Full Judgment Text
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PETITIONER:
THE TRUSTEES OF THE PORT OFMADRAS BY ITS CHAIRMAN
Vs.
RESPONDENT:
K. P. V. SHEIK MOHAMED ROWTHER& CO. AND OTHERS
DATE OF JUDGMENT:
11/12/1962
BENCH:
ACT:
Port Trust-Charges to be levied on steamer agents-Labour
supplied by Port Trust not fully or properly utilised-Rate
of charges-Liability of consignee-Madras Port Trust Scale of
Rates, ’E’ scale-Madras Port Trust Act, 1905 (Mad. 2 of
1905) ss. 39, 40, 42.
HEADNOTE:
In exercise of the powers under s. 42 of the Madras Port
Trust Act, 1905, the Trustees of the Port of Mardas, the
appellants, made amendments to the Madras Port Trust Scale
of Rates in 1958. By the amendment, Scale ’E’ was added
under Ch. V and it was to come into force from March 1,
1958. The scale laid down charges to be paid by Masters,
Owners or Agents of vessels in respect of Port Trust labour
requisitioned and supplied but not fully or properly
utilised. These charges were to be on account of the labour
of the Port Trust rendered idle on account of some lapse on
the part of the ship owners or on account of extra payment
to labour for the simultaneous working of more than one hook
at the vessel’s hatch. The labour requisition Form to be
submitted by the steamer-agents was also modified and the
new form contained an undertaking on the part of the
steamer-agents for the payment of the charges laid down in
Port Trust’s scale of rates from time to time in respect of
labour rendered idle or not properly utilised and also for
working more than one hook simultaneously at the hatch. The
respondents, the steameragents, filed petitions before the
High Court of Madras under I’ . 226 of the Constitution of
India, praying for a direction to the Port Trust not to
enforce these rates and not to require the filling in of the
new form, on the grounds, inter alia, (1) that the ship-
owners and the steamer-agents could not be made liable for
charges for short labour employed in the receiving or
removal of cargo and such charges must be borne by the
consignee, (2) the Port Trust had power to impose and
recover rates only or services rendered and that they had no
right to impose charges by way of compensation for default
or to collect
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charges from Masters, Owners or Agents of vessels in respect
of operations not properly falling under the head of
discharge of cargo from the vessel, (3) the compulsion
imposed on steamer agents in the matter of the scale ’E’
rates and in respect of the signing of the requisition for
shore labour was outside the authority conferred by law and
was illegal, and (4) such imposition whether as charges for
services or as compensation for default of steamer agents
was an unreasonable restriction on the fundamental right of
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the petitioners to carry on business as steamer-agents and
was inoperative in law.
Held : (1) The object behind the scale ’E’ rates was to
expedite the discharge of the cargo at the quay and thus to
enable a quantity of cargo to be discharged ’quickly. The
services rendered by the Port Trust were therefore services
to the ship and, consequently, charges for them could be
validity realised from the steamer-agents.
(2) The Madras Port Trust Act, 1905, did not contain any
provision which would constitute the Port Trust an agent of
the consignee for the purpose of the taking delivery of the
goods and the expression "receiving" in cl. (b) of sub-s.
(1) of
s. 39 of the Act did not mean receiving the goods on
behalf of
the consignee.
(3) Under ss. 39 and 40 the Port Trust took charge of
the goods on behalf of the ship-owner and not on behalf of
the consignee, and whatever services it performed at the
time of the landing of the goods or on their removal
thereafter, were services rendered to the ship.
(4) The impugned charges were rightly levied by scale ‘F’
on the Master, Owner or Agent of the vessels and that the
Port Trust could validly insist on the steamer-agent
requisitioning the shorc-labour to express., an undertaking
in the form for requisitioning labour that lie would pay the
charges laid down in the Port Trust’s scale of rates from
time to time in respect of labour rendered idle or not
properly utilised and also for working more than one hook
simultaneously at a vessel’s hatch.
Case law reviewed.
JUDGMENT:
CIVIL APPELLATE JURISDICTION ; Civil Appeals Nos. 187 to 191
of 1962.
Appeals from the judgment and order dated March 3 1961 of
the Madras High Court in Writ Appeal Nos. 53, 54, 55, 56,
and 57 of 1960,
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M. C. Setalvad, Attorney-General for India,
A. V. Viswanatha Sastri, R.Ganapathy Iyer,
V. V. Raghasvan and G. Gopalakrishnan, for the appellants.
S. T. Desai and P. Ram Reddy, for the respondents.
1962. December 11. The judgment of the Court was delivered
by
RAGHUBAR DAYAL, J.-The appellants, the Trustees of the Port
of Madras, hereinafter called the Board, appeal ag-tinst the
order of the High Court of Madras allowing the writ
petitions filed under Art. 226 of the Constitution by each
of the respondents and issuing a writ of mandamus directing
the appellants to forbear from enforcing the scale ’E’ rates
of the Madras Port Trust Scale of Rates and from requiring
the signing of the Shore Labour Requisition Form from the
steamer agent.
