Judgment:
B. Akbar Basha Khadiri, J.
1. The plaintiffs have come forward with the instant Appeal.
2. The brief facts are : The second and third plaintiffs are the partners in the first plaintiff, Nithiya Kalyani Timbers. The appellants/plaintiffs imported about 352 logs of wood from Andamans through merchant ship M.V. Kamakshi. The cargo reached Madras on 1-7-1979. All the amounts due to the Port Trust had been cleared. It was considered to be coastal cargo. The cargo was unloaded from the ship and kept in Jawahar Dock-4 and various places. The Port authorities allowed three free-days time for removal of the consignment. The consignment was such that it could be loaded only in trailers and removed from the Port area. There was a strike by the trailer workmen, due to which, the cargo could not be immediately removed. The strike went on for twenty one days. The striking trailer workmen did not allow any one to enter the area to clear that goods. Therefore, the appellants/plaintiffs could remove the goods only after the strike came to an end. But, the Port authorities levied charges under Section 48 of the Major Port Trusts Act, 1963 from 5-7-1979 to 25-7-1979 which worked out to a total amount of Rs. 93,967.33 under five bills. The levy was unilateral. They debited the amount towards payment due to the clearing agency, but in turn, the clearing agent had the same reimbursed by collecting the same from the appellants/plaintiffs. The appellants/plaintiffs were not at fault for non-removal of the cargo from the Dock yet. It was only due to the strike of the trailer workers. Therefore, the appellants/plaintiffs are not liable to pay demurrage. They issued a notice to the respondent/defendant-Port Trust authority to refund the amount with addition of Rs. 6,032.67 being the loss of earnings since the cargo was unnecessarily kept in the Port premises. The respondent/defendant refused to accede the request of the appellants/plaintiffs by letter, dated 8-9-1979. The appellants/plaintiffs had come forward with the suit seeking a decree for Rs. One lakh from the respondent/defendant with interest at 6% p.a. with costs.
3. The respondent herein as defendant filed written statement contending that the trailer workmen were not the employees of the respondent/defendant, the consignment was covered by the oversight delivery, that it is for the appellants/plaintiffs to remove the consignment within the free period allowed, that the respondent/defendant is not concerned with the striking of the trailer workmen, that the appellants/plaintiffs could have employed, some other persons and removed the cargo and that further the respondent/defendant is not responsible 'for the consequence of the strike by the trailer workmen who are not the employees of the respondent/defendant and the suit is, therefore, to be dismissed. They also pleaded that the claim is barred by limitation. In short, the respondent/defendant prayed for dismissal of the suit.
4. Subsequent to the filing of the written statement, the appellants/plaintiffs filed additional plaint to the effect that to attract provision of Section 48 of the Major Ports Act, the respondent/defendant had not performed any services to the appellants/plaintiffs regarding the consignments and therefore, the claim under Section 48 of the Major Ports Act is not based on the principle of law and that if at all the respondent/defendant can claim any amount that can be done only under Section 49 of the Major Ports Act by way of collecting rent for the area of the site kept in possession of the appellants/plaintiffs during the period of the strike, which was less than 500 sq. ft. and the instant claim under Section 48 of the Major Ports Act is not based on sound principle.
5. The learned Addl. Judge of the City Civil Court, Madras framed the following issues :-
(i) Whether the collection of demurrage is legal ?
(ii) Whether the plaintiff is entitled to refund of demurrage charges?
and (iii) To what relief ?
