The Board of Trustees of the Port of Mumbai Vs. Burdwan Textiles and anr. - Court Judgment

Excerpt:
customs - demand - recovery of pre confiscation charges - section 2(o) of the major port trust act, 1963 - confiscation - section 111(d) of the customs act, 1962 - section 3(2) of the imports and exports (control) act, 1947 - evidence - second defendant has been sued as a bailor, having discharged the consignment into the custody of the plaintiff - first defendant was sued as importers/consignees/owners of the consignment on which port trust charges became payable - first defendant was a fictitious entity - therefore suit will proceeded against second defendant - second defendant expressly held themselves out as agents - whether second defendant was the bailor of the suit consignment and as such were bound and liable to pay port trust charges held, property in the goods passes upon the endorsement of the bill of lading or the issuance of a delivery order - liability of a vessel agent as owner would arise for the purposes of section 2(o) in his capacity as an agent for the sale, custody, loading or unloading of such goods - nature of contract between second defendant with the carriers and the obligations which second defendant assumed under the contract were all facts which fell within the special knowledge of second defendant - second defendant failed to disclose the nature of the contract -therefore, second defendant have 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 -hence, suit shall stand decreed as prayed however, subject to said modification. - section 34: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on petition under section 34 of the act bombay court fees act (36 of 1959), schedule i, article 3, schedule ii, article 1(f)(iii) held, according to article 3 of schedule i, on any plaint, application or petition or memorandum of appeal for setting aside or modifying an award, same court fee is payable as is payable on a plaint or memorandum of appeal under article 1. thus, when an award is challenged by a plaint, application, petition or memorandum of appeal, court fee is payable on ad valorem basis. but from this requirement of payment of court fee on ad valorem basis, article 3 excludes an application or petition or memorandum of appeal filed in civil or revenue court challenging any award made under the arbitration act, 1940.thus, the provisions of article 3 of schedule 1 do not apply when an application is filed or appeal is filed challenging an award made under the arbitration act, 1940. thus the provisions of article 3 of schedule i do not apply when an application is filed challenging an award made under the arbitration act, 1940. the question, therefore, that arises for consideration is whether reference to the provisions of 1940 act found in article 3 of schedule i of the bombay court fees act can be said to include reference to the 1996 act. perusal of the provisions of section 8 of general clauses act shows that where by a central enactment any provision of a former enactment is repealed and re-enacted with or without modification then reference in any other enactment to the provisions so repealed shall, unless a different intention appears, be construed as references to the provisions so re-enacted. in the present case, it is common ground that the former enactment is the 1940 act, the new enactment is the 1996 act and any other enactment is the bombay court fees act, the only provision of the 1940 act referred to in article 3 of schedule 1 of the bombay court fees act is the provisions of section 33 of the 1940act and bare comparison of that provision with the provisions of sub-section (1) of section 34 of the 1996 act shows that the provision of section 33 of 1940 act is repealed and re-enacted in sub-section (1) of section 34 of the 1996 act with slight modification. therefore, reference to the provisions of section 33 of the 1940 act in article 3 of schedule-i of the bombay court fees act has to be construed, in view of the provisions of section 8 of the general clauses act, as reference to the provisions of section 34 of the 1996 act. so far as an appeal filed under section 37 of the 1996 act is concerned, perusal of section 37 shows that an appeal is provided to the appellate court against an order setting aside an arbitral award or refusing to set aside an arbitral award under section 34. thus, as the provisions of article 3 of schedule-i do not apply to an application or petition filed under section 34 of the 1996 act, they will also not apply to the memorandum of appeal filed to set aside or modify an award made by the arbitrator under the 1996 act. in other words nothing contained in article 3 of schedule-i of the bombay court fees act applies to an application, petition or memorandum of appeal to set aside or modify any award made under the 1996 act as it does not apply to an application or petition or memorandum of appeal to set aside or modify an award made under the arbitration act, 1940. perusal of the provisions of section 8 of the general clauses act shows that references in any other enactment to a provision in a former enactment is to be construed as reference to re-enacted provision in the new enactment unless a different intention appears. the different intention may appear either in the new enactment or in the other enactment. nothing was pointed out either in the 1996 act or in the bombay court fees act which can be construed as a different intention or which will show that it was not the intention of the maharashtra legislature to exclude an application or petition or memorandum of appeal filed in court to set aside or modify an award made under the 1996 act, from the provisions of article 3 of schedule-i of the bombay court fees act. it appears that the intention behind excluding an application made, challenging the award made under the 1940 act, from requirement of payment of ad valorem court fee which is required to be paid if the same litigant filed a suit on the same subject matter, was to encourage a litigant to go for arbitration instead of filing a suit. nothing has been pointed out to show that ther4e is any change in that legislative policy. on the contrary, from the preamble of the 1996 act it is clear that the policy of the legislature is to encourage people to adopt the mode of arbitration for resolving disputes. article 3 of schedule-i of the bombay court fees act does not apply to a petition, application or memorandum of appeal filed for challenging an award made under the 1996 act, and court fee on a petition filed under section 34 of the 1996 act challenging an award in high court is payable according to article 1(f)(iii) of schedule ii. section 37: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on appeal under section 37 of the arbitration & conciliation act, 1996 - held, court fee is payable according to article 13 of schedule ii of the bombay court fees act. schedule i, article 3 & schedule ii, article 1(f)(iii): [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on petition under section 34 of the arbitration & conciliation act, 1996 - held, when a petition under section 34 is to be filed before a principal civil court of original jurisdiction which is not a high court, the question arises which article of either first schedule or second schedule would apply. in so far as the challenge to an award made under the 1940 act is concerned, an application under section 33 of that act could be made to a civil court and therefore, payment of court fee was governed by article 1(a) of schedule ii. this was so because the application was to be presented to the court of civil judge which was not a principal civil court of original jurisdiction. but now because of change of definition of term court in the 1996 act, a petition has to be presented, challenging an award made under the 1996 act in terms of the provisions of section 34 thereof, before the principal civil court of original jurisdiction. no entry either in the first schedule or in the second schedule was pointed out which applies to an application or petition to be made before the principal civil court of original jurisdiction, and therefore, when a litigant wants to file petition before a principal civil court having original jurisdiction which is not high court, challenging an award made under the 1996 act, no court fee under bombay court fees act is payable because of absence of a general or specific provision. therefore, it can be said that no court fee under the bombay court fees act is payable when a petition under section 34 challenging an award is filed before any principal civil court of original jurisdiction which is not high court. schedule ii, article 13: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on appeal under section 37 of the arbitration & conciliation act, 1996 - held, court fee is payable according to article 13 of schedule ii of the bombay court fees act. - 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. 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. 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. 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. 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.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. 18. 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. 213. 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. 314. 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.