M. v. ANIAH VS WIMCO LTD, ORIENTAL PAPER INDUSTRIES
1999-01-01
A.N.RAY, D.P.KUNDU
body1999
DigiLaw.ai
A. N. RAY, D. P. KUNDU ( 1 ) THE Court: We are hearing an appeal (really two) from a judgment and decree passed on 18. 11. 92 which disposed of two suits. ( 2 ) IN one of the suits the plaintiff was Wimco Ltd. and in the other the plaintiff was Orient Paper. ( 3 ) THEY had brought on board M. V. Aniah, a vessel flying the Singapore flag, some 8,000 and odd bales of board cuttings or newspapers, all described to be in the nature of waste paper. Orient had brought some 8,000 bales, and Wimco some 480, but the values were roughly the same, in the first case Rs. 5 lakh and in the second case a little under that. ( 4 ) IN each of the cases the plaintiffs were the consignees. ( 5 ) IN the suit of Orient only the vessel was the defendant and it was a pure admiralty action. In the case of Wimco, also an admiralty action, although the Port and other authorities were defendants along with the vessel itself yet decrees were passed in each of the two suits against the vessel only. Both are pure admiralty decrees. ( 6 ) THE plaintiffs complained that although they had paid the freight and the ship had brought their cargo, yet those were not delivered to the plaintiffs at all. ( 7 ) THEREFORE, they claimed the lost price already paid for the goods. ( 8 ) THE peculiar facts which gave rise to these litigations were these. The ship arrived at the Calcutta Port on 10. 3. 85. It appeared after its arrival that there was some information that the consignment described as waste paper contained some religious matter concerning the minority community. There is an admitted Customs notification which prevents importation of such religious matter in this manner. The Port Authorities went on board the ship and on the basis of their information and action the bales of alleged waste paper could not be landed by the ship, and the ship's master and crew, in the usual manner on to the Port area. One of the bales was brust open and there is evidence that some Arabic printed matter was identified as containing Koranic verses. The protective agents of the ship owners informed both the plaintiffs of the problem of landing the cargo.
One of the bales was brust open and there is evidence that some Arabic printed matter was identified as containing Koranic verses. The protective agents of the ship owners informed both the plaintiffs of the problem of landing the cargo. The Port Authorities communicated, sometime around the 18th of March, to the Customs Authorities who are, in strict theory, the confiscating authorities. On the 21st of March 1985 the Master of the ship took the decision to sail away to Penag and there they discharged all the bales of waste paper. ( 9 ) THE ship returned to Calcutta sometime in April 1985. It then discharged large quantities of fattey oil which had been stored in the ship under the bales of paper. At that time, on the basis of the admiralty actions the ship was arrested, due security was furnished and the ship thereafter sailed away. We are told that the security is now continuing in the shape of Bank Guarantees. ( 10 ) IN the court below it was found that the master of the ship, who fills the double capacity of being an agent of the ship owner as well as being the agent of the cargo owners in law, had not sufficiently looked after the interest of the cargo owners. It has been held that the ship left in too much of a hurry without waiting for the ultimate decision of the Customs Authorities who had been written to only on the 18/19th of March 1985. ( 11 ) FROM the issues framed we find that on the first issue, which related to the maintainability of an admiralty action in the facts of the present case, we need not say anything. Parties in fact did not argue about the lack of jurisdiction in view of the recent pronouncement of the Supreme Court and we do not enter into that issue at all. ( 12 ) THE two subsequent issue Nos. 2 and 3 were the real issues in this suit. These were as follows:"1. Were the defendant Nos. 1 and 2 prevented from discharging the said cargo in the Port of Calcutta by the Port authority as claimed in paragraph 14 of the written statement? 2. Did the failure of the defendant Nos.