The respondents, who are either partnership firms or limited
companies, carry on the business of steamer agents at
Madras. The Board, with the sanction of the Central
Government, made amendments to the Madras Port Trust Scale
of Rates in 1958. By the amendment, scale ’E’ was added
under Chapter V. It was to come into force from March 1,
1958. The scale laid down charges to be paid by masters,
owners or agents of vessels in respect of Port Trust labour
requisitioned and supplied but not fully or properly
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utilised. The charges, for the sake of brevity, may be said
to be on account of the labour of the Port Trust, Madras,
rendered idle on account of some lapse on the part of the
ship. owners or on account of extra payment to labour for
the simultaneous working of more than one work at the
vessel’s hatch. The labour requisition Form to be submitted
by the steamer-agents was also modified and the new form
contained an undertaking
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on the part of the steamer-agents for the payment of the
charges laid down in the Board’s scale of rates from time to
time in respect of labour rendered idle or not properly
utilised and also for working more than one hook
simultaneously at the hatch. These amendments in the scale
of rates were made by the Board in the exercise of its power
under s. 42 of the Madras Port Trust Act, 1905 (Mad. Act 11
of 1905), hereinafter called the Act. This section empowers
the Board to frame a scale of rates at which and a statement
of the conditions under which any of the services specified
in the various clauses of the section shall be performed by
the Board or by a person to whom any service has been
relinquished under s. 41-A of the Act. Thereafter, the
respondents, viz., the steamer-agents, filed petitions under
Art. 226 of the Constitution, in the High Court of Madras,
and prayed for the issue of a writ of mandamus directing the
Board not to enforce these rates and not to require the
filling in of the new form. They contended that (1) the
ship-owners and the steamer-agents cannot be made liable for
charges for shore labour employed in the receiving or
removal of cargo and such charges must be borne by the
consignee (II) s. 39 of the Act provided for -the
performance of services by the Board and the other sections
provided for the imposition and recovery of rates for the
services performed for the vessel and services performed for
the goods. Services in the former category are to be paid
for on behalf of the carrier i. e., by the master, ship-
owner or the steamer-agent, and the services in the latter
category constitute a liability on the consignee ; (iii) the
Board has power to impose and recover rates only for
services rendered and that they have no right to impose
charges by way of compensation for default or to collect
charges from masters, owners or agents of vessels in respect
of operations not properly falling under the head of
discharge of cargo from the vessel ; (iv) prior to 1914, the
steamer-agents acted as landing-agents
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for removing cargo from ship to pier and collected for these
services from the consignees a separate charge known as
’landing charge’ in addition to the freight. When the quays
were constructed and cargo came to be landed there, the
Board took over the landing of goods and collected quay dues
instead of ’landing charges’ which were wholly paid by I he
consignees. These quay dues later on merged in the harbour
dues’ collected by the Board from the consignees; (v)
usually, the steamer agent informs the Traffic Manager the
probable date of arrival of the vessel under his agency,
tonnage hatch-wise of cagro to be landed at Madras and the
number of hatches proposed to be worked. Under the revised
procedure adopted by the Board on August 1, 1957, before a
ship has reached its berth, the steamer agent is required to
make an application and a deposit in his current account to
cover charges for the working of the vessel in respect of
overtime, supply of cranes, water and appliances and from
March 1, 1958, to meet the scale’ ’E’ contingencies also ;
(vi) the operation which goes on at the quay is described
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thus : After the Port Trust pilot brings the vessel to the
berth alloted to her :
"The stevedore labour supplied by the Madras Dock Labour
Board, a statutory body, board the vessel, prepare the
slings in the holds or hatches, work the ship’s winches and
the cargo is hoisted on the quayside. When the sling rests
on the shore or in the barge in the case of discharge at
moorings, the shore labour unsling the cargo and the Trust’s
Tally Clerk notes the items in a tally sheet. As each sheet
is closed a duplicate copy of the import tally sheet is
given to the steamer agent’s representative on the spot.
This duplicate copy is the receipt prescribed under section
39 (3) of the Madras Port Trust Act...... The shore labour
remove the cargo from the point of landing
920
to the shed or open for stacking and subsequent delivery of
the goods from the Trust to the consignee. The consignee
obtains delivery order from the Steamer agent and then files
Harbour Import Application with the Trust for payment of
Harbour dues and Bill of Entry with the Customs for the duty
payable by him. On payment of the duty and the harbour dues
by the. consignee the cargo is delivered to him by the
Trust."
(vii)The Board adopted the piece-rate scheme for the Dock
workers in pursuance of the report of the jeejeebhoy
Committee and the new scale ‘E’ rates are a part of such a
scheme. (viii), Prior to March 1, 1958 the cost of shore-
labour was met entirely by the Port Trust. No distinction
was made between the charges for shore labour in ordinary
cases and charges for shore- labour in respect of idle, time
or additional work. (ix) Under the scheme which was brought
into force on March 1, 1958, charges for shore labour in the
contingencies covered by the scale ’E’ have been excluded
from Harbour dues. These charges are now treated as charges
for which the steamer-agent is made responsible. (x) The
compulsion imposed on steamer agents in the matter of
payment of the scale ’E’ rates and in respect of the signing
of the requisition for shore labour is outside the authority
conferred by law on the trustees of the Port of Madras and
is illegal. Such an imposition whether as charges for
services or as compensation for default of steamer agents is
illegal and an unreasonable restriction on the fundamental
right of the petitioners to carry on business as steamer
agents and is inoperative in law. (xi) the Port Trust
authorities receiving goods on the quay or in the barge at
moorings, do so on behalf -of the consignee.
The Board, by the common counter-affidavit filed on its
behalf by the Deputy Traffic Manager of the
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Madras Port Trust, admitted the direct arrangements between
the ship-owner, master, or agent with the stevedores but did
not accept the allegations about the nature of the various
rates and duties levied and the legal position as stated in
the petitions. According to the Board, (i) the Harbour dues
on the import cargo under scale A, Chapter II of the Scale
of Rates, are payable on tonnage and include, beside
overhead, a nominal rent for storage for a specified period
etc., and the item of charges for porterage involved in
moving the goods from the landing point to the storage or
stacking point. (ii) It is not correct that the ship-owner
has nothing to do with the import cargo after it has been
landed by the stevedores at the landing point on the quay,
as the ship-owner in each case by the bill of lading has to
deliver the goods to the consignee named in the bill of
lading or his nominee and he remains liable under his
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contract until he has delivered the goods to the person who
is entitled to take delivery of the goods. (iii) Under
s. 39 of the Act the Port Trust gives facilities and
undertakes certain services. One of such services is the
moving of the goods from the landing point to the storage or
stacking point and thereafter delivering the goods to the
persons entitled under the bill of lading. The Board does
not undertake the unloading of the goods from the ship to
the quay. The ship-owner makes his own arrangements through
the stevedores, though the Board is authorised to undertake
such services on behalf of the ship-owner. It is a service
to the ship-owner by the Board to give the ship-owner a
receipt for the goods to keep them in custody and deliver to
the consignee. The services undertaken in respect of the
import cargo till they have been moved to the storage or
stacking point are services to the ship-owner for which the
ship-owner or master or steamer agent is primarily liable
and the charges may properly and legally be levied from
them. (iv) The Board collects the harbour dues from the
consignee at the time of giving delivery, but in fact
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makes that collection as agent of the ship-owner,
master, steamer agent who are primarily the persons
liable for the dues. (v) The Board is entitled to
collect the harbour dues from the ship-owner, master
or steamer agent. (vi) The issuance of a receipt to
the master at the landing point is a mere matter of
convenience for betokening the fact that the goods
have been handed over to the Port Trust for removal,
storage and delivery and does not in any way detract
from the fact that the subsequent services are
facilities
and services rendered to the’ ship-owner in respect of
the goods which are the subject of contract of carri-
age by the ship-owner. (vii) The past practice had
been for the agents to inform the Board about the
shore labour which would be necessary for moving
the goods in respect of each steamer. Prior to 1956,
this was done orally and then the Form was intro-
duced which contains the same particulars except
the undertaking to pay the scale ’E’ charges as the
impugned Form now contains. Since the enforce-
ment of the new piece-rate scheme, the payment to
labour was not based on tonnage but a daily wage
was fixed along with a provision for payment for
idle time and hook allowance for working two or
three hooks simultaneously at a vessel’s hatch.
