# THE TRUSTEES OF THE PORT OF MADRAS BY ITS CHAIRMAN v. K. P. V. SHEIK MOHAMED ROWTHER & CO. AND OTHERS

- **Citation:** [1963] Supp. 2 S.C.R. 915
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Bench:** S. K. Das, J. L. Kapur, A. K. Sarkar, M. Hidayatullah, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-trustees-of-the-port-of-madras-by-its-chairman-v-k-p-v-sheik-mohamed-2864
- **Pages:** 34

## Headnote

Port Trust-Charges to be levied. on steamer agents-Labour
supplied by Port Trust not fully or properly utilised-Rate of
chargea-Liability of consignee-Madras Port Trust
Scale of
Rates, 'E' scale-Madras Port Trust Act, 1905 (Mad. 2 of 1905)
88. 39, 40, 42.
In exercise of the powers under s. 42 of the Madras Port
Trust Act, 1905, the Tru•tees of the Port of Mardas, the
appellants, made amendments to the Madras Port Trust Scale
of Rates in 1958. By the amendment, Scale •E' was added
under Ch. V and it was to come into force from March 1,
1958. The scale laid down charges to be paid by Masters,
Owners or Agents of vessels in respect of Port Trust labour
requisitioned and supplied but not fully or properly utilised.
These charges were to be on account of the labour of the Port
Trust rendered idle on account of some lapse on the part of the
ship owners or on account of extra payment to labour for the
simultaneous working of more than one hook at the vessel's
hatch. The labour requisition Form to be submitted by the
steamer-agents was also modified and the new form contained
an undertaking on the part of the steamer-agents for the payment of the charges laid down in Port Trust's scale of rates
from time to time in respect of Jabour rendered idle or not
properly utilised and also for working more than one hook
simultaneously at the hatch. The respondents, the steameragcnts, filed petitions before the High Court ot Madras under
Art. 226 of the Constitution of India, praying for a direction
to the Port Trust not to enforce these rates and not to require
the filling in of the new form, on the grounds, inter alia, (I)
that the ship-owners and the steamer-agents could not be made
liable for charges for short Jabour employed in the receiving or
removal of cargo and such charges must be borne by the
consignee, (2) the Port Trust had power to impose and recover
rates only for services rendered and that they had no right to
jmp<>Se charges by way of compensation for default or to collect
1962
D1"mhlr, JI.
•
'
,,-·.
\
\<.
1002
The Trust us of
t!u Porl of Ma.tiras
v.
K.P.Y. SJui!; Mohd.
Rowthn fl Co.
.-~
-·-·--- ,- ·-~--~
916: SUPREME COURT REPORTS [1963] SUPP.
charges from l\.fasters, O\vners or Agents of vessels in respect of
operations not . properly falling under the head of discharge of
"cargo from the vessel, (3) the compulsion imposed on steamer
agents in the matter of the scale •E' rates and in respect of the
signing of the requisition for shore labour \Va'I
outsid~ the
- authority conferred by law and was illegal, and (4) such imposi·
tion --,vhether ·as charges for services or as compensation for
default of steamer agents was an unreasonable restriction on the
fundamental right of the petitioners to carry on business as
steamer-agents a~d Was inoperative in law.
_ Held : (I) The object. behind the scale •E' rates was to
expedite the discharge of the cargo at the quay and thus to
enable a quantity of cargo to be discharged quickly. The
services rende1ed by the Port Trust were therefore services to
the ship and, consequently, charges_ for them could be validity
realised from the steamer-agents.
-
-(2) The Madras Port Trust Act, 1905, did not contain
any provision \vhich \Vould constitute -the Port Tru~t an agent
of the consignee for the purpo;e of the taking delivery of the
- goods and the expression "receiving" in cl. (b) of sub-s. (I) of
s. 39 of the Act did not mean receiving the goods on behalf of
the C'onsignee.
(3) Under ss. 39 and 40 the Port Trust took charge of
the goods on behalf of the ship-owner and not on behalf of the
consignee, and whatever ·services it performed at the time of
-- --the landing of the goods -or on their removal thereafter, were
services rendered to the ship.
-
-- (4) The impugned charges were rightly levied by
scale •E' on the Master, Owner or Agent of the vessels and that
the Port Trust could validly insist on the steamer-agent requisitioning the shore-labour to express an undertaking in the form
for req

## Text

_Characters 0–39,936 of 65,308. This is a partial read: ask again with offset=39936 for what follows._

2 S.C.R.
SUPREME COURT REPORTS
915
THE TRUSTEES OF THE PORT OF
MADRAS BY ITS CHAIRMAN
v.
K. P. V. SHEIK MOHAMED ROWTHER
& CO. AND OTHERS
(S. K. DAS, J. L. KAPUR, A. K. SARKAR,
M. HIDAYATULLAH and RAGHUBAR DAYAL, jj.)
Port Trust-Charges to be levied. on steamer agents-Labour
supplied by Port Trust not fully or properly utilised-Rate of
chargea-Liability of consignee-Madras Port Trust
Scale of
Rates, 'E' scale-Madras Port Trust Act, 1905 (Mad. 2 of 1905)
88. 39, 40, 42.
