PRIYANKA OVERSEAS LTD Vs. KANDLA PORT TRUST

JUDGEMENT

(1.) Complaint was filed on 28.3.2000, inter alia, alleging that the Government of India has been sponsoring various schemes for promoting exports. Complainant concluded a contract with Govt. of Bangladesh for supply of 10,000 MTs of rice against contract No. IPR-03/04/99 dated 23rd March, 1999. Towards fulfilment of this contract, the complainant gave a guarantee/bond of US $1,35,066.75 in favour of the purchaser. The complainant procured the rice and brought it at the Port of Kandla. M/s. Geochem Laboratories Pvt. Ltd. - -Surveyors inspected 36466 bags weighing 2738.170 MTs of rice at the godowns of M/s. Cargo Conveyers, Gandhidham, clearing agents. The Surveyor found the rice fit and issued a certificate dated 4.4.1999. Opposite party has the facilities of transit sheds at the Port of Kandla for loading the goods directly to the vessel. M/s. Vilas Transport Company, appointed by the complainant made a request by means of letter dated 5.4.1999 for allotment of area in transit shed Nos. 1 and 3. Two shipping bill Nos. 5907 for a quantity of 6000 MTs & 5908 for a quantity of 4000 MTs of rice, both dated 1.4.1999 were submitted by the complainant for permission to load the rice on the vessel as required by Sections 50/51 of the Customs Act, 1962. Said 2738.170 MTs of rice was shifted to transit shed-3 (for short TS-3) containing 37466 bags from 6.4.1999 to 13.4.1999. It was further alleged that on 15.4.1999 the said Surveyor again inspected the rice for pre-shipment sampling and analysis and found that the bags were badly damaged with infestation and needed immediate fumigation. In the same shed, non edible cargo was also stored. It was pleaded that infestation had taken place on account of negligence on the part of opposite party. It was also alleged that there was a notice of heavy cyclone by the opposite party and as such effort to ship the said bags could not be completed and the rain took place. There was leakage of rain water and the water seeped into the bags as a result whereof the bags were effected and bad smell started coming and the rice became unfit for shipment. After inspection the said Surveyor issued a certificate dated 22.5.1999 to that effect. Complainant had paid charges/demurrage of Rs. 63,340 up to 6.5.1999. Opposite party issued notice of demand of further demurrage. By the letter dated 3.8.1999, the opposite party threatened the complainant to put the rice on auction in case the demurrage charges were not paid. By the letter dated 4.8.1999, the complainant asked the opposite party for waiver of demurrage charges as it had suffered heavy losses. Representation was again made on 11.8.1999 and 31.8.1999 for that purpose. On 4.9.1999, the opposite party permitted the removal of said rice bags to the rental warehouse within the port premises. By the letter dated 13/15.10.1999, opposite party again threatened to put the rice bags to auction without any further notice as per Section 2 of Kandla Port Trust Act. Aggrieved by this threat, the complainant filed a Writ Petition under Articles 226 and 227 of the Constitution of India in the High Court of Gujarat seeking to restrain the opposite party to go ahead with the auction. High Court finally disposed of the Writ Petition vide order dated 18.11.1999 with certain directions. Pursuant to this order, the Chairman of the opposite party after hearing the parties rejected the representations made by the complainant by the order dated 2.2.2000 declining to waive the demand of demurrage charges which at that point of time was of Rs. 85,76,260. It was stated that the order dated 2.2.2000 is bad in law as said reports of the Surveyor dated 4.4.1999, 15.4.1999 and 22.5.1999 were misread. The value of the said rice was around Rs. 2.92 crores. Direction was sought to made in para No. 32 of the complaint which being material, is re-produced below:

(2.) Complaint was contested by filing reply on the affidavit of R.T. Revankar, Traffic Manager. It was alleged that the complaint is not maintainable as the complainant had filed Writ Petition bearing No. SCA 8591 of 1999 before the Hon'ble High Court of Gujarat claiming similar reliefs. Order dated 18.11.1999 passed by the High Court directing the opposite party to decide the representation(s) made by the complainant after hearing the complaint. The opposite party heard the representation(s) of the complainant and by the order dated 2.2.2000 rejected the same. Thereafter, the complainant filed the present complaint as also Special Civil Suit No. 37 of 2000 in the Court of Subordinate Judge (SD), Gandhidham, Kutch praying for an interim relief in terms of grant of injunction against the opposite party from disposing of the rice to recover the demurrage charges. Application for interim relief was dismissed by the order dated 30.6.2000. Against that order, the complainant filed appeal being No. 375 of 2000 before the High Court of Gujarat and the same was dismissed by the order dated 14.12.2000 directing the opposite party to auction the rice in two lots etc. Against the order of High Court, the complainant filed SLP No. 165 of 2001 which was also dismissed by the Supreme Court. Complainant is not a consumer nor did the opposite party provide any service within the meaning of Consumer Protection Act, 1986 to the complainant. It was alleged that the scale of rates for the services provided by the opposite party under Section 42 of the Major Port Trust Act, 1963 is governed by the provisions of Section 48 of the Act. The scale of rates comes into force after being sanctioned by a notification in the Official Gazette by the Central Government. In terms of Section 54 of the Act, the Central Government alone has the power to modify or cancel the rates determined and charged by the opposite party. Under Section 61 of the Act the opposite party has the power to sell by auction the goods which are not removed from the opposite party's premises within two months from the date of keeping such goods in the custody of opposite party. Under Section 63 of the Act, opposite party has the power to apply the sale proceeds towards payment of the expenses of the sale and the claim according to the priorities mentioned in Section 59. It was stated that the answering opposite party is not aware that the rice bags were kept in the godowns of M/s. Cargo Conveyors which is outside the custom area and survey was done by M/s. Geochem Laboratories Pvt. Ltd. on 4.4.1999 as alleged. Opposite party provides transit sheds which are utilized for the purpose of easy loading as the sheds are very close to the jetty. Normally, transit sheds are allotted to the exporters for a maximum period of 15 days. It was admitted that M/s. Vilas Transport Co. on behalf of the complainant applied to the opposite party on 5.4.1999 for allotment of transit shed in regard to consignment of 2738.17 MTs par-boiled rice. Complainant was allotted transit shed in covered block No. 1 to 12 of TS-3. Vessel M.V. Victory Jupiter Light was to arrive at opposite party's port during the second week of April, 1999. It was denied that on 15.4.1999 the said Surveyor inspected the rice bags for pre-shipment sampling and analysis and found that the rice was badly affected with infestation and needed immediate fumigation as alleged. TS-3 was used only for storing edible oil/ agricultural products. At that time, block Nos. 1 to 12 were allotted to the complainant, 1470 MTs of rice was stored in covered block Nos. 13 to 16 and 155 MTs of soya extractions in bags was stored in block Nos. 17 and 18. It was denied that any infestation took place or there was any negligence on the part of opposite party as alleged. It was admitted that there was a cyclone threat. However, cyclone did not eventually strike and the shipping remained normal during that period. It was denied that the answering opposite party was negligent in maintaining the sheds due to which water seeped into the cargo stored. Opposite party was not aware of any Surveyor being appointed and the report, if any, submitted by the Surveyor is collusive. It was admitted that demurrage charges of Rs. 63,340 was paid up to 6.5.1999 by the complainant. It had not paid demurrage charges thereafter. Rice was not loaded in the vessel MV Jupiter Light as informed by the complainant and the same continued to remain the transit shed. By the letter dated 3.8.1999, the opposite party informed the said transporter that the rice was lying on transit terms for more than 90 days and no effort had been taken to shift the rice or remove it from the port area and the transporter, therefore, should make necessary arrangement for shipment/removal thereof within a week failing which the cargo will be put to auction without notice as per the provisions of the Act. It was denied that the rice was rendered unfit as alleged. By the letter dated 4.8.1999, the complainant informed that on pre-shipment analysis on 15.4.1999 the rice bags were found infested and needed fumigation. Letter dated 4.8.1999 was followed by the letter dated 11.8.1999 wherein the complainant pointed out that the rice bags were affected by rain water. Complainant sought waiver of transit shed demurrage charges and permission to take the rice bags out of the port premises. Complainant's said representation(s) could not be allowed as it had failed to pay the demurrage charges levied in terms of the scale of rates approved by the Central Government. Complainant was allowed to shift the rice bags to rental warehouse from 4.9.1999 to avoid further accumulation of demurrage charges. Issuance of notice dated 22.9.1999 demanding amount of Rs. 85,76,260 towards transit shed demurrage charges was not denied. Complainant's case for waiver of demurrage charges was not covered by the guidelines approved by the Central Government. It was denied that the order dated 2.2.2000 passed by the Chairman of the opposite party is bad in law and on facts as alleged. Opposite party on 15.10.1999 issued a notice for auction of uncleared/unshipped cargo lying in the transit shed to the complainant under Section 62 of the Act. 50% of the cargo i.e. 1350 MTs was put to auction and sold pursuant to the order dated 14.11.2000 of the High Court. Plea regarding infestation of rice stored in the transit shed was raised only after a period of 9 months and that too after receiving notice on 3.8.1999 by the complainant. Opposite party had auctioned the rice in two lots on 3.1.2001 and 10.1.2001 and recovered an amount of Rs. 1,28,25,284 provisionally. Complainant is still liable to pay the balance amount of Rs. 68,71,176 towards the demurrage charges payable plus interest. Denying deficiency in service/negligence, the reliefs claimed in the complaint were refuted.

(3.) Complainant filed application seeking amendment of the complaint for incorporating subsequent events by way of addition/renumbering of the paras which though was contested by the opposite party, was allowed by the order dated 19.3.2009. To be only noted that after amendment the complainant has improved the claim over the claim made in the complaint initially, to Rs. 5,96,96,193 with interest.