TaxTMI 
TaxTMI 
2002 (6) TMI 511
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.... of 1983, 288 of 1984 and 534 of 1985, the Collector of Customs has been shown as a defendant. It seems as against C.S. No. 534 of 1985, no appeal has been filed. In respect of the other two suits viz., C.S. Nos. 496 of 1983 and 288 of 1984, Appeal Nos. 46 of 1992 and 50 of 1992 have been filed among other appeals in which the claim is made against the Port Trust only. 2. Learned Single Judge of this Court thought it fit to consolidate all the cases together heard and delivered the judgment in common since in all these cases, the claims arise out of the same cause of action. However, the plaintiffs have let in evidence independently in respect of their claim. The Port Trust let in evidence in their defence. 3. The learned Judge after taking into consideration of the legal submissions submitted by the Counsel appearing for the respective plaintiffs and the defendants and upon considering the material evidences placed before it, both oral and documentary, ultimately came to the conclusion that the appellant Port Trust is liable for the loss that has occurred to the goods entrusted to the Port Trust by the various plaintiffs as a result of the fire accident that occurr....
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....law, the Customs Department is only having the authority and control over the goods. According to the learned Additional Solicitor General, the warehouse keeper i.e. Port Trust is only owner of the building and does not issue any receipt for the goods warehoused as prescribed in the Major Port Trusts Act. These are the precise contentions of the learned Additional Solicitor General appearing for the Port Trust for disowning the liability for the damage caused to the goods when they were warehoused with the Port Trust. 6. On the other hand, learned Counsel appearing for the claimants/respondents submitted that as per Section 43(1)(ii) of the Major Port Trusts Act, the Port Trust being a statutory bailee is liable for the loss caused to the goods warehoused with the Port Trust and no exception could be taken to the judgment in appeal. Learned Counsel appearing for the Insurance Company, which was arrayed as co-plaintiff in some of the suits on the ground of subrogation along with the importer-consignee, in all material facts supported the arguments of the learned Counsel appearing for the respondents/consignees for sustaining the judgment and countered the argument of the lea....
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....responsibility of the Board for the loss, destruction or deterioration of the goods taken charge by it and in respect of which a receipt under sub-section (2) of Section 42 has been issued by it shall be that of a bailee under Sections 151, 152 and 161 of the Indian Contract Act. The said provisions of the Contract Act obliges the Board to take such care of the said goods as a man of ordinary prudence would take of his own goods in similar circumstances, while exonerating it from any loss or destruction occurring to the goods in spite of such care taken by it. It further provides that if on account of the default of the bailee the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailor for any loss, destruction or deterioration of the goods from that time. The said provision also provides that the outer limit of such period which is 7 days as per Regulation in G.S.R 35(3e), dated 1-2-1975. Sub-section (2) of Section 43 requires a notice to be given within the period prescribed by the Regulations made for that behalf. 12. Section 46 of the Customs Act provides that the importer of any goods, other than goods intended for transit or t....
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....ore they are entitled to get damages for the goods that have been destroyed in the fire. 16. The defence in the written statement filed by the Port Trust is that it is not a bailee in respect of the goods that have been bonded by the plaintiffs, that the goods were bonded prior to clearance. The Anchor Gate Bonded Warehouse was under the Customs' control and the Port Trust was only a Warehouse keeper. As soon as the fire was noticed at 12.15 hours on 7-6-1982, all maximum possible steps have been taken immediately to extinguish the fire within minimum possible period. Even Snorkel and Fire Service from the Southern Railway, Railway Protection Force and other agencies have been requisitioned to put out the fire. The fire was brought under control within the evening on the same day. 17. The further case of defence of the Port Trust is that adequate number of fire extinguishers of the appropriate type have been installed in each warehouse and all the fire extinguishers were maintained in good condition and all possible necessary and precautionary steps were taken immediately after the fire was noticed. No hazardous cargo was stocked in the warehouse. The warehouse staf....
