(By V.M. Syam Kumar, Advocate, Cochin.) (Lecturer for Maritime Law, National University for Advanced Legal Studies, Kochi.)
Port Trusts have no power under the Major Port Trusts Act to enforce payment under a contract without first crystallizing the liability and quantum of damages by a process known to law- held the High Court of Kerala on 19.9.2008. The said dictum was laid down by the Hon’ble High Court of Kerala in a Writ Petition filed by a Clearing and Forwarding agent challenging the demand made by Cochin Port Trust to pay a certain amount of money towards the purported damages suffered by the Board due to fire in one of its ware houses which had been leased out to the Clearing and Forwarding agency. The Port Trust had threatened to suspend the operations of the Clearing and Forwarding if the amount of Rs.21,37,500/- demanded is not paid within 7 days. The Hon’ble High Court quashed the said demand made by the Port Trust and in the judgment appreciating the contentions raised on behalf of the Petitioner held that
“…there is no provision any where in the Major Port Trusts Act enabling the Port Trust to unilaterally fix, demand and recover damages in respect of leased premises and therefore, the demand itself by Ext. P14 is without jurisdiction”
“ ..even assuming that the Cochin Port Trust does have power to unilaterally fix and recover damages in respect of leased premises for non-payment of such damages, they cannot suspend statutory services rendered by the Port Trust to the petitioner for non-payment of the damages demanded.”
After considering the rival contentions the Hon’ble Court held that
“Certainly under sec.49 of the Major Port Trusts Act, the authority under the Major Port Trusts Act has the power to frame scale of rates for leasing of land or shed by owners of goods imported or intended for export or by steamer agents and for any other use of land, building, works, vessels or appliances belonging to or provided by the Board. The fact that Sec.49 provides for fixing of scales may show that the Board has powers to lease lands or sheds belonging to the Board to owners of goods or steamer agents. Notwithstanding the same, it cannot be said that such leasing of storage space is a statutory function. Leasing of the properties belonging to the Port Trust is purely a contract unconnected with the provisions of the Major Port Trusts Act. The Act does not provide for recovery of damages for breach of such contract for lease. That being so without first getting the liability for and quantum of damages (sic – fixed) by a process known to law, the port Trust cannot enforce payment of the same by the Petitioner. Further, in so far as respondents 1 & 2 have no case that the petitioner has violated any terms and conditions of the Major Port Trusts Act in respect of the clearing and forwarding agency, the non-payment of the unilateral demand for damages cannot be a reason for suspending other services being rendered by the respondents 1 & 2 to the petitioner in accordance with the Major Port Trusts Act. Therefore, clearly Ext. P14 is without jurisdiction. Accordingly, the same is quashed. However, this shall not preclude respondents 1 &2 from recovering any damages caused to their warehouse by proceeding in accordance with law.”
“…there is no provision any where in the Major Port Trusts Act enabling the Port Trust to unilaterally fix, demand and recover damages in respect of leased premises and therefore, the demand itself by Ext. P14 is without jurisdiction”
“ ..even assuming that the Cochin Port Trust does have power to unilaterally fix and recover damages in respect of leased premises for non-payment of such damages, they cannot suspend statutory services rendered by the Port Trust to the petitioner for non-payment of the damages demanded.”
After considering the rival contentions the Hon’ble Court held that
“Certainly under sec.49 of the Major Port Trusts Act, the authority under the Major Port Trusts Act has the power to frame scale of rates for leasing of land or shed by owners of goods imported or intended for export or by steamer agents and for any other use of land, building, works, vessels or appliances belonging to or provided by the Board. The fact that Sec.49 provides for fixing of scales may show that the Board has powers to lease lands or sheds belonging to the Board to owners of goods or steamer agents. Notwithstanding the same, it cannot be said that such leasing of storage space is a statutory function. Leasing of the properties belonging to the Port Trust is purely a contract unconnected with the provisions of the Major Port Trusts Act. The Act does not provide for recovery of damages for breach of such contract for lease. That being so without first getting the liability for and quantum of damages (sic – fixed) by a process known to law, the port Trust cannot enforce payment of the same by the Petitioner. Further, in so far as respondents 1 & 2 have no case that the petitioner has violated any terms and conditions of the Major Port Trusts Act in respect of the clearing and forwarding agency, the non-payment of the unilateral demand for damages cannot be a reason for suspending other services being rendered by the respondents 1 & 2 to the petitioner in accordance with the Major Port Trusts Act. Therefore, clearly Ext. P14 is without jurisdiction. Accordingly, the same is quashed. However, this shall not preclude respondents 1 &2 from recovering any damages caused to their warehouse by proceeding in accordance with law.”
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