{"id":114479,"date":"1996-11-22T00:00:00","date_gmt":"1996-11-21T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/luga-bay-shipping-corporation-vs-the-board-of-trustees-of-the-port-of-on-22-november-1996"},"modified":"2017-03-19T21:30:06","modified_gmt":"2017-03-19T16:00:06","slug":"luga-bay-shipping-corporation-vs-the-board-of-trustees-of-the-port-of-on-22-november-1996","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/luga-bay-shipping-corporation-vs-the-board-of-trustees-of-the-port-of-on-22-november-1996","title":{"rendered":"Luga Bay Shipping Corporation &amp; &#8230; vs The Board Of Trustees Of The Port Of &#8230; on 22 November, 1996"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Luga Bay Shipping Corporation &amp; &#8230; vs The Board Of Trustees Of The Port Of &#8230; on 22 November, 1996<\/div>\n<div class=\"doc_author\">Author: . Ahmadi<\/div>\n<div class=\"doc_bench\">Bench: S.C. Agrawal, Sujata V. Manohar, Cji<\/div>\n<pre>           PETITIONER:\nLUGA BAY SHIPPING CORPORATION &amp; ANOTHERSOUTH INDIA CORPORATI\n\n\tVs.\n\nRESPONDENT:\nTHE BOARD OF TRUSTEES OF THE PORT OF COCHIN &amp; ANOTHER\n\nDATE OF JUDGMENT:\t22\/11\/1996\n\nBENCH:\nS.C. AGRAWAL, SUJATA V. MANOHAR,CJI\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n<p>\t\t\t    WITH<br \/>\n\t\tCIVIL APPEAL NO.2427 OF 1994<br \/>\n\t\t      J U D G M E N T<br \/>\nAhmadi, CJI.\n<\/p>\n<p>     These two\tappeals arise  from a common judgment of the<br \/>\nDivision Bench\tof the\tHigh Court  of Kerala on a reference<br \/>\nmade to it by a learned single Judge of that Court. The High<br \/>\nCourt found  itself confronted with the question whether the<br \/>\nCochin Port  Trust is  entitled, under the Major Port Trusts<br \/>\nAct, 1963,  (hereinafter referred  to  as  &#8216;the\t Major\tPort<br \/>\nTrusts\tAct&#8217;)\tthe  Indian  Ports  Act,  1908\t(hereinafter<br \/>\nreferred to  as `the  Indian Ports Act&#8217;) and the Regulations<br \/>\nmade thereunder,  to demand  an unconditional  cash  deposit<br \/>\nfrom the owner of a ship which caused damage to the property<br \/>\nof the Port Trust.\n<\/p>\n<p>     The appellants  in Civil Appeal No.2427\/94, South India<br \/>\nCorporation (Agencies)\tLtd., are  the agents of the vessel,<br \/>\nM.T. Larnaca.  The appellants  in Civil\t Appeal No. 2426\/94,<br \/>\nM\/s Luga  Bay Shipping\tCorporation, are  the owners  of the<br \/>\nsaid vessel.  The respondents  are the\tBoard of Trustees of<br \/>\nthe Port  of Cochin,  (hereinafter referred  to as `the Port<br \/>\nTrust&#8217;), and  its Deputy Conservator. The vessel entered the<br \/>\nPort of\t Cochin on June 6, 1984 and was berthed at Berth No.\n<\/p>\n<p>2. On  June 14,\t 1984, the  vessel, while being shifted from<br \/>\nBerth No.  2 to\t the North  Tanker Berth, dashed against the<br \/>\nnorthern side  of the  RCC platform  on\t which\tthe  gravity<br \/>\nfenders were  suspended, causing  damage  to  the  platform.<br \/>\nNotice of  damage to  the platform  was served\ton June\t 20,<br \/>\n1984. The  appellants do  not dispute  that the\t vessel\t was<br \/>\nberthed in the North Tanker Berth on June 14, 1984. However,<br \/>\nthey deny  that any  damage was\t caused by the vessel to any<br \/>\nproperty of  the Port  Trust during  such birthing. The Port<br \/>\nTrust, on the other hand, claims that the damage assessed by<br \/>\nthe Port  Chief Engineer  was of  Rs.33.82 lakhs. The second<br \/>\nrespondent, the\t Deputy Conservator of Port Trust, requested<br \/>\nthe local  agents of  the vessel, by a notice dated June 29,<br \/>\n1984, to  deposit that\tamount. They were also informed that<br \/>\nthe vessel would be allowed to sail from the Port only after<br \/>\nthe amount was deposited.\n<\/p>\n<p>     The Shipping  Corporation, the  petitioner\t before\t the<br \/>\nCourt, filed  a writ  petition\tunder  Article\t226  of\t the<br \/>\nConstitution of\t India\twhich  was  registered\tas  Original<br \/>\nPetition No.5822  of 1984.  