British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries Quilon
1973-08-16
V.KHALID, V.P.GOPALAN NAMBIYAR
body1973
DigiLaw.ai
JUDGMENT K. Gopalan Nambiyar, J. 1. The British India Steam Navigation Company Limited, the defendant in O.S. No. 18 of 1965, Sub Court, Cochin, against whom a suit for damages for short- delivery of 733 bags of raw cashewnuts, was decreed for a sum of Rs. 44,438.03 and interest thereon at 6 per cent per annum from 17th July 1964 (amounting in all to Rs. 46,659.93) is the appellant in this appeal. The plaintiff- respondent purchased from East Africa a total of 350 tons of raw cashew nuts in three lots, 150 tons at Rs. 775 per ton in February-April; 100 tons at Rs. 765 per ton in February- March; and 100 tons at Rs. 775 per ton, in February-April. The defendant-company issued three bills of lading (Exts. P-1 to P-3) for the three lots of nuts, to carry the goods packed in 4445 bags in the vessel s.s. Steliosm and deliver the same at the Port of Cochin. Out of these, 3712 bags alone were delivered at Cochin. 733 bags represented the extent of short-delivery. The proportionate invoice price of the bags short-delivered was worked out at Rs. 44,438.03 for which the claim was laid. 2. The court below recorded that the factum of short- delivery of 733 bags was admitted by the learned counsel on both sides (vide paragraph 6 of the Judgment). It therefore found that there was short-delivery of 733 bags as claimed. For the defendant-company, it was argued that it was a mere charterer of the vessel, the ownership of which belonged to S. Matas and others Care Lucas Matas and Sons Piraeus Greece; that there was a charter of agreement between the company and the owners in London on 27th January 1964, and that the plaintiff remedy if any, was against the owner and not the charterer of the vessel. The plaintiff denied that the defendant company was only a charterer. To prove the existence and contents of the charter party agreement, Ext. D-1 which is a photostat copy of what purports to be a Time-charter, made and concluded in London on 27th January 1964 between the Victoria Steamship Co. Ltd., and the British India Steam Navigation Company was produced. It bears on the back of it, an endorsement dated 1st April 1966 from Sri V. K. Krishnankutty, plaintiff counsel: This may be received in evidence.
Ltd., and the British India Steam Navigation Company was produced. It bears on the back of it, an endorsement dated 1st April 1966 from Sri V. K. Krishnankutty, plaintiff counsel: This may be received in evidence. The document was produced in court on 18th August 1967, and shows that it was proved by P.W. 1 and marked as Ext. D-1 on 31st August 1967. On 31st August 1967, in the course of the cross- examination of the Manager of the plaintiff firm as P.W. 1, he admitted that the vakalat in favour of Sri V. K. Krishnankutty, Advocate (who had made the endorsement on the back of Ext. D-1) had not been withdrawn. The next sentence in the original of the deposition is: subject to objection the document is marked as Ext. D-1. This appears a rather queer and clumsy way of proving the document. Immediately after this, in reexamination, P.W. 1 stated that he did not know if Ext. D-1 was a true copy of the original. When the D.W. 1, an employee of the Madura Company Ltd., the agent of the defendant-company, was examined, he mentioned that the defendant was only a charterer and the names of the parties are mentioned in Ext. D-1, and explained that the Victoria Steamship Company Ltd. are the agents for the owners of the vessel. This, we should think, was the appropriate occasion for proving and marking the document, and raising objection, if any, to its reception in evidence. In cross-examination D.W. 1 stated that he had not seen the original of Ext. D-1, that Ext. D-1 is a photostat copy, and that he does not know where the original is. On these materials, counsel for the defendant-respondent contended that Ext. D-1 is not legally admissible as secondary evidence to prove the charter party agreement and that the court below had rightly ruled it as inadmissible, despite the endorsement made by the plaintiff counsel that the same may be received in evidence. The court below actually stated that the endorsement was made at the time when the counsel had ceased to appear for the plaintiff in the case, and therefore it cannot be said that the document was admitted by the plaintiff. This appears to us to be a feeble reason, as P.W. 1 admitted that the vakalath of counsel who made the admission had not been withdrawn.
