Summary
The vessel M.V. Karnika lay at anchorage in Mumbai Port. In an admiralty suit by an unpaid bunker supplier it was sold by court auction to NKD Maritime 'as is where is', free of all encumbrances, on terms that port dues, tariffs and taxes from the date the sale was sanctioned were the purchaser's liability. The Port Trust billed anchorage fees from the date of sale at the higher scale-of-rates tariff that applies after 30 days at anchorage, reflecting the vessel's earlier stay. A Single Judge directed revised bills, but the Division Bench allowed the Port Trust's appeal. The Supreme Court dismissed NKD's appeal. The vessel's prior anchorage, and the rate it attracts, are not an 'encumbrance' wiped out by a sale free of encumbrances under Section 8 of the Admiralty Act. NKD was charged only from the date of sale. Whether anchorage fees are 'port dues' under Section 50-B was not in issue.
Issues
- Whether a purchaser of a vessel sold by an admiralty court free of all encumbrances can be charged anchorage fees after the sale at the higher rate attracted by the vessel's earlier stay of more than 30 days
- Whether anchorage charges are 'port dues' capped at half rate under Section 50-B of the Major Port Trusts Act, 1963
Provisions considered
- Section 8, Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017A vessel sold by the High Court vests in the purchaser free from encumbrances, liens and charges; the duration of prior anchorage that determines the post-sale tariff rate is not such an encumbrance. (¶¶ 20, 21, 23)
- Sections 48 to 50 and 50-B, Major Port Trusts Act, 1963Anchorage fees under the TAMP scale of rates, framed under Sections 48 to 50, depend on the period of stay. The contention that they are 'port dues' limited to half rate under Section 50-B was held not to arise. (¶¶ 13, 14, 23, 24)
Held
- The vessel was sold free of encumbrances, and no pre-sale liability was imposed on the purchaser. Under the terms of sale, the purchaser bore port charges from the date of sanction of the sale, and anchorage fees were levied only from then. (¶¶ 17, 22, 23)
- It is far-fetched to treat the vessel's prior anchorage, and the rate that it attracts, as an encumbrance for computing anchorage fees after the sale. The fees depend on the number of days the vessel has been at anchorage, so the higher rate applicable after 30 days was correctly applied. (¶¶ 14, 15, 23)
- Whether 'port dues' under Section 50-B include charges other than port entry charges did not arise. The only dispute was whether the daily rate was about Rs. 5 lakh or Rs. 15 lakh. (¶ 24)
Result
Appeal dismissed. The Division Bench's judgment, setting aside the Single Judge's direction for revised bills, was upheld.