It prayed  for  calling  of\t the<br \/>\nrecords leading\t to the\t issue of notice (Exhibit P.6) dated<br \/>\nJune 29,  1984 and to quash the same by an appropriate writ;<br \/>\nto declare  condition No.6 of the Notification dated January<br \/>\n8,  1980   fixing  the\tscale  of  rates  and  statement  of<br \/>\nconditions for\tlevy of\t charges by  the  Port\tTrust  under<br \/>\nSections 48,  49 and  50 of  the Major Port Trusts Act ultra<br \/>\nvires the  Act and  the Constitution; to declare Regulations<br \/>\nNo.3 and  43 of\t Cochin Port  Trust Regulation,\t 1975  ultra<br \/>\nvires the  provisions of  the Indian Ports Act and the Major<br \/>\nPort  Trusts  Act  and\tto  restrain  the  respondents\tfrom<br \/>\nenforcing the  aforesaid two  regulations. We  will  shortly<br \/>\nadvert to  the impugned provisions of the Notification dated<br \/>\nJanuary 8,  1980 and  the Cochin  Port and  Dock Regulation,<br \/>\n1975. The  learned single  Judge of  the High Court referred<br \/>\nthe case  of a\tDivision Bench. The Division Bench posed the<br \/>\nquestion whether  the Cochin  Port Trust  is entitled, under<br \/>\nthe  Major  Port  Trusts  Act,\tthe  Indian  Ports  Act\t and<br \/>\nRegulations made thereunder, to demand an unconditional cash<br \/>\ndeposit from  the owner\t of the\t ship which allegedly caused<br \/>\ndamage to the property of the Port Trust. The Division Bench<br \/>\nexamined the  provisions of  Section 116  of the  Major Port<br \/>\nTrusts Act,  and came to the conclusion that, in a situation<br \/>\nlike  the  one\ton  hand,  the\tamount\tof  damage  must  be<br \/>\ndetermined by the Board and that the liability of the Master<br \/>\nand owner  of the  vessel was  absolute. Section  116 can be<br \/>\nreproduced for ready reference:\n<\/p>\n<blockquote><p>     116. Recovery of value of damage to<br \/>\n     property of  Board. &#8212;  If, through<br \/>\n     the negligence of any person having<br \/>\n     the  guidance  or\tcommand\t of  any<br \/>\n     vessel, or\t of any\t of the mariners<br \/>\n     or persons employed on such vessel,<br \/>\n     any damage\t is caused  to any dock,<br \/>\n     wharf, quay, mooring, stage, jetty,<br \/>\n     pier   or\t other\t work\tin   the<br \/>\n     possession of  any Board,\t[or  any<br \/>\n     movable property  belonging to  any<br \/>\n     Board,] the  amount of  such damage<br \/>\n     shall, on\tthe application\t of  the<br \/>\n     Board be recoverable, together with<br \/>\n     the  cost\t of  such  recovery,  by<br \/>\n     distress\tand    sale,   under   a<br \/>\n     Magistrate&#8217;s    warrant,\t of    a<br \/>\n     sufficient portion\t of  the  boats,<br \/>\n     masts,   spares,\tropes,\t cables,<br \/>\n     anchors or stores belonging to such<br \/>\n     vessel:\n<\/p><\/blockquote>\n<blockquote><p>     Provided that  no Magistrates shall<br \/>\n     issue  such  a  warrant  until  the<br \/>\n     master of\tthe vessel has been duly<br \/>\n     summoned to  appear before him and,<br \/>\n     if he  appears, until  he has  been<br \/>\n     heard; and\t provided also\tthat  no<br \/>\n     such warrant  shall  issue\t if  the<br \/>\n     vessel was\t at the\t time under  the<br \/>\n     orders   of   a   duly   authorised<br \/>\n     employee  of   the\t Board\tand  the<br \/>\n     damage caused  was attributable  to<br \/>\n     the order, act or improper omission<br \/>\n     of such employee.&#8221;<\/p><\/blockquote>\n<p>     The High  Court held  that the Board needed to approach<br \/>\nthe Magistrate only for effecting the recovery of the amount<br \/>\nand that  the Magistrate  is required  to hear the Master of<br \/>\nthe vessel  before issuing  a warrant  for recovery, but not<br \/>\nfor quantification  of the damage. The High Court went on to<br \/>\nexamine the  provisions of  the English Law, as contained in<br \/>\nSection 74  of the  Harbours Docks  and Piers Clauses Act ad<br \/>\nthe ratio  of certain  cases decided thereunder, and came to<br \/>\nthe conclusion\tthat the liability of the Master or owner of<br \/>\nthe vessel  with regard\t to damage  caused to  dock,  wharf,<br \/>\nquay, mooring,\tstage, jetty,  pier, etc.,  is absolute. The<br \/>\nHigh Court also made a reference to Section 131 of the Major<br \/>\nPort Trusts Act and held that the provision for a civil suit<br \/>\nmade therein  was without prejudice to any other action that<br \/>\ncan be\ttaken under  that Act  and was\tmeant to be employed<br \/>\nwhen the proceeds of sale of the property of the vessel were<br \/>\ninsufficient to meet the penalties payable or recoverable by<br \/>\nthe Board.  