This appears to us to be a feeble reason, as P.W. 1 admitted that the vakalath of counsel who made the admission had not been withdrawn. Nor was the court below quite accurate in holding that Ext. D-1 is not legally proved. The correct position appears to us to be thus: The endorsement of the plaintiffs counsel that Ext. D-1 may be received in evidence only means that the requirement of formal proof of the document is waived. But even then, the document was only a photostat copy of the original, which could pass only as secondary evidence. Was this admissible in evidence? and if so, had the necessary foundation been laid for the reception of secondary evidence of the existence, condition and contents of the original charter party, according to the terms of section 65 of the Indian Evidence Act? The endorsement on Ext. D-1 cannot be read as waiving the conditions for admission of secondary evidence; and if it does, counsel for the plaintiff- respondent is right in his submission that his client would not be bound by this concession made by counsel on a point of law. Under section 65 of the Indian Evidence Act secondary evidence may be given of the existence, condition, or contents of a document, under certain circumstances. None of these conditions have been proved to exist. Section 63 lists the classes of secondary evidence. Clause (2) thereof, which is relevant, refers to copies from the original, made by mechanical process, which, themselves ensure the accuracy of the copy, and copies compared with such copies. There is no proof of the accuracy of the photographic copy or its having been compared with, or being a true reproduction of, the original. Sufficient foundation has not been laid in the evidence to show that this requirement has been satisfied. We have referred earlier to the relevant portions of the evidence of P.W. 1 and D.W. 1 which show they cannot depose to the accuracy of the copy, or of its having been compared with the original. We are not, in the circumstances, satisfied either that Ext. D-1 can pass as secondary evidence, under section 63, or that the necessary foundation had been laid for the reception of the same as secondary evidence under section 65.
We are not, in the circumstances, satisfied either that Ext. D-1 can pass as secondary evidence, under section 63, or that the necessary foundation had been laid for the reception of the same as secondary evidence under section 65. Therefore, strictly, there is no proof of the existence or the contents of any charter party agreement between the defendant-appellant and the owners of the vessel. 3. But it was contended for the appellant that the bills of lading Exts. P-1 to P-3 themselves afford indication of the existence of a charter-party agreement. These are signed by the defendants for the master and owners. At the bottom of these bills of lading, is printed in red: See conditions of carriage and other conditions on reverse. On reverse we get condition No. 4 which reads: If the vessel is not owned by or chartered by demise to the Company or Line by whom this bill of lading is issued (as may be the case notwithstanding anything that appears to the contrary) this bill of lading shall take effect only as a contract with the owner, or demise charter as the case may be, as principal, made through the agency of the said Company or Line who act solely as agents, and shall be under no personal liability whatsoever in respect thereof. It was argued that by reason of the above condition in the bills of lading, the defendant-company cannot be personally liable for the claim. We are unable to agree. The bills of lading are issued in the printed forms of the defendant- company, and they bear prominently the name of the defendant-company at their top. Beyond what appears at the bottom, over the signature and seal, there is nothing at all to indicate that the defendant-company was issuing the bills of lading for and on behalf of any owners of the vessel. The name of the owner is not disclosed either. Reading the bills of lading as a whole, we find it impossible to hold that the same were issued on behalf of the owner and would exclude the personal liability of the defendant-company.
The name of the owner is not disclosed either. Reading the bills of lading as a whole, we find it impossible to hold that the same were issued on behalf of the owner and would exclude the personal liability of the defendant-company. Counsel on both sides relied on stray passages from Scrutton: On Charter Parties� and Carver Carriage by Sea, in support of their respective cases, that the carrier is not, and is, liable, in such cases; but beyond reading the passages, neither side made good its submission by citing any of the1 cases referred to. We therefore do not propose to embark on any investigation of our own, as to the ramifications and development of this part of the law. 4. Assuming that Exts. P-1 to P-3 may be regarded as having been issued on behalf of unspecified owners, counsel for the plaintiff-respondent is, again right in his submission that clause (4) of these documents, offends the provisions of the Carriage of Goods by Sea Act, 1924. Article I (a) of the Rules in the Schedule to the Act (which have to be given the force of law subject to the provisions of the Act) defines Carrier� as including the charterer also. Article III is entitled Responsibilities and Liabilities�. Clauses (1) and (2) read: Article III (1) The carrier(s) shall be bound before and at the beginning of the voyage, to exercise due diligence to (a) Make the ship seaworthy; (b) Properly man, equip, and supply the ship; (c) Make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation. (2) Subject to the provisions of Article IV (1), the carrier (m) shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.� Article IV deals with rights and immunities and provides by clause (2), that neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from a variety of causes, such as act, neglect or default of the master, pilot, etc., fire, perils and accidents of the sea, act of God, etc. None of these, have application to this case to relieve the liability of the carrier. Clause (8) of Article III reads: 8.
