INDIA STEAMSHIP (P) LTD. and JAMES MACKINTOSH & CO. PVT. LTD. v. DEPUTY CONSERVATOR, COCHIN PORT TRUST; CHAIRMAN, COCHIN PORT TRUST; BOARD OF TRUSTEES, COCHIN PORT TRUST; FA & CAO, COCHIN PORT TRUST; TARIFF AUTHORITY FOR MAJOR PORTS (TAMP)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR** ## **FRIDAY, THE 24TH DAY OF FEBRUARY 2012/5TH PHALGUNA 1933** ## **WP(C).No. 12119 of 2008 (P)** **----------------------------------------** **PETITIONER(S): -----------------------** ## **1. INDIA STEAMSHIP,** **44, PARK STREET, 6TH FLOOR KOLKATA-700 016 REP. BY ITS POWER OF ATTORNEY HOLDER, MR.ROBERT WILLIAM, AGED 64 YEARS,S/O.N.D. CHACKO BRANCH MANAGER, JAMES MACKINTOSH & CO.PVT.LTD DARRAGH SMAIL CENTRE, 2ND FLOOR,5TH CROSS ROAD, W/ISLAND.** **2. JAMES MACKINTOSH & CO.PVT. LTD., DARRAGH SMAIL CENTRE, 2ND FLOOR, 5TH CROSS ROAD W/ISLAND,COCHIN-682003, REP. BY ITS BRANCH MANAGER MR.ROBERT WILLIAM.** **BY ADVS.SRI.V.J.MATHEW (SR.) SRI.BIJISH B.TOM SRI.VARGHESE CHERIAN SRI.VIPIN P.VARGHESE SMT.CEYA ELIZABETH MATHEW SRI.P.K.SURESH KUMAR (SR.)** ## **RESPONDENT(S):** **------------------------ -** ## **1. THE DEPUTY CONSERVATOR, COCHIN PORT TRUST, W/ISLAND, COCHIN-9.** **2. THE CHAIRMAN,** - **COCHIN PORT TRUST, W/ISLAND, COCHIN-9.** **3. BOARD OF TRUSTEES, COCHIN PORT TRUST, W/ISLAND, COCHIN-9 REP. BY ITS, CHAIRMAN.** **4. THE FA & CAO, COCHIN PORT TRUST, W/ISLAND, COCHIN-9.** **tss** ## **W.P.(C) NO 12119/2008** **5. THE TARIFF AUTHORITY FOR MAJOR PORTS (TAMP),MUMBAI., 4TH FLOOR, BHANDAR BHAVAN, M.P.ROAD, MAZGAON, MUMBAI 400 010 REP.BY MR.C.S.VENKATRAMAN, DIRECTOR (COST)** **R1-4 BY ADVS. SRI.V.ABRAHAM MARKOS SRI.MATHEWS K.UTHUPPACHAN SRI.BINU MATHEW SRI.TERRY V.JAMES SRI.B.J.JOHN PRAKASH SRI.TOM THOMAS (KAKKUZHIYIL) SRI.JOSEPH MARKOSE (SR.) BY SRI.B.S.KRISHNAN(SR.),SC,PORT TRUST ADDL. R5 BY ADV. SRI.ABRAHAM THOMAS, CGC.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/02/2012, THE COURT ON 24/02/2012 DELIVERED THE FOLLOWING:** **tss** ## **W.P.(C) NO.12119/2008** ## **APPENDIX** ## **PEXTITIONER'S EXHIBITS** ## **P1:- COPY OF THE DEMAND STATEMENT ISSUED BY OST RESPONDENT TO THE PETITIONERS.** **P2:- COPY OF THE DEMAND STATEMENT DTD. 5/12/2007 ISSUED BY THE 4TH RESPONDENT TO THE PETITIONERS.** **P3:- COPY OF THE LETTER DT.D 17.12.2007 ISSUED BY THE IST PETITIONER TO THE 2ND RESPONDENT.** **P3(a):- COPY OF THE COVERING LETTER DTD. 18.12.2007 ISSUED BY THE 2ND PETITIONER TO THE 2ND RESPONDENT.** **P4:- COPY OF THE LETTER DTD. 21.12.2007 ISSUED BY THE IST RESPONDENT TO THE 2ND PETITIONER.** **P5:- COPY OF THE LETTER DTD. 15.1.2008 ISSUED BY THE 2ND PETITIONER TO THE 4TH RESPONDENT.** **P6:- COPY OF THE DTD. 23.1.2008 ISSUED BY THE 4TH RESPONDENT TO THE 2ND PETITIONER.** **P6(a):- COPY OF THE STATEMENT DTD. 23.1.2008 ANNEXED TO EXT.P6.** **P7:- COPY OF THE LETTER DTD. 13.2.2008 ISSUED BY THE IST PETITIONERTO THE 4TH RESPONDENT.** **P7(a):- COPY OF THE COVERING LETTER DT.D 14.2.2008 ISSUED BY THE 2ND PETITIONER TO THE 4TH RESPONDENT.** **P8:- COPY OF THE LETTER DTD. 2.4.08 ISSUED BY THE 4TH RESPONDENT TO THE 2ND PETITIONER.** **P9:- COPY OF THE LETTER DTD. 7.4.2008 ISSUED BY THE IST PETITIONER TO THE TARIFF AUTHORITY FOR MAJOR PORTS AND THE RESPONDENTS.** **P10:- COPY OF THE CIRCULAR NO.CAD/COSTING /SOR-SBM/2007 DTD 8.1.2009 ISSUED BY COCHIN PORT TRUST/RESPONDENTS 1 TO 4** **tss** ## **W.P.(C) 12119/2008** **P11:- COPY OF THE CHALAN DTD. 17.11.2007 FOR RS. 21,20,000/- ISSUED BY THE RESPONDENTS TO THE 2ND PETITIONER.** ## **P12:- COPY OF THE CHALAN DTD. 7.12.2007 FOR RS. 24,00,000/- ISSUED BY THE RESPONDENTS TO THE 2ND PETITIONER** **P13:- COPY OF THE CHALAN DTD 15.1.2008 FOR RS. 9,4.9,316/- ISSUED BY THE RESPONDENTS TO THE 2ND PETITIONER.** **P14:- COPY OF THE CHELAN NO.1002200 DT.D 5.3.2010 FOR RS. 38,22,038/- ISSUED BY THE COCHIN PORT TRUST TO THE 2ND PETITION.** **P15:- THE COVERING LETTER DTD. 5.3.2010 ISSUED BY THE PETITIONER TO THE 4TH RESPONDENT.** **P16:- COPY OF THE FULL TEXT OF THE TAMP NOTIFICATION NO.TAMP/32/2007-COPT DTD. 30.12.2008.** ## **RESPONDENT'S EXHIBITS:-** **R1(a):- COPY OF THE RELEVANT PORTION OF THE SCALE OF RATES.** **R1(b):- COPY OF THE NOTIFICATION.