Consignment Exporter Liable for Demurrage Charges

The Supreme Court held that the consignor-exporter is liable for demurrage charges and incidental fees when goods are unlawfully detained in customs. Relying on precedent, the Court found that the consignor-exporter bears responsibility, similar to the importer-consignee. The lower courts' decisions were overturned, and the suit against the consignor-exporter was decreed in favor of the plaintiff for the recovery of charges and costs.

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Issues involved:
The liability of the consignor-exporter for demurrage charges and incidental charges when goods are illegally detained in the customs area.

Summary:

The appellant, as the plaintiff, filed suit O.S. No. 3980 of 1969 in the City Civil Court at Madras against Defendants 1 to 5, seeking recovery of demurrage charges and other incidental charges for textile goods detained in the customs area of the Port of Madras. The City Civil Court dismissed the suit, holding that the consignor-exporter could not be held liable for such charges when goods were illegally detained by the Customs Authorities. The plaintiff appealed to the High Court of Madras, but the appeal was also dismissed. The present appeal challenges the dismissal of the suit by the City Civil Court and the High Court.

Upon hearing arguments from both parties, the Supreme Court referred to a previous ruling in International Airports Authority of India v. Grand Slam International, establishing that the importer-consignee of goods is liable to pay demurrage charges and other incidental charges for goods illegally detained in the customs area. This liability extends to exporter-consignors as well, regardless of the goods' ownership. Consequently, the judgments and decrees of the lower courts were set aside, and the suit against Defendant 1, the exporter-consignor, was decreed in favor of the plaintiff.

In conclusion, the Supreme Court allowed the appeal, overturned the decisions of the lower courts, and decreed the suit against Defendant 1 for the recovery of demurrage charges and other incidental charges, along with costs.

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