(Dhananjaya Y. Chandrachud, Indu Malhotra and Indira Banerjee, JJ.)
Shyama Prasad Mukherjee Port Kolkata Alias Kolkata Port Trust and Another _______________________________________ Appellant(s);
v.
Rajgaria Timber Private Limited and Others __________ Respondent(s).
Civil Appeal Nos 3556-3558 of 2020 [Arising out of SLP (C) Nos 12145-12147 of 2020], decided on October 29, 2020
The Order of the court was delivered by
Order
1. Leave granted.
2. The first and second respondents have filed a writ petition under Article 226 of the Constitution before the High Court at Calcutta where the levy of charges by the Port Trust on a consignment of logs lying within the docks is impugned.
3. The Single Judge was moved with an application for interim relief. By an order dated 21 September 2020, the Single Judge directed that the first and second respondents shall pay an amount of Rs. 25 lakhs to the appellants upon which the Port Authorities shall allow the removal of 50% of the cargo lying within the dock premises, subject to the first and second respondents complying with statutory formalities. The order of the Single Judge noted that the original petitioners imported 737 pieces of wooden logs admeasuring about 3395.625 metric tons which arrived at Kolkata Port on 19 March 2020. The goods have been stored in an area within the dock premises which is licensed by the Port Trust to the third respondent, Alap Carriers. While passing the interim order, the learned Single Judge noted that the case of the Port Trust is that a sum of about Rs. 1.50 crores is due from the first and second respondents as against which the goods (as claimed by the first and second respondents) are worth about Rs. 6 crores. In this background, the Single Judge opined that the release of half of the consignment against the deposit of an amount of Rs. 25 lakhs would secure the interest of the Port Trust. The Port Trust carried the matter in appeal before the Division Bench. By an order of the Division Bench dated 1 October 2020, the first and second respondents have been permitted to remove the entirety of the goods, subject to the payment of an amount of Rs. 50 lakhs.
4. The Port Trust moved this Court under Article 136 of the Constitution.
5. Mr. Mukul Rohatgi, learned Senior Counsel appearing on behalf of the appellants with Mr. Buddy Ranganathan, learned counsel, submitted that the direction of the Division Bench breaches the lien of the Port Trust under Sections 58 and 59 of the Major Port Trusts Act 19631. He submits that by the decisions of this court, the port authorities have been recognized to have a lien on the goods stored in the port area for the recovery of charges, including demurrage and fees. Moreover, it has been submitted that the order of the Division Bench, in fact, places the Port Trust (which was in appeal) in a position which is worse off than under the interim order of the Single Judge. Further, it has been submitted that the licensee of the Port Trust is the third respondent, Alap Carriers, which is alleged to have encroached upon an area larger than what was licensed and it would not be open to the first and second respondents, who have no privity with the Port Authorities, to assert any claim on behalf of the third respondent. Mr. Rohatgi submits that the Circulars of the Ministry of Shipping speak of a deferment (and not a waiver) of port charges.
6. On the other hand, Mr. Siddharth Dave, learned Senior Counsel appearing on behalf of the first and second respondents, submits that the issue before the learned Single Judge in the writ proceedings turns around the circulars dated 5 April 2020 and 28 April 2020. It has been submitted that as a result of the lock down which took place immediately after the goods landed on or about 19 March 2020, they could not be removed from the Port premises and the first and second respondents are entitled to a waiver of rent in terms of the Circulars of the Union Ministry of Shipping. Moreover, Mr. Dave submitted that the first and second respondents should be allowed to clear the entire cargo against a payment of Rs. 75 lakhs (as against Rs. 50 lakhs directed by the Division Bench) and no purpose would be served by allowing the cargo of timber to lie in the dock area. He urged that the Port authorities are refusing to comply with Circulars for the waiver of port charges during the pandemic.
7. The grievance of the Port Trust against the order of the Division Bench is legitimate. The Port Trust has a statutory lien on the goods, for unpaid charges under the provisions of Sections 58 and 59 of the Act. The decisions of this Court in International Airports Authority of India v. Grand Slam International2 and in Om Shankar Biyani v. Board of Trustees of Port of Kolkata3 have authoritatively recognized this principle. The Port Trust was in appeal against the order of the Single Judge directing the release of half the cargo against a payment of Rs. 25 lakhs. The Division Bench in appeal directed the release of the entire cargo against a payment of Rs. 50 lakhs, placing the Port Trust in a position which is worse off than under the interim order. We are hence constrained to interfere with the order of the Division Bench, though it arises in interlocutory proceedings because of the evident error. The Division Bench has ignored the statute, the binding precedents of this Court and acted contrary to judicial norms.