The High  Court also  examined the provisions of<br \/>\nClause (6)  of the  Notification dated January 8, 1990 which<br \/>\nrequires the Conservator of Ports to take necessary steps to<br \/>\nascertain the  amount of  damages, and\tto  serve  a  notice<br \/>\nspecifying the\tamount wherefor he was entitled to seize the<br \/>\nvessel which  caused the  damage and to detain the same till<br \/>\nthe amount  was paid.  That clause further provided that the<br \/>\nConservator could  sell the  vessel  and  out  of  the\tsale<br \/>\nproceeds, recover  the\tdamages\t as  well  as  the  cost  of<br \/>\nseizure, detention  and sale. The High Court opined that the<br \/>\nMaster of  the vessel could get the dispute over the quantum<br \/>\nof damages resolved by a competent civil court. According to<br \/>\nthe High  Court, in view of the provisions of the Major Port<br \/>\nTrusts Act  and the  Rules framed  thereunder, there  was no<br \/>\nforce in  the argument\tof the appellants that assessment of<br \/>\ndamages done unilaterally by the respondents was against the<br \/>\nrules of natural justice and, therefore, void.\n<\/p>\n<p>     Before this Court, the appellants disputed the absolute<br \/>\nnature of  liability as held by the High Court. The vires of<br \/>\nClause (6) of the Notification mentioned above has also been<br \/>\nchallenged. Regulation\tNo.43 of  the Cochin  Port and\tDock<br \/>\nRegulation, 1975 is also challenged as arbitrary.\n<\/p>\n<p>     We can  now refer\tto Clause  (6) of  the\tNotification<br \/>\ndated January 8, 1980 which is issued &#8220;in exercise of powers<br \/>\nconferred by  Sections 48,  49 and  50 of  Major Port Trusts<br \/>\nAct, 1963  and in  suppression\tof  the\t Cochin\t Port  Trust<br \/>\nNotification dated August 10, 1974.&#8221;\n<\/p>\n<blockquote><p>     &#8220;Clause  (6)   &#8211;\tAssessment   and<br \/>\n     recovery of compensation for damage\n<\/p><\/blockquote>\n<blockquote><p>     &#8211; If  any vessel or drift fouls any<br \/>\n     pier, wharf,  jetty or  quay in the<br \/>\n     Port of  Cochin and  thereby causes<br \/>\n     damage thereto  the Conservator  of<br \/>\n     the Port  shall forthwith\ttake the<br \/>\n     necessary steps  to  ascertain  the<br \/>\n     amount  of\t  damage  so  caused.  A<br \/>\n     notice  specifying\t the  amount  of<br \/>\n     damage so ascertained and demanding<br \/>\n     its payment  shall be served drift.<br \/>\n     If the  damage is caused by a draft<br \/>\n     and the  owner  of\t such  drift  is<br \/>\n     unknown or\t cannot be  ascertained,<br \/>\n     the notice\t of the\t demand shall be<br \/>\n     posted upon  a conspicuous place in<br \/>\n     the  Cochin   Port\t Trust,\t  Deputy<br \/>\n     Conservator&#8217;s  Office   or\t  Custom<br \/>\n     House.  Within  a\tweek  after  the<br \/>\n     serving or\t of the\t posting of  the<br \/>\n     notice of\tthe demand,  as the case<br \/>\n     may be,  the said\tamount shall  be<br \/>\n     paid. It  shall be\t lawful for  the<br \/>\n     Conservator to  seize the vessel or<br \/>\n     drift    which\tcaused\t  damage<br \/>\n     immediately  the  damage  has  been<br \/>\n     caused together  with  the\t tackle,<br \/>\n     apparel or\t furniture belonging  to<br \/>\n     the vessel,  and  detain  the  same<br \/>\n     till the  amount together\twith the<br \/>\n     cost of seizure or detention is not<br \/>\n     paid, the\tConservator may sell the<br \/>\n     vessel or\tthe tackle,  apparel  or<br \/>\n     furniture or  the drift  and out of<br \/>\n     such  sale\t  proceeds  pay\t to  the<br \/>\n     Cochin Port  Trust\t the  amount  of<br \/>\n     damage and\t the  cost  of\tseizure,<br \/>\n     detention and sale rendering to the<br \/>\n     master or\towner, the  surplus,  if<br \/>\n     any, on  demand, provided\tthat the<br \/>\n     demand is\tmade within  three years<br \/>\n     from the date of the sale.