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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2525 OF 2018 [Arising out of SLP (C) No.4683 of 2012]

THE CHAIRMAN, BOARD OF TRUSTEES            ....APPELLANT  COCHIN PORT TRUST   

        Versus  

M/S AREBEE STAR MARITIME .....RESPONDENTS AGENCIES PVT. LTD. & ORS.      

WITH

CIVIL APPEAL NO.2526 OF 2018

SLP(C) No. 5034/2012

CIVIL APPEAL NO.2527 OF 2018

SLP(C) No. 5270/2012

CIVIL APPEAL NO.2530 OF 2018

SLP(C) No. 7636/2012

CIVIL APPEAL NO.2529 OF 2018

SLP(C) No. 7716/2012

CIVIL APPEAL NO.2528 OF 2018

SLP(C) No. 7600/2012

REPORTABLE

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CIVIL APPEAL NO.2531 OF 2018

SLP(C) No. 7809/2012

CIVIL APPEAL NO.2532 OF 2018

SLP(C) No.7813/2012

CIVIL APPEAL NO.2533 OF 2018

SLP(C) No. 7864/2012

CIVIL APPEAL NO.2534 OF 2018

SLP(C) No. 8165/2012

AND

CIVIL APPEAL NO.2535 OF 2018

SLP(C) No.8126/2012

J U D G M E N T

Dr. D.Y. CHANDRACHUD, J

1 Leave granted.  

2 These proceedings have arisen from a judgment dated 27 September

2011 of a Division Bench of the Kerala High Court in a batch of writ appeals

and original petitions, preferred by various shipping agents.  

3 The question before  the  High Court  was whether  the liability  to  pay

‘ground rent’ on containers unloaded at Cochin Port, but not cleared by the

consignees/importers and refused to be de-stuffed by the Port, on the ground

of  inadequate  storage  space,  can  be  imposed  on  the  owners  of  the

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vessel/steamer  agents  beyond  the  period  of  75  days,  fixed  by  the  Tariff

Authority of Major Ports1, a statutory body constituted under Section 47A of the

Major Port Trust Act2, 1963.  

4 The facts of  the case are summarized in the following extract  of  the

judgment of the High Court:

“The sequence of events that led to the stalemate refers to the  incidents  which  happened  in  1998  when there  (sic) imports synthetic woollen rags (in containers) in the Cochin Port Trust premises. The said containers were destuffed to facilitate  Customs  examination  and  to  return  the  empty containers  to  the  Steamer  Agents.  The  destuffed  cargo occupied much larger space and was not promptly cleared by the consignees in  view of  the  hurdles placed by the Customs stating that the cargo actually did not constitute old woollen rags as declared, but mostly were brand new clothes which could not  have been cleared. The ‘modus operandi’  of  the  consignees/importers  attracted  wide attention of all concerned and taking note of the probable extent  of  liability  to  be  imposed  by  the  Customs Department, and the liability to be satisfied to the Port and others concerned, the consignees did not turn up to clear the goods and they were lying idle in the Port premises for quite long.”

The Port Trust charged ‘ground rent’ from the Steamer Agents/owners of the

containers.

5 The case revolves around the interpretation of the provisions of the MPT

Act. The Act makes provision for the constitution of port authorities in whom it

vests administrative control and management of ports. Section 3 authorises

the Central Government to constitute a Board of Trustees (“Board”3) in respect

1 TAMP 2  MPT Act 3 “Board” and “Port Trust authority” have been used interchangeably.

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of any major port. Under Section 5, every Board is to be a body corporate.

Section 35 empowers the Board to execute works within or without the limits of

the  port  and  provide  any  such  appliances  for  the  port  as  it  “may  deem

necessary or expedient”. Section 43 places responsibility on a Board for the

loss, destruction or deterioration of goods of which it has taken charge.

