Research › Browse › Judgment

Kerala High Court · body

1975 DIGILAW 104 (KER)

THE MUGAL LINE LTD. v. THE FOOD CORPORATION OF INDIA

1975-04-10

GEORGE VADAKKEL, P.SUBRAMONIAN POTI

body1975
JUDGMENT : George Vadakkel, J. The 1st defendant against whom a decree for realisation of Rs. 20,214.26 with interest at 6 per cent per annum thereon from the date of suit till realisation with proportionate costs of suit was decreed has come up in appeal challenging the same. The Government of India through its Chief Controller of Chartering, Central Chartering Committee, New Delhi “chartered the 1st defendant's ship s.s. “SAUDI” whereunder the 1st defendant agreed to carry 5000 long tons 5 per cent more or less, at the 1st defendant's option, rice in gunny bags from J Ports out of Burma for discharge at Cochin 1/2 Ports East Coast India or 1/2 Ports West Coast India at the option of the Government of India, the Charterer. Pursuant to the aforesaid Charter Party Agreement which is evidenced in this case by Ext. P1 dated 1st November 1965 the 1st defendant received into their ship s.s. “SAUDI” on 16th November 1960 55,406 bags of rice, on 1st December 1965, 23,511 bags of rice and on 4th December 1965 another consignment of six bags of rice The total weight of the rice contained in these bags was 5611 19 1- 21 L.T. Exts. D-4, D-5 and D-6 are the respective bills of lading, Exts P-2, Ext. P-3 and P-4 are respectively the duplicate copies of Exts. D-4, D-5 and D-6. It is the case of the plaintiff (The Food Corporation of India) in whose favour Exts. D-4 to D-6 Bills of Lading were endorsed by the Charterer, the Government of India, that after all adjustments made there was a net short delivery of 36-943-202 M.T. of rice by the carrier, the 1st defendant. The plaintiff, therefore, filed the suit out of which this appeal arises for damages for short delivery. As already stated that claim was upheld and the suit was decreed. 2. The Steamer s.s. “SAUDI” arrived at Cochin on 13th December 1965 and completed discharge of cargo on 19th December 1963. While the goods were being discharged and removed to the Wharf the Dock Inspector of the Plaintiff Corporation, who has been examined in this case as pw. 1 noticed that certain bags were burst or torn or slack; he, therefore, requested the 2nd defendant, M/s Pierce Leslie and Co., Ltd., who are the agents of the 1st defendant, for a survey of the goods. Ext. 1 noticed that certain bags were burst or torn or slack; he, therefore, requested the 2nd defendant, M/s Pierce Leslie and Co., Ltd., who are the agents of the 1st defendant, for a survey of the goods. Ext. P-7 is the copy of the letter requesting survey addressed to the 2nd defendant and is dated 20th December 1965. After discharge the cargo was stacked inside the Port Transit Shed in the wharf. The goods were surveyed by Lloyd's Agents and Ext. P8 dated 17th June 1966 is the survey report. Ext. P8 shows that the cargo was surveyed on 24th, 27th and 28th December 1965 as also on 1st, 3rd and 23rd February 1966 in the Port Transit Shed. The survey report further shows that 2060 bags were torn and the slack and mouth burst, 522 bag opened and loosely re-stitched and six bags were torn The total shortage in the aforesaid bags numbering 2588 with reference to the weight given in the three bills of lading was 78-001 640 M. T. Another 72 bags over and above the aforesaid 2588 bags were found wet and the contents thereof had been discoloured and damaged. Those 72 bags of rice were reconditioned and surveyed. The survey report shows that the damage to the contents of these 72 bags was occasioned due to the same having come into contact with water at some stage during transit. The survey report also states that on chemical test the damaged rice indicated no traces of salt. After adjusting the sweepings taking into account deduction-allowance as noted by the surveyors the shortage in the 72 bags was reckoned as 0-397-160 M.T. Thus the total net weight of the goods short delivered to the plaintiff was 78-398 800 M.T. The plaintiff claimed damages in respect of short delivery as aforesaid of the goods entrusted to the 1st defendant for carriage, at the invoice rate; and also claimed proportionate freight and insurance. The plaintiff submitted claim bills Exts. P-15 and P-l6 both dated 18th July 1966. However, in calculating the average weight per bag the plaintiff committed an error and therefore revised claim bills, Exts. P-18 and P-19 were submitted on 24th October 1966 and 26th October 1966. The suit claim is in accordance with the revised claim bills. 