In exercise of the powers under s. 42 of the Madras Port
Trust Act, 1905, the Tru•tees of the Port of Mardas, the
appellants, made amendments to the Madras Port Trust Scale
of Rates in 1958. By the amendment, Scale •E' was added
under Ch. V and it was to come into force from March 1,
1958. The scale laid down charges to be paid by Masters,
Owners or Agents of vessels in respect of Port Trust labour
requisitioned and supplied but not fully or properly utilised.
These charges were to be on account of the labour of the Port
Trust rendered idle on account of some lapse on the part of the
ship owners or on account of extra payment to labour for the
simultaneous working of more than one hook at the vessel's
hatch. The labour requisition Form to be submitted by the
steamer-agents was also modified and the new form contained
an undertaking on the part of the steamer-agents for the payment of the charges laid down in Port Trust's scale of rates
from time to time in respect of Jabour rendered idle or not
properly utilised and also for working more than one hook
simultaneously at the hatch. The respondents, the steameragcnts, filed petitions before the High Court ot Madras under
Art. 226 of the Constitution of India, praying for a direction
to the Port Trust not to enforce these rates and not to require
the filling in of the new form, on the grounds, inter alia, (I)
that the ship-owners and the steamer-agents could not be made
liable for charges for short Jabour employed in the receiving or
removal of cargo and such charges must be borne by the
consignee, (2) the Port Trust had power to impose and recover
rates only for services rendered and that they had no right to
jmp<>Se charges by way of compensation for default or to collect
1962
D1"mhlr, JI.
•
'
,,-·.
\
\<.
1002
The Trust us of
t!u Porl of Ma.tiras
v.
K.P.Y. SJui!; Mohd.
Rowthn fl Co.
.-~
-·-·--- ,- ·-~--~
916: SUPREME COURT REPORTS [1963] SUPP.
charges from l\.fasters, O\vners or Agents of vessels in respect of
operations not . properly falling under the head of discharge of
"cargo from the vessel, (3) the compulsion imposed on steamer
agents in the matter of the scale •E' rates and in respect of the
signing of the requisition for shore labour \Va'I
outsid~ the
- authority conferred by law and was illegal, and (4) such imposi·
tion --,vhether ·as charges for services or as compensation for
default of steamer agents was an unreasonable restriction on the
fundamental right of the petitioners to carry on business as
steamer-agents a~d Was inoperative in law.
_ Held : (I) The object. behind the scale •E' rates was to
expedite the discharge of the cargo at the quay and thus to
enable a quantity of cargo to be discharged quickly. The
services rende1ed by the Port Trust were therefore services to
the ship and, consequently, charges_ for them could be validity
realised from the steamer-agents.
-
-(2) The Madras Port Trust Act, 1905, did not contain
any provision \vhich \Vould constitute -the Port Tru~t an agent
of the consignee for the purpo;e of the taking delivery of the
- goods and the expression "receiving" in cl. (b) of sub-s. (I) of
s. 39 of the Act did not mean receiving the goods on behalf of
the C'onsignee.
(3) Under ss. 39 and 40 the Port Trust took charge of
the goods on behalf of the ship-owner and not on behalf of the
consignee, and whatever ·services it performed at the time of
-- --the landing of the goods -or on their removal thereafter, were
services rendered to the ship.
-
-- (4) The impugned charges were rightly levied by
scale •E' on the Master, Owner or Agent of the vessels and that
the Port Trust could validly insist on the steamer-agent requisitioning the shore-labour to express an undertaking in the form
for requisitioning labour that he \vould p.iy the charges laid
clown in the Port Trust's scale of rates from time to time in
respect of labour rendered idle or not properly utilised and also
·for \vorking more than one hook simultaneously at a vessel's
hatch.·
Case Ja\V re" ic\ved. --
C1v1L-APPELLATEjumsnrcTION; Civil Appeals
Nos. 187 to l\ll of l!J62.
Appeals from the judgment and order dated
l\1arch 3 l!J61 of the l\Iadras High Court in Writ
Appeal Nos. 53, M, 55, 56, and 57of1960,
2 S.C.R.
SUPREME COURT REPORTS
917
M. 0. Sewl-vad., Attorney-General for India,
A. V.
Visw.Jnatha
Sc'stri, R.
Gc-,,nc,pathy Iyer,
V. V. Raghavan and. G. Gopul(if;,i'islman, · for the
appellants.
S. T. Desai and P. Ram Reddy,
for
the
respondents.
1962. December 11.
The Judgment of the
Court was deli vcn~d by
RAGHUBAR DAY.AI~, J.-The appellants, the
Trustees of the 11ort of Madras, hereinafter called
the Board, appeal ag.1inst the order of the High
Court of Madras allowing the writ petitions filed
under Art. 226 of the Constitution by each of the
respondents and issuing a writ of mandamus directing the appellants to forbear from enforcing the
scale 'E' rates of the Madras Port Trust Scale of
Rates and from requiring the signing of the Shore
Labour Requisition Form from the steamer agent.
