SUN EXPORT CORPORATION AND ANR. versus BOARD OF TRUSTEES OF THE PORT OF BOMBAY

Citation: [1997] SUPP. 4 S.C.R. 682 · Decided: 23-10-1997 · Supreme Court of India · Bench: A.S. ANAND · Disposal: Dismissed

Judgment (excerpt)

A 
SUN EXPORT CORPORATION AND ANR. 
v. 
BOARD OF TRUSTEES OF THE PORT OF BOMBAY 
OCTOBER 23, 1997 
B 
[DR. A.S. ANAND AND K. VENKATASWAMI, JJ.] 
' 
Bombay Port Trust Act 1879 : S.3(5) /Major Port Trusts Act 1963 : 
S.2(0)-/mporter acting as agent of the consignee and responsible for custody 
C of goods-Held, it was owner of the goods in question and liable to pay 
charges to the Port Trust. 
D 
· Major Port Trusts Act, 1963 : S.63-Goods confiscated by Customs 
Authority-Held, not available for appropriation towards Port Trust dues. 
Appellant No. I, a sole proprietary concern of appellant No. 2, imported 
certain consignment in the years 1973-74, against two import licences held 
by an engineering firm. The said firm had obtained from the Joint Controller 
of Imports and Exports two letters of authority whereunder the first appellant 
was to clear the goods in respect of those two licences from the warehouse at 
the docks. That, however, was not done. By its order made in February 1976 
E the Collector of Customs found that the said goods were liable to .confiscation 
under section lll(d) of the Customs Act, and the appellant was given option 
tl) redeem them on payment of Pen:dty. 
Since the goods were not recovered from the warehouse, the respondent 
Port Trust served a notice on the first appellant in April 1976 calling upon it 
F to do the needful and pay the dues of the Port Trust. As the goods had not 
been cleared, in October 1976 the respondent informed first appellant of the 
demurrage charges upto the date of confiscation and called upon it to remit 
the said amount. 
The first appellant having failed to pay the charges, the respondent 
G instituted a suit in the High Court in November 1979 for recovery of its dues/ 
with interest from the date of suit till realisation. The appellants resisted the 
suit. It was contended for them that since they were not importers or owners 
of the goods they were not liable for the wharfage and demurrage charges, 
that the engineering firm being the licence holders, who had imported the 
H said goods were the owners of the goods within the meaning of the expression 
682 
. 
' ' 
SUN EXPORT CORPN. v. BD. OF TRUSTEES OF THE PORT OF BOMBAY 
683 
'owner' under the Bombay Port Trust Act as well as the Major Port Trusts A 
Act, and as such that firm alone was liable to pay the dues of the Port Trust 
and since the respondent Port Trust had failed and neglected to recover their 
dues from the said firm, they were stopped from claiming demurrage and 
other charges from the appellants. The Single Judge held that the appellants 
were not the importers and/or owners of the goods and the respondent could B 
not recover dues from them. The Division Bench in appeal decreed the suit 
with 12% interest per annum from the date of the suit till realisation of the 
amount 
It was contended on behalfofthe appellant that the letters of authority 
issued in their favour did not create any privity between them and the C 
respondent since those were issued under the Import and Export Policy. That 
the holders of the import licences, or the named consignee, the bank, could 
only be fastened with the liability to pay demurrnge charges because the 
appellants were not the owners of the goods, and that it was open to the 
respondent to recover the demurrage charges by sale of the goods, and not 
having done that, the respondent could not fasten the liability on the appellants. D 
For the respondent it was contended that the first appellant had at no 
point of time informed them that it was acting for and on behalf of the holders 
of the import licences only, that since the appellants were acting as agents 
for the consignee and were therefore responsible for the custody of the goods E 
and their clearance from the warehouse and since they had and failed to clear 
the goods and remove them from the warehouse they could not escape their 
liability to pay the dues claimed. 
Dismissing the appeal, the Court 
HELD : l. The liability of the appellants has been correctly fastened by 
the Division Bench of the High Court It was their obligation to clear the goods 
from the warehouse of the respondent and since they had failed to do so, they 
were liable to pay charges to the Port Trust. 1690-FJ 
2. The definition of the expression 'owner' in S.3(5) of the Bombay Port 
Trust Act and S.2 of the Major Port Trusts Act goes to show that it includes 
within its ambit a 'consignee' as well as an 'agent for the cust

Excerpt shown. Read the full judgment & AI analysis in Lexace.