** **R1(c):- COPY OF THE BOARD MEETING HELD ON 29.6.07** ## **TRUE COPY** ## **P.S. TO JUDGE** **tss** ## **W.P.(C) NO.12119/2008** ## **APPENDIX** ## **PEXTITIONER'S EXHIBITS** ## **P1:- COPY OF THE DEMAND STATEMENT ISSUED BY OST RESPONDENT TO THE PETITIONERS.** ## **P2:- COPY OF THE DEMAND STATEMENT DTD. 5/12/2007 ISSUED BY THE 4TH RESPONDENT TO THE PETITIONERS.** **P3:- COPY OF THE LETTER DT.D 17.12.2007 ISSUED BY THE IST PETITIONER TO THE 2ND RESPONDENT.** **P3(a):- COPY OF THE COVERING LETTER DTD. 18.12.2007 ISSUED BY THE 2ND PETITIONER TO THE 2ND RESPONDENT.** ## **P4:- COPY OF THE LETTER DTD. 21.12.2007 ISSUED BY THE IST RESPONDENT TO THE 2ND PETITIONER.** **P5:- COPY OF THE LETTER DTD. 15.1.2008 ISSUED BY THE 2ND PETITIONER TO THE 4TH RESPONDENT.** **P6:- COPY OF THE DTD. 23.1.2008 ISSUED BY THE 4TH RESPONDENT TO THE 2ND PETITIONER.** **P6(a):- COPY OF THE STATEMENT DTD. 23.1.2008 ANNEXED TO EXT.P6.** **P7:- COPY OF THE LETTER DTD. 13.2.2008 ISSUED BY THE IST PETITIONERTO THE 4TH RESPONDENT.** **P7(a):- COPY OF THE COVERING LETTER DT.D 14.2.2008 ISSUED BY THE 2ND PETITIONER TO THE 4TH RESPONDENT.** **P8:- COPY OF THE LETTER DTD. 2.4.08 ISSUED BY THE 4TH RESPONDENT TO THE 2ND PETITIONER.** **P9:- COPY OF THE LETTER DTD. 7.4.2008 ISSUED BY THE IST PETITIONER TO THE TARIFF AUTHORITY FOR MAJOR PORTS AND THE RESPONDENTS.** **P10:- COPY OF THE CIRCULAR NO.CAD/COSTING /SOR-SBM/2007 DTD 8.1.2009 ISSUED BY COCHIN PORT TRUST/RESPONDENTS 1 TO 4** ## **T.R. Ramachandran Nair, J.** **- - - - - - - - - - - - - - - - - - - - - - - -** ## **W.P.(C) No. 12119 of 2008-P** **- - - - -- - - - - - - - - - - - - - - - - - - - -** ## **Dated this the 24th day of February, 2012** ## **JUDGMENT** This writ petition is filed by a Steamship Company and its local steamer agent. The whole dispute is regarding the validity of the demand made by the Cochin Port Trust as per Ext.P8 which represents the tug hire charges and an amount of Rs.94,90,443/- has been claimed therein along with penal interest. 2. The circumstances under which the said amount has been charged on the petitioners, in a nutshell, is the following: The first petitioner is the owner of a tanker vessel viz. “MT RATNA SHALINI V-73”. It came to the Cochin Port carrying 82249 MT crude oil to be received by Bharat Petroleum Corporation Limited. The vessel was anchored at the outer anchorage on 13.11.2007 at 16.18 hours. It is the case of the petitioners that on 15.11.2007 at night the Master of the vessel received instructions from the Port Control to pick up the port's pilot at 0540 hrs on 16.11.2007 for taking the vessel inside the Port through the Port's channel for berthing the vessel at the Cochin Port's Oil Terminal. The Port's pilot boarded the vessel at the appointed time and took control of the vessel. It is further WPC.12119/2008 2 averred that when the vessel was about to enter into the Port channel between buoy No.1 and buoy No.2, the vessel grounded. As the efforts to pull out the the vessel using the Port tugs became in vain, it could not be re-floated. For lightening the vessel, the first petitioner used another tanker vessel 'MT Lady Chiara' and the cargo of crude oil was transferred to the said vessel and thereafter the vessel was cleared safely from the channel and brought to the outer anchorage. The vessel was again brought inside the Port by the Port's pilot and remaining cargo was also discharged at the designated oil terminal. Finally, the vessel sailed out from Cochin Port on 24.11.2007. 3. Initially, the second petitioner was served with a demand statement showing an amount of Rs.22,24,396.00 (Ext.P1). Ext.P2 is another demand notice showing an amount of Rs.9,49,316/-. The first petitioner sought to waive certain charges as per Ext.P3 letter which was replied by the Port Trust as per Ext.P4. It is stated that again the fourth respondent issued another demand statement showing a balance amount of Rs.95,67,992/-, to which the second petitioner gave a reply requesting to issue the details of the Tug hire charges and the bills relating to the payments made, as per Ext.P5. Ext.P6 is the reply given to the same showing a total amount of Rs.1,28,87,761/-. The contention raised by the petitioners mainly is that the respondents have charged exorbitant rates for the hired tugs @ US $ WPC.12119/2008 3 1708.33 (Rs.66,915/-) per hour instead of Rs.5625/- per hour as shown in Ext.P1. Finally the fourth respondent issued a letter to the second respondent demanding payment of the balance amount of Rs.94,90,443/-. 