(viii) The proper utilisation of the time of the
labour depends upon the steamer agents first giving
a proper anticipation and shift at which they were to
be put on the job being the time when the cargo will
be ready for removal and, secondly, there giving a
continuous supply of cargo for removal so that there
is no gap in the work. (ix) The levy of multiple
hook allowance against the steamer agents is a facility
to the ship to discharge fast and sail quicker. When
two or more hooks work in a ship’s hatch, the gangs
handling cargo will not be in a position to handle
more cargo and therefore the approval of Board was
obtained for payment of an allowance to compensate
such loss in their earnings. As working of additional
hooks in a vessel’s hatch benefits the ship, the
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recovery of hook allowance from the steamer agents under
scale ’E’ is legitimate. (x) The additional charge made
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under scale ’E’ is a charge in respect of facilities
afforded to and services undertaken on behalf of the ship-
owner, master, agent by the Board in relation to the cargo
which is under contract of carriage by them, in the same way
as harbour dues.
To understand the exact nature of the impugned charges, it
is necessary to quote the scale ’E’ charges to which
objection is taken :
SCALE E-Charges Against Masters, Owners, or Agents of
Vessels in respect of Port Trust Labour requisitioned and
supplied but not fully or properly utilised
Item Classification for purposes
no. of this Scale
1. Port Trust Mazdoors rendered idle on account of the
breakdown of ship’s winches, wrigging of ship’s derricks,
shifting of cranes at the request of the steamer agents or
stevedores, cargo not being ready for shipment, completion
of loading and/or unloading before the end of the shift,
late arrival of vessel at the berth or for any other reason
which is attributable to the vessel and is beyond the
control of the workmen.
Note : Idle time will be calculated as follows
Charges Payable
64 nP. per mazdoor per hour in the case of 8 hr. shifts and
at 80 nP. per hour in the case of 6-1/2 hr. shifts.
924
item Classification for purposes
no. of this Scale
Any continuous stoppage of work of 15 minutes or under shall
be ignored and any continuous stoppage in excess of 15
minutes and up to 30 minutes shall be counted as 30 minutes.
If the said continuous stoppage continues in excess of 30
minutes the actual excess rounded off to the next quarter
will be calculated as idle time. For example, if there is
continuous stoppage for 35 minutes, the idle time will be
calculated as 45 minutes.
2. Port Trust Mazdoors sent
away or not required after
shore work shall have thereof or Rs. commenced at the start
of 2.50 per half shift
each shift. or part thereof.
3. Allowances for working Rs. 1.25 for each
of two hooks simultane- mazdoor (Madras
ously at a vessel’s hatch. Port Trust Shore
Mazdoor) employ-
ed at the hooks.
4. Allowances for working of Rs. 1.66 for each
more than two hooks Madras Port Trust
simultaneously at a vessel’s Shore Mazdoor
hatch. employed at the
hooks.
N. B.-One hour’s clear notice in writing must be
given of cancellation of labour requisitioned
Charges Payable
Rs. 5 per mazdoor
per shift or part
925
for work at hooks. If cancellation orders are not received
in time, charges will be levied for the full period
requisitioned.
Note : The above amendment will take effect from the date of
Introduction of the Piece-Rate Scheme, viz., March 1, 1958.
Sd/-etc.
A circular Exhibit-B was issued by the Board to all the
steamer agents on February 25, 1958, explaining the features
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of the Piece-Rate Scheme for Dock and Stevedore works for
the Port of Madras. The Board emphasized that the Piece-
Rate Scheme was formulated to increase the out-turn of
vessels and sought the cooperation of the steamer agents and
the stevedores in the implementation of the scheme and
making it a success.
The salient features of the scheme in respect of payment of
wages to the workers show that, under the scheme, the worker
is assured of a minimum daily wage and that, the actual
earnings for a day really depend on his output per shift,
they being linked with productivity. A gang of workers
consists of one maistri and 14 workers. They handle the
goods at a particular point, say a hook. Datum lines have
been fixed for different kinds of cargo per hook per shift.
’Datum lines’ means the ’standard output’ of the work to be
performed by a gang in a particular hook during a shift.
The output is calculated in deadweight tons. Thus a daily
wage rate as well as a wage rate for standard output have
been fixed for all categories of workers who have been
classified in five categories, one of which is the Port
Trust Shore Labour. If the ’workers produce more than the
datum lines, they are entitled to the increased wage rate.
There is steady increase in the earnings
926
if the output exceeds the 100% of the datum tonnage and at
150% the worker gets twice his daily wage rate and at 200%
the piece rate wage is thrice the daily wage rate.
These features of the scheme sufficiently indicate the
significance of ’idle time’ for the workers. If, during a
shift, the workers are not actually employed on the job for
which they are engaged and have to remain idle, their output
of work during that shift, on the basis of tonnage, is bound
to be less and, consequently, their earnings would be less
than what they could be if they had been continuously
employed during the shift. To compensate such loss in
earnings due to the time of the workers remaining unemployed
idle allowance is granted for such time during which the
workers are rendered idle for reasons beyond their control
for periods in excess of 15 minutes. The circular shows
that idle allowance is paid at the daily wage rate for the
following reasons :
(i) breakdown of cranes or winches.
(ii) shifting of quay cranes or rigging of ship’s derricks.