6. The learned Additional Judge clubbed issue Nos. 1 and 2 together and found that the consignment is covered by over side delivery and in such a case, there is delivery from the ship or vessel directly to the consignee and therefore, the clear agent ought to have directly taken the delivery of the logs which were kept on the yard, but they have not done so, that the respondent/defendant is not responsible for the strike, and that there was no whisper in the notice that the appellants/plaintiffs attempted to clear the logs outside the Port, but they were prevented by the striking trailer men. The learned Additional Judge held that the Port Trust being a protected area coming under the control of the Chairman of the Port Trust, if really the appellants/plaintiffs had ventured to remove the logs through the lorries and if there had been an obstruction by striking men, the appellants/plaintiffs would have complained of such objection to the Port Trust authorities, but they have not done so. Finally, the learned Additional Judge held that the logs were in the transit area, which cannot be allotted for rental basis. Then holding that though the respondent/defendant has a discretion under Section 53(2) of the Major Ports Act to exempt payment of the charges, the respondent/defendant cannot be found fault with for not doing so, the learned Additional Judge, accordingly, dismissed the suit. Aggrieved by the judgment and decree, the plaintiffs have come forward with the instant appeal.
7. Heard both the sides. The point for consideration is whether the learned Additional Judge erred in holding that the appellants herein/plaintiffs are not entitled to refund of demurrage charge. It is not in dispute that the appellant herein had imported certain logs of wood from Andaman. They reached the Port of Madras on 1-7-1979. It is also admitted that the consignment was covered by overside delivery order. It is also considered by both the sides that by overside delivery order is meant that the consignment has to be directly transferred from the ship to the containers or the vehicles of the consignee and it has to be taken away from the Port. The learned Counsel for the respondent drew my attention to the Scale of Rates and Statement of Conditions framed by the Trustees of the Port of Madras under Sections 48, 49 and 50 sanctioned by the Central Government under Section 52 of the Major Port Trusts Act, 1963, which have been published under Notification No. 1, in the Supplement to Part VI Section 3(a) of the Tamil Nadu Government Gazette, dated 8th January, 1975. Reference to these rules would go to show that schedule to Chapter III, Item No. 85 refers to timber (in logs) other than Match Wood logs. It is not the case that the timber was imported for manufacture of match sticks. The learned Counsel also referred to Chapter IV of the Rules framed which reads as under :-
'Demurrage is chargeable on all goods left in the Board's transit sheds or yards beyond the expiry of the free days. After demurrage begins to accrue no allowance, is made for Sundays or Board's holidays. The free days are fixed by the Board from time to time.
'Day' for purposes of this Chapter shall be reckoned as from 6 a.m. to 6 a.m.'
It is admitted that the consignment was unloaded on 1-7-1979. After allowing the free days and also the Sunday, the free days came to an end on 4-7-1979. The consignee has removed the logs on 25-7-1979. The Port has claimed demurrage from 5-7-1979 to 25-7-1979. The total amount works out to Rs. 93,967.33. According to the appellants, the charges have been levied under Section 48 of the Major Port Trusts Act and Section 48 of the Act would apply only to services rendered by the Port Trust. Section 48 recites as under :-
'48. (1) Every Board shall from time to time frame a scale of rates at which, and a statement of the conditions under which, any of the services specified hereunder shall be performed by itself or any person authorised under Section 42 at or in relation to the port or port approaches -
(a) transhipping of passengers or goods between vessels in the port or port approaches;
(b) landing and shipping of passengers or goods from or to such vessels to or from any wharf, quay, jetty, pier, dock, berth, mooring, stage or erection, land or building in the possession or occupation of the Board or at any place within the limits of the port or port approaches;
(c) cranage or porterage of goods on any such place;
(d) wharfage, storage or demurrage of goods on any such place;
(e) any other service in respect of vessels, passengers or goods, excepting the services in respect of vessels for which fees are chargeable under the Indian Ports Act.
(2) Different scales and conditions may be framed for different classes of goods and vessels.'
Section 42 of the Major Port Trusts Act recites as under :-
'42. (1) A Board shall have power to undertake the following services :-
(a) landing, shipping or transhipping passengers and goods between vessels in the port and the wharves, piers, quays or docks belonging to or in the possession of the Board;
(b) receiving, removing, shifting, transporting, storing or delivering goods brought within the Board's premises;
(c) carrying passengers by rail or by other means within the limits of the port or port approaches, subject to such restrictions and conditions as the Central Government may think fit to impose;
(d) receiving and delivering, transporting and booking and dispatching goods originating in the vessels in the port and intended for carriage by the neighbouring railways, or vice versa, as a railway administration under the Indian Railways Act, 1890; and
(e) piloting, hauling, mooring, remooring, hooking, or measuring of vessels or any other service in the respect of vessels.
