whether the liability to pay “ground rent” on containers unloaded at Cochin Port, but not cleared by the consignees/importers and refused to be destuffed by the Port, on the ground of inadequate storage space, can be imposed on the owners of the vessel/steamer agents beyond the period of 75 days, fixed by the Tariff Authority of Major Ports [TAMP], a statutory body constituted under Section 47-A of the Major Port Trusts Act [MPT Act], 1963.

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2525 OF 2018
THE CHAIRMAN, BOARD OF TRUSTEES,
COCHIN PORT TRUST …APPELLANT
VERSUS
M/S AREBEE STAR MARITIME AGENCIES
PVT. LTD. & ORS. …RESPONDENTS
WITH
CIVIL APPEAL NO. 2526 OF 2018
CIVIL APPEAL NO. 2527 OF 2018
CIVIL APPEAL NO. 2528 OF 2018
CIVIL APPEAL NO. 2529 OF 2018
CIVIL APPEAL NO. 2530 OF 2018
CIVIL APPEAL NO. 2531 OF 2018
CIVIL APPEAL NO. 2532 OF 2018
CIVIL APPEAL NO. 2533 OF 2018
CIVIL APPEAL NO. 2534 OF 2018
CIVIL APPEAL NO. 2535 OF 2018
J U D G M E N T
R.F. Nariman, J.

  1. This batch of appeals arises out of a reference order made by a
    Division Bench of this Court dated 07.03.2018 reported as (2018) 4
    2
    SCC 592. The learned Division Bench stated as to how these
    proceedings arose before it as follows:
    “1. These proceedings have arisen from a judgment dated
    27-9-2011 [Arebee Star Maritime Agencies (P)
    Ltd. v. Cochin Port Trust, Original Petition No. 21041 of
    1999, decided on 27-9-2011 (Ker)] of a Division Bench of the
    Kerala High Court in a batch of writ appeals and original
    petitions, preferred by various shipping agents.
  2. The question before the High Court was whether the
    liability to pay “ground rent” on containers unloaded at
    Cochin Port, but not cleared by the consignees/importers
    and refused to be destuffed by the Port, on the ground of
    inadequate storage space, can be imposed on the owners
    of the vessel/steamer agents beyond the period of 75 days,
    fixed by the Tariff Authority of Major Ports [TAMP], a
    statutory body constituted under Section 47-A of the Major
    Port Trusts Act [MPT Act], 1963.
  3. The facts of the case are summarised in the following
    extract of the judgment of the High Court:
    “The sequence of events that led to the stalemate refers to
    the incidents which happened in 1998 when there (sic)
    imports synthetic woollen rags (in containers) in the Cochin
    Port Trust premises. The said containers were destuffed to
    facilitate Customs examination and to return the empty
    containers to the steamer agents. The destuffed cargo
    occupied much larger space and was not promptly cleared
    by the consignees in view of the hurdles placed by the
    Customs stating that the cargo actually did not constitute old
    woollen rags as declared, but mostly were brand new
    clothes which could not have been cleared. The “modus
    operandi” of the consignees/importers attracted wide
    attention of all concerned and taking note of the probable
    extent of liability to be imposed by the Customs Department,
    and the liability to be satisfied to the Port and others
    concerned, the consignees did not turn up to clear the goods
    and they were lying idle in the Port premises for quite long.”
    3
    The Port Trust charged “ground rent” from the steamer
    agents/owners of the containers.”
  4. After then setting out the relevant provisions of the Major Port Trusts
    Act, 1963 [“MPT Act”] and the relevant portions of five decisions of this
    Court, namely, Port of Madras v. K.P.V. Sheik Mohamed Rowther
    & Co. 1963 Supp. (2) SCR 915 [“Rowther-I”]; Port of Madras v.
    K.P.V. Sheik Mohd. Rowther & Co. P. Ltd. (1997) 10 SCC 285
    [“Rowther-II”]; Port of Bombay v. Sriyanesh Knitters (1999) 7 SCC
    228; Forbes Forbes Campbell & Co. v. Port of Bombay (2015) 1
    SCC 228 [“Forbes-II”] and Rasiklal Kantilal & Co. v. Port of Bombay
    (2017) 11 SCC 1, the Division Bench then stated:
    “23. Analysing the above judgments, the following position
    emerges:
    23.1. The decisions in Rowther-I, Rowther-II, Sriyanesh
    Knitters, Forbes-II and Rasiklal do not seem to follow a
    consistent line about whom the Port Trust has to fasten the
    liability for payment of its charges;
    23.2. The Constitution Bench judgment in Rowther-I holds
    that when Port Trust takes charge of the goods from the
    shipowner, the shipowner is the bailor and the Port Trust is
    the bailee. While the Bench of two Judges in Sriyanesh
    Knitters holds that there comes into existence the
    relationship of bailor and bailee between the consignee and
    the Port Trust, the decision in Forbes-II disagrees with this
    view of Sriyanesh Knitters. Rasiklal opines that enquiry into
    such relationship is irrelevant in determining the right of a
    Port Trust to recover its dues;
    23.3. While the decision in Sriyanesh Knitters was based on
    the interpretation of the term “owner” under Section 2(o) of
    the MPT Act, the judgments in Forbes-II and Rasiklal do not
    4
    find the question of interpretation of the term “owner” to be
    relevant;
    23.4. While Forbes-II relies upon the Constitution Bench
    decision in Rowther-I to come to its
    conclusions, Rasiklal does not find Rowther-I to be an
    authority for the proposition that until the title in goods is
    passed to the consignee, the liability to pay various charges
    payable to a Port Trust, for its services in respect of goods,
    falls exclusively on the steamer agent;
    23.5. In Rowther-II, it was held that once the goods are
    handed over to the Port Trust by the steamer and the
    steamer agents have duly endorsed the bill of lading or
    issued the delivery order, their obligation to deliver the
    goods personally to the owner or the endorsee comes to an
    end. The decision in Rasiklal, which has been delivered after
    the reference of Forbes-I was disposed of, takes a contrary
    view that in cases where the consignee does not come to
    take delivery of goods, the position of law laid down
    by Rowther-II would result in a situation that the Port Trust
    would incur expenses without any legal right to recover such
    amount from the consignor, with whom there was no
    contractual obligation; and
    23.6. The Bench of two Judges in Rasiklal opined that it
    agrees with the conclusions recorded in RowtherII and Forbes-II that a Port Trust could recover the rates
    due, either from the steamer agent or the consignee.
    However, the holding in Rowther-II finds only the consignee
    to be liable.
  5. Taking note of the above inconsistencies in the
    judgments which have been delivered after the
    pronouncement by the Constitution Bench in Rowther-I, we
    are inclined to the view that the following issues need to be
    resolved by a larger Bench:
    24.1. Whether in the interpretation of the provision of
    Section 2(o) of the MPT Act, the question of title of goods,
    and the point of time at which title passes to the consignee
    is relevant to determine the liability of the consignee or
    5
    steamer agent in respect of charges to be paid to the Port
    Trust;
    24.2. Whether a consignor or a steamer agent is absolved
    of the responsibility to pay charges due to a Port Trust, for
    its services in respect of goods which are not cleared by the
    consignee, once the bill of lading is endorsed or the delivery
    order is issued;
    24.3. Whether a steamer agent can be made liable for
    payment of storage charges/demurrage, etc. in respect of
    goods which are not cleared by the consignee, where the
    steamer agent has not issued a delivery order; if so, to what
    extent;
    24.4. What are the principles which determine whether a
    Port Trust is entitled to recover its dues, from the steamer
    agent or the consignee; and
    24.5. While the Port Trust does have certain statutory
    obligations with regard to the goods entrusted to it, whether
    there is any obligation, either statutory or contractual, that
    obliges the Port Trust to destuff every container that is
    entrusted to it and return the empty containers to the
    shipping agent.
  6. The larger Bench may deal with any additional issues
    relevant to the context, as it deems necessary.”
  7. The impugned judgment dated 27.09.2011 of a Division Bench of the
    Kerala High Court decided a limited question that was argued before
    it, namely:
    “Whether liability to pay ‘Ground Rent’ in respect of the
    containers unloaded in the Cochin Port, lying uncleared by
    the Consignees/Importers and refused to be destuffed by
    the port, for inadequate storage space, can be mulcted on
    the owners of the Vessel/Steamer Agents beyond 75 days,
    in view of the Scheme of the Statute (Major Port Trusts Act
    1963 – in short ‘MPT Act’) and the contents of the TAMP
    6
    (Tariff Authority for Major Ports) Orders dated 10.11.1999,
    19.07.2000, and 13.09.2005, is the point.”
  8. The impugned judgment came to be passed as a number of writ
    appeals had been preferred by shipping agents, the Port Trust, and
    one consignee against the judgment dated 16.09.2002 of a single
    Judge of the Kerala High Court. A writ petition, namely, W.P. (C) No.
    32191 of 2004, was also disposed of by the impugned judgment, as it
    raised a similar question of law. The facts involved in these appeals
    and writ petition were briefly stated in paragraphs 4 and 5 of the
    impugned High Court judgment as follows:
    “4. Goods involved in all the cases, imported as ‘FCL’ (Full
    Container Loads) mainly consist of ‘synthetic woollen rags’,
    except in W.P. (C) No. 32191 of 2004, where it is VCD
    players. The period of import is during August 1998 to March
  9. All the Containers now stand returned after destuffing,
    pursuant to common judgment in the Original Petitions and
    the interim orders passed in the Appeals.
  10. Some of the goods imported earlier in the Cochin Port,
    titled as “woollen rags” were actually found to be “brand new
    clothes” on inspection by the Customs Department, which
    attracted heavy duty, penalty and such other charges. The
    dispute between the Consignees and the Customs went on
    for an indefinite period and in the said circumstances, the
    consignees did not turn up to clear the goods in respect of
    the subsequent transactions as well, presumably knowing
    the probable outcome and the huge liability to be satisfied
    under different heads including the Port charges and other
    dues because of the delay. So also, no action was taken by
    the Port Trust to destuff the goods and they retained the
    containers for their own reasons.”
    7
  11. The learned Senior Advocate who led the arguments on behalf of the
    shipping agents before the High Court made one important
    concession, namely, that the shipping agents do not propose to press
    the contention as to their liability in satisfying ground rent, except that
    they ought not to be mulcted with any such liability beyond the period
    of 75 days, which was set out in the relevant Tariff Authority for Major
    Ports (“TAMP”) Orders. At the point of time that the Division Bench
    delivered its judgment, a Division Bench of this Hon’ble Court in
    Forbes Forbes Campbell & Co. Ltd. v Board of Trustees, Port of
    Bombay (2008) 4 SCC 87 [“Forbes-I”], had referred the following
    three questions to a larger Bench:
    “9. The questions of law of public importance in this appeal
    are as follows:
  12. Whether a steamer agent can be construed as owner of
    the goods carried in his principal’s vessel within the definition
    of “owner” in relation to goods under Section 2(o) of the
    Major Port Trusts Act, 1963?
  13. Whether a steamer agent at all can be made liable for
    payment of storage charges/demurrage, which are
    uncleared by the consignee, even where steamer agent has
    not issued delivery order?
  14. In the event a steamer agent is held liable, to what extent
    he is liable and whether it absolves the respondent from
    acting promptly under Sections 61 or 62 of the Act?
  15. Since this reference had not yet been answered by the larger Bench
    at the time the impugned proceedings were ongoing, the learned
    8
    Senior Advocate representing the shipping agents before the High
    Court clarified that the High Court may go on to decide only the
    question as to the extent of liability of the shipping agents, i.e. whether
    liability could extend beyond the 75 days mentioned in the relevant
    TAMP Orders.
  16. In answering the question raised before it, the impugned judgment
    referred to the fact that the shipping agents repeatedly requested the
    Port Trust to destuff the containers which were lying at the port, but
    that the Port Trust stated that they cannot do so for inadequacy of
    space. The impugned judgment therefore held that because of the
    lapse on the part of the consignee on the one hand in not lifting the
    goods, and the Port Trust on the other in not destuffing containers, the
    shipping agents were caught in between, and were being made “to pay
    through their nose”. This being the case, the impugned judgment went
    on to construe sections 61 and 62 of the MPT Act, by which a Board
    “may”, after the expiry of two months from the time when any goods
    passed into its custody, sell such goods under certain circumstances.
    The impugned judgment went on to hold that the expression “may” in
    the said provisions must be read as “shall”, as a duty is cast on the
    Port Trust to get rid of the goods as soon as possible in a fact situation
    9
    where the consignee does not lift such goods. Ultimately, the
    impugned judgment concluded:
    “44. In the above facts and circumstances, this Court finds
    that, there is no rationale on the part of the Port Trust in
    contending that they are entitled to collect ‘Ground Rent’
    charges in respect of containers indefinitely. The course
    pursued by them without causing the goods to be destuffed,
    despite the specific request, on the failure of the
    Consignee/Importer to have it cleared and by proceeding
    against such goods for causing the same to be sold in the
    public auction, realising the funds, to be apportioned in the
    manner specified under Section 63, cannot but be
    deprecated. This Court holds that the respondent Port Trust
    can demand ‘Ground Rent’ only to a maximum period of ‘75
    days’ as specified by the Tariff Authority for Major Ports as
    per the relevant TAMP Orders discussed above.”
  17. Shri Ritin Rai, learned Senior Advocate appearing on behalf of the
    Appellant Port Trust, referred to various provisions of the Customs Act,
    1962 and the MPT Act, and argued that once responsibility for the
    goods is taken over by the Port Trust, the Port Trust becomes a bailee
    of the goods delivered to it by the ship-owner, who in turn is relieved
    of its liability for loss or damage to the goods during the period when
    the goods are in the custody of the Port Trust. Thus, the Port Trust is
    entitled to recover, from the shipping agents, demurrage and other
    dues for the period until a delivery order is issued by the shipping agent
    to the consignee, and for this purpose is entitled to exercise a lien over
    the goods for realisation of such demurrage. He added that where a
    delivery order is withheld or withdrawn, disabling the consignee from
    10
    getting delivery of the goods, the position remains as if no delivery
    order was issued at all. In such a case, the liability for payment of
    demurrage and other dues of the Port Trust will continue to be with the
    shipping agent. According to the learned Senior Advocate, the different
    strands of the judgments of this Court can all be reconciled to reach
    the conclusion canvassed for by the learned Senior Advocate. He
    argued that the submission that upon landing and discharge of the
    goods from the vessel, the Port Trust becomes a sub-bailee of the
    shippers/consignors, and that the Port Trust can therefore recover its
    dues only from the consignors, or the consignee who steps into the
    consignor’s shoes upon endorsement of the bill of lading pursuant to
    section 1 of the Indian Bills of Lading Act, 1856, is wholly incorrect. He
    dealt with the decision of the Privy Council in “The K.H. Enterprise”
    [1994] 1 Lloyd’s Law Reports 593, and distinguished the said decision
    from the present case, stating that the decision nowhere relates to the
    obligations of the bailee to the sub-bailee for services undertaken by it
    at the bailee’s request. He went on to argue that in any case, the subbailee in K.H. Enterprise (supra) was entitled to payment for its
    services from the bailee pursuant to the agreement between them, and
    not from the bailor/shipper. Analogously, therefore, the Port Trust (subbailee) would be entitled to payment for its services from the shipping
    11
    agent (bailee). He was at pains to argue that the passing of title to the
    goods is immaterial when it comes to the Port Trust collecting its dues,
    as the Port Trust has no means of ascertaining when such title has
    passed. In any event, Shri Rai contended that the correct reading of
    the MPT Act leads to the conclusion that the passing of title is in any
    case wholly irrelevant. He stressed the fact that containers belonging
    to the shipping agents are required to be returned to them upon
    destuffing, as a result of which they are liable for ground rent. He
    strongly supported the decision in Rasiklal (supra) which laid this
    proposition down as a matter of law. He also strongly deprecated the
    impugned judgment of the Kerala High Court, stating that the discretion
    that has been given under sections 61 and 62 of the MPT Act to the
    Port Trust cannot be converted into a mandatory obligation, and that
    “may” must be read as “may”, and not “shall”.
