Navigating the Inland Vessels Act: Jurisdiction, Safety and Liability in India

Navigating the Inland Vessels Act: Jurisdiction, Safety and Liability in India

Introduction

Inland water transport constitutes a vital yet under-leveraged component of India’s logistics and passenger mobility matrix. The primary statute governing this sector for more than a century has been the Inland Vessels Act, 1917 (“1917 Act”). Despite repeated State-level amendments and sectoral enactments such as the Inland Waterways Authority of India Act, 1985 (“IWAI Act”), the 1917 Act persisted as the central framework until Parliament enacted the Inland Vessels Act, 2021 (“2021 Act”), signalling a paradigm shift towards a unified regulatory code. This article critically analyses the 1917 Act—and transitional issues arising under the 2021 Act—through the lenses of jurisdiction, safety, liability and fiscal regulation, synthesising leading judicial precedents and statutory developments.

Legislative Framework

1. The 1917 Act: Objectives and Architecture

Enacted under British rule, the 1917 Act seeks “to regulate the navigation of inland mechanically propelled vessels.” Key provisions include:

  • Section 2: Definitions—most notably “mechanically propelled vessel,” expanded judicially to include even dumb barges towed by tugs (West Coast Dredging Co., 2015)[1].
  • Section 19: Mandatory registration of vessels plying in inland waters, invoked in Jindal ITF v. I-Marine Infratech (2021)[2].
  • Chapter IV-A (ss. 54A–54F): Inserted in 2007 to provide compulsory third-party insurance and establish Inland Vessels Accident Claims Tribunals, mirroring Chapter XI of the Motor Vehicles Act, 1988 (“MVA”). Effective enforcement, however, required State notifications, the absence of which led to procedural impasse in K.M. Rafeeque (Ker HC, 2021)[3].

2. The IWAI Act, 1985

The IWAI Act created the Inland Waterways Authority of India, a central body corporate with extensive powers of regulation, development and policy direction[4]. As the Jharkhand High Court held in Jai Bajrang Walee Stone Works (2021), the IWAI’s competence over private ferries co-exists with, rather than supplants, State settlement of public ferries[5].

3. The 2021 Act: Continuity and Reform

Replacing the 1917 Act, the 2021 Act introduces a “certificate of survey”, national vessel registry, digital enforcement and strict pollution norms. Transitional provisions preserve licences issued under the 1917 Act until revalidated, a factor relevant to pending litigation and administrative actions discussed below.

Jurisdictional Dimensions

1. Centre–State Competence

Legislative power over inland waterways straddles Entries 24, 31 and 32 (List I) and Entry 58 (List II) of the Seventh Schedule. The Supreme Court in Panduronga Timblo (1992) upheld State power to legislate on ferries and inland watercraft irrespective of propulsion method, treating large powered barges as “boats” within Entry 58[6]. Conversely, central jurisdiction prevails over national waterways and mechanically propelled vessels when Parliament legislates, as seen in the 2021 Act.

2. Government Corporations as “State”

In Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly (1986) the Supreme Court declared the wholly Government-owned corporation an instrumentality of the State under Article 12, thereby subjecting its employment rules to Article 14 scrutiny[7]. This classification bears relevance where IWAI or similar entities exercise licensing or disciplinary powers under the 2021 Act.

3. Admiralty Jurisdiction over Inland Vessels

Although admiralty courts historically targeted sea-going ships, modern Indian jurisprudence extends jurisdiction to inland vessels when they are subject to actions in rem. In Jindal ITF (Cal HC, 2021) a barge registered under both the 1917 Act and the Merchant Shipping Act, 1958 was arrested; the Court rejected the defence that purely inland operation ousted admiralty jurisdiction, citing M.V. Elisabeth and M.V. Al Quamar[2].

Safety, Registration and Licensing

1. Definition of Mechanically Propelled Vessel

Section 2(1)(c) of the 1917 Act includes “every description of vessel propelled wholly or in part by mechanical power, including dumb vessels towed by such vessel.” The Kerala High Court in West Coast Dredging emphasised that even a non-self-propelled barge used in dredging fell within the definition, validating detention under the Kerala Inland Vessels Rules, 2010[1].

2. Municipal Ferries and Compliance

In Sali Thomas v. Cochin Municipal Corporation (2019) the petitioner sought mandamus ensuring compliance with Sections 265–267 of the Kerala Municipalities Act and the 1917 Act for municipal ferry operations[8]. The case underscores the overlap between municipal obligations and the statutory regime for vessel safety, particularly after fatal accidents such as the Fort Kochi tragedy (2015).

