Shipping Corporation of India Ltd. v. Oriental Insurance Co. Ltd
1994-10-03
B.N.PATNAIK, K.T.THOMAS
body1994
DigiLaw.ai
Judgment :- Patnaik, J. This appeal has been preferred by the defendants against the judgment dated 20-12-1988 passed by the learned Sub Judge, Cochin in O.S. No. 153 of 1987. Itis a suit for damages to the tune of Rs. 2,31,177.63 paise on account of the loss of 15.586 M.T. of cashew nuts during transit by sea. 2. Plaintiff No.1 is the insurer and plaintiff No.2 is the consignee of the goods. Defendant No.1 is the Shipping Corporation of India which transported the goods and Defendant No.2 is their agent. The plaintiffs' case is that as per the Bill of Lading No.1 dated 5-6-1986, 202.830 M.T. of raw cashewnuts bagged in 2700 bags, valued at Rs. 29,89, 274.60 paise were booked for transportation by sea for and on behalf of the second plaintiff at the port of Dar Es Salaam to be discharged at the port of Cochin through the defendant-Shipping Corporation. The same was insured by the first plaintiff under the Marine Insurance (Cargo) Policy on payment of the premium. The goods were loaded in 'M.V. Viswa Yash' at Dar Es Salaam. The vessel arrived at Cochin on 27-6-1986. At the time of landing the consignment, the bags were found to be torn and burst and the contents were partly lost. The defendants have received the consignment in proper and good condition at the time of booking the same at Dar Es Salaam; but due to the negligence and rough handling of the employees of the efendants there was a shortage of 15.686 M.T. of cashewnuts. The port authorities issued short landing certificates showing the short delivery of the consignment. An independent survey was conducted and the surveyors also reported the above loss. The second plaintiff submitted a claim notice for settling the claim to the defendants. But, they failed to settle the same and hence on the basis of the weighment certificate issued by the Cochin Port Trust and the insurance survey report the second plaintiff claimed damages from the first plaintiff. The first plaintiff paid the amount. The second plaintiff executed a letter of subrogation in favour of the first plaintiff authorising them to file the suit against the defendants for recovery of the compensation for the loss and damage to the goods for and on behalf of the second plaintiff.
The first plaintiff paid the amount. The second plaintiff executed a letter of subrogation in favour of the first plaintiff authorising them to file the suit against the defendants for recovery of the compensation for the loss and damage to the goods for and on behalf of the second plaintiff. The defendants as Sea Carriers failed to take diligent care of the said consignment while in transit. The defendants are therefore, liable to pay the compensation as claimed for the short delivery. 3. Both the defendants filed separate written statements containing the same averments. While denying the allegation of negligence and carelessness in transporting the cargo in question, it is admitted that as per the declaration of the shipper, 2700 bags of cashewnuts were shipped from Dar Es Salaam under the bill of lading. The carrier never admitted the weight, value, quality, contents and condition of the contents. The entire cargo loaded were discharged at the Port of Cochin and the Port outturn certificate issued by the Cochin Port Trust confirms the fact that there was no short delivery. It is further averred that 2010 sound bags were taken delivery by the clearing agents of the second plaintiff without any complaint or demur about the conditions of the sound bags. Thereafter, the clearing agent of the second plaintiff requested the second defendants that 690 bags which were left behind were required to be surveyed. Out of the 690 bags only 138 bags were presented by the clearing agent of the second plaintiff for the joint survey conducted by the independent surveyors. After the survey of 138 bags, rest of the aforesaid 690 bags were also cleared by the clearing agent. It was found that a part of the cargo in 138 bags were missing and the same were found to be cut, torn and burst. On the basis of the landed weight of the sound bags, the weight of 138 sound bags would come to 8,940.0 Kgs. leaving a shortage of 598.8 Kgs, only. Against the said net shortage of 598.8 Kgs., the earner has delivered 10 bags of steamer sweepings weighing 538 Kgs. In order to compensate this net shortage of 57.8 Kgs., two bags of shed sweepings were also delivered to the clearing agents of the second plaintiff. Therefore, there was no reason for the defendants to honour the claim put forward by. the second plaintiff.
