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Ramanujam, J.—This appeal arises out of a suit filed by the trustees of the Port Trust of Madras, the first Respondent herein, for recovery of Rs. 9,646.56 being demurrage charges, harbour dues, etc. from the appellant and the second Respondent herein for certain services rendered under Sections 42 and 43 of the Madras Port Trust Act, hereinafter referred to as the Act. The first Defendant, the Appellant herein is the agent of the steamer State of Madras Which arrived at Madras Harbour on 7th November 1960. 21 Cases of art silk velvet under mark Mehara Nagapattinam consigned to the second Defendant, after unloading were taken charge and stored by the Plaintiff in its warehouse at the request of the first Defendant. The goods were ultimately not taken delivery of by the consignee but confiscated by the customs authorities on 24th March 1961 for infringement of customs regulations. For the services rendered to the goods under Sections42 and 43 of the Act by the Plaintiff from the date of its taking charge upto the date of the confiscation, it has levied charges at the prescribed rates. According to the Plaintiff, the aggregate amount payable for the services it had rendered to the goods came to Rs. 9,646.56, and the first Defendant as a person who entrusted the goods with the Plaintiff and the second Defendant as the consignee of the goods for whose benefit services were rendered, are liable to pay the same.
The first Defendant resisted the suit contending that the Port Trust took delivery of the goods on behalf of the consignee and not as the bailee of the steamer or its agents, that their liability ceases as soon as the goods had been placed at the quay side for delivery to the consignee, that neither of them is liable for the charges claimed, that the receipt issued by the Port Trust u/s 39 of the Act effects a termination of a the liability of the steamer and its agent in respect of the cargo that the Port Trust as a bailee of the consignee can claim the service charges only from the consignee and not from the steamer agent, and that in any event, it having acted as agent for a disclosed principal, the steamer, the Port Trust has to claim the same direct from its principal, the steamer.
The second Defendant contended that as the goods had been confiscated by the customs authorities as a consignee, it is not liable to pay the charges, that the failure to clear the consignment was not due to its negligence as it has been prevented from clearing the same by the customs authorities, that as the lien for the Port Trust charges on the goods is paramount the rights of the customs authorities can only be subject to the said lien, and that in any event, it is only the steamer or its agent who is liable to pay the charges.
The Court below found that the service rendered by the Port Trust to the goods in question are not on behalf of the consignee, but only on behalf of the steamer agent who as a bailor entrusted the goods to the Port Trust, and that, therefore, it is only the steamer agent who is liable to pay the charges claimed and not the consignee. It also held that the steamer agent having been treated as the owner of the goods under the provisions of the Act, the Port Trust is entitled to claim the charges in question from the steamer agent. In this view, the Court below decreed the Plaintiff''s suit as against the first Defendant alone and dismissed the suit as against the second Defendant. Thus the only question that arises in this appeal is as to who is liable to pay the charges due and claimed by the Port Trust in respect of the goods confiscated by the customs authorities while they were in its custody.
Mr. V.K.T. Chari, the learned Counsel for the Appellant contends that the view taken by the Court below is erroneous, that the steamer or the steamer agent cannot in any case be said to be the bailor and that in fact it is the consignee who is liable to pay for the services rendered to the goods in question. He points out that the obligation undertaken by the steamer to deliver the goods to the consignee comes to an end as soon as the goods are unloaded from the ship and placed on the quay side to enable the consignee to take delivery, that the carriage of goods covers the period from the time of loading to the time of discharge of the goods from the ship, that when the Port Trust interposes and takes charge of the goods u/s 3 of the Act it does only as an agent of the consignee, that the responsibility of the carrier in relation to the goods carried ceases as soon as the goods are handed over to the Port Trust under the said section, that therefore, the services rendered by the Plaintiff have to be paid for only by the consignee and not by the steamer or its agents, and that a steamer which is only an insurer cannot be mulcted with the costs of the services rendered by the Port Trust to the goods after it had taken charge of the goods for effecting delivery to the consignee. It has also been contended for the Appellant that the steamer or its agent has no ownership of the goods at any time, that it cannot be brought in with the definition of owner under the Act and that, therefore, the steamer or its agent can neither be a bailor nor the owner of the goods in question. The learned Counsel refers to the decision of Palaniswami, J. in The Trusties of the Port of Madras v. Sha Taraii Mangilal and Ors. Civil Suit No. 20 of 1963 and of Varadarajan J. in the Trustees of the Port of Madras v. Bhesu Manufacturing Co. and Anr. Civil Suit No. 48 of 1970 which held that the relationship of bailor and bailee exists between the steamer agent and the Port Trust and that as such the former is liable for the service charges in respect of the goods, and contends that the said decisions do not lay down the correct law.
