Supreme Court of India

Chairman, Board Of Trustees, vs M/S Arebee Star Maritime on 5 August, 2020

Appellant- The Chairman, Board of Trustees, Cochin Port Trust

Respondents- M/S Arebee Star Maritime Agencies PVT. LTD. & ORS.

Brief Facts/ Background

In 1998-99 many containers which were supposed to contain woollen rags, were discharged
from various container Line’s vessels at Cochin Port. On inspection by the Customs before cargo
clearance found that the containers contained woolen garments not woollen rags, thus it
became a subject of customs investigation during the time it gets uncleared. The Cochin port
also refused to de- stuff the containers because of lack of space in the port. Due to the fear that
the customs might tell the cargos to get cleared before they could collect the outstanding
container charges and ground rent from the importers, the vessel agents cancelled the delivery
orders they had issued for the cargos. The Port Trust imposed ground rent on the containers
and deducted those amount from the vessel agents running account with the port. Thus the
vessel agents issued proceedings against the Port in Kerela High Court stating that the amount
should be recovered from the importers only.

The Single Judge of the Kerala High Court judgment was not in favor of the vessel agents and
hence they filed an appeal to the Division Bench of the High Court i.e The Appellate Court. The
Appellate Court observed that The Tariff Authority for Major Ports had in its order of July 2000
and told that the Port was not allowed to charge excess amount of what is been decided by
TAMP since it is not permitted to charge any ground rent on abandoned containers beyond 75
days( Major Port Trust Act 1963).

The Port Trust then submitted a Special Leave Petition to the Supreme Court against the Order
of the Appelate Court.

Judgment- The Large Bench of the Supreme Court Discussed the cases in details and gave the
final verdict.

According to the definition of ‘owner’ in section 2(o) of The Major Port Trusts Act 1963, the
point of time at which title of the goods passes to the consignee is not relevant to determine if
the consignee or vessel agent will have to pay for the charges to Port Trust.

As per The Indian Bills of Lading Act 1856, once custody and receipt of the consignment has
been received by the Port Trust, the vessel owner / agent is not liable to pay for storage
charges. Post landing and removal of goods to storage, it is the importer who is supposed to
pay for any charges to the Port and not the vessel agent. And also if the importer doesn’t show
up and collect the goods, the Port is duty bound to de stuff the container and return the empty
container to the vessel agent within a reasonable time.