The respondents, who arc either partnership
firms or limited companies, carry on the business of
steamer agents at :Madras. The Board, with the
sanction of the Central Government, made amend·
ments to the Madras Port Trust Scale of Rates in
1958. By the amendment, scale 'E' was added
under Chapter V. It was to come into force from
March 1, 1958. The scale laid down charges to be
paid by masters, owners or agents of vessels in re·
spect of Port Trust labour requisitioned and supplied
but not fully or properly utilised. The charges, for
the sake of brevity, may be said to be on account of
the labour of the Port Trust, Madras, rendered idle
on account of some lapse on the part of the ship·
owners or on account of · extra payment to labour
for the simultaneous working of more than one ho0k
at the vessel's hatch. The labour requisition Form
to be submitted by the steamer-agents was also
modified and the new form contained an undertaking
1961
Tli1 Twsltts of
the p~, t of 1\fadr11s
v.
K.P.V. Sheik Mohd.
R~ii!lher & Co.
Raghuhr D,,yal, J.
1962
Thi Trustees of
th1 Porl of Madras
v.
K.l'.P. Sluik Mohd.
Rowlk1r & Co.
Ra:;hu/Jar Dayal, /,
918 SUPREME COURT REPORTS (1963] SUPP.
on the part of the steamer-agents for the payment
of the charges laid down in the Board's scale of rates
from time to time in respect of labour rendered idle
or not properly utilised and also for working more
than one hook simultaneously at the hatch. These
amendments in the scale of rates were made by the
Board in the exercise of its power under s. 42 of the
Madras Port Trust Act, 1905 (Mad. Act II of 1905),
hereinafter called the Act. This section empowers
the Board to frame a scale of rates at which and a
statement of the conditions under which any of the
services specified in the various clause~ of the section
shall be performed by the Board or by a person to
whom any service has been
relinquished under
s. 41-A of the Act. Thereafter, the respondents, viz.,
the steamer-agents, filed petitions under Art. 226 of
the Constitution, in the High Court of Madras, and
prayed for the issue of a writ of mandamus directing
the Board not to enforce these rates and not to require the filling in of the new form.
They contended that (I) the ship-owners and the steamer-agents
cannot be made liable for charges for shore labour
employed in the receiving or removal of,car~o and
such charges must be home by the consignee ;
(II) s. 39 of the Act provided for the performance of
services by the Board and the other sections provided
for the imposition and recovery of rates for the
services performed for the vessel and services performed for the goods.
Services in the former category are to be paid for on behalf of the carrier i. e.,
by the master, ship-owner or the steamer-agent, and
the services in the latter category constitute a liability on the consignee ; (iii) the Board has power to
impose and recover rates only for services rendered
and that they have no right to impose charp; es by
way of compensation for default or to collect charges
from masters, owners or agents of vessels in respect
of operations not properly
fallin~ under . the h ead
of discharge of cargo from the vessel ; (iv) prior
to 1914, the steamer-agents acted as landing-agents
2 $.C.R.
SUPREME COURT REPORTS
919
for removing cargo from ship to pier and collected
for these services from the consignees a separate charge
known as 'landing charge' in addition to the freight.
When the quays were constructed and cargo came
to be landed there, the Board took over the landing
of goods and collected quay dues instead of 'landin~
charges' which wrre wholly paid by the consignees.
These quay dues later on merged in the 'harbour
dues' collected by the Board from the consignees ;
(v) usually, the steamer agent informs the Traffic
Manager the probable date of arrival of the vessel
under his agency,
tonnage hatch-wise of cagro to
be landed at Madras and the number of hatches
proposed to be worked.
Under the revised procedure
adopted by the Board on August I, 1957, before a
ship has reached its berth, the steamer agent is required to make an application and a deposit in his
current account to cover charges for the working of
the vessel in respect of overtime, supply of cranes,
water and appliances and from l\Iarch I, 1958, to
meet the scale 'E' contingencies also ; (vi) the opera·
tion which goes on at the quay is described thus :
After the Port Trust pilot brings the vessel to the
berth alloted to her :
"The stevedore labour su pplicd by the Madras
Dock Labour Board, a statutory body, board
the vessel, prepare the slings in the holds or
hatches, work the ship's winches and the cargo
is hoisted on the quayside. When the sling
rests on the shore or in the barge in the case
of discharge at moorings, the shore labour
unsling the cargo and the Trust's Tally Clerk
notes the items in a tally sheet.
As each sheet
is closed a duplicate copy of the import tally
sheet is given to the steamer agent's rcpresen·
tativc on the spot. This duplicate copy is the re·
ceipt prescribed under section 39 (3) of the
Madras Port Trust Act ...... The shore labour
remove the cargo from the point of landing
Jfi2
The Trustees ef
Ike l'Mt ef Mafirc.s
~-
E.l'.V. Sheik Mohd.
lt.1wtlur & Co.
llqhuJ«t D1y«l, J.
1962
Tiie Trustees of
the Port ef lvladraJ
v.
K.P.V. Sheik Mohd.
Rowther & Co.
Ro:liubar Do.ya!, J,
920 SUPREME COURT REPORTS [1963) SUPP.
to the shed or open for stacking and subsequent delivery of the
goods
from
the
Trust to the consignee.
The consignee obtains
delivery order
from tl1e Steamer agent and
then files Harbour Import Application with
the Trust for payment of Harbour dues and
Bill of Entry with the Customs for the duty
payable by him. On payment of the duty and
the harbour dues by the consignee the cargo
is delivered to him by the Trust."