(iii) cargo not ready for shipment
(iv) late arrival of vessels at the berth
(v) completion of loading and/or unloading before the end
of the shift
(vi) actual rain-time during shift working hours, and
(vii) any other reason beyond the control of the workmen
except slow work on the part of the workmen covered by this
scheme.
Item No. I of scale ’E’ charges makes the idle a1lowances,
for reasons nos. (ii) to (v) and for
927
breakdown of ship’s winches mentioned in reason (i),
chargeable against masters, owners or agents of vessels who
control matters giving rise to those reasons.
The workers are also paid multiple hook allowance. They are
entitled to "hook allowance’ at the rate of 1/4th of the
daily wage if two hooks work simultaneously at a hatch and
1/3rd of the -daily wage, if more than 2 hooks work at a
hatch. One gang of workers handle goods at one point, i.e.,
at one hook.. If several hooks are simultaneously worked at
the vessel’s hatch, an equal number of gangs of workers will
be employed to handle the goods. The result is that the
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output per gang is proportionately reduced and consequently
its earnings are reduced. There may be further reduction in
earnings if the cargo is discharged during half-shift. It
is to compensate such losses that under the piece-rate
scheme, the workers are paid hook allowance.
The simultaneous working of more than one hook at the hatch
of a ship helps the ship to discharge cargo fast and sail
away quicker. The hook allowance is charged against the
master, and steamer. agents of the ship as the working of
additional hooks benefits the ship.
The writ petitions were disposed of by a learned Single
judge of the High Court. He dismissed them holding that the
liability to pay the charges.- being for services rendered,
the charges could be imposed only on the person to whom that
service is rendered, that the entrustment of the goods to
the Board is by the shipping agent though the entrustment is
for ultimate delivery of the goods to the consignees and
that the service is rendered to the shipping agent even
though the consignee also benefits by that service and it
Was not necessary for imposing the liability that
928
the shipping agent must exclusively benefit from the service
rendered.
On appeal, the appellate Bench reversed the order, allowed
the petitions and issued a writ of mandamus as prayed. It
held that the Board had no authority to introduce the new
scale ’E’ rates payable by the master, owner or agent of the
vessel, -that the ship-owner’s liability ends when the goods
had been put over the rail of the ship and from the moment
the goods are put within the reach of the Board employees to
take charge of them and tally clerk passes the receipt on
behalf of the Board. The services in respect of which the
new charges are sought to be levied cannot be deemed to be
services rendered to the master, owner or agent of the
vessel. They must be deemed to be services rendered to the
consignee. The purpose of the requisition by the steamer
agent was really to avoid delay and consequent congestion
and, generally, for the convenience of the Board. The
requisition must be treated as one on behalf of the
consignees because it is not part of the duty of the steamer
agents to take delivery.
The contentions raised before us for the parties are the
same as were urged in the Courts below and will be mentioned
when dealt with later.
Before we deal with the contentions of the parties, we may
refer to the various provisions of law having a bearing on
the question before us. Clause (7) of s. 5 of the Act
states that ’owner’, when used in relation to goods,
includes any consignor, consignee shipper or agent for the
sale, custody, loading or unloading of such goods. Section
39 provides for the performance of services by the Board and
reads:
,,(I) The Board shall, according to its powers, provide all
reasonable facilities for and shall have power to undertake
the following services:--
(a) landing, shipping, or transhipping
929
passengers and goods between vessels in the port and the
wharves, piers, quays or docks in possession of the Board;
(b) receiving, removing, shifting, transporting,, storing
or delivering goods brought within the Board’s premises;
(c) carrying passengers by rail, tramway or otherwise
within the limits of the port, subject to such restrictions
and conditions as the Central Government may see fit to
impose; and
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(d) receiving and delivering, transporting and booking and
despatching goods originating in the vessels in the port and
intended for carriage by the neighbouring railways, or vice
verse, as a railway company or administration under the
Indian Railways Act. 1890.
(2) The Board shall, if so required by the owner, perform
in respect of goods all or any of the services mentioned in
clauses (a), (b), and (d) of sub-section (1), provided that
the Board shall not be bound to perform any service which it
has relinquished under the provisions of clause (a) of sub-
section (1) of section 41-A.
(3) The Board shall, if required, take charge of the goods
for the purpose of performing the service and shall give a
receipt in the form and to the effect prescribed from time
to time by the Central Government.
After any goods have been taken charge of and a receipt
given for them under this section no liability for any loss
or damage which may occur to them shall attach to any person
to whom a receipt shall have been given or to the
930
master or the owner of the vessel from which the goods have
been landed or transhipped."
Section 40 laying down the responsibility of the Board for
loss etc., of goods reads:
"(l) The responsibility of the Board for the loss,
destruction or deterioration of goods of which it has taken
charge shall, subject to the other provisions of this Act
and subject also in the case of goods. received for carriage
by railway to the provisions of the Indian Railways Act,
1890, be that of a bailee under sections 151, 152 and 161 of
the Indian Contract Act, 1872, omitting the words ’in the
absence of any special contract’ in section 152 of the last-
men-
tioned Act. Provided that, till the receipt
mentioned insub-section (3) of section 39-is
given by theBoard, the goods shall be at the
risk of the owner.
(2) The Board shall not be in any way responsi-
ble for loss of or damage to goods of which it
has taken charge, unless notice of such loss or
damage shall have been given within one month of the date of
the receipt given for the goods under sub-section (3) of
section 39."
Section 41-A deals with relinquishment of services subject
to the control of the Central Government and sub-s. (1) of
s. 41 provides that any person to whom any or all of the
services under cls. (a) and (b) of sub-s. (1) of s. 39 has
or have been relinquished unders.41-A, shall, if so required
by the owner, perform in respect of goods ’any of the
services so relinguished add for that purpose take charge of
the goods and give a receipt in the form and to the effect
prescribed from time to time by the Central Government.
931
Section 42 which deals with the scale of rates,
reads
"The Board shall frame a scale of rates at which and a
statement of the conditions under which any of the services
specified hereunder shall be performed by itself or by a
person to whom any service has been relinquished under
section 41-A or partly by one and partly by the, other:-
(a) Transhippingof passengers ox goods
;
between vessels in the harbour;
(b) landing and shipping, of passengers or goods from or to
such vessels to or from any wharf, quay, pier, dock, land or
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building in the possession or occupation of the, Board or at
any place within the limits of the port;
(c) cranage or porterage or goods on any such place;
(d) wharfage, storage or demurrage or goods on
any such place;
(e) any other service in respect of vessels,
passengers or goods excepting the services in respect of
vessels for which fees are chargeable under the Indian Ports
Act, 1908 (XV of 1908)."
