(Published in Part – III Section 4 of the Gazette of India, Extraordinary)
| No. 77 | New Delhi, the
17 April, 2001 |
Tariff
Authority for Major Ports
In
exercise of the powers conferred by Sections 48, 49 and 50 of the Major
Port Trusts Act, 1963 (38 of 1963), the Tariff Authority for Major
Ports hereby approves the request of the Jawaharlal Nehru Port Trust for
exemption from implementing the Orders relating to levy of penal interest for
the period 23 March 2000 to 30 September 2001 as in the Order appended hereto.
( S. Sathyam )
Chairman
O
R D E R
(Passed
on this 8th day of April 2002)
This case relates to a proposal from the Jawaharlal Nehru Port Trust (JNPT)
for grant of exemption from implementation of this Authority’s Orders
relating to levy of penal interest for the period 23 March 2000 to 30 September
2001.
2.
Emphasizing the principle of level playing ground, this Authority
had passed an Order on 4 February 2000 prescribing payment of penal interest on
delayed payments both ways i.e. by Port users as well as by the
Port Trusts. Retaining the
underlining principle envisaged, this Order was subsequently amended on a
few occasions to modify the rate of penal interest and grace period in
consideration of the requests made by some of the Major Port Trusts.
The last such amendment was made on 5 November 2001 by considering the
proposal made by the Indian Ports Association.
3.
In this backdrop, the JNPT has forwarded the proposal in reference
wherein it has brought out the following points:-
(i).
The Port has not been able to implement the orders of the Authority from
23 March 2000 to 30 September 2001.
(ii).
On receipt of the initial Order of the Authority, the JNPT has
expressed its difficulties in implementing the order.
The Authority has, however, advised all the Major Ports to
take up this matter with the Indian Port Association to formulate a coordinated
view about adoption of a uniform interest rate as also the time limit beyond
which the penalty will apply.
(iii).
The intention behind the Order of the Authority was to provide a level
playing ground. Till 30
September 2001, the JNPT neither levied nor paid any penal interest.
(iv).
If it is decided to implement the Orders of the Authority retrospectively,
it will become difficult to identify the cases where delays occurred and to
recover the dues from users. The
entire matter will lead to confusion and protests from port users. In the
event, retrospective billing will cause hardships and difficulties.
4.
The JNPT has also informed that the position mentioned above was
considered by its Board of Trustees in its meeting held on 22 February 2002 and
it was decided to approach the Authority with the request to exempt the JNPT
from the implementation of the Orders for levy of penal interest from 23 March
2000 till 30 September 2001.
5.1
The Order in reference was passed by this Authority exercising its
statutory powers. It has the
effect of modifying the Scale of Rates of the Major Port Trusts; and,
the Major Port Trusts are legally bound to follow the rates and conditionalities
prescribed in their Scales of Rates.
It is noteworthy that this Authority’s Order in reference has
not been set aside by any higher judicial forum.
The difficulties earlier expressed by the JNPT in implementation of the
Order were adequately dealt with and suitable advice was given to the JNPT.
That being so, the approach earlier adopted by the JNPT about not
implementing this Authority’s Order cannot be said to be in conformity
with the tariff setting arrangements envisaged in the Major Port Trust Act.
5.2
Notwithstanding the position discussed above, it is noteworthy
that the JNPT has already implemented the Order from 1 October 2001. The problems now expressed by the JNPT in implementation of
the order retrospectively appear to be genuine and worthy of admission.
5.3
As has already been clarified in various related Orders, the
intention behind the prescription of penal interest is to allow a level playing
ground and to provide for uniformity in the matter of payment of interest on
delayed payments by the Port users as well as delayed refunds made by the Port
Trust. In other words,
if the Port applies the penal interest provision for delayed payments from users,
the same condition shall be applicable to delayed refunds made by it.
In the case in hand, the JNPT has clarified that penal interest
provisions have not been enforced either way till 30 September 2001.
5.4
Bearing in mind the fact that the governing principle of ‘level
playing ground’ has not been violated, and recognising the legal
and accounting difficulties in enforcing the prescription retrospectively,
this Authority is inclined to accede to the request now made by the JNPT.
6.
In the result, and for the reasons given above, and based
on a collective application of mind, this Authority grants exemption to
the JNPT from implementation of the Orders relating to levy of penal interest
for the period 23 March 2000 to 30 September 2001.
( S. Sathyam )
Chairman