-
(vii) The Board adopted the piece-rate scheme for the
Dock workers in pursuance of the report of the
Jeejeebhoy Committee and the new scale 'E' rates
arc a part of such a scheme.
(viii) Prior to March l;
l!J58, the cost of shore· labour was met entirely by the
Port Trust.
No distinction was made between the
charges for shore labour in ordinary cases and charges
for shore-labour in respect of idle time or additional
work.
(ix) Under the scheme which was brought
into force on March 1, 1958, charges for shore labour
in the contingencies covered by the scale 'E' have been
excluded from Harbour dues. These charges are now
treated as charges for which the steamer-agent is
made responsible. (x)
The compulsion imposed on
steamer agents in the· matter of payment of the scale
•E' rates and in respect of the signing of the requisition
for shore labour is outside the authority conferred by
law on the trustees of the Port of Madras and is illegal.
Such an imposition whether as charges for services or
as compensation for default of steamer agents is
illegal and an unreasonable restriction on the fundamental right of the petitioners to carry on business as
steamer agents and is inoperative in law. (xi) the
Port Trust authorities receiving goods on the quay or
in the barge at moorings, do so on behalf of the
consignee.
~
The Board, by the common counter-affidavit
filed on its behalf by the Deputy Traffic Manager of the
-
--- ..
2 S.C.R.
SUPREME COURT REPORTS
921
Madras Port Trust, admitted the direct arrangements
between the ship-owner, master, or agent with the
stevedores but <lid not accept the allegations about
the nature of the various rates and duties levied and
the legal position as stated in the petitions.
According tu the lloard, (i} the Harbour clues on the import
cargo under scale A, Chapter 11 of the Scale of
Rates, are payable on ·tonnage and include, beside
overhead, a nominal rent for storage for a specified
period etc., and the item of charges for porterage involved in moving the goods from the landing point to
the storage or stacking point.
(ii) It is not correct
that the ship owner has nothing to do with the import
cargo after it h<1s been landed by the stevedores at
the lauding point on the quay, as the ship-owucr iu
each case by the bill of lading has to deliver the
goods lo the consignee named in the bill of ladiug or
his nominee and he remains liable under his contract
until he has delivered the goods to the person who
is entitled to take delivery of the goods.
(iii) Under
s. 39 of the Act the Port Trust gives facilities and
undertakes certain services.
One of such services is
the moving of the goods from the landing point to the
storage or stacking point and thereafter delivering the
goods to the persons entitled under the bill of lading.
The Board does not undertake the unloading of the
goods from the ship to the quay.
The ship·owner
makes his own arrangements through the stevedores,
though the Board is authorised to undertake such
services on behalf of the ship·owncr.
It is a service
to the ship-owner by the Board to give the ship-owner
a receipt for the goods to keep them in custody and
deliver to the consignee. The services undertaken in
respect of the import cargo till they have been moved
to the storage or stacking point arc services to the
ship-owner for which the ship-owner or master or
steamer agent is primarily liable and the charges
may properly and legally be levied from them.
(iv) The Board collects the harbour dues from the
consignee at the time of giving delivery, but in fact
1962
Tk1 Trustees of
th~ Port of Jladras
v.
K.P.V. Sheik Mohd.
Rowtlr.1r & Co.
Ra1llubar D1v•ol, J.
1962
Tiu Trustees of
tlu Port of Majras
Y.
Ir.P.V. M<ik Mohd.
Rowther & Co.
Roghu.bar Dayal, J.
922 SUPREME COURT REPORTS [1963) SUPP.
makes that collection as agent of the ship·owner,
master, steamer agent who are primarily the persons
liable for the dues.
(v) The Board is entitled to
collect the harbour dues from the ship-owner, master
or steamer agent. (vi) The issuance of a receipt to
the master at the landing point is a mere matter of
convenience for betokening the fact that the goods
have been handed over to the Port Trust for removal,
storage and delivery and docs not in any way detract
from the fact that the subsequent services are facilities
and services rendered to the ship-owner in respect of
the goods which are the subject of contract of carriage by the ship-owner.
(vii) The past practice had
been for the agents to inform the Board about the
shore labour which would be necessary for moving
the goods in respect of each steamer.
Prior to 1956,
this was done orally and then the Form was introduced which contains the same particulars except
the undertaking to pay the scale 'E' charges as the
impugned Form now contains. Since the enforcement of the new piece-rate scheme, the payment to
labour was not based on tonnage but a daily wage
was fixed along With a provision for payment for
idle time and hook allowance for working two or
three hooks simultaneously
at a
vessel's hatch.
(viii) The proper utilisation of the time of the
labour depends upon the steamer agents first giving
a proper anticipation and shift at which they were to
be put on the job being the time when the cargo will
be ready for removal and, secondly, there giving a
continuous supply of cargo for removal so that there
is no gap in the work.
(ix) The levy of multiple
hook allowance against the steamer agents is a facility
to the ship to discharge fast and sail quicker. When
two or more hooks work in a ship's hatch, the gangs
handling cargo will not be in a position to handle
more cargo and therefore the approval of Board was
obtained for payment of an allowance to compensate
such loss in their earnings.
As working of additional
hooks
in a vessel's hatch benefits the ship, the
..
