Full Judgment Text
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PETITIONER:
BOARD OF TRUSTEES OF THE PORT OF BOMBAY
Vs.
RESPONDENT:
JAI HIND OIL MILLS COMPANY AND OTHERS
DATE OF JUDGMENT09/01/1987
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
SINGH, K.N. (J)
CITATION:
1987 AIR 622 1987 SCR (1) 932
1987 SCC (1) 648 JT 1987 (1) 110
1987 SCALE (1)22
CITATOR INFO :
RF 1991 SC1243 (4)
ACT:
Major Port Trusts Act, 1963: Sections 5,48 to 65. Bombay
Customs House Public Notice No. 111 dated July 29, 1985;
Paragraph 2(a).
Goods detained by Customs House at Port--Clearance
of--Demurrage charges levied by Port Trust--Necessity for
Court to ensure payment.
HEADNOTE:
The Major Port Trusts Act, 1963 empowers by cl.(d) of
s.48 the Board of Trustees, constituted under that Art, to
impose rates in respea of wharfage, storage or demurrage of
goods at the port. Section 53 of the Act empowers and Board
in special cases to exempt either wholly or partially any’
goods from payment of any rate or of any charge leviable in
respect thereof or remit the whole or any portion of such
rate or charge so levied. The Port Trust had in consultation
with the Customs authorities provided for grant of conces-
sion in the matter of payment of demurrage charges on the
issue of detention certificate by the latter.
Paragraph 2(a) of the Bombay Customs House Public Notice
No. 111 dated 29th July, 1985 provides for a regular deten-
tion certificate to be issued where the goods are detained
by the Customs House for the bona fide operation of import
control formalities.
A dispute arose between the 1st respondent and the
Customs authorities with regard to the basic customs duty
payable on the goods imported by the former. By an interim
order passed in a writ petition filed by the respondent, the
High Court directed the Customs authorities to allow clear-
ance of the consignments on respondent furnishing a bank
guarantee in respect of the disputed amount of duty payable,
in favour of the Collector of Customs. The respondent,
however, failed to clear the goods from the Port.
Since the consignments were incurring demurrage the
respondent filed another writ petition seeking a direction
to the Customs authorities
933
to issue detention certificates, which was allowed by the
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Court on the 1st respondent giving an undertaking that it
would pay the demurrage amount if it failed in the earlier
writ petition. The Customs authorities were, thus, obliged
to issue the detention certificates.
The Port Trust was not made party to any of the writ
petitions. It refused to honour the detention certificates
and to grant remission of demurrage unless the respondent
gave a bank guarantee to the extent of 80 per cent of the
fees claimed. The High Court, however, by an interim order,
in the writ petition filed against the Port Trust, directed
the clearance of goods without payment of demurrage and
without insisting on the bank guarantee. The appeals filed
against the aforesaid orders were summarily dismissed by the
High Court.
In the appeals by special leave, it was contended for
the appellantPort Trust, that the High Court should not have
directed the Customs authorities to issue detention certifi-
cates without the Port Trust being made a party to the writ
petition and in any event without passing an order duly
providing for the payment of the wharfage and demurrage
charges due to the Port Trust in the event of the first
respondent failing in its contention, and that the High
Court had committed an error in directing the first respond-
ent to give a bank guarantee only in respect of the customs
duty payable and not making a similar order with regard to
wharfage and demurrage charges payable to the Port Trust.
Disposing of the appeals, the Court,
HELD: 1. The power of the Port Trust to fix rates of
demurrage and to recover the same from an importer and to
show concession as regards demurrage charges in certain
specified cases has been recognised. [942F-G]
Trustees of the Port of Madras v. M/s. Aminchand Pyare-
lal & Others, [1976] 1 SCR 721 and The Board of trustees of
the Port of Bombay v. Indian Goods Supplying Co., [1977] 3
SCR 343, referred to.
