THE GAZETTE OF INDIA .EXTRAORDINARY

[PART III—SEC. 4]

SCHEDULE

Ca»a No.TAMP/13/2000-TPT

M/s. Shiva Marketing Umltad (SML)

...

Applicant

Th« Tuticorln Port Trust (TPT)

...

Respondent

(Passed on this 5th day of January 2001)

This case relates to a representation made by Mf%. Shiva Marketing Ltd. (SML)

to treat their barges 'BLUMlNGDALE' and 'SHIVA-6' (used for off-shore storage of molasses

for export) by the Tutlcorin Port Trust (TPT) ae dumb barges for the purpose of levy of Berth

Hire charges.

The SML has made the following points in its application:

(i).

The SSL exported approximately 1,25,000 MT of molasses during the year

1995-96 and 1996-97 through the Tuticorin Port

(ii).

It had kept barges 'BLUMIGDALE' and 'SHIVA-6' at the TPT and watt using

them as off shore storage of molasses.

(iii).

When it originally placed the barges at the TPT, the SML was given to

understand wrongly by Its agents that the berth hire charges for dumb barges

was calculated on the basis of GRT, as in the case of commercial vessels.

(iv).

The TPT Scale of Rates contains different rates for a commercial vessel and a

dumb barge.

(v).

The TPT, even after pointing out the provisions in the Scale of Rates,

continues to levy the commercial vessel rates.

3.1.

The representation was sent to the TPT for comments. The important points

made by the TPT In its reply are given below: -

(i).

The SML chartered two barges in 1995, which were foreign flag vessels, to be

used for storage and transportation of molasses for export to the mother

vessel.

(ii).

The DG (Shipping), Mumbai had initially issued a specified period licence to

the above barges for the purpose of storage/transfer of Bulk molasses within

the Harbour limit of the Indian Ports. Subsequently the said two dumb barges

were registered with the Mercantile Marine Department (MMD), Mumbai as

Coastal vessels with the name of 'BLUMINGDALE' and 'SHIVA-6" with effect

from 10 September 97 and 10 February 98 respectively.

(iii).

The Berth hire charges for the dumb barges were initially calculated on the

basis of GRT of a foreign flag vessel, as the two barges had separate official

number, port of Registry and possess separate loadllne certificates. The

charges were revised to be levied as per the Scale of Rates for the Coastal

vessels from the date of conversion to coastal run.

(iv).

Pursuant to non payment of the outstanding dues in respect of Berth Hire

charges, the port decided to sell the barges to make good the dues after

intimating the decision to the SML on 18 November 1999.

(v).

The SML agreed to pay the outstanding berth hire charges as on 30 November

1999 amounting to Rs.43,79,680/- in 12 monthly instalments commencing from

January 2000 as well as current monthly berth hire charges vide their letter

dated 6 January 2000. But the SML has not paid any amount till date.

3.2.

In response to the comments of the TPT, the SML has made the following

further comments:

0).

Charges leviable on lash vessels / barges are applicable to its dumb barges

also.

(II).

It Is not clear whether the coastal rates were applied from the time the barges

had specific period licence from the DO (Shipping), Mumbai or not.

(iii).

it has requested the Port to shift both the barges to Zone B. However, shifting

of only one barge from Zone 'A' to Zone 'B' has taken place.

(iv).

Due to the financial crisis, the SML intends to make the payments from out of

the funds generated from the barge working. So, it may be allowed to utilise

the barges for storing and export of molasses.

(v).

The TAMP may like to impress upon the TPT not to dispose off the barges (by

auction).

3.3.

The TPT was requested to examine the points made by the SML; and, it was

also advised not to auction the barges as apprehended by the SML until the case was decided

by the Authority.

The representation was sent to various port users / representative bodies of

users for their comments. The comments received are summarised below:

The Container Shipping Lines Association (CSLA)

Since the representation does not involve the movement of containers, they did not

offer any views.

Th» Tutlcorln steamer Agents Association fTSAAl

As the barges are used only for storage of export cargo and there is a rate for berth

hire for barges in the Scale of Rates, the berth hire charges are to be collected as

specified in the Scale of Rates only and not on GRT basis.

The Indian National Shipowners Association (INSA)

The Scale of Rates and the statement of conditions of the TPT prescribe only the

charges for lash vessels / barges and they may apply to the Dumb barges of the SML.

The Tutlcorln Stevedores Association (TSA)

The TSA has forwarded the following comments of M/s. Aspinwall & Co, who were the

agents of the SML:

(a).

