As per case facts, JSW Steel, importing iron ore via barges, faced a situation where one barge, M.V. Satyam, sank, obstructing port navigation. The Mumbai Port Trust (MPT) issued a ...
WP_2127_96.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2127 OF 1996
JSW Steel Limited formerly known as ISPAT
Industries Limited … Petitioner
vs.
The Board of Trustees of the Mumbai Port Trust
and others … Respondents
WITH
INTERIM APPLICATION (L) NO.17073 OF 2025
WITH
INTERIM APPLICATION (L) NO.29912 OF 2025
WITH
INTERIM APPLICATION (L) NO.13670 OF 2025
IN
WRIT PETITION NO.2127 OF 1996
---
Mr. Surel Shah, Senior Advocate a/w. Ms. Fatema Kachwalla and Ms.Meher
Mistri, i/b. J. Sagar Associates for petitioner and for applicant in
IAL/17073/2025 and IAL/29912/2025.
Mr. Venkatesh Dhond, Senior Advocate a/w. Mr. Dhruva Gandhi and Ms.
Heenal Wadhwa, i/b. The Law Point for respondent No.1.
Mr. S. Shamim a/w. Mr. Murtuza Slatewala, i/b. S. Shamim and Co. for
respondent No.2.
Mr. Shyam Kapadia a/w. Mr. Vikas V. Warekar and Mr. Shamant Satia, i/b.
Warekar and Warekar for respondent No.3 and for applicant in
IAL/13670/2025.
CORAM : MANISH PITALE &
SHREERAM V. SHIRSAT, JJ.
Reserved on : FEBRUARY 17, 2026
Pronounced on : APRIL 10, 2026
JUDGEMENT : (Per Justice Manish Pitale)
. The proceedings in this petition were remitted by the Supreme
Court by its order dated 14.02.2025, after setting aside order dated
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13.08.2021 passed by a Division Bench of this Court, disposing of the
writ petition as infructuous, on the basis of the events that took place
during the pendency of the petition. The Supreme Court found that
the writ petition could not have been disposed of, as a pure question
of law was required to be decided in the light of Section 14 of the
Indian Ports Act, 1908 (for short ‘the said Act’) and that in that
context, the
lis between the parties was very much alive. The
Supreme Court requested this Court to give priority to the matter for
disposing it of expeditiously. In this backdrop, the writ petition was
taken up for hearing and disposal.
2. The petitioner, formerly known as ISPAT Industries Limited,
was engaged in the business of manufacturing steel at its plant
located at Dolvi, Dharamatar, Raigad and for the said purpose, it was
required to import large quantities of iron ore. The petitioner
constructed a private jetty at Dharamatar and it’s cargo was being
transported through the jetty to the said plant from waters upon
which the respondent No.1 - Mumbai Port Trust (MPT), formerly
known as Bombay Port Trust, was having control. As large vessels
could not directly access the jetty, the cargo was required to be
discharged at anchorage outside the port limits of respondent No.1 –
MPT and it had to be transported to the petitioner’s jetty through the
waters of the port in small barges. During monsoon season, the
petitioner had to conduct its lighterage operations from Jawaharlal
Nehru Port Trust (JNPT) anchorage to a jetty at Dharamatar.
3. A number of communications were exchanged between the
petitioner and the respondent No.1 - MPT for permission to the
petitioner to use the said waters for transporting cargo in barges
from larger vessels outside the port limit to the petitioner’s jetty on
payment of applicable charges. In this context, on 27.09.1994, the
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petitioner executed a contract with the respondent No.2 - N. S.
Guzder & Co., under which the said respondent No.2 was responsible
for providing barges for transporting the said cargo of the petitioner.
Respondent No.3 - Shivam Engineers executed a memorandum of
understanding (for short, ‘MOU’) with the respondent No.2 to
provide barges, including a barge called M. V. Satyam on a time
charter basis. On 09.01.1995, requisite permission was granted to
the said barge M. V. Satyam under the provisions of the said Act to
move in the said waters under the control of the respondent No.1 -
MPT.
4. On 11.04.1995, the said barge M. V. Satyam, carrying iron ore
from a larger vessel M. V. Aditya Gaurav to the petitioner’s jetty, sank
in the harbour at anchorage W-1. In this backdrop, on 19.04.1995,
the respondent No.1, through its Deputy Conservator, issued a notice
addressed to the petitioner and respondent Nos.2 and 3 under
Section 14(1) of the said Act, calling upon them to raise and remove
the wreck of the said barge M. V. Satyam within 30 days from the
date it sank, so that the wreck impeding navigation of vessels
entering or leaving the port of Mumbai and the Jawaharlal Nehru
Port, would be removed. The respondent No.1 - MPT further called
upon the noticees to deposit a sum of ₹ 70 lakhs as security, to
ensure that the said wreck was raised or removed within the
stipulated period of time.
5. A number of communications were exchanged between the
parties and meetings were held in the context of the situation created
by sinking of barge M. V. Satyam. On 30.09.1996, the petitioner sent
a communication to the Deputy Conservator of respondent No.1 -
MPT that in the light of the fact that under Section 14 of the said Act,
only the ‘owner’ of the barge could be held responsible for removal of
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such wreckage, the petitioner could not be held responsible and that
the demand made by the respondent No.1 – MPT for making
financial contribution towards removal of the wreckage, was not
acceptable.
6. In this backdrop, on 14.10.1996, the Deputy Conservator of
the respondent No.1 - MPT sent a communication to the petitioner
referring to the sinking of barge M. V. Satyam and the failure on the
part of the petitioner to deposit ₹ 70 lakhs, in terms of the notice
dated 19.04.1995. Thereupon, it was stated that since the petitioner
had refused to participate in the tender process for salvaging the
wreck, the permission granted to the petitioner for transit of barges
for lighterage operations at the Mumbai harbour, stood suspended
with immediate effect.
7. Since this had an adverse impact on the very business of the
petitioner, it was constrained to file the instant Writ Petition No.2127
of 1996, before this Court. The petitioner prayed for a writ against
the respondent No.1, prohibiting it from insisting on the petitioner
removing the said wreck of barge M. V. Satyam or depositing amount
in that context and also prayed for restraining the respondent No.1
from preventing the petitioner from availing the services of the MPT
and its waters. The petitioner also prayed for interim stay of the
aforesaid communication dated 14.10.1996.
8. On 31.10.1996, this Court, while admitting the writ petition,
granted ad-interim relief in terms of prayer clause (c), thereby
staying the operation of the impugned communication dated
14.10.1996, subject to the petitioner depositing a sum of ₹ 70 lakhs
in this Court. It is to be noted that prior to the aforesaid
communication dated 14.10.1996 being issued by the respondent
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No.1 - MPT, a number of communications were exchanged between
the parties, with regard to raising or removing of the wreckage. The
respondent No.1 - MPT specifically relies upon such communications
in support of its contentions raised before this Court during the
course of hearing.
9. It is the matter of record that the respondent No.1 - MPT called
for tenders for removing the wreckage and for undertaking salvage
operations. After initial tenders failed, eventually, one Madgavkar
Salvage was awarded the contract on ‘no cure - no pay’ basis for a
sum of ₹ 87 lakhs. On 29.01.1998, the said contractor - Madgavkar
Salvage completed the salvage operations and raised a bill with
regard to the same. Respondent No.1 - MPT cleared the bill.
10. This writ petition came up for hearing on 13.08.2021, when a
Division Bench of this Court took into consideration the aforesaid
fact of the salvage operations being completed. It was noted that the
respondent No.1 - MPT had already paid the amount to Madgavkar
Salvage for the said salvage operations and that a notice of motion
was filed on behalf of the said respondent for withdrawing the
amount deposited by the petitioner.
11. Having taken into consideration the events that took place
during the pendency of the writ petition, the Division Bench of this
Court held that the petition was rendered infructuous and disposed
of the same, as well as the notice of motion filed by the said
respondent for withdrawal of the amount by permitting the said
respondent to withdraw the amount deposited in this Court along
with accrued interest, without prejudice to the rights and contentions
of the parties. It was further held that since disputed questions of
facts were involved and in the backdrop of the writ petition having
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been rendered infructuous, it was open for the petitioner to file a suit
against the respondents for refund / recovery of ₹ 70 lakhs along
with accrued interest, if so advised. The remedies of the respondent
No.1 to recover further amounts, if any, were also kept open.