3. Compulsory Insurance

Chapter IV of the 1917 Act (read with MVA Chapter XI) mandates third-party risk cover. In Liverpool & London P&I Association v. M.V. Sea Success I (2003) the Supreme Court traced the evolution of compulsory marine insurance, referencing the 1917 Act’s incorporation of MVA provisions[9]. The statutory obligation has been reaffirmed in accident litigation and recent policy debates preceding the 2021 Act.

Liability and Compensation

1. Accident Claims Tribunals

K.M. Rafeeque exposed administrative lacunae where Motor Accident Claims Tribunals (MACTs) declined jurisdiction absent notification under Section 54C(f). The Kerala Government’s 2021 notification retroactively vested MACTs with authority, enabling expeditious adjudication[3].

2. Negligence, Vicarious Liability and Deficiency in Service

The Supreme Court in Vadodara Municipal Corporation v. Purshottam V. Murjani (2014) upheld consumer-forum awards against a municipal corporation and private operator for a boating disaster, holding that violation of the 1917 Act constituted “deficiency in service.” Public authorities cannot invoke statutory functions as shields against tortious or consumer liability[10].

Fiscal and Regulatory Compliance

1. Service-Tax Classification

Prior to 1 September 2009, transportation of goods by inland waterways evaded service tax. Adani Enterprise Ltd. v. CST (2022) held that once “coastal goods and inland water transport services” were specifically taxed from that date, identical activities could not be shoe-horned into older “port services” entries[11]. The Supreme Court in Union of India v. Coastal Container Transporters Association (2019) further cautioned High Courts against quashing show-cause notices on classification disputes, emphasising statutory appellate remedies[12].

2. Excise and Customs Classification

Similar reasoning guided CESTAT in CCE Goa v. Vijai Marine Services (2019), where registration of a casino vessel under the 1917 Act informed but did not conclusively determine customs classification[13].

Emerging Challenges and Recommendations

  • Uniform Implementation: Fragmented State amendments under the 1917 Act necessitated the 2021 Act’s concurrent enforcement model. Effective digital registries and survey certification must be operationalised to avoid a repeat of the Rafeeque impasse.
  • Admiralty–Inland Interface: Clear statutory guidance is required to harmonise admiralty arrest procedures with inland vessel operations to prevent forum shopping and uncertainty following Jindal ITF.
  • Insurance Penetration: Enforcement mechanisms—such as linkage of operating permits to live insurance policies—should emulate the motor-vehicle model.
  • Consumer Protection Synergy: Post-Vadodara Municipal, operators must adopt standard operating procedures and safety audits; regulators should publish compliance scores to foster transparency.
  • Tax Clarity: With the advent of GST, specific exemption or rate notifications for inland water transport should be aligned with infrastructure-promotion policies to avoid the classification disputes highlighted in Coastal Container and Adani.

Conclusion

The inland-waterway regime in India is transitioning from a century-old, State-amended mosaic to a technologically driven, nationally integrated framework under the 2021 Act. Judicial pronouncements have addressed jurisdictional ambiguities, reinforced safety and insurance obligations, and prevented fiscal overreach. Nevertheless, administrative diligence and inter-agency coordination remain critical to realising the developmental and environmental potential of India’s inland waterways. Lessons from the 1917 Act’s litigation trajectory—spanning ferries to casino vessels—must inform the 2021 Act’s implementation, ensuring that navigational progress does not lag behind legal reform.

Footnotes

  1. West Coast Dredging Company v. State of Kerala, 2015 SCC OnLine Ker 38389.
  2. Jindal ITF Ltd. v. I-Marine Infratech (India) Pvt. Ltd., 2021 SCC OnLine Cal 142.
  3. K.M. Rafeeque v. Secretary, Dept. of Coastal Shipping, 2021 SCC OnLine Ker 13328.
  4. Paras extracted from Central Inland Water Transport Corp. Ltd. & Anr., Supreme Court of India, 1986.
  5. Jai Bajrang Walee Stone Works v. State of Jharkhand, Jharkhand HC, 2021.
  6. Panduronga Timblo Industries v. Union of India, (1992) Supreme Court.
  7. Central Inland Water Transport Corp. Ltd. v. Brojo Nath Ganguly, (1986) 3 SCC 156.
  8. Sali Thomas v. Cochin Municipal Corporation, 2019 SCC OnLine Ker 4578.
  9. Liverpool & London P&I Association v. M.V. Sea Success I, (2003) Supreme Court.
  10. Vadodara Municipal Corporation v. Purshottam V. Murjani, (2014) Supreme Court.
  11. Adani Enterprise Ltd. v. Service Tax, CESTAT Ahmedabad, 2022.
  12. Union of India v. Coastal Container Transporters Association, (2019) SCC OnLine SC 274.
  13. CCE Goa v. Vijai Marine Services, CESTAT, 2019.