The TPT had clearly informed M/s. Shiva Marketing Limited about the schedule

of rates and other conditions to which they agreed.

9/a is"/ «s*\ - 3

„

T H E GAZETTE OF INDIA : EXTRAORDINARY

[PART III—SEC, 4]

(b).

As per the Scale of Rates there is no separate rate for dumb barges. The

charges have to be paid as per the Scale Of Rates either a Foreign run or

Coastal run.

(c).

The TPT had way back in 1997 itself had informed the SML that its barges

could not be treated at par with LASH barges.

(d).

M/s. Shiva Marketing Limited have to pay a huge amount to M/s. Aspinwall &

Co., and the matter is pending at the Tuticorin Court.

Tho Shipping Corporation of India (SCI)

The Agents of the SCI, M/s. Pereira & ft&irte, have physically -verified the barges

'BLUMINGDALE' and 'SHIVA-fl' lying at the TPT and found them as dumb barges.

The Tuticorin Chamber of Commerce and industry f TCCI)

The TCCI had no comments to offer on the subject.

The Tuticorin Custom* Licensed Agents' Association (TCLAA)

They offered the same views as that of the TSAA.

5.1.

On being requested, tne SML has sent the following information / documents:

(i).

Statement of the specific period licence Issued by the DO (Shipping), Mumbai

to the barges to operate with in the Harbour limit of the Indian Ports;

(ii).

Certificate of registry issued by the MMD, Mumbai, under the Coasting Vessel

Act for both the barges.

(iii).

They also stated that both the barges are dumb barges and cannot move on

their own. The barges were double banked most of the times they were

berthed.

5.2.

The SML has further stated as follows:

(i)

It has already paid RB.2 lakhs in the month of June 2000 and intend paying

some more money in the month of August 2000. However, the TPT insists on

at least 50% payment (i.e. about 20 lakhs) and a binding agreement relating to

the balance payment.

(ii)

The TPT is not allowing the SML to operate the vessels, which is a must for

arranging payments out of the earnings.

6.1.

The TPT has reiterated the facts earlier furnished and further clarified on the

points made by the SML as follows:

(i).

Due to lack of sufficient place, the other barge 'SHIVA-6' could not be shifted

to Zone 'B\

(ii).

There is no provision in the Indian Ports Act 1908 or MPT Act 1963 or the TPT

Scale of Rates to pay the dues to the port out of the funds to be generated

from the operation of the vessels / barges.

6.2.

The TPT has also Informed that the SML has not paid the dues, despite

several reminders.

7.1.

A joint hearing in this case was held on 6 September 2000 at the TPT

premises. During the joint hearing, the following submissions were made:

Shiva Marketing Limited (&MU

(i).

This is a case of unjust enrichment.

(ii).

The rate of $ 129 is inequitable and unjustifiable.

(iii).

The rate for dumb barges is low. It should be applicable to our vessels, which

are like dumb barges,

(iv).

The TPT treats our dumb barges as foreign going vessels. This is atrocious;

and, the arbitrariness, needs to be corrected. The TPT shall follow the MOPT

model.

(V).

Regarding payment of outstanding due*, we will stick to our commitment of

paying in instalments to TPT.

Tutjcodn Port Trust fTPTl

(I).

There is no need for a specific agreement. The port has a notified Scale of

Rates.

(ii).

The reference to the MOPT is not relevant because the rates between the

ports will vary.

(iii).

The comparison of a dumb barge with a LASH barge is not correct. The two

cannot be equated.

(iv).

The SML started a commercial venture. If It did not become a success, It

cannot become a ground for review of our rates.

(v).

'Principle of estoppel' will surely apply as the SML has started the operation

and were paying. Suddenly they have raised objection.

(vi).

Nothing prevented the SML to take their barges away to the MOPT or

elsewhere. Who will pay tor the cost involved in keeping these barges and

looking after them?

(vil).

The SML has agreed to pay RMS lacs in 12 instalments. Now they are going

back.

(viii).

The TPT cannot recognise a new concept. A vessel is a veseel, it will go by its

registration and not arbitrarily classified as dumb barges.

Th« Container Shipping Lin«s Association (CSLA)

The SML have introduced an Innovative method of adding to the traffic of the port

which should be encouraged.

Th» Tuticorln Steamy Agent's Association (TSAAl

(i).

Instead of dragging the issue, the port should adopt a liberal attitude and

resolve the issue on arbitration basis.