  18. Shri Prashant S. Pratap, learned Senior Advocate appearing on behalf
    of Respondent No.1, a shipping/steamer agent, was at pains to point
    out that endorsement on the bill of lading by the shipping agent, and a
    delivery order being given by the shipping agent, does not pass title to
    the goods. The endorsement on the bill of lading by the consignor in
    favour of a notified party or a consignee, when read with section 1 of
    the Indian Bills of Lading Act, 1856, is the endorsement that passes
    12
    title to goods, and must not be confused with his client’s endorsement
    on the bill of lading. He relied heavily on the Privy Council judgment in
    K.H. Enterprise (supra), stating that the decision applied on all fours
    to the present case, and that therefore the Port Trust as a sub-bailee
    of the goods steps into the shoes of the bailee, i.e. the ship-owner/shipowner’s agent, and must therefore sue the bailor i.e. the
    consignor/shipper, and not the original bailee. This was also because
    implied consent has been given by the consignor to handover the
    goods to the Port Trust at the port of despatch for delivery to the
    consignee, the Port Trust being fully aware that the goods are not the
    property of the carrier, namely the vessel, who is the bailee. He argued
    that on a conjoint reading of the provisions of the MPT Act, and on a
    reading of section 158 of the Indian Contract Act, 1872, the bailor must
    repay to the bailee “necessary expenses” incurred by it for the
    purposes of the bailment. This would, therefore, enable the Port Trust
    to recover storage charges from the bailor who is always the owner of
    the goods, whether consignor or consignee, but never from the shipowner, who is never the bailor. Shri Pratap argued that the MPT Act
    itself makes a clear distinction between the steamer agent, who is the
    agent of the vessel, and other agents, namely those of the
    consignor/consignee, under section 62 of the MPT Act. Further, upon
    13
    sale of goods under section 63, the excess must be returned only to
    the owner. Such excess can never be paid to the ship-owner or the
    steamer’s agent. He further went on to argue that a clear distinction is
    made in section 2(o) of the MPT Act between “owner” in relation to the
    goods, and “owner” in relation to the vessel, and that the steamer
    agent – who is the agent of the vessel – can never be said to be the
    “owner” of goods. He relied strongly on the judgment in Sriyanesh
    Knitters (supra), stating that the Port Trust is a bailee on behalf of the
    consignee who is the bailor, on a consideration of section 1 of the
    Indian Bills of Lading Act, 1856, and submitted that Forbes-II (supra)
    is wholly incorrect and deserves to be overruled. He dealt with the
    judgment in Rowther-I (supra) in great detail, and distinguished it from
    the present case, stating that the judgment does not concern
    demurrage or storage charges post landing of the goods, and after the
    Port Trust takes custody of the goods and issues the receipt, and is
    thus not applicable to the facts of the present case. Further, according
    to him, Rasiklal (supra), insofar as it agrees with Forbes-II (supra) is
    incorrect. Insofar as Rasiklal (supra) notes the legal position that the
    Port Trust is a sub-bailee of the goods bailed by the consignor (bailor)
    to the ship-owner (bailee), it is absolutely correct and must be followed.
    So far as Rowther-II (supra) is concerned, the learned Senior
    14
    Advocate stated that the portion of Rowther-II (supra), which mixes up
    endorsement by the steamer agent with the endorsement by the
    consignor, cannot be said to be good law. He also contended that the
    issuance of a delivery order to the consignee is irrelevant, and has no
    bearing on the liability to pay storage charges. He further argued that
    to the extent that the judgment states that the vessel and its agent
    cannot be mulcted with the charges, the judgment is absolutely correct
    and must be followed. Insofar as goods carried by containers is
    concerned, Shri Pratap contends that the Port Trust itself states that
    the charges claimed by the Port Trust are in respect of goods, and not
    in respect of the container in which the goods are stuffed. Thus, the
    container cannot be said to be “goods” as defined which would incur
    storage charges. He also relied upon the counter affidavit filed by the
    Port Trust before the High Court, in which the Port Trust admitted that
    if the goods were imported as bulk cargo, the liability to satisfy
    demurrage would not be on the steamer agent but on the consignee.
    The mere fact that they are carried in a container can therefore make
    no difference. He argued that since all questions were now open before
    this Court, he was not constrained by the predecessor counsel
    (including himself) in the High Court, stating that as a reference was
    then pending to a larger Bench of this Court, they did not argue the
    15
    larger question as to whether the steamer agent is at all liable. There
    is no estoppel in any case in law, and the correct position has to be
    determined by this Court.
    10.Shri Rahul Narichania, learned Senior Advocate appearing on behalf
    of Respondent No.6 (The Container Shipping Lines Association), who
    is an Intervenor in these proceedings, argued that the definition of
    “owner” in section 2(o) of the MPT Act differentiates between owner of
    the “vessel”, and owner of the “goods”, and that a steamer agent does
    not come within the first part of section 2(o) if the doctrine of noscitur a
    sociis is applied. He argued that a steamer agent is an agent of a
    disclosed principal, i.e. the ship-owner, and therefore cannot be made
    liable for demurrage charges. It is only an agent for loading and
    unloading of cargo, i.e. an agent of the consignor or consignee who
    can be made so liable. He went on to argue that a steamer agent must
    be distinguished from a stevedoring agent, and is not involved in
    loading and unloading cargo. He referred to various provisions of the
    MPT Act, and argued that section 48(1)(d) therein does not
    contemplate any liability on a steamer agent. This section has to be
    contrasted with section 49(1)(c), which expressly contemplates liability
    on a steamer agent, but only with respect to land that is taken on lease
    from the Port Trust by the steamer agent. He relied heavily upon
    16
    sections 61 to 63 of the MPT Act to argue that when the goods are sold
    by the public auction, a steamer agent has to be notified only because
    the vessel owner may have a lien on such goods, which can be
    enforced in its favour under section 60 of the MPT Act. Further, he
    argued that it is made clear that if there is a surplus from the sale
    proceeds, such surplus shall be paid only to the importer, owner or
    consignee of the goods or their agent, from which list of persons the
    ship-owner and its agent are conspicuously absent, making it clear that
    it is the owner of the goods alone, or persons entitled to the goods, that
    the Port Trust must chase for demurrage charges incurred after
    landing. He then argued that the passing of title under section 1 of the
    Indian Bills of Lading Act, 1856 makes it clear that it is either the
    consignor (before title passes) or the consignee (after title passes) that
    can alone be made liable for payment of such charges. He also argued
    that the obligation to clear goods imported which have been stored in
    a warehouse are that of the importer, and for this he relied heavily on
    section 49 of the Customs Act, 1962. He argued that this would also
    make it clear that the steamer agent therefore does not come into the
    picture. He further argued that the steamer agent has no bailor-bailee
    relationship with the Port Trust, and joined Shri Pratap in relying upon
    Sriyanesh Knitters (supra) and overruling of Forbes-II (supra). To the
    17
    extent that Rasiklal (supra) has made observations against steamer
    agents, it is incorrect in law and should be overruled to this extent.
    11.Shri Kavin Gulati, learned Senior Advocate appearing on behalf of
    Hapag-Lloyd India Pvt. Ltd., a shipping agent and also an Intervenor
    in these proceedings, reiterated the submissions made by the
    predecessor counsel, and further stressed on sections 29, 30, 33, 45,
    48 and 150 of the Customs Act. He also argued that once goods have
    been landed, a ship-owner’s agent can never be made liable for
    demurrage charges, which should be to the account of the owner or
    the beneficial owner of the goods.
    12.Having heard the learned Senior Counsel on behalf of all parties, it is
    necessary to first set out the relevant provisions of the MPT Act.
    “Section 2. Definitions.-In this Act, unless the context
    otherwise requires,-
    (f) “dock” includes all basins, locks, cuts, entrances, graving
    docks, graving blocks, inclined planes, slipways, gridirons,
    moorings, transit-sheds, warehouses, tramways, railways
    and other works and things appertaining to any dock, and
    also the portion of the sea enclosed or protected by the arms
    or groynes of a harbour;
    xxx xxx xxx
    (h) “goods” includes livestock and every kind of movable
    property;
    xxx xxx xxx
    (n) “master”, in relation to any vessel or any aircraft making
    use of any port, means any person having for the time being
    18
    the charge or control of such vessel or such aircraft, as the
    case may be, except a pilot, harbour master, assistant
    harbour master, dock master or berthing master of the port;
    (o) “owner”,
    (i) in relation to goods, includes any consignor, consignee,
    shipper or agent for the sale, custody, loading or unloading
    of such goods; and
    (ii) in relation to any vessel or any aircraft making use of any
    port, includes any part-owner, charterer, consignee, or
    mortgagee in possession thereof;
    xxx xxx xxx
    (v) “rate” includes any toll, due, rent, rate, fee, or charge
    leviable under this Act;
    xxx xxx xxx
    (z) “vessel” includes anything made for the conveyance,
    mainly by water, of human beings or of goods and a
    caisson;”
    “42. Performance of services by Board or other
    person.—(1) A Board shall have power to undertake the
    following services:—
    (a) landing, shipping or transhipping passengers and goods
    between vessels in the port and the wharves, piers, quays
    or docks belonging to or in the possession of the Board;
    (b) receiving, removing, shifting, transporting, storing or
    delivering goods brought within the Board’s premises;
    (c) carrying passengers by rail or by other means within the
    limits of the port or port approaches, subject to such
    restrictions and conditions as the Central Government may
    think fit to impose;
    (d) receiving and delivering, transporting and booking and
    despatching goods originating in the vessels in the port and
    intended for carriage by the neighbouring railways, or vice
    19
    versa, as a railway administration under the Indian Railways
    Act, 1890 ( 9 of 1890);
    (e) piloting, hauling, mooring, remooring, hooking, or
    measuring of vessels or any other service in respect of
    vessels; and
    (f) developing and providing, subject to the previous
    approval of the Central Government, infrastructure facilities
    for ports.
    (2) A Board may, if so requested by the owner, take charge
    of the goods for the purpose of performing the service or
    services and shall give a receipt in such form as the Board
    may specify.
    (3) Notwithstanding anything contained in this section, the
    Board may, with the previous sanction of the Central
    Government, authorise any person to perform any of the
    services mentioned in sub-section (1) on such terms and
    conditions as may be agreed upon.
    (3A) Without prejudice to the provisions of sub-section (3), a
    Board may, with the previous approval of the Central
    Government, enter into any agreement or other
    arrangement (whether by way of partnership, joint venture
    or in any other manner) with, any body corporate or any
    other person to perform any of the services and functions
    assigned to the Board under this Act on such terms and
    conditions as may be agreed upon.
    (4) No person authorised under sub-section (3) shall charge
    or recover for such service any sum in excess of the amount
    specified by the Authority, by notification in the Official
    Gazette.
    (5) Any such person shall, if so required by the owner,
    perform in respect of goods any of the said services and for
    that purpose take charge of the goods and give a receipt in
    such form as the Board may specify.
    (6) The responsibility of any such person for the loss,
    destruction or deterioration of goods of which he has taken
    charge shall, subject to the other provisions of this Act, be
    20
    that of a bailee under sections 151, 152 and 161 of the
    Indian Contract Act, 1872 (9 of 1872).
    (7) After any goods have been taken charge of and a receipt
    given for them under this section, no liability for any loss or
    damage which may occur to them shall attach to any person
    to whom a receipt has been given or to the master or owner
    of the vessel from which the goods have been landed or
    transhipped.
  19. Responsibility of Board for loss, etc., of goods.—(1)
    Subject to the provisions of this Act, the responsibility of any
    Board for the loss, destruction or deterioration of goods of
    which it has taken charge shall,—
    (i) in the case of goods received for carriage by railway, be
    governed by the provisions of the Indian Railways Act, 1890
    (9 of 1890); and
    (ii) in other cases, be that of a bailee under sections 151,
    152 and 161 of the Indian Contract Act, 1872 (9 of 1872),
    omitting the words “in the absence of any special contract”
    in section 152 of that Act:
    Provided that no responsibility under this section shall attach
    to the Board—
    (a) until a receipt mentioned in sub-section (2) of section 42
    is given by the Board; and
    (b) after the expiry of such period as may be prescribed by
    regulations from the date of taking charge of such goods by
    the Board.
    (2) A Board shall not be in any way responsible for the loss,
    destruction or deterioration of, or damage to, goods of which
    it has taken charge, unless notice of such loss or damage
    has been given within such period as may be prescribed by
    regulations made in this behalf from the date of taking
    charge of such goods by the Board under sub-section (2) of
    section 42.”
    “48. Scales of rates for services performed by Board or
    other person.—(1) The Authority shall from time to time, by
    21
    notification in the Official Gazette, frame a scale of rates at
    which, and a statement of conditions under which, any of the
    services specified hereunder shall be performed by a Board
    or any other person authorised under section 42 at or in
    relation to the port or port approaches—
    (a) transhipping of passengers or goods between vessels in
    the port or port approaches;
    (b) landing and shipping of passengers or goods from or to
    such vessels to or from any wharf, quay, jetty, pier, dock,
    berth, mooring, stage or erection, land or building in the
    possession or occupation of the Board or at any place within
    the limits of the port or port approaches;
    (c) cranage or porterage of goods on any such place;
    (d) wharfage, storage or demurrage of goods on any such
    place;
    (e) any other service in respect of vessels, passengers or
    goods.
    (2) Different scales and conditions may be framed for
    different classes of goods and vessels.”
    “59. Board’s lien for rates.—(1) For the amount of all rates
    leviable under this Act in respect of any goods, and for the
    rent due to the Board for any buildings, plinths, stacking
    areas, or other premises on or in which any goods may have
    been placed, the Board shall have a lien on such goods, and
    may seize and detain the same until such rates and rents
    are fully paid.
    (2) Such lien shall have priority over all other liens and
    claims, except for general average and for the ship-owner’s
    lien upon the said goods for freight and other charges where
    such lien exists and has been preserved in the manner
    provided in sub-section (1) of section 60, and for money
    payable to the Central Government under any law for the
    time being in force relating to customs, other than by way of
    penalty or fine.
    22
  20. Ship-owner’s lien for freight and other charges.—(1)
    If the master or owner of any vessel or his agent, at or before
    the time of landing from such vessel any goods at any dock,
    wharf, quay, stage, jetty, berth, mooring or pier belonging to
    or in the occupation of a Board, gives to the Board a notice
    in writing that such goods are to remain subject to a lien for
    freight or other charges payable to the ship-owner, to an
    amount to be mentioned in such notice, such goods shall
    continue to be liable to such lien to such amount.
    (2) The goods shall be retained in the custody of the Board
    at the risk and expense of the owners of the goods until such
    lien is discharged as hereinafter mentioned; and godown or
    storage rent shall be payable by the party entitled to such
    goods for the time during which they may be so retained.