6 Section 2(o) defines an "owner", in relation to goods, to include “any

consignor,  consignee,  shipper  or  agent  for  the  sale,  custody,  loading  or

unloading of such goods”; and in relation to any vessel or any aircraft making

use of any port, to include “any part-owner, charterer, consignee, or mortgagee

in possession thereof”. Section 42 authorises the Board to undertake certain

services. Sub-section (2) of Section 42 provides that a Board may, if requested

by  the  owner  of  the  goods,  take  charge  of  the  goods  for  the  purpose  of

performing services. Section 42(7) provides that after goods have been taken

charge of and a receipt given for them under the Section, no liability for any

loss or damage which may occur to them shall attach to any person to whom a

receipt has been given or to the master or owner of the vessel from which the

goods have been landed or transhipped.

Chapter VI of the Act provides for imposition and recovery of rates at ports.

The right to prescribe the scale of rates for services performed by the Board or

other persons and to prescribe the statement of conditions under which the

premises of the Board can be used, was vested earlier, mainly under Sections

48 and 49, with the Board of Trustees of the Port. Later, with an amendment of

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the Act in 1997, Section 47A was inserted by which TAMP was created. The

power to prescribe a scale of rates now vests with TAMP.

Under Section 59(1), a lien on goods is created in favour of the Board (in

respect of any service rendered for such goods).  The Board is empowered to

seize and detain the goods until its rates and rents are fully paid. Section 60

provides  for  the  Ship-owner's  lien  for  freight  and  other  charges.4 Under

Sections 61 and 62, such seized/detained goods can be sold by the Board by

public  auction  or  in  any  other  manner,  subject  to  the  conditions  and

procedures prescribed in those provisions.  

Though the term ‘ground rent’ is not defined in the MPT Act, the source of

authority to levy it is in Section 49(1) (d)5 of the Act. The scheme of the MPT

Act appears to be silent with regard to the persons from whom ‘ground rent’

and other charges could be collected.

7 During the course of submissions before the High Court, it was pointed

out that the question whether a “Steamer Agent” can be construed to be the

“owner” of the goods carried in the vessel belonging to its principal, in view of

the definition in Section 2(o) and whether the “Steamer Agent” can be made

liable for the payment of storage charges/demurrage in respect of the goods,

4 Section 60(1) provides: (1) “if the master or owner of any vessel or his agent, at or before the time of landing from such vessel any goods at any dock, wharf, quay, stage, jetty, berth, mooring or pier belonging to or in the

occupation of a Board, gives to the Board a notice in writing that such goods are to remain subject to a lien for freight or other charges payable to the ship-owner, to an amount to be mentioned in such notice, such goods shall continue to be liable to such lien to such amount.” 5 Section 49(1) (d) provides: [(1) The Authority shall from time to time, by notification in the Official Gazette, also frame a scale of rates on payment of which, and a statement of conditions under which, any property belonging to,  or  in  the  possession  or  occupation  of,  the Board,  or  any place  within  the  limits  of  the port  or  the port approaches may be used for the purposes specified hereunder]:-

…  (d) any other use of any land, building, works, vessels or appliances belonging to or provided by the

Board.

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which are uncleared by the consignee, has been referred by a Bench of two

learned Judges of this Court to a larger Bench  in Forbes Forbes Campbell

and Co. Ltd. v Board of Trustees, Port of Bombay6 [Forbes- I]. This Court

had then framed the following questions of law of public importance:

a) Whether  a  steamer  agent  can  be  construed as  owner  of  the  goods

carried in his principal’s vessel within the definition of “owner” in relation

to goods under Section 2(o) of the Major Port Trusts Act 1963;

b) Whether a steamer agent can be made liable for payment of storage

charges/demurrage in  respect  of  goods,  which  are  uncleared by the

consignee,  even where the steamer agent  has not  issued a delivery

order; and  

c) In the event that a steamer agent is held liable, to what extent is he

liable and whether it absolves the Port Trust from acting promptly under

Sections 61 or 62 of the Act?

In view of the above reference, the High Court did not deal with these specific

issues. However, the High Court observed that the reference did not cover:

(i) The scope and the power of TAMP (with effect from 9 January 1997)

to prescribe the scale of  rates and conditions,  as specified under

Sections 48 and 49 of the MPT Act; and

6 (2008) 4 SCC 87

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(ii) Whether various TAMP orders limiting the entitlements of the Port

Trust to realize the ‘ground rent’ was in tune with the mandate of

Sections 61/62 of the MPT Act.