(ii).

Please fix a separate rate for dumb barge.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART III—SEC. 4]

Tutlcorin Chambr of Commerce and industry rrccil

The operation started by th« SML is a first of its in kind in the TPT. They need

sympathy and encouragement

Indian National Shipowners' Association UNSAl

0)-

It is a special circumstance in which a dumb barge can be equated with a lash

barge.

(il).

The SML can take advantage of reference to a 3000 tonne limit on GRT in

certification of the vessel.

7.2.

At the request of the SML, a further of time upto 15 September 2000 for

submitting its written arguments was granted.

8.1.

Subsequent to the hearing, the SML, through its legal counsel, has sent

elaborate written submissions giving the entire sequence of events chronologically for taking

the complete view without prejudice and furnished the following additional information:

(I).

The barges were kept in a place where no other vessels were being kept or

brought. Only fore and aft of one barge was toughing the jetty at any point of

time. The second barge was always kept double banked with the first barge.

(ii).

The size of LASH barges is not mentioned anywhere. This means the rate

fixed for LASH barge is irrespective of the size of the barge and the same

should hold good for a dumb barge also.

(iii).

When delay in obtaining Specific Period Licences (SPL), the TPT charged

berth hire on foreign going rates. The barges even when they did not have any

SPL, continued to remain in the TPT and as per definition only costal rates

should be charged.

(iv).

Since bill of entry relating to import of barges was not filed, the Customs

detained the barges from 10 September 98 to 12 May 2000. Hearing a petition

filed by the SML, the Customs, Excise and Gold (control) Appellate Tribunal

ruled that the detention was not proper and filing of bill of entry was not

necessary.

(v).

Due to this illegal detention for a period of nearly 20 months, enormous berth

hire charges were imposed by the TPT for no fault of the SML. The berth hire

charges for this period should be wai.ed or recovered from the Customs

Authority.

(vi).

During the period, the Government had also imposed a ban on movement of

molasses out of the country.

(vil).

The SML hat prayed for the following:

(a).

A clear definition of dumb barge should be used; and, specific rates for

the dumb barges should be levied as per the Scale of Rates.

(b).

A distinction is to be made between the vessels coming and berthing

for a period of 5 to 10 days and for substantial period of time.

(c).

LASH barges rate should be logically applied to a dumb barge where

no size constraint has been kept.

However, the LASH barge rates

with proportionate increase on the basis of size of the biggest Lash

barge may be applied

(d)

During the period of Illegal customs detention of the barges, no

payment of berth hire charges is to be recovered from the SML

(e).

The vessels have never moved out of the port area at the TPT, Its

status remains that of a coastal vessel and coastal rates should be

charged for the entire stay of the barges at the TPT.

8.2.

A copy of the written submissions from the legal counsel of the SML was sent

to the TPT for comments, rf any. In its reply the TPT has stated as follows:

(i).

The Berth Hire Charge* collected from any vessel are not on the basis of any

specific berth.

Any developed property Inside the TutJcorin harbour is

considered as a berth and shall be charged without any distinction.

The contentions of the SML that the barges were berthed at an angular fashion

and only one barge was touching the jetty at any point of time is not acceptable

as there is no provision for waiver of Berth hire charge on the above basis.

(ii).

The LASH barges are small with capacity of approximately 300 MT whereas

the barges of SML are much bigger with capacity of approximately 3000 MT of

cargo.

The LASH barges are plain cargo containers with no equipment of their own,

whereas SML barges have got independent pumping arrangements for loading

and discharge of cargo.

The LASH barge, even in loaded condition can be picked up by a crane

mounted on the mother vessel, where as the barges of SML are too big for this

purpose.

(III).

The TPT Scale of Rates specifies the charges on LASH mother vessel and

LASH barges and no specifications for any other kind of barges is made.

Hence the SML barges are treated like a normal commercial vessels and

charged according to the GRT.

(iv).

It was made amply clear to the SML In 1996 Itself, that these barges would be

treated as commercial vessels and charged accordingly. The SML didn't raise

any objection and paid dues upto 30 April 97. The SML raised these points

about the comparison with dumb barge only after loosing business, to evade

legitimate port dues.

(v).

The Scale of Rates duly approved by the TAMP does not differentiate between

non power-driven vessel and a power driven vessel for calculating Berth Hire

fees. Different rates for commercial barges of SML do not appear anywhere.

The barges of the SML cannot be considered as non commercial vessels like

tugs and barges as they have been employed for commercial purpose.

