Board of Trustees of the Port of Bombay vs Shaw Wallace and Co. Ltd. and Others

S.P. Bharucha, J.—This appeal is filed by the Trustees of the Port of Bombay. It does not impugn any order passed by the learned single judge. What it impugns is a clause in the guidelines which the learned single judge was persuaded by counsel to frame for the benefit of the Customs Authorities, Bombay Port Trust Authorities and the persons in charge of the conveyance and their agents so as to provide for smooth exercise of functions under the provisions of the Customs Act as well as to ensure that injustice was not caused to any of the authorities or to the persons in charge of the conveyance.

The petitioners before the learned single judge were the agents of the vessel of M.V. Ratna Kirti. The vessel discharged cargo within the port of Bombay in August 1981. Its Import General Manifest showed consignments of newsprint manifested at items 8, 9, 11 and 31. The out-turn report issued by the Port Trust, which was the 1st respondent to the petition, showed that in respect of the newsprint at item 8 twenty-five rolls had been short landed, at items 9 and 11 three rolls had been short landed and at item 31 four rolls had been short landed. Going upon the out-turn report the Customs Authorities (who are the other respondents to the writ petition) issued to the petitioners a notice u/s 116 of the Customs Act in respect of such short landing. Thereafter, an order was passed which imposed upon the petitioners a penalty in the sum of Rs. 32,677/-. An appeal against this order was dismissed. Thereupon this writ petition was filed. It prayed that the out-turn report of the Port Trust and the show cause notice and orders of the Customs Authorities be quashed.

At the hearing of the writ petition the learned single judge was, as we have stated, persuaded to issue guidelines as aforesaid. In respect of cargo brought in L.C.L. containers i.e. containers containing ''Less Container Load,'' the learned single judge laid clown, inter alia this guideline: "(2) In case the seals of the L.C.L. containers at the time of unloading are found to be intact but are broken or tampered with at the time of destuffing, then responsibility for difference between the manifested quantity and de-stuffing quantity would be that of the Port Trust authorities and not of the carrier". It is this guideline which the Port Trust impugns in the appeal.

Mr. Makhija, learned Counsel for the Port Trust, submitted that the Port Trust could not be held liable for what was not found inside the container after it was opened on the basis of the manifest. Once the container had been de-stuffed and its actual contents taken charge of by the Port Trust, the Port Trust was of course responsible therefore and a provision in that regard was contained in Section 42, particularly Sub-sections (2) and (7), of the Major Port Trusts Act, 1963. He submitted that if this clause of the guideline remained as it stood someone could well contend that the Port Trust had strict liability in respect of the difference between the manifested quantity and the de-stuffed quantity where the seals of the L.C.L. containers had been found to be intact at the time of unloading but broken or tampered with at the time of de-stuffing.

The submission was that this guideline should be suitably amended having regard to this apprehension. The only opposition to such amendment has come from Mr Bulchandani, learned Counsel for the Customs Authorities. He submitted that if this was done the Customs Authorities would no longer be able to hold the carrier responsible for the difference between the manifested quantity and the de-stuffed quantity where the seals of the L.C.L. containers at the time of unloading were found to be intact but broken or tampered with at the time of de-stuffing. In his submission, even in such situations the carrier remained responsible to the Customs Authorities and it was for the carrier to take action as it thought fit against the Port Trust Authorities.

This is an argument which we cannot countenance. In such a situation the carrier would not be responsible. Whether the Port Trust in a given case would be responsible is another matter, but there can also be no statement by the court which would lead to the inference that in every such case the Port Trust would be strictly liable.

In these circumstances, we amend the guidelines framed by the learned single judge u/s (B) "Cargo brought in container" [(B) (b) L.C.L. CONTAINER (Less Container Load)] to read "(2) In case the seals of the L.C.L. containers at the time of unloading are found to be intact, but are broken or tampered with at the time of de-stuffing, then responsibility for difference between the manifested quantity and de-stuffed quantity would not be of the carrier."

Order on the appeal accordingly.

No order as to costs.