2.1 The orders passed by the High Court in the proceed-
ings to which the Port Trust was not a party, were not
binding on the Port Trust in view of the violation of the
principles of natural justice. [943G-H]
2.2 The Port Trust being a body corporate constituted
under Major Port Trusts Act, 1963 was entitled to he heard
by the Court
934
before any order which affected its interests prejudicially
was passed. The High Court, therefore, before compelling the
Customs authorities to issue a detention certificate should
have issued notice to the Port Trust. This was necessary
because on the production of that certificate the Port Trust
was under on obligation to permit the clearance of the goods
without payment of full demurrage charges. If ultimately the
party concerned was found to he at fault and become liable
to pay the full demurrage charges the Port Trust in the
absence of a bank guarantee would not be in a position to
recover full demurrage charges from the party concerned
since it would have no longer any lien as provided by s.59
of the Act on the goods which were already cleared. [943D-F]
3. The orders of the High Court in the proceedings to
which the Port Trust was a party were contrary to the public
notice issued by the Customs authorities as well as the
rules of the Port Trust. It erred in not imposing any condi-
tion on the first respondent for protecting the interests of
the Port Trust. It should have directed the first respondent
to furnish bank guarantee in respect of the demurrage
charges payable to the Port Trust in the event of the first
respondent being held to be in default ultimately, rather
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than merely directing an undertaking to be given in favour
of the High Court. [943B-D]
4. The goods having already been cleared, to protect the
interests of the Port Trust the order passed on December I6,
1986 directing the first respondent to furnish bank guaran-
tee in favour of the appellant with regard to the balance of
wharfage and demurrage charges and in default thereof to pay
the amount in cash would be the final order in the matter.
The customs authorities to complete the adjudication pro-
ceedings expeditiously and within March 16, 1987. [944B-E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4483 &
4484 of 1986
From the Judgment and Order dated 26.6.86 of the Bombay
High Court in Notice of Motion No. 1418/86 in Appeal No.
512/86 in W.P. 1007/86.
F.S. Nariman, O. Chenoy, A.K. Verma, D.N. Mishra and
D.N. Bhansaria for the Appellant.
Soli J. Sorabjee, M.M. Jayakar and B.R. Aggarwala for
the Respondents.
935
The Judgment of the Court was delivered by
VENKATARAMIAH, J. These appeals by special leave are
filed against the Order dated 26.6.1986 passed in Appeal No.
512 of 1986 in Writ Petition No. 1007 of 1986 and the Order
dated 26.6.1986 in Appeal No. 535 of 1986 in Writ Petition
No. 1424 of 1986 of the High Court of Bombay. Since these
two are connected matters, they are disposed of by this
common judgment.
The facts of these two cases are these. The appellant in
both these appeals is the Board of Trustees of the Port of
Bombay (hereinafter referred to as ’the Port Trust’) and the
1st Respondent in both these appeals is a partnership firm
by name M/s. Jai Hind Oil Mills Company. The 1st Respondent
imported 5 consignments of Propylene of 10 metric tons each
in January, 1986 by S.S. Maribor. The general landing date
of the said consignments was 20th January, 1986 and the last
free date in respect of them was 23rd January, 1986. There-
after the said consignments were incurring demurrage. The
bills of entry were submitted by the 1st Respondent to the
Customs authorities in the same month. Disputes arose be-
tween the 1st Respondent and the Customs authorities with
regard to the basic customs duty payable in excess of 32.50%
(as goods were imported from the Republic of Korea which was
a developing country), with regard to loading the assessable
value with customs duty for calculation of the additional
duty and with regard to loading the CIF value with the
landing charges. Not being satisfied with the contentions of
the Customs authorities the 1st Respondent filed a writ
petition in Writ Petition No. 122 of 1986 for the issue of
certain directions to the Customs authorities with regard to
the levy of customs duty. In that Writ Petition on January
21, 1986 the High Court passed an interim order which di-
rected the Customs authorities not to insist on payment of
the customs duty in dispute pending hearing and disposal of
the Writ Petition on the 1st Respondent furnishing a Bank
Guarantee to the extent of the 90 per cent of the disputed
amount of duty in respect of one item and 100 per cent of
the disputed amount of duty in respect of two other items in
favour of the Collector of Customs. Thereafter some corre-
spondence ensued between the 1st Respondent and the Customs
authorities in connection with the description of the above
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goods. It would appear that while the Bill of Lading and the
Invoice described the goods as ’Propylene’ the marks on the
consignments indicated that they contained ’Polypropylene’.