12. Aggrieved by the said order of this Court, the petitioner filed
Special Leave Petition (C) No.15490 of 2021. On 14.02.2025, the
Supreme Court found the approach adopted by this Court, while
disposing of the writ petition by the order dated 13.08.2021, as
erroneous, holding that the
lis between the parties was very much
alive. It was held that a pure question of law i.e. on whom the
liability for clearing the wreckage was to be fastened, was raised and
that it ought to have been decided by this Court, as the petitioner
had raised a legal objection giving rise to the pure legal issue, which
ought to have been answered. On this basis, the said order dated
13.08.2021 passed by this Court, was set aside and the matter was
remanded to this Court with a request for expeditious disposal.
13. Mr. Surel Shah, the learned senior counsel appearing for the
petitioner submitted that notice dated 19.04.1995 issued under
Section 14 of the said Act, although addressed to the petitioner also,
could not be the basis to foist liability on the petitioner for raising or
removing the wreckage of barge M. V. Satyam, as the petitioner was
not the owner of the said barge. It was submitted that the said barge
M. V. Satyam qualified to be a ‘vessel’ under Section 3(7) of the said
Act and since only the ‘owner’ of the vessel could be held liable
under Section 14 thereof, there was no question of the petitioner
being held liable, in the facts and circumstances of present case.
Attention of this Court was specifically invited to the order dated
14.02.2025, whereby the Supreme Court had remitted the present
matter to this Court. It was submitted that the Supreme Court
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specifically held that the
lis between the parties was very much alive
and that a pure question of law arose in the matter, pertaining to the
issue as to on whom the liability for clearing the wreckage, was to be
fastened. By referring to the contents of Section 14 of the said Act, it
was submitted that apart from the said provision specifically
requiring notice to be issued to the ‘owner’ of the vessel, a
mechanism was provided as to in what manner the expenses for
raising, removal or destroying the wreckage were to be fastened.
14. It was submitted that the petitioner had specifically denied its
liability on the ground that it was not the owner of the barge M. V.
Satyam. It was submitted that the documents on record clearly
demonstrated that the respondent No.3 was the owner of the said
barge and therefore, the petitioner could not be held liable. It was
submitted that the emphasis placed on behalf of respondent No.1 -
MPT on communications exchanged with the petitioner was
misplaced and the ownership of the vessel cannot be fastened on the
petitioner merely on the basis of such exchange of communications.
It was submitted that the petitioner had only engaged the services of
the said barge owned by respondent No.3, through respondent No.2
and that the MOU executed between respondent Nos.2 and 3
demonstrated that the barge was hired on a time charter basis,
wherein the petitioner had no commercial control over the barge.
15. Attention of this Court was also invited to the letter dated
09.01.1995 issued by the Deputy Conservator of respondent No.1 -
MPT, addressed to respondent No.2, granting permission for the said
barge M. V. Satyam to move in Bombay harbour and its waters. On
this basis, it was submitted that the proceeding under Section 14 of
the said Act could be undertaken only in respect of the owner of the
barge and not the petitioner and that the notice was wrongly issued
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to the petitioner.
16. The learned senior counsel appearing for the petitioner further
referred to the contents of the affidavit filed on behalf of respondent
No.1 - MPT in Notice of Motion No.374 of 1998 filed in the present
petition, wherein it was specifically stated that respondent Nos.2 and
3 were the owners of the barge and that they were liable to secure
respondent No.1 - MPT for the expenses incurred for removal of
salvage. It was submitted that therefore, respondent No.1 - MPT
itself conceded that the petitioner was not the owner of the barge.
17. Reliance was placed on the judgement of the Supreme Court in
the case of
The Union of India vs. Gosalia Shipping (Pvt.) Ltd.,
(1978) 3 SCC 23, to elaborate as to what could be said to be a ‘time
charter party’ as opposed to a ‘voyage charter party’. It was submitted
that the instant case pertained to a time charter party, wherein the
ownership and possession of the vessel (in this case, M. V. Satyam)
remained with the owner i.e. respondent No.3. It was emphasized
that the petitioner was never in commercial control of the said barge
and that it could never be said to be a disponent owner. On this
basis, it was submitted that respondent No.1 - MPT cannot rely upon
judgement of this Court in the case of
Liverpool and London
Steamship Protection and Indemnity Association Ltd. vs. m. t.
Symphony and others
,
(2003) 4 Mh.L.J. 708, judgement of the Delhi
High Court in the case of
Sara International Ltd. vs. Arab Shipping
Co. (P) Ltd.
,
2009 (113) DRJ 717 and judgement of the Karnataka
High Court in the case of
Zurbagan Shipping LLC vs. C. S. Flourish
and others
(
judgement and order dated 31.10.2025 passed in
Original Side Appeal No.4 of 2025).
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18. The learned senior counsel appearing for the petitioner relied
upon judgements of the Calcutta High Court in the cases of
Lee
Young Sang and another vs. The Board of Trustees for the Port of
Calcutta
,
1997 SCC OnLine Cal 231 and Sri Maharshi Shipping
Private Limited and another vs. Syama Prasad Mookerjee Port,
Kolkata and others
,
2023 SCC OnLine Cal 5602, to submit that
Section 14 of the said Act required the ‘owner’ of the vessel to clear
the salvage and this supported the contentions raised on behalf of
the petitioner in this petition. Reliance was also placed on the
judgement of this Court, in the case of
Oil and Natural Gas
Corporation Ltd. vs. Osprey Underwriting Agencies Ltd. and others
,
(1998) 3 All MR 713, to contend that the liability of removing the
wreckage and salvage could not be foisted on the petitioner, in the
facts and circumstances of the present case.
19. Since respondent No.1 - MPT sought to justify its stand on
materials other than the contents of the said notice issued under
Section 14 of the said Act and reliance was sought to be placed on
Sections 10 to 12 thereof, it was submitted that the correctness or
otherwise of the said notice, could be tested only on the basis of the
contents thereof and not any other extraneous material. It was
further submitted that this was not a case of a wrong provision being
quoted or the source of power being available elsewhere for
respondent No.1 - MPT.
20. Reliance was placed on the judgements of the Supreme Court
in the cases of
Commissioner of Police, Bombay vs. Gordhandas
Bhanji
,
1951 SCC 1088 and Mohinder Singh Gill and another vs. The
Chief Election Commissioner, New Delhi and others
,
(1978) 1 SCC
405. It was also submitted that respondent No.1 - MPT was not
justified in relying upon the judgement of this Court in the case of
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Adani Ports and Special Economic Zone Limited vs. Board of Trustees
of Jawaharlal Nehru Port Authority and others
,
2022 SCC OnLine
Bom 1326 and judgements of the Supreme Court in the cases of
Assistant General Manager, State Bank of India and another vs. Tanya
Energy Enterprises, Through its Managing Partner Shri Alluri
Lakshmi Narasimha Varma
(
judgement and order dated 15.09.2025
passed in Civil Appeal No.11134 of 2025) and Chairman, All India
Railway Recruitment Board and another vs. K. Shyam Kumar and
others
,
(2010) 6 SCC 614, for the reason that in the said cases, the
Courts found that there was sufficient material in the pleadings and
documents to test the contentions raised by the petitioner,
challenging action undertaken by instrumentalities of the State.
21. In the said cases, the Courts found that such pleadings and
material could certainly be taken into account, even if the position of
law laid down by the Supreme Court in the aforesaid cases of
Commissioner of Police, Bombay vs. Gordhandas Bhanji (supra) and
Mohinder Singh Gill and another vs. The Chief Election
Commissioner, New Delhi and others (supra), was to be taken into
consideration. But, in the present case, there are no pleadings or any
documents on record to show as to how respondent No.1 - MPT can
now seek to rely upon Sections 10 to 12 of the said Act, to justify the
notice specifically issued under Section 14 thereof. It was submitted
that in this regard, reliance placed on a plethora of other judgements
on behalf of respondent No.1 - MPT, is also not justified.
