IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE EASWARAN S.

MONDAY, THE 17^TH DAY OF MARCH 2025 / 26TH PHALGUNA, 1946

WA NO. 333 OF 2021

AGAINST THE JUDGMENT DATED 11.03.2020 IN WP(C) NO.7435 OF 2020 OF HIGH COURT OF KERALA

APPELLANTS/PETITIONERS IN WP(C:

1 THE CONTAINER SHIPPING LINES ASSOCIATION (INDIA)
A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION
ACT 1860, HAVING ITS REGISTERED ADDRESS AT MACKINNON
MACKNENZIE BUILDING, BALLARD ESTATE, MUMBAI
400001,REPRESENTED BY ITS CHIEF EXECUTIVE OFFICE
MR.SUNIL VASWAMI

2 CMA CGM AGENCIRES ( INDIA ) PVT.LTD.,
HAVING ADDRESS AT OFFICE NO.219,2ND FLOOR, METRO HOUSE,
OPP.PMTC,OFF WADIA COLLEGE, MANGALDAS ROAD, PUNE 411
001, MAHARASTRA,INDIA REPRESENTED BY ITS BRANCH MANAGER
MR.SHYAM SUNDER .N.

3 MSC AGENCY INDIA PVT.LTD.
HAVING ADDRESS AT MSC HOUSE, ANDHERI KURLA ROAD,
ANDHERI EST, MUMBAI-400 059, REPRESENTED BY IS BRANCH
JACOB GEORGE

BY ADV.
SRI.SRINATH SRIDEVAN, SR
SRI.PRATHAMESH KAMAT
SMT.SNEHA RAJIV
SRI.MALHAR ZATAKIA
SRI.SHIV IYER
SMT.ADITI MAHESHWARI
SMT.ANKITA SEN

RESPONDENTS/RESPONDENT NOS. 1 TO 3 IN WP(C):

1 UNION OF INDIA
THROUGH SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF
REVENUE NORTH BLOCK, NEW DELHI-110 001

2 COMMISSIONER OF CUSTOMS,
CUSTOMS HOUSE, WILLINGDON ISLAND, COCHIN-682 009

3 SEPCIAL SECRETARY LOGISTICS
DEPARTMENT OF COMMERCE, MINISTRY OF COMMERCE AND
INDUSTRY,UDYOG BHAWAN, NEW DELHI-110 107

BY SRI.SREELAL N. WARRIER, SC
SRI.P.VIJAYAKUMAR, ASG OF INDIA

THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 17.03.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT

Dr. A.K.Jayasankaran Nambiar, J.

The petitioners in WP(C) No.7435 of 2020 are the appellants herein aggrieved by the judgment dated 11.03.2020 of a learned Single Judge, who dismissed their Writ Petition.

2. The brief facts necessary for the disposal of this Writ appeal are as follows:

The appellants had impugned a Public Notice No.5/2020 dated 03.02.2020, as well as Exts.P3 toP5 communications issued to them by the 3rd respondent, purportedly based on the said Public Notice, as illegal and violative of their fundamental rights under the Constitution of India. The appellants are an Association of Container Shipping Lines, and Individual Shipping Lines, who render services of carriage of goods by sea from one Port to another across international waters. It is the case of the appellants that the terms of carriage of goods, and the services offered by them in connection therewith, fall broadly under two categories, namely, (1) Container yard to Container yard (CYCY) and (2) Free In Free Out (FIFO). In the case of the former, the goods to be carried on the Vessel are put on board the Vessel by the shipper on the express condition that the charges to be paid to the Vessel would include all the incidental charges incurred in respect of the goods from the stage at which the goods are received at the container yard at the Port of shipping and upto the stage where they are delivered to the container yard at the Port of discharge.

The charges so collected would include the Ocean freight, the terminal charges at either end, and other ancillary charges. In the case of the FIFO clause, the charges collected for carriage of the goods would not include the terminal handling charges and charges incidental thereto, since the express terms of the agreement would have mandated that the said charges would be at the option of the recipient/importer of the goods.

