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Suit No. 129 of 1957, decided on 16th August 1961.
Ss. 43, 43‑A & 43‑B read with Scale of Charges, Note 4‑B‑Board of Trustees competent to frame scale of charges and make alterations from time to time with sanction of Government‑Rejection of Customs Detention Certificate by Board of Trustees final‑Order of rejection cannot be challenged by suit.
S. 65‑Original letter of Govern ment not traceable‑Certified copy of letter may be admitted in evidence.
S. 21
--Customs Authori ties competent to issue certificate‑Certificate may be withdrawn and fresh one issued.
Ss. 29, 32, 43, 53‑A & 84
‑Board of Trustees right to claim and recover dues and charges‑Statutory right‑Limitation Act (IX of 1908), Art 120, applicable.
The Secretary of State for India‑in‑Council v. Abdul Bari and others I L R 20 Cal. 51; Rajah of Vizianagaram v. Dindi China A I R 1937 Mad. 217 ; District Board Dehra Dun v. Babu Ram A I R 1941 All. 152; Kamruddin Kadibhai & Co. v. The Municipal Committee, Anjangaon A I R 1951 Nag. 148; Mst. Amar Kaur v. Secretary of State A I R 1939 Lab. 583; Municipal Committee, Amritsar v. Kanshi Ram A I R 1938 Lays. 267 and Mritunjay Prasad Sitala Prasad v. District Council, Hoshangabad A I R 1947 Nag. 153 ref.
Tikamdas for Plaintiffs.
A. Aziz for Defendants.
Dates of hearing: 3rd and 18th November 1960, 9th and 13th December 1960.
This is a suit for the recovery of Rs. 1,58,278 by the Trustees of the Port of Karachi against Messrs Malik Muhammad Din & Sons in respect of the dues relating to the import by the defendants of 252 packages of mild steel plates.
2. The material allegations of the plaint are that the Karachi Port Trust is a local authority for the limits of the Port of Karachi and works as statutory bailee of the consignments landed on Karachi Wharf; that the defendants who are merchants had opened with the plaintiffs an account known as "Let Pass Deposit Account" and such sums which were paid by them to the plaintiffs were credited to the former's account and the amounts failing due on account of storage, wharfage etc. were debited ; that a consign ment consisting of 252 packages of mild steel plates was imported by the defendants and arrived here on 22‑12‑1951 per s.s. "Berkenfels" and the defendants having proved their title to the said consignment cleared them on 18‑10‑52 ; that the storage and wharfage fee amounted to Rs. 2,91,181. The defendants there after obtained from the Customs authorities two delay certificates and on that basis claimed certain deductions. The first certificate related to the period between 30‑1‑52 and 7‑7‑52 and the second for the period 8‑7‑52 to 4‑9‑52 ; the plaintiffs accepted the second delay certificate and permitted a deduction of Rs. 50,262 thus reducing the claim of the plaintiffs to Rs. 2,40,917 ; they however rejected the first delay certificate ; that the defendants appealed against the rejection of the first certificate and undertook to pay the sum assessed by the plaintiffs in the event of their appeal being rejected; that as a result of the appeal to the Government the Collector of Customs withdrew the aforesaid two delay certificates and issued instead two fresh certificates in substitution of the previous ones. The first certificate related to the period 30‑1‑52 to 14‑3‑52 and the second certificate to the period 28‑4‑52 to 10‑ ‑52 and 11‑7‑52 to 15‑9‑52. The plaintiffs accepted the certificates which had the effect of reducing their claim to Rs. 1,58,278 which is the sum the plaintiffs have claimed in the suit. The cause of action is alleged to have arisen on 26‑8‑55 when the amount was finally determined on the basis of fresh reduction and when a demand was accordingly made. In the alternative it is stated that the suit is governed by Article 120 of the Limitation Act, under which it is within time in any event.
3. The substance of the defence put forward is the written statement was as follows : That the rejection by the plaintiffs of the first delay certificate was incompetent and that the same was binding upon the Port Trust authorities and it was, therefore, urged that the plaintiffs were not entitled to the sum of Rs. 2,40,917 which was assessed upon the basis of the acceptance of the original second certificate only. The inference suggested was that the amount would have been further reduced if the first certificate had also been accepted. It was denied that the defendants had given any undertaking to pay the dues as claimed by the plaintiffs and that In any case this was merely an offer which was not acted upon by the plaintiffs and they could not therefore take any advantage of it. With regard to the subsequent delay certificates which were issued by the Customs authorities in place of the earlier ones it was alleged that the same were not binding upon the defendants. The plaintiffs' claim for Rs. 1,58,278 was accordingly denied and it was further asserted that the same was barred by limitation. A further plea was set up that the plaintiffs themselves were liable for the delay in the clearance of the goods as the defendants had offered to remove them against indemnity bond. This plea however was not pressed.
