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PETITIONER: BOARD OF TRUSTEES OF THE PORT OF BOMBAY

       Vs.

RESPONDENT: JAI HIND OIL MILLS COMPANY AND OTHERS

DATE OF JUDGMENT09/01/1987

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) SINGH, K.N. (J)

CITATION:  1987 AIR  622            1987 SCR  (1) 932  1987 SCC  (1) 648        JT 1987 (1)   110  1987 SCALE  (1)22  CITATOR INFO :  RF         1991 SC1243  (4)

ACT:     Major Port Trusts Act, 1963: Sections 5,48 to 65. Bombay Customs  House  Public Notice No. 111 dated July  29,  1985; Paragraph 2(a).     Goods  detained  by  Customs  House  at  Port--Clearance of--Demurrage  charges levied by Port  Trust--Necessity  for Court to ensure payment.

HEADNOTE:     The  Major Port Trusts Act, 1963 empowers by  cl.(d)  of s.48  the Board of Trustees, constituted under that Art,  to impose rates in respea of wharfage, storage or demurrage  of goods at the port. Section 53 of the Act empowers and  Board in  special cases to exempt either wholly or partially  any’ goods from payment of any rate or of any charge leviable  in respect  thereof or remit the whole or any portion  of  such rate or charge so levied. The Port Trust had in consultation with  the Customs authorities provided for grant of  conces- sion  in the matter of payment of demurrage charges  on  the issue of detention certificate by the latter.     Paragraph 2(a) of the Bombay Customs House Public Notice No. 111 dated 29th July, 1985 provides for a regular  deten- tion  certificate to be issued where the goods are  detained by  the Customs House for the bona fide operation of  import control formalities.     A  dispute  arose  between the 1st  respondent  and  the Customs  authorities with regard to the basic  customs  duty payable  on the goods imported by the former. By an  interim order passed in a writ petition filed by the respondent, the High Court directed the Customs authorities to allow  clear- ance  of  the consignments on respondent furnishing  a  bank guarantee in respect of the disputed amount of duty payable, in  favour  of  the Collector of  Customs.  The  respondent, however, failed to clear the goods from the Port.     Since  the  consignments were  incurring  demurrage  the respondent  filed another writ petition seeking a  direction to the Customs authorities 933 to  issue detention certificates, which was allowed  by  the

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Court  on the 1st respondent giving an undertaking  that  it would  pay the demurrage amount if it failed in the  earlier writ  petition. The Customs authorities were, thus,  obliged to issue the detention certificates.     The  Port  Trust was not made party to any of  the  writ petitions.  It refused to honour the detention  certificates and  to grant remission of demurrage unless  the  respondent gave  a bank guarantee to the extent of 80 per cent  of  the fees claimed. The High Court, however, by an interim  order, in the writ petition filed against the Port Trust,  directed the  clearance  of goods without payment  of  demurrage  and without  insisting on the bank guarantee. The appeals  filed against the aforesaid orders were summarily dismissed by the High Court.     In  the appeals by special leave, it was  contended  for the appellantPort Trust, that the High Court should not have directed the Customs authorities to issue detention certifi- cates without the Port Trust being made a party to the  writ petition  and  in any event without passing  an  order  duly providing  for  the payment of the  wharfage  and  demurrage charges  due  to the Port Trust in the event  of  the  first respondent  failing  in its contention, and  that  the  High Court had committed an error in directing the first respond- ent to give a bank guarantee only in respect of the  customs duty  payable and not making a similar order with regard  to wharfage and demurrage charges payable to the Port Trust. Disposing of the appeals, the Court,     HELD:  1.  The power of the Port Trust to fix  rates  of demurrage  and to recover the same from an importer  and  to show  concession  as regards demurrage  charges  in  certain specified cases has been recognised. [942F-G]     Trustees of the Port of Madras v. M/s. Aminchand  Pyare- lal & Others, [1976] 1 SCR 721 and The Board of trustees  of the Port of  Bombay v. Indian Goods Supplying Co., [1977]  3 SCR 343, referred to.     2.1 The orders passed by the High Court in the  proceed- ings  to  which  the Port Trust was not a  party,  were  not binding  on the Port Trust in view of the violation  of  the principles of natural justice. [943G-H]     2.2  The Port Trust being a body  corporate  constituted under  Major Port Trusts Act, 1963 was entitled to he  heard by the Court 934 before any order which affected its interests  prejudicially was passed. The High Court, therefore, before compelling the Customs authorities to issue a detention certificate  should have  issued  notice to the Port Trust. This  was  necessary because on the production of that certificate the Port Trust was under on obligation to permit the clearance of the goods without payment of full demurrage charges. If ultimately the party  concerned was found to he at fault and become  liable to  pay  the full demurrage charges the Port  Trust  in  the absence  of a bank guarantee would not be in a  position  to recover  full  demurrage charges from  the  party  concerned since  it would have no longer any lien as provided by  s.59 of the Act on the goods which were already cleared. [943D-F]     3.  The orders of the High Court in the  proceedings  to which the Port Trust was a party were contrary to the public notice  issued  by the Customs authorities as  well  as  the rules of the Port Trust. It erred in not imposing any condi- tion on the first respondent for protecting the interests of the Port Trust. It should have directed the first respondent to  furnish  bank  guarantee in  respect  of  the  demurrage charges payable to the Port Trust in the event of the  first respondent  being held to be in default  ultimately,  rather

