TaxTMI 
TaxTMI 
2015 (5) TMI 403
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Leave granted in SLP(C) No. 4221 of 2012. 2. The common question of law that arises in these appeals, though in different facts and circumstances, is with regard to the liability of the agent of a ship owner (hereinafter referred to as the "Steamer Agent") to pay demurrage and port charges to the Board of Trustees of a Port (hereinafter referred to as "the Port Trust Authority") in respect of goods brought into the port and warehoused by the said authority. Before proceeding to answer the aforesaid question it will be convenient to take note of the core facts in each of the appeals under consideration. Civil Appeal No. 2134/2006 and Civil Appeal arising out of SLP(C) No. 4221/2012 3. The consignee of the goods not having either cleared the same or having responded to any of the notices issued, the goods were sold by public auction by the Port Trust authority after almost four years of receipt thereof. The amount fetched in the auction fell short of the total charges payable which led the said authority to file a suit against the Steamer Agent for the balance amount. The suit was dismissed. In appeal, the High Court reversed the decree holding the Steamer Agent ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the consignee. A "Shipper" is also known as a slot charterer/slot hirer. The agent referred to in the first part of definition of "Owner" in Section 2(o)(i) is an agent of the shipper and not that of the ship owner. The provisions of Section 42 of the Act of 1963 have also been relied upon to contend that once the goods come in to the custody of the Port Trust authority, there is a relationship of bailor and bailee between the consignee and the Port Trust authority and there is no such relationship between the ship owner or his agent on the one hand and the Port Trust on the other. The decision of this Court in Board of Trustees of the Port of Bombay and Others v. Sriyanesh Knitters - (1999) 7 SCC 359 = 1999 (112) E.L.T. 373 (S.C.) is referred to and relied upon for the above proposition. It is further contended that the remedy of a ship owner or his agent by way of lien against the goods is of a limited operation; it is only qua the freight charges and other charges payable to the ship owner. The said lien under Section 60 of the Act of 1963 will not extend to demurrage or port charges. Section 60 of the Act of 1963 therefore does not provide for recompense of demurrage or port ch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade at the request of the Steamer Agent and the service rendered was before the goods had come into the custody of the Port Trust authority. The view expressed with regard to the liability of a Steamer Agent, therefore, is in a different context, it is contended. 9. On behalf of the respondent Port Trust authority it is contended that the decision of this Court in the 1997 case has to be understood to be confined to situations where the bill of lading had been endorsed or delivery orders had been issued by the Steamer Agent. In all other situations i.e. where the bill of lading has not been endorsed, a relationship of bailor and bailee between the Steamer Agent and the Port Trust authority would come into existence by virtue of the provisions of Section 42 of the Act of 1963 and continue till the bill of lading is duly endorsed. This is because the goods come into the custody of the Port Trust from the ship owner by operation of the provisions of Section 42 of the Act of 1963. It is further contended that the views expressed in Sriyanesh Knitters (supra) with regard to the relationship of bailor and bailee between the consignee and the Port Trust authority was in a situatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 40 speaks of the responsibility of the Board for the loss, destruction or deterioration of the goods of which it has taken charge as a bailee under ss. 151, 152 and 161 of the Indian Contract Act. Section 148 of the Contract Act states that a bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the bailor and the person to whom they are delivered is called the bailee. It is clear therefore that when the Board takes charge of the goods from the ship-owner, the ship-owner is the bailor and the Board is the bailee, and the Board's responsibility for the goods thereafter is that of a bailee. The Board does not get the goods from the consignee. It cannot be the bailee of the consignee. It can be the agent of the consignee only if so appointed, which is not alleged to be the case, and even if the Board be an agent, then its liability would be as an agent and not as a bailee. The provisions of ss. 39 and 40, therefore, further support the contention that t....