None of these, have application to this case to relieve the liability of the carrier. Clause (8) of Article III reads: 8. Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to, or in connection with, goods arising from negligence, fault or failure in the duties and obligations provided in this Article or lessening such liability otherwise than as provided in these Rules, shall be null and void and of no effect. A benefit of insurance or similar clause shall be deemed to be a clause relieving the carrier from liability.� Clause (4) on the reverse of the bills of lading, in so far as it completely excludes the personal liability of the agent, quite irrespective of whether he has exercised the measure of diligence laid upon him by Article III, clauses (1) and (2) of the schedule seems to us to be a clause relieving or lessening the carrier liability. That conclusion is supported by the principle of the decision of the Supreme Court in East and West Steamship Co. Georgetown, Madras v. S. K. Ramalingam Chettiar A.I.R. 1960 S.C. 1058. We therefore agree with the contention of the plaintiff-respondent that even if clause (4) has to be read as part of the contract, the same should be regarded as illegal, as being opposed to Article III, clauses (1) and (2) of the schedule to the Carriage of Goods by Sea Act. 5. There is yet another difficulty in accepting the contention urged on behalf of the appellant. The name and particulars of the owner, has not been disclosed either in the bills of lading (or even in Ext. D-1, if it were to be regarded as admissible in evidence). Being so, under section 230 of the Indian Evidence Act, the principal cannot escape liability. Section 230 of Indian Contract Act in so far as it relevant provides: 230. In the absence of any contract to that effect, an agent, cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. Such a contract shall be presumed to exist in the following cases: 1. * * * * 2.
In the absence of any contract to that effect, an agent, cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. Such a contract shall be presumed to exist in the following cases: 1. * * * * 2. Where the agent does not disclose the name of his principal; 3 * * * * In the face of the above provision the court below was right in holding that the defendant-company was liable on the plaint claim. 6. Counsel for the appellant cited to us the passages from Scrutton: On Charter Parties, and, Carver on Carriage by Sea to show that in the cases where the charter is a charter by demise, the charterer would be liable; and that he would not be so liable in the case of a time-charter which was claimed to exist between the appellant and the owners in this case. We have held that neither the existence nor the contents of the charter-party agreement, if any, between the appellants and the owner, have been legally proved. It is therefore unnecessary to consider this aspect of the question. 7. It was argued that the appellant was not liable to pay interest on the claim. The plaint stated that a claim- bill was issued to the defendants on 17th July 1964. Issue 5 raised the question whether the plaintiff is entitled to interest at 6 per cent as claimed. The trial court recorded that it was not disputed that the claim for the proportionate invoice price of the bags short-delivered, was made on 17th July 1964. That being so, the award of interest at 6 per cent from that date was justified. 8. However, the defendant-appellant is well-founded in its contention that there is no proof of the quantum of damages suffered by the plaintiff by reason of the short-delivery. It appears remarkable that on this aspect evidence should have been lamentably lacking. P.W. 1, the only witness examined on the side of the plaintiff merely stated that there was short-delivery of 733 bags and Rs. 44,438.03 is due. There is absolutely nothing to show how, or on what basis, he was entitled to this amount as damages.
It appears remarkable that on this aspect evidence should have been lamentably lacking. P.W. 1, the only witness examined on the side of the plaintiff merely stated that there was short-delivery of 733 bags and Rs. 44,438.03 is due. There is absolutely nothing to show how, or on what basis, he was entitled to this amount as damages. The court below proceeded on the basis that the defendant appellant was entitled to an amount corresponding to the proportionate invoice price of the short-delivery of 733 bags of raw cashewnuts, and not as damages. But even the process of computation was not made clear. We doubt if this approach by the court below reflects a correct understanding of the plaint claim, or of issue 4 which was struck in the case, which is: If there was short-delivery, to what damages is the plaintiff entitled? . The short-delivery having been found, we think that the interests of justice require that the plaintiff should be given an opportunity of establishing the quantum of damages by reason of the short- delivery. 9. While confirming the finding of the court below that the defendant is liable for the plaint claim, we would call for a fresh finding from that court on issue 4, viz. the quantum of damages to which the plaintiff is entitled. The parties will be at liberty to lead such fresh evidence on the point as they deem fit. The finding will be submitted to this court within two months of the receipt of records. The parties are allowed two weeks from the date of notification of the finding on the court notice board to file objections if any, to the finding. The appeal will be listed for further hearing thereafter.