Natvar Parikh Industries Limited and anr. Vs. Board of Trustees for the Port of Calcutta and ors. - Court Judgment

1. The appellants above named were the writ petitioners who filed the writ petition on or about 23rd July, 1997 prayed for amongst other reliefs:

(b) Writ do issue in the nature of mandamus commanding the respondents port authorities to provide the services which they have undertaken to do in the port in accordance with the procedure laid down by them and to arrange for destuffing the cargo and to release the said containers list of which is described in Annexure 'B' hereto;

(c) Declaration that the port authorities are not entitled to charge any demurrage till the date of release of the said containers.

2. Thereafter owing to subsequent development in view of passing of orders by this Court and consequently sale of the goods as stated hereinafter the writ petition was amended praying for amongst other reliefs:

(b-1) A writ of and/or in the nature of mandamus do issue commanding the respondents and each one of them to sell the said cargo of urea forthwith and to pay all the amounts spent by the petitioner on transportation and destuffing of the said cargo and also for the demurrage already debited by the respondent authorities in respect of the said containers;

(b-2) A writ of and/or in the nature of mandamus do issue commanding the respondents and each one of them not to charge any demurrage on FCL containers;

(b-3) A writ of and/or in the nature of Mandamus do issue commanding the respondents and each one of them to act in accordance with the Major Port Trusts Act and only to debit the demurrage charges subject to the lien exercised by the petitioner upto the period of 2 months from the date of landing of the containers and not thereafter;

(b-4) A declaration be made that the excess amount sought to be recovered by the port authorities be refunded and/or adjusted by the port authorities in the marine account of the petitioner;

(b-5) A writ of and/or in the nature of mandamus do issue commanding the respondents and each one of them to discharge a lien of the petitioner on the said goods before appropriating the same on any other account.

The learned Trial Judge by the Judgment and order impugned dismissed the writ petition.

3. The writ petition was filed and subsequently amended on the facts and in the circumstances which are precisely stated hereunder:

The appellants/writ petitioners at the relevant point of time were carrying on business as ship owners, charterers and shipping agents and as such they obtained licences under the provisions of Major Port Trusts Act, 1963 as well as the Customs Act, 1962. In course of their business in or about 1996 the appellants carried 70 containers containing urea in bags from Dubai Port for delivery to Agriculture Input Corporation Limited, Kathmandu, Nepal. The said cargo was carried by the petitioners by various ships viz. 'Tiger Creek' V-96, 'M.V. Nevelsk' Voy-005. 'M.V. Nevelsk Voy-006, 'M.V. Angromeda Star', 'M.V. Xour', Singapore. Those cargos so carried by the appellants were imported by a Nepalese establishment viz. M/s. Agriculture Input Corporation, Taku, Kathmandu. The said five vessels reached Calcutta Port between 12th September, 1996 and 19th October, 1996. Immediately after arrival of the said ships, necessary notice was sent to the above consignee/importer. Notice of arrival was also sent by the appellants immediately after arrival of the said ships. In spite of repeated reminders and demands the said goods contained in 70 containers were not cleared. So the appellants, by a notice of abandon dated 28th February, 1997, called upon respondent No. 4 to render their help and cooperation so that the appellants could destuff the said containers for release of the empty containers for rescue. The aforesaid loaded containers were left at port premises for a long time as the consignee had not taken steps for taking delivery of the said cargo. The cargo being urea is of corrosive nature and it was reasonably apprehended that the said containers might be rendered useless with the floors and paints work exposed to urea, vapour and liquid. Further, due to non-destuffing of the cargo port authorities are collecting demurrage charges by debiting from the Marine Account maintained with the port authorities. Royal Nepalese Consulate General at Calcutta was also informed regarding non-clearance of the goods by the aforesaid Nepali consignee and as such the appellants prayed for their help, co-operation and further granting permission to destuff the container at the warehouse of Nepal Transit Warehouse Corporation Limited at Calcutta. The petitioners received a copy of the letter from the said consignee whereby the appellants were informed that there were certain disputes with the suppliers of the said goods and therefore they disowned their liability either with regard to the said goods or with regard to the expenses incurred in connection with the said goods. In view of the aforesaid dead-lock situation with regard to the said cargo the appellants by their letter dated 29th April, 19S7 requested customs authority for their help and assistance to make the said containers free of cargo so that the said containers might be made available for re-export. Similar request was made to the port authorities by an Advocate's letter dated 17th May, 1997 for granting permission to destuff the said containers and to permit to sell the said cargo contained in the said containers and to suitably appropriate the sale proceeds. The customs authority by their letter dated 21th May, 1997 recorded their 'no objection' for destuffing the said containers. The petitioners/appellants on several occasions repeatedly requested the port authority to arrange to destuff the cargo and to release the containers but no step was taken although customs authority issued 'no objection' certificate. The aforesaid inaction on the part of the port authority is wholly illegal, unjustified as they have failed to discharge their duty as provided under the appropriate provisions of the Major Port Trusts Act.

