The East and West Steamship Company,
George Town, Madras Vs. S. K. Ramalingam Chettiar [1960] INSC 98 (3 May 1960)
03/05/1960 GUPTA, K.C. DAS GUPTA, K.C. DAS
GAJENDRAGADKAR, P.B.
WANCHOO, K.N.
CITATION: 1960 AIR 1058
CITATOR INFO :
R 1972 SC1405 (57) RF 1972 SC1935 (11)
ACT:
Carrier of goods by sea-Loss or damage,
meaning of-Liability of carrier-Delivery of goods-Time for-The Indian Carriage
of Goods Act, 1925 (XXVI Of 1925), Schedule, Art III, Para. 6, cl. 3.
HEADNOTE:
The appellant in the first case (C. A. No.
88/56) and the respondents in the other two cases (C. As. Nos. 91 & 92 of
1958) were shipping companies carrying goods by sea from one port to another.
They carried goods of the opposite parties by ships to their places of
destination but failed to deliver the whole of the goods consigned. In the
suits brought by the owners of the goods for compensation the main question
related to the interpretation of the 3rd clause of para. 6 of Art. III in the
Schedule to the Indian Carriage of Goods by Sea Act, 1925 (XXVI Of 1925) which
runs thus:- " In any event the carrier and the ship shall be discharged
from all liability in respect of loss or damage unless suit is brought within
one year after the delivery of the goods or the date when the goods should have
been delivered ".
In the first case the Madras High Court
expressed the opinion that the above clause did not provide for the extinction
of the consignor's right to claim compensation but merely prescribed a rule of
limitation. It also held that the term in the bill of lading requiring that the
claim for compensation should be made within one month from the date of arrival
of the vessel was repugnant to Rule 8 to Art. III of the Schedule and was void.
The Bombay High Court held that Art. 111(6) dealt with all cases of loss or
damage whether the loss or damage was caused by the deterioration of the goods
or by their non-delivery and further that the words " the loss or damage
" included any loss or damage caused to the consignee in respect of his
claim for compensation from the shipping company. If also held that the goods
should have been delivered as soon as they were landed. On appeal by special
leave:
Held, that the word " loss " in cl.
3, para. 6 of Art. III in the schedule to the Indian Carriage of Goods Act,
1925, meant and included any loss caused to a shipper or consignee by reason of
the inability of the ship or the carrier to deliver part or whole of the goods,
to whatever reason such failure might be due.
Spens and another v. The Union Mayine
Insurance Co. Ltd., 3 Common Pleas 427, distinguished, 821 Sandeman & Sons
v. Tyzack and Branfoot Steamship Co. Ltd., [1913] A. C. 680, referred to.
The words "discharged from
liability" were intended to mean and did mean that the liability had
totally disappeared and not only that the remedy as regards the liability had
disappeared.
The date when the goods should have been
delivered for the purpose Of cl. 3, para. 6 of Art. III of the Act was the date
when the ship by which the goods were carried left the port of delivery.
The stipulation in the bill of lading
requiring claim for compensation being made within one month from the date of
arrival of the ship was null and void.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 88 of 1956.
Appeal by special leave from the judgment and
decree dated February 11, 1954, of the Madras High Court in Civil Revision
Petition No. 921 of 1952, arising out of the judgment and decree dated November
2, 1951, of the Court of Small Causes, Madras, in Suit No. 4076 of 1950 (N. T.
A. No. 113 of 1951).
With Civil Appeals Nos. 91 and 92 of 1958.
Appeals by special leave from the judgment
and decree dated March 10, 1955, of the Bombay High Court in Appeals Nos. 66/X
and 67/X of 1954, arising out of the judgment and decree dated February 15,
1954, of the said High Court in Suits Nos. 1693 of 1949 and 105 of 1950,
respectively.
B. Sen, S. N. Mukherjee and B. N. Ghosh, for
the appellant (in C. A. No. 88 of 1956).
C. B. Pattabhiraman and Ganapathy Iyer, for
respondent (in C. A. No. 88 of 1956).
C. K. Daphtary, Solicitor-General of India,
S. N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellants (In C.
As. Nos. 91 and 92 of 1958).
G. Gopalakrishnan, for the respondent (In C.
A. No. 91/58).
A. V. Viswanatha Sastri and G.
Gopalakrishnan, for the respondent (In C. A. No. 92 of 58).