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....e proper officer does not mean that the Port Trust has no custody or control over the goods. For the purpose of keeping the goods under its custody, the Port Trust collects rent, which is statutorily authorised under sub-section (2) of Section 63 of the Customs Act. The power of the warehouse keeper has been specifically mentioned in the said sub-section and in case rents are not paid within the time prescribed, the warehouse keeper may after due notice to the owner of the warehoused goods and with the permission of the proper officer of the Customs could sell the goods notwithstanding the fact that the transfer of the goods warehoused had taken place such sufficient portion of the goods as the warehouse keeper may select for the purpose of realising the rent. 20. Further sub-section (2) of Section 42 of the Major Port Trusts Act read with Section 43 of the said Act makes the position very clear. Sub-section (2) of Section 42 of the Major Port Trusts Act empowers the Port Trust to take charge of the goods for the purpose of performing the service or services, if so requested by the owner and on such taking charge of the goods, the Port Trust shall give a receipt in such for....
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....ntrol of the proper officer that has been contemplated under the Customs Act is for the purpose of realising the duty and other charges payable to the customs on the importation of the goods. But that does not preclude the Port Trust to realise the rent for the period for which the goods have been bonded with them or the Port Trust is collecting any rent or charges from the customs authorities. The Major Port Trusts Act and the Customs Act contemplate dual rights and duties on the part of the Customs and the Port Trust. The moment the Port Trust receives the goods for proper custody, the duty to take care of the goods for safe delivery is fastened on the Port Trust. 24. It is pertinent to note that under Section 45 of the Customs Act all the imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Collector of Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII. So long as the goods are in the customs area, the goods shall remain in the custody of such person as may be approved by the Collector of Customs. Once the goods are warehoused....
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....lal [1976 (3) SCC 167] and Indian Goods Supplying Co. [1977 (2) SCC 649], by following the decisions rendered therein, it was held thus: "The power of a Port Trust to fix rates of demurrage and to recover the same from an importer or exporter (although the question of an exporter paying demurrage arises rarely) under law and to show concession as regards demurrage charges in certain specified cases is recognised by the Court in the Trustees of the Port of Madras v. Aminchand Pyarelal and in the Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co. These decisions are no doubt based on the relevant laws which were in force at the material time. But the decisions are still relevant insofar as cases arising under the Act because the Act also contains provisions more or less similar to the statutory provisions considered in the said decisions. Demurrage charges are levied in order to ensure quick clearance of the cargo from the harbour. They are always fixed in such a way that they would make it unprofitable for importers to use the port premises as a warehouse. It is necessary to do so because congestion in the ports affects the free movement of ships and the loading a....
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....88 (35) E.L.T. 244 (S.C.) = 1988 (3) Supreme Court Cases 310 to contend that it is only the Customs Department and not the Port Trust is liable for the loss caused to the goods in the present case. We are not able to see any reason to accept the contention, because there is a ocean of difference between the facts of that case and the present case. In that case, the goods imported were never warehoused. The goods were unloaded in customs area and later confiscated under Section 111(d) and (m) of the Customs Act and the goods were not handed over and never be in the possession and custody of the Port Trust and the goods were in the transitory period. On the other hand, it is admitted fact that in all these appeals, the goods were warehoused on filing the Bill of Entry. There is no confiscation here in this case. 29. Under Section 151 of the Indian Contract Act, the bailee is bound to take much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value of the goods bailed. In view of the above said provision, the Port Trust has to prove that it has taken care of the goods bailed to....
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....r, he made a crucial admission in his evidence that inflammable or combustible or hazardous goods would not be permitted to warehouse in the dock and as such nothing of such nature of goods have been warehoused. This admission of the Dock Manager of the Port Trust go to falsify the theory of spontaneous combustion, because of the reason of high temperature on the date of accident advanced by the appellant. 34. The Executive Engineer (Electronics), tendered his evidence as D.W.7 as to the soundness of the warehouse and also the electrical installations. But his evidence is in total contradiction to that of D.W.5, who has deposed that the Anchor Gate House has been completely reduced to ashes whereas according to D.W.7, at the time of his inspection after the accident, the fuses were intact and thus, there could not be any leakage or defect in the electrical system. It is pertinent to note that the fuse carriers of the Anchor Gate warehouses which were found to be intact according to D.W.7 were not produced before the enquiry by the Port Trust or before the trial stage to prove the case. 35. According to D.W.5, the Dock Manager of the Port Trust, the Anchor Gate wareh....