22. It was further submitted that the contention raised on behalf of
respondent No.1 - MPT by relying upon the provisions of the
Merchant Shipping Act, 1958 (for short, Merchant Shipping Act), is
also not justified, as the aforesaid point has been raised in the
written submissions at the time of final hearing, with no basis for the
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same in the pleadings in the writ petition. It was submitted that the
said respondent was trying to justify its actions against the petitioner
by taking recourse to the said statute, which does not find mention
either in the said notice dated 19.04.1995 issued under Section 14 of
the said Act, or in any other affidavit or documents on record.
Without prejudice to the said submission, it was submitted that a
proper reading of the provisions of the Merchant Shipping Act,
including Section 402 thereof, on which reliance was placed by
respondent No.1 - MPT, would show that the same cannot apply to
the facts and circumstances of the present case.
23. Section 402 of the Merchant Shipping Act pertains to services
rendered for recovering salvage, cargo or wreck and it provides for a
specific mechanism for the same. It has to be read with the Merchant
Shipping (Wrecks and Salvage) Rules, 1974 (for short, the Merchant
Shipping Rules) that provide a further elaborate mechanism to deal
with such situations. Any action thereunder presupposes certain steps
to be taken, which admittedly were not taken by respondent No.1 -
MPT and therefore, at this belated stage of hearing of the writ
petition, the said respondent cannot be allowed to rely upon the said
provisions to justify its action against the petitioner.
24. In this regard also, reliance was placed on the aforementioned
contention that the action of respondent No.1 - MPT could not be
justified on the basis of provisions of law not relied upon and the
pleadings, affidavit or material on record, making no reference to the
same. It was further submitted that even in the cases where this
Court and Supreme Court looked at pleadings, affidavit and material
available on record to test the correctness or otherwise of the
impugned action, a measure of public interest was involved, while in
the present case, the only question was regarding the identification
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of the party liable under Section 14 of the said Act.
25. The learned senior counsel appearing for the petitioner further
submitted that respondent No.1 - MPT could certainly not rely upon
the principles of
Quantum Meruit and Polluter Pays, as the said
principles are wholly inapplicable to the facts of the present case. It
was nowhere the case of the said respondent that any pollution was
caused by the incident in question and that action in that regard was
contemplated, when notice was issued under Section 14 of the said
Act. Similarly, respondent No.1 - MPT was not providing any service
in respect of removal of wreckage of barge M. V. Satyam to invoke
the
Quantum Meruit principle.
26. It was further submitted that while remanding the matter, the
Supreme Court had also clearly indicated that the petitioner was
liable to be compensated in the event the petition succeeded, as the
respondent No.1 - MPT had already withdrawn the amount
deposited by the petitioner as per order passed by this Court. It was
submitted that after the writ petition was dismissed as per the earlier
order passed by this Court, which was set aside by the Supreme
Court in appeal, the said respondent MPT had withdrawn the
amount deposited by the petitioner along with interest i.e. ₹
4,09,25,764. It was submitted that in the event, this Court accepts
the contentions of the petitioner and sets aside the impugned order,
thereby allowing the present petition, the said respondent ought to
be directed to pay the said amount to the petitioner.
27. On the other hand, Mr. Venkatesh Dhond, learned senior
counsel appearing for respondent No.1 - MPT submitted that the
communications exchanged between the petitioner and the said
respondent show that at every stage, the petitioner referred to the
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barges used for lighterage operations, as ‘our barges’. These included
the barge M. V. Satyam that sank, leading to the controversy between
the parties. It was emphasized that permission was also granted for
the said barge M. V. Satyam to be used in the waters under the
control of the said respondent, on applications made by the
petitioner in that regard. The conduct of the petitioner, immediately
after the incident of sinking of the said barge, is also significant, as it
demonstrates that in a series of meetings held with the said
respondent, the petitioner represented itself as the owner of the
barge and also accepted to bear the liability of costs to be incurred
for removal of wreckage of the said barge. In principle, the petitioner
agreed to bear the expenses for removal of the cargo also and this
was without any reservation.
28. In this regard, it was submitted that in its reply to the Notice of
Motion No.374 of 1998 filed by respondent No.3, the petitioner
adopted a new stand of foisting liability on the ‘owner’ of the barge,
only in order to wriggle out of its responsibility and liability. It was
further submitted that when communications were exchanged
between the petitioner and respondent No.1 MPT, in respect of
services of salvage companies sought to be engaged, the petitioner
accepted its liability. Although the initial attempts to enter into
contract with salvage companies, failed, eventually Madgavkar
Salvage Company was engaged, which successfully removed the
salvage and raised a bill on the respondent No.1 MPT. In the facts
and circumstances of the present case, the petitioner ought to have
borne the entire liability.
29. It was submitted that the petitioner was deliberately
interpreting Section 14 of the said Act in a hyper-technical manner,
to claim that it would foist liability only on the ‘registered owner’ of
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the vessel. Reliance was placed on the judgement of this Court in the
case of Liverpool and London Steamship Protection and Indemnity
Association Ltd. vs. m. t. Symphony and others (supra), judgement of
the Delhi High Court in the case of Sara International Ltd. vs. Arab
Shipping Co. (P) Ltd. (supra) and judgement of the Karnataka High
Court in the case of Zurbagan Shipping LLC vs. C. S. Flourish and
others (supra), to contend that the petitioner was the disponent
owner, as it had engaged the services of the barge M. V. Satyam for
transporting its cargo of iron ore between the mother ship to its jetty.
This clearly demonstrated the commercial control over the said barge
being exercised by the petitioner and therefore, as a disponent
owner, it was liable to bear the expenses for removal of the vessel
along with the cargo, under Section 14 of the said Act.
30. It was further submitted that the petitioner cannot escape
liability on the ground that the subject notice dated 19.04.1995
mentioned only Section 14 of the said Act. Merely mentioning of a
wrong provision would not lead to a conclusion that respondent No.1
- MPT did not have any source of power to call upon the petitioner to
bear the liability of removal of wreckage of the said vessel.
31. It was submitted that the petitioner cannot be allowed to
interpret the law laid down by the Supreme Court in the cases of
Commissioner of Police, Bombay vs. Gordhandas Bhanji (supra) and
Mohinder Singh Gill and another vs. The Chief Election
Commissioner, New Delhi and others (supra), to contend that other
than the contents of the said notice dated 19.04.1995, this Court
cannot look at any other material. Much emphasis was placed on the
judgement of this Court in the case of Adani Ports and Special
Economic Zone Limited vs. Board of Trustees of Jawaharlal Nehru
Port Authority and others (supra) and judgement of the Supreme
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Court in the case of Assistant General Manager, State Bank of India
and another vs. Tanya Energy Enterprises, Through its Managing
Partner Shri Alluri Lakshmi Narasimha Varma (supra), to contend
that this Court could indeed look at all the material and documents
on record, in order to test whether the respondent No.1 - MPT was
justified in calling upon the petitioner to bear the liability of removal
of wreckage.
32. In support of the said propositions, reliance was placed on
further judgements of the Supreme Court in the cases of
N. Mani vs.
Sangeetha Theatre and others,
(2004) 12 SCC 278, P. K. Palanisamy
vs. N. Arunmugham and another
,
(2009) 9 SCC 173 and
Commissioner of Customs & Central Excise, Goa vs. Pankaj Jaju,
2013 SCC OnLine Bom 2063. Reliance was also placed on the
judgment of the Supreme Court in the case of
Union of India and
another vs. Mohit Minerals Private Limited,
(2022) 10 SCC 700, to
contend that non-reference to the source of power cannot vitiate its
exercise and application, so long as such source of power legally
exists.
33. The learned senior counsel appearing for respondent No.1 -
MPT relied upon Sections 10 to 12 of the said Act, to contend that
the source of power for the said respondent to foist liability on the
petitioner, was clearly available under the said provisions. The
material on record demonstrated that the cargo i.e. the iron ore
belonging to the petitioner along with the said vessel i.e. barge M. V.
Satyam, had created obstruction within the limits of the port and
therefore, the said respondent was well within its rights to call upon
the petitioner to make good the costs for removal of such
obstruction.
