LUGA BAY SHIPPING CORPORATION AND ANR. ETC. versus THE BOARD OF TRUSTEES OF THE PORT OF COCHIN AND ANR.

Citation: [1996] SUPP. 9 S.C.R. 103 · Decided: 22-11-1996 · Supreme Court of India · Bench: A.M. AHMADI · Disposal: Dismissed
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Judgment (excerpt)

.. 
LUGA BAY SHIPPING CORPORATION AND ANR. ETC. 
v. 
THE BOARD OF TRUSTEES OF THE PORT 
OF COCHIN AND ANR. 
NOVEMBER 22, 1996 
[AM. AHMADI, C.J., S.C. AGRAWAL AND 
SUJATA V. MANOHAR, JJ.] 
A 
B 
Major Pait T1usts Act, 1963-Ss. 123(/)(n)(o), 116 read with section 
65(ii), 48, 49, 50, 52:-Notification dated 8.1.1980-Clause 6--Power of the C 
Board-Tofu: the quantum of damages caused by a vessel to any property of 
the polt or the Board zmilatera/ly-Demand its unconditional cash deposit 
before the vessel leaves the pan-Detain a vessel if the compensation/secwity 
is not paid or famished-Held not ultravires sections 48, 49, 50 or S. 123-ls 
consistent with the scheme of S. 116 read with S. 65(ii)-Not violative of mies D 
of Natural Justice-So also there is no inconsistency in Regulation 43 of the 
notification dated 1.1.1975. 
The appellants vessel entered the port of Cochin on 6th June 1984 
and dashed against the platform which caused 'damage to the tune of Rs. 
33.82 lakhs. On 29th June, 1984, a notice demanding an unconditional E 
deposit of the said amount was served by the respondent on the appellants. 
They were also informed that until the payment was deposited the vessel 
would not be allowed to sail from the port. 
The appellants challenged the demand of unconditional cash deposit 
by the respondent by filing a writ petition in the High Court. The High F 
Court dismissed the Writ Petition. The appellant filed the present appeal. 
Dismissing the appeal, this court 
HELD : 1. The master or owner of a vessel shall be held liable for any 
damage caused by the vessel to the works or property of the Board and G 
Board is empowered to detain a vessel if the compensation/security is not 
paid or furnished. [113-A-B] 
2. Section 116 of the Major Ports Act empowers the Board to quantifJ: 
the damage and lay claim therefor. If the amount so quantified is not paid, 
the Board can invoke section 65(Il) to ensure that port clearance is not H 
103 
104 
SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R. 
A granted to the vessel until the amount of damage/compensation due to the 
Board has been paid or realised. Section 123 empowers the Board to make 
regulations to ensure the safety of the port, which naturally includes 
providing for the eventuality of damage caused to the Board's property. Any 
such provision, if made, would not be inconsistent with sections 48, 49 and 
B 
c 
50 and would certainly be within the scope of section 123(1), (n) and (o) of 
the Major Port Trusts Act. Therefore, it can not be said that clause (6) of 
the notification dated 8.1.1980 is ultravires section 48, 49 and 50 or section 
123, it is quite consistent with the scheme of section 116 read with section 
65(11) of the Major Port Trusts Act. So there is no inconsistency in Regula-
tion 43 of the notification dated 1.1.1975. [113-A-B; E-G] 
3.1. In order to protect international trade and at the same time to 
ensure that the damage caused to the property of the port is recovered 
before the vessel leaves the port, it is essential that the Board should be 
empowered to determine the quantum of damages and ensure that the 
vessel does not leave the port before depositing cash or providing security 
D for the same. [114-C-D] 
3.2. Besides, to avoid dislocation of traffic, it is essential that the 
damage caused to the port property is repaired without loss of time, for 
which funds would be required. It is, therefore, inevitable that the Board 
should be given power to quantify the damage and secure the same from 
E the offending vessel before it leaves the port. [114-D-E] 
3.3. A hearing before quantification of the damages is not possible. If 
the master or the owner of the vessel desires to question the quantum of 
damages, the law does not preclude the filing of a civil suit in that behalf. 
F 
[115-B; 114-F] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2426 of 
1994 Etc. 
From the Judgment and Order dated 25.11.93 of the Kerala High 
G Court io O.P. No. 5822 of 1984. 
S. Venkateshwaran, C.S. Vaidyanathan, Ms. Indu Malhotra and Ms. 
Shirio Khajuria for the Appellants. 
A!taf Ahmad, Additional Solicitor General and M.P. Viood for the 
H Respondents. 
• 
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LUGA BA YSHIPPING CORPN. ~: BD. OFTRUSTEESOFTilli PORT OF COCHIN [AHMADI, CJ.] 
105 
The Judgment of the Court was delivered by : 
AHMADI, CJI. These two appeals arise from a common judgment 
of the Division Bench of the High Court of Kerala on a reference made to 
it by a learned single Judge of
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