    (3) Upon the production before any officer appointed by the
    Board in that behalf of a document purporting to be a receipt
    for, or release from, the amount of such lien, executed by
    the person by whom or on whose behalf such notice has
    been given, the Board may permit such goods to be
    removed without regard to such lien, provided that the Board
    shall have used reasonable care in respect to the
    authenticity of such document.
  21. Sale of goods after two months if rates or rent are
    not paid or lien for freight is not discharged.—(1) A
    Board may, after the expiry of two months from the time
    when any goods have passed into its custody, or in the case
    of animals and perishable or hazardous goods after the
    expiry of such shorter period not being less than twenty-four
    hours after the landing of the animals or goods as the Board
    may think fit, sell by public auction or in such cases as the
    Board considers it necessary so to do, for reasons to be
    recorded in writing, sell by tender, private agreement or in
    any other manner such goods or so much thereof as, in the
    opinion of the Board, may be necessary—
    (a) if any rates payable to the Board in respect of such goods
    have not been paid, or
    23
    (b) if any rent payable to the Board in respect of any place
    on or in which such goods have been stored has not been
    paid, or
    (c) if any lien of any ship-owner for freight or other charge of
    which notice has been given has not been discharged and if
    the person claiming such lien for freight or other Charges
    has made to the Board an application for such sale.
    (2) Before making such sale, the Board shall give ten days’
    notice of the same by publication thereof in the Port Gazette,
    or where there is no Port Gazette, in the Official Gazette and
    also in at least one of the principal local daily newspapers:
    Provided that in the case of animals and perishable or
    hazardous goods, the Board may give such shorter notice
    and in such manner as, in the opinion of the Board, the
    urgency of the case admits of.
    (3) If the address of the owner of the goods has been stated
    on the manifest of the goods or in any of the documents
    which have come into the hands of the Board, or is otherwise
    known notice shall also be given to him by letter delivered at
    such address, or sent by post, but the title of a bona fide
    purchaser of such goods shall not be invalidated by a reason
    of the omission to send such notice, nor shall any such
    purchaser be bound to inquire whether such notice has been
    sent.
    (4) Notwithstanding anything contained in this section, arms
    and ammunition and controlled goods may be sold at such
    time and in such manner as the Central Government may
    direct.
    Explanation.—In this section and section 62—
    (a) “arms and ammunition” have the meanings respectively
    assigned to them in the Arms Act, 1959 (54 of 1959);
    (b) “controlled goods” means goods the price or disposal of
    which is regulated under any law for the time being in force.
  22. Disposal of goods not removed from premises of
    Board within time limit.—(1) Notwithstanding anything
    24
    contained in this Act, where any goods placed in the custody
    of the Board upon the landing thereof are not removed by
    the owner or other person entitled thereto from the premises
    of the Board within one month from the date on which such
    goods were placed in their custody, the Board may, if the
    address of such owner or person is known, cause a notice
    to be served upon him by letter delivered at such address or
    sent by post, or if the notice cannot be so served upon him
    or his address is not known, cause a notice to be published
    in the Port Gazette or where there is no Port Gazette, in the
    Official Gazette and also in at least one of the principal local
    daily newspapers, requiring him to remove the goods
    forthwith and stating that in default of compliance therewith
    the goods are liable to be sold by public auction or by tender,
    private agreement or in any other manner:
    Provided that where all the rates and charges payable under
    this Act in respect of any such goods have been paid, no
    notice of removal shall be so served or published under this
    sub-section unless two months have expired from the date
    on which the goods were placed in the custody of the Board.
    (2) The notice referred to in sub-section (1) may also be
    served on the agents of the vessel by which such goods
    were landed.
    (3) If such owner or person does not comply with the
    requisition in the notice served upon him or published under
    sub-section (1), the Board may, at any time after the
    expiration of two months from the date on which such goods
    were placed in its custody, sell the goods by public auction
    or in such cases as the Board considers it necessary so to
    do, for reason to be recorded in writing sell by tender, private
    agreement or in any other manner after giving notice of the
    sale in the manner specified in sub-sections (2) and (3) of
    section 61.
    (4) Notwithstanding anything contained in sub-section (1) or
    sub-section (3)—
    (a) the Board may, in the case of animals and perishable or
    hazardous goods, give notice of removal of such goods
    although the period of one month or, as the case may be, of
    25
    two months specified in sub-section (1) has not expired or
    give such shorter notice of sale and in such manner as, in
    the opinion of the Board, the urgency of the case requires;
    (b) arms and ammunition and controlled goods may be sold
    in accordance with the provisions of sub-section (4) of
    section 61.
    (5) The Central Government may, if it deems necessary so
    to do in the public interest, by notification in the Official
    Gazette, exempt any goods or classes of goods from the
    operation of this section.
  23. Application of sale proceeds.—(1) The proceeds of
    every sale under section 61 or section 62 shall be applied in
    the following order—
    (a) in payment of the expenses of the sale;
    (b) in payment, according to their respective priorities, of the
    liens and claims excepted in sub-section (2) of section 59
    from the priority of the lien of the Board;
    (c) in payment of the rates and expenses of landing,
    removing, storing or warehousing the same, and of all other
    charges due to the Board in respect thereof, including
    demurrage (other than penal demurrage) payable in respect
    of such goods for a period of four months from the date of
    landing;
    (d) in payment of any penalty or fine due to the Central
    Government under any law for the time being in force
    relating to customs;
    (e) in payment of any other sum due to the Board.
    (2) The surplus, if any, shall be paid to the importer, owner
    or consignee of the goods or to his agent, on an application
    made by him in this behalf within six months from the date
    of the sale of the goods.
    (3) Where no application has been made under sub-section
    (2), the surplus shall be applied by the Board for the
    purposes of this Act.
    26
  24. Recovery of rates and charges by distraint of
    vessel.—(1) If the master of any vessel in respect of which
    any rates or penalties are payable under this Act, or under
    any regulations or orders made in pursuance thereof,
    refuses or neglects to pay the same or any part thereof on
    demand, the Board may distrain or arrest such vessel and
    the tackle, apparel and furniture belonging thereto, or any
    part thereof, and detain the same until the amount so due to
    the Board, together with such further amount as may accrue
    for any period during which the vessel is under distraint or
    arrest, is paid.
    (2) In case any part of the said rates or penalties, or of the
    cost of the distress or arrest, or of the keeping of the same,
    remains unpaid for the space of five days next after any such
    distress or arrest has been so made, the Board may cause
    the vessel or other things so distrained or arrested to be
    sold, and, with the proceeds of such sale, shall satisfy such
    rates or penalties and costs, including the costs of sale
    remaining unpaid, rendering the surplus (if any) to the
    master of such vessel on demand.
  25. Grant of port-clearance after payment of rates and
    realisation of damages, etc.—If a Board gives to the officer
    of the Central Government whose duty it is to grant the portclearance to any vessel at the port, a notice stating,—
    (i) that an amount specified therein is due in respect of rates,
    fines, penalties or expenses chargeable under this Act or
    under any regulations or orders made in pursuance thereof,
    against such vessel, or by the owner or master of such
    vessel in respect thereof, or against or in respect of any
    goods on board such vessel; or
    (ii) that an amount specified therein is due in respect of any
    damage referred to in section 116 and such amount together
    with the cost of the proceedings for the recovery thereof
    before a Magistrate under that section has not been
    realised,
    such officer shall not grant such port-clearance until the
    amount so chargeable or due has been paid or, as the case
    may be, the damage and cost have been realised.”
    27
    “123. General power of Board to make regulations.—
    Without prejudice to any power to make regulations
    contained elsewhere in this Act, a Board may make
    regulations consistent with this Act for all or any of the
    following purposes, namely:—
    xxx xxx xxx
    (c) for the form of receipt to be given under sub-section (2)
    of section 42;
    (d) for the period within which notice may be given under
    sub-section (2) of section 43;
    xxx xxx xxx
    (i) for the mode of payment of rates leviable by the Board
    under this Act;”
    “131. Alternative remedy by suit.—Without prejudice to
    any other action that may be taken under this Act, a Board
    may recover by suit any rates, damages, expenses, costs,
    or in the case of sale the balance thereof, when the proceeds
    of sale are insufficient, or any penalties payable to, or
    recoverable by, the Board under this Act or under any
    regulations made in pursuance thereof.”
    13.Since certain provisions of the Customs Act, 1962 were relied upon
    during the course of arguments, they are also set out as follows:
    “2. Definitions.—In this Act, unless the context otherwise
    requires,—
    xxx xxx xxx
    (26) ―“importer”, in relation to any goods at any time
    between their importation and the time when they are
    cleared for home consumption, includes any owner,
    beneficial owner or any person holding himself out to be the
    importer;”
    “29. Arrival of vessels and aircrafts in India.—(1) The
    person-in-charge of a vessel or an aircraft entering India
    28
    from any place outside India shall not cause or permit the
    vessel or aircraft to call or land—
    (a) for the first time after arrival in India; or
    (b) at any time while it is carrying passengers or cargo
    brought in that vessel or aircraft,
    at any place other than a customs port or a customs airport,
    as the case may be unless permitted by the Board.
  26. Delivery of arrival manifest or import manifest or
    import report.—(1) The person-in-charge of —
    (i) a vessel; or
    (ii) an aircraft; or
    (iii) a vehicle,
    carrying imported goods or export goods or any other person
    as may be specified by the Central Government, by
    notification in the Official Gazette, in this behalf shall, in the
    case of a vessel or an aircraft, deliver to the proper officer
    an arrival manifest or import manifest by presenting
    electronically prior to the arrival of the vessel or the aircraft,
    as the case may be, and in the case of a vehicle, an import
    report within twelve hours after its arrival in the customs
    station, in such form and manner as may be prescribed and
    if the arrival manifest or import manifest or the import report
    or any part thereof, is not delivered to the proper officer
    within the time specified in this sub-section and if the proper
    officer is satisfied that there was no sufficient cause for such
    delay, the person-in-charge or any other person referred to
    in this sub-section, who caused such delay, shall be liable to
    a penalty not exceeding fifty thousand rupees:
    Provided that the Principal Commissioner of Customs or
    Commissioner of Customs may, in cases where it is not
    feasible to deliver arrival manifest or import manifest by
    presenting electronically, allow the same to be delivered in
    any other manner.
    29
    (2) The person delivering the arrival manifest or import
    manifest or import report shall at the foot thereof make and
    subscribe to a declaration as to the truth of its contents.
    (3) If the proper officer is satisfied that the arrival manifest or
    import manifest or import report is in any way incorrect or
    incomplete, and that there was no fraudulent intention, he
    may permit it to be amended or supplemented.”
    “33. Unloading and loading of goods at approved places
    only.—Except with the permission of the proper officer, no
    imported goods shall be unloaded, and no export goods
    shall be loaded, at any place other than a place approved
    under clause (a) of section 8 for the unloading or loading of
    such goods.”
    “45. Restrictions on custody and removal of imported
    goods.—(1) Save as otherwise provided in any law for the
    time being in force, all imported goods unloaded in a
    customs area shall remain in the custody of such person as
    may be approved by the Principal Commissioner of Customs
    or Commissioner of Customs until they are cleared for home
    consumption or are warehoused or are transhipped in
    accordance with the provisions of Chapter VIII.
  27. Entry of goods on importation.—(1) The importer of
    any goods, other than goods intended for transit or
    transhipment, shall make entry thereof by presenting
    electronically on the customs automated system to the
    proper officer a bill of entry for home consumption or
    warehousing in such form and manner as may be
    prescribed:
    Provided that the Principal Commissioner of Customs or
    Commissioner of Customs may, in cases where it is not
    feasible to make entry by presenting electronically on the
    customs automated system, allow an entry to be presented
    in any other manner:
    Provided further that if the importer makes and subscribes
    to a declaration before the proper officer, to the effect that
    he is unable for want of full information to furnish all the
    particulars of the goods required under this sub-section, the
    30
    proper officer may, pending the production of such
    information, permit him, previous to the entry thereof (a) to
    examine the goods in the presence of an officer of customs,
    or (b) to deposit the goods in a public warehouse appointed
    under section 57 without warehousing the same.
    (2) Save as otherwise permitted by the proper officer, a bill
    of entry shall include all the goods mentioned in the bill of
    lading or other receipt given by the carrier to the consignor.
    (3) The importer shall present the bill of entry under subsection (1) before the end of the next day following the day
    (excluding holidays) on which the aircraft or vessel or vehicle
    carrying the goods arrives at a customs station at which such
    goods are to be cleared for home consumption or
    warehousing:
    Provided that a bill of entry may be presented at any time
    not exceeding thirty days prior to the expected arrival of the
    aircraft or vessel or vehicle by which the goods have been
    shipped for importation into India:
    Provided further that where the bill of entry is not presented
    within the time so specified and the proper officer is satisfied
    that there was no sufficient cause for such delay, the
    importer shall pay such charges for late presentation of the
    bill of entry as may be prescribed.
    (4) The importer while presenting a bill of entry shall make
    and subscribe to a declaration as to the truth of the contents
    of such bill of entry and shall, in support of such declaration,
    produce to the proper officer the invoice, if any, and such
    other documents relating to the imported goods as may be
    prescribed.
    (4A) The importer who presents a bill of entry shall ensure
    the following, namely:—
    (a) the accuracy and completeness of the information given
    therein;
    (b) the authenticity and validity of any document supporting
    it; and
    31
    (c) compliance with the restriction or prohibition, if any,
    relating to the goods under this Act or under any other law
    for the time being in force.
    (5) If the proper officer is satisfied that the interests of
    revenue are not prejudicially affected and that there was no
    fraudulent intention, he may permit substitution of a bill of
    entry for home consumption for a bill of entry for
    warehousing or vice versa.”
    “48. Procedure in case of goods not cleared,
    warehoused, or transhipped within thirty days after
    unloading.—If any goods brought into India from a place
    outside India are not cleared for home consumption or
    warehoused or transhipped within thirty days from the date
    of the unloading thereof at a customs station or within such
    further time as the proper officer may allow or if the title to
    any imported goods is relinquished, such goods may, after
    notice to the importer and with the permission of the proper
    officer be sold by the person having the custody thereof:
    Provided that —
    (a) animals, perishable goods and hazardous goods, may,
    with the permission of the proper officer, be sold at any time;
    (b) arms and ammunition may be sold at such time and place
    and in such manner as the Central Government may direct.
    Explanation.— In this section, ― “arms” and “ammunition”
    have the meanings respectively assigned to them in the
    Arms Act, 1959 (54 of 1959).
  28. Storage of imported goods in warehouse pending
    clearance or removal.—Where,––
    (a) in the case of any imported goods, whether dutiable or
    not, entered for home consumption, the Assistant
    Commissioner of Customs or Deputy Commissioner of
    Customs is satisfied on the application of the importer that
    the goods cannot be cleared within a reasonable time;
    (b) in the case of any imported dutiable goods, entered for
    warehousing, the Assistant Commissioner of Customs or
    Deputy Commissioner of Customs is satisfied on the
    32
    application of the importer that the goods cannot be
    removed for deposit in a warehouse within a reasonable
    time,
    the goods may pending clearance or removal, as the case
    may be, be permitted to be stored in a public warehouse for
    a period not exceeding thirty days:
    Provided that the provisions of Chapter IX shall not apply to
    goods permitted to be stored in a public warehouse under
    this section:
    Provided further that the Principal Commissioner of
    Customs or Commissioner of Customs may extend the
    period of storage for a further period not exceeding thirty
    days at a time.”