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34. It was further submitted that the petitioner was also liable
under the Merchant Shipping Act, particularly Section 402 thereof,
for the liability of removal of wreckage. It was submitted that when
services were provided for removal of vessel or cargo or equipment
of a wrecked vessel, the owner of the vessel was liable to pay
reasonable sum for salvage to the salvor. In the present case, since
the petitioner refused to bear the liability, the respondent No.1 - MPT
had to remove the wreckage by engaging the services of Madgavkar
Salvage. The amount charged by the said company was liable to be
paid by the petitioner and therefore, the source of power for the said
respondent, could also be located in the Merchant Shipping Act. It
was submitted that even if the petitioner claims that only respondent
No.3 can be treated as the owner of the vessel, the petitioner
continued to be the owner of the cargo i.e. the iron ore and
therefore, Section 402 of the Merchant Shipping Act clearly applies
to the facts of the present case. This was particularly so, as the
charges raised by the said Madgavkar Salvage pertained mainly to
the removal of the cargo, apart from removal of wreckage of the
vessel to remove the obstruction in the port.
35. The learned senior counsel for the respondent No.1 - MPT
further invoked the principles of
Quantum Meruit and Polluter Pays,
to contend that these were additional grounds on which the
petitioner ought to be held liable. On these aspects of the matter,
reliance was placed on the judgements of the Supreme Court in the
cases of
Alopi Parshad & Sons Ltd. vs. Union of India (
AIR 1960 SC
588) and Delhi Pollution Control Committee vs. Lodhi Property Co.
Ltd.
(
2025 SCC OnLine SC 1601).
36. Mr. S. Shamim, learned counsel appeared on behalf of
respondent No.2 and submitted that the said respondent could not
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be held liable in any manner.
37. Mr. Shyam Kapadia, learned counsel appeared on behalf of
respondent No.3 and submitted that sub-sections (1A), (1B), 2, 3
and 4 of Section 14 of the said Act lay down a stepwise mechanism,
with regard to the manner in which action is to be undertaken for
raising or removing the wrecked vessel, which is impeding
navigation. Such mechanism was never followed by respondent No.1
and therefore, there was no question of foisting any liability on
respondent No.3. Even with regard to the provisions of Merchant
Shipping Act and the Rules framed thereunder, it was submitted that
appropriate steps were required to be taken, wherein there was a
mechanism for dispute resolution and only upon undertaking such
steps, the liability could be foisted. It was submitted that therefore, in
the present petition filed by the petitioner, the respondent No.1 -
MPT cannot be permitted to make any claim against respondent
No.3. On this basis, it was submitted that this Court may consider
passing appropriate orders in the writ petition.
38. Having heard the learned counsel for the parties and in the
light of the present matter having been remitted by the Supreme
Court, it would be appropriate to first refer to the order dated
14.02.2025 passed by the Supreme Court in Appeal arising out of
Special Leave Petition (C) No.15490 of 2021. The Supreme Court,
while setting aside the earlier order dated 13.08.2021 passed by this
Court, disposing of this writ petition, observed as follows:
‘6. Having considered the matter, we find merit in the
submissions put forth by the appellant. The way the
High Court approached the issue appears to be
erroneous for the simple reason that the
lis was very
much alive, as a pure question of law stood raised i.e.,
on whom the liability for clearing the wreckage was to
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be fastened. The Impugned Order has not dealt with this
fundamental issue. When on a purely legal issue, the
appellant raised a legal objection, and also deposited the
amount demanded by respondent no.1 in the High
Court, in our considered view, the High Court was
required to answer the question of law. In this analysis,
no exercise was required involving disputed factual
questions. Moreover, the efflux of time is a result of
systemic delay, not due to any laches on the part of the
appellant.
7. xxx xxx xxx
8. In the above circumstances, we are unable to sustain the
order impugned. Accordingly, the same is set aside. WP
No.2127/1996 is revived. The matter is remanded to the
High Court to consider all issues on merits as raised in
the writ petition. As the monies deposited by the
appellant are stated to have already been withdrawn by
respondent no.1, were the appellant to eventually
succeed in the writ petition, the appellant would be
suitably compensated on this score.’
39. Thus, it is evident that this Court is required to consider a
specific question of law as to on whom the liability of clearing the
wreckage was to be fastened, under Section 14 of the said Act and if
the finding thereon is in favour of the petitioner, then it is to be
suitably compensated. This is particularly in the backdrop of the fact
that respondent No.1 - MPT withdrew the amount of ₹ 70 lakhs
deposited by the petitioner, after the present writ petition was
disposed of as per order dated 13.08.2021. It is undisputed that the
said amount with interest came to ₹ 4,09,25,764, which the
respondent No.1 - MPT had withdrawn.
40. Thus, the fundamental question for consideration in this writ
petition is, as to whether the challenge raised by the petitioner is
sustainable and whether the petitioner is justified in contending that
as per Section 14 of the said Act, it is not liable for removal of
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wreckage and consequently, for bearing the costs for the same. In
other words, the petitioner contends that the notice dated
19.04.1995 sent by the respondent No.1 - MPT was maintainable
only against the ‘owner’ of the barge M. V. Satyam i.e. the vessel
which sank and whose wreckage was to be removed.
41. On the basis of the documents on record, it is asserted that the
petitioner is not covered under the expression ‘owner’ and therefore,
on this very ground, the said notice is rendered unsustainable.
Consequently, the letter dated 14.10.1996 withdrawing the
permission granted to the petitioner to use waters under the
supervision and control of the respondent No.1 - MPT, is also
rendered unsustainable. The respondent No.1 has refuted the said
claim and it is asserted that in the facts and circumstances of the
present case, the petitioner stood covered under the expression
‘owner’ and that the hyper-technical contention raised on behalf of
the petitioner that the ‘owner’ has to be the ‘registered owner’, ought
not to be accepted.
42. In this context, it is necessary to refer to Section 14 of the said
Act, which reads as follows:
‘14.Raising or removal or wreck impeding navigation within limits
of Port:
(
1) If any vessel is wrecked, stranded or sunk in any port in such a
manner as to impede or likely to impede any navigation
thereof, the conservator shall give notice to the owner of the
vessel to raise, remove or destroy the vessel within such period
as may be specified in the notice and to furnish such adequate
security to the satisfaction of the conservator to ensure that the
vessel shall be raised, removed or destroyed within the said
period:
Provided that the conservator may extend such period to such
further period as he may consider necessary having regard to
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the circumstances of such case and the extent of its
impediment to navigation.
(
1A) Where the owner of any vessel to whom a notice has
been issued under sub-section (
1) fails to raise, remove
or destroy such vessel within the period specified in the
notice or the extended period or fails to furnish the
security required of him, the conservator may cause the
vessel to be raised, removed or destroyed.
(
1B) Notwithstanding anything contained in the foregoing
sub-sections, if the conservator is of the opinion that any
vessel which is wrecked, stranded or sunk in any port is
required to be immediately raised, removed or destroyed
for the purpose of uninterrupted navigation in such port,
he may, without giving any notice under sub-section (
1),
cause the vessel to be raised, removed or destroyed.
(
2) If any property recovered by a conservator acting under sub-
section (
1A) or sub-section (1B) is unclaimed or the person
claiming it fails to pay the reasonable expenses incurred by the
conservator under that sub-section and a further sum of
twenty per cent. of the amount of such expenses, the
conservator may sell the property by public auction, if the
property is of a perishable nature, forthwith, and, if it is not of
a perishable nature, at any time not less than thirty days after
the recovery thereof.
(
3) The expenses and further sum aforesaid shall be payable to the
conservator out of the sale-proceeds of the property, and the
balance shall be paid to the person entitled to the property
recovered, or, if no such person appears and claims the
balance, shall be held in deposit for payment, without interest,
to any person thereafter establishing his right thereto:
Provided that the person makes his claim within three years
from the date of the sale.
(
4) Where the sale proceeds of the property are not sufficient to
meet the expenses and further sum aforesaid, the owner of the
vessel at the time the vessel was wrecked, stranded or sunk
shall be liable to pay the deficiency to the conservator on
demand, and if the deficiency be not paid within one month of
such demand the conservator may recover the deficiency from
such owner in the manner laid down in sub-section (
2) of
section 57 for recovery of expenses and damages or in any
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other manner according as the deficiency does not or does
exceed one thousand rupees.’
43. There can be no dispute about the fact that the above-quoted
provision specifically uses the word ‘owner’. The said word is not
defined in the said Act. There can also be no dispute about the fact
that the definition of ‘vessel’ in Section 3(7) thereof, indeed covers
the said barge M. V. Satyam, which sank in the port waters, leading
to the controversy between the parties.