Section 44 provides that every scale and every statement of
conditions framed by the Board under ss. 42, 43 or 43-A
shall be submitted to the Central Government for sanction,
and when sanctioned and published, will, have the force of
law. Sections 45 and 46 provide for the enhancement of the
rates by the Board and the Central Government, if the Board
fails to do so, respectively.
932
Section 50 provides that the rates in respect of goods to be
landed shall be payable immediately on the landing of the
goods and those in respect of goods to be removed from the
premises of the Board, or to be shipped for export, or
transhipped, shall be pay-able before the goods are removed
or shipped or transhipped. Section 51 gives the Board a
lien on the goods for the amount of the rates leviable under
the Act in respect of any goods and for the rent due to the
Board on any buildings etc., in which those goods had been
placed. Section 52 provides for the priority of this lien
of the Board over certain other liens and claims. Section
53 provides for the preservation of lien for freight or
other char es including landing charges payable to the ship
owner after the
the Board. Section 54 provides for the retention of such
goods in the custody of the Board at the risk and expense of
the owners of the said goods until such lien is discharged
and also provides that the godown or storage rent would be
payable by the party entitled to such goods for the time
during which they may be so retained.
Section 56 provides for the sale of goods after two months
if rates or rents are not paid or lien for freight is not
discharged. Section 57 provides for the publication of the
notice for sale in the case of perishable goods in the
custody of the Board, in the Gazette and section 58 provides
for giving notice to the owner of the goods of his address
is known. Section 59 provides as to how the sale proceeds
are to be applied. It is to be applied in the payment of
the expenses of sale in payment of the liens and claims
excepted in s. 52 from the priority of the lien of the Board
and in payment of the rates and expenses of landing,
removing, storing or warehousing the same, and of all other
charges due to the Board in respect thereof.
goods are landed and the lien for frieght or charges
takes priority over the aforesaid lien of
933
The Board framed by-laws in exercise of the powers conferred
by s. 95 of the Act. By-law no. 2, provides for the
regulation of admission to the harbour premises by means of
permits etc. They are to be issued to such of the public as
have business to transact within the premises in somewise
connected with the purposes, services or works of the
harbour. By-law -no. 3 provides that the master, owner or
the agent of a vessel carrying cargo for discharge at the
Port of Madras shall furnish the Traffic Manager, Port
Trust.- within not less than six clear working days a true
copy of the complete Import General Manifest before being
permitted to break bulk. The manifest is to show full
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details of each consignment manifested, including litreage
in the case of liquids in bulk and gross weight in kilos in
other cases. Non-submission of such manifests within the
stipulated time may result in the vessel concerned not being
permitted to break bulk.
By-law no. 4 provides that no goods maybe landed or shipped
except at places appointed by the Port Trust for each class
of cargo. By-law 4-A provides that if any vessel discharges
upon any wharf or property of the Port Trust any cargo in
such a rotten condition as to be a nuisance or injurious or
dangerous to health, the Traffic Manager, Port Trust, may
require the consignee thereof or if the consignee should
disclaim, deny or dispute the consignment or decline all
responsibility for the same or if there should be no
consignee , the owner, master or
agent of the vessel from which the same had been discharged,
to forthwith cause the said cargo or goods or substance to
be removed from the property of the Port Trust and, on the
failure of such persons to have the goods removed, to have
the removal effected by the Traffic Manager in such manner
as he may think fit, or cause the same to be destroyed, and
to demand the expenses incurred from the said consignee or
the said master, owner or agent as the. case may be.
934
By-law no. 5 provides that when the Port Trust undertakes
the reception, removal, porterage or storage of cargo
under s. 39 of the Act, it shall deliver it or permit its
shipment after all dues shall have been paid and that in the
case of cargo of which the Port Trust does not elect to
undertake such services, no steamer agent, shipper or
consignee may remove any part of such cargo from the
harbour premises until authorised by the Port Trust so to do
after dues shall have been paid. By-law no. 6 provides that
harbour dues on goods landed, together with any other
charges incur-red under the Port Trust Scale of Rates, shall
be paid before removal of the goods from the harbour
premises. By-law no. 7 provides that all applications for
permission to export or import goods shall be on approved
forms and that such forms shall be filled in and signed by
the shipper or consignee of the goods or by his agent.
We may also refer to the Manual of Instructions issued by
the Board for the Traffic Department. Mr. Desai has urged
that the Manual should not be looked into as it is not part
of the record. Strictly, this is correct, but whatever
extra is contained in the instructions is really
amplification or explanation of facts already on record, in
the affidavit and the common counter- affidavit filed on
behalf of the parties. We can look at the manual of
instructions for this purpose. The instructions provide
that agents of vessels will inform the Traffic Manager of
the probable date of arrival of their steamers and that the
Traffic Manager will note his requirements for a quay or a
mooring berth on such notice. Instruction no. 3 states that
the authority from the steamer agents as bailors to the
Trust as bailee to deliver goods may take the form of an
endorsement by the steamer agents on the bill. of lading and
that a bill of lading presented without the steamer agent’s
endorsement cannot be accepted. Instruction no. 4 deals
with the tally sheet and is in these terms
935
"’The Form prescribed by the Local Government under section
39(3) of the Madras Port Trust Act for cargo landed into the
custody of the Port Trust. The original copy serves the
Trust as its record. The duplicate copy, the prescribed
receipt, is handed to the tenderer immediately the form has
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been entered up with the marks, numbers, description (as far
as possible) and other particulars, such as outward
condition of each individual package and signed by a Port
Trust Tally Checker. Great care must be exercised in
entering up Tally Sheets as they are the only records for
the settlement of claims between the tenderer and the Port
Trust and contribute largely towards smooth working. Tally
sheets are kept in the Traffic Sections for 28 days after
the departure of a vessel and are then filed in the
Application Section in the Office of the Assistant Traffic
Manager (Shipping).
x x x x x x x x
Instruction No. 5 deals with receipting and provides
"’As each tally sheet which is prepared in duplicate with
carbon paper is completely filled-in, it should be signed by
the Port Trust Tally Checker and the Steamer Agent’s
representative and the duplicate copy should be handed over
to the latter on the spot. This constituted the receipt
under s. 39(3) of the Act."
