By IANS
New Delhi : A two-judge bench of the Supreme Court Thursday doubted the correctness of a three-judge bench’s judgement in a case relating to the payment of cargo storage charges and referred the matter to Chief Justice K.G. Balakrishnan, asking if their doubts were genuine.
A bench of Justice H.K. Sema and Justice Markandey Katju ended up doubting the correctness of a 1997 ruling by a three-judge bench, while adjudicating a 36-year-old dispute on payment of a paltry sum of Rs.4,752.
The dispute on the payment arose in 1976 between the Bombay Ports Board of Trustee and Forbes Campbell and Company Limited, a private Indian firm which worked as the agent of vessel S.S. President Madison belonging to an US firm, American President Lines Limited.
The case itself dates back to February 1972, when the American cargo ship docked at the Mumbai port with seven cartons of ball bearings, imported by Indian firm Metal Fabs India Private Limited. The cargo was offloaded at the port but the consignee, Metal Fabs, did not bother to collect it and port authorities stored it in their warehouse.
As the importing firm refused to collect the cargo till October 1974, the port authorities repeatedly demanded storage charges from the Indian shipping agent.
As the shipping agent refused to heed to the demand of the port authorities, they auctioned the cargo to realise the storage charges. But the auction yielded only Rs.62,000, which was still Rs.4,752 less than the actual storage charges.
At this, the port authorities again demanded the sum from the shipping agent, which again refused to pay. This led to litigation at a lower court and subsequently at the high court. The matter finally reached the apex court in 2006.
The bench first thought of dismissing the case as it involved a very small amount. What, however, prevented the bench from throwing out the case was the fact that the question – who, the shipping agent or the consignee firm, owed the payment to the Bombay Port – was deemed by the bench to be an important legal issue.
“On the first blush, since the amount towards the storage charges was only to the extent of Rs.4,752, we thought of dismissing the case with a question of law left open,” the two-judge bench said in its ruling.
“However, having regard to the questions of law of public importance involved in this case, which are of a recurring nature, the matter needs to be considered in depth,” the bench said, while deciding to take up the issue.
During the arguments in the case, counsel for the shipping agent cited a 1997 ruling of the three-judge bench, which had held in another case that the Port Trust of India could collect the storage charges only from the consignee and not from the shipping agent.
It was this judgement whose correctness has been doubted by the two-judge bench.
“After reading the aforesaid judgement, we doubted its correctness as we are unable to persuade ourselves to accept it,” said the bench.
“Since we have doubted the correctness of the decision by a larger three-judge bench of the apex court, and in view of the question of law of public importance thrown up by this case, the same may be referred to a larger bench for an authoritative decision,” the bench said.
“Let the matter be placed before the chief justice of India for appropriate orders,” the bench added.