44. As to whether the petitioner can be said to be the owner of the
barge M. V. Satyam, will have to be decided on the basis of the
documents and material on record, which are undisputed.
Respondent No.1 - MPT has placed much reliance on letters dated
25.11.1993, 07.02.1994 and 16.03.1994, sent by the petitioner to
the said respondent, while seeking permission for operating barges,
in order to transport its cargo i.e. the iron ore from the mother vessel
to the jetty, for further transport to the plant of the petitioner. It was
emphasized that in each of such communications, the petitioner used
the expression ‘our barges’. According to respondent No.1 - MPT, this
demonstrates that even according to the petitioner, it was the owner
of the barges. The said argument is stated only to be rejected. Merely
because the petitioner used the expression ‘our barges’ in such
communications, while seeking permission for operation of barges in
the waters under the control of respondent No.1, would not foist
ownership in the petitioner in respect of the barges so used,
including the barge M. V. Satyam. The word ‘owner’ has a specific
connotation in law and reference to such letters/communications
cannot take the case of the said respondent any further.
45. The documents on record also show that the petitioner had
engaged the services of respondent No.2, an international freight
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forwarders company, for hiring barges in order to transport the cargo
from the mother vessel to the jetty. Respondent No.2 entered into the
aforesaid MOU with respondent No.3, which was the owner of the
barges, including the barge M. V. Satyam. The document granting
permission for operation of the barges dated 09.01.1995, shows that
the Deputy Conservator of respondent No.1 - MPT addressed the said
permission letter to respondent No.2, marking copies to its other
officers, including the Senior Dock Master and Chief Signalman at
the Port Signal Station.
46. Respondent No.3, in its affidavit filed in Notice of Motion
No.62 of 1997 filed in this writ petition, specifically stated that it
‘owned’ the barge M. V. Satyam and it was given on time charter to
respondent No.2 for a specific period of time and that the petitioner
had merely employed the services of respondent No.2. Such
statements were repeated by respondent No.3 in its affidavit in
Notice of Motion No.374 of 1998 filed in this writ petition,
specifically stating that it was true that respondent No.2 had
chartered the said barge M. V. Satyam, which was ‘owned’ by
respondent No.3 and that during one of its trips, the said barge sank.
47. Apart from this, the affidavit filed by respondent No.1 itself in
Notice of Motion No.62 of 1997 filed in this writ petition, also
specifically stated that respondent Nos.2 and 3 were ‘owners’ of the
barge M. V. Satyam and hence, they were liable. Such statements
make it abundantly clear that it was an admitted position that
respondent No.3 was the owner of the barge M. V. Satyam and it was
treated so by respondent No.1 - MPT itself. As a matter of fact, in the
notice dated 19.04.1995 issued by respondent No.1 in the context of
sinking of barge M. V. Satyam, the respondent No.3 was stated to be
the owner of the said barge and respondent No.2 was stated to be
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the charterer, while the petitioner was specifically stated to be the
‘principal employer’. Thus, it becomes clear that even as per
respondent No.1 - MPT, the owner of the barge M. V. Satyam was
respondent No.3 and there is no disputed question of fact regarding
the same.
48. Faced with this situation, it was claimed on behalf of
respondent No.1 - MPT that the petitioner was the ‘disponent owner’
of the barge M. V. Satyam and therefore, it cannot escape liability. In
the first place, there is no support for the proposition that the word
‘owner’ used in Section 14 of the said Act has to be read as a
‘disponent owner’. So long as the words used in the provision are
specific, their literal meaning is to be adopted, unless such an
approach leads to illogical and unsustainable consequences. This
Court does not find any reason to depart from adopting the literal
meaning of the word ‘owner’ used in Section 14 of the said Act.
49. Yet, even if the said contention raised on behalf of respondent
No.1 - MPT is to be considered in the facts and circumstances of the
present case, it will have to be examined as to what is the purport of
the expression ‘disponent owner’ and whether it can apply to the
petitioner in the present case.
50. In the case of Liverpool and London Steamship Protection and
Indemnity Association Ltd. vs. m. t. Symphony and others (supra), a
Division Bench of this Court had an occasion to consider the said
aspect of the matter and it was held that a disponent owner means a
person or a company that controls the commercial operation of a
ship and very often, such a disponent owner is a shipping line, which
time charters the ship and issues liner bills of lading to its owner.
51. In this context, a reference to the judgement of the Supreme
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Court in the case of
Epoch Enterrepots vs. M. V. Won FU,
(2003) 1
SCC 305, would be relevant. In the said case, the Supreme Court
considered the said aspect of a disponent owner and observed as
follows:
‘36. Even, however, assuming the agreement has in fact
been entered into by the disponent owner, unless
sufficient evidence is laid that the charter was by
demise, whereby the possession and control of the
vessel was given to the disponent owner, question of
pursuing the cause of action against the vessel
would not arise. Needless to add that charter parties
are of three kinds: (a) demise charter; (b) voyage
charter; and (c) time charter. Whereas in demise
charter, the vessel is given to the charterer who
thereafter takes complete control of the vessel
including manning the same, in both voyage charter
and time charter, master and crew are engaged by
the owner who act under the owner's instructions
but under the charterer's directions. Simply put,
voyage charter is making available the vessel for use
of carriage for a particular voyage and the time
charter correspondingly is where the vessel is made
available for carriage of cargo for a fixed period of
time. In the contextual facts, apart from the fixture
note, no other documentary support is available as
to whether ownership arose through a charter by
demise and possession and control of the vessel has
already been given to the disponent owner. The
facts disclose that the disponent was an intending
charterer of the vessel from the owner and it is on
expectancy of such a contract, the fixture note was
issued. There was as a matter of fact no charter
party or agreement with the charterer and some
eventuality in future is stated to be the basis of the
cause of action. It is on this score we think it
expedient to record that even upon assumption of
the appellant's case at its highest, no credence can
be attached thereto. The disponent owner was not a
demise charterer but it is on the happening of such
an event in future that such a fixture note has been
issued. In our view there is no sufficient evidence
available as regards the action in rem making the
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vessel liable in the contract said to have been
entered into, as recorded in the fixture note. It is in
the nature of a breach of contract and liability of the
vessel would not arise, though however, we are not
expressing any opinion as regards the
maintainability of an action in personam or its a
eventual success.’
52. In the instant case, the MOU on record shows that respondent
No.2 had chartered the barge M. V. Satyam belonging to respondent
No.3. It was a time charter, wherein respondent No.3, as the owner
of the barge M. V. Satyam, had chartered the same to respondent
No.2. In the above-quoted paragraph in the judgement of the
Supreme Court in the case of Epoch Enterrepots vs. M. V. Won FU
(
supra), a distinction has been drawn between a demise charter, a
voyage charter and a time charter. It is specifically observed that in
demise charter, the vessel is given to the charterer, who thereafter
takes complete control of the vessel, including manning the same,
while in voyage charter and time charter, the master and crew are
engaged by the owner and they act under the instructions of the
owner, but the directions of the charterer.
53. In the light of the said MOU placed on record and the
permission letter dated 09.01.1995 issued by respondent No.1 - MPT,
we find that respondent No.2 was the charterer, who had taken the
vessel i.e. barge M. V. Satyam on time charter from respondent No.3,
who was the owner of the same. The contents of the MOU show that
the master was provided by respondent No.3 and the charges of hire
were payable by respondent No.2 as the charterer. Thus, by no
stretch of imagination, can the petitioner be covered under the
expression ‘disponent owner’. It cannot be said that the petitioner
had complete control over the commercial operations of the vessel
i.e. barge M. V. Satyam.
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54. In this context, the petitioner is justified in relying upon the
judgement of the Supreme Court in the case of The Union of India vs.
Gosalia Shipping (Pvt.) Ltd. (supra), wherein the Supreme Court
referred to the position that in a time charter, the ownership and
possession of the ship remain with the original owner.
55. Therefore, reliance placed on behalf of respondent No.1 - MPT
on the judgement of this Court in the case of Liverpool and London
Steamship Protection and Indemnity Association Ltd. vs. m. t.
Symphony and others (supra), judgement of the Delhi High Court in
the case of Sara International Ltd. vs. Arab Shipping Co. (P) Ltd.
