This suit is directed against levy of revised wharf age And storage charges by the Karachi Port Trust in pursuance to the provisions of section 43A and section 43B of the Karachi Port Trust Act, 1886.
2. The plaintiff is importer of rubber tyres and in the ordinary course of business, imported some consignments between December, 1997 to March; 1998 and when in 1998 the plaintiff approached the defendant for release of the consignments, the defendant calculated the demurrage charges on the basis of notification issued on 28-3-1998, retrospectively. Being aggrieved by this act of the defendant, the plaintiff filed the present suit.
3. On 15-3-1999 the following issues were framed:--
(1) Whether the provisions of S.R.O. 13(KE)/98, dated 26-2-1998 are applicable to plaintiff's consignment?
(2) What should the decree be?"
4. As no factual controversy was involved in the matter, it was also ordered, with the consent of the parties, that since the case involves interpretation of statutes, no oral evidence is required to be adduced by the parties and the case shall be decided on the basis of documents filed by the respective parties.
5. Contention of the plaintiff is that the effect of the Notification S.R.O. 25 (KE)/98, published in the Gazette of Pakistan, Extra-ordinary, Part II, dated 28-3-1998, could not be made so as to override the prevailing rates retrospectively under an earlier notification bearing S.R.O. No.13(KE)/98 published in the Gazette of Pakistan, Extra-ordinary, Part II, dated 26-2-1998. It has been further contended that the levy of revised rates retrospectively is illegal.
6. Mr. Javed Farooqui,.learned counsel for the plaintiff, after referring to the dates of arrival of each of the eight consignments. imported by the plaintiff, argued that the levy of wharfage and storage charges in respect of the said consignment can only be levied in prospective manner and it cannot be levied retrospectively. He contended that the plaintiff has imported these consignments under legitimate expectancy as to the payment of wharfage and storage charges at the rate as applicable on the date on which such consignments arrived at the Port of Karachi and any levy with retrospective effect, contrary to the provisions of law, is illegal. In support of his contentions, the learned counsel relied on the cases of (1) Shaikh Fazal Ahmed and others v. Claims Commissioner, Lahore (PLD 1964 SC 494), and (2) Messrs Army Welfare Sugar Mills Ltd. v. Federation of Pakistan and others (1992 SCM R 1652).
7. In the case of Shaikh Fatal Ahmed (supra), the Hon'ble Supreme Court held as under:-- "This amendment had come into force on 22-2-1963. An obvious objection to this amendment is that it is a notification by the Government in exercise of the power of subordinate legislation and such power does not include a power to give retrospective effect. The power of subordinate legislation which is exercised by the executive is a very limited power. Its exercise even to a limited extent had been objected to on ground that the fact that a Legislature had been empowered to legislate on a particular subject did not imply that it could delegate its power of legislation to any other person or body of persons. The power of delegation had, however, to be accepted to a limited extent because in many cases it is almost impossible for the Legislature to make provisions in detail and in some cases the time or the occasion for applying a statute has to be left to the executive Government. It was considered that it was not possible for the Legislature to exercise its function properly unless the grant of subordinate legislative power to the executive was permitted to this extent. However, the subordinate legislative power is to be permitted only to the extent to which it is necessary for the proper exercise of its function by the Legislature power and a power to legislate with retrospective effect has never been accepted as included in a power of subordinate legislation. In Rahmat Ullah v. Deputy Settlement Commissioner (PLD 1963 SC 633), this Court held that a notification by the Government under the Displaced Persons (Compensation and Rehabilitation) Act could not have retrospective effect."
8. In the case of Army Welfare Sugar Mills Ltd. (supra), the learned Judges of the Hon'ble Supreme Court held. as under:-- "25. The High Court has wrongly placed reliance on the general proposition that a notification cannot operate retrospectively without realizing that there is a marked distinction between a notification which purports to impair existing/vested rights or imposes new liabilities or obligations retrospectively and a notification which purports to confer benefit retrospectively."
9. The learned counsel has ventured to explain that the procedure for levy of the wharfage and storage charges is defined under the two Notifications provide for an initial period of ten days of storage without any charges, followed by three subsequent periods of ten days each, providing for levy of stepped charges at higher rates at each subsequent interval of ten days.
