{"id":101906,"date":"2001-04-10T00:00:00","date_gmt":"2001-04-09T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/shipping-corpn-of-india-ltd-vs-c-l-jain-woolen-mills-ors-on-10-april-2001"},"modified":"2019-01-05T22:40:42","modified_gmt":"2019-01-05T17:10:42","slug":"shipping-corpn-of-india-ltd-vs-c-l-jain-woolen-mills-ors-on-10-april-2001","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/shipping-corpn-of-india-ltd-vs-c-l-jain-woolen-mills-ors-on-10-april-2001","title":{"rendered":"Shipping Corpn. Of India Ltd vs C.L. Jain Woolen Mills & Ors on 10 April, 2001"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Shipping Corpn. Of India Ltd vs C.L. Jain Woolen Mills & Ors on 10 April, 2001<\/div>\n
Author: Pattanaik<\/div>\n
Bench: G.B. Pattanaik Phukan, B.N. Agrawal<\/div>\n
           CASE NO.:\nAppeal (civil) 2681  of  2001\n\n\n\nPETITIONER:\nSHIPPING CORPN. OF  INDIA LTD.\n\n\tVs.\n\nRESPONDENT:\nC.L. JAIN WOOLEN MILLS & ORS.\n\nDATE OF JUDGMENT:\t10\/04\/2001\n\nBENCH:\nG.B. Pattanaik S.N. Phukan & B.N. Agrawal\n\n\n\n\nJUDGMENT:\n<\/pre>\n
WITH
\nCivil Appeal Nos.  2682-2684 of 2001.\n<\/p>\n
(@ S.L.P.(c) Nos. 5001, 9021\/99 and SLP (c) No. 3063\/2001
\nrespectively)<\/p>\n
L…I…T…….T…….T…….T…….T…….T…….T..J
\nJUDGMENT<\/p>\n
PATTANAIK,J.\n<\/p>\n
    Leave Granted.\n<\/p>\n
    In\tthis  batch  of appeals, a common  question  of\t law
\nhaving\tarisen,\t they  were  heard together  and  are  being
\ndisposed  of  by  this common judgment.\t  The  question\t for
\nconsideration  is whether the appellant, who under the terms
\nof  the\t contract  between him and the owner of\t the  goods,
\nhaving a lien over the goods, until the dues are paid can be
\nforced to release the goods, without charging any demurrage,
\nmerely\tbecause\t the customs authorities issued a  detention
\norder  for  a  specified  period ?   We\t would\tdiscuss\t the
\nquestion  in  relation to the facts in the case between\t the
\nShipping  Corporation of India vs.  C.L.  Jain Woolen Mills.
\nThe<\/a>  respondent\t C.L.\tJain   Woolen  Mills,  imported\t the
\nconsignment  of polyester filament yarn from Korea to India.
\nThe  port  of  load  was  Busan in Korea  and  the  port  of
\ndischarge  was Bombay in India, but the place of delivery of
\ngoods  was ICD, Delhi.\tThe goods thus being brought to\t the
\nport of Bombay were discharged but there had been no customs
\nclearance at Bombay and the sealed container was transhipped
\nto  ICD,  Delhi,  where\t it   remained\twith  the  Container
\nCorporation  of India.\tThe Shipping Corporation of India is
\nengaged\t in the business of carriage of goods.\tOn the terms
\nand  conditions contained in the Bill of Lading, in  respect
\nof  the\t goods consigned to it, the corporation claims\tthat
\nthe  goods  cannot be released unless demurrage charges\t are
\npaid.\tAfter the goods arrived in Delhi and remained in the
\ncustody\t of the appellant, the customs authorities being  of
\nthe  opinion that import of polyester filament yarn weighing
\n5,376  kgs.   was unauthorised and directed confiscation  of
\nthe  same,  valued at Rs.11.5 lakhs under Section 111(d)  of
\nthe Customs Act, 1962.\tThe said customs authorities however
\npermitted the owner to redeem the goods on payment of Rs.  7
\nlakhs.\tThat apart, a penalty of Rs.  1 lakh was also levied
\nunder  Section 112(a) of the Customs Act.  The owner of\t the
\ngoods  assailed the order before the Customs, Excise &\tGold
\n(Control)  Appellate  Tribunal\t[for   short  CEGAT].\t The
\ntribunal  instead  of deciding the objections raised by\t the
\nowner  to  the\tvalidity  of the  order\t of  the  Additional
\nCollector  of Customs, ordered that the advance licence\t and
\nDEEC  Book be amended and adjourned the appeal for a  period
\nof three months.  The owner, therefore, approached the Delhi
\nHigh  Court by filing a writ petition, which was  registered
\nas Writ Petition No.  1604\/91, praying quashing of the order
\nof  the\t customs  authorities, confiscating  the  goods\t and
\nimposing  the  penalty and that of the Import Trade  Control
\nAuthority enhancing the export obligation from 14,497.5 kgs.