(2) A Board may, if so requested by the owner, take charge of the goods for the purpose of performing the service or services and shall give a receipt in such form as the Board may specify.
(3) Notwithstanding anything contained in this section, the Board may, with the previous sanction of the Central Government, authorise any person to perform any of the services mentioned in Sub-section (1) on such terms and conditions as may be agreed upon.
(4) No person authorised under Sub-section (3) shall charge or recover for such service any sum in excess of the amount leviable according to the scale framed under Section 48 or Section 49 or Section 50.
(5) Any such person shall, if so required by the owner, perform in respect of goods any of the said services and for that purpose take charge of the goods and give a receipt in such form as the Board may specify.
(6) The responsibility of any such person for the loss, destruction or deterioration of goods of which he has taken charge shall, subject to the other provisions of this Act, be that of a bailee under Sections 151, 152 and 161 of the Indian Contract Act, 1872.
(7) After any goods have been taken charge of and a receipt given for them under this 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.'
According to the learned Counsel for the appellants, a harmonious reading of Section 42 and Section 48 of the Act would go to show that only if the Port Trust has rendered any services to the consignee, it can levy charges under Section 48 of the Major Port Trusts Act, but in the instant case, the consignment was taken care of by the appellant and was cleared by the Agent who had arranged persons to look after the safety of the consignment. It is further submitted that the consignment was not kept in the custody of the Port Trust, for the Port Trust to claim demurrage. According to the appellant, if the goods are kept in the custody of the Port Trust, then that would constitute to wharfage and if the goods are kept in the custody of the Port Trust and stored in an allotted place, then storage would come in. According to the learned Counsel, only when the element of wharfage and storage are involved, then it can be construed that the respondent has rendered some services to the appellant and therefore, service charges can be collected under Section 48 of the Major Port Trusts Act. According to the Counsel, demurrage would not attract the provision of Section 48 of the Major Port Trusts Act without rendering any services. The learned Counsel for the appellants also pointed out that the consignment was entirely in the custody of the consignee, who has taken care of its safety and security by employing his own men of his clearing agent, and if at all the Port Trust is to claim any charge, it can only claim rent by virtue of the provision of Section 49 of the Major Port Trusts Act. Section 49 of the Major Port Trusts Act recites as under :-
'49. (1) Every Board shall, from time to time, 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 :-
(a) approaching or lying at or alongside any buoy, mooring, wharf, quay, pier, dock, land, building or place as aforesaid by vessels;
(b) entering upon or plying for hire at or on any wharf, quay, pier, dock, land, building, road, bridge or place as aforesaid by animals or vehicles carrying passengers or goods,
(c) leasing of land or sheds by owners of goods, imported or intended for export, or by steamer agents;
(d) any other use of any land, building, works, vessels or, appliances belonging to or provided by the Board.
(2) Different scales and conditions may be framed for different classes of goods and vessels.
(3) Notwithstanding anything contained in Sub-section (1), the Board may, by auction or by inviting tenders, lease any land or shed belonging to it or in its possession or occupation at a rate higher than that provided underSub-section (1).'
According to the learned Counsel for the appellants, the appellants were occupying only about 300 sq. ft. of the space and if at all they could have to pay the rent as fixed by the respondent under the Rules of the Port Trust for the period from 5-7-1979 to 25-7-1979.