-
.---
2 S.C.R.
SUPREME COURT REPORTS
923
recovery of hook al\o_wanceJrom the steamer agents
under scale 'E' is legitimate. ( x) The additional
charge made under scale 'E' is a charge in respect of
facilities afforded to and services undertaken on
behalf of the ship-owner, master, agent by the Board
in relation to the cargo which is under contract of
carriage by them, in the same way as harbour dues.
To understand the exact nature of the impu··
gned charges, it is necessary to quote the scale 'E'
charges to which objection is taken :
SCALE E-Charges Against Masters, Owners, or
Agents of Vessels in respect of Port Trust Labour
requisitioned and supplied but not fully or properly
utilised
Item Classification for purposes
no.
of this Scale
Charges Payable
1. Port
Trust
Mazdoors 64 nP. per mazrendered idle on account door per hour in
of the breakdown of ship's the case of 8 hr.
winche3, wrigging of ship's shifts and at 80
derricks, shifting of cranes nP. per hour in
at the request
of the the case of 6~ hr.
steamer agents or steveshifts.
dores, cargo not being
ready for shipment, completion of loading and/or
unloading before the end
of the shift, late arrival
of vessel at the "berth or
for any other reason which
is attributable to the vessel
and is beyond the control
of the workmen.
Note : Idle time will be calculated as follows :
1962
T1u T nu tees oJ
IM Part ef Madras
••
K.P.V. Sheik Mohd.
Rowtlur & Co.
llaglw6.r Dq)'a/, J.
1962
Thi Trustees of-
,,,, Port of Madras
v.
lf.P. V. Sheik Mohd.
Rowther & Co.
Raghu/Jar D1Jyal, J.
924 SUPREME COURT REPORTS [1969) SUPP.
Item Classification for purposes
no.
of this Scale
Any continuous stoppage
of work of 15 minutes or
under shall be ignored and
any continuous stoepage
in excess of 15 mmutes
and up to 30 minutes shall
be counted as 30 minutes.
If the said
continuous
stoppage
continues
in
excess of 30 minutes the
actual excess rounded off
to the next quarter will be
calculated as idle time.
For example, if there is
continuous stoppage for 35
minutes, the idle time will
be calculated as 45 minutes.
2.
Port Trust Mazdoors sent
away or not required after
shore work
shall
have
commenced at the start of
each shift.
3. Allowances for working
of two hooks simultaneously at a vessel's hatch.
4. Allowances for working of
more
than
two
hooks
simultaneously at a vessel's
hatch.
Charges Payable
Rs. 5 per mazdoor
per shift or part
thereof,
or
Rs.
2.50 per half shift
or part thereof.
Rs. 1.25 for each
mazdoor (Madras
Port Trust Shore
Mazdoor) employed at the hooks.
Rs. l.fl6 for each
Madras Port Trust ·
Shore
Mazdoor
employfd at the
hooks. •
N. B.-One hour's clear notice in writing must be
given of cancellation of labour requisitioned
1
-
--~
2 S.C.R.
SUPRE~E COURT REPORTS
925
for work at hooks. If cancellation orders are
not received in time, charges will be levied for
the full period requisitioned.
Note : The above amendment will take effe~t from
the date of Introduction of the Piece-Rate
Scheme, viz., March 1, 1958.
Sd/-etc.
A circular Ex:hibit-B was issued by the Board
to all the steamer agents on February 25, 1958,
explaining ,the features of the Piece-Rate Scheme for
Dock and Stevedore works for the Port of Madras.
The Board emphasized that the Piece-Rate Scheme
was formulated to increase the out-turn of vessels and
sought the cooperation of the steamer agents and the
stevedores in the implementation of the scheme and
making it a success.
The salient features of the scheme in respect
of payment of wages to the workers show that, under
the scheme, the worker is assured of a minimum daily
wage and that, the actual earnings· for a day really
depend on his output per shift, they being linked with
productivity. A gang of workers consists of one
maistri and 14 workers. They handle the goods at
a particular point, say a hook. Datum lines have
been fixed for different kinds of cargo per hook per
shift. •Datum lines' means the 'standard output' of
th~ work to be performed by a gang in a particular
hook during a shift. The output is calculated in
deadweight tons. Thus a daily wage rate as well
as a wage ri.te for standard output have been fixed
for all categories of workers who have been classified
in five categories, one of which is the Port Trust
Shore Labour. If the workers produce more than
the datum lines, they are entitled to the increased
wage rate. There is steady increase in the earnings .
1962
The Trusl•ts of
lhe Port of Afadras
"·
K.P.V. Sluik Mohd.
Rowther & Co.
Raglwbar Dayal, J.
1962
Tn. T rust1u ef
th< Port of Madta
...
K.P.V. Sheik Mohd.
Rowlher & Co.
Ra1hubiJ1 Dayal, ,I.
926 SUPREME COURT REPORTS [1963] SUPP.
if the output exceeds the 100% of the datum tonnage
and at 150% the worker gets twice his daily wage
rate and at 200% the piece rate wage is thrice the
daily wage rate.
These features of the scheme sufficiently indicate the significance of 'idle time' for the workers.