\nto  22,330 kgs.\t of polyester fabric.  It was the contention
\nof  the owner before the High Court that in accordance\twith
\nthe  export  policy  and the Duty  Exemption  Scheme,  raw
\nmaterials  could  be  cleared for home\tconsumption  without
\npayment\t of  import  duty.  To avail of\t the  facility,\t the
\nimporter  is  required to apply for grant of licence  called
\nthe  Advance  Licence  and on the basis of the\tsame,  raw
\nmaterials  could  be imported without payment of  any  duty.
\nAccording  to  the owner, under the licence, thus issued  by
\nthe  Controller of Imports and Exports, entitling import  of
\nraw   materials\t without  payment  of  duty,   the   customs
\nauthorities   committed\t error\tin   proceeding\t  with\t the
\nconfiscation  proceedings and ordering confiscation as\twell
\nas  levying penalty.  The customs authorities as well as the
\nController  of Imports and Exports had been arrayed as party
\nrespondents  in the writ petition.  Both of them as well  as
\nUnion  of  India  resisted the claim of the owner,  who\t had
\nimported  the goods in question.  The High Court disposed of
\nthe  writ  petition by judgment dated 9th  September,  1994,
\nquashing  the  order of the Additional Collector of  Customs
\ndated  10th August, 1990 as well as the order of the Customs
\nExcise\tand  Gold  (Control) Appellate Tribunal\t dated\t21st
\nMarch, 1991 and directed the Collector of Customs to release
\nthe  goods forthwith.  The High Court also further held that
\nsince  the action of the customs authorities is illegal, the
\ngoods  in  question  will have to be released to  the  owner
\nwithout payment of any detention or demurrage charges by the
\nowner.\t Needless  to mention, the Shipping  Corporation  of
\nIndia,\tthe  appellant\tin the present appeal, who  was\t the
\ncarrier\t and  who under the Bills of Lading had a lien\tover
\nthe goods, until the dues are paid had not been made a party
\nto  the aforesaid writ petition.  At this stage it may\talso
\nbe  noticed that during pendency of the writ petition in the
\nHigh  Court, an interim order had been passed, entitling the
\nowner  to  take\t release of the goods on payment of  Rs.   5
\nlakhs to the customs authorities and a bank guarantee of Rs.
\n5  lakhs  but the owner had not taken advantage of the\tsaid
\ninterim\t order\tand  the goods continued to  remain  in\t the
\ncustody\t of the present appellant and demurrage charges went
\non  accruing.  The order of Delhi High Court was assailed in
\nthis Court by filing a Special Leave Petition by the Customs
\nAuthorities  but  that Special Leave Petition however  stood
\ndismissed on 13.11.95 in SLP No.  5671\/95.  The owner of the
\ngoods  having  failed  in  his\tattempt\t to  get  the  goods
\nreleased,  notwithstanding  the orders of the High Court  in
\nCWP  No.   1604\/91,  filed an application for  initiating  a
\ncontempt  proceeding,  which  was   registered\tas  CCP\t No.
\n120\/95.\t  The  High  Court  however came to  hold  that\t the
\nauthorities  cannot  be held to be guilty of disobeying\t the
\norders\tof the Court and accordingly, dismissed the contempt
\npetition.   While  dismissing  the  contempt  petition,\t the
\nlearned\t Judge,\t granted  liberty to the owner to  move\t the
\nDivision  Bench of the High Court for appropriate directions
\nregarding  payment of demurrage\/detention charges.  Pursuant
\nto  the aforesaid observations in the contempt\tproceedings,
\nan  application\t being\tfiled  by the owner,  the  same\t was
\nregistered  as CM 4829\/96.  That application was disposed of
\nby  the\t Division Bench of Delhi High Court by\torder  dated
\n18th  January, 1999.  The Division Bench, while disposing of
\nthe  petition,\tcame  to hold that the\tentitlement  of\t the
\ncarrier\t of the goods to charge demurrage charges and if so,
\nwhether\t the customs authorities would be liable to pay\t the
\nsame  or not is not required to be answered and is a matter,
\nwhich  should  be sorted out between those two\tcorporations
\nand the customs authorities.  But so far as the owner of the
\ngoods  are  concerned,\the  having   been  absolved  of\t any
\nliability  to  pay  the demurrage charges by virtue  of\t the
\njudgment  of  Delhi  High  Court dated\t9.9.94\tin  CWP\t No.
