Statutory port demurrage scales may validly regulate cargo clearance, but recovery fails without proof of liability against the proper party.

A statutory port authority empowered to frame a scale of rates and conditions for services may levy demurrage-like charges to secure prompt cargo clearance and prevent congestion, and such a scale is not ultra vires merely because it differs from the strict mercantile meaning of demurrage or classifies detention categories differently. The demand was upheld in principle as neither unreasonable nor beyond the statute. However, liability for recovery was not established on the record against the respondents, because the detention certificate did not create legal liability and the evidence did not prove that the first respondent, as an intermediary without shown title or beneficial interest, was the proper party to bear the charge.

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Issues: (i) Whether the scale of rates and conditions framed by the Port Trust for demurrage was void as unreasonable or as being beyond the power conferred by the governing statute; (ii) Whether the first respondent was liable to pay the demurrage claimed.

Issue (i): Whether the scale of rates and conditions framed by the Port Trust for demurrage was void as unreasonable or as being beyond the power conferred by the governing statute.

Analysis: The statutory scheme empowered the Board to frame a scale of rates and conditions for the services it rendered, subject to Central Government sanction. Such rates were not bye-laws and were not to be judged by the ordinary tests applicable to penal or regulatory bye-laws. The demurrage charge formed part of the consolidated charges for services and was designed to secure quick clearance of cargo and prevent port congestion. The classification in the scale between different categories of customs detention was not arbitrary merely because the Court might have preferred a different approach. The use of the word demurrage did not confine the Board to the mercantile meaning of that term, because the statute authorised rates for services and not merely charges for default.

Conclusion: The scale of rates was neither unreasonable nor ultra vires the statute.

Issue (ii): Whether the first respondent was liable to pay the demurrage claimed.

Analysis: The claim against the Union of India and the Collector of Customs had no legal foundation, and the mistaken detention certificate could not fasten liability on them. As regards the first respondent, the record did not establish sufficient facts to support liability, particularly since the import licence stood in the name of the State Trading Corporation and the first respondent appeared to be only an authorised intermediary with no title or beneficial interest in the goods. The appellants had also allowed clearance without contemporaneous demand, thereby weakening the case for imposing the charge on the first respondent alone.

Conclusion: The first respondent was not proved liable on the record as it stood.

Final Conclusion: The challenge to the validity of the demurrage scale failed, but the suit for recovery also failed for want of a sustainable basis against the respondents on the facts proved.

Ratio Decidendi: A statutory authority empowered to frame a scale of rates for services rendered under the Act may levy charges designed to secure prompt clearance and regulate use of its facilities, and such a scale is not invalid merely because it departs from the strict mercantile notion of demurrage or distinguishes between categories of detention.

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