If, during a shift, the workers are not actually
employed on the job for which they are engaged and
have to remain idle, their output of work during that
shift, on the basis of tonnage, is bound to be less and,
consequently, their earnings would be less than what
they could be if they had been continuously employed
during the shift. To compensate such loss in earnings
due to the time of the workers remaining unemployed
idle allowance is granted for such time during which
the workers are rendered idle for reasons beyond their
control for periods in excess of 15 minutes. The
circular shows that idle allowance is paid at the daily
wage rate for the following reasons :
{i) breakdown of cranes or winches.
(ii) shifting of quay cranes or rigging of ship's
derricks.
(iii)
(iv)
(v)
cargo not ready for shipment
late arrival of vessels at the berth
completion of loading and/or unloading
before the end of the shift
(vi) actual rain-time during shift working
hours, and
(vii)
any other reason beyond the control of the
workmen except slow work on the part of
the workmen covered by this scheme.
Item No. I of scale 'E' charges makes the idle
~llowances! for reasons nos. (ii) to {v) and f9r
2 S.C.R.
SUPREME COURT REPORTS
927
breakdown of ship's winches mentioned in reason (i),
chargeable agaimt masters, owners or agents of
vessels who control matters giving rise to those
reasons.
The workers are also paid multiple hook allowance. They are entitled to 'hook allowance' at the
rate of I/4th of the daily wage if two hooks work
simultaneously at a hatch and I/3rd of the daily
wage, if more than 2 hooks work at a hatch. One
gang of workers handle goods at one point, i.e., at
one hook. If several hooks are simultaneously worked at the vessel's hatch, an equal number of gangs of
workers will be employed to handle the goods. The
result is that the output per gang is proportionately
reduced and consequently its earnings are reduced.
There may be further reduction in earnings "if the
cargo is discharged during half-shift. It is to com·
pensate such losses that under the piece-rate scheme,
the workers are paid hook allowance.
The simultaneous working of more than one
hook at the hatch of a ship helps the ship to discharge
cargo fast and sail away quicker. The hook allowance is charged against the master, and steamer
agents of the ship as the working of additional hooks
benefits the ship.
The writ petitions were disposed of by a learned
Single Judge of the High Court. He dismissed them
holding that the liability to pay the charges, being
for services rendered, the charges could be imposed
only on the person to whom that service is rendered,
that the entrustment of the __ goods to the Board .is by
the shipping agent. though the entrustment is for ultimate delivery of the goods to the consignees and that
the serVice is rendered to the shipping agent even
though the consignee also benefits by that service and
it was not nece1JSary for imposing the liability thai
1962
Thi Tru.fte1J of
tlu Porl of MadrtJs
••
K.P.V. S.ilik Mohd.
Rowthtr & Co.
R•1luhar Dapl, J.
1962
Tht Truslets oJ
!lit Fart of Madru.r
v.
K.P.V. Slilik Moh •
Rowthn & Co.
l/aghuhM Dayrl, J.
928 SUPREME COURT REPORTS [1963) SUPP.
the shipping agent must exclusively benefit from the
service rendered.
On appeal, the appellate Bench reversed the
order, allowed the petitions and issued a writ of
mandamus as prayed. It held that the Board had no
authority to introduce the new scale 'E' rates payable
by the master, owner or agent of the vessel, that the
ship·owner's liability ends when the goods had been
put over the rail of the ship and from the moment
the goods are put within the reach of the Board
employees to take charge of them and tally clerk
passes the receipt on behalf of the Board. The
services in respect of which the new charges are
sought to be levied cannot be deemed to be services
rendered to the master, owner or agPnt of the vessel.
They must be deerned to be services rendered to the
consignee.
The purpose of the requisition by the
steamer agent was really to avoid delay and conse·
quent congestion and, generally, for the convenience
of the Board. The requisition must be treated as one
on behalf of the consignees because it is not part of
the duty of the steamer agents to take delivery.
The contentions raised before us for the parties
are the same as were urged in the Courts below and
will be mentioned when dealt with later.
Before we deal with the contentions of the
parties, we may refer to the various provisions of law
having a bearing on the question before us. Clause (7)
of s. 5 of the Act states that 'owner', when used in
relation to goods, includes any consignor, consignee,
shipper .or agent for the sale, custody, loading or unloading of such goods. Section 39 provides for the
performance of services by the Board and reads:
" ( 1) The Board shall, according to its powers,
provide all rea~onable facilities for and shall
have power to undertake the following services:--
(a)
landing,
shipping,
or
transhipping
1
-
2 S.C.R.
SUPREME COURT REPORTS
929
passengers and goods between vessels in the port
and the wharves, piers, quays or docks in possession of the Board;
(b) receiving, removing, shifting, transporting,
storing or delivering goods brought within the
Board's premises;
(c) carrying passengers by rail, tramway or
otherwise within the limits of the port, subject
to such restrictions and conditions as the Central
Government may see fit to impose; and
(d) receiving and delivering, transporting and
booking and despatching goods originating in
the vessels in the port and intended for carriage
by the neighbouring railways, or vice verse, as a
railway company or administration under the
Indian Railways Act, 1~90.
(2) The Board shall, if so required by the
owner, perform in respect of goods all or any
of the services mentioned in clauses (a), (b),
and (d) of sub-section (1), provided that the
Board shall not be bound to perform any service
which it has relinquished under the provisions
of clause (a) of sub-section (1) of section 41-A.