10. In reply to a question by the Court, the learned counsel admitted that prior to the impugned Notification, an initial period of ten days was allowed free of payment of storage charges. There is no significant alteration in the procedure as to give rise to any objection on this point, which needs no further discussion.
11. Summing up the arguments, the learned counsel has contended that the effective date of the imposition of the wharfage and storage charges, as specified in the aforesaid notification, should be for consignments arriving on or after 28-3-1998.
12. Mr. Muhammad Shoaib, learned counsel appearing for Messrs Hamid Hussain & Company, Advocates for the defendant, has vehemently opposed the contention of the learned counsel for the plaintiff. His contentions are that the rates for payment of wharfage and storage charges are notified in the aforesaid notification published in the Gazette of Pakistan, Extraordinary, Part II, dated 26-2-1998. He further went on to argue that this Notification has the backing of the sanction from the Federal Government. Referring to the provisions of section 43B of the K.P.T. Act, the learned counsel contended that since sanction of the Federal Government was obtained prior to the issuance of the notification, therefore, it became effective from the date of the notification and not from the date of its publication in the Gazette. The learned counsel also referred to the case of Army Welfare Sugar Mills Ltd. (supra), and relying on para. 25 of the Report, he stated that Notifications can be given retrospective effect. The learned counsel further contended that sanction of the Government, as contemplated in section 43B of the KPT Act, was obtained by the Board of KPT prior to the issuance of the Notification i.e. 24-12-1997, and, therefore, the Nc tification was effective from -such date as, under the provisions of section 43B, it would be effective from the date of sanction.
13. As the examination of the above discussion requires consideration of the provisions of section 43B of the KPT Act,.the same is produced below for convenient reference: "43B. Every scale framed and every alteration of a scale made by the Board under either of the last two sections preceding shall be submitted to Government tor sanction; and, when so sanctioned and published in the official Gazette shall have the force of law."
From the documents available on record, it appears that the two Notifications were published in the Gazette of Pakistan. Extraordinary, Part II on 26-2-1998 and 28-3-1998 respectively. For the purposes of the consignments in the suit, the same rates were prescribed for wharfage as well as for storage charges and as such there has been no change in the rates. Subsequently, no cause of grievance is made out on this count.
14.Referring to the effective date of operation of the notification, the learned counsel for the defendant contended that the notification would be operative from the date of sanction, however, it has been clearly mentioned in the afore-quoted section 43B of the K.P.T. Act that the charges are recoverable after publication of the rates in the official Gazette. Therefore, this contention cannot be sustained on the ground that after the first mandatory condition of sanction by the Government, the same is subject to the second mandatory requirement of publication in the official Gazette. The precise words used in the said section are that "when so sanctioned and published in the official Gazette shall have the force of law". Since conjunction "and" is used between the two requirements, i.e. sanction and publication, therefore, these two requirements are to be fulfilled before a notification can have the force of law.
15. Furthermore, the instant case is different from a case in which determination of a one time liability such as payment of a tax or duty is involved. In the instant case continuous services are being rendered over a prolonged -period of time. While .the charges can be recovered at an enhanced rate in a retrospective manner, yet, in view of the continuing nature of the transaction, the storage charges would be leviable on the consignments, subject to storage at the wharfs of KPT, at the rates in pursuance to the Notification, from the date of its publication in the official Gazette.
16. The effect of the above discussion is that the first issue is answered in the affirmative. However, as there is no change in the wharfage and storage charges in the two notifications, there will be no change in the liability of the plaintiff, provided that the same shall be recoverable only from the date of the notification i.e. 26-2-1998. In pursuance to the provisions of section 43B of the K.P.T. Act, which is not disputed.
17. In view of the above, any charge of wharfage and storage charges at the enhanced rate for the period prior to 26-2-1998 on the aforesaid consignments is declared illegal and the suit is decreed accordingly.
18. The consignments of the plaintiff were released on furnishing of a bank guarantee before the Nazir of this Court. It is hereby ordered that the bank guarantee be encashed and after calculating the charges on the basis of the rates prevailing on the respective dates, i.e. for the period prior to the date of publication of the Notification on the rates prevailing then, and for the period after the publication of the Notification on such rates as mentioned therein, and such amount may be para to the defendant while the remaining balance, if any, may be returned to the plaintiff.