M/s Six Star Corporation Vs. Government of Bangladesh

M/s Six Star Corporation, Proprietor Haji Mozahar Sowdager (Petitioner)

Vs.

Government of Bangladesh Represented by the Secretary, Ministry of Food and others (Respondents)

Supreme Court

Appellate Division

(Civil)

JUSTICE

Syed J. R. Mudassir Husain CJ

Mohammad Fazlul Karim J

Amirul Kabir Chowdhury J

Judgment dated : October 27, 2004.

Cases Referred To-

Chairman, Port Authority and another Vs. Ministry of Defence and oth­ers 49 DLR (AD) 152; Emilie Millon, Gulbe & others Vs. Owners of the Emilie Millon, Aspinall reports of Maritime Cases Volume 10 Page 162.

Lawyers Involved:

Rokanuddin Mahmud, Senior Advocate, instructed by Nurul Islam Bhuiyan, Advocate-on-Record-Petitioner

Hafizullah, Senior Advocate, instruct­ed by Md. Nawab Ali, Advocate-on-Record-Respondent No. 1.

Civil Petition for Leave to Appeal No.1143 of 2004.

(From the Judgment and Order dated August 01. 2004 passed by the High Court Division in Admiralty Suit No. 13 of 2001)

JUDGEMENT

               Mohammad Fazlul Karim J.-  The auction purchaser petitioner seeks leave to appeal against the impugned judgment and order dated 01-08-2004 passed by a Single Judge of the High Court Division in Admiralty Suit No.13 of 2001 rejecting and application for direction upon the respondent No.9 Mongla Port Authority to release the bank guarantee No. 02/2003 dated 24-03-2003 amounting to Tk. 2,54,86,000/- issued by Janata Bank, Lal Dighi East Corporate Branch, Chittagong in favour of the auction pur­chaser-petitioner furnished in compliance to the order passed by this Division on 30-03-2003 in C.P.L.A. No. 118 of 2003 in order to get permission to remove the vessel in question from Mongla Port to Chittagong Port.

2. The facts in the application for direction to respondent No. 9 Mongla Port Authority relevant for our purpose, in short are that the auction purchaser-peti­tioner was the highest bidder at the auction sale of the vessel M.V. Vishva Kaumudi for a sum of Tk. 4.00 core and this court by judgment and order dated 27-11-2002 accepted the offer core with a direction to issue sale certificate in favour of auction purchaser petitioner on pay­ment of outstanding amount of Tk. 2,99,50,000/- towards customs duties, VAT and other charges at the rate of 39.53% and also to hand over the vessel M.V. Vishva Kaumudi to them subject to destruction of the rice on board the said vessel. It was directed to the Mongla Port and Customs Authorities to depute their respective officers to remain present at the time of delivery of possession of the vessel M.V. Vishva Kaumudi to the auc­tion purchaser petitioner. That as per order of the Court the auction purchaser petitioner deposited the entire amount of Tk.4.00 core on 09-12-2002 which was duly accepted. That ultimately the auction purchaser petitioner through its C & F Agent filed bills of entry on 23-12-2002 to the Customs Authority, Khulna for the pur­pose of payment of customs duty, VAT and other charges and thereafter on 31-12-2002 filed and application to the Commissioner of Customs, Customs House, Khulna praying for issuing a cus­toms clearance certificate on receiving the dues. The Deputy Commissioner of Customs, Mongla, Port Bhaban, Khulna by a letter dated 02-01-2003 directed the auction purchaser petitioner to submit as many as ten items of papers including payment of MOT Bills which are not at all necessary for assessment of customs duties and to accept payment of the same. That thereafter the auction pur­chaser filed an application before the Court for a direction to the Customs Authority to accept customs duties and other taxes and also to direct the Mongla Port authority to issue “No Objection certificate” (NOC) for release of M.V. Vishva Kaumudi and also by another application for permission to remove the said vessel from Mongla Port to Chittagong Port and for destruction of the rice by cutting the vessel in the ship breaking yard of the petitioner at Chittagong. That upon hear­ing the said application High Court Division by a judgment and order dated 19-01-2003 directed the Mongla Port Authority to issue    necessary “No Objection Certificate” and further directed the Commissioner of Customs, Khulna to accept customs duties and VAT at the rate of 39.53% on that sale price of the vessel and also to furnish clearance in favour of the auction purchaser within a period of two weeks from date. That against the said judgment and order dated 19-01-2003, Mongla Port Authority filed Civil Petition for Leave to Appeal No.118 of 2003 before this Division and the Court directed the auction purchaser to furnish bank guarantee and the auction purchas­er furnished a bank guarantee being No. 02/2003 dated 24-03-2003 for an amount of Tk. 2,54,86,000/- issued by Janata Bank, Laldighi East Corporation Branch. Chittagong. Accordingly, this Court by a judgment and order dated 30-03-2003 disposed of the said Civil Petition direct­ing the parties to take steps for expedi­tious hearing of the suit before the High Court Division with the observation:

“We accordingly accept the bank guarantee and direct the port authori­ty to issue the no objection certificate in respect of the M.V. Vishva Kaumudi now lying at Mongla Port jetty on acceptance of the bank guarantee fur­nished in favour of the Chairman Mongla Port Authority by the auction purchaser. The auction purchaser shall, however, renew the bank guar­antee until disposal of the suit.”

