Raj Shipping Agencies Ltd. v. The Board of Trustees of the Port of Mumbai

1. Since pleadings in the petition are completed, by consent of the parties, we decided to dispose the petition at this stage itself. Rule. Rule made returnable forthwith. As common issues arise, both petitions are disposed by this common judgment. For convenience we take the facts in Writ Petition No.1637 of 2018.

2. Main prayers in Writ Petition No.1637 of 2018 read as under: “a. Writ of Mandamus or a Writ in the nature of Mandamus; or any other appropriate Writ, Order or direction, to quash the Respondent's Demand Notice dated 18th May 2010 and subsequent Demand Notices for payment of alleged shortfall in the berth hire charges, including interest levied thereon, wrongly claimed from the Petitioner by the Respondent for the period from 8.7.2008 to 28.10.2008; b. Writ prohibiting Respondent from giving effect to its demand in any way and/or stopping services to Petitioner and/or its vessels in any way relating to the impugned demand; e. Writ of Mandamus or a Writ in the nature of Mandamus; or any other appropriate Writ, order or direction, directing the Respondent to credit the sum of Rs.2,00,000/- wrongly encashed under Bank Guarantee no.20094541BGP0012 dated 5th February 2009 for the sum of Rs.2,00,000/- to the Petitioner's port deposit account reference no.RAJ01.” 2 of 12 Main prayers in Writ Petition No.1735 of 2018 read as under: “a. Writ of Mandamus or a Writ in the nature of Mandamus; or any other appropriate Writ, Order or direction, to quash the Respondent's Demand Notices nos. 1304321-1 dated 01.08.2014; 1404793-1 dated 03.01.2015; 1404793-1A dated 13.01.2015; for the Tug SAGAR I; No. 1403186-1 dated 5.1.2015 for the Tug Sagar Prince and nos. 1403645-1 dated 25.08.2014 and 1403645-1A dated 1.1.2015 for the Tug SAGAR III, including interest levied thereon and subsequent demand notices for payment of alleged shortfall in the berth hire charges wrongly claimed from the Petitioner by the Respondent for the period from 13.12.2013 to 04.01.2015 for Tug Sagar 1; from 13.12.2013 to 05.12.2014 for Tug Sagar Prince and from 01.05.2014 to 25.12.2014 for Tug Sagar III; b. Writ prohibiting Respondent from giving effect to its demand in any way and/or stopping services to Petitioner and/or its vessels in any way relating to the impugned demand; e. Writ of Mandamus or a Writ in the nature of Mandamus; or any other appropriate Writ, order or direction, directing the Respondent to credit the sum of Rs. 5,00,000/- wrongly encashed under Bank Guarantee nos. 0383IGFIN000217 dated 18th February 2017 for the sum of Rs. 3,00,000/- and 0383IGFIN001415 dated 21.04.2015 for the sum of Rs. 2,00,000/- from the Bank of Baroda, to the Petitioner's port deposit account reference no.SSO01.”

3. Petitioner has approached this Court to quash the demand notice dated 18th May 2010 and subsequent demand notices raised by respondent against petitioner for payment of Berth Hire Charges. According to petitioner it is incorrectly calculated and levied in respect of petitioner’s tug ATUL for the period from 8th July 2008 to 28th October 2008. Petitioner has also sought an injunction restraining respondent from encashment of bank guarantee dated 3rd March 2018 for Rs.2,00,000/- given on instructions from petitioner. Other prayers are also sought like restraining respondent from suspending port 3 of 12 services to petitioner and its tugs and from taking coercive steps, etc.

4. Petitioner owns tugs which are used in the Mumbai Port Area for towing big vessels to the berth from the anchorage and back. Respondent is entitled to levy charges as per the port scale of rates that is approved by Tariff Authority for Major Ports (TAMP), which is an independent Authority constituted under Section 47-A of the Major Port Trust Act, 1963 (MPT Act). It is TAMP that fixes rates and conditions in respect of the services, port dues and other charges levied by Major Ports in India.

5. Respondent has levied Berth Hire Charges on tug ATUL for the period from 8th July 2008 to 20th October 2008 under Section 2.16, Note 1(i) which is on the basis of minimum 1000 GRT (Gross Registered Tonnage). It is petitioner’s case that the Berth Hire Charges should be levied not under Note 1(i) & 1(ii) but Note No.4 of Section 2.16, whereby the concessional rate under Note 4 will be applicable to tug ATUL. According to petitioner, the Berth Hiring ought to have been calculated on the actual GRT of tug ATUL, i.e., 284 tons and not on 1000 GRT basis. The short point, therefore, in this petition is whether respondent is entitled to levy Berth Hire Charges on the basis of minimum 1000 GRT on tug ATUL or the Berth Hire Charges should be levied on the actual GRT of 284 tons, the concessional rate prescribed under Note 4 of Section 2.16 of the scale of rates. 4 of 12