In order to compensate this net shortage of 57.8 Kgs., two bags of shed sweepings were also delivered to the clearing agents of the second plaintiff. Therefore, there was no reason for the defendants to honour the claim put forward by. the second plaintiff. It is contended by the defendants that the port outturn statement is conclusive proof of the statements contained therein. The earners liability ceased as soon as the cargo is released off the ship's tackles. The port outturn statement was issued on the basis of the delivery effected of the cargo from the ship to the wharf. No short delivery was shown in the port outturn statement. The weight of the entire cargo was not ascertained either before loading or after discharge. The earner never admitted the weight, contents and the quality of the cargo. Whatever cargo was loaded at the port of loading was delivered at the port of Cochin. The defendants took all due care and caution to preserve, carry and discharge the entire consignment in the same apparent order and condition. The weight was taken note of at the time of consignment only for the purpose of calculating the freight payable in respect of the consignment. The liability for the discrepancy, if any, in the weight of the cargo declared by the shipper and allegedly received by the second plaintiff is of the shipper. 4. The learned Sub Judge, on a consideration of the oral and documentary evidence, found that the second plaintiff is the consignee of the goods in question. The first plaintiff is the insurer of the cargo in question. There was a short delivery of 15.686 M.T. of cashewnuts. By deducting the salvage value of 350.50 Kgs., the loss was assessed at Rs. 2,26,011.63 paise. He has further held that the defendants are liable to pay the amount to the first plaintiff as the second plaintiff has subrogated his rights in relation to the loss in question in favour of the first plaintiff. 5. Learned counsel for the appellant, while challenging the findings of the lower court urged that mere was in fact no short delivery of the goods and even if there was any shortage, the defendants cannot be made liable according to law. 6. Ext.
5. Learned counsel for the appellant, while challenging the findings of the lower court urged that mere was in fact no short delivery of the goods and even if there was any shortage, the defendants cannot be made liable according to law. 6. Ext. A3 which is the bill of lading shows that the defendants were entrusted with 202.830 Metric Tonnes of cashewnuts for carriage and delivery to the consignee. Exts. A5 and A5(a) are the weighment certificates issued by the Port Wharf Superintendent, Cochin. These documents show that on weighment of the total cargo, the weight of the same is found to be 185.940 W. Ext. A6 is the survey report of T.C.R.C. Surveyors & Assessors dated 1-8-1986. It shows that the survey was made LQ presence of the agent of the defendants. PW2 deposed mat the second defendant's surveyor was also present when the survey was done by M/s. TCRC Surveyors & Assessors. The surveyors ultimately found that the overall shortage on 100% weighment of the cargo was 19.590 M.T. But on comparison of sound and torn/burst bags the loss to be compensated was for 15.367 M.T. towards the quantity lost due to spillages. The plaintiffs in fact claimed a sum of Rs. 2,31,177.63 with future interest in respect of 15.686. M.T. In view of the statements of PW2 as well as the survey report (Ext. a6 ) there leaves no room for doubt that there was short delivery of the goods. 7. Learned counsel for the defendants contended by relying on Article 111 of the Schedule of the Indian Carriage of Goods by Sea Act, 1925 that there being no dispute that 2700 bags which were consigned were delivered at the Port of Cochin the liability of the defendants ceased. The defendants have no vouchsafed the correctness of the weight of the quantity consigned in as much as it is stated in the bill of lading that the weight of 80 Kgs. in each bag is only approximate.
The defendants have no vouchsafed the correctness of the weight of the quantity consigned in as much as it is stated in the bill of lading that the weight of 80 Kgs. in each bag is only approximate. It is pointed out that Rule 3(b) of Article III of the Act contemplates that after receiving the goods into his charge, the earner, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper, a bill of lading showing among other things, either the number of packages or pieces, or the quantity, or weight, as the case may be, as furnished in writing by the shipper. Since the same number of bags consigned were delivered to the consignee and the weight of the same being not correctly stated by the shipper, the ship owner is not responsible for the loss, if any. This contention has no force. The bill of lading indicates that the net weight was 202.830 M.T. If in fact each bag contained 80 Kgs., the weight of the contents of 2700 bags would not be of that quantity. It should be much more than that. It is correctly staled in the bill of lading that each bag approximately contained 80 Kgs., but the total net weight is 202.830 M.T. 8. On a plain reading of Rule 3(b) of Article III, it does not appear that the ship owner-is not obliged to mention the weight of the cargo in the bill of lading. All that the provisions state is that the bill of lading may show one or more descriptions of the consigned goods. The proviso thereunder contemplates that the ship owner or the earner is not bound to stale or show in the bill of lading any marks, number, quantity, or weight which he has reasonable grounds for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking. There is no endorsement in Ext. A3 that "weight and quantity unknown" or "weight, contents and value unknown" or "weight, measurement and value unknown". On the other hand, it is a clean bill of lading. It is mentioned therein that "2700 bags (202.830 Metric Tonnes) Dar Es Salaam standard quality dried raw cashewnuts 1985/86 crop packed in sound and seaworthy sisal/jute gunny bags of approximately 80 Kilos net each; clean on board dale 5-6-86".