According to Mr. V.K.T. Chari, a contract of carriage of goods by sea is not one of bailment and that the position of a steamer is only that of an insurer. Reference is made to the decision of the Privy Council in Irrawaddy Flotilla Company v. Bugwandass (1891) 18 I.A. 121. It has been laid down in that case that the Indian Contract Act of 1872 was not, a complete Code dealing with the law relating to contracts, that it merely defines and amends certain parts of that law, that though chapter 9 of that Act deals with bailments, it cannot be the intention of the Legislature while enacting the said Act to alter the then existing statute relating to common carriers and that if that were the intention the more usual course would have been to repeal the statute law relating to common carriers and to reenact its provisions with such alterations and modifications as are necessary. The reasoning of their Lordships was this:
At the date of the Act of 1872 the law relating to common carriers was partly written, partly unwritten, law. The written law is untouched by the Act of 1872. The unwritten law was hardly within the scope of an Act intended to define and amend the law relating to contracts. The obligation imposed by law on common carriers has nothing to do with contract in its origin. It is a duty cast upon common carriers by reason of their exercising a public employment for reward.
According to their Lordships the liability of a common carrier as an insurer was an incident of the contract between the common carrier and the owner of the property to be carried, and this circumstance being inconsistent with the statutory provisions of the Contract Act of 1872 led to the conclusion that the Contract Act of 1872 was not intended to deal with the law relating to common carriers and notwithstanding the generality of some expressions in the chapter on bailments, the common carriers cannot be taken to be within the Act. Relying on this decision the learned Counsel for the Appellant contends that the responsibility of a common carrier is not that of a bailee and that the chapter on bailments contained in the Contract Act has no application to a contract of carriage of goods by sea.
It is next contended that the property in the goods after a bill of lading has been issued should normally vest in the consignee or the endorsee and that thereafter even the consignor has no interest in the goods except a right of stoppage in transit for his lien for unpaid purchase price. Similarly a steamer or its agent has no interest in the goods after it has landed except the right to enforce the lien for freight etc., and the duty of the steamer or its agent is only to deliver the goods to the holder of the bill of lading and that duty normally ends when the goods are unloaded and placed on the quay side.
As the property in the goods only vests in either the consignee or the endorsee of the bill of lading and not in the steamer or its agent, only such consignee or endorsee who are liable to pay the charges claimed as owners of the goods, and once the goods are unloaded and put on quay side, it is for the holder of the bill of lading to take delivery. If delivery is not taken by such holder of the bill of lading, the steamer''s liability as a carrier ceases and only if the goods are not landed or short-landed it becomes liable to the holder of the bill of lading for non-landing or short landing cargo. If after the goods are landed and kept along the quay side the consignee or the endorsee of the bill of lading does not take delivery either as a result of the intervention by the customs authorities or otherwise, it is the responsibility of the consignee or the endorsee to pay the Plaintiff''s charges and the steamer agent''s liability ceases as soon as the unloading operations are completed and the goods are placed on the quay for delivery.
In this case we have to ascertain what are the liabilities of a steamer or its agents and those of the consignee after landing if the cargo remained undelivered either on the quay side or in the hands of the Port Trust owing to some default on the part of the consignee in taking delivery.
The provisions of the Indian Bills of lading Act, 1856 provide that all rights under the bill of lading vest in the consignee or endorsee, that a bill of lading in their hands for valuable consideration shall be conclusive evidence of such shipment as against the Master of the Ship, but that such rights will not prejudice or affect the consignor''s right of stoppage in transit or the steamsr''s right to claim freight against the original shipper or the consignee or the endorsee. volume XXV Halsbury''s Laws of England, third edition, page 449 paragraph 636 says that the person who is entitled to claim delivery of the cargo is the holder of the bill of lading, whether as consignee named in it or as assignee of it under a valid endorsement, and that the ship owner is liable to deliver the cargo only to a person who produces the bill of lading as otherwise he becomes responsible to the owner for the value of the cargo. Paragraph 639 states that the ship-owner remains liable under his contract until he has made delivery to a person entitled thereto and that a delivery to a where finger or to a dock authority is not, in itself, sufficient unless the contract provides for such delivery or unless there is a custom to that effect and that, if, however, no person comes forward to claim the goods such a delivery may exempt the ship-owner from further liability in respect of the goods actually delivered. Paragraph 653 indicates that though it is usual for the contract to provide expressly that the discharge is to be effected according to the custom of the port, such a provision is not necessary as any stipulation as to unloading is always construed in the light of the custom of the port of discharge, which should be taken as a term of the contract of carriage.