3. Accordingly, the petitioner was direct­ed to issue on objection certificate within 1 (one) week of the receipt of the bank guar­antee which has been handed over to the learned Attorney General for Bangladesh for on ward transmission to the Chairman, Mongla Port Authority. That as per order of this Division the bank guarantee was renewed till disposal of the suit, That High Court Division by a judgment dated 28th and 29th, 31st May 2003 and 1st and 2nd 2003 disposed of the suit on different issues and in respect of port dues the High Court Division observed as follows:

“The port dues of Tk.2,35,30,804.94 as prayed for on behalf of the defen­dant No. 9 is allowed against the vessel, the defendant No.1 if the defen­dant No.3 fails to pay this dues, the defendant No. 9 is at liberty to get said amount from the sale proceeds of the vessel kept within the Marshal of this Court. The Marshal of this directed to pay Tk.2,35,40,804.94 only in favour of the defendant No.9 if and when demanded on their behalf.” “To Mongla Port Authority is at liberty to take their dues of Tk. 2,35,30,945.95 paisa from the Marshal at any time and the Marshal of the Court shall so pay in favour of the Chairman, Mongla Port Authority by an account payee cheque as and when so demanded the defen­dant Nos.1-3 and 4 are entitled to take the rest of sale proceeds of the vessel from the Marshal through their learned Advocate after compliance of the Foreign Exchange Regulation with prior permission from Bangladesh Bank.

4. That in view of the facts and cir­cumstances stated above as the Court by a judgment and order dated 02-06-2003 passed in Admiralty Suit No. 12 of 2001 allowed the claim of the Mongla Port Authority and directed Marshal of the Court to pay Tk. 2,35,30,804.94 from the sale proceeds of the vessel in question, the defendant No.9, Mongla Port Authority is no longer required to keep the amount of the bank guarantee as fur­nished by the auction purchaser petition­er in favour of Mongla Port Authority and as such the auction purchaser-petitioner prays for release of the said Bank Guarantee No. 2/2003 dated 24-03-2003 for an amount of Tk. 2,54,86,000/- issued by Janata Bank, Laldighi East Corporate Branch, Chittagong, the auction purchas­er will be highly prejudiced and will suffer irreparable loss and injury in as much as the auction purchaser has to pay huge amount of interest against the said amount of bank guarantee.

5. The said application for a direction to defendant No. 9 Mongla Port Authority to release Bank Guarantee No. 02/2003 dated 24-03-2003 amounting to Tk. 2,54,86,000/- issued by Janata Bank, Laldighi East Corporate Branch. Chittagong in favour of the auction pur­chaser petitioner came up for hearing before a Single Bench of the High Court Division and the said application was rejected vide impugned judgment and order dated 01-08-2004.

6. Rokanuddin Mahmud, the learned Counsel appearing for the peti­tioner submits that the statutory port dues is recoverable out of the ship and the defendant- respondent No.3 the owner there of and the ship having been sold on auction, the port dues is liable to be adjusted out of the sale proceed of the vessel lying with the Marshal of this Court and accordingly the bank guaran­tee furnished by the petitioner for trans­portation of the auction purchased vessel from Mongla to Chittagong for Tk. 2,35,86,000/-i s liable to be returned to the petitioner auction purchaser. The learned Counsel further submitted that in view of the facts and circumstances stat­ed above as the Court by a judgment and order dated 02-06-2003 passed in Admiralty Suit No. 12 of 2001 allowed the claim of the Mongla Port Authority and directed Marshal of the Court to pay Tk.2,35,30,804.94 from the sale proceeds of the vessel in question, the defendant No.9, Mongla Port Authority is not required to keep the amount of the bank guarantee as furnished by auction pur­chaser petitioner in favour of Mongla Port Authority and as such prays for release of the said Bank Guarantee No.02/2003 dated 24-03-2003 for an amount of Tk. 2,54,86,000/- issued by Janata Bank, Laldighi East Corporate Branch, Chittagong; otherwise, the auction pur­chaser will be highly prejudiced and shall suffer irreparable loss and injury inas­much as the auction purchaser has to pay huge amount of interest against the said amount of bank guarantee. The learned Counsel further submitted that the learned Judge of the High Court Division commit­ted a gross error of law occasioning failure of justice in finding that the port dues is to be paid not out of the sale proceeds of defendant vessel but is to be recovered from the bank guarantee furnished in favour of Mongla Port Authority securing the payment of the Mongla Port dues and hence the prayer of return of the bank guarantee is misconceived and cannot be allowed inasmuch as the learned Judge of the High Court Division in his judgment dated 02-06-2003 passed in Admiralty Suit No.13 of 2001 observed that:

“The Port dues of Tk. 2,35, 30,804.94 as prayed for on behalf of the defen­dant No.9 is allowed against the vessel, the defendant No. 1 If the defen­dant No.3 fails to pay this dues, defen­dant No.9, is at liberty to get the said amount from the sale proceeds of the vessel kept with the Marshal of this Court. The Marshal of this court is directed to pay Tk. 2,35,30,804.94 only in favour of the defendant No.9, if and when demanded on this behalf.”

7. The learned Counsel further sub­mitted that the learned Judge of the High Court  Division  failed  to consider  the observation made in the judgment dated 02-06-004  passed in Admiralty Suit No.13 of 2001 to the effect that:

“The Mongla Port Authority is at liber­ty to take their dues of Tk. 2,35,30,945.95 paisa from the Marshal at any time and the Marshal of the Court shall pay in favour of the Chairman, Mongla Port Authority by an account payee cheque as and when so demanded. The defendant No.1 and 5 and 4 are entitled to take the rest of sale proceeds of the vessel from the Marshal through their learned Advocate after compliance of the Foreign Exchange Regulation with prior permission from Bangladesh Bank.”

8. M. Hafizullah, the  learned Counsel  appearing  for the  respondent No.1 submitted that the charges payable to the port authority under the respective Port Authority Ordinance which is a self contained Ordinance imposing tolls/dues and charges upon the vessel plying with­in or partly within and partly outside the limits of any  particular  port  and  for charges for services rendering to the port authority or to any official and that the port authority was empowered to detain the vessel for non-payment of tolls, dues, rights, charges or penalties payable under the Ordinance and that vessel requires a port clearance certificate before she is allowed to leave the port under the respective Ordinances and the same is a charge upon the vessel. Mr. Hafizullah further submitted that the payment of port dues has nothing to do with the sale pro­ceed of the vessel by auction which is an amount designed to secure payment of the decretal amount in the suit at the instance of the interested parties against the vessel and its owner or other con­cerned officials namely marshal the official etc. of the vessel.

9. On perusal of the Chittagong Port Authority Ordinance it appears that sec­tion 19(1)(a) provides for tolls, dues, rates and charges upon the vessel paying with­in and/or partly within or partly without the limit of the Port.

10. Thus it appears that like other tolls and taxes as in Custom Act, VAT Act, Municipal tax etc imposing tools and charges are inherent in the statutes and the authority concerned could impose, realise, disdain or remit the same and the same is attached to the ship/vessel itself as a charge and has nothing to do with the sale-proceeds of the vessel by way of auction in any suit to secure the satisfac­tion of the possible decree or decrees against the vessel, official or its owner. Upon auction sale of the vessel the ownership of the vessel is transferred to the auction purchaser who steps into the shoes of the owner of the ves­sel and in order to remove the vessel from the port limit the said auction pur­chaser owner is liable to pay tolls, charges, taxes etc. attached to the ves­sel as a charge imposed under the Port Authority Ordinance independently of the amount realised at auction sale. Prior to removal of the vessel the Port authority before issuing of a no objec­tion, is entitled to realise all its statuto­ry dues in accordance with the sched­ule specified for the purpose. In the case of Chairman, Port Authority and another Vs. Ministry of Defence and oth­ers reported in 49 DLR (AD) 152 a ques­tion was involved as to whether the earned Admiralty Judge acted beyond his jurisdiction for allowing the said vessel M.V. Fong Yung to leave the territorial waters of Bangladesh without port dues and other charges of the Chittagong Port Authority while passing the compromise decree, this Court held as under:

“In order to appreciate the point raised by the learned Counsel it is necessary to notice some of the pro­visions of the Ordinance which are relevant. Section 19(1) (a) provides for tolls, dues, rates and charges upon vessel plying within or party within and partly without the limits of the Chittagong Port. Section 19(1) (d) provides for charges for services ren­dered by the Port Authority to any vessel. Section 26 empowers the Port Authority to distrain vessel for non­payment of tolls, dues, rates, charges or penalties payable under the Ordinance, while under section 27 the vessel requires a port clearance cer­tificate before she is allowed to leave the Port. Under section 24 the Port Authority has, however, been invest­ed with the power of remission of tolls, dues, rates, or charges in special cases. We find no provision in the Ordinance which empowers the Court to exempt any vessel from payment of her dues payable to the Chittagong Port Authority.