4. After further oral examination of the parties' counsel on 3‑11‑60 the following issues were ultimately framed:‑
"(1) Whether the Karachi Port Trust Is a statutory Bailee
(2) (a) Whether the alleged rejection of 1st delay certificate has been done by competent authority
(b) Whether the alleged rejection of the 1st delay certifi cate is valid and effective
(3)' Whether the said 1st delay certificate Is effective and binding upon the Karachi Port Trust
(4) Whether the plaintiffs accepted the offer made in the defendant's letter dated 8‑6‑53
(5) Whether the defendants gave an undertaking as alleged in para. 8 of the plaint
(6) To what amount is the plaintiff entitled In this suit
(7) Whether the suit is barred by limitation
(8) To what relief are the plaintiffs entitled "
5. I shall first take up issues Nos. 2 and 3. Before I examine the import and effect of a delay certificate issued by the Customs authorities vis‑a‑vis the charges levied by the Karachi Port Trust it would be useful to refer to the relevant provisions of the Karachi Port Trust Act, 1886 which enables the Board to frame and from time to time alter the scale of charges. These powers are derived A from sections 43 and 43‑A. These may be reproduced:‑
"43. The Board shall frame and may from time to time alter
(a) a scale of tolls, dues, rates and charges for the landing and shipment of goods of the wharves, quays, stages, jetties and piers and for the use of such wharves, quays, stages, jetties and piers, and for the storing and keeping of any goods stored in any premises belonging to the Board and for the removal of goods and for the use of any mooring ;
(b) a scale of tolls for the use of the said wharves, quays, moorings, stages, jetties and piers, in case the Board permit the goods to be landed or shipped by others than their own servants; and
(c) a scale of charges for any services to be performed by the Board or their servants in respect of any vessel or goods, or for the use of any works or appliances to be provided by the Board.
43‑A. The Board may also frame, and from time to time alter, a scale of charges to be levied‑
(a) for the permission to use, and for the use of, any dock in the possession of the Board and for the services which the Board renders to, and for gear, tackle, tools, instruments, utensils, staging or materials supplied by the Board for the purpose of any vessel using, or any person working in any such dock ;
(b) subject to the provisions of section 29, for the use of water boats, barges and fire engines belonging to or maintained by the Board and for water supplied by the Board in accordance with the provisions of section 29 ; and
(c) for the towing of, and rendering assistance of the nature referred to in clause (10) of section 29 to vessels outside the limits of the Port."
Section 43‑B provides that every scale framed and every alteration thereof by the Board under the aforesaid two preceding sections shall be submitted to Government for sanction and when so, sanctioned and published in the Official Gazette shall have the force of law. The Board has framed the scale of charges under the powers given to it under sections 43 and 43‑A and this is contained in a booklet described as "Karachi Port Trust Scale of Charges framed under sections 43 and 43‑A of the Karachi Port Trust Act". On the first page of this booklet appears Table III under which storage charges on goods such as those in question are to be calculated on the following basis
| First 7 days | Free |
| Next 10 days | 15% |
| Next 10 days | 50% |
| Thereafter until clearance | 75% |
Note 4‑B to this scale reads as follows:‑
"Note 4‑B.‑In cases where a Customs Detention Certificate Is Issued for part or whole of a consignment, storage charges will be levied at the rate of 15% of wharfage per day on the whole consignment for the period of detention, and three work ing days thereafter, unless in the opinion of the Board there are other reasons which do not justify this concession. This con cessions will not apply to matches and dangerous goods specified under items No. II and III above."
It is this detention certificate mentioned in this note which has been described in the pleading as the delay certificate, and the note provides that where such a certificate is not rejected by the Board (Board of Trustees) the storage charges are to he levied at the rate of 15% of wharfage per day on the whole consignment for the period of detention.