4. At the first instance in the affidavit-in-opposition the real contesting party, port authority while resisting the application took legal stand as follows:

(i) Under Section 43 of the Major Port Trusts Act, 1963, port authorities have been authorized to frame scale of rates from time to time at which and a statement of the conditions under which any of the services specified under the said provisions shall be performed by the Port Trust at or in relation to the Port or Port approaches. One of such services being levy/fixing rate being wharfage, storage or demurrage inter alia in respect of goods landed from any vessel at the Port of Calcutta on any wharf quay, jetty, pier, dock, berth etc. or any place within the limits of Port or Port approaches.

(ii) The fixing of any rate by the Board of Trustees under the provision of Sections 48 and 49 of the said Act, 1963 shall be submitted to the Central Government under Section 52 of the said Act for sanction and shall have effect when every scale of rate so sanctioned and published by the Board in the Official Gazette, whereupon the same will have statutory force and cannot be challenged.

5. As per the rate of scale fixed the demurrage charges have been levied in this case as the goods contained in containers were not removed within the stipulated time, so port authority is bound to levy and charge demurrage charges. In this case the port has no responsibility either in law or otherwise to de-stuff the containers as there is no statutory stipulation as regard landing of full container load and lease container load accepting the modalities which covered de-stuffing and delivery of such containers. In case of full consignment containers load (hereinafter in short FCL) de-stuffing is allowed only within the port premises. De-stuffing of FCL containers is allowed only when the consignee comes up through the carriers (Steamer Agents) with a specific request for de-stuffing of FCL containers. In some special circumstances such containers are de-stuffed and allowed direct delivery only. The liability and responsibility of de-stuffing of containers lies wholly with the consignee through their clearing/forwarding agents. De-stuffing of container is not the liability of a port or Port Trust authority under normal circumstances. The containers are loaded with urea which are highly corrosive and pollutant. Moreover in this case consent is required from the Government of Nepal through Royal Nepal Consulate General for putting up for sale of the cargo in the container bound for Nepal for import under Major Port Trusts Act, since cargo belongs to a foreign and third country and have been imported under the license issued by the Government of Nepal. In order to explore the feasibility of sale the port authority has also addressed a letter to the Royal Nepal Consulate General on 9'1 June, 1997 with a reminder on 16th July, 1997 so that necessary action could be initiated to put up the cargo inside the container on sale. Such 'in-container-sale' is in practice at the Port of Bombay and in the present case also the said practice should be followed since the cargo is unsuitable for de-stuffing for the reasons stated hereinabove. Such 'in-container-sale' could be initiated only if the Royal Nepal Consulate General gives their consent under the provisions of Transit Trade and Cooperation Treaty between the Government of India and Government of Nepal and in accordance with the protocol under cargo destinated for Nepal should be put for sale when an expressed consent of the Government of Nepal is conveyed through Royal Nepal Consulate General. Such consent had been forwarded by the Consulate General on annual basis. Accordingly, last consent for all uncleared Nepal Cargo landed in the port premises within the calendar year 1995 since the cargo brought by the petitioner had landed between September and October, 1996 above permission given by Nepal does not apply to the instant goods and therefore, to expedite the matter answering respondents are to give consent with regard to 70 containers so that the same could be put up for sale. This was done specifically to help the carriers that is the petitioners to secure release of their containers. Thus the port authorities in this case has no duty to dispose of the goods in accordance with the provisions contained in Section 62 of the Major Port Trusts Act.