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than  merely directing an undertaking to be given in  favour of the High Court. [943B-D]     4. The goods having already been cleared, to protect the interests of the Port Trust the order passed on December I6, 1986 directing the first respondent to furnish bank  guaran- tee in favour of the appellant with regard to the balance of wharfage and demurrage charges and in default thereof to pay the  amount in cash would be the final order in the  matter. The  customs authorities to complete the  adjudication  pro- ceedings expeditiously and within March 16, 1987. [944B-E]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal Nos. 4483  & 4484 of 1986     From the Judgment and Order dated 26.6.86 of the  Bombay High  Court  in Notice of Motion No. 1418/86 in  Appeal  No. 512/86 in W.P. 1007/86.     F.S.  Nariman,  O. Chenoy, A.K. Verma, D.N.  Mishra  and D.N. Bhansaria for the Appellant.     Soli  J. Sorabjee, M.M. Jayakar and B.R.  Aggarwala  for the Respondents. 935 The Judgment of the Court was delivered by     VENKATARAMIAH,  J.  These appeals by special  leave  are filed against the Order dated 26.6.1986 passed in Appeal No. 512 of 1986 in Writ Petition No. 1007 of 1986 and the  Order dated  26.6.1986 in Appeal No. 535 of 1986 in Writ  Petition No.  1424 of 1986 of the High Court of Bombay.  Since  these two  are  connected matters, they are disposed  of  by  this common judgment.     The facts of these two cases are these. The appellant in both  these appeals is the Board of Trustees of the Port  of Bombay (hereinafter referred to as ’the Port Trust’) and the 1st  Respondent in both these appeals is a partnership  firm by name M/s. Jai Hind Oil Mills Company. The 1st  Respondent imported 5 consignments of Propylene of 10 metric tons  each in  January, 1986 by S.S. Maribor. The general landing  date of the said consignments was 20th January, 1986 and the last free date in respect of them was 23rd January, 1986.  There- after  the said consignments were incurring  demurrage.  The bills  of entry were submitted by the 1st Respondent to  the Customs  authorities in the same month. Disputes  arose  be- tween  the 1st Respondent and the Customs  authorities  with regard to the basic customs duty payable in excess of 32.50% (as goods were imported from the Republic of Korea which was a developing country), with regard to loading the assessable value  with customs duty for calculation of  the  additional duty  and  with  regard to loading the CIF  value  with  the landing charges. Not being satisfied with the contentions of the  Customs  authorities the 1st Respondent  filed  a  writ petition  in Writ Petition No. 122 of 1986 for the issue  of certain directions to the Customs authorities with regard to the  levy of customs duty. In that Writ Petition on  January 21,  1986 the High Court passed an interim order  which  di- rected  the Customs authorities not to insist on payment  of the customs duty in dispute pending hearing and disposal  of the  Writ Petition on the 1st Respondent furnishing  a  Bank Guarantee  to the extent of the 90 per cent of the  disputed amount  of duty in respect of one item and 100 per  cent  of the disputed amount of duty in respect of two other items in favour  of the Collector of Customs. Thereafter some  corre- spondence ensued between the 1st Respondent and the  Customs authorities in connection with the description of the  above