6. It was the contention of Mr. Aziz, the learned counsel for the defendants, that the first detention certificate relating to the period 30‑1‑52 to 7‑7‑52 was binding upon the plaintiffs and the charges should have been levied upon that basis. Exh. 40 is that certificate dated 7th July 1952 and it is stated therein that the delay from 30‑1‑52 to 7‑7‑52 was due to misplacement of the first bill of entry. The plaintiffs did not accept this as a good reason for excluding all this period for the levy of normal charges and it appears to me that even if the Customs authorities had adhered to that certificate, which they did not, the rejection thereof could not have been effectively challenged in this suit because in terms of Note 4‑B referred to above it is the opinion of the Board which must prevail. The further contention of Mr. Aziz that the rejec tion in this case was not made by the Board but by the Traffic Manager, is devoid of any force because admittedly the defendants had appealed to the Board agiin3t the rejection of this certificate and that appeal was rejected by the Board. Apart from this it is clear to me that the two certificates Exhs. 39 and 40, having been withdrawn by the Customs authorities who issued two fresh certificates, the earlier certificates must be deemed to be non existent and no claim for reduction of charges could be made by the defendants on their basis. Mr. Aziz remained undaunted and urged that these subsequent certificates were incompetent because the Customs authorities had no power to issue them or to with draw the earlier certificates. I find no substance in this argument. There are large number of defendants' own letters and representa tions on record addressed to the Port Trust Authorities urging them not to enforce the recovery of the sum of Rs. 2,40,917 which was the sum which had been assessed by them after they had rejected one of the two earlier certificates, and pleading that the result of their (defendants') appeal to the Government should be awaited. In their letter dated 8th June 1953 this is what the defendants said:‑
"We hereby undertake to pay up the outstanding dues of the K. P. T. in respect of the storage bill No. 392/83 for Rs..,2,40,917 in case our appeal is rejected."
The subsequent certificate by which considerable reduction was made as against the claim of the Karachi Port Trust was issued in consequence of the defendants' appeal. The plaintiffs have pro duced a certified copy of the letter dated 31‑1‑55 from the Collector of Karachi to the Chairman Karachi, Port Trust, Exh. 44, in which he has stated that the Central Board of Revenue had asked him for the report on the case. I admitted this copy because t Mr. Raymond, the Traffic Manager gave evidence to say that he was not able to find the original of this letter. The Collector of Customs, as this letter would show, had gone into the whole question most thoroughly and was able to make out a case for reduction of charges which the plaintiffs were claiming and the subsequent certi ficates Exhs. 41 and 42 dated 8‑7‑55 were issued by him accordingly, and the Collector of Customs was able to persuade the plaintiffs to accept these delay certificates. On general principles it is obvious that if the Customs authorities were competent to issue the earlier certificates they were also entitled to withdraw them and Issue fresh ones. I may further note that the Customs authorities were not a party to the suit and a great deal of arguments which were addressed before me were such which might have been pertinent only in an action between the defendants and the Customs authorities.
7. In view of the conclusion reached by me my finding on issues Nos. 2(a) and (b) is in the affirmative. I further hold that the first delay certificate having been withdrawn and replaced by Exhs. 41 and 42 ceased to have any effect. My finding on issue No. 3 is that the first delay certificate (of the first set) is not effective and binding.
8. The next question which falls for consideration is whether the plaintiffs' suit is barred by time, the subject‑matter of issue No. 7, and along with it I shall also deal with issue No.1
9. The goods in question arrived per s. s. Berkenfels on 22‑12‑51 and they came to be stored in the Karachi Port Trust on 8‑1‑52. They were cleared on 18‑10‑52 as the defendants had a "Let Pass Deposit Account" with the plaintiffs. The suit was filed on 25‑10‑57. According to the plaintiffs Article 120 of the Limitation Act which provides for 6 years' limitation applies to the case. If it does the suit would obviously be within time. It was however contended by the learned counsel for the defendants that limitation in this case was governed either by Article 110 or 115 of the Limitation Act which provide 3 years' limitation. If either of these Articles apply the suit would be time‑barred unless it is saved by any written acknowledgment of liability contained in the correspondence between the parties.