On the other hand, it is a clean bill of lading. It is mentioned therein that "2700 bags (202.830 Metric Tonnes) Dar Es Salaam standard quality dried raw cashewnuts 1985/86 crop packed in sound and seaworthy sisal/jute gunny bags of approximately 80 Kilos net each; clean on board dale 5-6-86". A clearer Bill of Lading is one which does not contain any reservation as to the apparent good order and condition of the goods or the packing. In Elleman and Bucknall Steamship Co. Ltd. v. Sha Misrima Bherajee (A.I.R 1966 S.C.1892), the Supreme Court quoted with approval para 82 of Part I, Vol. II of British Shipping Laws by Carver, which is as follows: - "The genera! 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 ship owner 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 clear bill of lading". Decisions have held Unit the "condition" refers to external and apparent condition, and quality, to some thing which is usually not apparent at all events to an unskilled person See Campania Nuviera Vazconzada v. Churchill and Sim. (1908) I KB 237. The words like "quality and measure unknown" found in (1908) 1 KB 237, "weight, contents and value unknown" in the Peter der Grosso (1875) 1 P.O. 414, "weight, quality, condition and measure unknown in The Trmp (1921) P. 337 were held to be no qualifying words. In Restitution Steamship Co. Lid. v. Sir John Fire and Co., (1989) 5 TLR 641, it was held "if you insert in the margin of a bill of lading weights, quantities, or anything that is not contained in the bill of lading itself, that is not a clean bill of lading". If such words found a-place in the body of a bill of lading, they would not have the effect of making the bill an unclean one we do not see how their mention in the margin would make a difference".
If such words found a-place in the body of a bill of lading, they would not have the effect of making the bill an unclean one we do not see how their mention in the margin would make a difference". A bill of lading with a statement that the goods were shipped in good order and condition" without any further reservation or qualification, is known as a clean bill of lading and the said words are affirmation of a fact. It is an admission creating an estoppel as between the ship owner and an endorsee, who on the faith of that admission has become endorsee for value of the bill of lading. The ship owners are estopped from denying that the goods and the packages were not in good order and condition. The estoppel applies only where the bad condition is discernible on a reasonable examination of the containers, having regard to the contents. Any qualification of the said affirmation must only refer to the external and apparent condition of the containers or packages. There is no such statement in the Bill of Lading in this case. 9. S.3 of the Indian Bills of Lading Act, 1856 reads as follows: - "Bill of lading in hands of consignee, etc., conclusive evidence of the shipment as against master etc. - Every bill of lad ing in the hands of a consignee or endorsee for valuable consideration representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the master or other person signing the same, not with-standing that such goods or some part thereof may not have been so shipped, unless such holder of the bill of lading shall have had actual notice at the time of receiving the same that the goods had not in fact been laden on board: Provided that the master or other person so signing may exonerate himself, in respect of such misrepresentation, by showing that it was caused without, any default on his part, and wholly by the fraud of the shipper or of the holder, or some person under whom the holder claims". There is no dispute that the goods in question had been loaded abode, the ship 'M.V. Viswa Yash'.
There is no dispute that the goods in question had been loaded abode, the ship 'M.V. Viswa Yash'. No case has been made out that there was misrepresentation or fraud regarding the number of bags and the quantity of the goods consigned for transportation. It has been pointed out by the Supreme Court i n Ellerman and Bucknall Steamship Co.Ltd. case ( A.I.R 1966 SC 1892) that a bill of lading serves three purposes, viz. (1) It is a receipt for the goods shipped containing the terms on which they have been received; (2) It is evidence of the contract for the carriage of the goods; and (3) It is a document of title for the goods specified therein. The contract of the ship owner in the Bill of Lading is that they will deliver the goods at their destination "in the like good order and condition" in which they were shipped. The defendants, on the other hand, did not deliver the consignment in the like good order and condition in as much as admittedly a considerable number of bags were found to be torn and burst. This leads to the only inference that the defendant-Corporation did not take proper care and caution during the transit in maintaining good order and condition of the consignment. 10. Learned counsel for the defendants finally contended that in view of the fact' that in the outturn statement (Ext. B7) issued by the Wharf Superintendent of the Cochin Port Trust, no such damage to the bags or loss to the quantity was shown, the defendants cannot be held liable for the loss, if any, and the damage or loss might have been caused in the Wharf where the goods were stored after unloading the same. This contention has also no force. DW1 has stated in the cross-examination that the Wharf is a protected area. Since it is a highly guarded place, the chance of pilferage or misappropriation of the articles stored there is too remote.
This contention has also no force. DW1 has stated in the cross-examination that the Wharf is a protected area. Since it is a highly guarded place, the chance of pilferage or misappropriation of the articles stored there is too remote. Sub-section (7) of S.42 of the Major Port Trusts Act reads as follows: - "After any goods have been taken charge of and a receipt given for them under this section, no liability for any loss or damage which may occur to them shall attach to any person to whom a receipt has been given or to the muster or owner of the vessel, from which the goods have been landed or transshipped". It is only when a proper receipt is issued by the Port Trust after taking charge of the goods from the ship-owner, the responsibility of the ship-owner in respect of the goods ceases. Ext. B7 is not a receipt as contemplated in sub-section (7) of S.42 of the Major Port Trusts Act. It is only a statement. It docs not contain an acknowledgment of receipt of the goods. 11. Since the outturn statement (Ext. B7) is not a receipt under sub-section (7) of S.42 of the Major Port Trusts Act and no receipt having been produced and proved in this case, the Port Trust authorities cannot be held liable merely on the basis of the outturn statement (Ext. B7). 12. For the reasons stated above, we find that the appeal has no merit. The same is hereby dismissed with costs.