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goods. It would appear that while the Bill of Lading and the Invoice described the goods as ’Propylene’ the marks on  the consignments indicated that they contained  ’Polypropylene’. The  1st Respondent was asked to explain the discrepancy  by the Customs authorities. There was also some dispute  raised as regards the invoice price. The 1st Respondent could  not, however, clear the goods 936 from the Port of Bombay. Thereafter the 1st Respondent filed another  Writ  Petition No. 519 of 1986 for the issue  of  a direction  to the Customs authorities to permit it to  clear the consignments. On April 2, 1985 the learned Single  Judge of the High Court of Bombay who heard the said Writ Petition passed  an  order allowing the 1st Respondent  to  dear  the consignments on furnishing an Import Trade Control bond  for the value of the consignments calculated at the rate of  U.S $  735 per metric ton and furnishing a Bank Guarantee  of  a nationalised  bank  in favour of the Collector  of  Customs, Bombay  to  the satisfaction of the  Prothonotary  &  Senior Master,  High  Court, Bombay, for a sum  equivalent  to  the difference in the value between U.S $ 7 15 and U.S $ 735 per metric  ton without prejudice to the rights and  contentions of  the  1st Respondent. The said order  provided  that  the Customs  authorities could continue their investigation  and adjudicate  upon the duty payable by the 1st Respondent.  On the basis of the above order the 1st Respondent was  allowed to  withdraw the Writ Petition with liberty to file a  fresh petition, if required. Since there was a delay in the clear- ance of the consignments in question and the 1st  Respondent had  become liable to pay demurrage to the Port  Trust,  the 1st  Respondent addressed a letter to the Collector of  Cus- toms,  Bombay  asking him to issue a  Detention  Certificate stating  that  the  goods had been detained  for  bona  fide Import Trade Control formalities so that it could claim  the remission  of demurrage payable to the Port Trust.  The  1st Respondent  followed  up the above letter  by  another  Writ Petition  No. 1007 of 1986 which was filed on or  about  the 17th  April,  1986 against the Customs authorities  for  the issue of a writ directing them to issue a Detention Certifi- cate  in  respect  of all the 5 consignments.  On  the  24th April,  1986 the learned Single Judge passed a  final  order directing  the  Customs  authorities to  issue  a  Detention Certificate  to  the 1st Respondent on  the  1st  Respondent giving  an  undertaking to the Court that it would  pay  the amount, if it failed in Writ Petition 122 of 1986.  Pursuant to the Order’ dated 24th April, 1986 passed in Writ Petition No.  1007 of 1986 the 1st Respondent gave an undertaking  to the Court that it would pay the amount upon its not succeed- ing in Writ Petition No. 122 of 1986. On the 21st May,  1985 the  Port Trust received a letter dated 19th May, 1986  from the  Assistant  Collector of Customs in which  it  had  been stated inter alia that five Detention Certificates had  been sent  along  with the said letter.. Actually  no  enclosures were received along with the said letter. But later on  they received two Detention Certificates in respect of two out of the five consignments on that day. They related to two bills of  entry bearing Nos. 3133/219 and 3 133/220. On  the  same day  the Docks Manager of the Port Trust received  a  letter from the clearing agent of the 1st Respondent asking 937 the  Port Trust to grant the remission of demurrage in  view of the Detention Certificates issued by the Customs authori- ties.  Since  the Port Trust was not a party to any  of  the Writ petitions, referred to above; and no Bank Guarantee  or Demand Draft had been furnished by the 1st Respondent cover-