&#8221;<\/p><\/blockquote>\n<p>     Section 48,  49 and  50 of\t the Major  Port Trusts\t Act<br \/>\nempower every  Board to\t frame certain\tscales of  rates and<br \/>\nSection 52  of the  Act provides that the date so fixed will<br \/>\nhave effect  only when\tsanction in  this behalf is given by<br \/>\nthe Central  Government. We  may now  notice Sections 48, 50<br \/>\nand 52 which read as under:\n<\/p>\n<blockquote><p>     &#8220;48. Scales  of rates  for services<br \/>\n     performed by Board or other person.\n<\/p><\/blockquote>\n<blockquote><p>     &#8212; (1)  Every Board shall from time<br \/>\n     to time  frame a  scale of rates at<br \/>\n     which,  and   a  statement\t of  the<br \/>\n     conditions under  which, any of the<br \/>\n     services specified\t hereunder shall<br \/>\n     be\t performed   by\t itself\t or  any<br \/>\n     person authorised\tunder Section 42<br \/>\n     at or  in relation\t to the\t port or<br \/>\n     port approaches &#8212;\n<\/p><\/blockquote>\n<blockquote><p>     (a) transhipping  of passengers  or<br \/>\n     goods between  vessels in\tthe port<br \/>\n     or port approaches;\n<\/p><\/blockquote>\n<blockquote><p>     (b)   landing   and   shipping   of<br \/>\n     passengers or goods from or to such<br \/>\n     vessels to or from any wharf, quay,<br \/>\n     jetty, pier,  dock, berth, mooring,<br \/>\n     stage or erection, land or building<br \/>\n     in the  possession or occupation of<br \/>\n     the Board\tor at  any place  within<br \/>\n     the limits\t of  the  port\tor  port<br \/>\n     approaches;\n<\/p><\/blockquote>\n<blockquote><p>     (c) carnage or portrage of goods on<br \/>\n     any such place;\n<\/p><\/blockquote>\n<blockquote><p>     (d) wharfage,  storage or demurrage<br \/>\n     of goods on any such place;\n<\/p><\/blockquote>\n<blockquote><p>     (e) any other service in respect of<br \/>\n     vessels,\tpassengers   or\t  goods,<br \/>\n     excepting the  services in\t respect<br \/>\n     of\t vessels   for\twhich  fees  are<br \/>\n     chargeable, under\tthe Indian Ports<br \/>\n     Act.\n<\/p><\/blockquote>\n<blockquote><p>     (2) Different scales and conditions<br \/>\n     may be framed for different classes<br \/>\n     of goods and vessels.&#8221;\n<\/p><\/blockquote>\n<blockquote><p>     &#8220;49. Scale\t of rates  and statement<br \/>\n     of conditions  for use  of property<br \/>\n     belonging\tto  Board.&#8211;  (1)  Every<br \/>\n     Board shall,  from\t time  to  time,<br \/>\n     also frame\t a  scale  of  rates  on<br \/>\n     payment of\t which, and  a statement<br \/>\n     of\t conditions   under  which,  any<br \/>\n     property belonging\t to, or\t in  the<br \/>\n     possession or  occupation\tof,  the<br \/>\n     Board,  or\t any  place  within  the<br \/>\n     limits of\tthe  port  or  the  port<br \/>\n     approaches\t may  be  used\tfor  the<br \/>\n     purposes specified hereunder:-\n<\/p><\/blockquote>\n<blockquote><p>     (a)  approaching  or  lying  at  or<br \/>\n     alongside any buoy, mooring, wharf,<br \/>\n     quay, pier, dock, land, building or<br \/>\n     place as aforesaid by vessels;<\/p><\/blockquote>\n<blockquote><p>     (b) entering  upon or  playing  for<br \/>\n     hire at  or  on  any  wharf,  quay,<br \/>\n     pier, dock,  land, building,  road,<br \/>\n     bridge or\tplace  as  aforesaid  by<br \/>\n     animals   or    vehicles\tcarrying<br \/>\n     passengers or goods;\n<\/p><\/blockquote>\n<blockquote><p>     (c) leasing  of land  or  sheds  by<br \/>\n     owners   of   goods   imported   or<br \/>\n     intended for  export or  by steamer<br \/>\n     agents;\n<\/p><\/blockquote>\n<blockquote><p>     (d) any  other  use  of  any  land,<br \/>\n     building,\t works,\t   vessels    or<br \/>\n     appliances belonging to or provided<br \/>\n     by the Board.\n<\/p><\/blockquote>\n<blockquote><p>     (2) Different scales and conditions<br \/>\n     may be framed for different classes<br \/>\n     of goods and vessels.\n<\/p><\/blockquote>\n<blockquote><p>     (3)    Notwithstanding\tanything<br \/>\n     contained in  sub-section (1),  the<br \/>\n     Board  may,   by  auction\t or   by<br \/>\n     inviting tenders, lease any land or<br \/>\n     shed belonging   to  it  or  in  it<br \/>\n     possession or  occupation at a rate<br \/>\n     higher  than  that\t provided  under<br \/>\n     sub-section (1).