JSA represents JSW Steel Limited before the Bombay High Court in significant ruling on Scope of Liability under the Indian Ports Act, 1908

JSA Advocates & Solicitors (JSA) successfully represented JSW Steel Limited before the Bombay High Court in a significant ruling clarifying the scope of liability of an “owner” under Section 14 of the Indian Ports Act, 1908.

By a judgment dated 10 April 2026 (“Judgment”), a Division Bench of the Bombay High Court (“Bombay HC”) allowed a writ petition filed by the Petitioner and set aside an order dated 14 October 1996 (“Suspension Order”) issued by the Bombay Port Trust (“Respondent No. 1”), which suspended the Petitioner’s permission to use Respondent No. 1’s waters for transit of barges pursuant to a statutory notice issued under Section 14 of the Indian Ports Act, 1908 (“Act”) b alleging failure to deposit INR 70,00,000/- towards removal of a sunken barge.

The writ petition was admitted, and by an interim order, the Petitioner was directed to deposit INR 70,00,000/- (“Deposit”) before the Bombay HC. The writ petition was subsequently disposed of as infructuous (“Impugned Order”), and Respondent No. 1 was permitted to withdraw the Deposit with interest. The Petitioner challenged the Impugned Order before the Supreme Court, which set it aside, holding that liability under Section 14 of the Act remained to be decided. The matter was accordingly remanded to the Bombay HC.

The dispute arose from the Statutory Notice and the consequent Suspension Order issued by Respondent No. 1, seeking to fasten liability on the Petitioner under Section 14 of the Act following the sinking of a barge engaged by it in Mumbai harbour. The principal issue before the Bombay HC was whether the Petitioner, not being the owner of the barge, could be held liable for removal of the wreckage.

Respondent No. 1 inter alia contended that it was entitled to seek the Deposit from the Petitioner on the basis that: (i) the Petitioner exercised commercial control over the barge and was therefore liable as a “disponent owner”; (ii) the Petitioner had, through its conduct and correspondence, accepted liability as the owner of the barge; (iii) Respondent No. 1 was otherwise empowered under the Act to recover costs for removal of the obstruction caused in its waters; (iv) the Petitioner was liable to pay for the cost for removal of cargo being iron ore which was causing obstruction in the waters; (v) the Petitioner was liable under Section 402 of the Merchant Shipping Act, 1958 (“MSA”) to pay a reasonable sum to the salvor; and (vi) the Petitioner was liable to make payment by virtue of the polluters pay principle.

The Petitioner inter alia contended that: (i) liability under Section 14 of the Act is confined strictly to the “owner” of the vessel and cannot be extended to a party merely availing services through a charter arrangement; (ii) the barge was owned by Shivam Enterprises (“Respondent No. 3”) and chartered by N.S. Guzder & Co. (“Respondent No. 2”) on a time charter basis, under which ownership and control remained with the owner; (iii) the Petitioner was admittedly not the owner of the barge; (iv) in a time charter, ownership and possession remain with the owner; (v) Respondent No. 1 could not rely on other statutory provisions, whether under the Act or under the MSA, in the absence of foundational pleadings or compliance with the prescribed statutory mechanism; and (vi) having invoked action under a particular section of the Act, Respondent No. 1 is restrained from invoking other provisions of the Act or other law without complying with the procedure set out therein (after so many years), as it would be in breach of established principles of natural justice.

The Bombay HC accepted the contentions of the Petitioner and allowed the writ petition holding that:

1. 1. Section 14 of the Act clearly fastens liability for removal of wreckage only upon the “owner” of the vessel, which expression must be construed in its ordinary legal sense.
2. Respondent No. 3 was admittedly the owner of the barge, which the Petitioner had merely engaged through a time charter arrangement. A time charter does not transfer ownership or possession of the vessel.
3. As held in Liverpool and London Steamship Protection and Indemnity Association Limited v. m. t. Symphony & Ors, a disponent owner is an entity that controls the commercial operations of a ship. In the present case, the vessel was taken on a time charter arrangement. The contractual arrangement clearly evidenced that the Petitioner did not have commercial control of the barge. The Petitioner could not be held to be a disponent owner.
4. The statutory scheme under Section 14, read with Section 57 of the Act, prescribes a specific procedure for removal of wreckage and recovery of associated costs, which must be strictly followed. Respondent No. 1 had not adhered to the prescribed statutory framework, and could not have, by way of the Statutory Notice, unilaterally fastened liability upon a party not contemplated by the provision.
5. Respondent No. 1’s action by way of the Statutory Notice and Suspension Order could not be sustained against the Petitioner under Section 14 of the Act since the Petitioner was not the owner of the barge.
6. Respondent No. 1’s belated reliance on other provisions of the Act and the provisions of the MSA was not justified in the absence of any foundational pleadings or compliance with the statutory mechanism prescribed under such provisions.

In light of the above, the Bombay HC held that the Petitioner could not be fastened with liability pursuant to the Statutory Notice issued under Section 14 of the Act, and consequently set aside the Suspension Order as being unsustainable in law. The Court directed Respondent No. 1 to refund to the Petitioner an amount of INR 4,09,25,764 (being the Deposit along with accrued interest) within a period of six weeks.

With this judgement, the Bombay High Court passed a definitive finding on the scope of liability of an “owner” under Section 14 of the Indian Ports Act, 1908.

The JSA team was led by Varghese Thomas, Partner with support from Fatema Kachwalla, Partner and Meher Mistri, Associate.