(vi).

The barges are foreign flag vessels with separate registry, official number and

loadline certificate. The rates of foreign flag vessels as per TPT Schedule of

rates are charged for the period upto April 1997 and later on the conversions of

the vessels to coastal, the berth hire charges were revised to be levied as that

for coastal vessels.

The Port h in no way connected with the Customs formalities to be observed

by importer* and the contention of the SML about waiver of Berth hire charges

for the period during which the barges were detained by the Customs is not

acceptable as there is no such provision in the Scale of Rates of the TPT.

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART III—SEC. 4]

With reference to the totality of information collected during the processing of

this case, and based on a collective application of mind, the following position emerges:

(i).

The dumb barges in question are exclusively used for storage of molasses for

export and berthed inside the TPT. These barges were foreign flag vessels

operating with Specified Period (coastal) Licences issued by the DG (Shipping)

before their registration as coastal vessels from 10 September 97 and 10

February 68.

(ii).

The TPT Scale of Rates was amended by this Authority through an Order

passed on 6 December 99. The pre-revlsed Scale of Rates contained different

berth hire rates for vessels, fishing vessels (Trawlers / Boats) and LASH

vessels / barges.

During the 1999 amendments, a separate rate for non-

commercial vessels like tugs and barges was introduced.

(iii).

The TPT has classified the barges in question as normal commercial vessel*

and levied berth hire accordingly. The applicant's contention is to group these

dumb barges alongwith LASH barges and to apply the berth hire rates given in

the Scale of Rates for LASH barges. To bolster its arguments, the SML has

pointed out that the Scale of Rates does not prescribe any size restrictions for

LASH barges.

Th« TPT has brought out several differences between the SML barges and

LASH barges. It is obvious that the sizes of the SML barges and LASH barges

do not compare. Apart from the size factor, a LASH barge is one which is

carried on board of the mother vessel and dropped at a Port for cargo

operation. The SML barges do not satisfy this condition.

It is relevant here to recall the observations of the INSA made in the case

relating to anchorage fee at the MBPT.

The INSA apprehended that the

concessions given to LASH barges could be exploited when they covert Into

dumb barges. The MBPT, however, maintained that it would go strictly by the

certification of vessels.

This amply proves that the vessel registration

authorities also recognise the differences between the LASH barges and dumb

barges.

Even though no size restrictions for LASH barge is mentioned in the Scale of

Rates, the provision is clear that the specified rate is applicable to LASH

barges only. And, the SML barges are not LASH barges. That being so, there

is no merit in the Applicant's arguments seeking application to the barges in

reference of berth hire rates prescribed for LASH barges.

(rv).

The SML barges can not be classified as non-commercial vessels as they were

engaged in a commercial operation of molasses export The SML has also

pleaded for a distinction between vessels staying for shorter duration and for

substantial period of time for the purpose of levying berth hire. It is to be

recognised that berth hire is for occupation of a berth. As long as a vessel

continues to occupy a berth she has to pay berth hire charges at the specified

rates for entire duration of stay at the berth.

There can not be any concession In the berth hire charges depending on the

duration of stay. In any case, the SML did not raise this issue before the TPT

prior to commencement of its operation at the Port. The argument made now

by the SML appears to be an after thought

(v).

The SML has also mentioned about detention of its barges by th» Customs

and prayed for waiver of berth hire accrued during the period of detention or to

recover such charges from the Customs.

Even during the period of detention the barges were at the TPT berth; and, the

TPT is legitimately entitled to levy berth hire for this period. The TPT can not

be made to forego its revenue for a dispute between the SML and the

Customs. The question of TPT recovering the berth hire charges from the

Customs does not arise.

Since Its barges were in occupation of the TPT

berths, the SML is responsible to pay to the TPT. It is for the SML to decide

whether it should claim reimbursements of such payments from the Customs.

(vi).

The SML contentions about paying the dues to the port out of revenue to be

generated in future from the barges working are devoid of any merit. It is to be

reiterated that berth hire is for occupation of a port's berth. There can not be

any condition that such levy should be linked to generation of revenue by the

occupier. The Port has not forced the barges to occupy its berth. The barges

have been brought to the Port by the Applicant to exploit a commercial

opportunity.

If the anticipated commercial success did not happen, the

applicant can not reasonably seek relief from the port by asking It not to charge

its legitimate dues or to wait indefinitely to recover such dues, till he generates

sufficient surplus revenue.

(vii).