    “150. Procedure for sale of goods and application of sale
    proceeds.—(1) Where any goods not being confiscated
    goods are to be sold under any provisions of this Act, they
    shall, after notice to the owner thereof, be sold by public
    auction or by tender or with the consent of the owner in any
    other manner.
    (2) The proceeds of any such sale shall be applied—
    (a) firstly to the payment of the expenses of the sale,
    (b) next to the payment of the freight and other charges, if
    any, payable in respect of the goods sold, to the carrier, if
    notice of such charges has been given to the person having
    custody of the goods,
    (c) next to the payment of the duty, if any, on the goods sold,
    (d) next to the payment of the charges in respect of the
    goods sold due to the person having the custody of the
    goods,
    (e) next to the payment of any amount due from the owner
    of the goods to the Central Government under the provisions
    of this Act or any other law relating to customs, and the
    balance, if any, shall be paid to the owner of the goods.
    33
    Provided that where it is not possible to pay the balance of
    sale proceeds, if any, to the owner of the goods within a
    period of six months from the date of sale of such goods or
    such further period as the Commissioner of Customs may
    allow, such balance of sale proceeds shall be paid to the
    Central Government.”
    14.A perusal of the relevant provisions of the MPT Act would show that
    when section 2(o) defines “owner”, it defines owner in relation to goods
    separately from owner in relation to any vessel. In sub-clause (i) of
    section 2(o), when owner is defined in relation to “goods”, the definition
    is an inclusive one. Secondly, it includes persons who are owners of
    the goods, or persons beneficially entitled to the goods, such as the
    consignor, consignee and the shipper and then also includes agents
    for sale, custody, loading or unloading of such goods. Ordinarily,
    agents for the sale or custody of goods would relate only to agents of
    the owner or persons beneficially entitled to such goods, which would
    certainly exclude the ship-owner and the ship-owner’s agent.
    However, considering the fact that the definition is an inclusive
    definition, and that loading or unloading of goods can take place by the
    steamer’s agent, as was held in Rowther-I (supra), it is difficult to
    accept the contention on behalf of the steamer’s agent that such
    persons would not be included within the definition of “owner” under
    the MPT Act.
    34
    15.For these reasons, it is not possible to apply the doctrine of noscitur a
    sociis to the definition of “owner” under section 2(o), as was contended
    by the learned Senior Advocates appearing on behalf of the steamer
    agents. In Brindavan Bangle Stores and Ors. v. Asst.
    Commissioner of Commercial Taxes and Anr. (2000) 1 SCC 674,
    this Court held:
    “7. The second contention raised on behalf of the appellants
    related to the clarity and ambiguity of Entry 30 and Entry 54
    and application of such construction of noscitur à sociis. In
    our opinion the learned Division Bench of the Karnataka
    High Court has rightly held that the said rule of construction
    has no application to the facts and circumstances of the
    case. This Court in State of Bombay v. Hospital Mazdoor
    Sabha [AIR 1960 SC 610] has considered in detail the rule
    of construction noscitur à sociis and in para 9, it is observed
    thus:
    “We are not impressed by this argument. It must be borne in
    mind that noscitur à sociis is merely a rule of construction
    and it cannot prevail in cases where it is clear that the wider
    words have been deliberately used in order to make the
    scope of the defined word correspondingly wider. It is only
    where the intention of the legislature in associating wider
    words with words of narrower significance is doubtful, or
    otherwise not clear that the present rule of construction can
    be usefully applied. It can also be applied where the
    meaning of the words of wider import is doubtful; but, where
    the object of the legislature in using wider words is clear and
    free of ambiguity, the rule of construction in question cannot
    be pressed into service.”
  29. As stated earlier on reading Entry 30 and Entry 54, we
    have no manner of doubt that there is neither any ambiguity
    nor do they lack any clarity. The legislature intended to levy
    and collect entry tax on the articles mentioned in both these
    entries. The words used therein are of wider import and
    clearly indicate that all articles made of glass or made from
    35
    all kinds of all forms of plastic including articles made of
    polypropylene, polystyrene and like materials are subjected
    to payment of entry tax. It cannot be disputed that the articles
    in question, namely, bangles are made of glass and/or made
    of plastic etc. The impugned judgment has very succinctly
    dealt with the contentions raised on behalf of both the parties
    and also dealt with the various reported decisions of this
    Court and other High Courts in great length. We are in
    complete agreement with the view taken by the Division
    Bench.”
    16.In the present case, we find no lack of clarity in the expression “agent
    for the…loading or unloading of such goods”, as including persons who
    may be the vessel’s agent involved in unloading goods. As the
    definition of “owner” is inclusive, as stated hereinabove, the nonmention of the ship-owner in the first part of the definition makes no
    difference, as it would be incongruous to hold that the shipowner’s
    agent is included in the latter part of the definition, but not the shipowner itself, which would indicate that the maxim noscitur a sociis
    cannot apply.
    17.This becomes even clearer when section 42 is perused. Under section
    42(1), a Board shall have power to undertake services insofar as
    landing, shipping or transhipping goods between vessels in the port
    and the wharves, piers, quays or docks belonging to or in the
    possession of the Board, referring clearly, therefore, to services
    rendered to the vessel (see section 42(1)(a)). Insofar as receiving,
    removing, shifting, or transporting goods is concerned, these could be
    36
    services to both the vessel as well as the owner/person entitled to the
    goods. The moot question is, when it comes to “storing” goods brought
    within the Board’s premises, whether such service could be said to be
    a service rendered to the vessel or its agent (see section 42(1)(b)).
    Some of the pivotal provisions of the MPT Act, insofar as the present
    questions are involved, are contained in sections 42(2), 42(7) and 43
    of the Act. Under section 42(2), a Board may, if so requested by the
    “owner”, take charge of the goods for the purpose of performing
    services, and shall give a receipt in such form as the Board may
    specify. It is obvious that if the ship-owner or its agent are not “owners”,
    the Board cannot take the charge of the goods from the ship-owner or
    its agent for the purpose of performing services, a result which would
    lead to startling consequences. Secondly, under sub-section (7), once
    goods have been taken charge of and a receipt given for them, no
    liability for any loss or damage which may occur to them shall attach to
    any person to whom a receipt has been given (this would include any
    of the persons mentioned in section 2(o)(i), including the vessel’s
    agents), or to the master or owner of the vessel from which the goods
    have been landed or transhipped. This would again make it clear that
    the master or owner of the vessel and their agents, from this point on,
    have been absolved from liability for loss or damage to the goods, as
    37
    the Board has now taken over the custody of the goods from such
    master or owner of the vessel. From this point on, therefore, the master
    or owner of the vessel and their agents cease to have any liability qua
    the goods, inasmuch as the Port Trust has now taken them over.
    Concomitantly, under section 43(1)(ii), the responsibility of the Port
    Trust for loss, destruction or deterioration of goods of which it has
    taken charge from this point of time onwards now becomes that of a
    bailee under sections 151, 152 and 161 of the Indian Contract Act,
    1872, omitting the words “in the absence of any special contract” in
    section 152 of the Contract Act. This responsibility attaches only after
    a receipt is given by the Board, and notice of loss or damage has been
    given, after expiry of such period (as may be prescribed) from the
    crucial date on which the Port Trust takes charge of the goods.
    18.At this juncture, it is important to state that arguments have been made
    based on observations contained in various judgments in which
    sections 42 (5) and (6) of the MPT Act have been referred. Sections
    42(5) and (6) have no application to the Board, as they apply only to
    the “person” authorised under section 42(3) by the Board to perform
    services mentioned in sub-section (1).
    19.Again, under section 48, a distinction is made between landing of
    goods from a vessel, and storage or demurrage charges in respect of
    38
    goods – see section 48(1)(b), as contrasted with section 48(1)(d).
    When it comes to services performed on vessels, sections 49A, 49B,
    50, 50A and 50B make it clear that the services rendered to vessels
    for which dues have to be paid by vessels are entirely separate and
    distinct from services rendered insofar as goods that are landed are
    concerned.
    20.Coming to section 59, it becomes clear that for all rates leviable under
    the MPT Act, which includes rates leviable for storage of goods, the
    Board shall have a lien on such goods, and may, after custody of such
    goods is taken by the Port Trust, then seize and detain the same until
    such rates are fully paid.
    21.Section 60 is also important, in that the ship-owner’s lien for freight and
    other charges is recognised if, at or before the time of landing of any
    goods from such vessel, such freight or other charges have not been
    paid. Under section 60(2), the goods shall be retained in the custody
    of the Board at the risk and expense of the owners of the goods until
    such lien is discharged. Most importantly, godown or storage rent shall
    be payable by “the party entitled to such goods” for the time during
    which they may be so retained. This section is of crucial importance,
    as it makes it clear that godown or storage rent is payable only by the
    party entitled to such goods, which can never be the ship-owner or the
    39
    ship-owner’s agent after the goods have been landed, and the vessel
    has sailed away from the port. Further, under section 61, after two
    months from the time goods have passed into the Board’s custody, the
    Board may, if it thinks fit, sell – by the modalities laid down – such
    goods or so much thereof as may be necessary to recover the rates
    payable to the Board which remain unpaid. Sub-section (3) of section
    61 is very important, in that before making such sale, if the address of
    the “owner of the goods” which has been stated on the manifest, or in
    other documents that have come into the hands of the Board, or is
    otherwise known, notice of such sale must be given to such owner.
    22.Section 62 speaks of the disposal of goods that have not been
    removed from the premises of the Board within time, and speaks of
    their removal by the “owner or other person entitled thereto”. Under
    sub-section (2) of section 62, where such goods are proposed to be
    removed or sold, a notice may also be served on the “agents of the
    vessel by which such goods were landed”. This is for the reason that
    the vessel’s agents may have indicated that the ship-owner has a lien
    for freight and other charges, which must be satisfied out of the sale of
    such goods. The important point to be noted is that a clear distinction
    is made between an “owner or other person entitled” to goods, and
    agents of the vessel. Further, under sub-section (3) of section 62, it is
    40
    only if the owner or person entitled to goods does not comply with the
    requisition in the notice, that the Board may, at any time after the
    expiration of two months from the date on which such goods were
    placed in its custody, then sell the goods in the manner indicated. The
    scheme of section 62, therefore, is that when it comes to sale of goods
    which are lying stored in the premises of the Board, notice is to be
    given only to the owner, or other persons who are beneficially entitled
    to the goods, who must then comply with the requisition given and
    remove the goods. At this juncture, the ship-owner or its agents are not
    persons who have to comply with such requisition, as they are neither
    persons who are the owner, or other persons entitled to the goods. The
    notice issued to the agent of the vessel is only for the limited purpose
    as aforesaid. This again indicates that goods that are stored on the
    premises of the Board have a nexus only with the owner or other
    persons entitled to those goods, and not with the agent of the vessel
    or the vessel itself.
    23.Section 63 is again very important. When goods have been sold and a
    surplus exists, the surplus shall be paid to only three persons or their
    agents, namely, the “importer”, “owner” or “consignee” of the goods.
    In this sub-section, namely, 63(2), as in the case of “owner’ under
    section 61(3), the owner of the goods is obviously not the “owner” as
    41
    defined under section 2(o), as the context of section 63(2) indicates
    otherwise. There would have been no need to add “importer” or
    “consignee” in this sub-section, as they are already subsumed within
    the wider definition of “owner” in relation to goods under section 2(o).
    Secondly, what is conspicuous by its absence is mention of the vessel
    or any agent for loading or unloading goods. As a matter of fact, when
    it comes to recovery of rates and charges against the vessel, a
    separate remedy is provided for in sections 64 and 65 of the MPT Act.
    24.The statutory scheme of the MPT Act now becomes crystal clear. Until
    the stage of landing and removal to a place of storage, the steamer’s
    agent or the vessel itself may be made liable for rates payable by the
    vessel for services performed to the vessel. Post landing and removal
    to a place of storage, detention charges for goods that are stored, and
    demurrage payable thereon from this point on, i.e. when the Port Trust
    takes charge of the goods from the vessel, or from any other person
    who can be said to be owner as defined under section 2(o), it is only
    the owner of the goods or other persons entitled to the goods (who
    may be beneficially entitled as well) that the Port Trust has to look to
    for payment of storage or demurrage charges.
    25.At this juncture, the Customs Act, 1962 also becomes relevant. Under
    section 2(26), “importer” is defined as including any owner, beneficial
    42
    owner or any person holding himself out to be the importer. Though
    this definition does not ipso facto apply to the MPT Act, it is important
    that the two Acts be read together, as both Acts deal with goods that
    are imported into the country from abroad, and their storage and
    disposal thereafter. In any event, the expression “importer” that occurs
    in section 63(2) of the MPT Act would certainly include a beneficial
    owner of the goods.
    26.Under section 29 of the Customs Act, the person-in-charge of a vessel
    when it carries cargo can land only at a “customs port” (as defined),
    unless otherwise permitted by the Central Board of Excise. Under
    section 30, the person-in-charge of a vessel carrying imported goods
    shall deliver to the “proper officer”, i.e. a customs officer, an import
    manifest of the vessel within the time prescribed, which would indicate
    the nature of the goods carried by the vessel, and the consignee or
    other owner of the goods. Under section 33, no such imported goods
    can be unloaded at any place other than the place approved for
    unloading of such goods in the customs port, customs airport or coastal
    port. Under section 45(1), all imported goods unloaded in a customs
    area shall remain in the custody of such person as approved by the
    Principal Commissioner of Customs or Commissioner of Customs until
    they are cleared for home consumption or are warehoused or
    43
    transhipped. Section 46(1) is extremely important in that it speaks of a
    bill of entry for home consumption or warehousing in such form and
    manner as may be prescribed. Section 46(2) then states that a bill of
    entry shall include all the goods mentioned in the bill of lading or other
    receipt given by the carrier to the consignor. Under section 48, if any
    goods brought into India from a place outside India are not cleared for
    home consumption or warehoused or transhipped within 30 days from
    the date of the unloading, such goods may, after notice to the
    “importer” and with permission of the proper officer, be sold by the
    person having the custody thereof.
    27.Under section 49, imported goods may, pending clearance or removal,
    be permitted to be stored in a public warehouse for a period not
    exceeding 30 days, or such other extended period that the Principal
    Commissioner or Commissioner of Customs may permit. The Customs
    Act, therefore, also contains parallel provisions for authorities under
    that Act to take charge of, store, and sell imported goods, in the
    circumstances mentioned therein.
    28.It was argued that carrying goods in a container would, in any case,
    make a difference to the position that only the owner of the goods or
    person entitled to the goods is liable to pay for demurrage. According
    to the Port Trust, when goods are imported in a container, and the
    44
    container is then landed without the goods being destuffed, and the
    container belongs to the ship-owner’s agent and has to be returned to
    the ship-owner’s agent, for the duration that the container takes up
    storage space, storage charges will have to be paid by the shipowner’s agent. Let us examine whether this argument is sound in law.
    29.Under the Customs Act, 1962, customs duties are levied on goods
    imported into India. “Import” has been defined in section 2(23) of the
    Customs Act as the “bringing into India from a place outside India”.