10. Article 110 of the Limitation Act governs the case of arrears of rent and is clearly intended to apply to cases where the relationship between the parties is that of a landlord and a tenant. This is not the case here and as I shall presently show the defen dants' liability to pay the Port Trust's dues is clearly a statutory liability. The charges levied by the Karachi Port Trust cannot be said to be arrears of rent within the meaning of Articles 110. The rent contemplated in this Article is one which accrues under a lease as defined by section 105 of the Transfer of Property Act. The Karachi Port Trust does not lease out any land to the Importers whose goods are landed on its property. It does not merely store the goods. It is also responsible for its safe keeping until it is cleared in due course. The possession of the land and the yard where the goods are stored always remains with the Port Trust and is never transferred to the importers. Where is then any lease or any question of arrears of rent or lease money A reference to some of the provisions of the Karachi Port Trust Act would on the contrary clearly show that the liability of the defendants of the dues claimed by the Karachi Port Trust is a statutory one. Chapter V of the Act deals with the powers and duties of the Board. Section 29 gives a long list of the works to be constructed and carried out by the Board. Sub‑clause (1) of section 29 provides for wharves, quays, stages, jetties, piers, docks, and landing places etc. and sub‑clause (2) provides for warehouses and sheds for receiving and storing goods which are landed. Section 32 deals with the provision and maintenance of wharves, warehouses, sheds etc. for the expedi tious shipment and landing of goods in and from sea‑going vessels and for the storing of such goods. Section 43 empowers the Board to frame and from time to time alter scale of rates and charges for the storing and keeping of any goods stored in any premises belonging to the 9oard. Under section 43‑B the scale of charges framed by the Board have to be submitted to Government for sanc tion and when so sanctioned and published in the Official Gazette they have the force of law. Section 53‑A empowers the Board to recover Its dues such as the one which is in dispute by means of a suit which is a remedy in addition to other methods of recovery such as sale of goods stored. Section 84 provides another remedy for recovery by the Board of its charges and dues in a summary proceeding before a Magistrate in the manner provided in the Code of Criminal Procedure for the recovery of fines. These provisions clearly show that the right of the Board of the Port. Trust to claim and recover its dues and charges is a statutory right and the rate charges have statutory sanction. The liability of the' defendants must, therefore, be held to be a statutory liability.
11. Let me now turn to Article 115 which, it was contended on behalf of the defendants, applied to this case if Article 110 did not apply. It may be useful to reproduce this Article:
"For compensation for the breach of any contract express or implied not in writing registered and not herein specially provided for, the limitation is 3 years from the time when the contract is broken."
I cannot see how the present claim can be said to be one for compensation for breach of a contract. The liability in the present case is clearly under statute and the elements of contract are clearly wanting here. It is the obligation of the Port Trust under the statute to receive the goods which are landed by ships and to store them and allow them to be cleared after the compliance with Customs formalities. The scale of charges itself has a statutory sanction. How then can it be said that a claim like the one in suit is for compensation for the breach of an express or an implied contract Therefore, neither Article 110 nor 115 is applicable. The fact that in Note I to Table III the rates in the table are said to be "for rent on goods" makes no difference to the real nature of the claim which cannot be said to be one for arrears of rent as provided for by Article 110.
12. The next question which falls for consideration is whether Article 120 applies to this case which is what the plaintiffs have stated in the plaint. This is a residuary Article and is applicable to suits for which no period of limitation is Provided elsewhere In the Schedule. I have held that neither Article 110 nor 115 applies to this case, and it was conceded by Mr. Aziz, and rightly so, that if these two Articles did not apply then Article 120 would apply because there is no other Article which would govern this case. Let me now examine the case law on the point.
13. The question came up for consideration before a Full Bench of the Calcutta High Court in the case of The Secretary of State for India‑in‑Council v. Abdul Bart and others (I L R 20 Cal. 51) The appeal arose out of a suit for the residue of the sale proceeds of an estate sold under the provisions of Act XI of 1859 against the Secretary of State for India‑in‑Council and a defence was raised that the suit was barred by limitation on the ground that Article 62 applied to the case. The Full Bench repelled this contention and observed as follows:
"The Limitation Act does not prescribe any period of limitation for money due under a statutory liability to pay it, so the suit is. I think, within Article 120, in other words, the period of limitation is six years, which begin to run from the time when a demand for the money is made bbl persons who could give the receipts required by the section."
14. In the case of Rajah of Vizianagaram v Dindi China (A I R 1937 Mad. 217) the Full Bench of the Madras High Court dealing with a suit for recovery of cess from intermediate land‑holder under section 88, Madras Local Board Act repelled the contention that the 3 years rule of limitation was applicable. Their Lordships held that the suit was not one for rent nor was it based on any contract express or implied. It was a suit to enforce a liability created by statute and was governed by Article 120. The Madras case was relied upon in an Allahabad case in District Board, Dehra Dun v. Babu Ram (A I R 1941 All. 152). This was a case for the recovery of certain amount as tax on circumstances and property by the District Board and it was held that Article 120 applied to such a case.
