Union of India, represented by the Deputy Commissioner, Ministry of Agriculture, Krishi Bhavan, New Delhi v. Alaska Maritime Agencies, Alaska
1994-10-27
ABDUL HADI, K.SANKARAN
body1994
DigiLaw.ai
Judgment :- ABDUL HADI, J. 1. The plaintiffs have preferred this appeal against the dismissal of their suit O.S. No. 195 of 1981 on the file of Sub Court, Cuddalore, for a sum of Rs. 3,56,649.93, said to represent the value of 205 metric tons of urea, shortlanded in the transhipment of 16011 metric tons of urea in bulk from the port of Kenai, Alaska by vessel M.V. Gladiolus, to the port of Cuddalore, as per the suit bill of lading, Ex. A2 dated 5.7.1980. 2. The plaint allegations may be summarised as follows:— The 1st defendants are the owners of the abovesaid vessel and the 2nd defendant are the disponent owners of the said vessel and carriers of the abovesaid urea and the 3rd defendant are the charterers (consignors) of the said goods by the said vessel and the said cargo has to be delivered to the consignee, the 1st plaintiff at Cuddalore Port. The 2nd plaintiff is the handling agent of the 1st plaintiff. The 4th defendant is the agent of defendants 1 to 3. The abovesaid consignment in bulk was shipped in apparent good order and condition from the abovesaid port of Kenai to India. The 2nd defendant issued bills of lading on behalf of the 1st defendant in July, 1980, agreeing to deliver the said consignment in like good order and condition, in accordance with the contract of carriage between the shipper (charterer or consignor) and the ship owner, at Cuddalore, the port of discharge to the consignee. The Master of the vessel has also certified that the said consignment had been received on board the abovesaid vessel. The vessel arrived at the port of Cuddalore on 29.7.1980, commenced discharge of cargo on 5.8.1980 and completed the discharge on 3.9.1980. The 2nd plaintiff arranged for the clearance of the said cargo. While taking delivery of the said cargo, the plaintiffs found that the vessel had discharged only 15806 metric tons as per the draft survey conducted at the port of discharge. Thus, the vessel had shortlanded 205 metric tons of urea. The plaintiffs initially claimed from the 4th defendant a sum of Rs. 6,90,209.25 as per the outturn statement, which showed that the vessel had shortlanded 405.831 metric tons. The plaintiffs subsequently restricted their claim to 205 metric tons as per the draft survey report which is more reliable and claimed accordingly only Rs. 3,56,649.93.
The plaintiffs initially claimed from the 4th defendant a sum of Rs. 6,90,209.25 as per the outturn statement, which showed that the vessel had shortlanded 405.831 metric tons. The plaintiffs subsequently restricted their claim to 205 metric tons as per the draft survey report which is more reliable and claimed accordingly only Rs. 3,56,649.93. The plaintiffs are entitled to receive the said sum from the defendants. The defendants have neither repudiated their claim, nor accepted the same. The plaintiffs are also entitled to receive from the defendants another sum of Rs. 8,000/- towards the extra expenditure incurred by the plaintiffs for digging and loosening of 8000 metric tons of caked cargo from the vessel. The defendants were negligent and failed to make the said vessel fit and safe for the reception, carriage and preservation of the abovesaid cargo. Hence, the claim for the abovesaid sum with interest at the rate of 12% per annum. 3. Defendants 2 and 4 alone filed written statement. Defendants 1 and 3 remained ex parte. The written statement of defendants 2 and 4 may be summarised as follows, in the light of the argument advanced before us: 4th defendant never acted as agent of defendants 1 and 3. Defendants 2 and 3 entered into a Charterparty on 18.6.1980 for the carriage of the abovesaid urea in bulk in the abovesaid vessel and accordingly the consignment was loaded on board at Kenai. Under Clause IV of the Charterparty, the cargo was to be loaded, stowed, trimmed and dishcarged by the charterers (3rd defendant) free of risk and expense to the vessel. So, the charterers employed their own stevedor labour for the loading of cargo and defendants 2 and 4 had no part to play in the said operation. Defendants 2 and 4, therefore deny that 16011 metric tons of urea were entrusted to the 2nd defendant, the carrier. As the cargo was carried on “FIO” terms, the bill of lading was issued on the basis of declarations made by the shippers (charterers). The carrier (2nd defendant) was not aware of the actual quantity that was loaded on board and the plaintiffs are put to strict proof thereof. Further, under Clause 18 of the bill of lading, the carrier had qualified the bill of lading.