\n1604\/91,  he  would  be entitled to get the  goods  released
\nwithout payment of the detention and demurrage charges.\t The
\nHigh  Court, therefore called upon the customs department as
\nwell  as the two corporations, who are the carriers to\tsort
\nout  the  matter within a specified period and further\theld
\nthat if any detention or demurrages charges are payable, the
\nsame  shall  be paid by the customs department within  three
\nweeks.\t It  further  directed\tthe carrier  of\t the  goods,
\nincluding  the\tappellant  to release the  goods  after\t the
\ncustoms\t department  pays the  detention\/demurrage  charges.
\nNotwithstanding\t the  aforesaid order, the goods  not  being
\nreleased,   when  a  fresh   contempt  petition\t was  filed,
\nregistered  as CCP No.\t89\/99, the High Court issued  notice
\non 25.2.99, calling upon the alleged contemnor to file their
\nreply  by  11th March, 1999.  Against the initiation of\t the
\naforesaid  contempt proceeding, the Shipping Corporation  of
\nIndia  filed SLP No.  3391\/99.\tThe order dated 18.1.99\t was
\nalso  assailed\tby  the\t  Shipping  Corporation,  which\t was
\nregistered  as SLP No.\t5001\/99.  The container\t Corporation
\nof  India  filed  a  special  leave  petition  on  identical
\ncircumstances  and raising identical question, which is\t SLP
\nNo.   9021\/99.\t The Union of India also assails  the  order
\ndated\t18.1.99\t by  filing   Special  Leave  Petition\t No.
\n3063\/2001  along  with\tthe application for  condonation  of
\ndelay.\t This  batch of cases were listed before a Bench  of
\ntwo  learned Judges on 11th February, 2001 and after hearing
\nthe  matters for sometime, the Bench felt that there appears
\nto  be some inconsistency between the decision of this Court
\nin Union of India vs.  Sanjeev Woolen Mills,<\/a> 1998(9) SCC 647
\nand  the Grand Slam Internationals case reported in 1995(3)
\nSCC 151 and as such observed that the cases should be placed
\nbefore\ta  Three Judge Bench and that is how, this batch  of
\ncases are before this three Judge Bench.  When these appeals
\nby grant of special leave were placed before the Three Judge
\nBench  on  1st\tMarch, 2001, we had directed  the  goods  be
\nreleased  to  the  owner  without any  conditions  but\tsuch
\nrelease\t will  be subject to the ultimate decision in  these
\nappeals.\n<\/p>\n
    The\t stand of the carriers in this Court is that in view@@
\n\t\t\t\t\t\t\tJJJJ
\nof  the provisions of the Bills of Lading Act as well as the@@
\nJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
\nterms  and  conditions\tunder  which  the  goods  have\tbeen
\nimported  the  corporation-carrier retains a lien  over\t the
\ngoods until all the dues including the demurrage charges are
\npaid  and  the\torder of the Delhi High Court  in  the\twrit
\npetition  to which these carriers were not parties, will not
\nobliterate  that  right.   The further contention  of  these
\ncorporations  is  that\tthe order of the  High\tCourt  dated
\n18.1.99\t without  determining the rights of the carrier\t and
\ndirecting   to\tsort  out  the\t matter\t with  the   customs
\nauthorities  is unsustainable and as such the same should be
\nset  aside.   The stand of the customs authorities  and\t the
\nUnion  of  India  on  the other hand  is  that\tthe  customs
\nauthorities  cannot be required to pay the demurrage charges
\nmerely\tbecause\t the  action of the customs  authorities  in
\ndetaining  the goods was found to be illegal by the Court of
\nlaw.   According to the Union of India in such a case when a
\ndetention  certificate is issued by the customs authorities,
\nthe  carrier  of  goods will not be entitled  to  claim\t any
\ndemurrage  charges notwithstanding the terms and  conditions
\nof  the contract under which the goods had been carried\t and
\non  this score, the order of the High Court dated 18.1.99 is
\nerroneous.   The contention of the importer of the goods  on
\nthe  other hand is that in view of the findings of the\tHigh
\nCourt  in  CWP No.  1604\/91, specifically holding  that\t the
\ngoods  in questions be released without payment of demurrage
\nor  detention charges and the further finding to the  effect
\nthat  the  order of the customs authorities in\tconfiscating
\nand  levying  penalty is illegal and invalid,  the  importer
\ncannot\tbe  made liable to pay the demurrage  and  detention
\ncharges.   It is the further submission of the importer that
\nnotwithstanding the clear directions of the High Court, non-
\nrelease\t of goods was a gross violation of the Courts order
\nand,  therefore,  the  appropriate   authorities  should  be
\nsuitably dealt with.\n<\/p>\n
    In view of the submissions made at the Bar appearing for
\ndifferent  parties, referred to earlier, the first  question