The 1st Respondent was asked to explain the discrepancy by
the Customs authorities. There was also some dispute raised
as regards the invoice price. The 1st Respondent could not,
however, clear the goods
936
from the Port of Bombay. Thereafter the 1st Respondent filed
another Writ Petition No. 519 of 1986 for the issue of a
direction to the Customs authorities to permit it to clear
the consignments. On April 2, 1985 the learned Single Judge
of the High Court of Bombay who heard the said Writ Petition
passed an order allowing the 1st Respondent to dear the
consignments on furnishing an Import Trade Control bond for
the value of the consignments calculated at the rate of U.S
$ 735 per metric ton and furnishing a Bank Guarantee of a
nationalised bank in favour of the Collector of Customs,
Bombay to the satisfaction of the Prothonotary & Senior
Master, High Court, Bombay, for a sum equivalent to the
difference in the value between U.S $ 7 15 and U.S $ 735 per
metric ton without prejudice to the rights and contentions
of the 1st Respondent. The said order provided that the
Customs authorities could continue their investigation and
adjudicate upon the duty payable by the 1st Respondent. On
the basis of the above order the 1st Respondent was allowed
to withdraw the Writ Petition with liberty to file a fresh
petition, if required. Since there was a delay in the clear-
ance of the consignments in question and the 1st Respondent
had become liable to pay demurrage to the Port Trust, the
1st Respondent addressed a letter to the Collector of Cus-
toms, Bombay asking him to issue a Detention Certificate
stating that the goods had been detained for bona fide
Import Trade Control formalities so that it could claim the
remission of demurrage payable to the Port Trust. The 1st
Respondent followed up the above letter by another Writ
Petition No. 1007 of 1986 which was filed on or about the
17th April, 1986 against the Customs authorities for the
issue of a writ directing them to issue a Detention Certifi-
cate in respect of all the 5 consignments. On the 24th
April, 1986 the learned Single Judge passed a final order
directing the Customs authorities to issue a Detention
Certificate to the 1st Respondent on the 1st Respondent
giving an undertaking to the Court that it would pay the
amount, if it failed in Writ Petition 122 of 1986. Pursuant
to the Order’ dated 24th April, 1986 passed in Writ Petition
No. 1007 of 1986 the 1st Respondent gave an undertaking to
the Court that it would pay the amount upon its not succeed-
ing in Writ Petition No. 122 of 1986. On the 21st May, 1985
the Port Trust received a letter dated 19th May, 1986 from
the Assistant Collector of Customs in which it had been
stated inter alia that five Detention Certificates had been
sent along with the said letter.. Actually no enclosures
were received along with the said letter. But later on they
received two Detention Certificates in respect of two out of
the five consignments on that day. They related to two bills
of entry bearing Nos. 3133/219 and 3 133/220. On the same
day the Docks Manager of the Port Trust received a letter
from the clearing agent of the 1st Respondent asking
937
the Port Trust to grant the remission of demurrage in view
of the Detention Certificates issued by the Customs authori-
ties. Since the Port Trust was not a party to any of the
Writ petitions, referred to above; and no Bank Guarantee or
Demand Draft had been furnished by the 1st Respondent cover-
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ing the 80% amount of the demurrage fees, the Port Trust
wrote a letter dated 30th May, 1986 to the 1st Respondent
asking the 1st Respondent to give a Bank Guarantee to the
effect that in the event. of the 1st Respondent losing Writ
Petition No. 122 of 1986 it would pay to the Port Trust,
Bombay the entire amount of remission along with interest at
15% per annum. When the aforesaid letter was sent, the Port
Trust was not aware of the Order dated 2nd April, 1986
passed in Writ Petition No. 519 of 1986. Thereupon, on June
12, 1986 the 1st Respondent and its partner Sham Lal Kishna-