The carrier (2nd defendant) was not aware of the actual quantity that was loaded on board and the plaintiffs are put to strict proof thereof. Further, under Clause 18 of the bill of lading, the carrier had qualified the bill of lading. The said Clause 18 reads as follows:— “As the Carrier has no reasonable means of checking the quantity or weight of goods shipped in bulk, the carrier does not represent the quantity or weight of such goods as furnished by the shipper and appearing in this Bill of Lading as being accurate.” Further, under Section 6 of the Carriage of Goods by Sea Act, 1925, in case of bulk cargo, where a bill of lading is issued on the basis of declarations made by the shippers, the quantity or weight mentioned in the bill of lading shall not be deemed prima facie evidence of the cargo having been loaded on board and the carrier shall not be deemed to have accepted the weight. As per the terms of the Charterparty and bill of lading, the cargo was loaded with due diligence. The vessel was in fit and sea-worthy condition at the time of commencement of the voyage. The ship arrived at the port of Cuddalore on 29.7.1980 and soon after commenced discharge of cargo. As per clause IV of the Charterparty, the cargo was discharged by the Stevedor labour, paid for and employed by the plaintiffs. Defendants 2 and 4 had nothing to do with the said operations. The discharge was completed on 3.9.1980. There was no shortlanding of 205 metric tons of urea. The alleged claim is based on a draft survey conducted at the port of discharge. But the draft survey is only approximate and will not disclose the actual quantity that was discharged from the vessel, as it is subject to fluctuations due to weather conditions. Defendants 2 and 4 also arranged for a draft survey by a reputed firm, who had remarked in their survey report as follows:— “Drafts read with vessel rolling in moderate swell of 4-6 feet height. Hence drafts to be considered approximate”. In any event as the cargo was loaded and discharged free of risk and expense to the vessel and by the Stevedors Labour employed by the plaintiffs themselves, the carrier cannot be held liable. The 4th defendant repudiated its liability by its letter dated 17.10.1980.
Hence drafts to be considered approximate”. In any event as the cargo was loaded and discharged free of risk and expense to the vessel and by the Stevedors Labour employed by the plaintiffs themselves, the carrier cannot be held liable. The 4th defendant repudiated its liability by its letter dated 17.10.1980. The plaintiffs are not entitled to the abovesaid sum of Rs. 8,000/- as the entire cargo was discharged from the vessel in the same order and condition as was entrusted at the port of shipment. The carrier has fulfilled all its obligations under the contract of carriage and also under the Carriage of Goods by Sea Act, 1925. There is no negligence on the part of defendants 2 and 4. The vessel, on its voyage, encountered rough and boisterous weather and soon after arrival at Cuddalore, the Master had lodged a note of protest with the Port Officer. The alleged loss or damage must have occurred only due to the boisterous weather. The said boisterous weather, being a peril of the sea, the carrier is absolved from any liability under Article IV Rule 2 of the Carriage of Goods by Sea Act, 1925. 4. The trial court found on issue No. 6 that the 4th defendant is not the agent of defendants 1 and 3 and this finding is not attacked by learned counsel for the appellants. We also find that in the suit defendants 1 and 3 have not been served directly, but, they were sought to be served only through the 4th defendant, on the footing that the 4th defendant was their agent. But, in view of the abovesaid finding of the court below, which has not been attacked in the appeal, it has to be taken that defendants 1 and 3 have not been served and so it is only to be seen whether the suit claim can be sustained against the 2nd defendant. 5. On the side of the plaintiffs, P.W. 1, the Marketing Officer of the 2nd plaintiff and P.W. 2, the Supervisor of one Galaxy Agency, the clearing agent at Cuddalore port were examined. On the side of the defendants, Cuddalore Port Officer was examined. Exs. A1 to A11. were marked on the side of the plaintiffs and Exs. B1 to B4 were marked on the side of the defendants.