Normally if the consignee refuses to take delivery of the cargo or fail to take delivery of the same within the agreed time or within a reasonable time where no time is fixed the steamer may terminate its responsibility as carrier by warehousing them as its only duty then is to treat the goods in a reasonably careful and prudent manner and thereafter he is responsible only as a warehouse man. In one of the earliest cases in Mackinnon v. Minchin (1870) 6 M.H.C.R. 353 a bill of lading given for a box of coral stipulated that if the consignee did not take delivery when the ship was ready to discharge, the goods might be warehoused at the merchant''s risk and the ship-owner''s liability was to cease when the goods left the ship''s side. The consignee did not take delivery at the ship''s side, the box was, therefore, taken to the custom-house and left there until the consignee produced the bill of lading and took delivery. After the box left the ship''s side, part of its contents was stolen. The question arose as to whether the ship-owners were not liable. However, in Hong Kong Banking Corporation v. Baket (1870) 7 B.H.C.R. 186 it has been held that the goods landed by the master at the custom house wharf and set apart there for the consignee, were still in the possession of the master as a carrier, even after a reasonable time for taking delivery had elapsed.
Dealing with the liability of the steamer Carver in his book Carriage by Sea twelfth edition, volume II at page 869 points out:
We have to consider two different duties of the ship-owner. one, that of taking care of the goods and answering for their safety the other, that of delivering them to the right persons. The latter may continue unimpaired, though the duty of taking care of the goods may become less stringent than it was under the contract of carriage.
At page 854 dealing with discharge operations he says:
The manner of discharging also is, in the absence of special terms, to be determined by reference to the regulations and practices of the port of discharge. These will show whether the goods should be discharged in the open water, or at a wharf, or in dock ; and whether on to the wharf or quay, or into a hulk or lighters alongside the ship (para 1002).
Duties of ship and receiver: Generally speaking, the consignee of the goods or the chartered is bound to remove the goods from the ship''s side, and to provide for that purpose a proper number of men and suitable appliances of the kind ordinarily used at the port, having regard to the manner in which the ship is to be discharged.
The ship-owner discharges the cargo out of the ship, and he must supply and needful men and appliances for getting the goods out of the holds, and delivering them upon the dock, or at the ship''s side. (paragraph 1004)....
....
The operation of unloading is a joint operation and although there is one totality of operations there is a clean division with respect to the allocation of work. Thus, if one party reasonably incurs expenses in performing work which is the responsibility of the other, that other will be obliged to reimburse him. (paragraph 1006)
Ship-owner generally discharged by delivery at ship''s side: Generally speaking, the ship-owner''s obligation is performed by a delivery at the ship''s side, or, at most, on the quay. And if the consignee sends lighters, for the goods, a delivery into the lighters, to his agents or servants as a rule terminates the ship-owner�s responsibility. But his responsibility may be extended by custom. (Para 1008)....
Failure of consignee to receive cargo: ship''s right to land it. If the consignee of the goods does not appear to claim and receive them, the master may land and warehouse them, or take such other steps as may be proper for their protection. And the consignee will be liable for any wharf are or other expenses properly incurred in doing so. (para 1015).
Payne''s Carriage of Goods by Sea, eighth edition pages 98 to 101 deal with the liability of the ship-owner to deliver the goods to the consignee:
Where delivery must be made: Unless otherwise agreed, the consignee must take the goods from alongside, though this obligation may be varied by a custom of the port which is not inconsistent with express terms of the contract....
The master is justified in delivering the goods to the consignee named in the bill of lading on production thereof, ....
Conversely, the master is not justified in delivering to any person who does not produce the bill of lading....
...But where the custom of the port of delivery recognises another mode of delivery, personal delivery is not necessary....
The ship-owner may also be excused by statute or by express contract from his liability to make personal delivery....
...The ship-owner continues liable as a carrier until by the contract, or in the usual course of business, the transit is terminated and the goods have been warehoused for their owner until he is ready to receive them. The mere fact that the goods have reached their destination is not enough to discharge the ship-owner....
The consignee''s refusal to take delivery, or failure to do so within a reasonable time, also puts an end to the ship-owner''s liability as a carrier.
Mitra on Carriage by Sea dealing with the custom of the port delivery says at page 95:
But personal delivery is not required where the custom of the port recognises another mode of delivery. Thus, in London delivery to the dock authority is, as regards the ship''s liability, equivalent to delivery to the consignee. Again, personal delivery may not be required by statute.
Basing on the views expressed by the above authorities, Mr. V.K.T. Chari, for the Appellant contends that though the ship-owner has undertaken the obligation by his contract to deliver the goods to the consignee that obligation can he said to have been discharged by delivering the goods to the Port Trust as per Section 39 of the Port Trust Act as that obligation has been undertaken by the Port Trust, that the obligation to effect personal delivery to the consignee has been statutorily transferred to the Port Trust as the statute directs the ship-owner to deliver the goods to the Port Trust and the Port Trust to take charge of the goods landed for purpose of effecting delivery to the consignee, that the said statutory directions should be taken to be a special condition forming part of the contract and that, therefore, the liability of the ship-owner in this case as to the personal delivery to the consignee has corns to an end as soon as the goods are taken charge of by the Port Trust u/s 39 of the Act. It is urged that once the goods are delivered to the Port Trust in pursuance of Section 39, it is the duty of the consignee to take delivery from the Port Trust within a reasonable time, that the goods while in the custody of the Port Trust can only be at the risk of the consignee, that the Port Trust when taking charge of the goods u/s 39 takes them as the agents of the consignee and therefore, the storage or demurrage charges in respect of the goods after they have been handed over to the Port Trust by the steamer can only be collected from the consignee.