We are therefore of the view that the learned Admiralty Judge, in allowing the vessel M.V. Fong Yun to leave the territorial waters of Bangladesh with­out payment of her dues payable to the Chittagong Port Authority, trav­elled beyond his jurisdiction.”

11. Although point raised in the said case is not directly involved in this petition but fact remains that the taxes and dues realizable under the said Ordinance are independent of the sale proceed of the ves­sel which is for the satisfaction of the decretal amount in the suit but the statutory dues charges, taxes, rates etc under the Ordinance are attached to the vessel to be realised from its existing transferee-owner while issuing the no objection cer­tificate for removing the vessel out of the Port area.

12. In Aspinall reports of Maritime Cases Volume 10 Page 162 in the case of the Emilie Millon, Gulbe, & others Vs. Owners of the Emilie Millon it was held that “the right of the dock board to detain the vessel until all rates were paid was absolute, and that no order could be made for the delivery of the vessel from the dock until all the dock rates were paid.”

13. The question of issuance of no objection certificate in respect of vessel M.V. Vishwa Kaumudi in question by the Mongla Port Authority in favour of auction purchaser arose in Civil Petition No.118 of 2003 where­in by order dated 30 March 2003 this Court directed the authority to issue no objection certificate within one week of the receipt of the bank guarantee for an amount of Tk. 2,52,37000/- from the auction purchaser on the finding inter alia, that:

“Since the payment of Port dues is independent of the amount of auction sale Tk.4 crores kept with the Marshal, the said amount of auction sale proceed which is for securing the decreetal amount in the suit, Similarly the customs dues like port dues are independent of those amount of sale proceed and whether there is a sale or not the port authority, under port Authority Ordinance 1976 is entitled to realise the port dues accrued on the vessel itself as charge on it whether it is sold or not, while issuing a ‘no objection certificate’ for removal of the vessel to any other place or destination beyond the Port limit, However, Admiralty Court would be addressed of the issue of payment of port dues if the parties so feel like and in that event any of our observation shall have no bearing on the Admiralty Court deciding the issue independently.”

14. It appears from the judgment of Admiralty Suit No. 13 of 2001 dated 28, 29, 30 and 31st May and 1st and 2nd June 2003 that no such issue to the above effect has been framed but the High Court Division has made certain gra­tuitous remark as under:

“The vessel M.V. Vishwa Kaumudi had already sold in auction for Tk. 400,000/-. Out of the said sale proceeds Tk. 400,000/- as 1% of the Marshal’s commission had been paid to the Marshal of this Court. An amount of Tk. 1,40,605/- was paid to the learned Advocate for the contest­ing defendants towards costs incurred for advertisement for auction of the vessel, inventory costs for the vessel and other necessary expenses. After deduction of those amounts, in total Tk. 5,40,605/- the rest of the sale pro­ceeds, amount to Tk. 3,94,59,305/- is now in the accounts of the Marshal of this Court.

The Mongla Port Authority is at liberty to take their dues of Tk. 2,35, 30,954.95 paisa from the Marshal at any time and the Marshal of the Court shall to pay in favour of the Chairman Mongla Port Authority by an account payee cheque as and when so demanded. The defendant Nos. 1.3 and 4 are entitled to take the rest of the sale proceeds of the vessel from the Marshal through their learned Advocate, after compliance of the Foreign Exchange Regulations with prior permission from Bangladesh Bank.”

15.  As no issue regarding the pay­ment of port dues was framed and decid­ed on the material on record in the suit excepting certain gratuitous remarks as above, we do not think that any observa­tion, direction or finding made in the said judgment regarding payment of port dues accrued on account of the vessel owned by the  subsequent auction purchaser petitioner shall have any legal force or bearing and   accordingly  the Admiralty Court as well on an application for release of the aforesaid Bank guarantee on the plea  that  in  the judgment  and  order passed by that Court the Port dues will be paid out of the sale proceed of the defen­dant  vessel  were  of  no legal conse­quences and consequently the prayer for return of the Bank guarantee to the auc­tion purchaser is of no avail.

16. The learned Admiralty Court found that the port dues is required to be paid out of the Bank guarantee furnished in favour of the Mongla Port Authority secur­ing the payment of port dues and hence the prayer for return of bank guarantee is misconceived and cannot be allowed.

In view of the above, we do no find any substance in the submission of the learned Counsel for the petitioner.

The petition is dismissed.

Ed.

Source : 6 LG (AD) (2009) 81

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