On the side of the defendants, Cuddalore Port Officer was examined. Exs. A1 to A11. were marked on the side of the plaintiffs and Exs. B1 to B4 were marked on the side of the defendants. Taking into account the pleadings and the evidence on record, the trial Court gave the following findings (apart from the above said findings on issue No. 6,) that weight etc. given in Ex. A2 are those furnished by the shipper and they cant be prima facie evidence, in view of Sec. 6 of the abovesaid Act and that the defendants were not negligent, the figures given in Ex. A.6 draft survey report cannot be said to be accurate figures and as such, the claim of the plaintiffs, based on draft survey report cannot be accepted. Even assuming that the consignment of 16011 metric tons was boarded on vessel, the carrier cannot be blamed for shortage since there was possibility of damage due to perils of sea. 6. In the appeal, C.M.P. No. 15703 of 1994 was filed by respondents 2 and 4 for the reception of the back portion of Ex. A2 Bill of Lading. According to the appellants, the plaintiffs, while marking Ex. A2 showed only the front portion of it and omitted to show the back portion thereof, which contains the conditions, under which the said bill of lading was issued by the 2nd defendant, the carrier, in favour of the 1st plaintiff. (The above referred to Clause 18 is one of the abovesaid conditions). This Civil Miscellaneous Petition was not objected to by the appellants and accordingly it was allowed. The said back portion is marked as Ex. B5. 7. The submissions of learned counsel for the appellant are as follows:— The Court below erred in relying on Section 6 of the abovesaid Carriage of Goods by Sea Act, 1925.
This Civil Miscellaneous Petition was not objected to by the appellants and accordingly it was allowed. The said back portion is marked as Ex. B5. 7. The submissions of learned counsel for the appellant are as follows:— The Court below erred in relying on Section 6 of the abovesaid Carriage of Goods by Sea Act, 1925. The said Section runs as follows:— “Where under the custom of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper and the fact that the weight is so ascertained or accepted is stated in the bill of lading, then, notwithstanding anything in the Rules, the bill of lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bill of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper.” No doubt, the Carriage of Goods by Sea Act, 1925 is not applicable to the present case, since as per Section 2 thereof, the said Act applies only in relation to the Carriage of Goods by sea from any port in India to any other port, whether in or outside India. The said learned counsel referred to an unreported judgment of a Division Bench of this Court dated 5.8.1977 in Pistis Companies Naviers v. Union of India (Appeal No. 165 of 1974), wherein Section 11 of the United States Carriage of Goods by Sea Act, 1936, which is verbatim same as the abovesaid Section 6 of the Indian enactment was referred to. But, the said learned counsel argues that even assuming that the abovesaid Section 11 is applicable, the necessary ingredients of Section 11 have not been proved and pleaded in the present case and, therefore, the conclusion that the bill of lading shall not be deemed prima facie evidence, etc., as contained in the said Section 11, cannot be reached in the present case and that hence Ex. A2, the bill of lading in the present case shall be prima facie evidence of the abovesaid quantity of 16011 metric tons of urea having been entrusted to the carrier, the 2nd defendant. Ex.
