx

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 743 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

(i) for the mode of payment of rates leviable by the Board under this Act;” “131. Alternative remedy by suit.—Without prejudice to any other action that may be taken under this 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 this Act or under any regulations made in pursuance thereof.”

13Copy pinpoint13. Since certain provisions of the Customs Act, 1962 were relied upon during the course of arguments, they are also set out as follows: “2. Definitions.—In this Act, unless the context otherwise requires,— xxx xxxxxx (26) ‘‘importer”, in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner, beneficial owner or any person holding himself out to be the importer;” “29. Arrival of vessels and aircrafts in India.—(1) The person- in-charge of a vessel or an aircraft entering India from any place outside India shall not cause or permit the vessel or aircraft to call or land— (a) for the first time after arrival in India; or (b) at any time while it is carrying passengers or cargo brought in that vessel or aircraft, at any place other than a customs port or a customs airport, as the case may be unless permitted by the Board.

30. Delivery of arrival manifest or import manifest or import report.—(1) The person-in-charge of — (i) a vessel; or G (ii) an aircraft; or (iii) a vehicle, carrying imported goods or export goods or any other person as may be specified by the Central Government, by notification in H

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A the Official Gazette, in this behalf shall, in the case of a vessel or an aircraft, deliver to the proper officer an arrival manifest or import manifest by presenting electronically prior to the arrival of the vessel or the aircraft, as the case may be, and in the case of a vehicle, an import report within twelve hours after its arrival in the customs station, in such form and manner as may be prescribed and if the arrival manifest or import manifest or the import report or any part thereof, is not delivered to the proper officer within the time specified in this sub-section and if the proper officer is satisfied that there was no sufficient cause for such delay, the person-in-charge or any other person referred to in this sub-section, who caused such delay, shall be liable to a penalty not exceeding fifty thousand rupees: Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to deliver arrival manifest or import manifest by presenting electronically, allow the same to be delivered in any other manner. (2) The person delivering the arrival manifest or import manifest or import report shall at the foot thereof make and subscribe to a declaration as to the truth of its contents. (3) If the proper officer is satisfied that the arrival manifest or import manifest or import report is in any way incorrect or incomplete, and that there was no fraudulent intention, he may permit it to be amended or supplemented.” “33. Unloading and loading of goods at approved places only.—Except with the permission of the proper officer, no imported goods shall be unloaded, and no export goods shall be loaded, at any place other than a place approved under clause (a) of section 8 for the unloading or loading of such goods.” “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 Principal Commissioner of Customs or Commissioner of Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII. H

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 745 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

46. Entry of goods on importation.—(1) The importer of any A goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting electronicallyon the customs automated system to the proper officer a bill of entry for home consumption or warehousing in such form and manner as may be prescribed: B Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically on the customs automated system, allow an entry to be presented in any other manner: C Provided further that if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this sub-section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs, or (b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same. (2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. (3) The importer shall present the bill of entry under sub-section (1) before the end of the next day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing: Provided that a bill of entry may be presented at any time not exceeding thirty days prior to the expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation into India: G Provided further that where the bill of entry is not presented within the time so specified and the proper officer is satisfied that there was no sufficient cause for such delay, the importer shall pay such charges for late presentation of the bill of entry as may be prescribed. H

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A (4) The importer while presenting a bill of entry shall make and subscribe to a declaration as to the truth of the contents of such bill of entry and shall, in support of such declaration, produce to the proper officer the invoice, if any, and such other documents relating to the imported goods as may be prescribed. B (4A) The importer who presents a bill of entry shall ensure the following, namely:— (a) the accuracy and completeness of the information given therein; (b) the authenticity and validity of any document supporting it; and C (c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under any other law for the time being in force. (5) If the proper officer is satisfied that the interests of revenue are not prejudicially affected and that there was no fraudulent intention, he may permit substitution of a bill of entry for home consumption for a bill of entry for warehousing or vice versa.” “48. Procedure in case of goods not cleared, warehoused, or transhipped within thirty days after unloading.—If any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transhipped within thirty days from the date of the unloading thereof at a customs station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer be sold by the person having the custody thereof: Provided that — (a) animals, perishable goods and hazardous goods, may, with the permission of the proper officer, be sold at any time; (b) arms and ammunition may be sold at such time and place and in such manner as the Central Government may direct. Explanation.— In this section, ¯ “arms” and “ammunition” have the meanings respectively assigned to them in the Arms Act, 1959 (54 of 1959).

