M/S. RASIKLAL KANTILAL & CO. versus BOARD OF TRUSTEE OF PORT OF BOMBAY & OTHERS

Citation: [2017] 4 S.C.R. 591 · Decided: 28-02-2017 · Supreme Court of India · Bench: JASTI CHELAMESWAR · Disposal: Case Partly allowed

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Judgment (excerpt)

[2017] 4 S.C.R. 591 
MIS. RASIKLAL KANTILAL & CO. 
v. 
BOARD OF TRUSTEE OF PORT OF BOMBAY & OTHERS 
(Civil Appeal No. 5968 of20ll) 
A 
FEBRUARY 28, 2017 
B 
[J. CHELAMESWAR AND ABHAY MANOHAR SAPRE, JJ.) 
Bailment: 
Consignments (78 in numbers) shipped on cash against 
documents basis - Received at Bombay Port - Consignees filed C 
bills of entry only in respect of 37 consignments, but failed to lift 
the consignments - Consignments stored at the Port - Exporter/ 
Co11'signor sold the consigned goods to the petitioner - Petitioner 
applied to Customs Authorities to file Bills of Entry for 41 
consignments and to substitute Bills of Entry in respect 37 D 
consignments - Customs authority issued detention certificate 
specifically mentioning that detention was for "bonafide operation 
of ITC formalities" - Notification of "Statement. of guideline~ for 
Permission of Demurrage Charges", 1992 whereby in cases where 
goods/consignments detained by Customs for 'ITC facilities' were 
to be considered for grant of remission from payment of demzirrage 
E 
for the period the goods were being so processed by Customs 
Authorities - Levy of demurrage charges giving remission of certain 
amount from the demurrage charge - Whether the appellant was 
liable to pay demurrage charges for the period anterior to his 
acquisition of title to the goods and whether the appellant was 
F 
entitiled to complete remission of the demurrage charges on account 
of delayed clearance for the goods by the Customs Department -
Held: The right of Board of Trustee to recover its dues (either from 
the steamer agent or the consignee) flows from s.158 of Contract 
Act rlw. s.1 of Bills of lading Act and from s.59(1) of the Major Port 
Trusts Act, 1963 - Enquiry into the title of the goods and the point G 
of time at which the title passes to the consignee is irrelevant for 
determining the authority of the Board to recover its dues - The 
question as to who would be liable to pay the dues would depend 
on the nature of relationship between the consignor and consignee 
H 
591 
592 
SUPREME COURT REPORTS 
[2017] 4 S.C.R. 
A - In the present case, the Board was sub-bailee of the goods bailed 
by consignor (bailor) to the ship-owner (bailee) through the agent 
(steamer agent) of the bailee - Appellant is only claiming through 
the bailor without any contractual relationship with the Board -
Therefore, the Board would be entitled to enforce its rights flowing 
B from the bailment between the ship-owner and the Board, against 
the consignee and recover expenses from him, incurred in connection 
with the bailment - Since the order of the Board declining total 
remission charges was not based on rational consideration and a 
sound policy, the order of the Board is set aside leaving it open to 
the Board to take appropriate decision duly recording the reasons 
. C for such decision - Major Port Trusts Act, 1963 - ss. 59(1) and 63 
- Contract Act, 1872 - s. 158 - Bills of Lading Act, 1856 - s. J. 
Plea: 
New plea - Raising of - Jn Supreme Court - Permissibility -
Held: A pure and substantial question of law cannot be barred from 
D being raised for the first time. · 
E 
.F 
Words and Phrases: 
'Demurrage' - Meaning of 
'Bailment' - Meaning of 
Partly allowing the appeal, the Court 
HELD: I. Though the question as regards the liability of 
the appellant to pay the demurrage was not raised before the 
High Court, the appellant need not be barred from raising this 
question before this Court because it is a pure and substantial 
question of law. No enquiry into any fact is really necessary to 
decide the said question of law. The only fact which is not clearly 
established on record is the point of time at which the titlP- in the 
goods passed to the appellant. [Paras 30, 31) (609-F-G; 610-B] 
2.1 Enquiry into the title of the goods and the point of time 
G at which the title passes to the consignee is irrelevant for 
determining the authority of a Board of Trustee to recover the 
amounts due to it under the Major Port Trusts Act, 1963. The 
authority and right of a Board to recover its dues either from the 
steamer agent or the consignee, flows from two different sources: 
H 
M/S. RASIKLAL KANTILAL & CO. v. BOARD OF TRUSTEE· 
593 
OF PORT OF BOMBAY 
(i) Section 158 of the Contract Act, 1872 read with Section 1 of A 
the Bills of Lading Act, 1856. (ii) Section 59(1) of 1963 Act. 
[Para 37) [615-B-C] 
2.2 The essence of bailment is possession and the consent 
of the ow

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