It is also pointed out that the provisions of the Port Trust Act cannot either enhance or add to the obligations of the steamer under the contract it has entered into with the shipper nor can it diminish any rights or remedies given to the steamer thereunder, that if the Port Trust had not intervened as per the provisions of the statute in the matter of discharge of the cargo and delivery of the same to the consignee, the steamer or its agent would have delivered the goods to the concerned consignee direct, that the interposition of the Port Trust after the cargo had been put on the quay side and before the actual delivery to the consignee cannot have the effect of enhancing the responsibility of the ship-owner as a carrier by imposing a liability to pay the storage or demurrage charges which become due as a result of the default of the consignee to take delivery of the goods or as a result of the goods being confiscated for infringement of the customs regulations.
It is said that the primary liability of the ship-owner to effect personal delivery to the consignee having been taken over by the Port Trust as a result of the statutory provisions which compel the ship-owner to deliver the goods to the Port Trust, it cannot recover the demurrage charges arising out of the default of the consignee, that once the goods are delivered by the ship-owner to the Port Trust as per Section 39 of the Act, he is no longer responsible for their safety, that the Port Trust is not acting as an agent for the ship-owner either for effecting delivery of the goods or for the purpose of ensuring the safety of the goods and that the Port Trust on taking charge of the cargo is under an obligation to deliver the goods to the same person as the ship-owner by his contract was bound to deliver.
To appreciate the above contentions, it is necessary to scan through the provisions of the Madras Port Trust Act. Section 5(7) defines owner in relation to goods as including any consignor, consignee, shipper or agent for the sale, custody, loading or unloading of such goods, and owner in relation to any vessel or any aircraft making use of the port includes any part-owner, charterer, consignee or mortgagee in possession thereof. Section 5(12) defines rate as including any toll, due, rent, rate, or charge leviable under the Act. Section 39(1) enumerates the following as those which can be rendered by the Board of Trustees constituted u/s 7 of the Act:
Landing, shipping, or transhipping passengers and goods between vessels in the Port and wharves, piers, quays or docks in possession of the Board;
Receiving, removing, shifting, transporting, storing or delivering goods brought within the Board''s premises:
Carrying passengers by rail, tramway or otherwise within the limits of the Port, subject to such restrictions and conditions as the Central Government may seem fit to impose and
receiving and delivering, transporting and booking and dispatching goods originating in the vessels in the port and intended for carriage by the neighbouring railways, or vice versa, as a railway company or administration under the Indian Railways Act, 1890.
Sub-section (3) provides that if the Board takes charge of the goods for the purpose of performing any of the above services, it shall give a receipt in the prescribed from to the person from whom the goods were taken charge of and that if such a receipt is given to the master or the owner of the vessel from which the goods have been landed or transhipped, the latter shall be under no liability for any loss or damage which may occur to the goods after the Board takes charge of the goods. Section 40(1) states that the responsibility of the Board for the loss, destruction or deterioration of goods of which it has taken charge shall, subject to the other provisions of this Act be that of a bailee under Sections 151, 152 and 161 of the Indian Contract Act of 1872 after the issue of a receipt referred to in Section 39(3). Sub-section (2) of Section 40 provides that the Board shall not be liable for any loss or damage to the goods of which it has taken charge, unless notice of such loss or damage shall have been given within one month of the date of receipt given for the goods u/s 39(3). Section 42 provides for the scale of rates at which and a statement of the conditions under which any of the services specified in Section 39(1) can be had. Section 43 provides for the scale of rates at which and a statement of conditions under which the use of any property belonging to the Board can be had. Section 50 provides the time for payment of the rates payable to the Board and Section 51 creates a lien on the goods in relation to the rates payable for the services rendered by the Board and the rent due for the use of its premises. Section 52 gives priority for the Board''s lien over other liens and claims, Section 54 enables the Board to retain the goods in its custody at the risk and expense of the owners of the goods until such lien is discharged and the go down or storage rent for the time during which they have been so retained is made payable by the party entitled to the goods. Section 56 enables the Board at the expiry of two months from the time when the goods came into its custody, except in the case of perishable goods, to sell by public auction in enforcement of the lien for its dues. Section 58 directs that a notice of such a sale shall be given to the owner of the goods. Section 58-A also enables the Board to sell the goods if they are not removed from its premises within one month from the date on which the goods are placed in the custody of the Board and after a notice of removal is issued to the owner of the goods. Section 59 dealing with the application of the sale proceeds is as under:
Application of sale-proceeds:-The proceeds of every sale under Sections56 or 58-A shall be applied as follows:
(a) in payment of the expenses of the sale.
