FORBES FORBES CAMPBELL & CO. LTD.versusBOARD OF TRUSTEES, PORT OF BOMBAY

                   [2014] 12 S.C.R. 337


       FORBES FORBES CAMPBELL & CO. LTD.                      A
                             v.
      BOARD OF TRUSTEES, PORT OF BOMBAY
           (Civil Appeal No. 2134 of 2006)
                  DECEMBER 03, .2014
                                                              B
      [RANJAN GOGOi AND R.K. AGRAWAL, JJ.]

     Major Port Trust Act, 1963 - s.42, 2(o), 40, 43, 60 -
Goods brought into the port and warehoused by the Port Trust
Authority - Consignee of the goods not attempted to clear bill C
of lading and also not responded to the notices issued -
Payment of demurrage and port charges to the Board of
Trustees of a Port - Held: Agent of the ship owner liable to
pay demurrage and port charges.
                                                               D
     Dismissing the appeals, the Court
     HELD: Once the bill of lading is endorsed or the
delivery order is issued it is the consignee or endorsee
who would be liable to pay the demurrage charges and .
other dues of the Port Trust authority. In all other . E
situations the contract of bailment is one between the
Steamer Agent (bailor) and the Port Trust Authority
(bailee) giving rise to the liability of the Steamer Agent for
such charges till such time that the bill of lading is
endorsed or delivery order is issued by the Steamer F
Agent. Sections 61 and 62 of the major Port Trusts
Act,1963 enables the Port Trust authority to proceed
against the goods within its custody to recover the
charges which may be payable to the Port Trust authority.
Ordinarily and in the normal ::ourse if resort is made to G
the enabling provisions in the Act of 1963 to proceed
against the goods for recovery of the charges payable to
the Port Trust authority there may not be any occasion
for the said authority to sustain any loss or even suffer
                              337                              H
    338      SUPREME COURT REPORTS             [2014] 12 S.C.R.


A any shortfall. of the dues payable to it so as to initiate
  recovery proceedings against the ship owners. On facts,
  the orders of the High Court are upheld. [Para 11, 12]
    [345-B-H]

B      Trustees of the Port of Madras Through Its Chairman Vs.
  K.P. V. Sheikh Mohd. Rowther & Co. Pvt. Ltd. and Another
  (1997) 10 SCC 285; Board of Trustees of the Port of Bombay
  and Others Vs. Sriyanesh Knitters 1999 (3) SCR 1238:(1999)
  7 SCC 359; The Trustees of the Port of Madras by Its
  Chairman Vs. K.P. V. Sheik Mohamed Rowther & Co. and
C Others (1963) Supp. 2 SCR 915 - referred to.
                        Ca.se Law Reference:
          (1997) 10 sec 285           Referred to    Para 3
D         1999 (3) SCR 1238           Referred to     Para 6
          (1963) Supp. 2 SCR ~15      Referred to     Para 8
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    2134 of 2006.
E
        From the Judgment & Order dated 16.12.2005 of the High
    Court of Bombay at Bombay in Writ Petition No. 1732 of 1990.

                               WITH

F   C.A. Nos. 7088, 7092 & 7094 of 2002, 802 of 2005, 10719 of
    2014.

      S.K. Bagaria, T.R. And~yarujina, Parag P. Tripathi Atul
  Yeshwant Chitale, Vikas Mehta, V.K. Ramabhadran, Siddharth
G Kaushik, K. Ajit Singh, Srinivas Vijay Kumar, Amitava
  Majumdar, Siddharth Dave, Aditya Krishnamurthy, Jemtiben,
  Senthil Jagadeesan, Priya Puri, Sandeep Narain, S.K. Das,
  Ashok Bannidinni, S. Narain & Co., Aniruddha Deshmukh,
  Mohit D. Ram, A.V. Rangam, Buddy A. Rang~nathan, Soumik
H Ghoshal, Nirnimesh Dube, Shubham Jaiswal, Vaishnavi Rao,
FORBES FORBES CAMPBELL & CO. LTD. v. BOARD OF 339
         TRUSTEES, PORT OF BOMBAY
Shalini Kumar, B. Krishna Prasad, Indra Sawhney, C.V. Subba          A
Rao, B.V. Balaram Das, Ritin Rai, V.K. Monga, Fereshte D.
Sethna, Sukhmani, B. Vijayalakshmi Menon for the appearing
parties.

     The Judgment of the Court was delivered by
                                                                     B
    RANJAN GOGOi, J. 1. Leave granted· in· SLP(C) No.
4221 of 2012.