4. Ext.P6 was answered by the petitioners as per Ext.P7 and finally Ext.P8 demand notice was issued. Thereafter, the petitioners have filed a detailed representation before the Tariff Authority for Major Ports ( for short 'TAMP') (Additional 5[th] respondent) seeking to declare Exts.P6 and P8 as null and void. 5. While admitting the writ petition on 10.4.2008 this Court passed an interim order that if the petitioner furnishes bank guarantee to the extent of Rs.95,00,000/-, there shall not be any recovery on the basis of Exts.P6 and P8. Subsequent developments have occurred during the pendency of the writ petition. 6. Along with I.A. No.7386/2009 the petitioners have produced Ext.P10, a circular issued by the Cochin Port Trust in terms of the notification dated 30.12.2008 issued by the TAMP which shows the schedule rates. According to the petitioners, as per Ext.P10, the Tug charges for operation at SPM for the period prior to 30.9.2008 are US $ 825.18 per hour. The Tug charges for the period after 30.9.2008 are US $ 560.25 per hour for foreign going vessels. The petitioners' vessel is a foreign going vessel. It is averred in para 6 of the affidavit filed along with WPC.12119/2008 4 the interlocutory application that the Tug charges for the hired Tugs ('Tug Ocean Symphony' and 'Tug Shiv') is US $ 1708.33 per hour and going by Ext.P10 it will be only US $ 825.18 per hour. Therefore, it was contended by the petitioners that the said rate alone can be applied. This Court by an interim order dated 1.7.2009 directed the Port Trust to file a counter affidavit in the matter. In the counter affidavit dated 18.7.2009 a detailed calculation is provided in para 4, based on Ext.P10. It is averred that the total amount of hire charges in respect of the two hired tugs comes to Rs.53,02,332/- at the rate of US $ 825.18 per hour, per tug. After adjusting the amount paid by the petitioners, the balance amount payable will be Rs.38,93,164/- including service tax @ 12.36% and hence it was pointed out that there is no question of any refund and the respondents are also entitled to interest for the delayed payment at the rate of 13.50% per year. The petitioners thereafter have filed a reply affidavit. According to the petitioners, the total amount if calculated in terms of the rate fixed by the TAMP as per Ext.P10, will be Rs.38,22,038/-. It is stated in para 12 that the petitioners are willing to pay the above amount against the revocation of the bank guarantee. 7. Along with an additional affidavit dated 9.3.2010 the petitioners have produced Ext.P14, a chalan dated 5.3.2010 showing remittance of an amount of Rs.38,22,038/- and Ext.P15, a request to return the bank WPC.12119/2008 5 guarantee. The petitioners, in the additional affidavit, disputes the demand for 13.5% interest stating that there is no statutory provision for demanding the said charges. 8. This Court heard the matter on 10.3.2010 and by an interim order, directed the bank guarantee to be released without further delay. With regard to interest for the delayed payment, it was observed that the said matter will be decided in the writ petition. The matter has thus come up for final hearing. 9. Heard Shri V.J. Mathew, learned Senior Counsel for the petitioners and Shri Joseph Markose, learned Senior Counsel for the respondents 1 to 4. 