Caravel Shipping Services P Ltd (Caravel) is a multimodal transport operator. In its capacity as a carrier, Caravel received a container in Port Klang, Malaysia, from the freight forwarder Straits Express (M) Sdn Bhd, Malaysia. The container was stuffed and sealed at the shipper’s premises. Two bills of lading were issued naming Semex Impex and Uni Phann, Chennai, as consignees respectively. On arrival at Chennai Port, Caravel filed an import manifest as required by s 30 of the Customs Act 1962. The container was destuffed by Chennai Container Terminal Ltd which found that 436 cartons were short landed out of the 872 cartons consigned to Semex Impex. The third respondent (who is unnamed in the judgment) imposed a penalty of INR 337,777 under s 116 of the Customs Act for the short delivery. Caravel appealed to the second respondent (again, unnamed in the judgment) which upheld the third respondent’s order. Caravel filed a revision before the first respondent (Government of India). Caravel then filed a petition for a writ of certiorari against the first respondent’s order.

Caravel asserted that art 7 of the Hague-Visby Rules permits the carrier to enter into ‘any agreement, stipulation, condition, reservation or exemption with respect to loss or damage of goods’. Therefore the clause in the bill of lading which states, ‘Shippers Load and Count Container Sealed by Shipper’ and ‘Said to contain’ protects it from liability with respect to disputes arising out of quantity loaded and quantity discharged.

The respondents said that the container loaded in Malaysia was an LCL container rather than an FCL container. They further argued that Caravel chose to declare in the bills of lading as ‘shipper’s load and count containers sealed by shipper’ to absolve itself of responsibility. The bill of lading reference numbers were the same with a distinguishing letter ‘A’. This appeared to be a deliberate attempt to mislead Customs. The respondents also pointed out that the Hague-Visby Rules have no binding effect on Customs. The agreements are entered into by the carrier with others and not Customs. Liability under s 116 of the Customs Act is on the person who files the manifest.

Held: The writ was dismissed. It is settled law that liability under s 116 of the Customs Act is on the person who files the import manifest. Customs should not be deprived of the penalty due to it. Caravel is the agent of the person in charge of the vessel, is the author of the manifest and fixed the seal on the container. The authorities were justified in imposing the penalty under s 116 of the Customs Act. However, it is open to Caravel to sort out the loss or penalty paid to Customs with the person with whom it had entered the contract.