2016 (7) TMI 277 - HC - Indian Laws

Court rules in favor of steamer agent, Kolkata Port Trust liable for cargo loss.

The court held that Kolkata Port Trust (KPT) was not entitled to recover demurrage charges from the steamer agent (ITM) post-endorsement of the bill of ... To what extent the Kolkata Port Trust (in short ‘KPT’) is entitled to recover demurrage charges from the respondent no. 1/writ petitioner in respect of containers in which poppy seed was imported by the respondent company from Karachi to Kolkata on route to Nepal - Held that:- Indian Trident Maritime (P) Ltd. (ITM) was not liable for the port charges incurred for storing the cargo in question on port premises after the issuance of the delivery order or endorsing the bill of lading. Further, it would appear from the correspondence exchanged between the parties that ITM was running from pillar to post to persuade KPT to allow de-stuffing of the cargo from the containers on port premises. It was lack of diligence in the matter on the part of the KPT that forced ITM to approach this Court in its writ jurisdiction. The genesis of the litigation is clearly traceable and attributable to the indolence and inaction on the part of the KPT. The question then arises is what happens to the claim of KPT? In our considered opinion, KPT has to look towards the consignee of the cargo in question for recovering its dues. It is not disputed that under the Major Port Trusts Act, the port trust authorities are entitled to frame scale of rates regarding the port rent, harbour charges, wharfage etc. and the port authorities have a statutory right to recover the same from the person liable to pay the same. In the facts of this case, the person liable is the consignee. Hence, the remedy of KPT is against the consignee. What happens if the consignee disappears from the scene, abandons the consignment in question or evinces no intention to clear the goods after clearing the port charges? In such situations the Port Authority’s claim is protected and secured by Sections 59, 61 and 62 of the MPT Act. Section 59 recognizes a statutory lien of the KPT on any goods which may have been placed on any port premises for the amount of all rates leviable under the Act in respect of the goods and for the rent due to the port authorities. Such lien of the port authorities have priority over all other liens and claims except for general average and ship owner’s lien on the said goods for freight and other charges. Any debit entry made by KPT in ITM’s Marine A/c held with it on account of rent/demurrage charges for the period subsequent to endorsement of bill of lading and/or issuance of delivery order by ITM in favour of the consignee, is not sustainable in law and must be reversed. - ITM is liable for rent/demurrage charges only up to the date of endorsement of bill of lading and/or issuance of delivery order. Issues Involved:1. Extent of Kolkata Port Trust's (KPT) entitlement to recover demurrage charges from the respondent.2. Liability of the steamer agent (ITM) for port charges incurred due to storage of goods.3. Applicability of Sections 61 and 62 of the Major Port Trusts Act, 1963.4. Responsibility for destuffing charges of the containers.Detailed Analysis:1. Extent of KPT's Entitlement to Recover Demurrage Charges:The appeal questioned the extent to which KPT could recover demurrage charges from ITM for containers carrying poppy seeds imported from Karachi to Kolkata en route to Nepal. The court noted that the consignee abandoned the goods, leading to the containers being stuck at the port, causing commercial loss to ITM. The court held that KPT was not entitled to debit ITM's Marine A/c for demurrage charges incurred after the endorsement of the bill of lading and issuance of delivery order. The court emphasized that ITM was running from pillar to post to get permission for destuffing, and the delay was attributable to KPT's lack of diligence.2. Liability of the Steamer Agent (ITM) for Port Charges:The court reiterated that the liability of a carrier or steamer agent is limited. Once the goods are off-loaded, the bill of lading is endorsed, and the delivery order is issued, the carrier or its agent is discharged of its obligations. The consignee or its agent becomes liable for port charges. The court referred to the Supreme Court's decision in K.P.V. Sheikh Mohd. Rawther & Co. Pvt. Ltd., which held that the consignee is liable for port dues after the endorsement of the bill of lading or issuance of the delivery order. Consequently, ITM was not liable for port charges incurred after these actions.3. Applicability of Sections 61 and 62 of the Major Port Trusts Act, 1963:The court noted that KPT had statutory rights under Sections 61 and 62 of the Major Port Trusts Act to sell the goods to recover dues if the consignee fails to remove them. However, KPT did not exercise these rights diligently. The court criticized KPT for its tardy conduct, which allowed the cargo to become valueless, and held that KPT was responsible for the loss. The court emphasized that KPT's claim for demurrage charges should be directed towards the consignee, not ITM.4. Responsibility for Destuffing Charges:The court found that ITM should not bear the cost of destuffing the containers, as the obligation to destuff lies with the consignee or its agent. The court referred to the Division Bench order dated 4 December 1996, which recorded that ITM would not be liable for any claims by the authorities against the owner of the destuffed cargo. Thus, ITM was not responsible for the destuffing charges amounting to Rs. 6,84,849.80.Conclusion:The court concluded that ITM was not liable for demurrage charges post-endorsement of the bill of lading and issuance of the delivery order. Any debit entries made by KPT in ITM's Marine A/c for such charges must be reversed. ITM was also not liable for the destuffing charges. The court directed that ITM could withdraw the Rs. 14 lakhs deposited with its Advocate on record, along with accrued interest. KPT was advised to pursue its claims against the consignee or the cargo in question in accordance with the law. The appeal and cross-objection were disposed of without any order as to costs.