(b) in payment according to their respective priorities, of the liens and claims excepted in Section 52 from the priority of the lien of the Board,
(c) in payment of rates and expenses of landing, removing, storing or warehousing the same, and of all other charges due to the Board in respect thereof.
Section 62 enables the Board to recover by suit any rates, damages, expenses, costs or in case of sale the balance thereof when the proceeds of sale are insufficient, or any penalties or fines payable to, or recoverable by the Board. Section 95 confers on the Board the power to make by-laws for the reception, porterage, storage and removal of goods brought within the premises of the Board and for the exclusive conduct of these operations by the Board or persons employed by the Board.
Volume II of the Manual of Instructions issued by the Board for the Traffic Department under the head shipping sets out the following procedure: The agents of the vessel have to inform the Traffic Manager of the probable date of arrival of the steamer giving particulars of the nature of the cargo and the number of days the berth would be required and then submit Import General Manifest to the customs house giving the description of the goods such as the number of packages, markings, description of the goods, the bill of lading number etc. They should also submit a freight manifesto to the Porterage office with the details of weights and measurements of the goods. Then the steamer agents either endorse the bill of lading or issue a delivery order enabling the goods to be delivered to the consignee. Thereafter the person entitled to the delivery of the goods files a bill of entry and the import application and after the bill of entry is passed by the customs, the goods are cleared. Chapter V of the Manual of Instructions deals with the procedure for passing import applications. It provides that the import application filed by the importer or anyone on his behalf should be followed by the bill of lading or delivery order duly endorsed by the steamer agents. Then the import application is compared with the bill of entry and thereafter the cargo is delivered after ensuring (i) that they are delivered to the rightful owner, (ii) that the customs duty had been paid and (iii) that all Port Trust charges had been recovered.
In the face of the above provisions, the question is as to who is liable for the demurrage charges in relation to the goods which were in the custody of the Port Trust till they were ultimately confiscated by the customs authorities. It cannot be disputed that neither the ship-owner or the steamer agent whose duty it is to deliver the cargo to the consignee as per the contract with the shipper, cannot lay any claim of ownership to the goods. The obligation to deliver the goods to the consignee has been taken over by the Port Trust under the provisions of the statute and the ship-owner is relieved of the liability for loss or damage to the goods from the moment the goods are taken charge of by the Port Trust as per Section 39 of the Act. Once the goods are handed over to the Port Trust by the steamer and the steamer agents have duly endorsed the bill of lading or issued the delivery order, their obligation to deliver the goods personally to the owner or the endorsee comes to an end. The subsequent detention of the goods by the Port Trust as a result of the intervention by the customs authorities cannot be said to be on behalf of or for the benefit of the steamer agents. Generally if there is a delay in taking delivery of the goods by the consignee within a reasonable time, the steamer or its agents can warehouse the goods. In such an event the warehouseman has an independent claim against the consignee or endorsee for the demurrage charges. The position cannot be different merely because the customs authorities have intervened. The position of the Port Trust is the same as that of a warehouseman whose responsibility to the goods is also said to be that of a bailee. It cannot be said that the steamer or its agents have undertaken any responsibility for the custody of the goods after the transit has come to an end and after the bill of lading has been duly endorsed or a delivery order issued. By the endorsement of the bill of lading or the issue of a delivery order by the steamer agents, the property in the goods vests on such consignee or endorsee, and thus it appears to be clear that the steamer or the steamer agents are not responsible for the custody of the goods after the property in the goods passes to the consignee or endorsee till the customs authorities actually give a clearance. It should also be remembered that the steamer which had entered into a contract of carriage of goods for a reward cannot be said to have undertaken the responsibility of safeguarding the goods or keeping them at their risk till the goods are actually cleared from the customs and taken delivery of by the consignee. That will be imposing a too onerous and unexpected responsibility on the steamer which is only a carrier. If they are subjected to such a responsibility, in most cases where the goods are detained without delivery in the hands of the Port Trust at the instance of the customs the steamer or steamer agents have to pay towards storage or demurrage charges amounts quite disproportionate to the freight they collect for the carriage of the goods. No carrier will undertake such a risk and responsibility. We are of the view that the provisions of the Port Trust Act cannot be so construed as imposing an additional liability or obligation on the carrier which was not contemplated by the contract it had entered with the ships. It is only the custom of or the statutory provisions applicable to the port of discharge that can be taken to be an implied condition of the contract between the shipper and the ship-owner. Therefore, the provisions the Port Trust Act cannot add to the liability of the steamer or its agents which was not contemplated by the shipper or the ship-owner at the time of entering into the contract. Having regard to the function and the obligations which the steamer has undertaken with the shipper under the contract, we cannot say that the steamer has undertaken the responsibility for the safety of the goods till the goods are cleared by the customs and taken delivery of by the consignee. As earlier referred to, the duty of the steamer is normally to deliver the goods to the consignee on the quay side but that place of delivery has been shifted by the provisions of the Port Trust Act to the warehouse where the Port Trust had stored the goods.