Addressing the issue of double banking of barges raised by the SML, the TPT

has mentioned that there is no provision in Its Scale of Rates for waiver of

berth hire charges on this basis.

The TPT Scale of Rates does contain a provision to charge 2/3 of the berth

hire charges on the vessel double banked with another vessel occupying a

berth. However, this provision is made only in respect of fishing vessels.

The principle accepted in the cases of double banked fishing vessels holds

good for any other category of vessels.

In fact, the vessel with which the

double banked vessel is tied, acts as a mooring for the latter. So, the double

banked vessel has to pay only mooring charges and not berth hire. Since no

separate mooring charges is available in the TPT, it is reasonable if the

provisions applicable to fishing vessels is extended to all vessels.

On the material point of time during which the SML barges were double

banked, there was no provision in the Scale of Rates of the TPT for not

charging full berth hire on double banked vessels. So, the billing done by the

TPT is as per its Scale of Rates in vogue. This Authority will introduce a

common practice at all major ports regarding levy of berth hire on double

banking vessels. Till such time, the TPT shall extend the existing provision

relating to Fishing trawlers to all other vessels in such cases. The Authority

can revise the Scale of Rates retrospectively. Such revisions, however, can

only be in exceptional circumstances or to make a correct interpretation of the

provisions in the Scale of Rates. There are no exceptional circumstances

governing this case.

That being so, there is no necessity to prescribe

retrospectively a separate provision to levy berth hire on double banked

vessels.

(viii).

There has been some confusion about the registration-status of the two

barges.

Alleging that the TPT has not appropriately classified them, the

Applicant has requested for the two barges to be treated as 'coastal vessels'

throughout

In this connection, the following facts are significant:

(a).

To start with, the two barges were foreign flag vessels (belonging to a

foreign Company); and, ipso facto, therefore, foreign-going.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART III—SEC. 4]

(b).

Subsequently, the two barges were converted into 'coastal vessels'

under Specific Period Licences issued by the Director General

(Shipping).

(c).

After expiry of the Specific Period Licences, there was a 'gap' in the

sense that no fresh registration for coastal operation was obtained.

(d).

Ultimately, both the barges were converted into coastal vessels on a

long-term basis by securing 'coastal registration' from the Director

General (Shipping).

From the statement of facts above, it is clear that the two barges had floated

between 'foreign-going' and 'coastal' categonsation intermittently.

For

purposes of this case, the periods relating to (b) and (c) above require to be

dealt with in particular. It is very clear from the registration that the periods

covered by (b) above fall clearly under the 'coastal' category. The TPT had

obviously erred in levying tariffs applicable to 'foreign-going' vessels for this

period. That being so, the contention of the Applicant about misapplication of

tariffs is upheld to this extent.

The Applicant's similar claim in respect of the period covered by (c) above

cannot, however, be sustained. As is evident from the narration of facts, the

two barges had been converted into 'coastal' status for specific periods. No

action apparently was taken by the Applicant either to get the specific periods

extended or to seek a fresh (coastal) registration. In the event, the vessels

were deemed to have reverted to their original status automatically. In other

words, for the period between expiry of the Specific Period Licence and

commencement of the regular 'coastal registration', the two barges in

reference were in the foreign-going' category. That being so, there was

nothing wrong in the levy of 'foreign-going vessel rates' by the TPT for the

period.

(ix).

The TPT contemplated action to auction the barges to realise outstanding

berth hire. At the request of the Applicant, the port was advised not to take

such action till the case is decided. Now that the case has been decided, the

TPT may proceed to raise a revised bill and recover the dues.

10.1.

In the result, and for the reasons given above, and based on a collective

application of mind, this Authority allows the application to the limited extent of treating the two

barges as 'coastal vessels' for the periods covered by the Specific Period Licences and rejects

all the other prayers. This part of the Order shall come Into effect immediately on notification of

this Order in the Gazette of India

10.2.

The TPT is directed to levy, with prospective effect, only 2/3rd of the berth hire

charges on a vessel which is double banked with another vessel occupying a berth. The TPT

is directed to introduce this prescription in its Scale of Rates appropriately. This part of the

Order shall be effective 30 days after publication of this Order in the Gazette of India.

S, SATHYAM, Chairman

[ADVT.TSIo. UI/IV/143/Exty./MOO]

Printed hy the Manager, Govl, of India Press, Ring Road, Mayapuri, New Dolhi-110064

and Published by the Controller of Publications, Delhi-110034.