Judgment:
D.Y. Chandrachud, J.
1. The suit has been instituted by the Board of Trustees of the Port of Mumbai for the recovery of preconfiscation charges. The First Defendants were sued as importers / consignees / owners of the consignment on which Port Trust charges became payable. The Second Defendant has been sued as agent of a vessel, M.S. Mckinney Maersk.
2. The case of the Plaintiff is that two consignments said to contain 60 cartons and 20 cartons of Polyester Fabric were discharged by the vessel on to the docks at Mumbai. The consignments were manifested under items 76 and 77 of Import General Manifest No. 1700 dated 15th November, 1984. A copy of the Import General Manifest was furnished by the Second Defendant to the Plaintiff on behalf of the vessel. The general landing date and the last free day of the cargo fell on 15th November, 1984 and 19th November, 1984 respectively. The goods were confiscated on 1st December, 1986 in exercise of powers conferred by Section 111(d) of the Customs Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 by the Collector of Customs, Bombay.
3. The suit has been instituted for the recovery of the charges due to the Port Trust from the last free day (19th November, 1984) until the day before the order of confiscation (30th November, 1986). The charges due to the Port Trust have been quantified at Rs. 2,15,851.80. The Plaintiffs issued two letters of demand on 8th August, 1987 and 26th August, 1987. The Second Defendants repudiated their liability in their letters dated 14th August, 1987 and 3rd September, 1987. Both the letters of the Second Defendants described themselves as 'agents : Maersk Line'.
The First Defendants were sued as importers / owners of the consignment. The Second Defendant has been sued as a bailor, having discharged the consignment into the custody of the Plaintiff.
4. The suit was dismissed as against the First Defendant for want of service of the writ of summons. As a matter of fact, the order of the Collector of Customs dated 1st December, 1986, notes that the First Defendant is a fictitious entity. The suit therefore proceeded against the Second Defendants.
5. The Second Defendants in their written statement expressly admitted that they were agents of the vessel M.S. Mckinney Maersk at the relevant time. The defence to the claim is that the Second Defendants were 'merely the agents of the vessel' and were neither owners of the vessel nor of the suit consignments. The Second Defendants claimed that they had not delivered any cargo to the Plaintiff; that the cargo was delivered directly by the vessel and that there was a failure on the part of the Plaintiff to dispose of the cargo soon after the period of two months from the date of landing.
6. On these facts, as pleaded by the parties, the following issues were drawn up:
1. Whether the Second Defendants were the Bailors of the suit consignment and as such were bound and liable to pay Port Trust charges as claimed in paragraph 5 of the Plaint;
2. Whether the suit consignment was confiscated by the Collector of Customs vide order dated 1st December, 1986 as alleged in paragraph 6 of the Plaint;
3. Whether the Defendants are bound and liable to pay the sum of Rs. 2,15,851.80 paise as Port Trust charges for the period prior to the date of confiscation together with interest thereon at the rate of 15% per annum as claimed in paragraph 14 of the Plaint;
4. To what reliefs, if any, are the Plaintiffs entitled to;
7. These issues now fall for consideration.
RE ISSUE No. 1
8. The question as to the liability of the Second Defendants must turn on the interpretation of the expression 'owner' for the purposes of the Major Port Trusts Act, 1963. Section 2(o) of the Act defines the expression 'owner' as follows:
(O) 'owner', (i) in relation to goods, includes any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods; and (ii) in relation to any vessel or any aircraft making use of any port, includes any part owner, charterer, consignee or mortgagee in possession thereof.
9. The definition of the expression 'owner' is essentially in two parts. The first part defines the expression with reference to goods while the second part defines the expression in relation to a vessel or a craft. For the purposes of the present suit, it is the first part that falls for interpretation. The first part includes within the purview of the expression 'owner' (i) a consignor; (ii) a consignee; (iii) a shipper and (iv) an agent for the sale, custody, loading or unloading of goods.