The learned Counsel for the Respondent however, states that the question involved in this case is not res Integra and the same has been conclusively decided by the Supreme Court in the Trustees of the Port of Madras v. K.P.V. Sheik Mohd. Rowther and Co. (1993) 2 S.C.R. 915 which has subsequently been followed in two cases of this Court in Civil Suit No. 20 of 1963 and Civil Suit No. 48 of 1970. It is therefore, necessary to consider the scope of those decisions.
In the Trustees of the Port of Madras v. K.P.V. Sheik Mohd. Rowther and Co. (1963) 2 S.C.R. 915 (sup.) certain sterner agents challenged the validity of certain charges in respect of the labour of the Port Trust rendered idle or not properly utilised though labour has been specifically requisitioned by the steamer agents and supplied by the Port Trust. The contentions on behalf of the steamer agents in that case were (i) the ship-owners and the steamer agents are not liable for charges for short labour employed in the receiving and removal of the cargo and such charges must be borne by the consignee, (ii) though the Port Trust had power to impose and recover rates only for services rendered, they had no right to impose charges by way of compensation in respect of the labour rendered idle or not properly utilised which will not strictly fall under the head of discharge of cargo from the vessel so as to attract the liability of ship-owners or their agents. The Supreme Court held that normally the services rendered by the Port Trust in the discharge of the cargo at the quay and services to the ship and charges for them could be validly realised from the steamer agents, that the Port Trust while taking charge of the goods u/s 39 of the Port Trust Act, 1905 does not act as an agent of the consignee for the purpose of taking delivery of the goods, and that it takes charge of the goods only on behalf of the ship-owner and whatever services it performed at the time of the landing of the goods and on their removal thereafter to its sheds were services rendered to the ship and, therefore, the charges levied in respect of the labour rendered idle were rightly levied on the steam agents who requisitioned its services. The services rendered in that case related to the clearance of the cargo from the ship and their removal to the custody of the Port Trust. Their Lordships of the Supreme Court took the view that the ship-owner is the bailee of the shipper, the consignor that he is responsible for the delivery of the goods to the consignee or the endorsee according to the terms of the bill of lading, that the ship-owner discharges that responsibility only when he delivers the goods to the consignee and that the delivery to the Port Trust u/s 39 is not delivery to the consignee as delivery contemplated by the shipper is to be on the presentation of the bill of lading, and that the Port Trust Act nowhere constitutes the Port Trust an agent of the consignee for taking delivery of the goods. According to their Lordships the reception of the goods by the Port Trust was on behalf of the ship-owner, and though the Board''s taking charge of the goods and giving a receipt therefore to the ship-owner, the owner of the vessel is absolved from the liability for any loss or damage which may occur to the goods hereafter, that will not suffice to convert the delivery of the goods to the Board as a delivery to the consignee and under the provisions of Sections 39 and 40 of the Act the Board acts only as a bailee of the ship-owner and not of the consignee and therefore, whatever services it performs at the time of the landing of the goods or their removal thereafter to its sheds are services rendered to the ship. While rejecting the contention advanced on behalf of the steamer agents that the responsibility of the steamer ceases when it has discharged the goods from the ship and had placed them in such a position that the consignee can take delivery of them and that whatever is done by the Port Trust thereafter in connection with the goods is done on behalf of the consignee and for his benefit, the Supreme Court observed:
The charges for labour rendered idle and for labour working more looked simultaneously, are not charges for services rendered subsequent to the landing of the goods. These are charges which are incurred at the last stage of the process of landing of the goods and therefore prior to the actual landing of the goods. They are, even under the general law, for services rendered to the master of the ship whose liability for loss or of damage to the goods continues upto the placing of the goods on the quay and their receipt by the Board.
Dealing with another contention of the steamer agents that as the Port Trust Act made it obligatory that the consignee gets his goods from the port Trust and not direct from the master of the ship, the Port Trust should be taken to act as agent of the consignee, the Supreme Court stated:
Assuming, however, that the consignee cannot take delivery of the goods at the quay from the ship direct, it does not follow that the Board receives the goods as the agent of the consignee. The only reasonable conclusion in the circumstances can be that the place of delivery is shifted from the side of the ship to the warehouses where the board stores the goods till the consignee appear to take delivery on the basis of the delivery order by the steamer agent which is usually an endorsement on the bill of lading, and the quay be considered a part of the ship.