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ing  the  80% amount of the demurrage fees, the  Port  Trust wrote  a letter dated 30th May, 1986 to the  1st  Respondent asking  the 1st Respondent to give a Bank Guarantee  to  the effect that in the event. of the 1st Respondent losing  Writ Petition  No.  122 of 1986 it would pay to the  Port  Trust, Bombay the entire amount of remission along with interest at 15% per annum. When the aforesaid letter was sent, the  Port Trust  was  not  aware of the Order dated  2nd  April,  1986 passed in Writ Petition No. 519 of 1986. Thereupon, on  June 12, 1986 the 1st Respondent and its partner Sham Lal Kishna- ni, who is 2nd Respondent herein filed another Writ Petition No.  1424 of 1986 in the High Court against the  Port  Trust for  quashing  the communication dated 30th May,  1986,  re- ferred  to above, under which the Port Trust had  asked  the 1st  Respondent  to furnish the Bank Guarantee or  a  Demand Draft to the extent of 80% of the demurrage fees claimed  by the Port Trust and for compelling the Port. Trust to  honour the Detention Certificates issued by the Customs authorities pursuant  to the Order dated 24th April, 1986 and to  permit the clearance of the goods without payment of demurrage  and without insisting upon the furnishing of a Bank Guarantee or a  Demand  Draft, as stated above. They also  asked  for  an interim  order of the effect that pending hearing and  final disposal  of the said Writ Petition, the Port  Trust  should forthwith  honour the Detention Certificates issued  by  the Customs  authorities  and allow the clearance of  the  goods without  payment of demurrage and without insisting  on  the Bank Guarantee or the Demand Draft. In that Writ Petition an interim  order was passed on the 17th June, 1986  as  prayed for  by  the 1st Respondent. Thereafter the Port  Trust  was advised to file an appeal before the Division Bench  against the Order dated 2nd April, 1986 passed in Writ Petition  No. 519  of 1986 and the Order dated 17th June, 1986  passed  in Writ Petition No. 1424 of 1986. While the Port Trust was  in the  process  of  getting the said appeals  made  ready  for filing by their advocates, the 1st Respondent threatened the Port  Trust  with contempt proceedings by its  letter  dated 20th  June, 1986. Immediately after the receipt of the  said letter, the Port Trust lodged the Appeal no. 512 of 1986. By an order dated 26th June, 1986 the appeal filed against  the Order dated 2nd April, 1986 passed in the Writ Petition  No. 1007 of 1986 was summarily dismissed. The said order, howev- er, stated as under: "It  is,  however, clarified that it is clear from  the  im- pugned 938 order  dated 24.4.1986 that the undertaking pertains to  the demurrage charges payable to the Port Trust. if the Respond- ents Nos. 1 and 2 (Petitioners) failed in Writ Petition  No. 122 of 1986 on the footing that no valid detention  certifi- cate could have been issued in that event.           Mr. Chinoy contends that the detention certificate could not be issued, if in the adjudication proceedings  the Petitioners  are  found  at fault and the  question  of  the Petitioners  giving an undertaking to provide for this  does not  appear to have been present in the mind of the  learned Judge when the order was passed.           Liberty to the Appellants ’to seek further  clari- fication  and/or  orders on this question from  the  learned Single Judge."     The appeal filed against the Order dated 17th June, 1986 in Writ Petition No. 1424 of 1986 was numbered as Appeal No. 535 of 1986. The said appeal was also summarily dismissed on 26th  June, 1986. As the Port Trust was advised to  file  an appeal  in this Court by special leave, the Port  Trust  did

