The Supreme Court of India clarified that the ship owner’s agent is liable to pay the demurrage charges and other dues of the port authority if the bill of lading or the delivery order is not endorsed or issued to the consignee.
“The position of law which appears to emerge is that once the bill of lading is endorsed or the delivery order is issued it is the consignee or endorsee who would be liable to pay the demurrage charges and other dues of the Port Trust authority. In all other situations the contract of bailment is one between the Steamer Agent (bailor) and the Port Trust Authority (bailee) giving rise to the liability of the Steamer Agent for such charges till such time that the bill of lading is endorsed or delivery order is issued by the Steamer Agent”, a Large Bench of the Court ruled.
The Court said when the port authority takes charge of the goods from the ship-owner, the ship-owner is the bailor and the port authority is the bailee, and the port authority’s responsibility for the goods thereafter is that of a bailee. The port authority does not get the goods from the consignee. It cannot be the bailee of the consignee. So whatever services port authority performs at the time of the landing of the goods or on their removal thereafter, are services rendered to the ship owner.