(3) The Board shall, if required, take charge of
the goods
for the purpose of performing the
service and shall give a receipt in the form and
to the effect prescribed from time to time by
the Central Government.
After any goods have been taken charge of
and a receipt given for them under this section
no liability for any loss or damage which may
occur to them shall attach to any person to
whom a receipt shall have been given or to the
1962
Th• Trustm qf
tlz• Port of Madru
v.
' K.P. V. Shlik Mo~.
Rowtlur l!f Co.
&g/.,bat DaJOI, I
IHI
7ltTnul#1~
llu P.n ef Momo.r
v.
K.P.V. Sivik Moh".
&wthn ffJ c •.
R(lhui• Dlf1'l, J.
930 SUPREME COURT REPORTS [1963] SUP!'.
master or the owner of the vessel from which
the goods have been landed or transhipped."
Section 40 laying down the responsibility of the
Board for loss etc., of goods reads:
"(1) 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 and subject also in the
case of goods received for carriage by railway
to the provisions of the Indian Railways
Act, 1890, be that of a bailee under sections 151,
152 and 161 of the Indian Contract Act, 1872,
omitting the words 'in the absence of any
special contract' in section 152 of the last-mentioned Act.
Provided that, till the receipt
mentioned in su b·section (3) of section 39 is
'
given by the Board, the goods shall be at the
risk of the owner.
(2) The Board shall not be in any way responsi·
hie for loss of or damage to 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 the receipt given for the goods
under sub-section (3) of section 39."
Section 41-A deals with relinquishment of services
subject to the control of the Central Government and
sub-s. (1) of s. 41 provides that any person to whom
any or all of the services under els. (a) and (b)
of sub·s. (1) of s. 39 has or have been relinquished
under s. 41 ·A, shall, if so required by the owner,
perform in respect of goods any of the services so
relinquished and for that purpose take charge of the
goods and give a receipt in the form and to the effect
prescribed
from
time to time by the Central
Government.
I
--
-
2 S.C.R.
SUPREME COURT REPORTS
931
Section 42 which deals with the scale of rates,
reads:
"The Board shall frame a scale of rates at
which and a statement of the conditions under
which any of the services specified hereunder
shall be performed by itself or by a person to
whom any service has been relinquished under
section 41-A or partly by one and partly by the
other:-
(a) Transhipping
of passengers
or
good11
between vessels in "the harbour;
(b) landing and shipping of passengers or goods
from or to such vessels to or from any wharf,
quay, pier, dock, land or building in the possession or occupation of the Board or at any place
within the limits of the port;
(c) cranage or porterage or goods on any such
place;
(rl) wharfage, storage or demurrage or goods on
any such place;
(e) any other service in respect of vessels,
passengers or goods excepting the services in
respect of vessels for which fees are chargeable
under the Indian Ports
Act, 1908
(XV
of 1908)."
Section 44 provides that every scale and every state·
ment of conditions framed by the Board under ss. 42,
43 or 43-A shall be submitted to the Central Government for sanction, and when sanctioned and published, will have the force of law. Sections 45 and
46 provide for the enhancement or the rates by the
Board and the Central Go\-ernment, if the Board fails
to do so, respectively.
1962
Tiu Trust111 of
tlu Porl qf Madra1
••
E.P.V. Sluik Molrd.
Rowtlur l!I Co.
1962
Tli• Trustm of
tM p.,, of Madras
v.
lf.P.V. Sluik Mohd.
Rowth11 I'!! Co.
932 SUPREME COURT REPORTS [1963] SUPP.
Section 50 provides that the rates in respect of
goods to be landed shall be payable immediately on
the landing of the goods and those in respect of goods
to be removed from the premises of the Board, or to
be shipped for export, or transhipped, shall be payable before the goods are removed or shipped or tran·
shipped. Section 51 gives the Board a lien on the
goods for the amount of the rates leviable under the
Act in respect of any goods and for the rent due to
the Board on any buildings etc., in which those goods
had been ·placed.
Section 52 provides for the
priority of this lien of the Board over certain other
liens and claims. Section 53 provides for the preservation of lien for freight or other charges including
landing charges payable to the ship-owner after the
goods are landed and the lien for freight or charges
takes priority over the aforesaid lien of the Board.
Section 54 provides for the retention of such goods in
the custody of the Board at the risk and expense of
the owners of the said goods until such lien is discharged and also provides that the godown or storage
rent would be payable by the party entitled to such
goods for tfie time during which they may be so
retained.
Section 56 provides for the sale of goods after
two months if rates or rents are not paid or lien for
freight is not discharged. Section 57 provides for
the publication of the notice for sale in the case of
perishable goods in the custody of the Board, in the
Gazette and section 58 provides for giving notice to
the owner of the goods of his address is known.
Section 59 provides as to how the sale proceeds are
to be applied. It is to be applied in the payment of
the expenses of sale in payment of the liens and
claims excepted in s. 52 from the priority of the lien
of the Board and in payment of the rates and expenses of landing, removing, storing or warehousing
the same, and of all other charges due to the Board
in respect thereof.
'
!