\nthat  arises  for  consideration is whether in the  case  in
\nhand,  the  importer of the goods can be made liable to\t pay
\nany  demurrage\/detention  charges?   It is  undisputed\tthat
\nunder  the  terms  and conditions of Bills  of\tLading,\t the
\ncarrier\t had  a lien over the goods until all the  dues\t are
\npaid and the goods having been kept, not being released, the
\ncorporation-carrier   was  entitled  to\t  charge   demurrage
\ncharges.   But\tin  view of the specific directions  of\t the
\nDelhi  High Court in the writ petition filed by the importer
\nof  the goods, challenging the legality of the order of\t the
\ncustoms\t authorities  in confiscating the goods and  levying
\npenalty\t and that order having reached finality by dismissal
\nof  the special leave petition against the same filed by the
\nUnion  of  India, the liability of the importer to  pay\t the
\ndemurrage  charges  ceases  and\t  that\tquestion  cannot  be
\nre-opened.\n<\/p>\n
    The next question that arises for consideration which is
\na  larger  issue, namely if the customs authorities  do\t not
\nrelease\t the  goods  and initiates proceedings\tand  finally
\npasses\torder  of confiscation but that order is  ultimately
\nset  aside in appeal and it is held by Court of law that the
\ndetention   of\tthe  goods  was\t  illegal,  then   in\tsuch
\ncircumstances  whether the carrier of the goods who had lien
\nover  the  goods for non- payment of duty, can\tenforce\t the
\nterms  and  conditions of the contract against\tthe  customs
\nauthorities,  making the said authorities liable to pay\t the
\ndemurrage  charges.  Needless to mention, demurrage  charges
\nare levied for the place the goods occupy and for the period
\nit remains not being released, on account of lack of customs
\nclearance.  It may be noticed at this stage that the customs
\nauthorities  exercise its power under the provisions of\t the
\nCustoms Act whereas the claim of the Corporation who acts as
\na  carrier  is\tbased upon the terms and conditions  of\t the
\ncontract  between  the importer and the carrier.  So far  as
\nthe  powers  of the customs authorities are  concerned,\t the
\nsame are circumscribed by the provisions of the Customs Act,
\n1962.\tSection 8 of the Customs Act empowers the  Collector
\nof  Customs to approve proper places in any customs port  or
\ncustoms airport or coastal port for unloading and loading of
\ngoods  and specify the limits of the customs area.   Section
\n33  prohibits unloading of imported goods at any place other
\nthan  the  place  approved under Section 8(a)  of  the\tAct.
\nSection\t 34  provides that the imported goods shall  not  be
\nunloaded from any conveyance except under the supervision of
\nthe  proper  officer.  Section 45 provides for clearance  of
\nimported  goods.  The same provision may be extracted herein
\nbelow in extenso:\n<\/p>\n
    Sec.45  Restrictions on custody and removal of imported
\ngoods:\n<\/p>\n
    (1)\t Save as otherwise provided in any law for the\ttime
\nbeing  in  force, all imported goods, unloaded in a  customs
\narea  shall  remain in the custody of such person as may  be
\napproved  by  the [Commissioner of Customs] until  they\t are
\ncleared\t for  home  consumption\t or are\t warehoused  or\t are
\ntranshipped  in\t accordance with the provisions\t of  Chapter
\nVIII.\n<\/p>\n
    (2) The person having custody of any imported goods in a
\ncustoms\t area,\twhether under the provisions of\t sub-section
\n(1)  or under any law for the time being in force  (a)shall
\nkeep  a record of such goods and send a copy thereof to\t the
\nproper\tofficer;   (b)\tshall not permit such  goods  to  be
\nremoved\t from  the  customs area or  otherwise\tdealt  with,
\nexcept\tunder  and  in\taccordance with\t the  permission  in
\nwriting of the proper officer.\n<\/p>\n
    (3)\t Notwithstanding  anything contained in any law\t for
\nthe time being in force, if any imported goods are pilferred
\nafter  unloading  thereof  in a customs area  while  in\t the
\ncustody\t of  a person referred to in sub- section (1),\tthat
\nperson shall be liable to pay duty on such goods at the rate
\nprevailing on the date of delivery of an import manifest or,
\nas  the case may be, an import report to the proper  officer
\nunder  section 30 for the arrival of the conveyance in which
\nthe said goods were carried.\n<\/p>\n
    Under  the aforesaid provision, the imported goods would
\nremain\tin the custody of the person approved by the Customs
\nCommissioner, until they are cleared for home consumption or
\nare  warehoused\t or are transhipped in accordance  with\t the
\nprovisions  of\tChapter VIII.  Section 47 of the Act is\t the
\nprovision to obtain clearance of goods for home consumption.