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not  apply to the learned Single Judge for clarification  as suggested in the Order passed in Appeal No. 512 of 1986.     It  may  be mentioned at this stage that  the  remaining three Detention Certificates relating to Bills of Entry Nos. 3133/221,222  and 223 were received by the Port  Trust  from the  Customs authorities on 3rd July, 1986. Two out  of  the five consignments were cleared by the 1st Respondent on  3rd July, 1986 and the remaining three consignments were cleared by  the  1st Respondent on 5th July, 1986 on payment  of  an aggregate  amount of Rs.49,510/50 paise for the  charges  of the Port Trust in accordance with the Order dated 17th June, 1986  passed in Writ Petition No.1424 of 1986 as  against  a total  amount of Rs.3,53,514.75 paise due to the Port  Trust for  wharfage  and demurrage charges upto the dates  of  the clearance of goods. Thus a sum of Rs.3,04,004.25 in  respect of wharfage and demurrage charges of the said five  consign- ments remains unpaid to the Port Trust. Aggrieved by the two orders  passed on 26th June, 1986 in Appeal No. 512 of  1986 and  Appeal No. 535 of 1986 the Port Trust has  filed  these two appeals by special leave. 939     The principal contention urged in both these appeals  is that  the  High Court should not have directed  the  Customs authorities to issue Detention Certificates without the Port Trust  being  made a party to the Writ Petition and  in  any event  without passing an order duly providing for the  pay- ment  of the wharfage and demurrage charges due to the  Port Trust  in  the event of the 1st Respondent  failing  in  its contention  in  Writ Petition No. 122 of 1986. It  is  urged that  a mere undertaking given in favour of the  High  Court agreeing  to pay the amount was not sufficient security  for the  amount  due to the Port Trust in the event of  the  1st Respondent  being  held to be the party in  default.  It  is further contended that the High Court committed an error  in directing  the 1st Respondent to give a Bank Guarantee  only in respect of the Customs duty payable by the 1st Respondent in the event of its Writ Petition being dismissed and in not making  a  similar  order directing the  1st  Respondent  to furnish  a  Bank Guarantee in respect of  the  wharfage  and demurrage charges payable to the Port Trust in the event  of the  1st  Respondent being ultimately held as the  party  in default.     The  Port  Trust  is constituted under  the  Major  Port Trusts Act, 1963 (hereinafter referred to as the Act). Under Section  5  of the Act every Board constituted under  it  is declared to be a body corporate having perpetual  succession and  a common seal with power, subject to the provisions  of the Act, to acquire, hold or dispose of property and it  may be the name by which i.t is constituted, sue or be sued. The affairs of the Port Trust are managed by the Board of  Trus- tees  and committees appointed by it in accordance with  the provisions  of the Act. It is thus an independent  statutory body and not just a department of Government. Under  Chapter VI  of  the  Act the Board of Trustees of a  Port  Trust  is empowered to impose and recover rates at Ports, for services rendered  by  the Port Trust or other persons  at  the  port under  its jurisdiction. Sections 48 to 65 of the Act  which are in Chapter VI of the Act deal with the said power of the Board  of Trustees. Section 48 authorises a Board from  time to  time to frame a scale of rates at which and a  statement of the conditions under which, any of the services specified thereunder shall be performed by itself or any person autho- rised  by it at the port or port approaches. Clause  (d)  of section  48 specifically empowers the Board to impose  rates in respect of wharfage, storage or demurrage of goods on any

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such  place.  Every scale of rates and  every  statement  of conditions  framed by the Board under the  foregoing  provi- sions are required to be submitted to the Central Government for  sanction  and will have effect when so  sanctioned  and published  by  the  Board in the Official  Gazette.  It  is, however, provided in section 53 of the Act that the Board of Trustees in special 940 cases and for reasons to be recorded in writing, may  exempt either wholly or partially any goods or vessels or class  of goods  or  vessels from the payment of any rate  or  of  any charge leviable in respect thereof according to any scale in force  under  the Act or remit the whole or any  portion  of such rate or charge so levied. The Port Trust has fixed  the scale  of rates charged at the docks. A  booklet  containing the said rates which are revised upto 10.1.1985 is  produced before  the  Court. Section III of the  said  booklet  which commences  at  page 14 thereof contains the Docks  scale  of rates’  fixed  by the Port Trust. In consultation  with  the Customs  authorities,  the Port Trust has provided  for  the grant  of concession in the matter of payment  of  demurrage charges on the issue of Detention Certificate by the Customs authorities. Section III-A(c) of the said booket deals  with the demurrage fees chargeable by the Port Trust. Proviso (d) to the said clause (c) states that the goods detained by the Customs  Department for special examination ’involving  ana- lytical or technical tests other than the ordinary processes of  appraisement’ will be exempt from demunage  fees  during such period of detention as may be certified by the  Collec- tor of Customs to be not attributable to fault or negligence on the part of importers or exporters plus two working  days and  that the Certification by the Customs will be given  by endorsement  on relative duplicate copies of Bills of  Entry or Shipping Bills. On the suggestion of the Customs  Depart- ment the Port Trust has accepted to allow concession in  the matter  of  demurrage  charges to the  extent  indicated  in Paragraph 4.10 of the note which is enclosed as Ext. ’B’  to the  Special  Leave Petition (Civil) No. 8466  of  1986.  It reads thus: "4.10  The best course seems to be to charge a rate per  day which corresponds to our minimum charge for handling,  stor- age,  care and custody or the goods after the expiry of  the free days. Wharfage constitutes handling costs plus  storage charges for a period of four days. Deducting handling costs, the balance represents storage charges for a period of  four days.  It is estimated that, excluding the  handling  costs, storage charges per day are equal to 20% of total  wharfage. It.  is, therefore, suggested that for the entire period  of certified detention we may retain per day 20% of the  wharf- age to cover the services referred to herein."     The  above concession is extended by the Port  Trust  in appropriate cases where Detention Certificates are issued by the  Customs authorities. The Customs authorities have  laid down  the procedure for issue of Detention Certificates  and the current procedure in 941 regard to the issue of Detention Certificates is embodied in the  Bombay  Custom House Public Notice  No.111  dated  29th July,  1985.  Paragraph 2.of the said notice  sets  out  the circumstances  under which a regular  Detention  Certificate could  be issued by the Customs House for  facilitating  the importers to get remission of demurrage charges. They are as under:-       "(a) Where the goods are detained by Custom House  for bona  fide operation of Import Control  Formalities  without