A2, the bill of lading in the present case shall be prima facie evidence of the abovesaid quantity of 16011 metric tons of urea having been entrusted to the carrier, the 2nd defendant. Ex. A5 dated 7.7.1980 the Certificate of Inspection and sampling given by Associated Cargo Service Company of New Jersey Inc., who have performed inspection for the quantity, quality, packing, etc. of M/V. Gladiolus also shows that 16011 metric tons of urea had been loaded to the abovesaid ship from 15.50 hours, July 3, 1980 to 2300 hours, July 4, 1980. D.W. 1 has also deposed thus:— Tamil Regarding the above referred to expenditure claimed for digging and loosening the caked cargo consisting of 8000 metric tons, Ex. A.7, dated 3.9.1980, the certificate of the Port Officer at Cuddalore showed as follows:— “On arrival it was noticed that cargo in the holds at the corners, underneath the hatch coaming and also all over the hatches at the depth of 1 foot was hard and caked up conditions. During the course of discharge also it was noticed that considerable amount of cargo found hard and in caked up condition. Hence crow bar, pick axe, showels were used for loosening the cargo for bagging for which extra labourers were engaged before bagging. It was estimated minimum of 50% of the Cargo in all the holds was hard and caked up condition i.e. 8000 M/Tons in all the hatches.” Though clause 18 of the conditions, under which Ex. A2 Bill of Lading was issued, is referred to in the written statement, there is no evidence regarding the said condition. 8. Even before adverting to the various submissions of learned counsel for respondents 2 and 4, I may straightaway deal with the abovesaid clause 18. The last of the above referred to submissions of learned counsel for the appellants relating to the said clause 18 will not survive, since the above referred to back portion of Ex. A2, containing the abovesaid conditions under which Ex. A2 bill of lading has been issued, has been marked as Ex. B5 now and it cannot be said that there is no evidence regarding the abovesaid clause 18. Ex. B5, which is the back portion of Ex. A2 contains the abovesaid clause 18 as stated in the written statement and as extracted above.
A2 bill of lading has been issued, has been marked as Ex. B5 now and it cannot be said that there is no evidence regarding the abovesaid clause 18. Ex. B5, which is the back portion of Ex. A2 contains the abovesaid clause 18 as stated in the written statement and as extracted above. As per the said clause 18 of the abovesaid conditions, under which the Bill of Lading has been issued, the 2nd defendant does not represent that the weight of the cargo, as furnished by the 3rd defendant, the shipper and appearing in the bill of lading, is accurate. So, the appellants claim in the suit loses much of its weight. This is the main argument of learned counsel for respondents 2 and 4. 9. He also argues that the appellants cannot contend that the abovesaid clause 18 is not valid. He also points out that the abovesaid clause 18 has not been waived by respondents and the abovesaid conditions appearing in Ex. B5 have not been repudiated by the shipper and the appellants cannot question the validity of clause 18. He also relies on the Supreme Court decision in British India Steam Navigation Co. Ltd. v. Shanmughavilas Cashew Industries ( 1990 (48) E.L.T. 481 (S.C.)) holding that none of the parties to a bill of lading having repudiated it, it cannot be contended that any particular clause in it offended the provisions of Carriage of Goods by Sea Act, 1924 and therefore bad. I also see great force in the abovesaid argument of learned counsel for the respondents and there is no case for interference in the decision arrived at by the trial court. 9 A. That apart, learned counsel for the said respondents also points out that as per the Bill of Lading the relevant Japanese Law of 1957 has to be applied. But, the plaintiffs have not proved what that Japanese law is. They, having come to Court with the abovesaid claim, it is for them to prove the same to seek any relief. There is merit in this argument also. 10.
