If the consignee of a shipment does not take delivery of the cargo, then the liability to pay demurrage and port charges for warehousing will fall on the agent of the ship owner or the steamer agent. The Supreme Court clarified this position last week in a batch of appeals against Bombay and Calcutta High Court judgments in the case, Forbes Campbell & Co v. Board of Trustees.
Supreme Court in Forbes Campbell & Co v. Board of Trustees clarified that when the consignee of a shipment does not take delivery of the cargo the liability to pay demurrage and port charges for warehousing will fall on the agent of the ship owner or the steamer agent.
In one typical case, the consignee of the goods did not clear it nor responded to any of the notices issued by the port authorities. Therefore, authorities sold the goods by public auction after a few years. Normally, the amount due is recovered from the sale by auction. But in these cases, the amounts fetched fell short of the total charges payable, leading to litigation. The port authorities filed a suit against the steamer agent for the balance amount. However, he suit was dismissed.
Port authorities appealed to the High Court, which subsequently held that the steamer agent was liable to the amounts fetched fell short of the total charges payable. The agents moved the Supreme Court arguing that under the provisions of the Major Port Trust Act and the bylaws no liability is cast either on the ship owner or his agent for payment of demurrage and port charges. The Supreme Court rejected this contention and dismissed the appeals.