\nSection\t 49 provides for storage of imported goods in public
\nwarehouse,  or\tin a private warehouse, if permitted by\t the
\nDeputy\tCommissioner of Customs or Assistant Commissioner of
\nCustoms.    Under  Chapter  IX\tof   the  Act,\tthe   Deputy
\nCommissioner  or  Assistant  Commissioner   of\tCustoms\t may
\nappoint\t public\t warehouses  wherein dutiable goods  may  be
\ndeposited,  as\tprovided  in Section 57 of the\tAct.   Under
\nSection\t  58,\tthe  Deputy    Commissioner   or   Assistant
\nCommissioner  may  even license private\t warehouses  wherein
\ndutiable  imported  goods  could  be  deposited.   But\t all
\nwarehoused  goods  would  be subject to the control  of\t the
\nproper\tofficer\t of the customs department, as\tprovided  in
\nSection 62 and the owner of the goods is required to pay the
\nrent  and warehouse charges to be fixed by the\tCommissioner
\nof  Customs, as provided in Section 63.\t No warehoused goods
\ncould  be taken out of the warehouse except for clearance of
\nhome  consumption  or for removal to another  warehouse,  as
\nstipulated  in\tSection 67 of the Act.\tSection 68  provides
\nthe  procedure\twhich an importer would follow for  clearing
\nthe  warehoused goods for home consumption.  The  expression
\nwarehouse  has\tbeen  defined in Section 2(43) to  mean\t a
\npublic\twarehouse  appointed under Section 57 or  a  private
\nwarehouse  licensed  under Section 58.\tIt is thus  apparent
\nfrom  different provisions mentioned above that the  customs
\nauthorities  have  full power and control over the  imported
\ngoods and without the permission of the customs authorities,
\nthe goods cannot be cleared.  But at the same time, there is
\nno  provision  in the Customs Act, conferring power  on\t the
\nCustoms\t Authorities  to  prohibit  or\tinjunct\t any   other
\nauthority  where the imported goods are stored from charging
\nthe  demurrage charges for the services rendered for storing
\nthe  imported  goods.  We are not concerned in\tthe  present
\ncase with the provisions of either the Major Ports Trust Act
\nor  International  Airport Authorities Act, as the  imported
\ngoods had not been stored either in any Major Port or in the
\ninternational  air  cargo.  It may however be  necessary  to
\nexamine some of the provisions of the Bills of Lading Act as
\nwell  as  the  Contract Act, since the claim  of  both,\t the
\nShipping  Corporation  and Container  Corporation,  charging
\ndemurrage  for\tthe space occupied for the goods, not  being
\nreleased, is on account of the contract between them.  Under
\nthe  Indian  Bills of Lading Act, 1956, every  consignee  of
\ngoods,\tnamed  in a Bill of Lading and every endorsee  of  a
\nBill  of  Lading,  is vested with absolute  right  over\t the
\ngoods.\t The  Bill  of\tLading is a  well  known  mercantile
\ndocument  of  title,  which is transferred in  the  business
\nworld  by endorsement passing to the endorsee, the title  of
\nthe  goods  covered  by such Bill of  Lading.\tClause\t(18)
\nprovides  for  payment\tof  demurrage  charges\tin  case  of
\nnon-clearance  of goods within the free time available.\t The
\nsaid clause is extracted herein below in extenso:\n<\/p>\n
    Clause 18  Delivery of goods in Container:\tIf receipt
\nof goods in container(s) is not taken by the merchant within
\n48  hours  after  discharge from the vessel  (or  after\t the
\narrival\t of the goods at place of delivery if named  herein)
\nthe  carrier shall be at liberty at his discretion either to
\nunpack\tthe  container(s)  and to put the goods in  safe  on
\nbehalf\tof  the\t merchant  and at the  merchants  risk\tand
\nexpense\t or  to\t charge\t demurrage in  accordance  with\t the
\ncarriers  tariff  applicable  to the route over\t which\tthe
\ngoods  are carried.  If unpacking the goods of\tcontainer(s)
\nis  required for whatever reason and the contents cannot  be
\nidentified  as\tto  the marks and numbers,  cargo  sweepings
\nliquid\tresidue\t and  any unclaimed contents  not  otherwise
\naccounted  for shall be allocated for completing delivery to
\nthe merchant.  The carrier shall not be required to separate
\nor  deliver  goods  in\taccordance with\t the  brand,  marks,
\nnumbers, size or types of packages as stated by the merchant
\nin  his\t particulars  but only to deliver  total  number  of
\ncontainers  (if\t same loaded by the merchant or packages  or
\nunits)\t(if container(s) loaded by the carrier) shown on the
\nface of this Bill of Lading.\n<\/p>\n
    Clause  (2)\t of  the Bill of Lading\t defines  Carriers
\nTariff as follows:\n<\/p>\n
    Clause (2)- Carriers Tariff:\n<\/p>\n
    The terms of the carriers applicable tariff are
\nincorporated herein and copies of the relevant