3. The only contention raised before us was that the plaintiff has not discharged the initial burden of proof. P-18 and P-19 were submitted on 24th October 1966 and 26th October 1966. The suit claim is in accordance with the revised claim bills. 3. The only contention raised before us was that the plaintiff has not discharged the initial burden of proof. The argument was that the plaintiff has not established a prima facie case that the loss or damage occurred while the goods were in the shipowner's custody and since the plaintiff has failed to establish that the damage occurred on account of improper or negligent storage while the goods were in the custody if the 1st defendant, the plaint claim for damages is unsustainable. In support of this argument the learned counsel for the 1st defendant-appellant relied on the statement in the bills of lading: “said to weigh”. He also relied on another statement in the bills of lading, viz., “Ship not responsible for weight of bags on the outturn”. However, all the three bills of lading Exts. D-4 to D 6 as also their duplicates Exts. P-2 to P-4 show that the goods were “Shipped in apparent good order and condition” which means that the Ist defendant issued clean bills of lading without any reservation. 4. A clean bill of lading as pointed out by the Supreme Court in Ellerman and Bucknal Steamship Co. Ltd. v. S.M. Bherajee AIR. 1966 S.C. 1892 at 1898: (1967) 1 S.C.J. 443 at 448 is “one which does not contain any reservation as to the apparent good order and condition of the goods or the packing”. The same decision also points out that “The general statement in the bill of lading that the goods have been shipped “in good order and condition” amounts (if it is unqualified) to an admission by the shipowner that, so far as he and his agents had the opportunity of judging, the goods were so shipped. If there is no clause or notation in the bill of lading modifying or qualifying the statement that the goods were “shipped in good order and condition” the bill is known as a clean bill of lading”. If there is no clause or notation in the bill of lading modifying or qualifying the statement that the goods were “shipped in good order and condition” the bill is known as a clean bill of lading”. And, this is what we find in Scrutton on Charter-Parties, Eighteenth Edition at page 114: “Where the bill of lading states, as it almost invariably does, that the cargo was “shipped in good order and condition”or “shipped in apparent good order and condition”, the shipowner is estopped as against an indorsee for value of the bill and against a person rightfully presenting the bill of lading and taking delivery thereunder from proving that they were not in apparent good order and condition, unless it was clearly known to the indorsee or person presenting the bill that the statement was untrue or is proved that he did not act upon the faith of the statement. In the absence of contrary evidence the fact that the holder of a bill of lading containing such a statement has taken in without objection is sufficient to show that he relied upon it”. To the same effect is the decision of the Supreme Court already adverted to where that court said that these words indicate affirmation of a fact and amount to an admission creating an estoppel as between the shipowners and an endorsee, who on the faith of that admission has become endorsee for value of the bill of lading and that the shipowners are estopped from denying that the goods and the packages were not in good order and condition. In view of these principles as against the plaintiff in this case who is an endorsee it is for the defendant to explain and establish as to how the goods which were received by the 1st defendant in apparent good order and condition were not in such state or condition when they arrived at the port of destination, viz., Cochin. 5. The 1st defendant has, therefore, a case that the goods when they arrived at the port of destination were in apparent good order and condition and in support thereof they had produced Ext. D-3, the report of survey conducted by the Deputy Conservator of Cochin Port at the request of the 2nd defendant. 