Steamer agent liable to pay demurrage and port charges

Supreme Court: Affirming the orders of High Courts of Calcutta and Bombay, regarding the payment of demurrage and port charges to the Board of Trustees of a Port in respect of goods brought into the port and warehoused by the said authority, Ranjan Gogoi and R.K. Agarwal, JJ., held that the agent of a ship owner is liable to pay demurrage and port charges in respect of the goods brought into the port and warehoused.

The Appellants in the present case, through Vikas Mehta, argued that under the provisions of the Major Post Trust Act, 1963; the byelaws of the Port Trust authority and the schedule of rates framed by such authority no liability is cast either on the ship owner or his agent for such payments. So, the liability to pay all rates/rents/ port charges being statutory, in the absence of such statutory provisions, the liability sought to be forced upon the Steamer Agents is without the authority of law.

On the other hand, the Respondents, through A.V. Rangam, contended that a relationship of bailor and bailee between the Steamer Agent and the Port Trust authority comes into existence by virtue of Section 42 of the Act of 1963 and continue till the bill of lading is duly endorsed.

The Court relied upon its own judgment in Trustees of the Port of Madras v. K.P.V. Sheik Mohamed Rowther & Co., (1963) Supp. 2 SCR 915 and stated that once the bill of lading is endorsed or the delivery order is issued it is the consignee or endorsee who 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. Forbes Forbes Campbell & Co. Ltd v. Board of Trustees, Port of Bombay, 2014 SCC OnLine SC 966, Date of Decision:- 03.12.2014

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