6. The scale of rates fixed by TAMP under Section 2.16 of chapter II reads as under:- “2.16 Composite Berth Hire Charges: Berth hire charges on vessels, boats and barges berthed at Indira Dock and its Harbour Wall, including Ballard Pier and Ballard Pier Extension, Prince’s & Victoria Docks and its harbour walls:-

┌───────────────────────────────────────────────────────────────────────────────────────────────┐
│    Sl.                Vessels Berthed at            Rate per GRT for per hour or part         │
│    No.                                                          thereof                       │
│                                                    Coastal Vessel (in       Foreign-going     │
│                                                          Rs.)              vessel (in US $)   │
├───────────────────────────────────────────────────────────────────────────────────────────────┤
│       1.        Indira Dock & its Harbour                0.119                   0.0075       │
│                 Walls, Ballard Pier and Ballard                                               │
│                 Pier Extension                                                                │
│       2         Prince’s & Victoria Docks and            0.092                   0.0059       │
│                 its harbour walls                                                             │
│            Notes:                                                                             │
│            1.      For the purpose of levy of the above charges                               │
│            (i). The minimum GRT for any vessel except off shore supply vessels will           │
│            be taken as 1000 and                                                               │
│            (ii) The term 'vessel' will include the boats, barges and craft of GRT of          │
│            1000 and above.                                                                    │
│            2. (i) The berth hire shall be leviable from the time a vessel takes the           │
│            berth till the time it leaves the berth.                                           │
│            (ii) There shall be a time limit beyond which berth hire shall not apply,          │
│            berth hire shall stop 4 hours after the time of vessel signaling its               │
│            readiness to sail.                                                                 │
│            (iii) There shall be a 'penal berth hire' equal to one day's berth hire            │
│            charges for a false signal.                                                        │
│            (iv). The Master / Agents of the vessel shall signal readiness to sail only        │
│            in accordance with favourable tidal and weather conditions.                        │
│            (v). The time limit of 4 hours prescribed for cessation of berth hire shall        │
│            exclude the ship's waiting period for want of favourable tidal conditions.         │
└───────────────────────────────────────────────────────────────────────────────────────────────┘

5. This issues with the approval of the Competent Authority.”

10. According to TAMP, therefore, respondent should charge only on the basis of actual tonnage of the tug ATUL under Serial No.4 of Part II of Section 2.16. Notwithstanding this, respondent insists on charging on the basis of 1000 GRT under Note 1(i) of Section 2.16 of part II of scale of rates. In our view, the view expressed by TAMP is binding on respondent as it is TAMP that has interpreted the scale of rates fixed by it. Further, since respondent has not challenged the interpretation/clarification of TAMP which was given on 1st March

2017. Infact by this decision dated 1st March 2017, TAMP has only clarified what it meant by clauses in Section 2.16 of the scale of rates and in our view that is binding on respondent. Mr. Talsania submitted that in paragraph 2 of the communication dated 1st March 2017, TAMP had initially accepted respondent’s submissions. We do not agree with Mr. Talsania because the paragraph as it reads only reproduces the stand taken by respondent. Mr. Talsania also submitted that respondent did not agree with the interpretation of TAMP. TAMP having come to a final decision accepting the submissions made by petitioner, if respondent was unhappy with the finding of TAMP it could have challenged the same. It has not. 10 of 12

11. Mr. Talsania also submitted that communication dated 1st March 2017 was not an order passed by TAMP but only an opinion. We are not inclined to accept this view. Even if it is an opinion of TAMP, every order or judgment is the opinion of the Court, Authority or the Forum interpreting the provisions of law. In this case also, by the said communication dated 1st March 2017, TAMP has only interpreted what it meant by Section 2.16 in the Scale of Rates that it had fixed. Further, in the communication dated 1st March 2017, at the end, in paragraph 5, it is stated that “this issues with the approval of Competent Authority”.

12. It is important to note that TAMP has given its decision on 1st March 2017 after giving hearing to Petitioner and Respondent. The power to give decision and its authentication is to be found in Section 47-F of the Act. The phrase “decision” is not defined under the Act. A decision would mean a conclusion preceded by reason to arrive at conclusion. Whenever a question is determined after weighing reason for and against a proposition, it is a decision. A decision means not merely a view but an objective determination based upon facts and circumstances of each case after examining the material on record and after hearing the parties who are going to be aggrieved by that. In the instant case before us, the communication dated 1st March 2017 would constitute a decision since it determines an issue at what rate respondent is entitled to charge based on the documents produced and 11 of 12 after hearing respondent. Therefore, in our view, the contention of Mr. Talsania that the same does not constitute a “decision” is to be rejected.

13. In these circumstances, rule is made absolute in terms of prayer clauses (a), (b) and (e). [JITENDRA JAIN, J.] [K. R. SHRIRAM, J.]