Case Note & Summary
The plaintiff, Board of Trustees of the Port of Chennai, filed a suit for recovery of Rs.1,08,84,931/- with interest at 15% per annum from the defendant, M/s.T.N.S.S.STEELS Pvt. Ltd., for unpaid port charges in respect of the vessel 'M.V.Island Pride'. The vessel arrived on 01.11.1999 and berthed at Coast Guard Berth. The previous owner, M/s. Hauers Lines Pvt. Ltd., sold the vessel to the defendant on 10.04.2000. The plaintiff had granted a waiver of 80% of port charges to the previous owner from 01.11.1999 to 31.03.2000, but the defendant did not pay charges from 10.04.2000 onwards. The defendant's steamer agent failed to pay, and the defendant requested waiver similar to the previous owner, which was denied. The plaintiff invoked Section 64 of the Major Port Trusts Act, 1963 and Regulation 4(5) of the Madras Port Trust (Distraint/Arrest & Sale of Vessel) Regulations to sell the vessel, but the sale did not proceed. The defendant contended that the charges were not payable as they were incurred before the purchase and that the plaintiff had waived them. The court held that the statutory charge under Section 64 attaches to the vessel and the defendant, as purchaser, is liable. The waiver granted to the previous owner was not binding on the plaintiff in favor of the defendant. The court decreed the suit in favor of the plaintiff for the claimed amount with interest at 15% per annum from the date of plaint till realization.
Headnote
A) Port and Harbour - Recovery of Port Charges - Liability of Purchaser of Vessel - Section 64, Major Port Trusts Act, 1963 - The plaintiff Port Trust sought recovery of berth hire and port charges from the defendant who purchased the vessel after the charges accrued. The court held that the statutory charge under Section 64 attaches to the vessel and the purchaser takes subject to that charge. The defendant is liable to pay the dues even though they arose before the sale, as the charge is not extinguished by transfer. (Paras 1-40) B) Port and Harbour - Waiver of Charges - Board Resolution - Estoppel - The defendant claimed waiver of charges based on a Board Resolution granted to the previous owner. The court held that the waiver was personal to the previous owner and not communicated to the defendant. The defendant cannot claim the benefit of a resolution that was not extended to them. (Paras 2-10) C) Interest - Port Dues - Rate of Interest - The plaintiff claimed interest at 15% per annum. The court allowed interest at 15% per annum from the date of plaint till realization, as per the practice of the Port Trust and in the absence of any contractual rate. (Para 40)
Issue of Consideration
Whether the defendant, as purchaser of the vessel, is liable to pay port charges incurred prior to the sale, and whether the plaintiff Port Trust is entitled to recover the same with interest.
Final Decision
The suit is decreed in favor of the plaintiff. The defendant is directed to pay Rs.1,08,84,931/- with interest at 15% per annum from the date of plaint till realization and costs of the suit.
Law Points
- Port Trust can recover charges from vessel owner even after sale
- Section 64 of Major Port Trusts Act
- 1963 creates charge on vessel
- Regulation 4(5) of Madras Port Trust (Distraint/Arrest & Sale of Vessel) Regulations
- liability of purchaser for pre-existing dues
- waiver not binding without formal acceptance
- interest at 15% per annum on port dues.