&#8221;\n<\/p><\/blockquote>\n<blockquote><p>     &#8220;50.   Consolidated    rates    for<br \/>\n     combination of  services.&#8211; A Board<br \/>\n     may, from\ttime to\t time,\tframe  a<br \/>\n     consolidated scale of rates for any<br \/>\n     combination   of\t the\tservices<br \/>\n     specified in  section 48 or for any<br \/>\n     combination  of   such  service  or<br \/>\n     services\twith\tany   user    or<br \/>\n     permission\t to   use  any\tproperty<br \/>\n     belonging to  or in  the possession<br \/>\n     or\t occupation  of\t the  Board,  as<br \/>\n     specified in Section 49.&#8221;<br \/>\n     &#8220;52.  Prior   sanction  of\t Central<br \/>\n     Government to rates and conditions.\n<\/p><\/blockquote>\n<blockquote><p>     &#8212; Every  scale of\t rates and every<br \/>\n     statement of conditions framed by a<br \/>\n     Board    under\tthe    foregoing<br \/>\n     provisions of this Chapter shall be<br \/>\n     submitted to the Central Government<br \/>\n     for sanction  and shall have effect<br \/>\n     when so sanctioned and published by<br \/>\n     the Board in the Official Gazette.&#8221;<\/p><\/blockquote>\n<p>     As\t can   be  seen\t  from\ta  plain  reading  of  these<br \/>\nprovisions. Section 48 empowers the Board to frame the scale<br \/>\nof rates  for providing\t certain services  while Section  49<br \/>\nempowers the  Board to frame the scale of rates for allowing<br \/>\nthe use\t of its\t property. Section  50 further\tempowers the<br \/>\nBoard  to   frame  consolidated\t  scale\t of  rates  for\t any<br \/>\ncombination of\tservices specified  in Section 48 or for any<br \/>\ncombination of\tservice or  services with  the user  of\t any<br \/>\nproperty belonging  to the  Board.  In\tnone  of  the  three<br \/>\nSections is  there any\tdirect mention\tof recovery  of\t any<br \/>\ndamage caused  by a vessel to any property of the Port or of<br \/>\nthe Board.\n<\/p>\n<p>     The  Notification\tdated  January\t8,  1980  issued  in<br \/>\nexercise of power conferred by Sections 48, 49 and 50 of the<br \/>\nMajor Port  Trusts Act\tin suppression\tof the\tCochin\tPort<br \/>\nTrust Notification  dated  August  10,\t1974  must  be\tread<br \/>\nalongside another  Notification dated January 1, 1975 issued<br \/>\nin suppression\tof all\tprevious Notifications\tissued under<br \/>\nSection 6(1) of the Indian Ports Act ad Section 29(1) of the<br \/>\nPetroleum Act,\t1934 by the Cochin Port Trust in exercise of<br \/>\npowers conferred  by sub-sections  (f) to (o) of Section 123<br \/>\nof the\tMajor Port  Trusts Act, which inter alia provides by<br \/>\nregulation 43  that the &#8220;Masters and Owners of vessels shall<br \/>\nhe held\t liable for  any damage\t whatsoever that  shall have<br \/>\nbeen caused by their vessels or servants to any of the works<br \/>\nor property  to the  Board and\tthe Board  may detain  their<br \/>\nvessels until  compensation claimed  by the Board is paid or<br \/>\nsecurity has  been given  for the  amount of damage caused.&#8221;<br \/>\nThe plain  language of\tthis regulation therefore shows that<br \/>\nthe Master  or Owner  of a  vessel can\tbe  held  liable  in<br \/>\ndamages for  any harm caused to the works or property of the<br \/>\nBoard and  empowers the\t Board to  detain a  vessel  if\t the<br \/>\ncompensation\/security  is   not\t paid\tor   furnished.\t  In<br \/>\nsubstance, the\tsame is\t the effect  of clause\t(6)  of\t the<br \/>\nNotification dated  January 8,\t1980 extracted\tearlier.  At<br \/>\nthis stage,  reference may  be made to Section 65(ii) of the<br \/>\nMajor Port Trusts Act which reads as under:\n<\/p>\n<blockquote><p>     &#8220;Section\t65.   Grant   of   port-<br \/>\n     clearance after  payment  of  rates<br \/>\n     and realisation  of damages, etc. &#8211;<br \/>\n     If a  Board gives to the officer of<br \/>\n     the Central  Government whose  duty<br \/>\n     it is  to grant  the port-clearance<br \/>\n     to any vessel at the port, a notice<br \/>\n     stating, &#8211;\n<\/p><\/blockquote>\n<blockquote><p>     (i) xxx xxx xxx\n<\/p><\/blockquote>\n<blockquote><p>     (ii)  than\t  an  amount   specified<br \/>\n     therein is\t due in\t respect of  any<br \/>\n     damage referred  to in  section 116<br \/>\n     and such  amount together\twith the<br \/>\n     cost of  the  proceedings\tfor  the<br \/>\n     recovery\t thereof     before    a<br \/>\n     Magistrate under  that section  has<br \/>\n     not been realised.