(
supra) and judgement of the Karnataka High Court in the case of Zurbagan Shipping LLC vs. C. S. Flourish and others (supra), is found
to be unsustainable. Hence, on this score also, the contentions raised
on behalf of the said respondent cannot be accepted. This is quite
apart from the fact that Section 14 of the said Act concerns only the
‘owner’ of the vessel. We also find in this context that the petitioner is
justified in relying upon the judgements of the Calcutta High Court in
the cases of Lee Young Sang and another vs. The Board of Trustees
for the Port of Calcutta (supra) and Sri Maharshi Shipping Private
Limited and another vs. Syama Prasad Mookerjee Port, Kolkata and
others (supra) and judgement of this Court in Oil and Natural Gas
Corporation Ltd. vs. Osprey Underwriting Agencies Ltd. and others
(
supra).
56. We also find that Section 14 of the said Act lays down an
elaborate stepwise mechanism in which the Conservator, like
respondent No.1 - MPT in the present case, is required to proceed in
situations where the vessel is wrecked, stranded or it sinks in the port
in such a manner that it impedes or is likely to impede any
navigation. As per the said provision, in such a situation, the
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Conservator, like respondent No.1 – MPT herein, is required to issue
notice to the owner of the vessel for providing adequate security for
ensuring that the vessel is raised, removed or destroyed within the
time specified in the notice, with a provision for the time period to be
extended. If the owner of the vessel fails to raise, remove or destroy
the vessel within the period specified in the notice or in the extended
period, or fails to furnish security, the Conservator, like respondent
No.1 – MPT herein, can raise, remove or destroy the vessel. In cases
where such step is required to be taken urgently, the Conservator,
like respondent No.1 - MPT herein, can raise, remove or destroy the
vessel immediately for uninterrupted navigation of the port, without
waiting for giving notice to the owner of the vessel.
57. It is further specified that while taking such action, if any
property is recovered and it remains unclaimed or a person claiming
it, fails to pay reasonable expenses incurred by the Conservator for
raising, removing or destroying the vessel along with a further sum
of 20% of the amount of such expenses, the Conservator can sell the
property by public auction. The sale proceeds are to be utilized
towards the expenses and the further sum and the balance is to be
paid to the person entitled to the property so recovered. If no such
person appears to claim the balance, it is required to be deposited for
payment without interest to any person thereafter who establishes
his right, provided such a claim is made within 3 years of sale of such
property by public auction. It is further specified that where the sale
proceeds are not sufficient to meet the expenses and the further sum,
the ‘owner’ of the vessel at the time when it was wrecked, stranded
or sank, is liable to make good the deficiency and if such deficient
amount is not paid within one month of demand, the Conservator,
like respondent No.1 – MPT herein, can recover such deficient
amount as per the procedure laid down in Section 57(2) of the said
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Act.
58. In this context, Section 57 of the said Act is relevant, which
reads as follows:
57. Ascertainment and recovery of expenses and
damages payable under this Act.—
(1) If any dispute arises as to the sum to be paid in
any case as expenses or damages under this Act, it shall
be determined by a Magistrate upon application made to
him for that purpose by either of the disputing parties.
(2) Whenever any person is liable to pay any sum, not
exceeding one thousand rupees, as expenses or damages
under this Act, any Magistrate, upon application made to
him by the authority to whom the sum is payable, may,
in addition to or instead of any other means for
enforcing payment, recover the sum as if it were a fine.’
59. It is relevant to note that sub-section (1) of Section 57 of the
said Act lays down that if a dispute arises with regard to the said
amount, it shall be determined by a Magistrate upon an application
made by either of the disputing parties. Thus, there is an elaborate
stepwise mechanism and procedure prescribed under Section 14 read
with Section 57 of the said Act, under which the Conservator, like
respondent No.1 – MPT herein, is required to proceed, in the event
the wrecked, stranded or sunk vessel impedes navigation in the port.
60. In the present case, this Court finds that respondent No.1 -
MPT failed to proceed in the stepwise manner prescribed under the
said statutory provisions. After certain meetings and exchange of
communications with the petitioner and respondent Nos.2 and 3, the
respondent No.1 - MPT simply proceeded to issue the letter dated
14.10.1996 to the petitioner, referring to the sinking of the barge
M.V. Satyam, the aforesaid notice dated 19.04.1995 issued to the
petitioner, respondent Nos.2 and 3 and further stated that since the
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petitioner had shown disinclination in participating in the tender
process for salvaging the wreck, the permission granted to the
petitioner for transit of barges for lighterage operations in the
harbour, stood suspended with immediate effect. The said approach
of respondent No.1 - MPT demonstrates that it failed to proceed as
per the stepwise mechanism given in Section 14 read with Section 57
of the said Act.
61. As a matter of fact, since the petitioner was not the owner of
the vessel i.e. barge M. V. Satyam, in the first place, the respondent
No.1 – MPT could not have issued the said notice to the petitioner
under Section 14 of the said Act. The failure on the part of
respondent No.1 - MPT, as the Conservator, to proceed strictly in
terms of the statutory provisions, deprived the parties to invoke
Section 57(1) of the said Act to raise any dispute before the
competent Magistrate, thereby showing the arbitrary and
unsustainable approach adopted by the said respondent. Thus, the
aforesaid action undertaken by the said respondent against the
petitioner, cannot be sustained and the petitioner, not being the
owner of the vessel i.e. barge M. V. Satyam, could not be held liable
under Section 14 of the said Act.
62. In this situation, in order to sustain its action against the
petitioner, during the course of hearing, respondent No.1 - MPT
sought to place reliance on Sections 10 to 12 of the said Act. The said
contention was based on the assertion that, as long as the source of
power was available to the said respondent to proceed against the
petitioner, mere reference to a wrong provision would not vitiate its
action. It was also contended that the petitioner could not rely upon
the position of law, clarified by the Supreme Court in the cases of
Commissioner of Police, Bombay vs. Gordhandas Bhanji (supra) and
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Mohinder Singh Gill and another vs. The Chief Election
Commissioner, New Delhi and others (supra), for the reason that
only the contents of the said notice dated 19.04.1995 issued by
respondent No.1 - MPT under Section 14 of the said Act, could not
be the basis to test the veracity of the action undertaken by the said
respondent. It was submitted that the position of law clarified in
subsequent judgments clearly indicated that the Court could look at
pleadings and other material on record to examine as to whether the
action could be sustained.
63. On the aspect of wrong provision being quoted and source of
power still being available to the authority, reliance was placed on
the judgments of the Supreme Court, in the cases of N. Mani vs.
Sangeetha Theatre and others (supra), P. K. Palanisamy vs. N.
Arunmugham and another (supra) and Union of India and another
vs. Mohit Minerals Private Limited (supra), as also judgment of this
Court in the case of Commissioner of Customs & Central Excise, Goa
vs. Pankaj Jaju (supra). There can be no quarrel with the said
proposition and it is well-settled that only because a wrong provision
is mentioned, the action undertaken by an authority, which otherwise
has a source of power to justify its action, cannot be held to be
unsustainable. But, in the present case, the respondent No.1 -MPT
chose to undertake action specifically under Section 14 of the said
Act.
64. On pointed queries put to the learned senior counsel appearing
for respondent No.1 - MPT as to whether reference to Section 14 of
the said Act in the notice dated 19.04.1995, could be said to be a
reference to a ‘wrong provision’, it was conceded that such was not
the case. In other words, the respondent No.1 - MPT proceeded to
exercise statutory power under the correct provision, while issuing
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notice dated 19.04.1995. Therefore, respondent No.1 - MPT is
required to justify recourse to the said correct provision invoked by
it, in order to proceed against the petitioner, in the fact and
circumstances of the present case. It is already concluded
hereinabove that respondent No.1 - MPT could not have issued
notice and proceeded against the petitioner under Section 14 of the
said Act, as the petitioner was not the owner of the vessel i.e. barge
M. V. Satyam.
65. It was in order to get over the said situation, that respondent
No.1 - MPT, at the stage of final hearing of this writ petition, sought
to rely upon Sections 10 to 12 of the said Act. It was sought to be
contended that even if this Court were to hold that the notice dated
19.04.1995 could not have been issued to the petitioner under
Section 14 of the said Act, the action intended to be taken by the said
respondent against the petitioner, could be treated as an action under
Sections 10 to 12 thereof. The said contention of respondent No.1 -
MPT can also not be sustained. A perusal of Sections 10 to 12 of the
said Act shows that while they pertain to removal of obstructions
within the limits of the ports and recovery of such expenses for
removal, the said provisions also specify a specific mechanism to be
followed by the Conservator, like respondent No.1 – MPT herein.