\nprovisions of the applicable tariff are obtainable
\nfrom the carrier or the agents upon request.  In the
\ncase of inconsistency between this Bill of Lading
\nand the applicable tariff, this Bill of Lading shall
\nprevail.\n<\/p>\n
    Clause  (14)  confers a lien on the goods for  all\tsums
\npayable under the contract.  The said clause is quoted below
\nin extenso:\n<\/p>\n
    Clause (14).  FREIGHT ETC.\tEARNED<\/p>\n
    ……..All\t unpaid\t charges shall be paid in  full\t and
\nwithout any offset, counterclaim or deduction.\tAny error in
\nfreight\t or other charges or in the classification of  Goods
\nis subject to correction and if on correction the freight or
\ncharges\t are  higher the Carrier may collect the  additional
\namount from shipper or consignees.  The Carrier shall have a
\nlien on the Goods and any documents relating thereto for all
\nsums  payable  to the Carrier under the contract  (including
\nwithout\t limitation unpaid freight and dead freight upon any
\nportion\t of the Goods covered by the Shipping Order  granted
\nin  respect hereof which may not have been shipped) and\t the
\nGeneral\t Average contribution to whomsoever due and for\t the
\ncost  of recovering the same and for that purpose shall have
\nthe  right  to sell the Goods by public auction\t or  private
\ntreaty\twithout notice to the Merchant.\t The Merchant  shall
\nindemnify  the Carrier against all and any costs incurred by
\nthe Carrier in exercising his rights under this clause.\n<\/p>\n
    The\t expression Carrier under the definition clause in
\nthe  Bill of Lading means the Shipping Corporation of  India
\nLimited\t and\/or associated company on whose behalf the\tBill
\nof Lading has been signed.\n<\/p>\n
    The\t two  provisions of the Contract Act, on  which\t Mr.
\nDave, appearing for the appellant, strongly relied upon, may
\nnow  be\t noticed.  Section 170 is the right of lien  of\t the
\nbailee for the services rendered in respect of the goods and
\nthe  bailee has right to retain the goods until he  receives
\ndue  remuneration for the services he has rendered.  Section
\n171  is\t the General lien of bankers, factors,\twharfingers,
\nattorneys and policy brokers, who also retain as a security,
\nthe  goods bailed to them.  The contention of Mr.  Dave, for
\nthe  appellant\tis  the\t right of  the\tappellant  to  claim
\ndemurrage  charges in respect of the goods, which is in\t his
\ncustody,  the  said  goods  not\t being\treleased,  within  a
\nspecified period, flows from the terms and conditions of the
\ncontract  between the importer and the corporation and\tthat
\nright  cannot  be  taken  away by issuance  of\ta  detention
\ncertificate  by the Customs authorities under the provisions
\nof  the Customs Act and as such even if a Court directs that
\nthe  importer  is not liable to pay the\t demurrage  charges,
\nbecause of the illegal detention of the goods by the customs
\nauthorities,  the appellant would not be bound by the  same,
\nparticularly,  when  the  appellant was not a party  to\t the
\nproceedings   between  the  customs   authorities  and\t the
\nimporter.   Learned Additional Solicitor General, Mr.  Mukul
\nRohtagi\t however,  on the other hand contends  that  Section
\n45(2)(b)  of  the Customs Act prohibits release of  imported
\ngoods  from the customs area, except in accordance with\t the
\npermission in writing of the proper officer.  The expression
\notherwise  dealt with in the aforesaid provision is also a
\nrestriction  placed on the custodian and that is a  complete
\nembargo\t for  the goods being released.\t The prohibition  in
\nquestion  is  in  relation to removal of goods\tas  well  as
\ndealing with the goods in any manner.  This being the manner
\nof  restrictions imposed for removal of the goods and at the
\nsame  time, conferring power on the customs authorities,  if
\nafter initiation of adjudication proceedings, a Court of law
\nnullifies the same and the customs authorities then issues a
\ndetention certificate, then the importer would not be liable
\nfor  paying  any  demurrage   charges,\tnotwithstanding\t the
\ncontract  between the importer and the appellant, and at any
\nrate,  the  customs authorities cannot be fastened with\t the
\nliability  of paying the demurrage charges.  In this view of
\nthe  matter, the order of the Delhi High Court dated 18.1.99
\nmust be held to be erroneous.  The rival contentions require
\ncareful\t examination  of  the different\t provisions  of\t the
\nCustoms\t Act,  the  Contract  Act as well as  the  Bills  of
\nlading.\n<\/p>\n
    Before   examining\t the  correctness   of\t the   rival
\nsubmissions,   one   thing  is\t crystal  clear\t  that\t the
\nrelationship  between the importer and the carrier of  goods