8. The real issue in contest in the writ petition turns upon the interpretation of the Circulars of the Ministry of Shipping. This needs to be resolved by the High Court. During the course of the hearing, we have indicated to the learned counsel that the appropriate course would be to direct the disposal of the writ petition by the Single Judge on an expeditious basis. Accordingly, it has been agreed that this Court may request the Single Judge to dispose of the writ petition within a period of one month from the date of receipt of a certified copy of the present order.
9. That leaves the Court with the question of interim relief. Instead of remanding the proceedings back to the Division Bench for reconsideration of the appeal and since the writ petition has been directed to be disposed of, this Court has heard the rival submissions on an appropriate interim arrangement. Mr. Dave submitted that the consignment of goods may be allowed to be cleared, since the goods were imported for business, subject to the first and second respondents being put on terms. Mr. Rohatgi submitted that if the entire consignment is sought to be cleared, this has to be against the payment of port charges and dues for the entire consignment. There is merit in the submission of the Port Trust. The Port Trust cannot be relegated to pursue the importer for the recovery of its dues after the goods have been cleared and removed from the dock premises. The charges payable to the Port Trust have to be duly paid before clearance in view of the statutory lien over the goods. The error of the High Court was precisely because the interim directions fail to secure the interest and lien of the Port Trust. The issue of whether the first and second respondents are entitled to any remission or waiver in terms of the Circulars of the Ministry of Shipping will be decided in the course of the hearing of the writ petition. If they succeed, consequential directions for refund with interest can follow. On the other hand, if the goods are allowed to be cleared without the payment of port dues, the interests of the Port Trust would not be secured. Hence we are of the view that it would be appropriate to subject the first and second respondents to an order for the payment of the dues which are claimed by the Port Trust, without prejudice to the contentions in the petition pending before the High Court.
10. Mr. Mukul Rohatgi stated that the dues of the Port Trust amount to Rs. 1.35 crores until 27 October 2020.
11. Having regard to the above position, we order and direct that the first and second respondents shall pay to the Port Trust an amount of Rs. 1.35 crores as a condition precedent for the release of the goods. This shall be subject to the first and second respondents complying with all other formalities, including obtaining customs clearance. In the event that the first and second respondents are held entitled to any refund under the final directions of the High Court after the petition is heard, the High Court would be at liberty to direct the refund of the excess amount collected, if any, together with interest.
12. We accordingly allow the appeals and set aside the impugned judgment and order of the High Court. There shall be an order in the above terms. The learned Single Judge is requested to take up the writ petition, being WPA 6810 of 2020, for expeditious disposal, preferably within a period of one month from the date on which a certified copy is placed on the record on the reopening of the High Court after the ensuing Puja recess. The rights and contentions of the parties on the merits are kept open.
13. Pending application, if any, stands disposed of.
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) Nos. 12145-12147/2020
Shyama Prasad Mukherjee Port Kolkata Alias Kolkata Port Trust & Anr _______________________________________________ Petitioner(s)
v.
Rajgaria Timber Private Limited & Ors _______________ Respondent(s)
(WITH IA No. 104281/2020-EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT and IA No. 104285/2020-PERMISSION TO PLACE ADDITIONAL FACTS AND GROUNDS and IA No. 104280/2020-PERMISSION TO FILE ADDITIONAL DOCUMENTS/FACTS/ANNEXURES)
Date : 29-10-2020 These petitions were called on for hearing today.
(Before Dhananjaya Y. Chandrachud, Indu Malhotra and Indira Banerjee, JJ.)
For Petitioner(s) Mr. Mukul Rohatgi, Sr. Adv.
Mr. Buddy A. Ranganadhan, Adv.
Ms. Stuti Krishn, Adv.
Mr. M. Thangadurai, Adv.
Mr. A.V. Rangam, AOR
For Respondent(s) Mr. Siddhartha Dave, Sr. Adv.
Ms. Pallavi Pratap, AOR
Mr. Arvind Kumar Gupta, AOR
UPON hearing the counsel the Court made the following
ORDER
14. Leave granted.
15. The appeals are allowed in terms of the signed reportable order.
16. Pending applications, if any, stand disposed of.
———
1 “Act”
2 (1995) 3 SCC 151
3 (2002) 3 SCC 168