8. Per contra, the learned Counsel for the respondent submitted that demurrage would not only cover services rendered, but also the charges can be collected without rendering services under certain circumstances. In support of his contentions, the learned Counsel for the respondent referred to Chapter IV of the rules mentioned supra, which would say that demurrage is chargeable on all goods left in the Board's transit sheds or yard beyond the expiry of the free days. It is admitted by both the sides that the consignment was left in the Port's transit sheds. The very word 'transit' would indicate that the goods can have a very temporary sojourn in the transit sheds. Considering the short duration, for which the goods were kept in the transit sheds, it cannot be said that rental amount can be collected regarding keeping the goods in the transit sheds. After all the transit sheds are to be made available at any given points of time to meet the contingencies. Further, the learned Counsel for the respondent cited a decision reported in Trustees, Port of Madras v. Aminchand Pyarelal wherein Their Lordships of the Apex Court have pointed out that if any person wants to use the premises of the Port Trust Board for any purpose mentioned in clauses (a) to (d) of Section 43, he has to pay the charge prescribed by the Board for the use of its premises. In that decision, the Apex Court has pointed in paragraph 30 of the judgment as under :-
'The High Court seems to have thought that the Board had the limited right to fix rates of demurrage and therefore rates could only be levied on goods which were not removed from the Board's premises due to some fault or negligence on the part of the importer or his agent. The High Court was probably misled in this conclusion by the use of word 'demurrage' in Clause (d) of Section 42. But 'demurrage' is surely not a service to be performed by the Board and is, on any view, a charge leviable on goods. Clauses (a) to (d) of Section 42 refer to various services like transhipment of passengers and goods, lending and shipment of passengers or goods, crange or porterage of goods and wharfage or storage of goods. It is these services in respect of which Section 42 authorises the Board to frame a scale of rates and the statement of conditions. The circumstance that the Board has used the expression 'Demurrage' as a heading for Chap. IV of the Scale of Rates or that it has used that expression in Rule 13(b) and (c) cannot constitute a fetter on its powers to fix the rates. The validity of the exercise of that power has to be judged on the language of Section 42 which is the source of the power.'
The Apex Court has pointed out in paragraph 31 of its judgment as under :-
'The High Court has cited many texts and dictionaries bearing on the meaning of 'Demurrage' but these have no relevance for the reason that demurrage being a charge and not a service, the power of the Board is not limited to fixing rates of demurrage. Besides, it is plain that the Board has used the expression 'Demurrage' not in the strict mercantile sense but merely to signify a charge which may be levied on goods after the expiration of Free Days. Rule 13(b) itself furnishes a clue to the sense in which the expression 'demurrage' is used by the Board. It provides, inter alia, that 'demurrage' shall be recovered at a concessional rate for a period of thirty days plus one working day where the goods are detained for compliance with certain formalities and where the Collector of Customs certifies that the detention of goods is 'not attributable to any fault or negligence on the part of Importers'.'
It therefore follows that demurrage is a charge and not a service fee.
9. It has also been pointed out that when the goods were not removed from the Port premises, then the consignee has to pay the charges, i.e., demurrage. In Port of Bombay v. I.G. Supplying Co. when identical plea that the respondent are in no way responsible for the delay in clearing the goods, as it had happened due to strike of the trailer workmen, it has been held that the delay in clearing the goods was not due to the negligence of the importer for which he could be held responsible, yet he cannot avoid the payment of demurrage as the rates imposed are under the authority of law the validity of which cannot be questioned.
10. It is seen that neither the appellants nor the respondent was responsible for the delay in clearing the consignment. It was due to the strike carried on by the trailer workmen, who were the employees of an independent contractor. It appears that the dispute between an independent employer and employees has resulted in the delay. Even under those circumstances, to fasten the responsibility on the respondent, as rightly pointed out by the learned Additional Judge, the appellants had not let in any evidence to show that that they had arranged for vehicles to carry away the loads and such vehicles were obstructed by the striking workers. It is evident that the goods were kept in the transit sheds. It invites the payment of demurrage after exclusion of the three free days alone. I do not find any error apparent in the judgment and decree passed by the learned Additional Judge. Accordingly, the instant Appeal is dismissed with costs confirming the judgment and decree delivered by the learned Addl. Judge, City Civil Court, Madras in O.S. No. 2727 of 1981.