\n<\/p><\/blockquote>\n<blockquote><p>     such officer  shall not  grant such<br \/>\n     port-clearance until  the amount so<br \/>\n     chargeable or due has been paid or,<br \/>\n     as the  case may be, the damage and<br \/>\n     cost have been realised.&#8221;<\/p><\/blockquote>\n<p>     This provision,  read in  conjunction with Section 116,<br \/>\nreveals the  anxiety of\t Parliament to ensure that, before a<br \/>\nvessel\t leaves\t   the\t Indian\t   port,   the\t amount\t  of<br \/>\ndamages\/compensation should  be secured. This anxiety is for<br \/>\nthe obvious  reason that  once the  vassal leaves the Indian<br \/>\nshores, it would be well-high impossible to realise the dues<br \/>\nof the\tBoard. To  complete the\t narration, we\tmay refer to<br \/>\nSection 131  which provides, albeit without prejudice to any<br \/>\nother action  that may\tbe taken under the Act, that a Board<br \/>\nmay recover  by a  suit its  dues including damages when the<br \/>\nproceeds of  sale are  insufficient or any penalties payable<br \/>\nto, or\trecoverable by\tthe  Board  under  the\tAct  or\t the<br \/>\nregulations made  in pursuance\tthereof,  are  insufficient.<br \/>\nThis provision\tgrants a  remedy in  addition to  the remedy<br \/>\ngranted to  the Board under the provisions of the Act or the<br \/>\nregulations to recover the shortfall through a suit.\n<\/p>\n<p>     Section 123  of the  Major Port  Trusts Act  confers  a<br \/>\ngeneral\t power\ton  the\t Board\tto  make  regulations.\tThis<br \/>\nprovision is  enacted without prejudice to any power to make<br \/>\nregulations contained elsewhere in the Major Port Trusts Act<br \/>\nand empowers  the Board\t to make regulations consistent with<br \/>\nthe provisions\tof the\tAct for\t all or\t any of\t the matters<br \/>\nenumerated in  clauses (a)  to (o)  thereof which inter alia<br \/>\ninclude:\n<\/p>\n<blockquote><p>     &#8220;(f) for  the safe,  efficient  and<br \/>\n     convenient\t use,\tmanagement   and<br \/>\n     control  of   the\tdocks,\twharves,<br \/>\n     quays, jetties,  railways tramways,<br \/>\n     buildings\t  and\t  other\t   works<br \/>\n     constructed  or   acquired\t by,  or<br \/>\n     vested in,\t the Board,  or\t of  any<br \/>\n     land or  foreshore acquired  by, or<br \/>\n     vested in,\t the  Board  under  this<br \/>\n     Act;\n<\/p><\/blockquote>\n<blockquote><p>     (n) for  ensuring the safety of the<br \/>\n     port;\n<\/p><\/blockquote>\n<blockquote><p>     (o) generally,  for  the  efficient<br \/>\n     and proper\t administration\t of  the<br \/>\n     port.&#8221;<\/p><\/blockquote>\n<p>     The learned  counsel for  the appellants submitted that<br \/>\nthe scope  of sections\t48, 49 and 50 being limited, and not<br \/>\nembracing the  imposition or recovery of damages, clause (6)<br \/>\nof the\tNotification of\t January  8,  1980  clearly  travels<br \/>\nbeyond the  scope of  these provisions\tand was,  therefore,<br \/>\nultra vires.  Nor could\t the said  clause  be  protected  by<br \/>\nvirtue of  the regulations  for the  simple reason that even<br \/>\nclauses (f),  (n) and  (o) of  Section 123  do not  speak of<br \/>\nimposition of  damages\/compensation for damage caused to the<br \/>\nproperty of  the Board. And, in any event, the conferment of<br \/>\npower  to   fix\t the  quantum  of  damages  or\tcompensation<br \/>\nunilaterally, without  affording the  Master or Owner of the<br \/>\nvessel\tan  opportunity\t of  being  heard,  was\t clearly  an<br \/>\ninfraction of the rule of natural justice.\n<\/p>\n<p>     Section 116  extracted earlier,  in unmistakable  terms<br \/>\nstates that  if, through the negligence of any person having<br \/>\nthe guidance  or command of any vessel, any damage is caused<br \/>\nto any\tdock  or  other\t property  of  the  Board  mentioned<br \/>\ntherein, the  amount of\t such damage  as is  claimed by\t the<br \/>\nBoard  shall  be  recoverable  by  distress  or\t sale  of  a<br \/>\nsufficient portion of the property on board the vessel under<br \/>\na Magistrate&#8217;s\twarrant. This  provision therefore  entitles<br \/>\nthe Board  to quantify\tthe damage and lay a claim therefor.