The Full Bench case of the Calcutta High Court was followed by the Nagpur High Court in Kamruddin Kadibhai & Co. v. The Municipal Committee, Anjangaon (A I R 1951 Nag. 148), and it was held that the liability of a buyer for reasonable charges for care and custody of the goods arises under section 44, Sale of Goods Act and the Article applicable to such a case is the residuary Article 120.
16. In a case decided by the Lahore High Court in Mst. Amar Kaur v. Secretary of State (A I R 1939 Lah. 583) which was in respect of a claim for compensation upon the allegation that the S. D. O., Canals had removed earth from the land of the plaintiff for which he had promised to ay compensation which he had failed to do, a preliminary objection was taken on behalf of the defendant that the suit was barred by time. This was over ruled on the ground that the act of the S. D. O. was performed under the powers of a statute and the cause of action arose on the failure of the Secretary of State to allot the statutory com pensation. It was held that the Article 120 applied to the case.
17. Mr. Aziz, the learned counsel for the defendants drew my attention to two cases. The first case is of the Lahore High Court In Municipal Committee, Amritsar v. Kanshi Ram (A I R 1938 Lah. 267). That was a case in which a compensation had been claimed by various landowners of land upon which the Municipal Committee had been holding a fair for a number of years. It was held that Article 115 applied to the case and not Article 120. This case is clearly distinguishable on the short ground that this was a claim for damages or compensation and not to enforce any statutory liability. The second case m Mritunjay Parsad Sitala Prasad v. District Council, Hoshanga bad (A I R 1947 Nag. 153) which was relied upon by Mr. Aziz related to the claim of a member of a District Council for a travelling allowance. The Manual of the District Council contained a rule being rule 79 which said:
"A District Council may pay etc."
Upon these facts it was held that there was no statutory obligation upon the Council to pay the allowance and the claim was really upon an implied contract. This case therefore is clearly distinguishable.
18. With the view expressed in the two Full Bench cases referred to above I am in respectful agreement. A suit to enforce a statutory liability such as .the one before me is governed by Article 120 of the Limitation Act, and since the suit was brought well within 6 years of the accrual of the liability I must hold that it is not barred by limitation. My finding on issue No. 7 is therefore in the negative.
19. From what I have held above and considering the various provisions of the Karachi Port Trust Act I hold that the position of the defendants comes well within the description of a statutory bailee. My finding on issue No. 1 is, therefore, in the affirmative.
20. In view of my finding on issue No. 7, I find it un necessary to go into the questions which are subject‑matter of issues Nos. 4 and 5.
21. On the question as to what is the amount due to the plaintiffs there is the evidence of P. W. 1 Mir Abdul Rashid, an employee of the plaintiffs and P. W. 2 Mr. M. Raymond, the Traffic Manager of the Karachi Port Trust. Mr. Abdul Rashid stated that the amount of charges in respect of the consignment in question according to the Schedule of Charges came to Rs. 2,91,181; that an allowance of Rs. 150,264 was given to the defendants upon the acceptance of one of the two delay certificates which had been issued by the Customs authorities in the first instance. This had left the balance to be Rs. 2,40,917. It was this amount that the Karachi Port Trust was claiming from the defendants and which the defendants had undertaken to pay by their letter dated 8‑6‑53 if their appeal was rejected. Mr. Abdul Rashid has stated that in consequence of the defendants' appeal to the 6nverriment the Custom, authorities reviewed the position and issued two fresh certificates which having been accepted by the Karachi Port Trust entitled the defendants to an allowance of Rs. 1,32,903. The plaintiff's' claim was thus reduced to Rs. 1,58,278 which is the amount claimed in tire suit. The witness further stated that even if the first two certificates had been accepted by the Port Trust there would still have been due from the defendants a sum of Rs. 1,04,609. The correctness of these figures was not questioned in cross‑examination. The evidence of Mr. Abdul Rashid is supported by the Traffic Manager P. W. 2, and I accept it. In fact, throughout the correspondence the correctness of these figures was never questioned by the defendants. What was being contended was that the defendants were not responsible for the delay which had been caused by the Customs authorities. I, therefore, hold that the plaintiffs are entitled to the sum of Rs. 1,58,278.
22. In the result I decree the plaintiffs' suit against the defendants for Rs. 1,58,278 with costs. The defendants shall also pay interest at 6% on the principal sum from the date of the decree until payment.
K. M. A.
Suit decreed.
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