6. On 9th August, 1997 in the above writ petition learned Single Judge has passed an interim order while giving direction for filing affidavits for hearing, to the effect as follows:

The petitioner is allowed to make an application to the customs authority for keeping the goods in container in the customs warehouse outside the port premises and the customs authorities should dispose of the application in accordance with Section 49 of the Customs Act within one month from the date of receipt of the application. It is made clear that if in the meantime the port authority received any communication from Nepal Consulate regarding sale of the goods contained in the container the port authority shall take steps to sell the goods in the container.

7. It appears being aggrieved by the said interim order which did not yield desired result the writ petitioner preferred appeal. The Appeal Court by judgment and order dated 5th September, 1997 allowed the appeal and gave following direction with observation amongst other as follows:

It shall be open to the respondent Calcutta Port Trust to initiate action, if it so likes within two weeks from today in terms of the above preferred provision of the Act for disposal of the consignment. If this action is initiated for disposal of the consignment, particularly in terms of Section 62 of the Act, it shall be open to the Port Trust to have the goods sold in-containers but by adopting the shortest possible time schedule for this purpose which in any case will not exceed more than two months from today and the goods thus being sold, responsibility to de-stuff the containers pursuant to the sale of the goods shall be of the Calcutta Port Trust and the containers thus de-stuffed within aforesaid period, these shall be returned to the petitioner.

If within two weeks from today the Calcutta Port Trust decides not to take action under the provision of the Act for disposal/sale of the goods, it shall be its responsibility immediately thereafter to start the process of de-stuffing immediately on the expiry of two weeks from today. The petitioners shall be rendered every possible assistance for de-stuffing of the containers, as being done in the normal case of the port authorities in respect of other carriers subject to payment of all charges of de-stuffing as laid down in that behalf. The de-stuffing process shall be completed without delay and thereafter the de-stuffed containers be handed over to the petitioners.

Since the petitioners prima facie cannot be found liable for payment of any demurrage charges for the containers, beyond 28.2.1997 the containers upon completion of either of the aforesaid two courses of action shall be released in favour of the petitioners upon their paying demurrage charges until 28.2.1997, if not already paid. The petitioners not being liable to pay demurrage charges after 28.2.1997 is our prima facie view. This point of course shall be subject to the ultimate decision in the writ application.

8. It appears from the records that even after passing of the aforesaid judgment and order of the Division Bench the parties went on exchanging correspondences fruitlessly and no positive step was taken for implementation of the above order. MJT) 4fff On 29th January, 1998 the said writ petition came up for hearing and further order was passed by the learned Judge directing the Calcutta Port Trust authority to take expeditious step for sale of the goods and thereafter the containers shall be handed over to the writ petitioners. Pursuant to the order passed by the Division Bench sale was directed to be effected by public auction by advertising in the newspaper. The sale proceeds was directed to be kept in short term deposit by the Calcutta Port authority and it appears that goods were thereafter brought out from the containers and were sold on diverse dates and an aggregate sum of Rs. 61,79,521.65/- (Rs. 35,00,000/- + 2,78,000/- + 24,01,521.65p.) after deducting all costs and expenses was found to be surpluses and the same was kept deposited. In the meantime the port authority debited a sum of Rs. 22,14,782.70.p on account of demurrage charges.

9. In view of sale of the said goods and the containers having been released in terms of the order of this Court it has now become bone of contention between the parties whether the appellant/writ petitioner is entitled to get payment of all the amounts spent by it for transportation and destuffing of the said cargo and also the total waiver of demurrage charges, which has already been realised by debitting the accounts of the appellants maintained by the respondents. Naturally, the legal issue would be involved in this connection, whether the port authority's negligent in discharging the duty under the provisions of the Major Port Trusts Act or not.