ni, who is 2nd Respondent herein filed another Writ Petition
No. 1424 of 1986 in the High Court against the Port Trust
for quashing the communication dated 30th May, 1986, re-
ferred to above, under which the Port Trust had asked the
1st Respondent to furnish the Bank Guarantee or a Demand
Draft to the extent of 80% of the demurrage fees claimed by
the Port Trust and for compelling the Port. Trust to honour
the Detention Certificates issued by the Customs authorities
pursuant to the Order dated 24th April, 1986 and to permit
the clearance of the goods without payment of demurrage and
without insisting upon the furnishing of a Bank Guarantee or
a Demand Draft, as stated above. They also asked for an
interim order of the effect that pending hearing and final
disposal of the said Writ Petition, the Port Trust should
forthwith honour the Detention Certificates issued by the
Customs authorities and allow the clearance of the goods
without payment of demurrage and without insisting on the
Bank Guarantee or the Demand Draft. In that Writ Petition an
interim order was passed on the 17th June, 1986 as prayed
for by the 1st Respondent. Thereafter the Port Trust was
advised to file an appeal before the Division Bench against
the Order dated 2nd April, 1986 passed in Writ Petition No.
519 of 1986 and the Order dated 17th June, 1986 passed in
Writ Petition No. 1424 of 1986. While the Port Trust was in
the process of getting the said appeals made ready for
filing by their advocates, the 1st Respondent threatened the
Port Trust with contempt proceedings by its letter dated
20th June, 1986. Immediately after the receipt of the said
letter, the Port Trust lodged the Appeal no. 512 of 1986. By
an order dated 26th June, 1986 the appeal filed against the
Order dated 2nd April, 1986 passed in the Writ Petition No.
1007 of 1986 was summarily dismissed. The said order, howev-
er, stated as under:
"It is, however, clarified that it is clear from the im-
pugned
938
order dated 24.4.1986 that the undertaking pertains to the
demurrage charges payable to the Port Trust. if the Respond-
ents Nos. 1 and 2 (Petitioners) failed in Writ Petition No.
122 of 1986 on the footing that no valid detention certifi-
cate could have been issued in that event.
Mr. Chinoy contends that the detention certificate
could not be issued, if in the adjudication proceedings the
Petitioners are found at fault and the question of the
Petitioners giving an undertaking to provide for this does
not appear to have been present in the mind of the learned
Judge when the order was passed.
Liberty to the Appellants ’to seek further clari-
fication and/or orders on this question from the learned
Single Judge."
The appeal filed against the Order dated 17th June, 1986
in Writ Petition No. 1424 of 1986 was numbered as Appeal No.
535 of 1986. The said appeal was also summarily dismissed on
26th June, 1986. As the Port Trust was advised to file an
appeal in this Court by special leave, the Port Trust did
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not apply to the learned Single Judge for clarification as
suggested in the Order passed in Appeal No. 512 of 1986.
It may be mentioned at this stage that the remaining
three Detention Certificates relating to Bills of Entry Nos.
3133/221,222 and 223 were received by the Port Trust from
the Customs authorities on 3rd July, 1986. Two out of the
five consignments were cleared by the 1st Respondent on 3rd
July, 1986 and the remaining three consignments were cleared
by the 1st Respondent on 5th July, 1986 on payment of an
aggregate amount of Rs.49,510/50 paise for the charges of
the Port Trust in accordance with the Order dated 17th June,
1986 passed in Writ Petition No.1424 of 1986 as against a
total amount of Rs.3,53,514.75 paise due to the Port Trust
for wharfage and demurrage charges upto the dates of the
clearance of goods. Thus a sum of Rs.3,04,004.25 in respect
of wharfage and demurrage charges of the said five consign-
ments remains unpaid to the Port Trust. Aggrieved by the two
orders passed on 26th June, 1986 in Appeal No. 512 of 1986
and Appeal No. 535 of 1986 the Port Trust has filed these
two appeals by special leave.