    Thus, import of goods can only be said to be complete after they cross
    into the territorial waters of India, and become part of the mass of
    goods within India. This is the law laid down by this Court in Garden
    Silk Mills Ltd. and Anr v. Union of India and Ors. (1999) 8 SCC 744,
    as follows:
    “17. It was further submitted that in the case of Apar (P)
    Ltd. [(1999) 6 SCC 117] this Court was concerned with
    Sections 14 and 15 but here we have to construe the word
    “imported” occurring in Section 12 and this can only mean
    that the moment goods have entered the territorial waters
    the import is complete. We do not agree with the submission.
    This Court in its opinion in Bill to Amend Section 20 of the
    Sea Customs Act, 1878 and Section 3 of the Central Excises
    and Salt Act, 1944, Re observed as follows:
    “Truly speaking, the imposition of an import duty, by and
    large, results in a condition which must be fulfilled before the
    goods can be brought inside the customs barriers, i.e.,
    before they form part of the mass of goods within the
    country.”
    45
  30. It would appear to us that the import of goods into India
    would commence when the same cross into the territorial
    waters but continues and is completed when the goods
    become part of the mass of goods within the country; the
    taxable event being reached at the time when the goods
    reach the customs barriers and the bill of entry for home
    consumption is filed.”
    30.Likewise, in Mangalore Refinery & Petrochemicals Ltd. v.
    Commissioner of Customs (2016) 14 SCC 709, this Court dealt with
    when an import could be said to be complete under the Customs Act.
    After referring to various provisions of the Customs Act, this Court held:
    “9. On a reading of the aforesaid provisions, it is clear that
    the levy of customs duty under Section 12 is only on goods
    imported into India. Goods are said to be imported into India
    when they are brought into India from a place outside India.
    Unless such goods are brought into India, the act of
    importation which triggers the levy does not take place. If the
    goods are pilfered after they are unloaded or lost or
    destroyed at any time before clearance for home
    consumption or deposit in a warehouse, the importer is not
    liable to pay the duty leviable on such goods. This is for the
    reason that the import of goods does not take place until they
    become part of the land mass of India and until the act of
    importation is complete which under Sections 13 and 23
    happens only after an order for clearance for home
    consumption is made and/or an order permitting the deposit
    of goods in a warehouse is made. Under Section 23(2) the
    owner of the imported goods may also at any time before
    such orders have been made relinquish his title to the goods
    and shall not be liable to pay any duty thereon. In short, he
    may abandon the said goods even after they have physically
    landed at any port in India but before any of the aforesaid
    orders have been made. This again is for the good reason
    that the act of importation is only complete when goods are
    in the hands of the importer after they have been cleared
    either for home consumption or for deposit in a warehouse.
    Further, as per Section 47 of the Customs Act, the importer
    has to pay import duty only on goods that are entered for
    46
    home consumption. Obviously, the quantity of goods
    imported will be the quantity of goods at the time they are
    entered for home consumption.
    xxx xxx xxx
  31. We are afraid that each one of the reasons given by the
    Tribunal is incorrect in law. The Tribunal has lost sight of the
    following first principles when it arrived at the aforesaid
    conclusion. First, it has lost sight of the fact that a levy in the
    context of import duty can only be on imported goods, that
    is, on goods brought into India from a place outside of India.
    Till that is done, there is no charge to tax. This Court
    in Garden Silk Mills Ltd. v. Union of India, stated that this
    takes place, as follows:
    “17. It was further submitted that in Apar (P) Ltd. [Union of
    India v. Apar (P) Ltd., (1999) 6 SCC 117] this Court was
    concerned with Sections 14 and 15 but here we have to
    construe the word “imported” occurring in Section 12 and
    this can only mean that the moment goods have entered the
    territorial waters the import is complete. We do not agree
    with the submission. This Court in its opinion in Sea
    Customs Act, 1878, S. 20(2), In re [Sea Customs Act, 1878,
    S. 20(2), In re, AIR 1963 SC 1760] SCR at p. 823 observed
    as follows:
    ‘26. … Truly speaking, the imposition of an import duty, by
    and large, results in a condition which must be fulfilled before
    the goods can be brought inside the customs barriers i.e.
    before they form part of the mass of goods within the
    country.’
  32. It would appear to us that the import of goods into India
    would commence when the same cross into the territorial
    waters but continues and is completed when the goods
    become part of the mass of goods within the country; the
    taxable event being reached at the time when the goods
    reach the customs barriers and the bill of entry for home
    consumption is filed.”
    47
    31.However, another line of judgments deals with what was called the
    “original package” doctrine laid down by Chief Justice Marshall of the
    US Supreme Court in Brown v. State of Maryland 25 U.S. 419 (1827).
    This judgment laid down that while the goods imported remained the
    property of the importer in the original form of packaging in which it
    was imported, a tax upon it would be “imposts or duties on imports”
    without the consent of the Congress, violating section 10(2) of Article I
    of the US Constitution. In addition, any such “impost or duty” would
    also violate the Commerce clause under section 8(3) of Article I of the
    said Constitution, which grants power to the Congress to regulate
    commerce with foreign nations. Thus, a State legislature has no power
    to impose an “impost or duty” upon the first sale of the commodity so
    long as it remained in the importer’s hands1
    .
    32.This doctrine has been the subject-matter of comment in a variety of
    different situations. Thus, in the Province of Madras v. Boddu
    Paidanna & sons, A.I.R. (29) 1942 Federal Court 33 (at page 37), in
    the context of sales tax legislation by the States, the Federal Court
    1
    In two later judgments of the US Supreme Court, Michelin Tire Corporation v.
    Wages 423 U.S. 276 (1976) and Limbach v. Hoover & Allison Company 466 U.S.
    353 (1984), judgments following Brown (supra) enunciating the “original package”
    doctrine were reversed, stating that non-discriminatory taxes which did not fall on
    imports as such, or interfere with the free flow of imported goods amongst the States,
    could not be said to be contrary to the Commerce clause or contrary to Section 10(2)
    of Article I of the US Constitution. A different approach was adopted to Section 10(2)
    of Article I, ignoring the question whether the goods were imported, and instead
    analysing the nature of the tax to determine whether it was an “impost or duty”.
    48
    referred to Chief Justice Marshall’s judgment, and distinguished the
    same, saying that it would apply to the Commerce clause in the US
    Constitution, and would not apply by analogy to the legislative entries
    under the Seventh Schedule of the Government of India Act (1935).
    Likewise, in State of Bombay and Anr. v. F.N. Balsara 1951 SCR
    682, in the context of a law passed by the Legislature of the Province
    of Bombay relating to prohibition of intoxicating liquors, an argument
    based on Chief Justice Marshall’s dictum in Brown (supra) was made,
    stating that in pith and substance such law would relate to import and
    export of intoxicating liquors, and therefore be void. This was turned
    down, referring to Boddu Paidanna (supra), stating that in the
    American judgment the widest meaning could be given to the
    Commerce clause as there was no question of reconciling that clause
    with another clause containing the legislative power of the State – see
    pages 696 to 700.
    33.In Central India Spinning and Weaving and Manufacturing
    Company, Ltd. v. The Municipal Committee, Wardha 1958 SCR
    1102, this Court, in the context of a terminal tax, relied upon the dictum
    of Chief Justice Marshall in Brown (supra) in order to answer the
    question before it, namely, whether a terminal tax can be levied on
    49
    goods which are in transit. The question was answered in the negative
    – see pages 1114 and 1121.
    34.In Gramophone Company of India Ltd. v. Birendra Bahadur
    Pandey & Ors. (1984) 2 SCR 664, Central India Spinning and
    Weaving (supra) was distinguished, and Boddu Paidanna (supra)
    and F.N. Balsara (supra) were relied upon, to interpret the word
    “import” as found in the Copyright Act, 1957. Cases under the Customs
    Act were expressly distinguished by this judgment as follows:
    “The learned counsel for the appellant invited our attention
    to Radhakishan v. Union of India [1965 2 SCR
    213]; Shawhney v. Sylvania and Laxman [77 Bom LR
    380]; Bernado v. Collector of Customs [AIR 1960 Ker 170],
    to urge that importation was complete so soon as the
    customs barrier was crossed. They are cases under the
    Customs Act and it is needless for us to seek aid from there
    when there is enough direct light under the Copyright Act
    and the various conventions and treaties which have with
    the subject “copyright” from different angles. We do not also
    desire to crow our judgment with reference to the history of
    the copyright and the customs legislations in the United
    Kingdom and India as we do not think it necessary to do so
    in this case.”
    2
    35.A recent judgment of this Court in State of Kerala & Ors. v. Fr.
    William Fernandez Etc. 2017 SCC OnLine SC 1291, was concerned
    with the validity of various State legislations relating to entry tax. As
    many as eight issues were raised by this Court, in which issue (iv)
    reads as follows:
    2 Page 691.
    50
    “44(iv). Whether the importation of goods, imported from a
    territory outside the India continues till the goods reach in
    the premises/factory of the importer, during which period
    State at no point of time is legislative competence to impose
    any tax.”
    36.The discussion in answering this question raised in paragraph 44(iv)
    begins in paragraph 86. After referring to various definitions of the term
    “import” in different legal situations, this Court noticed various
    judgments relating to customs in paragraphs 97 to 103. As a matter of
    fact in paragraph 103, the law laid down in Garden Silk Mills Ltd.
    (supra) was extracted with approval as follows:
  33. Similar view was expressed in the case of Garden Silk
    Mills Ltd. v. Union of India, (1999) 8 SCC 744, in paragraph
    18, which is to the following effect:—
    “18. It would appear to us that the import of goods into India
    would commence when the same cross into the territorial
    waters but continues and is completed when the goods
    become part of the mass of goods within the country; the
    taxable event being reached at the time when the goods
    reach the customs barriers and the bill of entry for home
    consumption is filed.”
    37.These judgments were then distinguished by the Court as follows:
    “104. The law relating to customs has been consolidated by
    the Customs Act, 1962. The definitions of “import”, “imported
    goods” and “importer” have already been noticed above.
    The definition of imported goods as given in Section 2(25)
    is-any goods brought into India from the place outside
    India but does not include goods, which have been cleared
    for home consumption. The provision clearly contemplates
    that once the goods are released for home consumption, the
    character of imported goods is lost and thereafter no longer
    the goods could be called as imported goods. The import
    transit is only till the goods are released for home
    51
    consumption. The taxing event for entry tax under Entry 52
    List II is entirely different and has nothing to do with the
    customs duty. The State by imposing entry tax in any
    manner is not entrenching in the power of the Parliament to
    impose customs duty. The goods are released for home
    consumption only after payment of the customs duty due to
    the Central Government. The goods which are imported
    cannot be held to be insulated so as to not subject to any
    State tax, any such insulation of the imported goods shall be
    a protectionist measure which will be discriminatory and
    invalid. When all normal goods are subjected to State tax no
    exemption can be claimed by goods, which have been
    imported from payment of entry tax. To take a common
    example, all goods, which pass through a toll bridge are
    liable to pay toll tax, can it be said that the imported goods
    which after having been released from customs barriers and
    are passing through a toll bridge, are not liable to pay the toll
    tax, the answer has to be in No. Thus, the event for levy of
    customs duty, which is in the domain of the Parliament, is
    entirely different from that of event of entry tax. The liability
    to pay State entry tax arises only when goods enter into a
    local area for consumption, use and sale, which event is
    entirely different and separate from the levy of a customs
    duty, which is on import.”
    (emphasis in original)
    38.The judgment went on to discuss the “original package” doctrine of
    Chief Justice Marshall in paragraphs 108 to 120, finding that recent US
    Supreme Court judgments had abandoned this doctrine, and that
    therefore, the Federal Court in Boddu Paidanna (supra) and the two
    judgments of this Court in F.N. Balsara (supra) and Gramophone
    Company of India Ltd. (supra) were correct in not relying on this
    doctrine in the context of the cases before them. This doctrine has no
    place in the customs law of India, the judgments of this Court
    52
    concentrating on when an import can be said to be complete on an
    analysis of the Customs Act.
    39.Given the aforesaid judgments under the Customs Act, a container,
    being a receptacle in which goods are imported, cannot be said to be
    “goods” that are imported as it does not become part of the mass of
    goods within the country on the facts of these cases. Thus, once
    destuffing takes place, the container has to be returned either to the
    ship-owner’s agent, or to the person who owns such container.
    40.In fact, the Bill of Entry (Forms) Regulations, 1976 (as amended up to
    date) contain forms in which a Bill of Entry is to be presented by an
    importer of goods for home consumption, or for warehousing, or for exbond clearance for home consumption. Regulation 3 of the aforesaid
    Regulations reads as follows:
    “3. Form of Bill of Entry.- The Bill of Entry to be presented
    by an importer of any goods for home consumption or for
    warehousing or for ex-bond clearance for home
    consumption shall be in Form I or Form II or Form III as the
    case may be.
    Explanation – In this regulation, “goods” does not include
    those goods which are intended for transit or
    transshipment.”
    41.Form I, which speaks of a Bill of Entry for home consumption, contains
    a declaration to be signed by an importer, clause 6(b) of which is
    important and is set out hereunder:
    53
    “6(b) I/We declare that there are the following payments
    actually paid or payable for the imported goods by way of
    cost and services other than those declared in the invoice^
    [^please refer to Rule 10 (1) (a) & (b) of the Customs
    Valuation Rules, 2007]
    Sl.
    No.
    Particulars Amount or
    expressed as % of
    the unit price
    i. Brokerage and
    Commissions, except
    buying commission
    [Rule 10(1)(a)(i) of the
    Customs Valuation
    Rules, 2007]:
    ii. Cost of containers
    [Rule 10(1)(a)(ii)]:
    iii. Packing cost [Rule
    10(1)(a)(iii)]:
    iv. Cost of goods and
    services supplied by
    the buyer [Rule
    10(1)(b)]:

    42.The same declaration is contained in Forms II and III. A perusal of the
    aforesaid Forms prescribed under the said Regulations would show
    the difference between “goods” that are imported, which have
    reference to the bill of lading/invoice presented by the importer which
    contains the number and value of the goods imported, and payments
    by way of costs and services other than those declared in the invoice,
    which includes costs of containers under Rule 10(1)(a)(ii) of the
    54
    Customs Valuation (Determination of Value of Imported Goods) Rules,
    2007, and packing costs under Rule 10(1)(a)(iii) of these Rules. This
    leads to an examination of the aforesaid Rules.
    43.Rules 2(1)(d) and (f) of these Rules are relevant, and are set out
    hereinbelow:
    “2. Definitions.-
    (1)In these rules, unless the context otherwise requires,-
    xxx xxx xxx
    (d) “identical goods” means imported goods-
    (i) which are same in all respects, including physical
    characteristics, quality and reputation as the goods being
    valued except for minor differences in appearance that do
    not affect the value of the goods;
    (ii) produced in the country in which the goods being
    valued were produced; and
    (iii) produced by the same person who produced the
    goods, or where no such goods are available, goods
    produced by a different person, but shall not include
    imported goods where engineering, development work,
    art work, design work, plan or sketch undertaken in India
    were completed directly or indirectly by the buyer on
    these imported goods free of charge or at a reduced cost
    for use in connection with the production and sale for
    export of these imported goods;
    xxx xxx xxx
    (f) “similar goods” means imported goods –
    (i) which although not alike in all respects, have like
    characteristics and like component materials which
    enable them to perform the same functions and to be
    commercially interchangeable with the goods being
    55
    valued having regard to the quality, reputation and the
    existence of trade mark;
    (ii) produced in the country in which the goods being
    valued were produced; and
    (iii) produced by the same person who produced the
    goods being valued, or where no such goods are
    available, goods produced by a different person, but shall
    not include imported goods where engineering,
    development work, art work, design work, plan or sketch
    undertaken in India were completed directly or indirectly
    by the buyer on these imported goods free of charge or
    at a reduced cost for use in connection with the
    production and sale for export of these imported goods;”
    44.Rule 4 deals with the transaction value of “identical goods”, and Rule
    5 deals with the transaction value of “similar goods”, and are set out
    hereinbelow:
    “4. Transaction value of identical goods.–
    (1)(a) Subject to the provisions of rule 3, the value of
    imported goods shall be the transaction value of identical
    goods sold for export to India and imported at or about
    the same time as the goods being valued;
    Provided that such transaction value shall not be the
    value of the goods provisionally assessed under section
    18 of the Customs Act, 1962.