10. Mr. Shibdas Banerjee, learned Senior Counsel for the appellants, submits that his client is supplier of the container and not the owner of the goods stuffed therein. His client is not responsible to clear or discharge the goods unless the consignee viz. the Nepal Government Company takes steps for clearance and for destuffing the container by off in-loading the goods. His client cannot remove the container and as such the port authority cannot realise any demurrage charges on account of arrears from the importer. He contends that time and again his client requested the port authority, customs authority as well as the Nepal Government Company but no action was taken by any of the parties. Under such circumstances, it was the port authority whose obligation was to take action under the provision of Section 62 of the Major Port Trusts Act to sell the goods and destuff the container after the goods were off-loaded. Under the treaty between Indian Government and the Nepal Government there is no embargo and/or prohibition from taking steps under the law. Such steps should have been taken within the time as mentioned in Section 62 of the said Act. According to him, the learned Trial Judge by dismissing the writ petition has overlooked the real issue. It is wrong to interpret Section 62 as being enabling section and because such interpretation enables the port authority to remain silent. It is again legally erroneous that the port authority is obliged to take action after destuffing cargo from the containers and not prior thereto. It is further absurd as has been found by the learned Trial Judge that delay involved in this case cannot be attributed to the consignee, or the port authority and further fixing the primary responsibility on the appellant. According to him, bye-law 55C cannot override the provision of Section 62 of the said Act. He has further contended that at earlier stage in the Division Bench Judgment dated 4th September, 1997 it has been clearly decided that the port authority is statutorily obliged to take action, on the face of this decision it was not open for the learned Trial Judge to record different findings, since there was no further development on fact nor any new question was urged or decided. In support of his contention he has relied on a number of reported decisions viz. : 2002(140)ELT321(SC) and : 2005(190)ELT436(Cal) .

11. Suhrid Roychowdhury, learned Senior Advocate, for the port authority contends that Section 62 is an enabling section and the port authority cannot take recourse to the same as a matter of course or duty. Unless the goods are off-loaded from the containers it means until the containers are destuffed the custody of the goods does not come into their hands. By virtue of the bye-law 55C it has been made clear that the port authority will take custody of the containerized goods and further will become a bailee only when the same is destuffed. The importer of the goods is the Nepal Government Company and the export and import of these goods through Calcutta Port is governed by the treaty between the two countries. Unless Royal Nepal Government grants permission for taking steps viz. for sale of the goods covered by the said treaty the port authority cannot do anything else. Moreover, destuffing of the containers by off loading the goods in question is highly hazards and the same is not undertaken ordinarily and it poses serious health hazards and environment pollution. Its shipping agent and/or slot charters as well as the petitioners are obligated to take steps for off loading the goods and to remove the containers from the port premises. So long goods remain within port area, port authority is legitimately entitled to impose demurrage charges as per the scale of rate fixed by it. Therefore, the demurrage charges which has accrued on account of the detention of the said container together with cargo are to be realised and/or to be paid by the appellant/writ petitioner for not having taken any steps for removal of the same. Moreover, the accounts maintained by the appellant with the port authority is highly irregular. The amount of sale proceeds in terms of the order of the Court has to be appropriated by the port authority alone, and appellant has no claim whatsoever with regard thereto. All costs and expenses and incidental charges thereto for sale obviously have to be borne by the appellant as appellant has got the container released. Port authority has rightly debitted its account on account of demurrage charges. In support of his submission he has placed reliance on the following reported and unreported decisions of this Court viz. : (1998)1CALLT63(HC) , APO 486 of 2005 Board of Trustees for the Port of Calcutta and Anr. v. Swahom Shipping Services Pvt. Ltd. and Ors. Appeal No. 572 of 2002 Board of Trustees for the Port of Calcutta and Ors. v. China Ocean Shipping (Group) and Ors.

12. We have heard respective contention of the parties and have gone through the materials placed before us and the impugned judgment and order of the learned Trial Judge. It appears to us the learned Trial Judge in substance held the port authority had no fault for de-stuffing the containers as Section 62 of the said Act is an enabling section and the de-stuffing of the container could not be done within the time by the steamer agent who is responsible for off-loading the goods from the container. It is also found by the learned Trial Judge, port authorities become the statutory bailee after de-stuffing of the container and not before that in order to hold port authority liable for any loss and damages. The learned Trial Judge also held consignee had no role to discharge before de-stuffing of container for release of the goods, which has to be done by the shipping agent or slot charterer. Therefore, the writ petitioners/appellants are not entitled to get any relief.

13. From the impugned judgment and order it appears to us the learned Trial Judge did not assign any reason on the question of law as to how the shipping agent is responsible or for that matter Board is not at fault in this case. The learned Trial Judge of course has taken note a number of decisions of this Court, but has relied on one of such decisions without mentioning or referring to particular decisions which has held that Section 62 of the Major Port Trusts Act, 1963 is an enabling section.

