Interpretation Of 'Scale Of Rates' By Tariff Authority For Major Ports Is A Binding Decision: Bombay High Court

The Bombay High Court has held that the Tariff Authority for Major Ports (TAMP) is the authority to interpret the 'Scale of Rates' fixed by it for services, port dues and other charges under the Major Port Trust Act, 1963 (MPT Act) and that its interpretation is a 'decision' and binding on the parties involved.The Division Bench of Justices K. R. Shriram and Jitendra Jain were considering the petitioner's challenge to the demand notices issued by the respondent, the Board of Trustees of the Port of Mumbai, for payment of Berth Hire Charges. The petitioner is a shipping agency that owns tugs, used for towing big ships in the Mumbai Port Area. The petitioner claimed that the respondent incorrectly calculated and levied the Berth Hire Charges for one of the petitioner's tugs. It was argued that respondent can only levy charges as per the rates approved by Tariff Authority for Major Ports. TAMP is a statutory body constituted under the Major Port Trust Act, 1963 and it fixes rates with respect to services, port dues and other charges, which are levied by the major ports in India. The High Court noted that the disagreement between petitioner and respondent arose over the interpretation of 'Scale of Rates' fixed by TAMP in 2008. Due to this disagreement, the petitioner made a representation to TAMP. After reviewing submissions from both parties, TAMP communicated on 01.03.2017 that the respondent should charge based on the actual tonnage of the tug rather than a minimum of 1000 Gross Registered Tonnage (GRT) on the petitioner's tug. However, the respondent did not levy the charges based on TAMP's communication. The Court referred to the provisions of the MPT Act. It noted that Section 30 of MPT Act provides that existing rates would apply, unless altered by the competent authority i.e. TAMP. It also referred to Section 42(4) which prohibits any Board Member or authorised person of a port authority from charging any sum higher than that fixed by the TAMP. It further referred to Sections 48 and 49 MPT Act which provide that TAMP must periodically set rates and conditions for services performed by the port authority. In view of these provisions, the Court observed that TAMP fixes the scale of rates and statement of conditions to be levied by the major ports and thus the TAMP's interpretation of the scale of rates is binding on the port authorities. It remarked “…the view expressed by TAMP is binding on respondent as it is TAMP that has interpreted the scale of rates fixed by it.” Regarding the respondent's disagreement with TAMP's interpretation, the court noted that the respondent did not challenge such interpretation. It stated “TAMP having come to a final decision accepting the submissions made by petitioner, if respondent was unhappy with the finding of TAMP it could have challenged the same. It has not.”The respondent contended that the communication of TAMP dated 01.03.2017 was merely an opinion and not a decision, to be binding on them. The Court remarked “Even if it is an opinion of TAMP, every order or judgment is the opinion of the Court, Authority or the Forum interpreting the provisions of law.” It observed that although the term 'decision' is not defined in the MPT Act, it typically refers to a reasoned conclusion reached after considering arguments both for and against a proposition. It noted that a decision involves an objective determination based on facts and circumstances, taking into account the evidence on record and hearing the affected parties. The Court pointed out that the TAMP's power to give decision and authentication is found under Section 47-F of the Act.In the present case, the Court stated that the TAMP made its communication after hearing the petitioner and respondent. TAMP determined the scale of rate at which the respondent could charge the petitioner, based on the parties' submissions and the documents produced. The Court therefore held the communication dated 01.03.2017 was a 'decision' and binding on the parties. The court thus quashed the demand notices issued by the respondent.Case title: Raj Shipping Agencies Ltd vs. The Board of Trustees of the Port of Mumbai (Writ Petition No.1637 of 2018) Citation: 2024 LiveLaw (Bom) 346Click Here To Read/Download Order

Interpretation Of 'Scale Of Rates' By Tariff Authority For Major Ports Is A Binding Decision: Bombay High Court

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Interpretation Of 'Scale Of Rates' By Tariff Authority For Major Ports Is A Binding Decision: Bombay High Court

Sanjana Dadmi

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