The High Court restricted the scope of consideration in the batch of petitions

and appeals to the scheme of the MPT Act and the effect of the TAMP orders

with regard to fixation of and the extent of liability upon the Steamer Agents to

pay the ‘ground rent’.

8 The High Court held thus:

“Nowhere  has  it  been  specified  in  the  statutes  or elsewhere that the Steamer Agents have a duty or liability to clear the goods from the custody of the Port, which in fact is the onus of the Consignee/their agents. This is more so since, as per the Bills of Lading Act, the ownership and title  to  the  goods  are  vested  on  the  Consignee  or  an endorsee of the Bill of lading. Once the goods are landed in the Port premises, the same cannot be cleared by the Owners  of  the  Vessel/Steamer  Agents  and  their  rights stand  confined  ‘only  to  the  lien’  for  freight  and  other charges to be exercised in conformity with S. 60(1) of the Major Port Trusts Act which of course is having priority in the matter of satisfaction/appropriation in the event of sale of  the  goods,  as  provided;  on  pursuing  the  course stipulated under Section 61/62 of the Major Port Trusts Act or such similar course as contemplated under Section 48 of the Customs Act. In both the cases, the Shippers’ lien gets  precedence  and  priority  over  any  other  dues/lien including the lien of the Port Trust or the amounts payable to the Customs/Government or  under such other heads, except the expenses for the sale proceedings, which is the mandate under Section 63 of the MPT Act and Section 150 of the Customs Act.”

The High Court came to the conclusion that the scheme of the statute does

not contemplate a liability to be fulfilled by the vessel owners except to the

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extent as specified and the freight and other charges payable to them get

priority over other dues payable to the Government and also to the Port, if the

lien is exercised in the manner specified under Section 60(1).

The High Court held that there is no justification for the Port Trust to collect

‘ground rent’ charges in respect of the containers indefinitely. The High Court

held that the authority and power to prescribe the scale of rates and conditions

under Sections 48 and 49 of the MPT Act stands vested exclusively with TAMP

with  effect  from  9  January  1997.  It  held  that  the Port  Trust  can  demand

‘ground rent’ only for a maximum period of 75 days, under the orders issued

by TAMP. The High Court rejected the contention of the Port Trust, that there

was  no  obligation  cast  upon  it,  to  have  destuffed  the  goods  when  the

containers landed.

9 Relevant to the present context, there is a line of judicial precedent. In

1963, a Constitution Bench in The Trustees of the Port of Madras v K P V

Sheik Mohamed Rowther & Co.7 [Rowther- I] upheld the power of the Board

to collect rates/charges from the steamer agent:

“There is no doubt that the shipowner is the bailee of the shipper, the consignor, and that he is responsible for the delivery  of  the  goods  to  the  consignee  or  a  transferee according to the terms of the bill of lading. This duty the ship-owner  discharges  only  when  he  has  delivered  the goods to the consignee or such person who is entitled to take delivery in accordance with the endorsements on the bill  of lading. Delivery to the Board is not delivery to the consignee or such person, both because the delivery is to be on the presentation of the Bill of lading and because the Act contains no provision which would constitute the Board an  agent  of  the  consignee  for  the  purpose  of  taking delivery of the goods.”

7 (1963) Supp. 2 SCR 915

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The case revolved around the question whether the Board acted as an agent

of the consignee. The Constitution Bench held that the Board takes charge of

the goods on behalf of the ship-owner and not on behalf of the consignee. The

contention that the Board acted an agent of the consignee was rejected:

“Section  40  [of  Port  Trust  Act  1905]  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 the Board takes charge of the goods on behalf of the shipowner and not on behalf  of  the consignee, and whatever services it performs at the time of the landing of the goods or on their removal thereafter, are services rendered to the ship.”