66. At this stage, a reference to Sections 10 to 12 of the said Act is
necessary and they read as follows:
‘10.Removal of obstructions within limits of port.—
(1) The conservator may remove, or cause to be removed,
any timber, raft or other thing, floating or being in any
part of any such port, which in his opinion obstructs or
impedes the free navigation thereof or the lawful use of
any pier, jetty, landing-place, wharf, quary, dock,
mooring or other work on any part of the shore or bank
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which has been declared to be within the limits of the
port and is not private property.
(2) The owner of any such timber, raft or other thing shall
be liable to pay the reasonable expenses of the removal
thereof, and if such owner or any other person has
without lawful excuse caused any such obstruction or
impediment, or causes any public nuisance affecting or
likely to affect such free navigation or lawful use, he
shall also be punishable with fine which may extend to
one hundred rupees.
(3) The conservator or any Magistrate having jurisdiction
over the offence may cause any such nuisance to be
abated.
11.Recovery of expenses of removal.—
If the owner of any such timber, raft or other thing, or
the person who has caused any such obstruction,
impediment or public nuisance as is mentioned in the
last foregoing section, neglects to pay the reasonable
expenses incurred in the removal thereof, within one
week after demand, or within fourteen days after such
removal has been notified in the Official Gazette or in
such other manner as the Government by general or
special order directs, the conservator may cause such
timber, raft or other thing, or the materials of any public
nuisance so removed, or so much thereof as may be
necessary, to be sold by public auction;
and may retain all the expenses of such removal and sale
out of the proceeds of the sale, and shall pay the surplus
of such proceeds, or deliver so much of the thing or
materials as may remain unsold, to the person entitled
to receive the same;
and, if no such person appears, shall cause the same to
be kept and deposited in such manner as the
Government directs;
and may, if necessary, from time to time, realise the
expenses of keeping the same, together with the
expenses of sale, by a further sale of so much of the
thing or materials as may remain unsold.
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12.Removal of lawful obstructions.—
(1) If any obstruction or impediment to the navigation of
any port subject to this Act has been lawfully made, or
has become lawful by reason of the long continuance of
such obstruction or impediment, or otherwise, the
conservator shall report the same for the information of
the Government, and shall, with the sanction of the
Government, cause the same to be removed or altered,
making reasonable compensation to the person suffering
damage by such removal or alteration.
(2) Any dispute arising concerning such compensation shall
be determined according to the law relating to like
disputes in the case of land required for public purposes.’
67. A perusal of the above-quoted provisions shows that the
Conservator, like respondent No.1 - MPT herein, can remove timber,
raft or other thing floating, which in its opinion, is obstructing or
impeding free navigation and that the owner of such timber, raft or
other thing would be liable to pay reasonable expenses for removal
thereof. It is further specified that the owner of such timber, raft or
other thing shall be punishable with fine extending upto one
hundred rupees, if public nuisance is caused and that the
Conservator or any Magistrate having jurisdiction over the offence,
can cause any such nuisance to be abated.
68. As regards recovery of expenses for removal, if the owner of
such timber, raft or other thing causing obstruction or impediment,
fails to pay reasonable expenses within one week after demand or
within 14 days after such removal, the Conservator, like respondent
No.1 - MPT herein, can sell such timber, raft or other thing by public
auction and retain the amount towards expenses from the proceeds,
with the surplus being delivered to the person entitled for the same.
Thus, Sections 10 to 12 of the said Act again lay down a stepwise
mechanism in which the Conservator, like respondent No.1 - MPT
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herein, is required to proceed and it cannot be said that the notice
dated 19.04.1995 issued by respondent No.1 - MPT invoking Section
14 thereof, should now be read as action taken under Sections 10
and 11 thereof.
69. The respondent No.1 is not justified in now contending that
the source of power should be read under Sections 10 and 11 of the
said Act, to sustain its action against the petitioner. In any case, it is
difficult to understand how the said respondent is now insisting upon
treating the iron ore of the petitioner being transported in the vessel
i.e. barge M. V. Satyam to be treated as ‘timber, raft or other thing
floating or being in any part of the port’. The iron ore admittedly
sank with the barge, further demonstrating the fallacy in the
argument.
70. As regards Section 12 of the said Act, a plain reading of the
same shows that it cannot be applicable to the controversy arising in
the present petition. It is not even the case of the respondent No.1 -
MPT that the obstruction or impediment to navigation in the port,
subject to this Act, has become lawful by reason of long continuance
or otherwise. Hence, reliance on the said provision is also not
sustainable. It is found that reliance placed on the judgements on the
part of the said respondent to claim that merely a wrong provision of
law was quoted, cannot be sustained and hence, the said contention
is also rejected.
71. As regards respondent No.1 - MPT being entitled to rely upon
material other than the contents of the notice dated 19.04.1995
issued under Section 14 of the said Act, even if the judgements relied
upon by respondent No.1 are to be taken into consideration i.e. in
the cases of Adani Ports and Special Economic Zone Limited vs.
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Board of Trustees of Jawaharlal Nehru Port Authority and others
(
supra) and
Assistant General Manager, State Bank of India and
another vs. Tanya Energy Enterprises, Through its Managing Partner
Shri Alluri Lakshmi Narasimha Varma (supra) and Chairman, All
India Railway Recruitment Board and another vs. K. Shyam Kumar
and others (supra), this Court finds that there is total lack of any
pleading or material on record to sustain the said contention. A
perusal of the aforementioned judgements of the Supreme Court and
this Court shows that apart from the contents of the notice/order, a
Writ Court can take into consideration the documents and pleadings
that could sustain the notice/order, which is the subject matter of
examination. In the present case, there is absolutely nothing in the
affidavits filed on behalf of respondent No.1 or in any of the
documents, to justify the stand taken by the said respondent that its
source of power could be located in Sections 10 to 12 of the said Act
or that any other source could be said to be available.
72. It is also relevant to note that in both the aforesaid cases
before the Supreme Court i.e. Assistant General Manager, State Bank
of India and another vs. Tanya Energy Enterprises, Through its
Managing Partner Shri Alluri Lakshmi Narasimha Varma (supra) and
Chairman, All India Railway Recruitment Board and another vs. K.
Shyam Kumar and others (supra) as also judgement of this Court in
the case of Adani Ports and Special Economic Zone Limited vs. Board
of Trustees of Jawaharlal Nehru Port Authority and others (supra),
the Courts specifically came to the conclusion that public interest and
larger public good were involved. The cases concerned issues of mass
copying during the examinations, black-listing of a contractor and
action being
bona fide taken by a secured creditor against a
defaulting borrower. Such are not the facts in the present case, as the
only question herein concerns the liability of a particular party for
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raising, removing or destroying a vessel/wreckage, which impedes
navigation in a port, in terms of the provisions of the said Act and in
the light of the contractual obligations between the parties
inter se.
In the facts and circumstances of the present case, it cannot be said
that the said principle can be invoked in public interest or for larger
public good. Hence, the said contention raised on behalf of
respondent No.1 also fails.
73. It is to be noted that respondent No.1 further claimed at the
stage of final hearing and only in the written submissions tendered at
the stage of final hearing, for the first time, that the source of power
can be located even in the Merchant Shipping Act. In this context,
Section 402 thereof was invoked. The said provision reads as follows:
‘402.
Salvage payable for saving life, cargo or wreck.―
(1) Where services are rendered―
(a) wholly or in part within the territorial waters of
India in saving life from any vessel, or elsewhere in
saving life from a vessel registered In India; or
(b) in assisting a vessel or saving the cargo or
equipment of a vessel which is wrecked, stranded or
in distress at any place on or near the coasts of
India; or
(c) by any person other than the receiver of wreck in
saving any wreck;
there shall be payable to the salvor by the owner of the
vessel, cargo, equipment or wreck, a reasonable sum for
salvage having regard to all the circumstances of the case.
(2) Salvage in respect of the preservation of life when
payable by the owner of the vessel shall be payable in
priority to all other claims for salvage.