    (b) In applying this rule, the transaction value of identical
    goods in a sale at the same commercial level and in
    substantially the same quantity as the goods being
    valued shall be used to determine the value of imported
    goods.
    (c) Where no sale referred to in clause (b) of sub-rule (1),
    is found, the transaction value of identical goods sold at
    a different commercial level or in different quantities or
    both, adjusted to take account of the difference
    56
    attributable to commercial level or to the quantity or both,
    shall be used, provided that such adjustments shall be
    made on the basis of demonstrated evidence which
    clearly establishes the reasonableness and accuracy of
    the adjustments, whether such adjustment leads to an
    increase or decrease in the value.
    (2) Where the costs and charges referred to in sub-rule
    (2) of rule 10 of these rules are included in the transaction
    value of identical goods, an adjustment shall be made, if
    there are significant differences in such costs and
    charges between the goods being valued and the
    identical goods in question arising from differences in
    distances and means of transport.
    (3) In applying this rule, if more than one transaction
    value of identical goods is found, the lowest such value
    shall be used to determine the value of imported goods.
  34. Transaction value of similar goods.-
    (1) Subject to the provisions of rule 3, the value of
    imported goods shall be the transaction value of similar
    goods sold for export to India and imported at or about
    the same time as the goods being valued:
    Provided that such transaction value shall not be the
    value of the goods provisionally assessed under section
    18 of the Customs Act, 1962.
    (2) The provisions of clauses (b) and (c) of sub-rule (1),
    sub-rule (2) and sub-rule (3), of rule 4 shall, mutatis
    mutandis, also apply in respect of similar goods.”
    45.A perusal of these Rules would show that the value of imported goods
    shall be the transaction value of identical goods, as defined, or similar
    goods, as defined – whichever rule applies to the facts of each
    particular case. It is clear that whether identical goods or similar goods
    are taken into account, the price of the container never enters, as the
    57
    only “goods” that are to be looked at are the goods that are “imported”,
    i.e. goods that are stuffed in the containers. Likewise, when it comes
    to “computed value”, Rule 8 states as follows:
    “8. Computed value.- Subject to the provisions of rule 3,
    the value of imported goods shall be based on a
    computed value, which shall consist of the sum of:-
    (a) the cost or value of materials and fabrication or other
    processing employed in producing the imported goods;
    (b) an amount for profit and general expenses equal to
    that usually reflected in sales of goods of the same class
    or kind as the goods being valued which are made by
    producers in the country of exportation for export to India;
    (c) the cost or value of all other expenses under sub-rule
    (2) of rule 10.”
    46.Rule 10, which deals with “costs and services” then states:
    “10. Costs and services.-
    (1) In determining the transaction value, there shall be
    added to the price actually paid or payable for the
    imported goods, –
    (a) the following to the extent they are incurred by the
    buyer but are not included in the price actually paid or
    payable for the imported goods, namely:-
    xxx xxx xxx
    (ii) the cost of containers which are treated as being one
    for customs purposes with the goods in question;”
    47.A reading of Rule 10(1)(a)(ii) would lead to the same result, as
    “imported goods” are differentiated from “containers”. Further, for the
    purposes of customs valuation, addition to the transaction value of the
    58
    imported goods is made only when the cost of containers is treated as
    being one with the goods in question. Even in such a situation, what is
    then imported is the “goods” and the container – the container not
    having to be destuffed, and therefore being cleared along with the
    goods contained therein for home consumption. In such a case, where
    containers do not have to be returned, but are imported along with the
    goods contained within it, after the Board takes custody of such
    container and the goods within it, the vessel or steamer agent is no
    longer liable – even containers that do not need to be destuffed will
    then incur demurrage along with the goods contained within it, which
    are then payable by the importer, owner, consignor or agent thereof.
    48.Further, to make matters clear beyond doubt, General Exemption No.
    170, which speaks of ‘Exemption to containers of durable nature’3
    ,
    states as follows:
    “In exercise of the powers conferred by sub-section (1) of
    Section 25 of the Customs Act, 1962 (52 of 1962), the
    Central Government, being satisfied that it is necessary
    in the public interest so to do, hereby exempts containers
    which are of durable nature, falling within the First
    Schedule to the Customs Tariff Act, 1975 (51 of 1975),
    when imported into India, from, –
    (a) the whole of the duty of customs leviable thereon
    under the said First Schedule; and
    3 Notification No. 104/94 dated 16.03.1994 as amended by Notification No. 101/95
    and 43/17.
    59
    (b) the whole of the integrated tax leviable thereon under
    sub-section (7) of section 3 of the said Customs Tariff Act:
    Provided that the importer, by execution of a bond in such
    form and for such sum as may be specified by the
    Assistant Commissioner of Customs or Dy.
    Commissioner of Customs binds himself to re-export the
    said containers within six months from the date of their
    importation and to furnish documentary evidence thereof
    of the satisfaction of the said Assistant Commissioner
    and to pay the duty leviable thereon in the event of the
    importer’s failure to do so:
    Provided further that in any particular case, the aforesaid
    period of six months may, on sufficient cause being
    shown, be extended by the said Assistant Commissioner
    for such further period, as he may deem fit.”
    A clarification by the Central Board of Indirect Taxes and Customs dated
    25th October, 20024
    , clarified as to what is meant by “containers of durable
    nature” as follows:
    “Notification No.104/94-Cus., exempts containers which
    are of durable nature from the whole of the duty of
    customs and additional duty subject to the condition that
    such containers are re-exported within 6 months from the
    date of importation and documentary evidence is
    furnished to the satisfaction of the Assistant
    Commissioner. As per the meanings assigned to the
    words “durable” and “container” in various Dictionaries, it
    would appear that any goods (containers) used for
    packaging or transporting other goods, and capable of
    being used several times, would fall in the category of
    “containers of durable nature”.
    A reading of the aforesaid also goes to buttress the conclusion reached
    in the previous paragraph of this judgment.
    4 Circular No.69/2002-Customs.
    60
    49.The Customs Tariff Act, 1975 also throws considerable light on
    containers fit for repetitive use. Section 2 of the said Act states as
    follows:
    “2. Duties specified in the Schedules to be levied.—
    The rates at which duties of customs shall be levied under
    the Customs Act, 1962 (52 of 1962), are specified in the
    First and Second Schedules.”
    50.The First Schedule deals with general rules for interpretation of “this
    Schedule”, and states:
    “5. In addition to the foregoing provisions, the following
    rules shall apply in respect of the goods referred to
    therein:
    (a) camera cases, musical instrument cases, gun cases,
    drawing instrument cases, necklace cases and similar
    containers, specially shaped or fitted to contain a specific
    article or set of articles, suitable for long-term use and
    presented with the articles for which they are intended,
    shall be classified with such articles when of a kind
    normally sold therewith. This rule does not, however,
    apply to containers which give the whole its essential
    character;
    (b)subject to the provisions of (a) above, packing
    materials and packing containers presented with the
    goods therein shall be classified with the goods if they are
    of a kind normally used for packing such goods. However,
    this provision does not apply when such packing
    materials or packing containers are clearly suitable for
    repetitive use.”
    51.This paragraph again clearly differentiates between containers which
    go along with the goods contained therein “suitable for long-term use”,
    from containers “suitable for repetitive use”, thus making it clear that
    61
    the containers of the latter type cannot be classified with the goods
    contained therein for payment of customs duty.
    52.At this juncture, it is important to examine the judgments of this Court.
    In Rowther-I (supra), the question before five honourable Judges of
    this Court arose out of the enforcement of the Scale ‘E’ rate that was
    added to the Madras Port Trust Scale of Rates in 1958. The question
    arose under the pari materia provisions of the Madras Port Trust Act,
    1905 (“Madras Act”), which has since been repealed by the MPT Act
    by section 133(2C) thereof. The respondents in this case were steamer
    agents. Scale ‘E’ laid down charges to be paid by Masters, Owners or
    Agents of vessels in respect of Port Trust labour requisitioned and
    supplied, but not fully or properly utilised, for unloading goods from the
    vessel. These rates are set out at pages 923 and 924 of the Supreme
    Court Report, and indicate that a certain amount has to be paid to
    labour which is rendered idle either on account of the vessel’s fault, or
    on account of force majeure conditions such as rain. This is further
    fleshed out by a Circular dated 25.02.1958, referred to at pages 925
    and 926. After setting out the relevant sections of the Madras Act, the
    by-laws, and the Manual of Instructions framed and issued by the
    Board, the first proposition of law laid down in the said judgment is that
    it is not obligatory on behalf of the Board to undertake the various
    62
    services mentioned in section 39 of the Madras Act (which is pari
    materia with section 42 of the MPT Act). It is only if such services are
    required by the “owner” as defined that such services are undertaken
    by the Board. It was then held that it was the steamer agent who was
    in a position to require the Board to undertake such services in respect
    of the cargo that the ship is to unload (see pages 935 to 936). The
    question for determination was then set out as follows:
    “The question for determination, in the case, then is whether
    the law making the steamer-agent liable to pay these
    charges is good law.”5
    53.“These charges”, as has been stated earlier, were on account of
    payment of labour dues for labour remaining idle, such labour being of
    the Port Trust which was used in the unloading of goods from the
    vessel. It was then mentioned that these charges were for the benefit
    of the vessel so that it completes its task of landing the goods as soon
    as possible. It was also pointed out that the steamer agent, and not the
    consignee, was liable to pay these charges as the goods are not
    unloaded “consignee-wise” (see page 938-939). It was then laid down
    that the ship-owner is the bailee of the consignor, and that he is
    responsible for delivery of goods to the consignee or transferee
    according to the terms of the bill of lading. However, the Court held that
    5 Page 937.
    63
    delivery of goods by the ship-owner to the Board cannot be said to be
    delivery to the consignee, as the Board cannot be said to be an agent
    of the consignee for the purpose of taking delivery of goods (see page
    939). Also, the Court observed that the provision of lien which the
    Board can exercise on the goods for non-payment of dues of the Board
    makes it clear that it does not act as an agent of the consignee (see
    page 947). The Court also held that when section 39(3) of the Madras
    Act speaks of taking of charge of the goods by the Board and giving a
    receipt to a ship-owner, and the master or owner of the vessel being
    absolved from liability for any loss or damage which may occur to the
    goods which had been landed, also does not lead to the conclusion
    that the Board takes delivery of those goods on behalf of the
    consignee. The Court then held:
    “It is clear therefore that when the Board takes charge of the
    goods from the ship-owner, the ship-owner is the bailor and
    the Board is the bailee, and the Board’s responsibility for the
    goods thereafter is that of a bailee. The Board does not get
    the goods from the consignee. It cannot be the bailee of the
    consignee. It can be the agent of the consignee only if so
    appointed, which is not alleged to be the case, and even if
    the Board be an agent, then its liability would be as an agent
    and not as a bailee. The provisions of ss.39 and 40,
    therefore, further support the contention that the Board takes
    charge of the goods on behalf of the ship-owner and not on
    behalf of the consignee, and whatever services it performs
    at the time of the landing of the goods or on their removal
    thereafter, are services rendered to the ship.”
    6
    6 Page 940.
    64
    54.This passage clearly states that since the Board does not get the
    goods directly from the consignee, but only from the ship-owners, it
    cannot possibly be said to be the bailee of the consignee. The
    observation that whatever services the Board performs at the time of
    landing of the goods, or “on their removal thereafter” are services
    rendered to the ship, must be understood in the context of the facts of
    that case. A perusal of the Board’s counter affidavit, which is reflected
    at page no.921, would show that the Harbour dues on the import of
    cargo speaks, inter alia, of charges involved in moving the goods from
    the landing point to the storage point. The expression “on their removal
    thereafter”, on the facts of this case, would therefore only mean
    services performed by the Board from landing point to storage point,
    and not thereafter. This is in fact made even clearer by the following
    passage in the said judgment:
    “The charges for labour rendered idle and for labour working
    more hooks simultaneously, are not charges for services
    rendered subsequent to the landing of the goods. These are
    charges which are incurred at the last stage of the process
    of landing of the goods and therefore prior to the actual
    landing of the goods. They are, even under the general law,
    for services rendered to the master of the ship whose liability
    for loss or of damage to the goods continues up to the
    placing of the goods on the quay and their receipt by the
    Board.”
    7
    7 Page 942.
    65
    55.While dealing with the case of Peterson v. Freebody & Co. [1895] 2
    Q.B.D. 294, which related to a suit between the ship-owner and the
    consignee, the observations of Lord Esher that the ship-owner must
    do something more than merely put his goods over the rail of his ship,
    namely, that he must put the goods in such position that the consignee
    can take delivery of them, were limited only to goods which are to be
    delivered to the consignee alongside the ship, and not when they are
    handed over to a statutory body like the Board, as a sub-bailee. The
    delivery therefore contemplated by these observations was held to be
    not equivalent to landing of the goods at the quay and placing them in
    charge of the Board. The observations as to the Board being a subbailee were therefore made to counter an argument based on an
    English judgment, that delivery of the goods to the Board amounts to
    delivery to the consignee, which would therefore make the consignee
    liable to pay the aforesaid unloading charges.