But, the plaintiffs have not proved what that Japanese law is. They, having come to Court with the abovesaid claim, it is for them to prove the same to seek any relief. There is merit in this argument also. 10. Further, we also find that the Supreme Court has held in 1990 (48) E.L.T. 481 (S.C.) (supra) as follows:— “None of the parties having repudiated the Bills of Lading in this case, the High Court ought not to have accepted the submission of the first respondent that clause 4 of the Bills of Lading offended the provisions of the Carriage of Goods by Sea Act, 1924 and therefore bad.” (The abovesaid 1924 enactment is the corresponding English enactment). In the present case also, the above referred to clause 18 has not been repudiated. 11. Then, if the abovesaid clause 18 is applicable, the question whether Ex. A2 Bill of Lading is prima facie evidence regarding the weight of urea entrusted to the carrier or whether Ex. A5 corroborates Ex. A2 may not have much significance. Then even assuming Exs. A2 and A5 prove that 16011 metric tons of urea were loaded on the ship and thus entrusted to the 2nd defendant at Kenai, the carrier, at Kenai, the 2nd defendant cannot be held liable for the abovesaid 205 metric tons claimed as shortage in delivery, particularly when the draft survey report Ex. A6 cannot be taken as accurate. That Ex. A6 is not ac curate has been admitted by P.W. 1 himself thus:— Tamil However, D.W. 1 also deposed as follows:— Tamil 11A. Learned counsel for the respondents also submits that the fact that the vessel, on its voyage, encountered with bad and boisterous weather is also proved by the note of protest Ex. B1 dated 1.8.1990 lodged by the Master of the vessel with the Port Officer, soon after arrival. The relevant passage in Ex. B1 is as follows:— “.. the said vessel encountered heavy weather on the following days during the voyage 12, 13, 14, 15, 27, 28, 29 of July 1980 during which period wind force was more 7 to 8, water shipping on decks.
The relevant passage in Ex. B1 is as follows:— “.. the said vessel encountered heavy weather on the following days during the voyage 12, 13, 14, 15, 27, 28, 29 of July 1980 during which period wind force was more 7 to 8, water shipping on decks. Vessels pitching and rolling heavily fearing loss or damage to the said cargo/ship and the said Master hereby gives notice of his intention of protesting and has caused this note or minute of all and singular the premises to be entered in this register. Which I attest. Sd/- (Master)” Learned counsel for the respondents also brings to our notice clause 11 of Ex. A1 Charter-party agreement, which inter alia says as follows:— “The ship owners shall be entitled to the like privileges and rights as are contained in. Article IV of the Schedule thereto (Carriage of Goods by Sea Act, 1924, which is the corresponding English enactment) as being agreed terms of this contract.” The said Article IV, Rule 2 says, “neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from perils, dangers and accidents of the sea or other navigable waters. In view of the above features also, the said learned counsel submits that the 2nd defendant will not be liable for the alleged shortlanding. The alleged loss, even if true, is due to “perils of sea”. The said learned counsel also relied on the following passage in Shipping Corporation of India v. Metal Box Co. (AIR 1977 Madras 101 = 89 L.W. 637):— “In Hamilton Fraser and Co., v. Pandoff and Co. , (1887) 12 AC 518, where a rat had gnawed a hole in a pipe, whereby sea-water entered and damaged the cargo, there was no suggestion that the ship was endangered, but the damage to the cargo of rice was held to be due to a peril of the sea. There are many contingencies which might let the water into the ship besides a storm and, in the opinion of Lord Halsbury in the case cited above, any accident that should do damage by letting in sea water into the vessel should be one of the risks contemplated.
There are many contingencies which might let the water into the ship besides a storm and, in the opinion of Lord Halsbury in the case cited above, any accident that should do damage by letting in sea water into the vessel should be one of the risks contemplated. It is clear therefore that it is not necessary that damage should be occasioned by extraordinary violence of wind or waves and it is enough if there is an accidental incursion of sea-water into the vessel in a manner where sea-water is not expected to enter in the ordinary course of things and there is consequent damage to the thing insured.” There is considerable force in the abovesaid argument of the learned counsel also. 12. The net result is the appeal is dismissed. However, in the circumstances of the case, there will be no order as to costs.