Instruction no. 26 states that the Trust grants delivery of
cargo on the authority of delivery orders granted by the
steamer agents as bailors. This authority may take the form
of an endorsement by the bailor on the bill of lading or a
separate delivery order on the Trust issued by the bailor.
It is to be noticed from the various provisions of the Act
that they do not make it obligatory on the
936
part of the Board to undertake the various services
mentioned in s. 39 of the Act.
Section 39, already quoted, empowers the Board
firstly, to provide all reasonable facilities, according
to its powers, for the services mentioned in the
various clauses of sub-s. (1), and secondly, empowers the
Board to undertake those services. The Board is thus
enabled to undertake those services. Sub-section (1) does
not make it a duty of the Board to undertake those services.
It is only by virtue of sub-s. (2) that the Board is to
perform in respect of goods, if required, all or any of the
services mentioned in cls. (a), (b) or (d) of sub-s. (1),
those services being in connection with the landing of goods
between vessels in the port and the wharves, piers, quays or
docks in possession of the Board and in connection with the
receiving, removing, shifting, transporting, storing or
delivering of goods brought within its premises and
despatching goods intended for carriage by neighbouring
railways. Sub-section (3) again says that the Board is to
take charge of the goods for the purpose of performing the
services, if required to do so, and, in that case, the Board
is to give receipt in the form and to the effect prescribed
by the Central Government. It is therefore clear that the
performance of any of the services mentioned in sub-s. (1)
of s. 39 and the taking of charge of the goods are
consequent on the Board being required to do so by the
’owner’, which is a general term including consignor,
consignee, shipper or agent. If the owner does not require
the Board to undertake such services and to take charge of
the goods for these purposes, the Board is not to undertake
those services.
It is the steamer-agent, who is in a position to require the
Board to undertake these services in respect of the cargo
the ship is to unload. He alone is respected to have full
knowledge about the time when the ship is to arrive, about
the suitability of the berth
937
for that ship, about the quantity and nature of the
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consignment and about the time the ship would like to be in
the dock and consequently about the amount of shore-labour
required in connection with the goods to be landed. It is
for this reason that it is the steamer-agent who informs the
staff of the Board about the arrival of the ship’ who has to
furnish the manifest giving details of the goods to be land-
ed and who has to submit a requisition about the shore
labour required and the period of time during which it would
be required. It is admitted for the parties that the
steamer-agent used to convey the information about the
necessary shorelabour and about the period when it was
required. The new Form of requisition introduced’ from
March 1, 1958, contained an undertaking by the steamer-agent
for the payment of the labour dues on account of labour
remaining idle or on account of labour working more than one
hook simultaneously. This was introduced in the Form
because such payments were newly introduced and added to the
charges which used to be collected by them on the basis of
tonnage handled by the shore-labour and possibly also on
account of the anticipated objection on the part of the
steamer-agents to their liability to pay these charges. The
liability to pay these charges, however, does not arise on
account of the undertaking but on account of the sanctioned
scale of rates at which and the conditions under which the
Board would perform those services. Section 44 of the Act
provides that such sanctioned rates and conditions shall
have the force of law.
The question for determination, in the case, then is whether
the law making the steamer-agent liable to pay these charges
is good law.
The learned Attorney-General has urged, for the appellant,
that the object behind the scale ’E’ rates is to expedite
the discharge of the cargo at the
938
quay and thus to enable a quantity of cargo to be
discharged quickly. The services rendered, by the
Board are therefore services to the ship and, cons-
equently, charges for them are to be realised from the
steamer-agents.
It is also urged that the harbour dues are collected from
the consignees as the Board is a bailee of the ship-owner
who is a bailee of the shipper and who is bound by the
contract to deliver the goods to the consignee or his
nominee, on the presentation of the bill of lading, The
Board’s taking charge of the goods landed does not amount to
its taking delivery of the goods from the ship-owner in
fulfilment of the ship-owner’s duty to deliver the goods to
the consignee, for the simple reason that the Board does not
get the goods on the presentation of the bill of lading.
There is no doubt that the object of the impugned charges is
what is urged for the appellant. The charges are for labour
rendered idle on account of some default on the part of the
ship-owner or his agent and not on account of anything
-which is within the control of the workmen. We have
already refer-red to the features of the piece-rate scheme
showing the necessity for the payment of the idle allowance
of the workers for labour rendered idle. Similar considera-
tions justify the payment of that allowance when labour is
sent away or not required after the shore work has commenced
at the start of the shift.
When more than one hook is worked at the same time, it
necessarily means quicker unloading of the goods. This,
again, is in the interest of the shipowner. The ship
completes its task of landing’ the goods earlier. The
provision for the workers working more than one hook at the
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same time is therefore again in the interest of the ship-
owner.
Another reason for charging the steamer-agent for these
payments is that the goods unloaded by the
939
ship need not be for one consignee alone. The goods are not
unloaded consignee-wise. It is not possible, and if
possible is bound to be very inconvenient, for the Board to
work out the proportionate charges for each consignee, in
connection with the payment for idle allowance and the hook
allowance when cargo is discharged with more than one hook
working simultaneouly at the vessel’s hatch. It is
reasonable therefore to make the ship-owner liable for their
payment.
There is no doubt that the ship-owner is the bailee of the
shipper, the consignor, and that he is responsible for the
delivery of the goods to the consignee or a transferee
according to the terms of the bill of lading. This duty the
ship-owner discharges only when he has delivered the goods
to the consignee or such person who be entitled to take
delivery in accordance with the endorsements on the bill of
lading. Delivery to the Board is not delivery to the
consignee or such person, both because the delivery is to be
on the presentation of the bill of lading and because the
Act contains no provision which would constitute the Board
an agent of the consignee for the purpose of taking delivery
of the goods.
We, do not agree with the contention for the respondents
that the expression ’receiving’ in cl. (b) of sub-s. (1) of
s. 39 of the Act means receiving the goods on behalf of the
consignee. The reception of the goods can be on behalf of
the ship-owner also. The steamer-agent cannot ask the Board
to receive the goods on behalf of the consignee.