<br \/>\nIn the\tpresent case,  as soon\tas the damage was noticed on<br \/>\n15th June, 1984 while the vessel was still in the berth, the<br \/>\nAgent and  Master of the vessel were informed and thereafter<br \/>\nthe damage  was assessed  by the  Board and  claim was made.<br \/>\nThis action was clearly in terms of the afore-quoted Section\n<\/p>\n<p>116. If\t the amount so quantified is not paid, the Board can<br \/>\ninvoke Section\t65(ii) to  ensure that port-clearance is not<br \/>\ngranted\t  to\tthe   vessel\tuntil\t the\tamount\t  of<br \/>\ndamages\/compensation due  to the  Board\t has  been  paid  or<br \/>\nrealised. This is the scheme of the Major Port Trusts Act.\n<\/p>\n<p>     Now, we come to the scheme of Sections 48, 49 and 50 of<br \/>\nthe said Act. Section 48 empowers the Board to frame a scale<br \/>\nof rates  and a\t statement of  conditions under which any of<br \/>\nthe services  shall be\tperformed by  it and  these  include<br \/>\nservices to  be provided inter alia for landing and shipping<br \/>\nof goods  from or to vessels in the port, dock, etc. Besides<br \/>\nprescribing the\t rates to  be charged for such services, the<br \/>\nBoard is  expected to  frame a statement of conditions under<br \/>\nwhich the services would be performed and this could provide<br \/>\nfor the remedy in case of damage to the Board&#8217;s property. So<br \/>\nalso, under  Section 49,  the Board  can frame the rates and<br \/>\nstatement of  conditions for performing the services set out<br \/>\ntherein. Under\tthese provisions,  therefore, it  is left to<br \/>\nthe Board  not only  to\t frame\tthe  rates  of\tcharges\t for<br \/>\nservices  rendered,   but  also\t  to  make  a  statement  of<br \/>\nconditions under which the services would be performed.\n<\/p>\n<p>     Next,  Section   123  empowers   the  Board   to\tmake<br \/>\nregulations, albeit  consistent with the Act, for all or any<br \/>\nof the\tpurposes set  out therein,  which inter alia include<br \/>\nthe safe, efficient and convenient use, management of docks,<br \/>\netc. This  would certainly include consequential remedies in<br \/>\nthe event of damage to the Board&#8217;s property. Regulations can<br \/>\nbe made\t to ensure  the safety\tof  the\t port  and  for\t its<br \/>\nefficient and  proper administration  which would  naturally<br \/>\ninclude providing  for the  eventuality of  damage caused to<br \/>\nthe  Board&#8217;s   property\t while\tproviding  services  to\t the<br \/>\nvessels, etc.,\tmaking use  of the port, dock, etc. Any such<br \/>\nprovision, if  made, would  not be inconsistent with Section<br \/>\n48, 49\tand 50\tand would  certainly be\t within the scope of<br \/>\nSection 123(f),\t (n) and  (o)  extracted  earlier.  We\tare,<br \/>\ntherefore,  unable   to\t hold\tthat  clause   (6)  of\t the<br \/>\nNotification dated  January 8,\t1980 is ultra vires Sections<br \/>\n48, 49\tand 50\tor Section  123 and is quite consistent with<br \/>\nthe scheme  of Section\t116 read  with Section 65(ii) of the<br \/>\nMajor Port  Trusts Act\tS also,\t we see\t no inconsistency in<br \/>\nRegulation 43 of the Notification dated January 1, 1975.\n<\/p>\n<p>     That takes\t us to\tthe next  contention namely, whether<br \/>\nthe unilateral\taction taken  by the  Board in assessing the<br \/>\ndamages\t is  in\t violation  of\tthe  principles\t of  natural<br \/>\njustice. At  first blush,  the argument\t made appears  to be<br \/>\nattractive but, on closer scrutiny, and having regard to the<br \/>\npurpose and  object of\tmaking the  said provision entitling<br \/>\nthe Board  to determine\t the quantum  of damages,  it  would<br \/>\nappear that  the urgency  of the  situation demands that the<br \/>\nBoard should be allowed to determine the liability and claim<br \/>\npayment or  security for  the same  before the vessel leaves<br \/>\nthe shores  of the  country. We\t have  already\tpointed\t out<br \/>\nearlier the  anxiety  of  the  legislature  to\tprovide\t