10 A decision of a three-Judge Bench of this Court in Trustees of the Port

of Madras  v K P V Sheikh Mohd. Rowther & Co. Pvt. Ltd.8 [Rowther- II]

dealt with the question “whether the demurrage charges, harbour dues etc.

payable to the Port Trust of Madras were to be recovered from the consignee

of the goods or from the steamer agent”. In this case, the goods remained in

the custody of the Port Trust for a long time till they were ultimately confiscated

8 (1997) 10 SCC 285

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by the Customs authorities. It was held that only the consignee was liable to

pay the demurrage charges. The learned Judges approved the reasoning of

the Madras High Court that:

“Once the goods are handed over to the Port Trust by the steamer and the steamer agents have duly endorsed the bill of lading or issued the delivery order, their obligation to deliver the goods personally to the owner or the endorsee comes to an end… Even though the consignee is not  a party to the contract of carriage once the property in the goods had passed to him, he becomes liable to pay the storage or demurrage charges as owner of the goods to the shipowner.”

This  Court  also  agreed  with  the  conclusion  of  the  High  Court  that  the

provisions of the MPT Act cannot be so construed as to hold that the steamer

agent has undertaken the responsibility for the safety of the goods till they are

cleared  by  Customs and taken delivery  of  by  the  consignee.  The facts  in

Rowther II were distinguished from those in Rowther I.

Rowther-I was  distinguished  in  Rowther-II  on  the  ground  that  while  the

charges in the former case related to services rendered by the Port Trust at

the time of the landing of the goods and their removal thereafter to its custody

those  charges  being  for  services  provided  for  the  benefit  of  the  steamer,

Rowther-II  related to demurrage charges after the goods were landed and

taken charge of by the Board and after the steamer agent had endorsed the

Bill of lading or issued a delivery order for effecting delivery to the consignee,

that is, after the property in the goods had passed to him.

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11 In a subsequent judgment of this Court in  Board of Trustees of the

Port of Bombay and Others v Sriyanesh Knitters9, it was held that by virtue

of the definition of the term “owner” under Section 2(o) of MPT Act and the

relevant  provisions  of  the  Bills  of  Lading  Act,  the  consignee of  the  goods

named in the Bill  of  lading or  every  endorsee of  the Bill  of  lading for  the

purpose of the MPT Act, is regarded as the owner of goods and it is from the

owner that the recovery of charges under the MPT Act is provided in respect of

such goods. It was held:

“It is the consignee which is the bailor with the Port Trust being the consignee (sic bailee).”

12 In Forbes-I, the Bench of two learned Judges of this Court doubted the

correctness  of  the  decision  rendered  in  Rowther-  II  and  referred  it  for

consideration to a larger Bench. By an order dated 13 August 2014, a Bench

of three judges did not see any inconsistency in Rowther- II and thus referred

the matter  back to the regular  Bench for  further  hearing with the following

observations:

“We have gone through the order whereby the matter has been referred to this Bench.  

We have noted the fact that no reason for not agreeing with the Judgment delivered by a three-Judge Bench has been assigned in the said order.  

Moreover,  upon going through the Judgment delivered in 1997 (10) SCC 285, we see no reason to disagree with the ratio laid down in the said Judgment.  

9 (1999) 7 SCC 359

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In  these circumstances,  we refer  the matter  back  to the regular  bench for  further  hearing as we do not  see any inconsistency in the said Judgment.”

A Bench of two Judges of this Court thereafter heard the matter and in Forbes

Forbes  Campbell  &  Co.  Ltd.  v Board  of  Trustees,  Port  of  Bombay10

[Forbes-II] dealt with the liability of the Steamer Agent to pay demurrage and

port charges to the Port Trust in respect of goods brought into the port and

warehoused by the Port Trust Authority. This Court opined that:

“[W]hile  it  is  correct  that  the  liability  to  pay  demurrage charges and port rent is statutory,  in the absence of any specific bar under the statute, such liability can reasonably fall  on  a  Steamer  Agent  if  on  a  construction  of  the provisions of the Act such a conclusion can be reached. Determination  of  the  aforesaid  question  really  does  not hinge  on  the  meaning  of  the  expression  “Owner”  as appearing in Section 2(o) of the Act of 1963, as has been sought to be urged on behalf of the appellant though going by the language of Section 2(o) and the other provisions of the Act especially Section 42, an owner would include a ship owner or his agent. Otherwise it is difficult to reconcile how custody  of  the  goods  for  the  purpose  of  rendering services  under  Section  42 can be entrusted to  the Port Trust  authority  by  the  owner  as  provided  therein  under Section 42(2). At that stage the goods may still be in the custody of the ship owner under a separate bailment with the shipper or the consignor, as may be. Even de hors the above question the liability to pay demurrage charges and port rent would accrue to the account of the Steamer Agent if a contract of bailment between the Steamer Agent and the Port Trust authority can be held to come into existence under Section 42(2) read with Section 43(1)(ii) of the Act of 1963.”   

After  examining  the  provisions  of  the  MPT Act  and  the  judgment  of  the

Constitution Bench in Rowther- I and of a Bench of two Judges in Sriyanesh

Knitters, the decision in Forbes-II concluded that:

10 (2015) 1 SCC 228

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“[T]he position of law which appears to emerge is that once the bill of lading is endorsed or the delivery order is issued it is the consignee or endorsee who would be liable to pay the demurrage charges and other dues of the Port Trust authority. In all other situations the contract of bailment is one between the Steamer Agent (bailor) and the Port Trust Authority (bailee) giving rise to the liability of the Steamer Agent for such charges till such time that the bill of lading is  endorsed  or  delivery  order  is  issued  by  the  Steamer Agent.”

The decision in Sriyanesh Knitters with regard to existence of a relationship

of bailor and bailee between the consignee and the Port Trust instead of the

Steamer Agent and the Port Trust authority was held to be a “mere conclusion”

reached in the facts of the case.

13 In  Rasiklal Kantilal & Co  v Board of Trustee of Port of Bombay11

[Rasiklal] while  considering  the  scheme of  the  MPT Act,  a  Bench  of  two

Judges of this Court observed that the Act is silent with regard to the persons

from whom demurrage and other charges could be collected. Since services

under Sections 49A to 50B are rendered only to the vessel, the Bench found it

“reasonable to interpret that only the ship and its agents are liable to pay the

rates for such services”. However, for services rendered to the goods, a lien is

created under Section 59 (1) in favour of the Port Trust, and the Port Trust is

entitled to seize and detain the goods until its charges are fully paid. While

contrasting Section 42(2) which contemplates “taking charge” (not possession)

of the goods by the Port Trust, and Section 59(1), which confers authority on

the Port Trust to seize and detain goods of which charge is taken of, the Court

11 (2017) 11 SCC 1

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identified a lack of clarity in the twin declarations in Section 59, but refused to

“express any final opinion in this regard”.  

While  addressing the issue about whom the Port Trust is entitled to collect

charges  from,  the  Court  discussed  Rowther-I,  Rowther-  II and  Forbes-II.

With reference to Rowther- I, this Court held:

“Rowther-I  is  not  an  authority  for  the  proposition  that  a Board could collect rates due for the services rendered to goods only from the steamer agent. Nor did this Court deal with  the  question  whether  the  title  in  the  goods  is  a relevant factor for determining a Board’s right to collect the rates...  Rowther-I  is  no authority  for  the proposition that until the title in goods passed to the consignee the liability to pay various rates payable to a Board for the services rendered  in  respect  of  goods  falls  exclusively  on  the steamer agent.”

The Court opined that it agreed with the conclusions laid down in Rowther-II

and Forbes-II, that “a Board could recover rates due, either from the steamer

agent or the consignee”. However, the Court held that the question of title of

the goods and the point of time at which the title passes to the consignee is

irrelevant for determining the authority of a Board to recover the amounts due

to it. The Court held:  

“As rightly opined in Forbes [II] case, there is no bailor and bailee relationship between the Board (the 1st respondent) and  the  consignee  (the  appellant);  either  voluntarily  or statutorily  compelled  but  such  a  relationship  exists between the  1st  respondent  and  the  owner  of  the  ship (through the steamer agent). It is possible in a given case where the consignee  or  any  other  person (such  as  the appellant  herein)  claiming  through  the  consignor, eventually may not  come forward to take delivery of  the goods for a variety of reasons - considerations of economy or supervening disability imposed by law etc. Therefore, in such cases to say that merely because the bill of lading is endorsed or the delivery order is issued, the consignor or his agent is absolved of the responsibility for payment (of rates or rent for services rendered w.r.t goods) would result in a situation that the Board would incur expenses without

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any legal right to recover such amount from the consignor and be driven to litigation for recovering the same from the consignee  who  did  not  take  delivery  of  the  goods  with whom  the  Board  had  no  contract  of  bailment  and consequently no contractual obligation to pay the ‘rates or rent’.”