10. In the present case, the fact that the Second Defendants were agents of the vessel at the material time has not been disputed. The Second Defendants have so expressly admitted in paragraphs 2 and 9 of the written statement. In their letters dated 14th August, 1987 and 3rd September, 1987 - Exhibits P3 and P5 the Second Defendants expressly held themselves out as agents of Maersk Line. In the affidavit in lieu of the examination in chief the Plaintiff's witness deposed that two consignments containing 80 cartons of Polyester Fabric were discharged by the vessel on to the docks at Mumbai. A copy of the Import General Manifest was furnished to the Plaintiff by the Second Defendants on behalf of the vessel. The liability of a vessel agent as owner would arise for the purposes of Section 2(o) of the Major Port Trust Act, 1963 in his capacity as an agent for the sale, custody, loading or unloading of such goods. The Plaintiff discharged the initial burden of establishing that the Second Defendants were the vessel agents, the vessel having discharged the consignment on to the Docks at Mumbai, by leading evidence of the Assistant Docks Manager. The Second Defendants chose not to lead any evidence in defence. This assumes significance because the defence which was sought to be made out in paragraph 9 of the written statement was that the cargo was delivered directly by the vessel and her officers and crew onto the Docks at Mumbai. The nature of the contract between the Second Defendants with the carriers and the obligations which the Second Defendants assumed under the contract were all facts which fell within the special knowledge of the Second Defendants. Evidently the Second Defendants chose to remain silent. An adverse inference has to be drawn by their failure to disclose the nature of the contract, in the sense that if the contract were to come before the Court, it would reveal the true nature of the obligations assumed by the Second Defendants towards the carriers.
11. The Supreme Court had occasion to consider the definition of the expression 'owner' under Section 2(o) of the Major Port Trust Act, 1963 in the Trustees of the Port of Madras v. K.P.V. Sheikh Mohd. Rowther & Co. Pvt. Ltd. : AIR 1995 SC 1922. In the appeal which arose before the Supreme Court out of the judgment of the Madras High Court, the High Court held that once the goods are handed over to the Port Trust by the steamer and the steamer agent has duly endorsed the bill of lading or issued the delivery order, the obligation to deliver the goods personally to the owner or to the endorsee comes to an end. In other words, upon the endorsement of the bill of lading and the issuance of a delivery order, the property in the goods passes to the endorsee. The judgment of the Supreme Court contains the following extract from the judgment of the Madras High Court which was in appeal in that case:
It cannot be said that the steamer or its agents have undertaken any responsibility for the custody of the goods after the transit has come to an end and after the bill of lading has been duly endorsed or a delivery order issued. By the endorsement of the bill of lading or the issue of a delivery order by the steamer agents, the property in the goods vests on such consignee or endorsee, and thus it appears to be clear that the steamer or the steamer agents are not responsible for the custody of the goods after the property in the goods passes to the consignee or endorsee till the customs authorities actually give a clearance.
12. The Supreme Court dismissed the appeal, holding that it was in agreement with the reasoning and conclusions of the High Court. The Bench of three Learned Judges in that case also relied upon the earlier judgment in International Airports Authority of India v. Grant Slam International : 1995(1) Scale 859. The judgment of the Supreme Court therefore is clearly an authority for the proposition that the vessel agent cannot be held liable once property in the goods has passed. Property in the goods passes upon the endorsement of the bill of lading or the issuance of a delivery order. In the present case, the Second Defendants did not lead any evidence in the suit and have therefore not established either the defence that that the scope of their contractual obligations did not cover the custody of the goods or the loading or unloading thereof or for that matter that the property in the goods had passed to the consignee. A defence that the property has passed to the consignee obviously could not have been raised because, as noted in the order of confiscation, the consignee himself was a fictitious entity. In these circumstances, the first issue will have to be answered in the affirmative.
ISSUE No. 2
13. The consignment was confiscated by the Collector of Customs by his order dated 1st December, 1986. A copy of the order of confiscation has been marked as Exhibit P1 by consent of parties.
ISSUE No. 3
14. The Plaintiffs have led evidence to establish the manner in which the computation of the pre confiscation charges in the amount of Rs. 2,15,851.80 was worked out. The working sheet was marked in evidence as Exhibit P6 subject to cross examination. The witness for the Plaintiff was asked as to whether the working sheet was prepared under his supervision. The witness stated that he would not be able to tell the name of the person who had prepared it, but it was prepared by the bill supervisor working with the Plaintiff. The witness for the Plaintiff stated that he has gone through the record of the suit and was deposing to his affidavit in lieu of examination in chief on the basis of the record maintained by the Plaintiff. In paragraph 5 of his examination in chief the witness stated that he had personally verified the correctness of the working sheet which was produced by him. There was no cogent or tenable challenge to the correctness of the working sheet. Issue No. 3 would therefore have to be answered in the affirmative.
15. In the circumstances, the suit shall stand decreed as prayed in terms of prayer Clause (a), however, subject to the modification that the Plaintiff would be entitled to interest at the rate of 6% per annum from the date of the suit until payment or realization.