for<br \/>\nimmediate action  to be\t taken before  the vessel leaves the<br \/>\nshore. Once  it has  left the  shore, it would be impossible<br \/>\nfor the\t Board to recover the damage caused by the vessel to<br \/>\nits property. In order to protect international trade and at<br \/>\nthe same  time ensure that the damage caused to the property<br \/>\nof the\tport is recovered before the vessel leaves the port,<br \/>\nit seems  essential that  the Board  should be\tempowered to<br \/>\ndetermine the  quantum of damages and ensure that the vessel<br \/>\ndoes not  leave the port before depositing cash or providing<br \/>\nsecurity for  the same.\t Besides, to  avoid  dislocation  of<br \/>\ntraffic, it  is essential that the damage caused to the port<br \/>\nor property  of the  Board is repaired without loss of time,<br \/>\nfor which  funds would\tbe required. In the circumstances,it<br \/>\nis therefore  inevitable that  the power  to  determine\t the<br \/>\ndamage must vest in the Board for, otherwise, the vessel may<br \/>\nleave the  port and  the Board\twould be  left to suffer the<br \/>\ndamage without\trecovering it  from  the  offending  vessel.<br \/>\nTherefore, while conceding that the right to be heard before<br \/>\nthe quantum  of damage\tis determined is an important right,<br \/>\nin the\tvery nature  of things\tand  having  regard  to\t the<br \/>\nurgency of  the matter,\t public interest demands that before<br \/>\nthe vessel  leaves the\tshores of the country, the estimated<br \/>\ndamage is  paid to or secured by the Board. The interests of<br \/>\njustice, insofar  as the  Board is  concerned, would  not be<br \/>\nsafeguarded is\tthis power  is not  vested in  the Board and<br \/>\nconsequently the  vessel is permitted to leave the shores of<br \/>\nthe country  without securing  the damage.  Besides, if\t the<br \/>\nMaster or  Owner of  the  vessel  desires  to  question\t the<br \/>\nquantum of damages determined by the Board, the law does not<br \/>\npreclude the  filing of\t a civil suit in that behalf. In the<br \/>\ncivil suit,  the basis\ton which  the quantum of damages was<br \/>\nworked out  by the  Board would\t be fully  reviewed and that<br \/>\nwould provide  a post-decisional  hearing to  the Master  or<br \/>\nOwner of  the vessel. We are, therefore, of the opinion that<br \/>\nin the very nature of things, it is not possible that a pre-<br \/>\ndecisional hearing should be accorded to the Master or Owner<br \/>\nof the\tvessel before  the Board  determines the  amount  of<br \/>\ncompensation. Even  if the  Board can  ensure  that  a\tport<br \/>\nclearance is not granted to the vessel, that would not serve<br \/>\nthe objective as the continued presence of the vessel at the<br \/>\ndock or\t port would block up traffic as urgent repairs would<br \/>\nnot be\tpossible and  the presence  of the  vessel would not<br \/>\npermit other  vessels to  enter that  area. In\tour opinion,<br \/>\ntherefore, the\tHigh  Court  was  right\t in  coming  to\t the<br \/>\nconclusion that\t in the\t very nature  of things,  a  hearing<br \/>\nbefore the  quantification of  damages by  the Board  is not<br \/>\npossible. We,  therefore, do  not  see\tany  merit  in\tthis<br \/>\ncontention either.\n<\/p>\n<p>     In the  result, we\t see no\t merit in these appeals. The<br \/>\nappeals are dismissed with costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Luga Bay Shipping Corporation &amp; &#8230; vs The Board Of Trustees Of The Port Of &#8230; on 22 November, 1996 Author: . Ahmadi Bench: S.C. Agrawal, Sujata V. Manohar, Cji PETITIONER: LUGA BAY SHIPPING CORPORATION &amp; ANOTHERSOUTH INDIA CORPORATI Vs. RESPONDENT: THE BOARD OF TRUSTEES OF THE PORT OF COCHIN &amp; [&hellip;]<\/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-114479","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Luga Bay Shipping Corporation &amp; ... vs The Board Of Trustees Of The Port Of ... on 22 November, 1996 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/luga-bay-shipping-corporation-vs-the-board-of-trustees-of-the-port-of-on-22-november-1996\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Luga Bay Shipping Corporation &amp; 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