      2. The common question of law that arises in these
appeals, though in different facts and circumstances, is with        c
regard to the liability of the agent of a ship owner (hereinafter
referred to as the "Steamer Agent") to pay demurrage and port
charges to the Board of Trustees of a Port (hereinafter referred
to as "the Port Trust Authority") in respect of goods brought into
the port and warehoused by the said authority. Before                0
proceeding to answer the aforesaid question it will be
convenient to take note of the core facts in each of the appeals
under .consideration.

Civil Appeal No. 2134/2006 and Civil Appeal arising out of
SLP(C) No. 4221/2012                                                 E

      3. The consignee of the goods not having either cleared
the same or having responded to any of the notices issued, the
goods were sold by public auction by the Port Trust authority
after almost four years of receipt thereof. The amount fetched F
in the auction fell short of the total charges payable which led
the said authority to file a suit against the Steamer Agent for
the balance amount. The suit was dismissed. In appeal, the High
Court reversed the decree holding the Steamer Agent to be
liable. In doing so, the High Court held that the ratio of the law G
laid down by this Court in Trustees of the Port of Madras
Through Its Chairman Vs. K.P. V. Sheikh Mohd. Rowther
& Co. Pvt. Ltd. and Another1 (hereinafter for convenience
referred to as 'the 1997 judgment') to be not applicable to the
1.   (1997) 10 sec 285 =AIR 1995 SC 1922.                            H
     340      SUPREME COURT REPORTS                [2014] 12 S.C.R.


A    present case inasmuch as in the 1997 case the Steamer Agent
     had endorsed the bill of lading in favour of the consignee
     tt:iereby transferring the property in the goods to the consignee
     whereas in the present case the consignee had not attempted
     to clear the bill of lading and had also not responded to the
 B   notices issued.

         4. The facts in Civil Appeal arising out of SLP(C) Nci.
     4221/2012 are largely identical with what has been stated
     above.

 C   Civil Appeal Nos. 7088/2002, 7092/2002. 7094/2002 and 802/
     2005

          5. In all these cases a Resolution of the Board of Trustees
     for the Port of Calcutta dated 21.10.1982 was challenged by
 o   which it was, inter alia, resolved that rent on cargo transported
     in containers may be recovered from the marine account of the
     Steamer Agent from the 16th day frorn the date of landing of
     the container if de-stuffing thereof is not done within the free
     time of 15 days. The challenge to the aforesaid Resolution by
·E   the Steamer Agent before the High Court having been
     negatived the appeals in question have been preferred before
     this Court.                      ·

         6. On behalf of the appellants it has been argued th.at
   under the provisions of the Major Port Trust Act, 1963
 F (hereinafter referred to as "the Act of 1963"); the byelaws of
   the Port Trust authority and the schedule of rates framed by such
   authority no liability is cast either on the ship owner or his agent
   for payment of demurrage and port charges. The liability to pay
   all rates/rents/port charges being statutory, in the absence of
 G a statutory empowerment, the liability sought to be fastened on
   the Steamer Agents is without authority of law. Referring to the
   definition of "Owner" in Section 2(o) of the Act of 1963 it is
   contended that neither the ship owner nor his agent comes
   within the ambit of the said definition of "Owner". Specifically,
 H
FORBES FORBES CAMPBELL & CO. LTD. v. BOARD OF 341
  TRUSTEES, PORT OF BOMBAY [RANJAN GOGOi, J.]

it is contended that the "Shipper" mentioned in Section 2(o) is A
not a "Ship Owner"; a Shipper is a mere courier to whom the
consignor hands over his goods for dispatch and delivery to
the consignee. A "Shipper" is also known as a slo.t charterer!
slot hirer. The agent referred to in the first part of definition of
"Owner" in Section 2(o) (i) is an agent of the shipper and not B
that of the ship owner. The provisions of Section 42 of the Act
of 1963 have also been relied upon to contend that once the
goods come in to the custody of the Port Trust authority, there
is a relationship of bailer and bailee between the consignee
and the Port Trust authority and there is no such relationship    c
between the ship owner or his agent on the one hand and the
 Port Trust on the other. The decision of this Court in Board of
 Trustees of the Port of Bombay and Others Vs. Sriyanesh
Knitters 2 is referred to and relied upon for the above
proposition. It is further contended that the remedy of a ship D
owner or his agent by way of lien against the goods is of a
 limited operation; it is only qua the freight charges and other
charges payable to the ship owner. The said lien under Section
60 of the Act of 1963 will not extend to demurrage or port
charges. Section 60 of the Act of 1963 therefore does not
provide for recompense of demurrage or port charges in the E
event the same are to be paid by the Steamer Agent to the Port
Trust authority, as held 'by the High Court.