(3) Where salvage services are rendered by or on behalf of
the Government or by a vessel of the Indian Navy or of
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the Coast Guard or the commander or crew of any such
vessel, the Government, the commander or the crew, as
the case may be, shall be entitled to salvage and shall
have the same rights and remedies in respect of those
services as any other salvor.
(4) Any dispute arising concerning the amount due under
this section shall be determined upon application made
by either of the disputing parties―
(a) to a Judicial Magistrate of the first class or
Metropolitan Magistrate, as the case may be, where
the amount claimed does not exceed ten thousand
rupees; or
(b) to the High Court, where the amount claimed
exceeds ten thousand rupees.
(5) Where there is any dispute as to the persons who are
entitled to the salvage amount under this section, the
the Judicial Magistrate of the first class or the
Metropolitan Magistrate or the High Court as the case
may be, shall decide the dispute and if the are more
persons than one entitled to such amount, such
magistrate or the High Court shall apportion the amount
thereof among such persons.
(6) The costs of and incidental to all proceedings before a
Judicial Magistrate of the first class or Metropolitan
Magistrate or the High Court under this section shall be
in the discretion of such magistrate or the High Court,
and such magistrate or the High Court shall have full
power to determine by whom or out of what property
and to what extent such costs are to be paid and to give
all necessary directions for the purpose aforesaid.’
74. A perusal of the above-quoted provision shows that it applies
where services are rendered for saving life from any vessel or
assisting the vessel or saving cargo of a vessel, which is wrecked,
stranded or is in distress at any place on or near the coasts of India
by any person other than the receiver of the wreck. Such a person or
salvor is required to be paid in terms of the above-quoted provision.
Respondent No.1 has invoked the said provision on the basis that
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eventually, it had to engage the services of Madgavkar Salvage for
removing the salvage of the wreck. It is relevant to note that while
respondent No.1 - MPT itself invoked Section 14 of the said Act by
issuing notice dated 19.04.1995, it did not take recourse to the
aforementioned stepwise mechanism specified in the said provision
read with Section 57 thereof. Even with regard to the removal of
salvage of the wreck by Madgavkar Salvage, it is an admitted
position that the said action was completed on 29.01.1998, which
was almost 2 years and 9 months after the incident of sinking of the
barge M. V. Satyam and almost 15 months after the interim order
was passed by this Court while admitting the writ petition.
75. The aforesaid timelines further demonstrate that respondent
No.1 - MPT cannot take recourse to Section 402 of the Merchant
Shipping Act as the source of its power to take action against the
petitioner in the context of salvage of wreck of barge M. V. Satyam.
Even otherwise, a perusal of the above-quoted Section 402 of the
Merchant Shipping Act shows that if a dispute arises with regard to
the amount under the said provision, it is to be determined on the
basis of an application made by either of the disputing parties to the
Judicial Magistrate First Class or Metropolitan Magistrate, where the
amount claimed does not exceed ₹ 10,000 or before this Court,
where the amount exceeds ₹ 10,000. The said mechanism of
resolving the dispute was again not made available to either party, if
at all the respondent No.1 - MPT could have taken recourse to the
said provision.
76. We also find substance in the contention raised on behalf of
the petitioner that the Merchant Shipping Rules framed under the
provisions of the Merchant Shipping Act further provide an elaborate
procedure about the manner in which steps are to be taken in the
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context of wreckage of a vessel, claims concerning wreck, sale of
such wreck and how the amount due for the salvage is to be
determined and paid. No such procedure was resorted to or even
relied upon by respondent No.1 and now at the stage of final hearing
of the writ petition, without any basis in the affidavits or pleadings
and by making reference merely in the written submissions tendered
at the time of final hearing, obviously the respondent No.1 cannot be
permitted to take recourse to the Merchant Shipping Act and the
aforementioned Rules framed thereunder.
77. It is interesting to note that as per Section 3(23) of the
Merchant Shipping Act, the word ‘owner’ is defined in the context of
a sailing ship to mean a person to whom the sailing ship belongs.
This is another indicator about the fact that the petitioner could not
be termed as an ‘owner’ of the vessel i.e. barge M. V. Satyam.
78. As regards the contentions raised on behalf of respondent No.1
– MPT about invoking the principles of
Quantum Meruit and Polluter
Pays, suffice it to say that the said contentions were again being
raised without any basis in the material placed on record before this
Court. At the stage of final hearing, the said contentions were raised
for the first time and reliance was sought to be placed on the
judgement of the Supreme Court in the case of
Alopi Parshad & Sons
Ltd. vs. Union of India (supra). We find that respondent No.1 did not
render any services to the petitioner on implication to a contract to
remunerate. The principle of
Quantum Meruit could be invoked only
when the price has not been fixed by contract for work done or
services rendered. We find the said contention of the respondent
No.1 to be wholly misplaced in the facts and circumstances of the
present case. As a matter of fact, the respondent No.1 – MPT could
justify its actions only under the provisions of the said Act.
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79. As regards reliance placed on the judgement of the Supreme
Court in the case of Delhi Pollution Control Committee vs. Lodhi
Property Co. Ltd. (supra), we find that the principles laid down in
the said judgement are wholly inapplicable to the facts and
circumstances of the present case. In the first place, nowhere in the
affidavits, documents and other material placed in this writ petition,
did the respondent No.1 – MPT ever claim that the cargo of the
petitioner discharged any pollutant in the waters of the port or there
was any resultant environmental damage. There is also nothing
discernible in the material concerning the present petition to indicate
any such aspect of potential risk or environmental damage. Hence,
the principle of Polluter Pays cannot be invoked by the said
respondent to foist any liability upon the petitioner.
80. It is also relevant to note that the respondent No.1 – MPT
nowhere referred to the steps taken in respect of the material that
was recovered eventually in January 1998, when the wreckage was
removed. There is nothing demonstrated by the said respondent that
the material which was recovered, was in any manner put to sale by
auction or as to what happened to the proceeds thereof. In such a
situation, it cannot lie in the mouth of the said respondent to claim
that the petitioner can be said to be liable, in the facts and
circumstances of the present case and as per the action sought to be
undertaken by the said respondent under the provisions of the said
Act.
81. Hence, it is held that the petitioner could not be held liable in
pursuance of notice dated 19.04.1995 under Section 14 of the said
Act. The consequent action of issuing letter/order dated 14.10.1996,
suspending the permission to the petitioner for transit of barges and
for lighterage operations, is also found to be unsustainable. As a
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matter of fact, the said letter/order dated 14.10.1996 was stayed by
this Court by its order dated 31.10.1996, subject to deposit of ₹ 70
lakhs in this Court. Therefore, the said letter/order dated 14.10.1996
is found to be unsustainable and it is set aside.
82. The Supreme Court in the above quoted paragraph No.8 of its
order dated 14.02.2025, specifically held that the petitioner would
be entitled to be suitably compensated, if it succeeds in the writ
petition.
83. In view of the above, the writ petition is allowed in the above
terms. We find that respondent No.1 – MPT had withdrawn an
amount of ₹ 4,09,25,764 (₹ 70 lakhs deposited by the petitioner
along with accrued interest), after this writ petition was earlier
disposed of by this Court on 13.08.2021. As a consequence of this
writ petition being allowed in above terms, the respondent No.1 –
MPT is directed to pay the said amount to the petitioner within a
period of six weeks from today.
84. It is made clear that this Court has decided the question as to
whether the petitioner could be held liable in terms of notice dated
19.04.1995 issued under Section 14 of the said Act. We find
substance in the contention raised on behalf of respondent No.3 that
in the absence of the stepwise mechanism to be undertaken under
the said provision, the said respondent was deprived of raising any
dispute, as contemplated under Section 57 thereof. Hence, even if
the respondent No.1 decides to proceed against respondent No.3
under Section 14 of the said Act, as the owner of the vessel, all the
rights and contentions of respondent No.3, are kept open.
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85. In view of the writ petition being allowed in the above terms,
all pending notices of motion and interim applications are also
disposed of.
(SHREERAM V. SHIRSAT, J.) (MANISH PITALE, J.)
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Priya Kambli
PRIYA
KAMBLI
Digitally signed by
PRIYA KAMBLI
Date: 2026.04.10
14:32:02 +0530
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