2 and 3 were the real issues in this suit. These were as follows:"1. Were the defendant Nos. 1 and 2 prevented from discharging the said cargo in the Port of Calcutta by the Port authority as claimed in paragraph 14 of the written statement? 2. Did the failure of the defendant Nos. 1 and 2 to discharge the said cargo in the port of Calcutta constitute a breach of the contract of affreightment evidenced by the said bills of lading?" ( 13 ) IF the Ship had been prevented from discharging the waste paper, then it would be absolved from liability. That would happen because of a particular clause in the bill of lading which is clause 16. We set out below sub-clauses (b) and (c) of Clause 16 as extracted from the judgment under appeal:-"16. Govt. directions, War, epidemics, Ice, strike etc. b. Should it appear that the performance of the transport would expose that vessel of any goods on board to risk of seizure or damage or delay, resulting from war, warlike operations, blockage, riots, civil commotions or piracy, or any person on board to the risk of loss of life or freedom, or that any such risk has increased, the Master may discharge the cargo at port of loading or any other safe and convenient port. C. Should it appear that epidemics, quarantine, ice-labour troubles, labour obstructions, strikes, lock-outs, any of which on board or on shore-difficulties in loading or discharging would prevent the vessel from leaving the port of loading or reaching or entering the port of discharge or there discharging in the usual manner and leaving again, all of which safely and without delay, the Master may discharge cargo at port of loading or any other safe and convenient port. " ( 14 ) IT was held, (in effect although may be not expressly) in the court below, that Clause 16 (c) did not absolve the Ship from liability. The word "prevent" occurring in this sub-clause was held as being akin to that type of prevention which would frustrate the contract. ( 15 ) THE appellants have attacked the judgment on this ground. It is their submission that prevention in Clause 16 (c) might be under circumstances which fall for short of circumstance which would frustrate the contract.
The word "prevent" occurring in this sub-clause was held as being akin to that type of prevention which would frustrate the contract. ( 15 ) THE appellants have attacked the judgment on this ground. It is their submission that prevention in Clause 16 (c) might be under circumstances which fall for short of circumstance which would frustrate the contract. According to them prevention is not to be related to absolute impossibility of performance or a total abandonment of the venture. ( 16 ) IN support of this contention the appellants have heavily relied upon the case of G. H. Renton reported at 1957 Appeal cases, page 149. It is the decision of the House of Lords. In that case a Ship bound for an English port obtained information while sailing that a strike had started at Hull, which spread thereafter to London, and thus the Ship diverted to Hamburg. ( 17 ) A clause very similar to our clause 16 (c) was present in that case also. Their Lordships opined that the presence of such a clause is not repugnant to the main object and purpose of the contract of carriage by sea. Their Lordships further opined that the prevention is not in the nature of frustration. Mr. Roy Chowdhury appearing for the appellants specifically placed before us the relevant passage from page 165 of the reports. ( 18 ) EVEN if we are persuaded to hold that clause 16 (c) does not envisage such as extreme contingency as frustrations yet we would have to decide in these appeals whether, in the facts and circumstances of these cases clause 16 (c), on its true interpretation, would apply and thus absolve the ship and the Ship owners from liability. ( 19 ) WHILE interpreting this clause we note that the word "prevent" does not occur in that clause in isolation. It is quite clear that the prevention is relatable to cases where the Ship is prevented from discharging in the usual manner the concerned cargo, and leaving the port again without delay. We have no hesitation in opinion that this type of prevention had occurred. ( 20 ) BUT this prevention is the effect.