It was further held that:

“Title  to  the  goods  is  irrelevant  even  in  the  cases  of  a bailment  arising  under  a  contract.  Any  person  who  is capable of giving physical possession of goods can enter into  a  contract  of  bailment  and  create  bailment…  The obligation of the bailee to return the bailed goods when the purpose of bailment is accomplished and the obligation of the  bailor  to  pay  the  bailee  “the  necessary  expenses incurred  by  him for  the  purpose  of  the  bailment”  in  our opinion would attend not only a bailment by contract but every kind of bailment… If the bailor has such an obligation to pay the bailee, any person claiming through the bailor must necessarily be bound by such an obligation unless the bailee releases such person from such an obligation. A consignee  is  a  person  claiming  through  the  consignor (bailor).”

Dealing with the import  of  goods into India by ship,  the Bench referred to

Section 1 of the Indian Bills of Lading Act, 1856 and held thus:

“...  the  1856  Act  enacts  a  fiction  that  the  consignee  to whom  the  property  in  the  goods  shall  pass  shall  be “subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with  himself”.  Bill  of  lading  is  evidence  of  a  contract between the shipper (consignor) and the owner of the ship by which the owner  of  the  ship  agrees to  transport  the goods delivered by the consignor to a specified destination and deliver it to the consignee. Delivery of goods pursuant to a bill of lading creates a bailment between the shipper and the owner of the ship. Obviously the legislature knew that a consignee under a bill of lading is a 3rd party to the contract but intrinsically connected with the transaction and thought it necessary to specify the rights and obligations of the consignee. Hence, the fiction under the 1856 Act, that the  moment  the  property  in  goods  passes  to  the consignee,  the  liabilities  of  the  consignee  in  respect  of such goods would be the same as those of the consignor, as if the contract contained in the bill of lading had been made with the consignee.”

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The Bench came to the conclusion that:  

“The consequence is that the 1st respondent (sub-bailee) would  be  entitled  to  enforce  its  rights  flowing  from  the Bailment between the shipowner and the 1st respondent against the consignee and recover expenses incurred by it in connection with the bailment from the consignee. The terms  and  conditions  of  the  contract  between  the consignor  or  person  claiming  delivery  of  the  goods  are irrelevant for determining the right of the 1st respondent to recover its dues. The obligations/liability of the consignee is determined by the statute. But the said obligation is not exclusive to the consignee.  The consignor (bailor) is not relieved of the obligation to pay by virtue of Section 158 of the  Contract  Act  the  expenses  incurred  by  the  1st respondent...  At this juncture, we must point out that the declaration under Section 42(7) absolving the owner of the ship and his agents is limited only to the obligations owed by the bailor to the consignee not to the sub bailor like the 1st respondent.”  

The Bench opined that if the MPT Act authorises the Port Trust “to recover its

dues  by  bailing the  goods  under  bailment,  in  those  cases  where  the

consignee does not turn up to take the delivery of the goods within the time

stipulated under Sections 61 or 62 of the Act, to deny the right to demand and

recover the amounts due from the consignee when he seeks delivery of the

goods under bailment would be illogical and inconsistent with the scheme of

the Act” (sic):  

“Such  right,  in  our  view,  undoubtedly  enables  the  1st respondent to claim various amounts due to it,  from any person claiming delivery of the goods either the bailor or a person  claiming  through  the  bailor  for  the  services rendered w.r.t. the goods. (sic)”

14 Analysing the above judgments, the following position emerges:

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(i) The decisions in Rowther- I, Rowther- II, Sriyanesh Knitters, Forbes-