    56.The second judgment with which we are concerned is Rowther-II
    (supra). The question that arose before a three-Judge Bench of this
    Court was whether demurrage charges payable to the Port Trust of
    Madras were to be recovered from the consignee of the goods, or from
    the steamer agent. The judgment of this Court, in essence, extracted
    66
    the judgment of the High Court that was impugned therein, and then
    agreed with the same. The High Court had held:
    “It cannot be disputed that neither the shipowner or the
    steamer agent whose duty it is to deliver the cargo to the
    consignee as per the contract with the shipper, cannot lay
    any claim of ownership to the goods. The obligation to
    deliver the goods to the consignee has been taken over by
    the Port Trust under the provisions of the statute and the
    shipowner is relieved of the liability for loss or damage to the
    goods from the moment the goods are taken charge of by
    the Port Trust as per Section 39 of the Act. Once the goods
    are handed over to the Port Trust by the steamer and the
    steamer agents have duly endorsed the bill of lading or
    issued the delivery order, their obligation to deliver the
    goods personally to the owner or the endorsee comes to an
    end. The subsequent detention of the goods by the Port
    Trust as a result of the intervention by the Customs
    authorities cannot be said to be on behalf of or for the benefit
    of the steamer agents. Generally, if there is a delay in taking
    delivery of the goods by the consignee within a reasonable
    time, the steamer or its agent can warehouse the goods. In
    such an event the warehouseman has an independent claim
    against the consignee or endorsee for the demurrage
    charges. The position cannot be different merely because
    the Customs authorities have intervened. The position of the
    Port Trust is the same as that of a warehouseman whose
    responsibility to the goods is also said to be a bailee. It
    cannot be said that the steamer or its agents have
    undertaken any responsibility for the custody of the goods
    after the transit has come to an end and after the bill of lading
    has been duly endorsed or a delivery order issued. By the
    endorsement of the bill of lading or the issue of a delivery
    order by the steamer agents, the property in the goods vests
    on such consignee or endorsee, and thus it appears to be
    clear that the steamer or the steamer agents are not
    responsible for the custody of the goods after the property in
    the goods passes to the consignee or endorsee till the
    Customs authorities actually give a clearance. It should also
    be remembered that the steamer which had entered into a
    contract of carriage of goods for a reward cannot be said to
    67
    have undertaken the responsibility of safeguarding the
    goods or keeping them at their risk till the goods are actually
    cleared from the Customs and taken delivery of by the
    consignee. That will be imposing a too onerous and
    unexpected responsibility on the steamer which is only a
    carrier. If they are submitted to such a responsibility, in most
    cases where the goods are detained without delivery in the
    hands of the Port Trust at the instance of the Customs the
    steamer or steamer agents have to pay towards a storage
    or demurrage charges amounts quite disproportionate to the
    freight they collect for the carriage of the goods. No carrier
    will undertake such a risk and responsibility. We are of the
    view that the provisions of the Port Trust Act cannot be so
    construed as imposing an additional liability or obligation on
    the carrier which was not contemplated by the contract it had
    entered with the shipper. It is only the customs of or the
    statutory provisions applicable to the port of discharge that
    can be taken to be an implied condition of the contract
    between the shipper and the shipowner. Therefore, the
    provisions of the Port Trust Act cannot add to the liability of
    the steamer or its agents which was not contemplated by the
    shipper or the shipowner at the time of entering into the
    contract. Having regard to the functions and the obligations
    which a steamer has undertaken with the shipper under the
    contract, we cannot say that the steamer has undertaken the
    responsibility for the safety of the goods till the goods are
    cleared by the Customs and taken delivery of by the
    consignee. As earlier referred to, the duty of the steamer is
    normally to deliver the goods to the consignee on the quay
    side but that place of delivery has been shifted by the
    provisions of the Port Trust Act to the warehouse where the
    Port Trust had stored the goods.”8
    57.The High Court then distinguished Rowther-I (supra) as follows:
    “But as already stated, the charges in that case related to
    the services rendered by the Port Trust at the time of the
    landing of the goods and their removal thereafter to its
    custody, and those charges were taken to be for the benefit
    of the steamer. It is for this reason that the Court took the
    view that the Port Trust is entitled to collect the service
    8 Page 286-287.
    68
    charges from the steamer or its agent. We are, however,
    satisfied that the above decision cannot be taken to lay down
    that the Port Trust can at no time proceed against the
    consignee for demurrage charges and can only look to the
    steamer agent. We are, here, concerned with the demurrage
    charges after the goods have been landed and taken charge
    of by the Board and after the steamer agent had endorsed
    the bill of lading or issued a delivery order for effecting
    delivery to the consignee that is after the property in the
    goods had passed to him. As already stated, the goods have
    remained in the custody of the Port Trust on the default of
    the consignee to satisfy the Customs authorities that the
    import was authorised. “Even though the consignee is not a
    party to the contract of carriage once the property in the
    goods had passed to him, he becomes liable to pay the
    storage or demurrage charges as owner of the goods to the
    shipowner.”9
    58.Rowther-II (supra) has made it clear that Rowther-I (supra) concerned
    itself with Port Trust dues at the time of landing of the goods, and their
    removal thereafter to custody of the Port Trust. These were charges
    wholly distinct from demurrage charges, which are incurred only after
    the goods have been landed and have been taken charge of by the
    Board. To the extent that the High Court lays this down as a proposition
    of law, there can be no exception. However, it goes on to state that
    when the steamer agent endorses the bill of lading or issues a delivery
    order for effecting delivery to the consignee, it is at this stage that the
    property in the goods passes to the consignee. This part of RowtherII (supra) is clearly contrary to Rowther-I (supra), which had stated:
    9 Page 287.
    69
    “In the present case, it was further contended that as
    between the master of the ship and the consignee, the Act
    made it obligatory that the consignee gets his goods from
    the Board and not direct from the master of the ship, and
    that therefore the Board acts as the agent of the consignee.
    We have not been referred to any provision in the Act which
    supports this contention. Assuming, however, that the
    consignee cannot take delivery of the goods at the quay from
    the ship direct, it does not follow that the Board receives the
    goods as the agent of the consignee. The only reasonable
    conclusion in the circumstances can be that the place of
    delivery is shifted from the side of the ship to the warehouses
    where the Board stores the goods till the consignee appears
    to take delivery on the basis of the delivery order by the
    steamer agent which is usually an endorsement on the bill
    of lading, and the quay be considered a part of the ship.”10
    59.Rowther-I (supra) clearly lays down that the endorsement of the bill of
    lading by a steamer agent is for the purpose of delivery of the goods,
    and, accordingly, cannot be for the transfer of title to the goods.
    Rowther-II (supra) cannot, therefore, be said to be good in law when
    it speaks of endorsement on the bill of lading and issuance of delivery
    order by the steamer agent passing title of the goods to the consignee.
    Once this is made clear, the ratio of Rowther-II (supra) is to be
    understood thus: since charges for storage or demurrage are after
    goods are removed and placed in the custody of the Board, the
    steamer agent cannot be made to pay the same, as it would impose “a
    too onerous and unexpected responsibility on the steamer”, which is
    only a carrier, and not owner, of the goods.
    10 Page 946.
    70
    60.At this juncture, it is important to understand the legal effect of a bill of
    lading. This has been set out by a five Judge Bench of this Court in
    J.V. Gokal and Co. (Pvt.) Ltd. v. Asst. Collector of Sales-Tax
    (Inspection) and Ors. (1960) 2 SCR 852, as follows:
    “A bill of lading is “a writing, signed on behalf of the owner of
    the ship in which goods are embarked, acknowledging the
    receipt of the goods, and undertaking to deliver them at the
    end of the voyage subject to such conditions as may be
    mentioned in the bill of lading”. It is well-settled in
    commercial world that a bill of lading represents the goods
    and the transfer of it operates as a transfer of the goods. The
    legal effect of the transfer of a bill of lading has been
    enunciated by Bowen, L.J., in Sanders Brothers v. Maclean
    & Co. [(1883) II QBD 327] thus at p. 341:
    “The law as to the indorsement of bills of lading is as clear
    as in my opinion the practice of all European merchants is
    thoroughly understood. A cargo at sea while in the hands of
    the carrier is necessarily incapable of physical delivery.
    During this period of transit and voyage, the bill of lading by
    the law merchant is universally recognised as its symbol,
    and the indorsement and delivery of the bill of lading
    operates as a symbolical delivery of cargo. Property in the
    goods passes by such indorsement and delivery of the bill
    of lading, whenever it is the intention of the parties that the
    property should pass just as under similar circumstances the
    property would pass by an actual delivery of the goods. And
    for the purpose of passing such property in the goods and
    completing the title of the indorsee to full possession thereof,
    the bill of lading, until complete delivery of the cargo has
    been made on shore to someone rightfully claiming under it,
    remains in force as a symbol, and carries with it not only the
    full ownership of the goods, but also all rights created by the
    contract of carriage between the shipper and the shipowner.
    It is a key which in the hands of a rightful owner is intended
    71
    to unlock the door of the warehouse, floating or fixed, in
    which the goods may chance to be.”11
    61.Section 1 of the Indian Bills of Lading Act, 1856 is also important, which
    states:
    “Rights under bills of lading to vest in consignee or
    endorsee.—Every consignee of goods named in a bill of
    lading, and every endorsee of a bill of lading to whom the
    property in the goods therein mentioned shall pass, upon or
    by reason of such consignment or endorsement shall have
    transferred to and vested in him all rights of suit, and be
    subject to the same liabilities in respect of such goods as if
    the contract contained in the bill of lading had been made
    with himself.”
    62.Under this section, the “endorsement” referred to is the endorsement
    made by the consignor or owner of the goods in favour of such
    endorsee on the bill of lading, so that title to property is then transferred
    to the endorsee. This endorsement is very far removed, as has been
    correctly stated in Rowther-I (supra), from the endorsement on the bill
    of lading by a steamer agent indicating that the goods have been
    delivered. Therefore, shorn of the confusion that has arisen as a result
    of mixing-up the two types of endorsement, the ratio of Rowther-II
    (supra) that, after goods are taken charge of by the Port Trust and
    stored in its premises incurring demurrage charges thereon, the vessel
    or its agent cannot be made responsible, is unexceptionable.
    11 Page 861-862.
    72
    63.After extracting passages of the judgment of the High Court, this Court
    in Rowther-II (supra) then went on to extract a passage from
    International Airport Authority of India v. Grand Slam
    International (1995) 3 SCC 151, by which it was made clear that
    demurrage charges are to be paid by the importer or consignee liable
    for the same (and not the vessel or the steamer agent thereof).
    64.Sriyanesh Knitters (supra) is the next judgment that has to be dealt
    with in chronological sequence. This was a judgment of two learned
    judges of this Court, in which the question that arose before the Court
    was stated thus:
    “1. The common question involved in these appeals is
    whether the appellant Board of Trustees of the Port Trust
    constituted under the Major Port Trusts Act, 1963 (for short
    “the MPT Act”) have a general lien for their dues over the
    present or future consignments imported by the importers at
    the Bombay Port when the said dues are in respect of the
    past imports made by the said importers.”
    65.The Court first found that a reading of sections 59 and 61(1) of the
    MPT Act made it clear that the lien spoken of is a lien qua the particular
    goods that are imported, and cannot extend to previous imports of
    similar goods made by the same party. The Court then went on to hold
    that the MPT Act is not a comprehensive code, and has to be read
    together with other Acts wherever the MPT Act is silent. It was then
    held that section 171 of the Indian Contract Act, 1872 speaks of a
    general lien which may be exercised by the Port Trust as it is a
    73
    “wharfinger” within the meaning of said section. This being so, the Port
    Trust may continue to retain the goods bailed as security for past dues,
    but would have to have recourse to proceedings in accordance with
    law for securing an order, which would then enable the Port Trust to
    sell the goods to realise the amounts due to it. This could be done by
    filing a suit for recovery of the amount due to it under section 131 of
    the MPT Act.
    66.However, the judgment goes on to make certain observations, in
    particular in paragraph 23, stating that a relationship of bailor and
    bailee comes into existence, when the Board is required to store goods
    that have been imported, between the Board and the consignee of
    those goods. Apart from the fact that this is directly contrary to
    Rowther-I (see page 940), the consignee cannot be considered to be
    a bailor if the definition of bailor under the Indian Contract Act, 1872 is
    read. Under section 148 of the Contract Act, a bailor is defined as a
    person who delivers the goods to the bailee. In this case, the person
    who delivers the goods to the bailee is the vessel and not the
    consignee, as has been correctly stated in Rowther-I (supra).
    Therefore, the observations that the consignee is the bailor of the
    goods, with the Port Trust being the bailee thereof, made in paragraphs
    23 and 25 of Sriyanesh Knitters (supra) cannot be said to state the
    74
    law correctly, and are accordingly overruled. However, since we are
    not going into the point of sub-bailment as argued by Shri Pratap, we
    leave open the question as to whether the Port Trust, as sub-bailee, is
    entitled to recover its dues from the original bailor – the consignor, and
    persons claiming through it, given the statutory scheme of the MPT
    Act.
    67.However, Rowther-I (supra) was correctly distinguished by the Court
    in Sriyanesh Knitters (supra) in paragraph 24 thereof, and its ratio
    qua the MPT Act not being an exhaustive code has our concurrence.
    68.In Forbes-I (supra), two learned Judges of this Court doubted the
    correctness of Rowther-II (supra) and framed three questions
    (referred to earlier in this judgment) to be answered by a larger Bench.
    On 13.08.2014, the larger Bench of three Judges held:
    “We have gone through the order whereby the matter has
    been referred to this Bench. We have noted the fact that no
    reason for not agreeing with the Judgment delivered by a
    three-Judge Bench has been assigned in the said order.
    Moreover, upon going through the Judgment delivered in
    1997 (10) SCC 285, we see no reason to disagree with the
    ratio laid down in the said Judgment. In these
    circumstances, we refer the matter back to the regular bench
    for further hearing as we do not see any inconsistency in the
    said Judgment.”
    69.The matter then came back to a Bench of two Hon’ble Judges of this
    Court, which delivered the judgment in Forbes-II (supra). In Forbes-II,
    the Court set out the question of law that arose before it as follows:
    75
    “1…The common question of law that arises in these
    appeals, though in different facts and circumstances, is with
    regard to the liability of the agent of a shipowner (hereinafter
    referred to as the “steamer agent”) to pay demurrage and
    port charges to the Board of Trustees of a Port (hereinafter
    referred to as “the Port Trust Authority”) in respect of goods
    brought into the port and warehoused by the said authority.
    Before proceeding to answer the aforesaid question it will be
    convenient to take note of the core facts in each of the
    appeals under consideration.”
    70.Agreeing with the High Courts of Bombay and Calcutta that the
    steamer agent cannot be made liable for demurrage, the Court went
    on to hold:
    “10. While it is correct that the liability to pay demurrage
    charges and port rent is statutory, in the absence of any
    specific bar under the statute, such liability can reasonably
    fall on a steamer agent if on a construction of the provisions
    of the Act such a conclusion can be reached. Determination
    of the aforesaid question really does not hinge on the
    meaning of the expression “owner” as appearing in Section
    2(o) of the 1963 Act, as has been sought to be urged on
    behalf of the appellant though going by the language of
    Section 2(o) and the other provisions of the Act especially
    Section 42, an owner would include a shipowner or his
    agent. Otherwise it is difficult to reconcile how custody of the
    goods for the purpose of rendering services under Section
    42 can be entrusted to the Port Trust Authority by the owner
    as provided therein under Section 42(2). At that stage the
    goods may still be in the custody of the shipowner under a
    separate bailment with the shipper or the consignor, as may
    be. Even dehors the above question the liability to pay
    demurrage charges and port rent would accrue to the
    account of the steamer agent if a contract of bailment
    between the steamer agent and the Port Trust Authority can
    be held to come into existence under Section 42(2) read with
    Section 43(1)(ii) of the 1963 Act.
  35. For the reasons already indicated the decision
    in Sriyanesh Knitters with regard to existence of a
    76
    relationship of bailor and bailee between the consignee and
    the Port Trust Authority instead of the steamer agent and the
    Port Trust Authority cannot be understood to be a
    restatement of a general principle of law but a mere
    conclusion reached in the facts of the case where the
    consignee had already appeared in the scene. In all other
    situations where the bill of lading has not been endorsed or
    delivery orders have not been issued and therefore the
    consignee is yet to surface, the following observations of the
    Constitution Bench in K.P.V. Sheik Mohamed Rowther &
    Co. [Port of Madras v. K.P.V. Sheik Mohamed Rowther &
    Co., 1963 Supp (2) SCR 915] will have to prevail: (SCR p.