\nin  whose  favour the Bill of lading has been consigned\t and
\nwho has stored the goods in his custody, the relationship is
\ngoverned  by the contract between the parties.\tSection\t 170
\nof the Indian Contract Act engraft the principle of Bailees
\nlien,  namely if somebody has received the articles on being
\ndelivered  to  him and is required to store the\t same  until
\ncleared for which he might have borne the expenses, he has a
\nright  to detain it until his dues are paid.  But it is\t not
\nnecessary  in  the  case in hand to examine the\t common\t law
\nprinciple  and the bailees lien inasmuch as the very  terms
\nof  the contract and the provisions of the Bills of Lading,,
\nunequivocally conferred power on the appellant to retain the
\ngoods,\tuntil  the dues are paid.  Such rights\taccruing  in
\nfavour of the appellant cannot be nullified by issuance of a
\ncertificate  of detention by the customs authorities  unless
\nfor such issuance of detention certificate any provisions of
\nthe  Customs  Act  authorises.\tWe had not  been  shown\t any
\nprovisions  of\tthe  Customs  Act, which  would\t enable\t the
\ncustoms\t authorities  to compel the carrier, not  to  charge
\ndemurrage  charges,  the moment a detention  certificate  is
\nissued.\t  It  may  be  undoubtedly  true  that\tthe  customs
\nauthorities  might have bona fide initiated the\t proceedings
\nfor  confiscation  of  the goods which\thowever,  ultimately
\nturned out to be unsuccessful and the Court held the same to
\nbe  illegal.   But  that  by itself, would  not\t clothe\t the
\ncustoms authorities with the power to direct the carrier who
\ncontinues  to retain a lien over the imported goods, so long
\nas  his\t dues  are  not paid, not to  charge  any  demurrage
\ncharges nor the so- called issuance of detention certificate
\nwould  also  prohibit  the carrier from raising\t any  demand
\ntowards\t demurrage  charges,  for   the\t occupation  of\t the
\nimported  goods\t of the space, which the proprietor  of\t the
\nspace is entitled to charge from the importer.\tThe importer
\nalso  will  not\t be entitled to remove his  goods  from\t the
\npremises  unless customs clearance is given.  But that would
\nnot  mean  that\t demurrage charges could not  be  levied  on
\nimporter  for  the space his goods have occupied, since\t the
\ncontract  between  the\timporter and the proprietor  of\t the
\nspace  is in no way altered because of the orders issued  by
\nthe  customs authorities.  The learned Additional  Solicitor
\nGeneral,  vehemently argued and pressed sub-section 2(b)  of
\nSection\t 45  in support of his contention that the  imported
\ngoods  have  to\t be  dealt   with  in  accordance  with\t the
\npermission  in writing of the proper officer of the  customs
\ndepartment  and\t in  exercise  of such\tpower  when  customs
\nauthorities  initiate adjudication proceeding and ultimately
\nconfiscate  and levy penalty, when such order is struck down
\nand  a detention certificate is issued, the said issuance of
\ndetention  certificate\twould  come  within  the  expression
\notherwise  dealt  with\tused  in  Section  45(2)(b),   and
\ntherefore, the proprietor of the space would be bound not to
\ncharge\tany demurrage charges.\tWe are unable to accept this
\ncontention inasmuch as the expression otherwise dealt with
\nused  in  Section 45(2)(b), in the context in which  it\t has
\nbeen  used,  cannot be construed to mean, it authorises\t the
\ncustoms\t officer to issue a detention certificate in respect
\nof the imported goods, which would absolve the importer from
\npaying\tthe  demurrage charges and which would\tprevent\t the
\nproprietor  of the space from levying any demurrage charges.
\nHaving scrutinized the provisions of the Customs Act, we are
\nunable\tto  find  out any provision which  can\tbe  remotely
\nconstrued to have conferred power on the customs authorities
\nto  prevent  the  proprietor of the space from\tlevying\t the
\ndemurrage charges and, thereby absolving the importer of the
\ngoods  from  payment  of  the same.  In\t fact  the  majority
\ndecision  in  Grand Slam Internationals case,  1995(3)\tSCC
\n151, clearly comes to the aforesaid conclusion with which we
\nrespectfully agree.\n<\/p>\n
    We\thave  also  examined the decision of this  Court  in
\nUnion  of  India vs.  Sanjeev Woolen Mills,<\/a> 1998(9) SCC\t 647
\nand  we\t do not find any apparent inconsistency between\t the
\ndecision of this Court in Grand Slam and that of the Sanjeev
\nWoolen\tMills.\tIn Sanjeev Woolen Mills, the imported  goods
\nwere  synthetic\t waste\t(soft quality), though\tthe  customs
\nauthorities  detained  the same, being of the  opinion\tthat
\nthey  were  prime fibre of higher value and not soft  waste.