1960. May 3. The Judgment of the Court was
delivered by 107 822 DAS GUPTA, J.-These three appeals-Civil Appeal No. 88 of
1956, Civil Appeal No. 91 of 1958 and Civil Appeal No. 92 of 1958, of which one
is from a decision of the High Court of Madras and the other two from decisions
of the High Court of Bombay raise some common questions of general importance
to carriers of goods by sea and of shippers as regards the 3rd clause of
paragraph 6 of Art. III in the Schedule of the Carriage of Goods by Sea Act
(hereinafter called " the Act "). This clause provides that " in
any event the carrier and the shipper shall be discharged from all liability in
respect of loss or damage unless a suit is brought within one year after the
delivery of the goods or the date when the goods should have been delivered
". In all the three appeals before us the carriers' main defence to claims
of compensation by the owners of the goods was based on this clause and the
courts had to consider whether this defence was available to the carrier.
The appeal from the Madras High Court was in
respect of a consignment of 90 bundles of brass circles which were consigned to
the respondent at Madras from Bombay to Madras per S. S. Fakira, a Steamer
belonging to the East and West Steamship Co. The Ship arrived in Madras on
August 1, 1948, and 78 out of the 90 bundles were delivered on August 25, 1948,
to the appellant through his clearing agent, the second respondent. Five more bundles
were delivered on September 25, 1948. After some correspondence between the
Shipping Company and the first respondent regarding the seven bundles not,
delivered the appellant company repudiated finally the respondent's claim on
March 24, 1950.
The first respondent brought the present suit
on June 27, 1950, claiming Rs. 1,023-5-0 as compensation-Rs. 974-13-0 for the
value of the undelivered goods and Rs. 48-8-0 as the profit of which he had
been deprived. The claim for this amount of profit was given up at the Trial.
The appellant's defence was: (1) that the suit having been filed beyond the
period prescribed in cl. 6 of Art. 3 of the Act; (2) that the suit was also
barred as no claim had been made within the period of one month from the date
of 823 arrival of the vessel as stipulated in the bill of lading and (3) that
the goods were insufficiently packed and therefore carrier was not liable for
the alleged loss. The learned Judge of the Small Causes Court who tried the
suit as also the Judge who heard the matter on a new trial application held
that the plaintiff's right to claim compensation was extinguished before the
date of the suit.
As regards the second defence based on the
stipulation in the bill of lading that notice has to be given within one month
the Trial Court held that this term in the bill of lading was void and of no
effect. The learned Judges who heard the new trial application disagreed with
this and accepted the defence on this point also. In the result they dismissed
the new trial application and confirmed the order of dismissal made by the
learned Trial Judge. Against this order the High Court of Madras was moved by
the plaintiffs under s. 115 of the Code of Civil Procedure. The learned Judge
held that the term in the bill of lading as regards one month's notice was
repugnant to Rule 8 to Art. III of the Schedule to the Act and was void. He was
also of opinion that the date of the final repudiation of liability by the
Shipping Company as regards the short delivery or non-delivery is the date
" when the goods should have been delivered " within the meaning of
the 3rd clause of the 6th paragraph of Art. III and so whether this clause
provided for extinction of a right or only prescribed a rule of limitation, the
defence based on this clause of the Act could not succeed. He expressed his own
opinion, however, that this clause did not provide for extinction of the right
but merely prescribed a rule of limitation. In view of his conclusions he set
aside the decision of the lower courts and remanded the suit for further
disposal to the trial court. After remand the trial court on May 4, 1954,
decreed the suit for a sum of Rs. 974-13-0. Against that decree no steps were
taken by the Shipping Company. It was after that date that the Shipping Company
applied for and obtained from this Court special leave to appeal on October 11,
1954. It has to be noticed that as the decree made in the suit has become final
and unassailable, this appeal is really of 824 academic interest. In view
however of the fact that the main question of law raised, viz., as regards the
scope and interpretation of the 3rd Clause of para. 6 of Art. III of the
Schedule to the Act is being raised before us in the other two appeals from the
Bombay High Court also we have heard the counsel for both sides in this appeal
in full.
Of the two appeals from Bombay-the one Civil
Appeal No. 92 of 1958 is in respect of some consignments at Bombay by S. S.
Tweedsmuir Park, S. S. Finnamore Hill and S. S. Ismalia- all vessels belonging
to the first defendant, the British India Steam Navigation Company Ltd. S. S.
Tweedsmuir and S.
S. Finnamore Hill arrived in the port of
Bombay on or about September 10, 1948, and steamer Ismalia arrived in Bombay on
September 6,1948. The vessels discharged their cargoes alongside on to the
docks belonging to the Trustees of the Port of Bombay. The plaintiffs took
delivery of the goods packed in bags which bore their distinctive and
identifying marks, but were unable to obtain delivery of 164 bags out of the consignment
sent by Ismalia, 869 bags out of the consignment sent by Finnamore and 1,657
bags out of the consignment sent by Tweedsmuir Park. The suit was brought on a
claim of Rs. 1,10,323-8-0 as compensation for the bags not delivered. The
Trustees of the Port of Bombay were also made defendants. We are no longer
concerned with them as after the suit was dismissed by the Trial Judge against
both the defendants the plaintiffs did not prefer any appeal against the order
of dismissal as against the Trustees.