10. Learned Senior Counsel for the petitioners invited my attention to the averments in I.A. NO. 16082/2011 filed on 10.10.2011 and the notification issued by the TAMP produced as Ext.P16 therein. It is pointed out that the said notification is dated 30.12.2008 and issued in terms of the provisions under Sections 48 and 49 of the Major Port Trust Act fixing, interalia, the rates for various services to be rendered by the Port Trust. The same is effective from 3.12.2007 as evident from para 11(xvii). The TAMP, as per the said notification, had approved the Tug charges for SPM operation which was notified by the Cochin Port Trust as per Ext.P10 circular. The contention now raised is that the services of the two hired WPC.12119/2008 6 Tugs were provided by the Port Trust for the period from 16.11.2007 to 20.11.2007. Ext.P16 will show that the TAMP approved hire charges for the tugs is only US $ 825.18 per hour for foreign going vessels for the period from 3.12.2007 to 30.9.2008. Thus, the retrospective effect of the notification is only from 3.12.2007. Therefore, for the period from 16.11.2007 to 20.11.2007 the then existing TAMP approved scale of rates have to be applied as far as the petitioners are concerned. It is therefore pointed out that even the payment of Rs.38,22,038/- is in excess and accordingly a direction is sought to reimburse the said amount itself with interest. 11. A counter affidavit has been filed by the first respondent to the above application. Learned Senior Counsel for the petitioners, relying upon Sections 42 and 48 of the Major Port Trusts Act, and the judgment of the Apex Court in **Visakhapatnam Port Trust and another v. M/s. Ram Bahadur Thakur Pvt. Ltd.** (1997 KHC 865), that of a Division Bench of this Court in **W.H.D' Cruz & Sons v. Board of Trustees of the Port of Cochin** (2009 (1) KLT 494) and that of a learned Single Judge of the High Court of Goa, Daman & Diu in **Chowgule & Co. Pvt. Ltd. v. The Board of Trustees of the Port of Mormugan** (AIR 1974 Goa, Daman & Diu 10), contended that the Port Trust cannot fix their own rates for any WPC.12119/2008 7 items of work. The amount claimed is towards the activity provided under Section 42(e), specifically 'mooring'. It is therefore submitted that since Section 48 directs framing of scale of rates for the service performed by the Port, Exts.P10 and P16 cannot have any application for any period prior to the appointed date therein, and therefore it is pointed out that the rates can be applied only as per Ext.R1(b) produced along with the counter affidavit filed by the Port Trust and going by the same, the rate applicable is under Chapter V, under the heading “Miscellaneous Charges” and against item 3 “Mooring Tug” the amount shown is Rs.13300-. It is therefore submitted that as Ext.P16 has no retrospective effect for the crucial period herein, the rate can only be Rs.13300/- per hour. My attention was also invited to Ext.P4 and other communications in the matter. 12. Learned Senior Counsel for the Cochin Port Trust submitted that the services rendered herein required hiring of two other tugs for salvage, obviously, and the same will not come within the meaning of the word 'mooring'. My attention was invited to the averments in the counter affidavit filed by the Port Trust in the matter. 13. In the counter affidavit filed by the first respondent dated 20.7.2009 the stand taken in paragraph 3 is that due to sheer negligence of the master of the vessel, the vessel drifted away from the channel and happened to be grounded. For the salvage of the vessel the tugs belonging WPC.12119/2008 8 to the Port were put into operation, viz. Tugs Baali, Kodungallore and Balavan. Apart from the above, two other tugs hired by the Port for BPCL - KR's Single Point Mooring (SPM) Operation viz. Tug MT Shiv and Tug Ocean Symphony were also used. As regards the hire charges payable by a private party for the use of these hired Tugs, the Board has taken into consideration various aspects such as cost of fuel, 10% of overhead charges of hire charges and other relevant cost factors and fixed adhoc hire charges. Learned Senior Counsel invited my attention to the relevant clauses of the notification issued by the TAMP dated 28.3.2005, viz. clauses 2.17.1 to 2.17.4. It is stated that this is a case where a specific tariff for salvage operations is not available in the notified scale of rates and in such cases the port can submit a suitable proposal and under clause 2.17.2, simultaneously with the submission of proposal, the proposed rate can be levied on an ad hoc basis till the rate is finally notified. It is stated