\nOn account of non-release, the imported goods incurred heavy
\ndemurrage  charges  but the customs  authorities  themselves
\ngave  an undertaking before the High Court that in the event
\nthe  goods are found to be synthetic waste, then the Revenue
\nitself\twould  bear  the   entire  demurrage  and  container
\ncharges.   Further the Chief Commissioner of Customs,  later
\nhad ordered unconditional release of goods and yet the goods
\nhad  not been released.\t It is under these circumstances and
\nin  view  of the specific undertaking given by\tthe  customs
\nauthorities, this Court held that from the date of detention
\nof  the\t goods\ttill the customs authorities  intimated\t the
\nimporter,  the\timporter  would not be required to  pay\t the
\ndemurrage  charges.  But in that case even subsequent to the
\norders\tof the customs authorities on a suit being filed  by
\none  of\t the  partners\tof the importer-firm,  an  order  of
\ninjunction  was\t issued and, therefore it was held that\t for
\nthat  period,  the importer would be liable for\t paying\t the
\ndemurrage and container charges.  The judgment of this Court
\nin  Sanjeev Woolen Mills, therefore, was in relation to\t the
\npeculiar  facts and circumstances of the case and the  Court
\nhad  clearly observed that the order in question is meant to
\ndo  justice to the importer, looking to the totality of\t the
\ncircumstances and the conduct of customs authorities.  Thus,
\nwe  see no inconsistency between the ratio in Sanjeev Wollen
\nMills  and  the Judgment of this Court in Grand Slam.\tThat
\napart,\tthe  judgment in Grnd Slam was a three\tjudge  bench
\njudgment.   In the case in hand, as has already been  stated
\nearlier,  the  earlier\tjudgment of Delhi High\tCourt  dated
\n9.9.94\tin  C.W.P.   No.  1604\/91, has become  final,  which
\nentitles  the  importer\t to get the goods  released  without
\npayment\t of  the  detention and demurrage charges.   In\t the
\ncontextual  facts, notwithstanding the judgment of the\tHigh
\nCourt,\tthe  goods  not having been released,  the  impugned
\norder  and  direction  dated 18.1.99, cannot be held  to  be
\ninfirm\tin  any manner.\t In the absence of any provision  in
\nthe  Customs Act, entitling the customs officer to  prohibit
\nthe  owner of the space, where the imported goods have\tbeen
\nstored from levying the demurrage charges, levy of demurrage
\ncharges\t for non-release of the goods is in accordance\twith
\nthe  terms and conditions of the contract and as such  would
\nbe  a  valid levy.  The conclusion of the High Court to\t the
\neffect\tthat  the  detention  of the goods  by\tthe  customs
\nauthorities was illegal and such illegal detention prevented
\nthe   importer\tfrom  releasing\t  the  goods,  the   customs
\nauthorities  would be bound to bear the demurrage charges in
\nthe  absence of any provision in the Customs Act,  absolving
\nthe  customs  authorities  from\t  that\tliability.   Section
\n45(2)(b)  of  the  Customs Act cannot be construed  to\thave
\nclothed\t the customs authorities with the necessary  powers,
\nso  as\tto  absolve  them of the  liability  of\t paying\t the
\ndemurrage  charges.   In the aforesaid premises, we  see  no
\ninfirmity  with the directions given by the Delhi High Court
\non  18.1.99.   The  goods in question, having  already\tbeen
\ndirected  to  be  released,  without   the  payment  of\t the
\ndemurrage  charges,  the  importer must have got  the  goods
\nreleased.   Having  regard  to\tthe fact  situation  of\t the
\npresent\t case, it would be meet and proper for us to  direct
\nthe  Shipping  Corporation and Container Corporation, if  an
\napplication is filed by the customs authorities to waive the
\ndemurrage charges.  The appeal is disposed of accordingly.\n<\/p>\n
37<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Shipping Corpn. Of India Ltd vs C.L. Jain Woolen Mills & Ors on 10 April, 2001 Author: Pattanaik Bench: G.B. Pattanaik Phukan, B.N. Agrawal CASE NO.: Appeal (civil) 2681 of 2001 PETITIONER: SHIPPING CORPN. OF INDIA LTD. Vs. RESPONDENT: C.L. JAIN WOOLEN MILLS & ORS. DATE OF JUDGMENT: 10\/04\/2001 BENCH: G.B. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-101906","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nShipping Corpn. Of India Ltd vs C.L. 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