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any default on the part of the importers.       (b)  Where the goods have been released on caution  (a regular  Detention  Certificate  and  not  a  Recommendatory letter).       (c)  Where,  the goods are detained the  Custom  House pending  test report and the facility of  clearance  against provisional assessment has not been allowed. Such  Detention Certificates  will  be issued on merits for the  period  for which the goods were detained for the purpose.       (d) Where, the goods are detained for PHO formalities, the certificate will cover the period stretching between the date of drawal of the sample by the PHO and the date of  his test results, and       (e)  In cases where samples have been drawn  from  the imported  consignments  by the  Asstt.  Drug/Controller  for ensuring  compliance with the provisions of Drugs  and  Cos- metics Act, 1940 and where the Assistant Drugs Controller is of  the  opinion that release cannot be  allowed  against  a Letter of Guarantee pending test."     The  said Public Notice also states that Detention  Cer- tificates  will  not  be issued in the  following  types  of cases:       (a)  "Time  taken by the Custom House  Laboratory  for analytical/chemical  testing of samples drawn from the  con- signments, since the facility of clearing the goods on  bond in terms of Section 18 already exists. (b) Samples drawn from the imported consignments by the 942 Assistant Drugs Controller for ensuring compliance with  the provisions  of Drugs and Cosmetics Act, 1940 and  for  being forwarded to the Central Drugs Laboratory, Calcutta, as  the importers  can avail of the facility of clearing  the  goods against  Letters  of Guarantee and need not  wait  till  the receipt of the test report.          The facility of allowing clearance of goods against letters of Guarantee is extended only on the specific recom- mendations of the Assistant Drugs Controller on the Bill  of Entry in each case.       (c) The period taken for mutilation of woollen rags in the Docks.       (d)  Cases  where goods are detained in  the  ordinary course  of  appraisement such as for  determination  of  the Tariff classification of goods or their assessable value  in terms of Section 14 of the Customs Act."     It  is  agreed between the Customs authorities  and  the Port Trust that no Detention Certificate would, however,  be issued  by  the  Customs Department if there  has  been  any default on the part of the importer or exporter. It is  thus clear that in the event of the importer or exporter being at fault,  he  would not be entitled to any concession  in  the matter  of  demurrage  charges. He has to  pay  whatever  is payable  in accordance with the ’scale of rates’ charged  at the docks as fixed by the Port Trust.     The power of a Port Trust to fix rates of demurrage  and to  recover the same from an importer or exporter  (although the question of an exporter paying demurrage arises  rarely) under  law  and  to show  concession  as  regards  demurrage charges  in  certain specified cases is recognised  by  this Court  in the Trustees of the Port of Madras v.  M/s.  Amin- chand  Pyarelal & Others, [1976] 1 SCR 721 and in the  Board of  Trustees of the Port of Bombay versus Indian Goods  Sup- plying  Co., [1977] 3 SCR 343. These decisions are no  doubt based on the relevant laws which were in force at the  mate- rial  time. But the decisions are still relevant insofar  as cases  arising under the Act because the Act  also  contains