The purport of the above decision is that the ship-owner is the bailee of the shipper or the consignor when he takes charge of the goods for carriage, that the Port Trust when it receives the goods u/s 39 from the ship-owner becomes the bailee of ship-owner or a sub-bailee, that the Port Trust is neither an agent or bailee of the consignee or the endorsee. In view of the above decision, the contention of Mr. V.K.T. Chari that if at all the Port Trust is a bailee or agent of only the consignee and not of the steamer and that delivery of the goods to the Port Trust amount to a delivery to the consignee is no longer tenable.
But as already stated, the charges in that case related to the services rendered by the Port Trust at the time of the landing of the goods and their removal thereafter to its custody, and those charges were taken to be for the benefit of the steamer. It is for this reason the Court took the view that the Port Trust is entitled to collect the services charges from the steamer or its agent. We, are however, satisfied that the above decision cannot be taken to lay down that the Port Trust can at id time proceed against the consignee for demurrage charges and can only look to the steamer agent. We are here concerned with the demurrage charges after the goods have been landed and taken charge of by the Board and after the steamer agents had endorsed the bill of lading or issued a delivery order for effecting delivery to the consignee, that is after the property in the goods had passed to him. As already stated, the goods have remained in the custody of the Port Trust on the default of the consignee to satisfy the customs authorities that the import was authorised. Even though the consignee is not a party to the contract of carriage once the property in the goods had passed to him, he become liable to pay the storage or demurrage charges as owner of the goods to the ship-owner. It is well known that where a bill of lading is delivered to the named consignee or an endorsee with the intention of passing the property in the goods specified therein the rights and liabilities under the bill of lading are transferred to such consignee or endorsee as if the contract had been made with himself. Thus the ship-owner is entitled to collect the charges in question from the consignee in this case cannot be disputed. In Fowler v. Knoop (1878) Q.B.D. 299 it has been held that even in the absence of any stipulation in the bill of lading the consignee is liable for damage for detention if the ship is detained beyond a reasonable time by reason of his failure to take delivery of the goods. The same principle applies even in respect of demurrage. Therefore, the crucial question is when a default is committed by the consignee to take delivery of the goods even after the bill of lading had been duly endorsed or a delivery order duly issued by the steamer agents, who, as between the ship-owner and the consignee, is liable for the demurrage charges incurred by the Port Trust as a bailee of the steamer in connection with the goods it had taken charge. The charges claimed here is for storage of goods. The storage is for the sole benefit of the consignee, who has become the owner of the goods and in normal circumstances the charges are collected from him at the time of taking delivery of the goods. Though the steamer is the bailor, the retention of the goods in the warehouse by the Port Trust as a result of the customs regulations cannot be said to be for its benefit.
Admittedly if the goods had been taken delivery of by the consignee by presenting the bill of lading the Port Trust would have collected the demurrage charges along with the harbour dues from him. Again if the goods had not been confiscated they would have been sold by the Port Trust u/s 56 and sale proceeds adjusted as against its dues as per Section 59. The difficulty in this case has arisen because of the confiscation of the goods by the Customs authorities as a result of which no delivery has taken place to the consignee. The Plaintiff in this case filed the suit both against the consignee as well as the steamer agents. But the Court below has chosen to decree the suit only against the steamer agents. It cannot be disputed that the ownership of the goods had clearly vested in the consignee as the bill of lading had duly been endorsed by the steamer agents and a part of the consignment had admittedly been cleared by the consignee. The dispute relates only to the demurrage charges in relation to a part of the consignment which has been confiscated by the customs authorities. In our view the provisions of Sections 51 to 54, 56 to 58, 58-A, 59 and 62 throw some light on the question as to who is liable for demurrage charges as between the consignee and the ship-owner. Sections 51 to 54 deal with the lien of the Port Trust for all rates leviable under the Act which include the demurrage charges, and power has been given to the Port Trust to retain the goods until the said lien is discharged at the risk and expense of the owners of the goods, and the go down or storage rent for the period during which such goods are retained has been made payable by the party entitled to the goods. Sections 56 to 58 and 58-A enable the Board to sell by public auction so much of the goods as will be necessary to recover the Port Trust dues including storage rent if it is not paid within two months from the date when the goods came into its custody after notice to the owner of the goods. Section 59 directs that the surplus sale proceeds of any such sale after deducting the expenses of the sale and all liens which have got priority over the lien of the Board and all rates and expenses of landing, removing and warehousing the same and all other charges due to the Port Trust in respect of the goods shall be paid to importer, owner or consignee of the goods or to his agents, on his applying for the same Section 62 says that if the sale proceeds are not sufficient to meet the liability of the Board in full, the Board may recover the balance by filing a suit. A conjoint reading of all the above sections indicates that the person liable to pay the demurrage charges is the owner of the goods and that liability can also be enforced by the sale of the goods. There is no provision in the Act which gives a recourse to the Port Trust as against the ship-owner or the steamer agents for the demurrage charges which it had incurred while the goods were in its custody. It is true that as bailors who entrusted the goods with the Port Trust the steamer agents are liable to pay its dues if their instructions regarding delivery cannot be carried out and the goods are to be returned to them. But the Port Trust is not in a position to re-deliver the goods and call upon the steamer to pay the demurrage charges for the period of its custody. It cannot be disputed that if the ship-owner after keeping the goods ready for delivery to the consignee, had been. forced to insure the storage charges as a result of the default committed by the consignee in taking delivery, he can recover the storage charges from the consignee in whom the property in the goods had vested. That right of the steamer agents can also be enforced by the Port Trust, Which is in the position of a warehouseman, against the consignee on whose default the storage charges have become payable.
