2020 (8) TMI 300 - SC - Customs

Port Trust's Ground Rent limited to 75 days per TAMP Orders. Liability for demurrage charges shifts upon goods' transfer.

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

The court held that the Port Trust could demand 'Ground Rent' only up to a maximum of 75 days as specified by TAMP Orders. The definition of 'owner' under ... Levy of Ground Rent on Containers - steamer agents - scope of the term owner - distinction between storage of goods and demurrage charges - time limitation for de-stuffing the goods and return of the container - scope of the term 'May' - can it be treated as 'Shall' - interpretation of statute - sections 61 and 62 of the MPT Act - 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 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, 1963? HELD THAT:- 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. - 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. A container, being a receptacle in which goods are imported, cannot be said to be “goods” that are imported as it does not become part of the mass of goods within the country on the facts of these cases. Thus, once destuffing takes place, the container has to be returned either to the ship-owner’s agent, or to the person who owns such container. May versus Shall - Held that:- while it may not be correct to say that “may” has to be read as “shall” in sections 61 and 62 of the MPT Act, yet in all future cases the Board is under a constitutional duty to sell the goods in its custody within a reasonable time from which it takes custody of those goods. Ordinarily, the time of four months from the date of landing of the goods mentioned in section 63(1)(c) of the MPT Act should be the outer-limit within which such goods should be put up for sale. If not put up for sale within such time, the Board must explain as to why, in its opinion, this could not be done, which explanation can then be tested by the Courts. If the explanation is found to be reasonable, and the owner or person entitled to the goods does not remove the goods thereafter, penal demurrage may then be levied and collected by the Board. To this extent, therefore, while overruling the impugned judgment of the Kerala High Court [2011 (9) TMI 991 - KERALA HIGH COURT] on the aspect of “may” being read as “shall” in sections 61 and 62 of the MPT Act, yet the hovering omnipresence of Article 14 over the Board must always be given effect to, and there must be a very good reason to continue detention of goods beyond the period of four months as mentioned hereinabove before they are sold. Conclusion: The point of time at which title to the goods passes to the consignee is not relevant to determine the liability of the consignee or steamer agent in respect of charges to be paid to the Port Trust; The bill of lading being endorsed by the steamer agent is different from the bill of lading being endorsed by the owner of the goods. In the first case, the endorsement leads to delivery; in the second case, the endorsement leads to passing of title. For the reasons mentioned in the judgment, both stages are irrelevant in determining who is to pay storage charges – we have held that upto the point that the Port Trust takes charge of the goods, and gives receipt therefor, the steamer agent may be held liable for Port Trust dues in connection with services rendered qua unloading of goods, but that thereafter, the importer, owner, consignee or their agent is liable to pay demurrage charges for storage of goods; The statutory scheme of the MPT Act now becomes crystal clear. Until the stage of landing and removal to a place of storage, the steamer’s agent or the vessel itself may be made liable for rates payable by the vessel for services performed to the vessel. Post landing and removal to a place of storage, detention charges for goods that are stored, and demurrage payable thereon from this point on, i.e. when the Port Trust takes charge of the goods from the vessel, or from any other person who can be said to be owner as defined under section 2(o), it is only the owner of the goods or other persons entitled to the goods (who may be beneficially entitled as well) that the Port Trust has to look to for payment of storage or demurrage charges. A container which has to be returned is only a receptacle by which goods that are imported into India are transported. Considering that the container may belong either to the consignor, shipping agent, ship-owner, or to some person who has leased out the same, it would be the duty of the Port Trust to destuff every container that is entrusted to it, and return destuffed containers to any such person within as short a period as is feasible in cases where the owner/person entitled to the goods does not come forward to take delivery of the goods and destuff such containers. What should be this period is to be determined on the facts of each case, given the activities of the port, the number of vessels which berth at it, together with the volume of goods that are imported. While it does not lie in the mouth of the Port Trust to state that it has no place in which to keep goods after they are destuffed – as in the facts in the present case – yet a court may, in the facts of an individual case, look into practical difficulties faced by the Port Trust. This may lead to the “short period” in the facts of a particular case being slightly longer than in a case where a port is less frequented, and goods that are stored are lesser in number, given the amount of space in which the goods can be stored. Appeal of the Port Trust allowed. Issues Involved:1. Liability to pay 'ground rent' on containers beyond 75 days.2. Interpretation of Section 2(o) of the Major Port Trusts Act (MPT Act).3. Responsibility of the consignee or steamer agent for charges due to the Port Trust.4. Principles determining the Port Trust's entitlement to recover dues.5. Obligation of the Port Trust to destuff containers and return them to the shipping agent.Detailed Analysis:1. Liability to Pay 'Ground Rent' Beyond 75 Days:The core issue was whether the liability to pay 'ground rent' on containers unloaded at Cochin Port, but not cleared by consignees/importers, can be imposed on the vessel owners/steamer agents beyond the 75 days fixed by the Tariff Authority of Major Ports (TAMP). The court held that the Port Trust could demand 'Ground Rent' only up to a maximum of 75 days as specified by TAMP Orders. The High Court's judgment was based on the lapse of the consignee in not lifting the goods and the Port Trust in not destuffing the containers due to inadequate space.2. Interpretation of Section 2(o) of the MPT Act:The definition of 'owner' under Section 2(o) was scrutinized to determine whether it includes steamer agents. The court concluded that the definition is inclusive and can encompass agents for loading or unloading goods, including steamer agents. The doctrine of noscitur a sociis was deemed inapplicable due to the clear and wide scope of the definition.3. Responsibility of the Consignee or Steamer Agent:The court examined whether a steamer agent can be held liable for storage charges/demurrage if the consignee fails to clear the goods. It was held that once the Port Trust takes charge of the goods and issues a receipt, the vessel or its agent is absolved from liability for loss or damage to the goods. The responsibility for demurrage charges falls on the importer, owner, consignee, or their agent after the Port Trust takes custody of the goods.4. Principles Determining the Port Trust's Entitlement to Recover Dues:The court analyzed various judgments and statutory provisions to establish that the Port Trust can recover dues from the owner or person entitled to the goods, but not from the steamer agent after the goods have been landed and taken charge of by the Port Trust. The statutory scheme of the MPT Act was clarified, emphasizing that storage charges are payable by the owner or person entitled to the goods, not the steamer agent.5. Obligation to Destuff Containers:The court addressed whether the Port Trust is obliged to destuff every container and return the empty containers to the shipping agent. It was held that containers are merely receptacles for transporting goods and must be returned to the shipping agent or owner after destuffing. The Port Trust has a duty to destuff containers within a reasonable period, considering practical difficulties and the volume of goods handled by the port.Conclusion:The court provided a comprehensive interpretation of the MPT Act, clarifying the liabilities and responsibilities of steamer agents, consignees, and the Port Trust. The judgment emphasized the need for the Port Trust to act reasonably and within a reasonable period when handling and destuffing containers. The appeals were disposed of, and the High Court's judgment was set aside only on the point that the word 'may' in sections 61 and 62 of the MPT Act cannot be read as 'shall,' subject to the requirement for the Port Trust to act reasonably.