3. The apprehension of the appellants on coming across the Public Notice No. 5/2020 dated 03.02.2020 was with regard to the regulatory power that was apparently exercised by the Customs Authority in respect of a matter that fell within the realm of a private contract between the appellants and their clients viz. the shipper or the consignee or the holder of the bill of lading all of whom came within the definition of merchant as defined in the bill of lading. Their apprehension was fortified when they received Exts.P2 to P5 communications that gave the impression that the 3rd respondent had interpreted the Public Notice as one that mandated that persons like the appellants could not thereafter collect handling charges over and above the terminal handling charges that were prescribed by the Indian Port in accordance with the scale of rates prescribed under the Major Port Trust Act.

4. The learned Single Judge, who considered the Writ Petition, found that the Public Notice that was impugned did not suffer from the vice of an unauthorised delegation of power, and further that it was only intended to offer an option to importers to either approach the terminal operator directly for the payment of terminal handling charges or pay the said charges through the shipping line in their discretion. The learned Judge did not, however, consider the legality of Exts.P2 to P5 communications received by the appellants or the argument of the appellants herein that the contents of those communications were not in conformity with those in the Public Notice aforementioned. The learned Single Judge dismissed the Writ Petition by holding that the appellants herein did not have any cause of action to challenge Exts.P1 Public Notice, and inasmuch as there was already a contract between them and the importer, their rights under the contract were protected by the terms of the contract itself.

5. Before us, it is the submission of the learned Senior counsel Sri. Srinath Sridevan assisted by the learned counsel Sri. Prathamesh Kamat, appearing on behalf of the appellants, that the learned Single Judge failed to notice the reliefs prayed for by the appellants in the Writ Petition, which included a challenge to the communications issued by the 3rd respondent and a prayer for the issuance of a writ of mandamus to restrain the 2nd and 3rd respondent or any other State Authority from acting on Public Notice No.5/2020 in the manner understood by them. We have also been shown a copy of the judgment of a Division Bench of the Bombay High Court dated 26.07.2024 in WP(C).Nos. 2914 of 2021 and 3081 of 2021 where, while interpreting a similar Public Notice issued by the Customs Authorities in Bombay, and the communications similar to Exts.P2 to P5 that were issued in the wake of said Public Notice, the High Court found that the communications of the 3rd and 4th respondents therein, that gave the impression that the impugned Public Notices were mandatory, and were not concerned with contracts such as CYCY, FIFO etc were contrary to the stand taken by the notice-issuing respondents in those cases, and proceeded to set aside the said communications as contrary to the Public Notice.

6. Per contra, it is the submission of the learned Standing counsel for the respondents herein that the challenge to Ext.P1 Public Notice is not maintainable since, according to him, the Public Notice does not prevent the appellants from enforcing the terms of their contract with the importer in relation to the carriage of goods in their Vessel, and further there is no mandate in the said Public Notice that the appellants must act contrary to the terms of their contract with the importer. It is his specific case that the Public Notice merely offers an option to importers in the matter of payment of terminal handling charges in that they could pay the terminal handling charges directly to the terminal operators without the intervention of any shipping line.

7. On a consideration of the rival submissions, we find force in the contention of the learned Senior counsel appearing on behalf of the appellants, that Exts.P2 to P5 communications issued to them by the 3rd respondent runs contrary to the express terms of Ext.P1 Public Notice, and virtually reads-in conditions thereto that were not contained in, or contemplated through, Ext.P1 Public Notice. As a matter of fact, the respondents have not been able to point to any regulatory power on the basis of which a notice in the nature of Ext.P1 Public Notice could be issued, if it had the effect of interfering with the terms of a contract entered into between the shipping lines and the shipper/recipient of the goods under carriage. In the absence of such a regulatory power, traceable to the provisions of any statute or contract, we are of the view that such a power, that has the potential to interfere with the freedom of contract between parties, cannot be inferred from the terms of a Public Notice. It is in this respect that we find Ext.P2 to P5 communications to be legally flawed and contrary to Ext.P1 Public Notice. We, therefore, set aside Ext.P2 to P5 communications issued by the 3rd respondent and hold that Ext.P1 Public Notice shall not be interpreted by the 2^nd and 3^rd respondents or any person acting under them, in a manner that interferes with the terms of any private contract entered into between the shipping lines, and the shipper/recipient of the goods carried under a bill of lading. The Writ Appeal is thus allowed as above, by leaving open the question as regards the authority of law that informs the issuance of public notices to be decided in an appropriate case

Sd/-

DR. A.K.JAYASANKARAN NAMBIAR
JUDGE

Sd/-
EASWARAN S.
JUDGE