939
The principal contention urged in both these appeals is
that the High Court should not have directed the Customs
authorities to issue Detention Certificates without the Port
Trust being made a party to the Writ Petition and in any
event without passing an order duly providing for the pay-
ment of the wharfage and demurrage charges due to the Port
Trust in the event of the 1st Respondent failing in its
contention in Writ Petition No. 122 of 1986. It is urged
that a mere undertaking given in favour of the High Court
agreeing to pay the amount was not sufficient security for
the amount due to the Port Trust in the event of the 1st
Respondent being held to be the party in default. It is
further contended that the High Court committed an error in
directing the 1st Respondent to give a Bank Guarantee only
in respect of the Customs duty payable by the 1st Respondent
in the event of its Writ Petition being dismissed and in not
making a similar order directing the 1st Respondent to
furnish a Bank Guarantee in respect of the wharfage and
demurrage charges payable to the Port Trust in the event of
the 1st Respondent being ultimately held as the party in
default.
The Port Trust is constituted under the Major Port
Trusts Act, 1963 (hereinafter referred to as the Act). Under
Section 5 of the Act every Board constituted under it is
declared to be a body corporate having perpetual succession
and a common seal with power, subject to the provisions of
the Act, to acquire, hold or dispose of property and it may
be the name by which i.t is constituted, sue or be sued. The
affairs of the Port Trust are managed by the Board of Trus-
tees and committees appointed by it in accordance with the
provisions of the Act. It is thus an independent statutory
body and not just a department of Government. Under Chapter
VI of the Act the Board of Trustees of a Port Trust is
empowered to impose and recover rates at Ports, for services
rendered by the Port Trust or other persons at the port
under its jurisdiction. Sections 48 to 65 of the Act which
are in Chapter VI of the Act deal with the said power of the
Board of Trustees. Section 48 authorises a Board from time
to time to frame a scale of rates at which and a statement
of the conditions under which, any of the services specified
thereunder shall be performed by itself or any person autho-
rised by it at the port or port approaches. Clause (d) of
section 48 specifically empowers the Board to impose rates
in respect of wharfage, storage or demurrage of goods on any
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such place. Every scale of rates and every statement of
conditions framed by the Board under the foregoing provi-
sions are required to be submitted to the Central Government
for sanction and will have effect when so sanctioned and
published by the Board in the Official Gazette. It is,
however, provided in section 53 of the Act that the Board of
Trustees in special
940
cases and for reasons to be recorded in writing, may exempt
either wholly or partially any goods or vessels or class of
goods or vessels from the payment of any rate or of any
charge leviable in respect thereof according to any scale in
force under the Act or remit the whole or any portion of
such rate or charge so levied. The Port Trust has fixed the
scale of rates charged at the docks. A booklet containing
the said rates which are revised upto 10.1.1985 is produced
before the Court. Section III of the said booklet which
commences at page 14 thereof contains the Docks scale of
rates’ fixed by the Port Trust. In consultation with the
Customs authorities, the Port Trust has provided for the
grant of concession in the matter of payment of demurrage
charges on the issue of Detention Certificate by the Customs
authorities. Section III-A(c) of the said booket deals with
the demurrage fees chargeable by the Port Trust. Proviso (d)
to the said clause (c) states that the goods detained by the
Customs Department for special examination ’involving ana-
lytical or technical tests other than the ordinary processes
of appraisement’ will be exempt from demunage fees during
such period of detention as may be certified by the Collec-
tor of Customs to be not attributable to fault or negligence
on the part of importers or exporters plus two working days
and that the Certification by the Customs will be given by
endorsement on relative duplicate copies of Bills of Entry
or Shipping Bills. On the suggestion of the Customs Depart-
ment the Port Trust has accepted to allow concession in the
matter of demurrage charges to the extent indicated in
Paragraph 4.10 of the note which is enclosed as Ext. ’B’ to
the Special Leave Petition (Civil) No. 8466 of 1986. It
reads thus:
"4.10 The best course seems to be to charge a rate per day
which corresponds to our minimum charge for handling, stor-
age, care and custody or the goods after the expiry of the
free days. Wharfage constitutes handling costs plus storage
charges for a period of four days. Deducting handling costs,
the balance represents storage charges for a period of four
days. It is estimated that, excluding the handling costs,
storage charges per day are equal to 20% of total wharfage.