    940)
    “Section 40 speaks of the responsibility of the Board for the
    loss, destruction or deterioration of the goods of which it has
    taken charge as a bailee under Sections 151, 152 and 161
    of the Contract Act, 1872. Section 148 of the Contract Act
    states that a bailment is the delivery of goods by one person
    to another for some purpose, upon a contract that they shall,
    when the purpose is accomplished, be returned or otherwise
    disposed of according to the directions of the person
    delivering them. The person delivering the goods is called
    the bailor and the person to whom they are delivered is
    called the bailee. It is clear therefore that when the Board
    takes charge of the goods from the shipowner, the
    shipowner is the bailor and the Board is the bailee, and the
    Board’s responsibility for the goods thereafter is that of a
    bailee. The Board does not get the goods from the
    consignee. It cannot be the bailee of the consignee. It can
    be the agent of the consignee only if so appointed, which is
    not alleged to be the case, and even if the Board be an
    agent, then its liability would be as an agent and not as a
    bailee. The provisions of Sections 39 and 40, therefore,
    further support the contention that the Board takes charge
    of the goods on behalf of the shipowner and not on behalf of
    the consignee, and whatever services it performs at the time
    of the landing of the goods or on their removal thereafter,
    are services rendered to the ship.”
  36. From the above, the position of law which appears to
    emerge is that once the bill of lading is endorsed or the
    delivery order is issued it is the consignee or endorsee who
    77
    would be liable to pay the demurrage charges and other
    dues of the Port Trust Authority. In all other situations the
    contract of bailment is one between the steamer agent
    (bailor) and the Port Trust Authority (bailee) giving rise to the
    liability of the steamer agent for such charges till such time
    that the bill of lading is endorsed or delivery order is issued
    by the steamer agent.
  37. In the orders of the Calcutta High Court under challenge,
    it is mentioned that Section 60 of the Act provides a remedy
    to the steamer agent to recover the dues from the
    consignee. Section 60 of the 1963 Act confers a limited lien
    on the shipowner “for freight and other charges payable to
    the shipowner” which expression does not extend to
    demurrage and other port charges. The High Court,
    therefore, does not appear to be correct in its conclusions.
    However, the said error would not be fundamental to the final
    conclusion reached by the High Court. In this regard we
    cannot help noticing the special provisions of Sections 61
    and 62 of the Act which enable the Port Trust Authority to
    proceed against the goods within its custody to recover the
    charges which may be payable to the Port Trust Authority.
    Ordinarily and in the normal course if resort is made to the
    enabling provisions in the 1963 Act to proceed against the
    goods for recovery of the charges payable to the Port Trust
    Authority there may not be any occasion for the said
    authority to sustain any loss or even suffer any shortfall of
    the dues payable to it so as to initiate recovery proceedings
    against the shipowners.”
    71.Paragraph 10 of the judgment does hold that the language of section
    2(o) read with other provisions of the MPT Act, especially section 42,
    would include a ship-owner or his agent. We have already pointed out
    that the principle of noscitur a sociis cannot be applied to this definition
    clause, both on its plain language, as also the fact that it is an inclusive
    definition clause, which shows that this statement of the law is correct.
    However, the statement in this paragraph that even de hors the above
    78
    question, the liability to pay demurrage charges and port rent would
    accrue to the account of the steamer agent because of the statutory
    bailment that comes into existence under section 42(2) read with
    section 43(1)(ii), is plainly incorrect, in view of our finding that after the
    Port Trust takes charge of the goods and issues a receipt therefor (at
    which point of time the statutory bailment comes into force), the vessel
    or the steamer agent cannot be held liable.
    72.Insofar as paragraph 11 is concerned, we have already made it clear
    that Sriyanesh Knitters (supra) cannot be said to reflect the correct
    position in law, insofar as a bailment between the consignee and the
    Port Trust is concerned, and thus Sriyanesh Knitters (supra) has
    been overruled by us to this extent.
    73.Paragraph 12 of the said judgment contains the same confusion that
    is contained in Rowther-II (supra), and cannot therefore be said to lay
    down the law correctly. The correct position in law is, as has been
    stated hereinabove, that after the Port Trust takes charge of the goods,
    and issues a receipt therefor, and thereafter stores the goods in a place
    belonging to it, such storage charge cannot be to the account of the
    vessel or an agent of the vessel.
    74.Paragraph 13 refers to one other aspect of the case that has been
    argued before us. It may be recalled that the impugned judgment of
    79
    the Kerala High Court in the present case had held that the word “may”
    occurring in sections 61 and 62 of the MPT Act must be read as “shall”.
    This is not the correct position in law, as a discretion is vested in the
    Board to sell the goods in the circumstances mentioned in sections 61
    and 62. However, such discretion cannot be exercised arbitrarily, as
    the Board is “State” within the meaning of Article 12 of the Constitution,
    and is therefore bound by the constraints of Article 14 of the
    Constitution of India (see Dwarkadas Marfatia and Sons v. Board of
    Trustees of the Port of Bombay (1989) 3 SCC 293 at paragraph 22).
    Therefore while it may not be correct to say that “may” has to be read
    as “shall” in sections 61 and 62 of the MPT Act, yet in all future cases
    the Board is under a constitutional duty to sell the goods in its custody
    within a reasonable time from which it takes custody of those goods.
    Ordinarily, the time of four months from the date of landing of the goods
    mentioned in section 63(1)(c) of the MPT Act should be the outer-limit
    within which such goods should be put up for sale. If not put up for sale
    within such time, the Board must explain as to why, in its opinion, this
    could not be done, which explanation can then be tested by the Courts.
    If the explanation is found to be reasonable, and the owner or person
    entitled to the goods does not remove the goods thereafter, penal
    demurrage may then be levied and collected by the Board. To this
    80
    extent, therefore, while overruling the impugned judgment of the Kerala
    High Court on the aspect of “may” being read as “shall” in sections 61
    and 62 of the MPT Act, yet the hovering omnipresence of Article 14
    over the Board must always be given effect to, and there must be a
    very good reason to continue detention of goods beyond the period of
    four months as mentioned hereinabove before they are sold.
    75.We now come to a judgment of two honourable Judges of this Court in
    Rasiklal (supra). The question that arose in this case was as to
    whether the Appellant ‘Rasiklal Kantilal and Company’, who was a
    person interested in purchasing goods, and did not at the time have
    title to the goods, would be liable to pay demurrage charges for a
    period of roughly six months, which began with the date on which he
    applied to the customs authorities to have bills of entries substituted in
    his name. On the facts in that case, during the period from November,
    1991 to January, 1992, 78 shipments of goods were imported by 5
    different consignees from a UK company, one M/s Metal Distributors
    (UK) Ltd; these consignments were landed at Bombay Port. The
    consignees filed bills of entry for 37 out of 78 consignments, but
    subsequently failed to lift the consignments, as a result of which they
    came to be stored at the Port of Bombay. The consignments were
    shipped on a “CAD basis”, i.e. cash against documents, in which title
    81
    would remain with the UK company till such time that an importer would
    retire the documents against payment.
    76.This Court held that despite Rasiklal not being an owner of the goods,
    he was liable to pay demurrage for the aforesaid period. Strictly
    speaking, this judgment does not apply to the facts of the cases before
    us, in that Rasiklal was neither the owner of a vessel or its agent. It
    was an importer of goods who had beneficial title to the said goods, as
    a formal agreement between the UK company and Rasiklal to
    purchase the said goods was made in April, 1992. Given our reading
    of the MPT Act, and section 63(2) in particular, this judgment could
    have been supported on the basis that Rasiklal was an importer (within
    the meaning of section 63(2)) of the goods, and as beneficial owner of
    the goods would therefore be liable to pay storage charges of the
    aforesaid goods. However, this Court did not choose this route in order
    to arrive at its conclusion. On the other hand, it went on to consider
    Rowther-I (supra), Rowther-II (supra), and Forbes-II (supra), and
    arrived at the following conclusion in paragraph 47:
    “47. With respect, we agree with the conclusions recorded
    by this Court in Rowther-2 and Forbes that a Board could
    recover the rates due, either from the steamer agent or the
    consignee but we are of the humble opinion that enquiry into
    the question as to when the property in the goods passes to
    the consignee is not relevant.”
    82
    77.The Court then went on to examine various provisions with regard to
    bailment, and stated that passing of title in goods is irrelevant
    conceptually to bailment, which concerns itself with delivery and not
    title of goods. It then framed the question in paragraph 51, thus:
    “The only question is: from whom can the board recover –
    we emphasise the question is not who is liable.”
    78.From paragraphs 52 to 60, the Court then went on to consider the
    observations made in Rowther-I (supra) that the first respondent, i.e.
    the Port Trust, is a sub-bailee of the goods bailed by the consignor to
    the ship-owner. This being so, it is the consignor to whom the Port
    Trust has to look for payment of these charges, and since in this case
    Rasiklal is a consignee claiming through the consignor, Rasiklal would
    be liable. Section 158 of the Indian Contract Act, 1872 and section 1
    of the Indian Bills of Lading Act, 1856 were relied upon to reach this
    conclusion.
    79.First and foremost, Rowther-I (supra) did hold that the Port Trust is a
    sub-bailee of goods bailed by the consignor to the ship-owner, but so
    held in order to distinguish an English judgment – as has been pointed
    out hereinabove – which would then lead to the proposition that once
    the goods are placed in the charge of the Board, it would amount to
    delivery to the consignee, which proposition was turned down by the
    Court. The question whether section 158 of the Contract Act can apply
    83
    to a statutory bailment under the MPT Act is left open, given that the
    Port Trust is not limited only to recovering “necessary expenses” to be
    payable by the bailor, but is statutorily is entitled to recover, by way of
    levy of rates and expenses incurred for storage of the goods, together
    with something more – the something more being rates of storage
    higher than warehousing rates as a deterrent against keeping these
    goods in the Port Trust premises. This Court in Board of Trustees of
    the Port of Bombay v. Jai Hind Oil Mills Co. and Ors. (1987) 1 SCC
    648 has observed:
    “10. The power of a Port Trust to fix rates of demurrage and
    to recover the same from an importer or exporter (although
    the question of an exporter paying demurrage arises rarely)
    under law and to show concession as regards demurrage
    charges in certain specified cases is recognised by this
    Court in the Trustees of the Port of Madras v. Aminchand
    Pyarelal [(1976) 3 SCC 167] and in the Board of Trustees of
    the Port of Bombay v. Indian Goods Supplying Co. [(1977) 2
    SCC 649]. These decisions are no doubt based on the
    relevant laws which were in force at the material time. But
    the decisions are still relevant insofar as cases arising under
    the Act because the Act also contains provisions more or
    less similar to the statutory provisions considered in the said
    decisions. Demurrage charges are levied in order to ensure
    quick clearance of the cargo from the harbour. They are
    always fixed in such a way that they would make it
    unprofitable for importers to use the port premises as a
    warehouse. It is necessary to do so because congestion in
    the ports affects the free movement of ships and the loading
    and unloading operations. As stated earlier, the Port Trust
    shows concession to the party concerned in certain types of
    cases.”
    84
    80.As a matter of fact, the Division Bench in Rasiklal (supra) seems to
    have put the cart before the horse, on a ground based in equity. The
    Court stated:
    “60…Denying such a right on the ground that the person
    claiming delivery of the goods acquired title to the goods only
    towards the end of the period of the bailment of the goods
    with the first respondent would result in driving the first
    respondent to recover the amount due to it from the bailor or
    his agent who may or may not be within the jurisdiction of
    the municipal courts of this country (by resorting to a
    cumbersome procedure of litigation). The first submission is,
    therefore, rejected.”
    81.As has been pointed out by us, no such right has been denied on a
    correct reading of the MPT Act. The importer, the consignee and the
    consignor, or their agents, can all be held liable to pay demurrage
    charges. However, since Rasiklal (supra) does not involve either the
    owner of the vessel or its agent, we leave open the question as to
    whether the Port Trust, as sub-bailee, is entitled to recover its dues
    from the original bailor – the consignor, and persons claiming through
    it, given the statutory scheme of the MPT Act, as has already been
    indicated in paragraph 66 above.
    82.Based on the above discussion, our answers to the questions framed
    in the reference order are as follows:
  38. The point of time at which title to the goods passes to the
    consignee is not relevant to determine the liability of the
    85
    consignee or steamer agent in respect of charges to be paid
    to the Port Trust;
  39. and 3. The bill of lading being endorsed by the steamer
    agent is different from the bill of lading being endorsed by the
    owner of the goods. In the first case, the endorsement leads to
    delivery; in the second case, the endorsement leads to passing
    of title. For the reasons mentioned in the judgment, both stages
    are irrelevant in determining who is to pay storage charges –
    we have held that upto the point that the Port Trust takes
    charge of the goods, and gives receipt therefor, the steamer
    agent may be held liable for Port Trust dues in connection with
    services rendered qua unloading of goods, but that thereafter,
    the importer, owner, consignee or their agent is liable to pay
    demurrage charges for storage of goods;
  40. As per paragraph 24 of our judgment;
  41. The answer to question number 5 is really in two parts: first,
    as to whether carrying goods in a container would make any
    difference to the position that only the owner of the goods or
    person entitled to the goods is liable to pay for demurrage; and
    second, as to whether the Port Trust is obliged to destuff
    containers that are entrusted to it and return empty containers
    86
    to the shipping agent. The answer to the first question is
    contained in paragraphs 45 to 51 of our judgment. The answer
    to the second question is that a container which has to be
    returned is only a receptacle by which goods that are imported
    into India are transported. Considering that the container may
    belong either to the consignor, shipping agent, ship-owner, or
    to some person who has leased out the same, it would be the
    duty of the Port Trust to destuff every container that is
    entrusted to it, and return destuffed containers to any such
    person within as short a period as is feasible in cases where
    the owner/person entitled to the goods does not come forward
    to take delivery of the goods and destuff such containers. What
    should be this period is to be determined on the facts of each
    case, given the activities of the port, the number of vessels
    which berth at it, together with the volume of goods that are
    imported. While it does not lie in the mouth of the Port Trust to
    state that it has no place in which to keep goods after they are
    destuffed – as in the facts in the present case – yet a court
    may, in the facts of an individual case, look into practical
    difficulties faced by the Port Trust. This may lead to the “short
    period” in the facts of a particular case being slightly longer
    87
    than in a case where a port is less frequented, and goods that
    are stored are lesser in number, given the amount of space in
    which the goods can be stored.
    83.Having answered the questions that have been posed before this
    Court, we do not, on the facts of this case, think that the justice of the
    case demands that we should interfere with the impugned High Court
    judgment. The steamer agents themselves did not dispute liability to
    pay ground rent upto 75 days before the High Court, and have
    admittedly paid the said charges long ago. As a matter of fact, the
    steamer agents paid ground rent even beyond the period of 75 days –
    the High Court having ordered the Appellant Port Trust to recompute
    the liability of the steamer agents, and return the balance to the parties
    concerned within two months from the date of receipt of a copy of the
    impugned judgment. To order a refund of ground rent paid for 75 days
    to the steamer agent, and direct the Board to then recover the same
    from the importer, consignor and/or the owner of the goods at this late
    stage of the proceedings would not be in the interest of justice.
    84.Accordingly, we dispose of the appeals that have been filed against
    the impugned High Court judgment. The impugned judgment is set
    aside on one question of law, namely, that the expression “may” in
    sections 61 and 62 of the MPT Act cannot be read as “shall”, subject
    88
    to the caveat that as the “State” under Article 12 of the Constitution, a
    Port Trust must act reasonably, and attempt to sell the goods within a
    reasonable period from the date on which it has assumed custody of
    them.
    …………..………………J.
    (R. F. Nariman)
    ……..……………………J.
    (Navin Sinha)
    ……..……………………J.
    (Indira Banerjee)
    New Delhi.
    5
    th August, 2020.