5. The 1st defendant has, therefore, a case that the goods when they arrived at the port of destination were in apparent good order and condition and in support thereof they had produced Ext. D-3, the report of survey conducted by the Deputy Conservator of Cochin Port at the request of the 2nd defendant. In that report it is stated that the Deputy Conservator inspected the hatches of the ship on 13th December 1965 and on inspection he found that the cargo was properly stored and adequately dunnaged and ventilated and that as far as he could see there was neither damage due to heat, or sweat nor from water. However, as rightly pointed out by the lower court that report was without notice to the plaintiff and cannot therefore, be used against the plaintiff Moreover it was the 2nd defendant, though no doubt at the request of the plaintiff who caused M/s Lloyds to survey and give Ext. P-8 report, and it was that defendant who produced Ext. P-8. This is particularly so in view of Clause.26 of Ext. P-l according to which clause the bills of lading are to be conclusive evidence as regards the number of bags shipped. That clause also provides that the vessel shall be responsible for the number of bags and contents short delivered and that the goods have to be surveyed at the cost of the shipowner prior to removal of the goods from the wharf which survey has to be carried out be independent surveyors at ports where independent surveyors are available. The 2nd defendant, M/s Pierce Leslie and Co. Ltd., themselves were the Lloyd's Agents and it was they who caused Ext. P-8 survey report to be made. Therefore, there is no merit in the argument based on Ext. D-3. Nor do we find any merit in the contention that the loss might have occurred after the poods were discharged at the wharf. We should remember that the Lloyd's survey was in the transit shed in the wharf and that as per Clause.26 of Ext. P-l already noticed the survey was to be conducted prior to the removal of the goods from the wharf; and the said survey was pursuant to Ext. P-7 request dated 20tb December 1965, the very next day after the discharge of the cargo was completed on 19th December 1965. The Surveyor who conducted Ext. P-l already noticed the survey was to be conducted prior to the removal of the goods from the wharf; and the said survey was pursuant to Ext. P-7 request dated 20tb December 1965, the very next day after the discharge of the cargo was completed on 19th December 1965. The Surveyor who conducted Ext. P-8 survey has shown that the wharf is a protected area where nobody can enter without a pass and that there is a watch and ward service. He has also sworn that at the wharf gate there were policemen besides watchmen of the Port on duty. We are, therefore, one with the lower court in holding that the defendants have not established that the pilferage or the loss could have been caused after the unloading. 6. Relying on Ext. D-1, note of protest dated 15th December 1965 issued by the Deputy Conservator and Notary Public and proved by DW. 2, to the effect that the Chief Officer of the ship protested that the vessel experienced cyclonic weather and vessel laboured heavily, etc.. the learned counsel for the appellant raised an argument that the short delivery was occasioned on account of cyclonic weather. Here again, as pointed out by the lower court, there is no evidence to show that the quantity of rice damaged by coming into contact with water was so damaged by salt (sea) water. One would expect that if the vessel met cyclonic weather on its voyage, the damage on account of water would be due to sea water and not fresh water; and as regards the torn and burst gunnies there is no explanation afforded how those bags got damaged in that manner. 7. The result of the above discussion is that the burden of establishing that the short delivery was not on account of the 1st defendant's negligence or carelessness is upon them. This they have failed to establish. They have also failed to establish that the shortage of goods occurred after the goods were discharged and at a time when they had no custody of the same. On the other band the plaintiff has established by proving the bills of lading that the goods were shipped in apparent good order and condition and at the time of unloading it was noticed that those goods were not in apparent good order and condition. They have, therefore, caused a survey to be made. On the other band the plaintiff has established by proving the bills of lading that the goods were shipped in apparent good order and condition and at the time of unloading it was noticed that those goods were not in apparent good order and condition. They have, therefore, caused a survey to be made. The survey report shows that there is shortage. In view of these facts we are unable to interfere with the lower court's judgment and decree. Accordingly we affirm the same and dismiss this appeal with costs. Dismissed.