It. is, therefore, suggested that for the entire period of
certified detention we may retain per day 20% of the wharf-
age to cover the services referred to herein."
The above concession is extended by the Port Trust in
appropriate cases where Detention Certificates are issued by
the Customs authorities. The Customs authorities have laid
down the procedure for issue of Detention Certificates and
the current procedure in
941
regard to the issue of Detention Certificates is embodied in
the Bombay Custom House Public Notice No.111 dated 29th
July, 1985. Paragraph 2.of the said notice sets out the
circumstances under which a regular Detention Certificate
could be issued by the Customs House for facilitating the
importers to get remission of demurrage charges. They are as
under:-
"(a) Where the goods are detained by Custom House for
bona fide operation of Import Control Formalities without
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any default on the part of the importers.
(b) Where the goods have been released on caution (a
regular Detention Certificate and not a Recommendatory
letter).
(c) Where, the goods are detained the Custom House
pending test report and the facility of clearance against
provisional assessment has not been allowed. Such Detention
Certificates will be issued on merits for the period for
which the goods were detained for the purpose.
(d) Where, the goods are detained for PHO formalities,
the certificate will cover the period stretching between the
date of drawal of the sample by the PHO and the date of his
test results, and
(e) In cases where samples have been drawn from the
imported consignments by the Asstt. Drug/Controller for
ensuring compliance with the provisions of Drugs and Cos-
metics Act, 1940 and where the Assistant Drugs Controller is
of the opinion that release cannot be allowed against a
Letter of Guarantee pending test."
The said Public Notice also states that Detention Cer-
tificates will not be issued in the following types of
cases:
(a) "Time taken by the Custom House Laboratory for
analytical/chemical testing of samples drawn from the con-
signments, since the facility of clearing the goods on bond
in terms of Section 18 already exists.
(b) Samples drawn from the imported consignments by the
942
Assistant Drugs Controller for ensuring compliance with the
provisions of Drugs and Cosmetics Act, 1940 and for being
forwarded to the Central Drugs Laboratory, Calcutta, as the
importers can avail of the facility of clearing the goods
against Letters of Guarantee and need not wait till the
receipt of the test report.
The facility of allowing clearance of goods against
letters of Guarantee is extended only on the specific recom-
mendations of the Assistant Drugs Controller on the Bill of
Entry in each case.
(c) The period taken for mutilation of woollen rags in
the Docks.
(d) Cases where goods are detained in the ordinary
course of appraisement such as for determination of the
Tariff classification of goods or their assessable value in
terms of Section 14 of the Customs Act."
It is agreed between the Customs authorities and the
Port Trust that no Detention Certificate would, however, be
issued by the Customs Department if there has been any
default on the part of the importer or exporter. It is thus
clear that in the event of the importer or exporter being at
fault, he would not be entitled to any concession in the
matter of demurrage charges. He has to pay whatever is
payable in accordance with the ’scale of rates’ charged at
the docks as fixed by the Port Trust.
