Natural justice and port demurrage protection require hearing the port authority and securing its dues before goods are cleared.

A statutory port authority's demurrage and wharfage interests cannot be prejudiced by issuance of a detention certificate without notice and an opportunity of hearing, because such a direction may affect its recovery rights and statutory lien after clearance of goods. The authority must therefore be treated as a necessary participant before any order impacting its monetary claim is made. Where clearance is permitted on the basis of detention certificates, an undertaking alone is insufficient protection for the port's dues; the claim should ordinarily be secured by an appropriate bank guarantee, or cash payment if guarantee protection is not furnished.

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Issues: (i) Whether the Port Trust, whose demurrage interests were directly affected by issuance of detention certificates, was entitled to notice and an opportunity of hearing before such certificates were directed to be issued. (ii) Whether the order permitting clearance of goods on the basis of detention certificates should have been protected by a bank guarantee securing the Port Trust's demurrage claim.

Issue (i): Whether the Port Trust, whose demurrage interests were directly affected by issuance of detention certificates, was entitled to notice and an opportunity of hearing before such certificates were directed to be issued.

Analysis: The Port Trust was a distinct statutory body empowered to levy and recover wharfage and demurrage under the Major Port Trusts Act, 1963. Once a detention certificate was issued, the Port Trust was obliged to grant concession in demurrage and, if the goods were cleared, its statutory lien could be lost. An order passed behind its back, therefore, prejudicially affected its legal rights and offended the principles of natural justice.

Conclusion: The Port Trust was entitled to be heard before any direction affecting its demurrage recovery was made, and the High Court's order suffered from non-joinder and denial of hearing.

Issue (ii): Whether the order permitting clearance of goods on the basis of detention certificates should have been protected by a bank guarantee securing the Port Trust's demurrage claim.

Analysis: The High Court had safeguarded the customs duty dispute by insisting on a bank guarantee, but only an undertaking was taken for the demurrage liability. In the circumstances, an undertaking was insufficient protection because the Port Trust's dues were substantial and recovery after clearance of goods would be difficult. The proper course was to secure the Port Trust by a bank guarantee covering the balance demurrage and wharfage charges.

Conclusion: The detention-certificate relief was allowed to stand only with a direction to furnish a bank guarantee securing the Port Trust's claim, failing which cash payment was required.

Final Conclusion: The appeals were disposed of by modifying the operative relief so that the Port Trust's demurrage interest was protected while the clearance already granted to the importer was not disturbed.

Ratio Decidendi: Where a detention certificate or similar administrative direction would prejudice a statutory port authority's recoverable demurrage and may destroy its ability to enforce a lien after clearance of goods, the authority must be heard and its monetary interest secured by appropriate protection such as a bank guarantee.

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