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 747 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

49. Storage of imported goods in warehouse pending A clearance or removal.—Where,–– (a) in the case of any imported goods, whether dutiable or not, entered for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of the importer that the goods cannot be cleared within B a reasonable time; (b) in the case of any imported dutiable goods, entered for warehousing, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of the importer that the goods cannot be removed for deposit in a C warehouse within a reasonable time, the goods may pending clearance or removal, as the case may be, be permitted to be stored in a public warehouse for a period not exceeding thirty days: Provided that the provisions of Chapter IX shall not apply to goods D permitted to be stored in a public warehouse under this section: Provided further that the Principal Commissioner of Customs or Commissioner of Customs may extend the period of storage for a further period not exceeding thirty days at a time.” E “150. Procedure for sale of goods and application of sale proceeds.—(1) Where any goods not being confiscated goods are to be sold under any provisions of this Act, they shall, after notice to the owner thereof, be sold by public auction or by tender or with the consent of the owner in any other manner. F (2) The proceeds of any such sale shall be applied— (a) firstly to the payment of the expenses of the sale, (b) next to the payment of the freight and other charges, if any, payable in respect of the goods sold, to the carrier, if notice of such charges has been given to the person having custody of the G goods, (c) next to the payment of the duty, if any, on the goods sold, (d) next to the payment of the charges in respect of the goods sold due to the person having the custody of the goods, H

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A (e) next to the payment of any amount due from the owner of the goods to the Central Government under the provisions of this Act or any other law relating to customs, and the balance, if any, shall be paid to the ownerof the goods. Provided that where it is not possible to pay the balance of sale proceeds, if any, to the owner of the goods within a period of six months from the date of sale of such goods or such further period as the Commissioner of Customs may allow, such balance of sale proceeds shall be paid to the Central Government.”

14Copy pinpoint14. A perusal of the relevant provisions of the MPT Act would show that when section 2(o) defines “owner”, it defines owner in relation to goods separately from owner in relation to any vessel. In sub-clause (i) of section 2(o), when owner is defined in relation to “goods”, the definition is an inclusive one. Secondly, it includes persons who are owners of the goods, or persons beneficially entitled to the goods, such as the consignor, consignee and the shipper and then also includes agents for sale, custody, loading or unloading of such goods. Ordinarily, agents for the sale or custody of goods would relate only to agents of the owner or persons beneficially entitled to such goods, which would certainly exclude the ship-owner and the ship-owner’s agent. However, considering the fact that the definition is an inclusive definition, and that loading or unloading of goods can take place by the steamer’s agent, as was held in Rowther-I (supra), it is difficult to accept the contention on behalf of the steamer’s agent that such persons would not be included within the definition of “owner” under the MPT Act.

15Copy pinpoint15. For these reasons, it is not possible to apply the doctrine of noscitur a sociis to the definition of “owner” under section 2(o), as was contended by the learned Senior Advocates appearing on behalf of the steamer agents. In Brindavan Bangle Stores and Ors. v. Asst. Commissioner of Commercial Taxes and Anr. (2000) 1 SCC 674, this Court held:

G “7. The second contention raised on behalf of the appellants related to the clarity and ambiguity of Entry 30 and Entry 54 and application of such construction of noscitur à sociis. In our opinion the learned Division Bench of the Karnataka High Court has rightly held that the said rule of construction has no application to the facts and circumstances of the case. This Court in State of H

THE CHAIRMAN, BOARD OF TRUSTEES, COCHIN PORT TRUST v. M/S 749 AREBEE STAR MARITIME AGENCIES PVT. LTD. [R. F. NARIMAN, J.]

Bombay v. Hospital Mazdoor Sabha [AIR 1960 SC 610] has considered in detail the rule of construction noscitur à sociis and in para 9, it is observed thus: “We are not impressed by this argument. It must be borne in mind that noscitur à sociis is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. It is only where the intention of the legislature in associating wider words with words of narrower significance is doubtful, or otherwise not clear that the present rule of construction can be usefully applied. It can also be applied where the meaning of the words of wider import is doubtful; but, where the object of the legislature in using wider words is clear and free of ambiguity, the rule of construction in question cannot be pressed into service.”

8. As stated earlier on reading Entry 30 and Entry 54, we have no manner of doubt that there is neither any ambiguity nor do they lack any clarity. The legislature intended to levy and collect entry tax on the articles mentioned in both these entries. The words used therein are of wider import and clearly indicate that all articles made of glass or made from all kinds of all forms of plastic including articles made of polypropylene, polystyrene and like materials are subjected to payment of entry tax. It cannot be disputed that the articles in question, namely, bangles are made of glass and/or made of plastic etc. The impugned judgment has very succinctly dealt with the contentions raised on behalf of both the parties and also dealt with the various reported decisions of this Court and other High Courts in great length. We are in complete agreement with the view taken by the Division Bench.”

16Copy pinpoint16. In the present case, we find no lack of clarity in the expression “agent for the…loading or unloading of such goods”, as including persons who may be the vessel’s agent involved in unloading goods. As the definition of “owner” is inclusive, as stated hereinabove, the non-mention of the ship-owner in the first part of the definition makes no difference, as it would be incongruous to hold that the shipowner’s agent is included in the latter part of the definition, but not the ship-owner itself, which would indicate that the maxim noscitur a sociis cannot apply. H