It is quite clear that the prevention is relatable to cases where the Ship is prevented from discharging in the usual manner the concerned cargo, and leaving the port again without delay. We have no hesitation in opinion that this type of prevention had occurred. ( 20 ) BUT this prevention is the effect. Is it the meaning of this clause, that this effect of prevention, however, or in whatsoever manner brought about, will in each case absolve the Ship owners from liability to discharge its cargo at the intended port of destination? In other words, if the prevention, such as this, arises out of the causes and contingencies not mentioned or contemplated in clause 16 (c), would the ship be entitled to sail away in those situations also? We find from the clause that if the difficulty arises out of labour trouble or strike, as in the Renton case, the clause will apply, but will the clause apply if the difficulty of discharging and leaving without delay is caused by some other factor not thought of and not provided for in express terms by the makers and prepares of the Bill of Lading? ( 21 ) IN our opinion, the answer to this question would decide the appeal. It is also our considered opinion that clause 16 (c) does not envisage difficulties in discharging, howsoever, or in whatsoever manner arising. If that were so, there would be absolutely no sense in mentioning particular events like epidemics or labour trouble which might cause difficulties of discharge or loading. If we were to read clause 16 (c) as absolving the ship from the liability of discharging at the destination port, whenever difficulties arise, whatever the cause of such difficulty might be, we would writing out a new clause and a new contract for the parties which they did not themselves write. ( 22 ) MR. Sen for Wimco and Mr. Banerjee for Orient Paper were both at pains to persuade us, that this minimal restriction, to this spectrum of difficulties, envisaged in clause 16 (c) must be provides so as to give it a practical and sensible meaning and interpretation. ( 23 ) PARTIES, through their learned counsel, cited many authorities and many cases other than the handful dealt with here. But in our opinion these are the important and relevant materials for deciding the real issue in the appeal. Mr.
( 23 ) PARTIES, through their learned counsel, cited many authorities and many cases other than the handful dealt with here. But in our opinion these are the important and relevant materials for deciding the real issue in the appeal. Mr. Banerjee gave us the case of Delhi Development reported at AIR 1973 SC 2609 . At paragraph 21 there is a quotation from yet another judgment which lays down the salutary rule, that if two interpretations of a contract are possible, one giving some meaning to all clauses, and another rendering some of the clauses otiose, then and in that event, the first interpretation is to be preferred, which gives some meaning to every portion of the contract. ( 24 ) IF the above principle is applied to clause 16 (c), it would be seen, that difficulties in loading or discharging mentioned there are those difficulties which are the result of the events mentioned in the beginning of the clause viz. epidemics, quarantine, etc. ( 25 ) IN a case of this nature, the interpretation of the clause this way or the other causes quite a heavy loss to the losing party. If it goes one way, the ship owner might have to pay for the lost goods without ascribable fault or negligence or mala fides to itself or its agents, and the ship owner might have to bear the burden, being the lost price of the goods. After all, the ship owner did not consciously bring the religious matters or the contraband paper on board. Again, if the interpretation goes the other way, the consignees who had paid for the goods, might lose the price altogether and get nothing for it. In our case, the consignees have treated their goods as totally lost, because getting the goods from Penag would be a totally different venture for them, which they had not contracted for, when they bought the goods from the Singapore shippers. ( 26 ) THUS, in a case of this nature, whatever the interpretation of the contract, one party has to lose heavily. That is of course the fate in many other types of litigation as well. ( 27 ) ON the interpretation of clause 16 (c), on which the parties really went to trial, in our opinion, the ship owners are not absolved from liability.
That is of course the fate in many other types of litigation as well. ( 27 ) ON the interpretation of clause 16 (c), on which the parties really went to trial, in our opinion, the ship owners are not absolved from liability. If they wanted absolution from liability in a wider variety of cases, it was up to them to make their Bill or Lading even more wide and even more comprehensive. Since they did not do so, they must fail. ( 28 ) ACCORDINGLY, the appeal is dismissed. We upheld the judgment and decrees of the Hon'ble Justice Ruma Pal dated 18. 11. 92. We also order that the plaintiffs in both the suits will be entitled to costs, both before us and in the court below, and each of the two sets of plaintiffs will get such costs compendiously assessed at Rs. 50,000/ -. ( 29 ) THE learned Receiver or Registrar (as the case might be) will immediately encash the Bank Guarantees lying to the credit of the two suits (or one, as the case might be) and pay the sums over to the concerned successful plaintiffs. All parties, the department and all others concerned will act on a signed authenticated copy of the judgment which will be made available to them upon the undertakings of the plaintiffs to have the decree perfected in each of their two suits. Appeal dismissed