14. Considering legal position including bye-laws in the context of various judgments delivered on this subject, we are of the opinion that the responsibility and/or liability of the port in case of clearance of containerized cargo is slightly different from that of ordinary cargo. The scheme of the Act is very clear with regard to levy and realization of rates and it appears from Section 59 of the said Act, Board has lien for rates. The power of the Board under Section 48 of the Act has been conferred to frame scale of rates to be realized for the services rendered by it. Under Section 59 of the said Act for the amount of rates leviable by Board under this Act in respect of any goods it may seize and detain the same until such rates and rents are fully paid. The definition of the goods has been given in Section 2(h) which includes livestock and every kind of movable property. At the same time under Section 60 ship-owners are also having lien for freight and other charges. Here we are dealing with the question of clearance of the container which cannot be done unless the same are de-stuffed by removing the goods contained therein. Under Sections 61 and 62 of the said Act the Boards have been empowered to sell the goods if the same are not cleared within the time stipulated. Those two sections are set out hereunder:

61. Sale of goods after two months if rates or rent are not paid or lien for freight is discharged.--(1) A Board may, after the expiry of two months from the time when any goods have passed into its custody, or in the case of animals and perishable or hazardous goods after the expiry of such shorter period not being less than twenty-four hours after the landing of the animals or goods as the Board may think fit, sell by public auction of in such case the Board considers it necessary so to do, for reasons to be recorded in writing, sell by tender, private agreement or in any other manner, such goods or so much thereof as, in the opinion of the Board, may be necessary-

(a) if any rates payable to the Board in respect of such goods have not been paid, or

(b) if any rent payable to the Board in respect of any place on or in which such goods have been stored has not been paid, or

(c) if any lien or any ship-owner for freight or other charges of which notice has been given has not been discharged and if the person claming such lien for freight or other charge has made to the Board an application for such sale.

(2) Before making such sale, the Board shall given ten days' notice of the same by publication thereof in the Port Gazette, or where there is no Port Gazette, in the Official Gazette and also in at least one of the principal local daily newspaper:

Provided that in the case of animals and perishable or hazardous goods, the Board may give such shorter notice and in such manner as, in the opinion of the Board, the urgency of the case admits of.(3) If the address of the owner of the goods has been stated on the manifest of the goods or in any of the documents which have come into the hands of the Board, or is otherwise known notice shall also be given to him by letter delivered at such address, or sent by post, but the tile of a bona fide purchaser of such goods shall not be invalidated by reason of the omission to send such notice nor shall any such purchaser be bound to inquire whether such notice has been sent.

(4) Notwithstanding anything contained in this section, arms and ammunition and controlled goods may be sold at such time and in such manner as the Central Government may direct.

62. Disposal of goods not removed from premises of within time limit.--(1) Notwithstanding anything contained in this Act, where any goods placed in the custody of the Board upon the landing thereof are not removed by the owner or other person entitled thereto from the premises of the Board within one month from the date on which such goods were placed in their custody, the Board may, if the address of such owner or person is known, cause a notice to be served upon him by letter delivered at such address or sent by post, or if the notice cannot be so served upon him or his address is not known, cause a notice to be published in the Port Gazette or where there is no Port Gazette, in the Official Gazette and also in at least one of the principal local daily newspapers, requiring him to remove the goods forthwith and stating that in default of compliance therewith the goods are liable to be sold by public auction or by tender, private agreement or in any other manner:

Provided that where all the rates and charges payable under this Act in respect of any such goods have been paid, no notice of removal shall be so served or published under this sub-section unless two months have expired from the date on which the goods were placed in the custody of the Board.

(2) The notice referred to in Sub-section (1) may also be served on the agents of the vessel by which such goods were landed.

(3) If such owner or person does not comply with the requisition in the notice served upon him or published under Sub-section (1), the Board may, at any time after the expiration of two months from the date on which such goods were placed in its custody, sell the goods by public auction or in such cases as the Board considers it necessary so to do, for reasons to be recorded in writing sell by tender, private agreement or in any other manner after giving notice of the sale in the manner specified in Sub-sections (2) and (3) of Section 61.