that by clause 2.17.4 the final rate fixed by the TAMP will ordinarily be effective only prospectively. The interim rate adopted in an ad hoc manner will be recognised as such unless it is found to be excessive requiring some moderation retrospectively. Herein, the interim rate was fixed and accordingly the demands were made and as per the TAMP notification it is now charged at the rate of US $ 825.18 and therefore the same is perfectly justified. WPC.12119/2008 9 14. Sections 42 and 48 of the Major Port Trusts Act will govern the matter. Section 42 is under the heading “Performance of services by Board or other person” and the services which can be undertaken by the Board are provided under sub heading (a) to (f). Item (e) is “piloting, hauling, mooring, remooring, hooking, or measuring of vessels or any other service in respect of vessels.” Section 48 of the Act authorises the TAMP to frame a scale of rates at which, and a statement of conditions under which, any of the services specified therein shall be performed by a Board and item (e) relates to “any other service in respect of vessels, passengers or goods .” Therefore, it is submitted by the learned Senior Counsel for the Port Trust that the rate fixed is reasonable. 15. Learned Senior Counsel for the petitioners submitted that what was charged is not for salvage operation but for the entire activities undertaken by the Port and hence it should be at a rate as reflected in any of the notifications for the relevant period. It is pointed out that even if the Port Trust can demand the hire charges, they can demand only at the rates approved by the TAMP for the relevant period and beyond that there is no power for them. It is also submitted that the activity will come only under the heading 'mooring'. 16. Evidently, under Sections 42 and 48 of the Act, the various services to be performed by the Board are provided and the scales of rates WPC.12119/2008 10 are also to be specified. The scales will have to be fixed by the Port Trust in accordance with the TAMP approved rate. That the vessel was grounded, is an admitted fact in the writ petition. Various operations had to be done for salvaging it. Whether the rates charged are covered by the notification issued by the TAMP, is a disputed question now. As far as the petitioners are concerned, they are seeking implementation of Ext.R1(b) rates which according to the learned Senior Counsel for the Port Trust, will not apply herein as the activities provided therein have nothing to do with the salvage operation undertaken by the Port. 17. In view of these disputes and since TAMP is the proper authority which fixes the scales of rates for any of the services, and this being an item of service rendered by the Port Trust, the additional fifth respondent will be perfectly justified in going into the matter for taking a proper decision. Already, the petitioners have filed a detailed representation as per Ext.P9 produced in the writ petition. There is no counter affidavit by the additional fifth respondent with regard to the controversy raised in the writ petition. 18. Accordingly, the writ petition is disposed of with the following directions: The petitioners and respondents 1 to 4 herein will forward their claims by filing appropriate statements before the additional fifth respondent within a period of one month from the date of receipt of a copy WPC.12119/2008 11 of this judgment. The additional fifth respondent will consider the whole aspects of the claim based on the pleas raised by the respective parties and find out whether the item of service rendered by the Port Trust is covered by the various notifications issued by the TAMP and if not, will fix scale of rates applicable for the service rendered by the Port Trust for the salvage operations and other related activities. The same will be communicated duly to the respective parties. This shall be done within a further period of six months. The whole liability for payment of the amount by the petitioners will depend upon the said decision. The writ petition is disposed of as above. No costs. ## **(T.R. Ramachandran Nair, Judge.)** ## **kav/**