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provisions more or less similar to the statutory  provisions considered  in  the said decisions.  Demurrage  charges  are levied in order to ensure quick clearance of the cargo  from the  harbour. They are always fixed in such a way that  they would make it unprofitable for 943 importers  to  use the port premises as a warehouse.  It  is necessary  to do so because congestion in the ports  affects the  free  movement of ships and the loading  and  unloading operations. As stated earlier. the Port Trust shows  conces- sion to the party concerned in certain types of cases.     In  the instant case the High Court by the order  passed in the writ petition to which the Port Trust was not a party directed the Customs authorities to issue Detention Certifi- cates  in respect of the consignments in question. In  doing so while the High Court had safeguarded the interests of the Customs authorities by. its earlier orders by directing  the 1st Respondent to furnish a Bank Guarantee in respect of the duty  payable to them, in respect of the  demurrage  charges payable to the Port Trust the High Court merely directed  an undertaking to be given in favour of the High Court. In  the ordinary course, the High Court should have directed the 1st Respondent  to  furnish  Bank Guarantee in  respect  of  the demurrage charges payable to the Port Trust in the event  of the 1st Respondent being held to be in default ultimately.     It  is, however, to be observed that  before  compelling the  Customs authorities to issue a  Detention  Certificate, the  High Court should have issued notice to the Port  Trust which  was vitally interested in securing its own  interests as  regards  the demurrage charges recoverable by  it  under law.  This  was necessary because on the production  of  the Detention Certificate issued by the Customs authorities  the Port  Trust was under an obligation to permit the  clearance of  the goods without payment of full demurrage charges.  If ultimately  the party concerned is found to be at fault  and becomes  liable to pay the full demurrage charges  the  Port Trust  may not be in a position to recover such full  demur- rage  charges from the party concerned, since it would  have no  longer any lien as provided by section 59 of the Act  on the  goods which are already cleared The Port Trust being  a body  corporate constituted under the Act is entitled to  be heard by the Court before any order which affects its inter- ests prejudicially is passed. This case serves as an  illus- tration  to  what is stated above. The Port Trust  has  been asked  to permit the clearance of goods in respect of  which demurrage  charges of Rs.3,53,5 14.75 paise are  payable  in the event of the 1st Respondent being held liable in law  to pay  the  full demurrage charges. The orders passed  by  the High  Court in the proceedings to which the Port  Trust  was not a party which had the effect of prejudicially  affecting the  interests of the Port Trust would not be binding on  it in  view of the violation of the principles of natural  jus- tice. The High 944 Court  erred  in not imposing any condition on the  1st  Re- spondent for protecting the interests of the Port Trust even in  the Writ Petition to which it was a party. The  impugned orders  are  contrary  to the public notice  issued  by  the Customs authorities as well as the rules of the Port Trust.     Having regard to the peculiar circumstances of this case in which the goods have already been cleared, the orders  of the  High  Court of Bombay against which these  appeals  are filed are, therefore, to be modified appropriately in  order to protect the interests of the Port Trust. Accordingly,  at the conclusion of the hearing of these appeals we passed  an

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order  on 16.12.1986 before reserving the appeals for  judg- ment  directing the 1st Respondent to furnish  within  eight weeks  a Bank Guarantee of a Nationalised Bank in favour  of the appellant for due payment of Rs.3,04,004.25 paise to the appellant on demand, without any demur, being the balance of wharfage  and  demurrage  charges in the event  of  the  1st Respondent  not succeeding ultimately in Writ  Petition  No. 127  of 1986 and on failure to furnish such  Bank  Guarantee within  eight weeks to pay in cash Rs.3,04,004.25  paise  to the  appellant forthwith. This shall be the final  order  in these appeals.     These  appeals are disposed of in the above  terms.  The Customs authorities shall complete the adjudication proceed- ings  as expeditiously as possible and in any  event  within 16.3.1987. P.S.S.                                      Appeals disposed of. 945