(4) Notwithstanding anything contained in Sub-section (1) or Sub-Section (3)-

(a) the Board may, in the case of animals and perishable or hazardous goods, give notice of removal of such goods although the period of one month or, as the case may be, or two months specified in Sub-section (1) has not expired or give such shorter notice of sale and in such manner as, in the opinion of the Board, the urgency of the case requires;

arms and ammunition and controlled goods may be sold in accordance with the provisions of Sub-section (44) of Section 61.

(5) The Central Government may, if it deems necessary so to do in the public interest, by notification in the Official Gazette, exempt any goods or classes goods from the operation of this section.

15. Upon reading of the aforesaid two sections it clearly indicates that the aforesaid provisions can be applied when the goods are placed in custody of the Board. It is contended that by virtue of bye-law 55C that the Board shall not accept custody of nor give any receipt nor be responsible in any manner whatsoever in respect of any goods of cargo landed from any vessel in container except when such goods are un-stuffed from the container by the master, owner or agent and direct receipt in a transit. In our view the aforesaid bye-law conflicting with the provision of Section 59 of the said Act so far power of sale is concerned. Section 59 is set out hereunder:

59. Board's lien for rates.--(1) For the amount of all rates leviable under this Act in respect of any goods, and/or the rent due to the Board for any buildings, plinths, stacking areas, or other premises on or in which any goods may have been placed, the Board shall have a lien on such goods and may seize and detain the same until such rates and rents are fully paid.

(2) Such lien shall have priority over all other liens and claims, except for general average and for the ship-owner's lien upon the said goods for freight and other charges were such lien exists and has been preserved in the manner provided in Sub-section (1) of Section 60, and for money payable to the Central Government under any law for the time being in force relating to customs, other than by way of penalty or fine.

16. It is the law unless a particular movable property or, goods remained in possession or custody of a person the lien cannot be claimed. Under the aforesaid section a statutory hen has been created in respect of any goods brought to the port area whether lawfully or unlawfully. If bye-law 55C is read isolated from the aforesaid section then the port authority cannot claim or realize any rent for keeping container within the port area. On careful reading of bye-law 55C it will be clear that the Board is not accepting custody nor is responsible in any manner in respect of the goods or cargo brought under container unless the same are un-stuffed meaning thereby the Board cannot become liable for any loss of goods as a bailee until the same are unstuffed. But this should not be understood to say that Board can not take step for sale of goods.

In our view the aforesaid bye-law 55C is applicable only to wriggle out from responsibility as bailee of the goods.

17. What Board will do in case of the goods remaining in container is not removed within the maximum period of two months under the provision of Section 62 of the said Act, has been explained by the Supreme Court in case of 2002(3) SCC 168 Om Shankar Biyani v. Board of Trustees, Port of Calcutta and Ors. In paragraph 22 while considering Section 62 together with Section 59 of the Supreme Court it is observed as follows:

In our view, the 1st respondent should have sold off the goods at that stage. It is a statutory body. Merely because there is no obligation to sell does not mean that it can allow the goods to lie around. By this time the 1st respondent well knew that the appellant was not paying the charges. Now the Court had permitted it to take recourse to such action as was available in law. Sale is contemplated in the Major Port Trusts Act itself. In our view the 1st respondent should have now sold the goods. Apart from the fact that demurrage charges would have stopped running, valuable godown space would also have become available to it. On facts of this case, we feel that it would be just and proper that the 1st respondent not be allowed to charge demurrage charges after 10.1.1992.

18. Then again in paragraph 24 in that case the Supreme Court observed amongst others as follows:.In the event of the appellant not clearing the goods after paying all charges within 30 days from today the 18th respondent will be at liberty to take action under Section 62 of the Major Port Trusts Act and also, if permissible in law to do so, to make a claim against the appellant for recovery of the balance amount due after sale of the goods.

19. It appears that the learned Single Judge relying on an unreported decision rendered in case of Matter No. 3691 of 1990 Chairman, Calcutta Port Trust and Ors. v. Star Iron Works Private Limited and Ors. held since Section 62 is an enabling section hence it was not the obligation of the Board to take any step to sell the goods.

