Storage of imported goods in warehouse pending clearance

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

1. Chairman, Board of Trustees, C. P. T vs Arebee Star Maritime Agen. Pvt. L

   Supreme Court of India 05 Aug 2020 Binding Precedent For All Lower Courts In India And Persuasive For International Reportable (2020) 8 SCC 552 Or (2018) 4 SCC 592 For Reference Order

   Court's Decision & Legal Precedent

   The statutory scheme of the Major Port Trusts Act 1963 establishes a clear demarcation of liability for port charges at the critical juncture of Port Trust taking custody of goods and issuing receipt thereof. Prior to this point steamer agents may be liable for rates payable by vessel for services performed to the vessel including charges for landing and removal of goods to storage point. Subsequent to this point and for the entire period goods are stored in Port premises the only parties liable for demurrage and storage charges are the owner of the goods or other persons entitled to the goods whether beneficially entitled or not including importers consignees and consignors or their agents. The steamer agent is absolved of all liability for goods once Port Trust assumes custody as the master or owner of vessel stands relieved of responsibility for loss or damage to goods under section 42(7) of the Act. The passing of title to goods under general law or whether bill of lading is endorsed or delivery order issued are matters wholly irrelevant to determining post-custody liability as Port Trust takes charge from ship-owner becoming bailee to ship-owner as bailor not to consignee. Containers are merely receptacles in which goods are imported and must be distinguished from the goods themselves. Containers do not become part of the mass of goods within India for import duty purposes and must be returned to their owners once destuffing occurs. Accordingly containers themselves are not subject to demurrage or storage charges once destuffed. While sections 61 and 62 of the Act confer discretion on Port Trust to sell goods marked by word 'may' not mandatory word 'shall' the Port Trust as State under Article 12 Constitution is subject to Article 14 equality constraint and must exercise this discretion reasonably including implicit constitutional duty to sell goods within reasonable time ordinarily not exceeding four months from date of landing unless strong reasons exist justifying continued detention which must be capable of judicial review.

   On this section: Storage in public warehouse. Importer's obligation to clear goods within reasonable time indicating importer bears cost of delay.

   Read the full order on eCourts India

2. Board of Trustees Cochin Port. Trust vs Marine Container Ser. (south)p. L

   Supreme Court of India 05 Aug 2020 Binding (Supreme Court) Reportable

   Court's Decision & Legal Precedent

   After Port Trust takes custody of imported goods and issues receipt therefor, only the importer, owner, consignee or their authorized agents are liable to pay storage charges and demurrage levied by the Port Trust. The steamer agent (shipping agent) and shipowner are absolved of all liability for storage charges post-custody, even if bill of lading has not been endorsed by the steamer agent or delivery order issued. The passing of title to goods is irrelevant in determining liability to pay storage charges. Containers that require destuffing are not 'goods' for purposes of imposing demurrage; they are receptacles and must be returned to their owners (steamer agents/shipping lines) within a reasonable period. Port Trust is constitutionally bound to exercise its discretion to sell uncleared goods within a reasonable period, ordinarily not exceeding four months from date of assuming custody, and must destuff containers and return them when consignee/owner does not clear goods.

   On this section: Imported goods may be stored pending clearance for limited period; importer responsible for storage arrangements

   Read the full order on eCourts India

3. Chairman, Cochin Port Trust vs A. P. Industries

   Supreme Court of India 05 Aug 2020 Binding (SC) - Landmark Three-Judge Bench Judgment Reportable (2020) 9 SCC 1

   Court's Decision & Legal Precedent

   After the Port Trust takes charge of imported goods and issues a receipt therefor, the steamer agent or vessel owner shall not be liable for demurrage, storage charges, or other dues to the Port Trust. Such liability passes exclusively to the importer, owner, consignee, or their agents. The point of time at which title to goods passes to the consignee is irrelevant in determining this liability. The Port Trust's duty is to recover such charges from persons beneficially entitled to the goods, which may be determined through the legal framework of the Customs Act (importer) or the Indian Bills of Lading Act (consignee). Containers fit for repetitive use are not 'imported goods' but mere receptacles and the Port Trust bears the duty to destuff such containers and return them within reasonable time. The discretion granted to Port Trust under Sections 61-62 of the MPT Act cannot be construed as a mandatory duty but must be exercised reasonably within approximately four months from the date of landing goods, subject to the constraints of Article 14 of the Constitution.