The learned Counsel for the first Respondent has also raised the contention that the steamer agents come within the definition of owner and, therefore, they are also liable to meet the demurrage charges under the above sections which refer to the owners. In this connection the definition of owner has also been referred to. Even assuming that the steamer agent comes within the definition of owner as contended for, we cannot apply the definition of owner without reference to the context in which the term has been used. The learned Counsel also refers to certain instances where the steamer agents had been paid the surplus sale proceeds on the ground that they are the owners. But even if such a practice had been followed, that cannot throw any light on the true interpretation of the statutory provisions. The steamer agents have no right in the goods after they have duly endorsed the bill of lading or issued a delivery order to the consignee or endorsee enabling them to take delivery of the goods from the Port Trust and thereafter they cannot have any right to get the surplus sale proceeds. If any amount is due to the steamer towards that would have been collected as a prior charge in the distribution of sale proceeds as per Section 59. Therefore, except the right to recover the freight or other charges legally due to them, neither the steamer nor the steamer agent can claim the residue of sale proceeds of the goods whose ownership has vested in the consignee or endorsee in the bill of lading. It is also pointed out that wherever there is no delivery order by the steamer agent, or the consignee does not at all take delivery, the Port Trust has to deliver the goods only to the steamer agents at whose instance the goods were taken charge of. It is true that in such cases the steamer agents are entitled to get back the goods on payment of the harbour dues and demurrage charges for sending back or "re-shipping the same to the port of shipper, consignee or the owner of the goods. But the case on hand is not such a case. For one thing the goods have been confiscated by the customs authorities and they are not available for delivery to the steamer agents for re-shipment. Secondly, there is no averment in the pleadings in this case, nor has it been contended at any stage that the steamer agents did not issue delivery order or endorse the bill of lading, and as such the goods had been lying with the Port Trust only at the risk of the steamer agents and therefore, they are liable to pay the demurrage charges. A part of the consignment had admittedly been delivered in this case and that can only be on the basis of an endorsement in the bill of lading. It cannot, therefore, he said that when the consignee named in the bill of lading is known and he has been authorised to take delivery of the good is by the steamer agents, the demurrage charges which become due by the default of such consignee not satisfying the customs authorities are payable by the steamer agents.
It is also contended by the learned Counsel for the Appellant that, even assuming that the steamer is liable for the demurrage charges, in view of Section 230 of the Contract Act the steam agents having acted on behalf of the steamer, a disclosed principal, the Port Trust has to. proceed directly against the steamer and not against the steamer agents. Section 230 of the Contract Act provides that an agent cannot personally enforce nor be bound by contracts on behalf of disclosed principal, in the absence of any contract to that effect. But though the ship-owner is a disclosed principal, in the absence of any contract to that effect, if the steamer agent is liable for the demurrage charges under the provisions of the Port Trust Act, he cannot invoke the provisions of the general law and say that the claim is not enforceable as against him. As we have already held that neither the ship-owner nor the steamer agent cannot be held liable in this case for the demurrage charges claimed, the question as to whether the suit claim has to be enforced only against the principal does not arise.
The decision of Palaniswami, J. in The Trustees of the Port of Madras v. Sha Taraji Mangilal and Ors. Civil Suit No. 20 of 1963 and Varadarajan J. in The Trustees of the Port of Madras v. Bhesu Manufacturing Co. and Anr. Civil Suit No. 48 of 1970 proceed on the basis that the decision of the Supreme Court in The Trustees of the Port of Madras v. K.P. V. Sheik Mohd. Rowther and Co. (1963) Supp. 2 S.C.R. 915 is conclusive on the liability of the steamer agents. But as already stated the decision of the Supreme Court was with reference to the charge due to the Port Trust for services rendered before it took charge of the goods u/s 39 and not to demurrage charges payable to the Port Trust after it had taken charge of the goods.
In our view the decree passed against the Appellant will have to be set aside and it set aside. There will be a decree in the suit in favour of the Plaintiff for the entire suit claim against the second Defendant who is the consignee.
The result is, the appeal is allowed. The suit is decreed with costs as against the second Defendant alone. There will be no order as to coats in this appeal.