•
2 S.C.R.
SUPREME COURT REPORTS
933
The Board framed by-laws in exercise of the
powers conferred by s. 95 of the Act. By-law no. 2
provides for the regulation of admission to the
harbour premises by means of permits etc. ·They
are to be issued to such of the public as have business to transact within the premises in somewise
connected with the purposes, services or works of the
harbour. By-law no. 3 provides that the master,
owner or the agent of a vessel carrying cargo for discharge at the Port of Madras shall furnish the Traffic
Manager, Port Trust, within not less than six clear
working days a true copy of the complete Import
General Manifest before being permitted to break
bulk. The manifest is to show full details of each
consignment manifested, including litreage in the
case of liquids in bulk and gross weight in kilos in
other cases. Non,submission of such manifests within the stipulated time may result in the vessel concerned not being permitted to break bulk.
By-law no. 4 provides that no goods may be
landed or shipped except at places appointed by the
Port Trust for each class of cargo. By-law 4-A provides that if any vessel discharges upon any wharf
or property of the Port Trust any cargo in such a
rotten condition as to be a nuisance or injurious or
dangerous to health, the Traffic Manager, Port
"'' Trust, may require the consignee thereof or if the
consignee should disclaim, deny or dispute the consignment or decline all responsibility for the same or
if there should be no consignee, the owner, master or
agent of the vessel from which the same had been
discharged, to forthwith cause the said cargo or goods
or substance to be removed from the property of the
Port Trust and, on the failure of such persons to have
the goods removed, ·to have the removal effected by
the Traffic Manager in such manner as he may think
fit, or cause the same to be destroyed, and to demand
the expenses incurred from the said consignee or the
said master, owner or agent as the case may be.
1962
TM Trusl11s oj
IM Port of Madras
•.
K.P.V. Sheik Mohd,
Rowther & Co.
&ghu!Jar D<!J!ol, J.
/!J62
Th• Trrute1s of
IA1 Port of Madras
v.
K.Y.P. Slllik MoM.
Rowtlw& Co.
&ihubar Dqyal, J.
934 SUPREME COURT REPORTS [1963] SUPP.
By-law no. 5 provides that when the Port Trust
undertakes the reception, removal, porterage or
storage of cargo under s. 39 of the Act, it shall deliver
it or permit its shipment after all dues shall have been
paid and that in the case of cargo of which the Port
Trust does not elect to undertake such services, no
steamer agent, shipper or consignee may remove any
part of such cargo from the harbour premises until
authorised by the Port Trust so to do after dues shall
have been paid. By-law no. 6 provides that harbour
dues on goods landed, together with any other charges
incurred under the Port Tmst Scale of Rates, shall
be paid before removal of the goods from the harbour
premises. By-law no. 7 provides that all applications
for permission to export or import goods shall be on
approved forms and that such forms shall be filled in
and signed by the shipper or consignee of the goods or
by his agent.
We may also refer to the Manual of Instructions
-
issued by the Board for the Traffic Department.
\
Mr. Desai has urged that the Manual should not
be looked into as it is not part of the record. Strictly,
this is correct, but whatever extra is contained in the
instructions is really amplification or explanation of
facts already on record, in the affidavit and the
common counter-affidavit filed on behalf of the parties.
We can look at the manual of instructions for this
purpose. The instructions provide that agents of vessels
will inform the Traffic Manager of the probable date
of arrival of their steamers and that the Traffic Manager will p.ote his requirements for a quay or a mooring
berth on such notice. Instruction no. 3 states that the
authority from the steamer agents as bailors to the
Trust as bailee to deliver goods may take the form of
an endorsement by the steamer agents on the bill of
.A.
lading and that a bill of lading presented without
"='
the steamer agent's endorsement cannot be accepted.
Instruction no. 4 deals with the tally sheet and is in
these terms :
~
(
2 S.C.R.
SUPREME COURT REPORTS
935
"The Form. prescribed by the Loca,l Government under section 39(3) of the Madras P&rt
Trust Act for cargo landed into the custody of
the Port Trust. The original copy serves the
Trust as its record. The duplicate copy, the
prescribed receipt, is handed to the tenderer
immediately the form has been entered up with
the marks, numbers, description (as far as
possible) and other particulars, such as outward
condition of each individual package and signed
by a Port Trust Tally Checker. Great care
must be exercised in entering up Tally Sheets
as they are the only records for the settlement
of claims between the tenderer and the Port
Trust and contribute largely towards smooth
working. Tally sheets are kept in the Traffic
Sections for 28 days after the departure of a
vessel and are then filed in the Application
Section in the Office of the Assistant Traffic
Manager (Shipping).
x
x
x
x
x
x
x
x"
Instruction No. 5 deals with receipting and provides :
"As each tally sheet which is prepared in duplicate with carbon paper is completely filled in,
it should .be signed by the Port Trust Tally
Checker and the Steamer Agent's representative
and the duplicate copy should be handed over
to the latter on the spot. This constituted the
receipt under s. 39(3) of the Act."
Instruction no. 26 states that the Trust grants delivery
of cargo on the authority of delivery orders granted
by the steamer agents as bailors. This authority may
take the form of an endorsement by the bailor on the
bill of Jading or a separate delivery order on the
Trust issued by the bailor.
It is to be noticed from the various provisions of
the Act that they do not make it obligatory on the
1962
Tiii T ruste1s ~f
tlz1 PMI ef Madras
••
K.P.V.