Sub-section (3) of s. 39 of the Act empowers the Board to
take charge of the goods for the purpose of performing
certain services which do not include the taking delivery of
the goods from the ship-owner. It is true that on the
Board’s taking charge of the goods and giving a receipt
about it to the ship-owner, the master or the owner of the
vessel is absolved from
liability for any loss or damage which may occur to
the goods which had been landed, but this provision
by itself does not suffice to convert the receiving of
the goods by the Board after they had been landed by
the ship-owner to the Board’s taking delivery of
those goods on behalf of the consignee. The Board
simply takes charge of the goods on being required by the
steamer-agent to take charge of it.
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 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 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. 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,
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which is not alleged to be the case, and even if the Board
be an agent, then its liability would be as an agent and not
as a bailee. The provisions of ss. 39 and 40, therefore,
further support the contention that the Board takes charge
of the goods on behalf of the ship-owner and not on behalf
of the consignee, 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.
We may now deal with the points urged by Mr. Desai, for the
respondents. The first and the
941
main question urged is about the legal obligation. of the
master in respect of the unloading of the cargo.
Mr. Desai has drawn attention to the provisions of the
Indian Carriage of Goods by Sea Act, 1925 (Act XXVI of
1925), and especially to the definition of the expression
’carriage of goods’ in Article I of the Schedule to that
Act. ’Carriage of goods’ according to cl. (e) of this
Article, covers the period from the time when the goods are
loaded on to the time when they are discharged from the
ship. Of course, once the goods are landed, they are no
more "carried’ by the ship and the expression "carriage of
goods’, could only cover the period up to the discharge of
the goods from the ship. But that does not in any way
affect the consideration of the questions before us.
Further, Rule 6 of Article III provided that unless notice
of loss or damage and the general nature of such loss or
damage be given in writing to the carrier or his agent at
the port of discharge before or at the time of the removal
of the goods into the custody of the person entitled to
delivery thereof under the contract of carriage, or, if the
loss or damage be not apparent, within three days, such
removal shall, prima facie, be evidence of the delivery by
the carrier of the goods as described in the bill of lading.
This implies that till the time of the removal of the goods
into the custody of the person entitled to the delivery
thereof under the contract of carriage, the carrier will not
be deemed to have delivered the goods in accordance with the
terms in the bill of lading. The responsibility of the
carrier for the goods does not cease merely by the technical
discharge of the goods from the ship but continues up to
their delivery in accordance with the terms of the bill of
lading.
It is urged by Mr. Desai that under the general law, the
responsibility of the master of the ship ceases when he has
discharged the goods from the ship and has placed them in
such position that the consignee
942
can take charge of them and that whatever -is done,
thereafter, in connection with the goods, is done on behalf
of the consignee and for his benefit.
The charges for labour rendered idle and for labour working
more hooks simultaneously, are not charges for services
rendered subsequent to the landing of the goods. These are
charges which are incurred at the last stage of the process
of landing of the goods and therefore prior to the actual
landing of the goods. They are, even under the general law,
for services rendered to the master of the ship whose
liability for loss or of damage to the goods continues up to
the placing of the goods on the quay and their receipt by
the Board.
The case Great Eastern Shipping Co. Ltd. v. Govindasamy (1),
is not of much help. It was not disputed, in that case,
that when, the master of the ship lands the goods and leaves
them in charge of the Port Trust the legal effect is as if
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the master representing the shipping company has delivered
the goods to the consignee for whom the Port Trust must be
deemed to be agents and that, having regard to the practice
obtaining in the Madras Port, it was not necessary that
there should be a formal requisition by the consignee to the
Port Trust to take charge of the goods. This case has not
been taken rightly by the Court below to be of any direct
authority on the question arising for decision in this case.
It is stated at p. 684, in Carver’s Carriage of Goods by
Sea’, 10th Edition, that generally speaking, the consignee
of the goods or the charterer is bound to remove the goods
from the ship’s side, and to provide for that purpose a
proper number of men and suitable appliances of the kind
ordinarily used at the port, having regard to the manner in
which the ship is to be discharged. It is stated at p. 687
"Where the customary manner of discharge at
the port requires that the cargo be put out by
(1)I.L.R. [1957] Mad. 840.
943
those working on the ship, say into lighters or on to a
quay, it has been held that the word " alongside’ may mean,
not actually at the ship’s side but in a lighter alongside
her."
We may now consider some cases on which reliance is placed
for the respondents.
In Peterson v. Freebody & Co. (1), the facts were different
from those of the present case. The Court was considering
the liability of the consignee for demurrage paid by the
ship-owner, on account of the delay in the discharging of
the cargo. The suit was between the ship owner and the
consignee. The charter-party provided:
"The discharging to take place in eight days... The cargo to
be brought to and taken from alongside the ship at
merchants’ risk and expense. The ship to deliver the cargo
with such dispatch that unnecessary delay can be avoided.
The ship to discharge over side in the river or dock into
lighters or otherwise, if required by consignees."
Lord Esher, M. R., stated at p. 297
"’Wherever the delivery is to be, the shipowner, on the one
hand, must give delivery. If he merely puts the goods on
the rail of his ship, he does not give delivery : that is
not enough. If, on the other hand, the consignee merely
stands on the other ship, or on the barge or lighter, or on
the quay, and does nothing, he does not take delivery. The
shipowner has performed the principal part of his
-obligation when he has put the goods over the rail of his
ship; but I think he must do something more-he must put the
goods in such a position that the consignee
(1) [1895] 2 Q.B.D. 294, 296, 297.
944
can take delivery of them. He must put them so far over the
side as that the consignee can begin to act upon them; but
the moment the goods are put within the reach of the
consignee he must take his part in the operation. At one
moment of time the ship-owner and the consignee are both
acting-the one in giving and the other in taking delivery;
at another moment the joint act is finished."
These observations apply when the goods are to be delivered
to the consignee alongside the ship and not when they are
-handed over to the Statutory body, like the Board, as a
sub-bailee. How the delivery is to be made depends on the
terms of the bill of lading and the custom of the Port. The
case is no authority for the proposition that in all
circumstances the master of the vessel is not responsible
for the performance of the acts subsequent to his placing
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the goods in such a position that the consignee can get
them, as contended for the respondents. The delivery
contemplated in these observations, is not, in our opinion,
equivalent to the landing of the goods at the quay as
contemplated by the various provisions of the Act.