   On this section: Used to show that importer bears obligation to clear imported goods; establishes that importer is party responsible for goods

   Read the full order on eCourts India

4. Chairman, Cochin Port Trust vs Maersk India Pvt. LTD

   Supreme Court of India 05 Aug 2020 Binding (Supreme Court) Reportable (2020) 8 SCC 1

   Court's Decision & Legal Precedent

   The statutory scheme of the Major Port Trusts Act 1963 establishes a two-stage liability framework: (1) STAGE ONE (PRE-LANDING TO RECEIPT): Until the Port Trust takes charge of goods and issues a receipt therefor, services rendered are for the vessel and steamer agents may be liable for landing and ancillary charges under the statutory bailment that comes into existence between vessel (bailor) and Port (bailee). (2) STAGE TWO (POST-RECEIPT/POST-LANDING): Once the Port Trust takes charge and receipt is issued, the vessel and steamer agents are absolved of all liability for the goods per section 42(7) of the Act. From this point forward, demurrage and storage charges are the liability of the importer, owner, consignee or their agents (i.e., persons beneficially entitled to the goods), not the steamer agent or vessel. (3) TITLE IRRELEVANCE: The point of time at which title to goods passes to the consignee is immaterial to determining liability for post-landing storage charges. Liability follows statutory entitlement and beneficial ownership per the MPT Act scheme, not technical title transfer. (4) CONTAINERS: A container which is a receptacle for transport and must be returned is not goods for purposes of storage charge liability. The Port Trust must destuff containers entrusted to it and return empty containers within a feasible period. (5) PORT DISCRETION: The Port Trust's power under sections 61-62 to sell goods is discretionary (may, not shall) but must be exercised reasonably with outer limit ordinarily of four months from landing date per Article 14 constraints, after which Port must justify continued detention.

   On this section: Imported goods may be stored in public warehouse; shows obligation of importer to clear goods is primary responsibility

   Read the full order on eCourts India

5. Chairman Cochin Port Trust vs Cma Cgm Agencies India Pvt. LTD

   Supreme Court of India 05 Aug 2020 Binding (Supreme Court of India) - Landmark Decision Reportable (2018) 4 SCC 592 [Reference Order dated 07-03-2018]; (2020) 10 SCC 1 [Main Judgment dated 05-08-2020]

   Court's Decision & Legal Precedent

   After a Port Trust takes charge of imported goods from a vessel and issues a receipt therefor, the Port Trust becomes the bailee of those goods. Demurrage and storage charges accruing thereafter for goods stored in the Port's premises are payable by the importer, owner, consignee or other person beneficially entitled to the goods, and NOT by the steamer agent or ship-owner. However, charges for services rendered at the time of landing of goods or their removal from the vessel to the Port's storage premises (such as unloading charges and labour dues) may be charged against the steamer agent as services rendered to the vessel. The time at which title in goods passes to the consignee is irrelevant in determining such liability. The Port Trust must act reasonably in exercising its discretion to sell goods under Sections 61-62 of the MPT Act and must attempt to sell goods within reasonable time from when it assumes custody, with four months from landing being the outer limit, failing which it must provide written explanation justifiable by the courts. Containers are receptacles for goods, not imported goods themselves, and must be destuffed and returned to the steamer agent or container owner within a short feasible period.

   On this section: Imported goods may be stored in public warehouse pending clearance; importer bears obligation to clear goods; import duty obligation rests with importer not steamer agent

   Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.