     7. It has been specifically argued that the liability of a ship
owner or his agent for payment of demurrage charges and port F
rent etc. stands concluded by the 1997 judgment. There is no
such liability in law. It is submitted that the fact of endorsement
of the bill of lading in favour of the consignee in the above case,
as distinguished from the present case, would not have the
effect of confining the ratio of the judgment only to situations G
where the bill of lading has been endorsed or the delivery order
has been issued by the Steamer Agent. This is because by
operation of Section 2(o) of the Act of 1963 "Owner" incl\ldes
a consignee but not a Steamer Agent. Therefore, endorsement
2.   (1999) 7 sec 359:                                            H
    342        SUPREME COURT REPORTS              [2014] 12 S.C.R.


A   of the bill of lading or delivery order is not determinative. The
    above stand has been further sought to be fortified by referring
    to the approval by this Court of the view expressed by the High
    Court of Madras that making a Steamer Agent liable for
    demurrage charges/port rent would be "imposing a too onerous
B   and unexpected responsibility on the steamer which is only a
    carrier" and further that if Steamer Ag~nts "are submitted to such
    a responsibility, in most cases where the goods are detained
    without delivery in the hands of the Port Trust at the instance of
    the customs the steamer or steamer agent have to pay towards
c   storage or demurrage charges amounts quite disproportionate
    to the freight they collect for the carriage of the goods." It is,
    therefore, submitted that the absence of liability of Steamer
    Agents for demurrage charges/port rent was decided on certain
    broader principles and propositions and not on the basi_s of the
    mere endorsement of the bill of lading or issuance of a delivery·
0
    order by the Steamer Agent.

         8. Learned counsel for the appellants has also referred to
    the dedsion of the Constitution Bench in The Trustees of the
    Port of Madras by Its Chairman Vs. K.P. V. Sheik
E   Mohamed Rowther & Co. and Others 3 (hereinafter for
    convenience referred to as 'the Cons_titution Bench decision')
    and has sought to explain the seemir:igly contradictory views
    with regard to liability of the Steamer Agents on the basis that
    the said liability was on account of charges incurred by the Port
F   Trust authority for engagement of labour made at the request
    of the Steamer Agent and the service rendered was before the
    goods had come into the custody of the Port Trust authority. The
    view expressed with regard to the liability of a Steamer Agent,
    therefore, is in a different context, it is contended.
G
         9. On behalf of the respondent Port Trust authority it is
    contended that the decision of this Court. in the 1997 case has
    to be understood fo be confined to situations where the bill of
    lading had been endorsed or delivery orders had been issued
H   3.   (1963) Supp. 2 SCR 915.
FORBES FORBES CAMPBELL & CO. LTD. v. BOARD' OF 343
  TRUSTEES, PORT OF BOMBAY [RANJAN GOGOi, J.]
by the Steamer Agent. In all other situations i.e. where the bill A
of lading has not been endorsed, a relationship of bailer and
bailee between the Steamer Agent and the Port Trust authority
would come into existence by virtue of the provisions of Section
42 of the Act of 1963 and continue till the bill of lading is duly
endorsed. This is because the goods come into the custody B
of the Port Trust from the ship owner by operation of the
provisions of Section 42 of the Act of 1963. It is further
contended that the views expressed in Sriyanesh Knitters
(supra) with regard to the relationship of bailer and bailee
between the consignee and the Port Trust authority was in a c
situation where the consignee had already appeared on the
scene and taken delivery of the goods·. Distinguishing the
aforesaid two judgments it is contended that the issue arising
is squarely covered by the decision of the Constitution Bench
holding a Steamer Agent to be liable under the Act to payment D
of demurrage charges and other port dues.

      10. While it is correct that the liability to pay demurrage
charges and port rent is statutory, in the absence of any specific
bar under the statute, such liability can reasonably fall on a
Steamer Agent if on a construction of the provisions of the Act E
such a conclusion can be reached. Determination of the
aforesaid question really does not hinge on the meaning of the
expression "Owner'' as appearing in Section 2( o) of the Act of
1963, as has been sought to be urged on behalf of the appellant
though going by the language of Section 2(o) and the other F
provisions of the Act especially Section 42, an owner would
include a ship owner or his agent. Otherwise it is difficult to
reconcile how custody of the goods for the purpose of rendering
services under Section 42 can be entrusted to the Port Trust
authority by the owner as provided therein under Section 42(2). G
At that stage the goods may still be in the custody of the ship
owner under a separate bailment with the shipper or the
consignor, as may be. Even de hors the above q4estion the
liability to pay demurrage charges and port rent would accrue
to the account of the Steamer Agent if a contract of bailment H
    344     SUPREME COURT REPORTS                [2014] 12 S.C.R.