The power of a Port Trust to fix rates of demurrage and
to recover the same from an importer or exporter (although
the question of an exporter paying demurrage arises rarely)
under law and to show concession as regards demurrage
charges in certain specified cases is recognised by this
Court in the Trustees of the Port of Madras v. M/s. Amin-
chand Pyarelal & Others, [1976] 1 SCR 721 and in the Board
of Trustees of the Port of Bombay versus Indian Goods Sup-
plying Co., [1977] 3 SCR 343. These decisions are no doubt
based on the relevant laws which were in force at the mate-
rial time. But the decisions are still relevant insofar as
cases arising under the Act because the Act also contains
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provisions more or less similar to the statutory provisions
considered in the said decisions. Demurrage charges are
levied in order to ensure quick clearance of the cargo from
the harbour. They are always fixed in such a way that they
would make it unprofitable for
943
importers to use the port premises as a warehouse. It is
necessary to do so because congestion in the ports affects
the free movement of ships and the loading and unloading
operations. As stated earlier. the Port Trust shows conces-
sion to the party concerned in certain types of cases.
In the instant case the High Court by the order passed
in the writ petition to which the Port Trust was not a party
directed the Customs authorities to issue Detention Certifi-
cates in respect of the consignments in question. In doing
so while the High Court had safeguarded the interests of the
Customs authorities by. its earlier orders by directing the
1st Respondent to furnish a Bank Guarantee in respect of the
duty payable to them, in respect of the demurrage charges
payable to the Port Trust the High Court merely directed an
undertaking to be given in favour of the High Court. In the
ordinary course, the High Court should have directed the 1st
Respondent to furnish Bank Guarantee in respect of the
demurrage charges payable to the Port Trust in the event of
the 1st Respondent being held to be in default ultimately.
It is, however, to be observed that before compelling
the Customs authorities to issue a Detention Certificate,
the High Court should have issued notice to the Port Trust
which was vitally interested in securing its own interests
as regards the demurrage charges recoverable by it under
law. This was necessary because on the production of the
Detention Certificate issued by the Customs authorities the
Port Trust was under an obligation to permit the clearance
of the goods without payment of full demurrage charges. If
ultimately the party concerned is found to be at fault and
becomes liable to pay the full demurrage charges the Port
Trust may not be in a position to recover such full demur-
rage charges from the party concerned, since it would have
no longer any lien as provided by section 59 of the Act on
the goods which are already cleared The Port Trust being a
body corporate constituted under the Act is entitled to be
heard by the Court before any order which affects its inter-
ests prejudicially is passed. This case serves as an illus-
tration to what is stated above. The Port Trust has been
asked to permit the clearance of goods in respect of which
demurrage charges of Rs.3,53,5 14.75 paise are payable in
the event of the 1st Respondent being held liable in law to
pay the full demurrage charges. The orders passed by the
High Court in the proceedings to which the Port Trust was
not a party which had the effect of prejudicially affecting
the interests of the Port Trust would not be binding on it
in view of the violation of the principles of natural jus-
tice. The High
944
Court erred in not imposing any condition on the 1st Re-
spondent for protecting the interests of the Port Trust even
in the Writ Petition to which it was a party. The impugned
orders are contrary to the public notice issued by the
Customs authorities as well as the rules of the Port Trust.
Having regard to the peculiar circumstances of this case
in which the goods have already been cleared, the orders of
the High Court of Bombay against which these appeals are
filed are, therefore, to be modified appropriately in order
to protect the interests of the Port Trust. Accordingly, at
the conclusion of the hearing of these appeals we passed an
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order on 16.12.1986 before reserving the appeals for judg-
ment directing the 1st Respondent to furnish within eight
weeks a Bank Guarantee of a Nationalised Bank in favour of
the appellant for due payment of Rs.3,04,004.25 paise to the
appellant on demand, without any demur, being the balance of
wharfage and demurrage charges in the event of the 1st
Respondent not succeeding ultimately in Writ Petition No.
127 of 1986 and on failure to furnish such Bank Guarantee
within eight weeks to pay in cash Rs.3,04,004.25 paise to
the appellant forthwith. This shall be the final order in
these appeals.
These appeals are disposed of in the above terms. The
Customs authorities shall complete the adjudication proceed-
ings as expeditiously as possible and in any event within
16.3.1987.
P.S.S. Appeals disposed
of.
945