Demurrage liability limited to the lawful retention period, with additional charges barred once port detention was no longer justified.

Further demurrage could not be fastened on the petitioners once the Port Authority had no lawful basis to retain the goods, and continued detention after the customs obstruction had ceased was treated as attributable to the Authority. Demurrage was therefore confined to the permitted two-month period from 12 February 1996, while the remaining claim was rejected. The petitioners were also directed to pay the admitted de-stuffing charges, together with demurrage for the limited period and the proportionate interest linked to the principal deposit. The governing principle stated was that demurrage cannot accrue indefinitely against a container owner beyond the period during which the port may lawfully retain the goods.

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Issues: (i) Whether any further demurrage charges could be fastened on the petitioners beyond the period allowed by the Court, and (ii) whether the petitioners were liable to pay de-stuffing charges and demurrage for the limited period directed by the Court.

Issue (i): Whether any further demurrage charges could be fastened on the petitioners beyond the period allowed by the Court.

Analysis: The dispute turned on liability for demurrage in respect of containers detained at the Port after the customs obstruction had ceased. The Court noted that the Port Authority had already realised demurrage up to the relevant stage and that, on the facts, the continued detention thereafter was attributable to the Port Authority. The Court also relied on the legal position that the Port Authority ought to have sold the goods within the prescribed period, and that demurrage could not be extended indefinitely against the petitioners once the Port Authority had no subsisting basis to retain the goods.

Conclusion: Further demurrage beyond two months from 12 February 1996 could not be charged to the petitioners.

Issue (ii): Whether the petitioners were liable to pay de-stuffing charges and demurrage for the limited period directed by the Court.

Analysis: The petitioners accepted liability for de-stuffing expenses, and the Court directed payment of the stated amount from the fixed deposit. The Court further held that demurrage for the permitted two-month period from 12 February 1996 remained payable at the prescribed rate, together with the proportionate interest attributable to the principal deposit, and that the balance of the claim could not be fastened on the petitioners.

Conclusion: The petitioners were liable to pay the de-stuffing charges and demurrage only for the two-month period directed by the Court.

Final Conclusion: The writ petition succeeded in part: the petitioners were protected from any additional demurrage beyond the limited period, but were directed to satisfy the admitted de-stuffing charges and the demurrage attributable to the specified two-month period.

Ratio Decidendi: Demurrage cannot continue to accrue against a container owner beyond the period during which the Port Authority can lawfully retain the goods, and the Authority must act within the period allowed by law to dispose of or release the goods.

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