We have already discussed that the landing of the goods by
the ship-owner on the quay and placing them in charge of the
Board does not amount to delivering them to the consignee,
even though it absolves the master of the ship from further
responsibility for the loss or damage to the goods.
The case reported as British Ship-owners’ Co. (Limited) v.
Grimond (1), is again, not of help, as it simply held that
delivery to the porters., whom the consignee was obliged by
the Harbour Regulation to employ and pay for the purpose of
receiving, was delivery to the consignee. In the present
case there is nothing to show that the consignees are
obliged by
(1) (1876) III Ses. Oases IV Series 968.
945
the Board to engage the shore-labour. Further, in the above
case, Lord justice Clerk said at p. 972
"The question of delivery is as much one of common-sense as
of technical rules. The general rule is that goods are
delivered when they are so completely in the custody of the
consignee that he may do as he pleases with them."
When the goods are placed in the charge of the Board, the
consignee is not at liberty to do anything he likes with
them and therefore, in the view expressed by Lord Justice
Clerk, the making over of the goods to the Board does not
amount to delivery to the consignee.
In Sze Hai Tong Bank Ltd. v. Rambler Cycle Co. Ltd., (1) it
was said :
"It is perfectly clear. law that a ship-owner who delivers
without production of the bill of lading does so at his
peril. The Contract is to deliver, on production of the
bill of lading, to the person entitled under the bill of
lading..... The’ shipping company did not deliver the goods
to any such person. They are therefore liable for breach of
contract unless there is some term in the bill of lading
protecting them. And they delivered the goods, without
production of the bill of lading, to a person who was not
entitled to receive them. They are therefore liable in
conversion unless likewise so protected."
Clause 2 of the Bill of lading provided :
"During the period before the goods are loaded on or after
they are discharged from the ship on which they are carried
by sea, the following terms and conditions shall apply to
the exclu-
(1) [l9591 A. C. 576, 586.
946
sion of any other provisions in this bill of lading that may
be inconsistent therewith, viz., (a) so long as the goods
remain in the actual custody of the "carrier or his
servants’.. - (b) whilst the goods are being transported to
or from the ship........ (c) in another cases the
responsibility of the carrier, whether as carrier or as
custodian or bailee of the goods, shall be deemed to
commence only when the goods are loaded on the ship and to
cease absolutely after they are discharged therefrom."
It was held that this clause did not protect the shipowner
in spite of the width of these expressions and its operation
must be limited and modified to the extent necessary to
enable the effect to be given to the main object and intent
of the contract and at least so as not to permit the carrier
deliberately to disregard his obligation as to delivery
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against the production of the bill of lading.
In the present case, it was further contended that as
between the master of the ship and the consignee, the Act
made it obligatory that the consignee gets his goods from
the Board and not direct from the master of the ship, and
that therefore the Board acts as the agent of the consignee.
We have not been referred to any provision in the Act which
supports this contention. Assuming, however, that the
consignee cannot take delivery of the goods at the quay from
the ship direct, it does not follow that the Board receives
the goods as the agent of the consignee. The only
reasonable conclusion in the circumstances can be that the
place of delivery is shifted from the side of the ship to
the warehouses where the Board stores the goods till the
consignee appears to take delivery on the basis of the
delivery order by the steamer-agent which is usually an
endorsement on the bill of lading, and the quay be con-
sidered a part of the ship. In Hamburg, it is so
947
considered, as would appear from the following note at p. 37
of the German Law of Carriage of Goods by Sea, by Sieve
King:
"’Where goods are shipped from or discharged on to a quay,
the question arises whose agent the owner of the quay is.
This of course depends upon the wording of the rules and bye
laws regulating the passing of goods over the quay. As a
rule (in Hamburg for instance) the qua is considered as
forming part of the
ship the owner of the quay is the agent of the master. The
fact of the shipper having handed the goods over to the
owner of the quay is tantamount to a receipt for the same on
the part of the master; the goods discharged upon the quay
are considered as still being in the possession of the
master until the consignee has received them from the
quay." .
If the Board was an agent of the consignee, it was bound to
deliver the goods to the consignee and should not have any
rights of retaining the goods till the payment of the rates
and other dues for which it had a lien on the goods. The
provision of there being a lien on the goods for the payment
of the dues of the Board or the freight, make it clear that
the Board did not have the custody of the goods as an agent
of the consignee.
It is further contended that s. 42 draws a distinction
between services performed in respect of the vessel and
those performed in respect of the goods; that the former
services are rendered to the master of the ship and the
latter to the consignee, the owner of the goods and that
service rendered by receiving the goods from the ship at the
quay is therefore service to the consignee. We do not
construe the expression " any other service in respect of
vessel, passengers or goods’ in cl. (e) of s. 42 of the Act
in this manner.
948
If it is interpreted as suggested, the Board must charge the
passenger to whom services are rendered. This is not done.
Any charges so incurred must be realised from steamer-
agents who may, in their turn, charge the passengers for the
same.
We do not agree with the contention that the charges for
labour rendered idle are in the nature of compensation or
damages in respect of any loss, inconvenience or expenses
caused to the Board or its shore-labour in consequence of
any default attributed to the master of the ship. There is
no question of damages. The labour has been engaged. It is
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paid for the time during which it remains idle, for no fault
of its own. Charges for that are levied from the person who
required that labour and is responsible for its remaining
idle. Of course, if the idle time was due to the default of
the labour, no such charges are required to be paid by the
ship-owner.
We are therefore of opinion that the impugned charges were
rightly levied by scale ’E’ on the master, owner or agent of
the vessels and that the Board could insist on the steamer-
agent requisitioning the shore-labour to express an
undertaking in the form for requisitioning labour that he
will pay the charges laid down in the Board’s scale of rates
from time to time in respect of labour rendered idle or not
properly utilised and also for working more than one hook
simultaneously at a vessel’s hatch.
We therefore allow the appeals with costs here and the
Courts below, set aside the order of the Court below and
dismiss the writ petitions. There will be one hearing fee.
Appeals allowed.
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