A   between the Steamer Agent and the Port Trust authority can
    be held to come into existence under Section 42(2) read.with
    Section 43(1 )(ii} of the Act of 1963. For the reasons already
    indicated the decision in Sriyanesh Knitters (supra) with
    regard to existence of a relationship of bailer and bailee
B   between the consignee and thePort Trust authority instead of
    the Steamer Agent and the Port Trust authority cannot be
    understood to be a restatement 'of a ·general principle of law
    but a mere conclusion reached in the facts of the case where
    the consignee had already appeared in the scene. In all other
c   situations where the. bill of lading has not been endorsed or
    delivery orders have not been issued and therefore the
    consignee is yet to surface, the following observations of the
    Constitution Bench in K.P. V. Sheik Mohamed Rowther & Co.
    and Others (supra) will have to prevail.
D        "Section 40 speaks of the responsibility of the Board for
         the loss, destruction or deterioration of the goods of which
         it has taken charge as a bailee under ss. 151, 152 and
         161 of -the Indian Contract Act. Section 148 of the
       . Contract Act states that a bailment is the delivery of
E        goods by one person to another for some purpose, upon
         a contract that they shall, when the purpose is
         accomplished, be returned or otherwise. disposed of
         according to the directions of the person delivering them.
         The person delivering the goods is called the bailor and
F        the person to whom they are delivered is called the
         bailee. It is clear therefore that when the Board takes
         charge of the goods from the ship-owner, the ship-owner
         is the bailor and the Board is the bailee, and the Board's
         responsibility for the goods thereafter is that of a bailee.
G        The Board does not get the goods. from the consignee.
         It cannot be the bailee of the consignee. It can be the
         agent of the consignee only if so appointed, which is not
         alleged to be the case, and even if the Board be         ar
         agent, then its liability would be as an agent and not as
H
       · a bailee. The provisions of ss. 39 and 40, therefore,
 FORBES FORBES CAMPBELL & CO. LTD. v. BOARD OF 345
   TRUSTEES, PORT OF BOMBAY [RANJAN GOGOi, J.]

      further support the contention that the Board takes charge        A
      of the· goods on behalf of the ship-owner and not on
      behalf of the con,signee, and whatever services it
      performs at the time of the landing of the goods or on their
      removal thereafter, are services rendered to the ship."
                                                                        B
       11. From the above, the position of law which appears to
 emerge is that once the bill of lading is endorsed or the delivery
 order is issued it is the consignee or endorsee who would be
 liable to pay the demurrage charges and other dues of the Port
 Trust authority. In all other situations the contract of bailment is   C
 one between the Steamer Agent (bailer) and the Port Trust
 Authority (bailee) giving rise to the liability of the Steamer Agent
 for such charges till such time that the bill of lading is endorsed
 or delivery order is issued by the Steamer Agent.

       12. In the or-ders of the Calcutta High Court under              D
  challenge, it is mentioned that Section 60 of the Act provides
  a remedy to the Steamer Agent to recover the dues from the
  consignee. Section 60 of the Act of 1963 confers a limited lien
  on the ship owner "for freight and other charges payable to the
  ship owner'' which expression does not extend to demurrage            E
  and other port charges. The High Court, therefore, does not
  appear to be correct in its conclusions. However, the s·aid error
  would not be fundamental to the final conclusion reached by the
. High Court. In this regard we cannot help noticing the special
  provisions of Sections 61 and 62 of the Act which enable the          F
  Port Trust authority to proceed against the goods within its
  custody to recover the charges which may be payable to the
  Port Trust authority. Ordinarily and in the normal course if resort
  is made to the enabling provisions in the Act of 1963 to
  proceed against the goods for recovery of the charges payable         G
  to the Port Trust authority there may not be any occasion for
  the said authority to sustain any loss or even suffer any shortfall
  of the dues payable to it so as to initiate recovery proceedings
  against the ship owners.
                                                                        H
    346          SUPREME COURT REPORTS           (2014] 12 S.C.R.


A       13. In view of the foregoing discussion, all the appeals are
    dismissed and the impugned order~ of the High Court of
    Bombay and Calcutta are affirmed.

    Nidhi Jain                                    Appeals dismissed.
B