20. We are of the view that the Division Bench Judgment relied on by the learned Trial Judge has no doubt held that Section 62 is an enabling section and this interpretation of the Court has not been ruled out by the Supreme Court in the aforesaid case. In our considered opinion enabling provision does not mean that one should remain absolutely silent. According to us, enabling provision means one cannot as a matter of right ordinarily ask the port authority to sell. We feel that after expiry of maximum period of two months by virtue of this enabling section it is the duty of the port authority to take steps for sale as provided in the said section. The law has to be applied for bringing about a solution of problem caused by not only the authority concerned but also the persons interested. If the enabling section is interpreted as being absolute discretion of the port authority and for any reason port authority exercises discretion not to sell the goods even under any circumstances then result would be absolutely chaotic for the simple reason that the person concerned will utilize the godown space and/or wharf of the port authority for indefinite period and further if the importer, consignee or shipping agent is incapable of paying the godown charges so to be accrued because of not the same being cleared then the port authority will never be able to realize not only the godown charges or any other rates but also will lose the value of the goods itself.

21. As observed by the Supreme Court that port premises is the valuable public premises and Section 62 has been provided for taking measure for clearance of the goods as the extreme measure. The aforesaid bye-law 55C cannot be made applicable to frustrate the very purpose and object of the aforesaid statutory provision of Section 62 of the Major Port Trusts Act.

In view of the said Supreme Court decision we feel that the Star Iron case is no longer a good law to the extent of contradiction and conflicting with the-above Supreme Court judgment.

22. For this simple reason an unreported decision of this Court in Appeal No. 717 of 1991 Chairman, Calcutta Port Trust and Ors. v. Star Iron Works Pitt. Limited and Ors. is also not a good law to the extent of inconsistency and/or conflicting with the above Supreme Court judgment.

23. In the case of Star Iron Works Private Limited and Ors. reported in CLT 1998(1) HC 63, the Division Bench of this Court has observed in the similar line as it has been held in the Star Iron case. The interpretation given in that case, of the Section 62 is not disputed. In that case it has been held that the importer and for that matter other parties cannot escape from their liability by taking a plea that Section 62 of the Act absolves the importer of the liability from paying demurrage after one month from the date of receipt of goods in the port area. But the Supreme Court in the above case explained the legal position. The situation of the case before the Supreme Court and the present one appear to be same. Hence the Board cannot remain silent spectator and ought to have taken steps under the provision of Section 62 of the said Act.

24. In this matter at the earlier stage Appeal Court on 4th September, 1997 'while disposing of an appeal against an interim order dated 8Lh August, 1997 has taken view that the port authority should have sold the goods contained in the containers after having unstuffed under Section 62 of the said Act. It is pertinent to note that the same Bench which has decided Star Iron case has taken the aforesaid view in this matter. Learned Single Judge of this Court in the case of Parekh Marine Agencies Pvt. Ltd. and Ors. reported in CLT 1999(3) HC 401, while interpreting bye-law 55C has observed that until and unless the goods contained in the container are unstuffed question of sale under Sections 60 and 61 of the 1963 Act does not and cannot arise. We are of the view that this interpretation is not correct one in view of interpretation of Supreme Court which necessarily implies that runs counter to the said section. We have already observed that the port authority has statutory lien for realizing rents chargeable over any goods brought to the port premises. Possession over and custody of the goods is a pre-condition for right of lien and naturally the; port authority has obligation to take steps under Sections 61 and 62 as the case may be. Sections 61 and 62 do not make differentiation between the goods brought in without container or with container for definition of the 'goods' in Section 2(h) of the said Act says amongst other every kind of movable property. Moreover, the said bye-law nowhere prevented the port authority from taking steps for unstuffing the goods.