II and Rasiklal do not seem to follow a consistent line about whom the

Port Trust has to fasten the liability for payment of its charges;

(ii) The Constitution Bench judgment  in  Rowther-I  holds that  when Port

Trust takes charge of the goods from the ship-owner, the ship-owner is

the  bailor  and  the  Port  Trust  is  the  bailee.  While  the  Bench  of  two

Judges in Sriyanesh Knitters holds that there comes into existence the

relationship of  bailor  and bailee between the consignee and the Port

Trust, the decision in  Forbes-II  disagrees with this view of  Sriyanesh

Knitters. Rasiklal opines that enquiry into such relationship is irrelevant

in determining the right of a Port Trust to recover its dues;

(iii) While  the  decision  in  Sriyanesh  Knitters  was  based  on  the

interpretation of the term “owner” under Section 2(o) of the MPT Act, the

judgment  in  Forbes-II  and  Rasiklal  do  not  find  the  question  of

interpretation of the term “owner” to be relevant;  

(iv) While Forbes-II relies upon the Constitution Bench decision in Rowther-

I to come to its conclusions, Rasiklal does not find Rowther-I to be an

authority for the proposition that until the title in goods is passed to the

consignee, the liability to pay various charges payable to a Port Trust,

for  its  services  in  respect  of  goods,  falls  exclusively  on  the  steamer

agent;

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(v) In  Rowther-II, it was held that once the goods are handed over to the

Port Trust by the steamer and the steamer agents have duly endorsed

the bill of lading or issued the delivery order, their obligation to deliver

the goods personally to the owner or the endorsee comes to an end.

The decision in Rasiklal, which has been delivered after the reference

of Forbes-I was disposed of, takes a contrary view that in cases where

the consignee does not come to take delivery of goods, the position of

law laid down by  Rowther-II would result  in a situation that  the Port

Trust  would  incur  expenses  without  any  legal  right  to  recover  such

amount  from  the  consignor,  with  whom  there  was  no  contractual

obligation; and

(vi) The Bench of  two Judges in  Rasiklal opined that  it  agrees with  the

conclusions  recorded  in  Rowther-II  and  Forbes-II that  a  Port  Trust

could  recover  the  rates  due,  either  from  the  steamer  agent  or  the

consignee. However, the holding in Rowther-II finds only the consignee

to be liable.

15 Taking note of the above inconsistencies in the judgments which have

been  delivered  after  the  pronouncement  by  the  Constitution  Bench  in

Rowther-I, we are inclined to the view that the following issues need to be

resolved by a larger Bench:

a) Whether in the interpretation of the provision of Section 2(o) of the MPT

Act, the question of title of goods, and the point of time at which title

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passes  to  the  consignee  is  relevant  to  determine  the  liability  of  the

consignee or steamer agent in respect of charges to be paid to the Port

Trust;

b) Whether a consignor or a steamer agent is absolved of the responsibility

to pay charges due to a Port Trust, for its services in respect of goods

which  are  not  cleared  by  the  consignee,  once  the  Bill  of  lading  is

endorsed or the delivery order is issued;

c) Whether a steamer agent can be made liable for payment of storage

charges/demurrage, etc. in respect of goods which are not cleared by

the consignee, where the steamer agent has not issued a delivery order;

if so, to what extent;

d) What are the principles which determine whether a Port Trust is entitled

to recover its dues, from the steamer agent or the consignee; and

e) While the Port Trust does have certain statutory obligations with regard

to  the  goods  entrusted  to  it,  whether  there  is  any  obligation,  either

statutory  or  contractual,  that  obliges  the  Port  Trust  to  de-stuff  every

container that is entrusted to it and return the empty containers to the

shipping agent.

The larger Bench may deal with any additional issues relevant to the context,

as it deems necessary.

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16 We request the Registry to place the papers before the Hon’ble Chief

Justice  of  India  for  such  administrative  directions  as  may  be  considered

appropriate.  

................................................J                                                          [R K AGRAWAL]  

                                                  .................................................J          [Dr D Y CHANDRACHUD]

New Delhi; 7 March, 2018