25. In the case of Swahom Shipping Services Pvt. Ltd. v. Commissioner of Customs (Port), reported in 2005(190) ELT 436 (Cal.), a learned Single Judge has observed that irrespective of act and conduct of the importer of the goods and container owners the port authority is not only empowered but is duty-bound to take steps under Sections 61 and 62 and 63 for sale and appropriation of sale proceeds within the time mentioned therein. It is also observed that port authority as being the statutory bailee of the goods brought within its premises is bound to take such steps mentioned in the aforesaid Acts and Regulations framed contrary to the aforesaid provisions preventing it from taking action are not an excuse for not taking any action. In paragraph 14 it is also observed by learned Single Judge that the port authority is not the custodian of the goods until the same are unstuffed for taking steps under the law. It is further observed that there is no restriction or embargo under the aforesaid bye-law for not taking action by the Board under the aforesaid section of the said Act. This Judgment of course has been set aside by the Appeal Court on 12th May, 2006 but Appeal Court has not decided at all that the port authority is never liable nor responsible for taking steps under Section 62 of the said Act. This Appeal Court Judgment has relied on the Judgment rendered by the Division Bench in Star Iron Works Private Ltd. We notice the decision of the Supreme Court in case of Om Shankar Biyani, reported in 2002(3) SCC 168, was not drawn to the attention of the Hon'ble Division Bench wherein it has been held that merely because there is no obligation to sell does not mean that it can allow the goods to lie around. Therefore the Division Bench Judgment setting aside the decision of the learned Single Judge in Swahom Shipping Services Pvt. Ltd. is not a good law. Another unreported decision has been relied on by Mr. Roy Chowdhury rendered in case of Seahorse Shipping & Shipmanagement and Ors. v. United Liner Agencies of India Limited and Integrated Marketing Private Limited. In our view this Judgment on the facts and in circumstances of this case does not help. No one can dispute that consignee, importer, shipping agent has liability and responsibility for payment of the rents but according to us if such rents are not paid the same must be recovered but the port authority cannot allow to accrue the demurrage charges for indefinite period in the event the goods whether containerized or not are not removed within the maximum period of two months. It must be sold i.e. the statutory empowerment has been made by the Legislature upon the port authority for realizing all the unpaid rents exercising its statutory lien. Therefore, this Judgment is distinguishable on the facts and circumstances of this case.

26. A learned Single Judge of this Court, in case of Donald and Macarthy Pvt. Ltd. has taken a view that when the goods are not removed, whether in the container or otherwise, the port authority after expiry of two months must sell the goods to arrest the demurrage charge being accrued.

27. The next contention of Mr. Roy Chowdhury is that Indo Nepal Treaty has really prevented the port authority from taking any action to sell the goods. At the earlier stage Division Bench of this Court has observed upon reading of the Indo-Nepal Treaty that no such restriction would be found. The Division Bench of this Court while admitting the present appeal at the earlier stage has taken the same view. Then the aforesaid views were recorded as being tentative and prima facie and not the final pronouncement, but we think upon reading as many times as required that there is no cause for taking a different view. We have read the Indo-Nepal Treaty. We find not only there is no restriction nor prohibition rather the aforesaid treaty is very clear in Article VII that the provision mentioned therein are subject to Indian Laws and Regulations. The protocol to the treaty of transit between Nepal and India where under Clause 6 it is made clear that the transit cargo shall be subjected to the levy of all charges by the trustees in accordance with the schedules of charge in force from time to time. According to Sub-clause (3) under Clause 11 that all goods intended for removal in transit to Nepal while in the process of removal to or from warehouses or other storage places that may be leased out in Calcutta Port for the storage of such goods and also while in storage or under the process of packing, sorting and separation etc. in such warehouses or places shall be subject to relevant Indian Laws and Regulations.

28. Therefore, it is not understood why such contention has been raised that Indo-Nepal Treaty stands in the way of applying the aforesaid provision of the law. We are of the view that no consent from anyone is necessary, even then it appears from the correspondences that Nepal Diplomatic Mission in Calcutta and Nepal Government did not raise any objection to taking of any action as the goods are disclaimed by the importer.

29. We, therefore, allow the appeal and set aside the impugned judgment. We hold that the appellant/writ petitioner is liable to pay demurrage charges for the containers till 23rd July, 1997 as on that date the petitioner filed this writ petition for taking action. The port authority is, therefore, directed to calculate the demurrage charges after allowing the usual time free of any charges, for removal of the container till that date and after realizing the aforesaid amount so to be calculated either by deduction from the sale proceeds lying in the hands of the port authority or by debitting the amount. The petitioner/appellant is entitled to all costs and expenses if incurred by them, for sale in terms of order of the Court. The port authority shall pay the same first, thereafter, from the balance amount demurrage charge as above shall be realized. If there be any surplus, the same shall be kept deposited without lien or charge. There will be no order as to costs.

30. After calculation, in terms of this judgment and order, if any amount is found to be payable by the writ petitioner/appellant, the writ petitioner/appellant shall pay the same in terms of the undertaking given to this Court. If nothing is found payable, then undertaking, so given, shall stand discharged automatically.

Urgent xerox certified copy of this order, if applied for, be supplied to the applicants.