The main defence of the first defendant, the
Shipping Company, was that the company was discharged from all liability in
respect of the loss or damage alleged in the plaint by reason of the provisions
of the Act inasmuch as the suit had not been brought within one year of the
date " when the goods should have been delivered". Another defence
was that the company was not liable as no notice within 3 days after discharge
and before goods were removed from the quay or ship's side or place of discharge
had been given and so in view of Clause 20 of the bill of lading the company
was free from all liability. The trial judge held that 825 in view of the fact
that S.S. Finnamore Hill completed discharging her cargo on 19th September,
1948, S.S. Ismalia completed discharging her cargo on 25th September, 1948, and
S.S. Tweedsmuir Park completed discharging her cargo on 27th September, 1948,
the suit was clearly not brought " within one year " from the date
" when the goods should have been delivered". He held therefore that
the defendants were discharged from all liability by reason of the provisions
of the Act. Accordingly he dismissed the suit. In appeal from this order of
dismissal the plaintiffs contended that Art.
III (6) did not deal with cases of loss or
damage arising from non-delivery of goods; in the alternative it was contended
that the expression " loss or damage " in Art.
III (6) must be limited to the loss or damage
to the goods themselves and if the goods have not been lost this clause had no
application. The learned judges of the High Court rejected both these
contentions. They were of opinion that Art. III (6) deals with all cases of
loss or damage whether the loss or damage is caused by the deterioration of the
goods or is caused by the non-delivery of the goods and further that " the
loss or damage" as used was used by the Legislature to include any loss or
damage caused to shipper or consignee in respect of which he claims
compensation from the shipping company. The learned judges also held that so
far as the shipping company was concerned the delivery of goods is given or
ought to be given as soon as the goods are landed and therefore in this case
the goods with regard to the three ships having been cleared on September 19,
1948, September 25, 1948, and September 27, 1948, respectively.
These were the dates on which the goods
" should have been delivered " for the purposes of the application of
the 3rd clause of paragraph 6 of Art. Ill. Accordingly agreeing with the Trial
Judge that the liability of the shipping company was discharged and the suit
was not maintainable they dismissed the appeal.
The other appeal from the Bombay High Court,
viz., Civil Appeal No. 91 of 1958 is in respect of a consignment of 6,000 bags
of coconut from Cochin and 4,733 bags of copra and coconuts from Badagara 826
consigned to the plaintiffs for carriage to Bombay by the steamer "
Bharatjal " belonging to the appellant, the Bharat Lines Ltd. The steamer
arrived in Bombay Port sometime in the middle of September, 1948. The plaintiffs
however failed to obtain delivery of 596 bags from the Badagara consignment and
470 bags from the Cochin consignment. They brought the suit on December 5,
1949, against the shipping company, the Bharat Lines Ltd., and also against the
Trustees of the Port of Bombay on a claim of Rs. 1,05,726-1- 6 on which Rs.
45,725-7-5 appear to have been claimed as compensation in respect of the bags
not delivered and the remainder as compensation for damage to the goods in the
bags of which delivery was taken. We are no longer concerned with the second
defendant, the Trustees of the Port of Bombay, as after the suit was dismissed
by the Trial Court the plaintiffs did not pursue the claim against them.
The main defence of the first defendant, the
shipping company, was that the suit was barred " by reason of the Indian
Carriage of Goods by Sea Act ". It was also urged that the suit was not
maintainable as under the terms of the bill of lading the plaintiffs were bound
to notify to the defendants their claim in writing about the alleged non-
delivery within one month from the date of the arrival of the vessel which the
plaintiffs had failed to do. It appears to have been conceded before the Trial
Judge in the Bombay High Court that the suit had not been filed within one year
after the delivery of the goods or the date on which the goods should have been
delivered. The plaintiffs' counsel also appears to have conceded that cl. 6 of
Art.
III applied to the case. The learned Judge
therefore held that the first defendant had been discharged from all liability
in respect of the loss or damage alleged in the plaint and dismissed the suit.
It appears however that in the appeal from this order of dismissal the
plaintiffs urged that Art. III (6) of the Act did not apply to the facts of the
case and also the date on which the goods should have been delivered should be
construed to mean the date " when the loss was finally ascertained "
and the shipping company was in a position to finally declare that they were or
were not 827 in a position to deliver the goods in question. In dismissing the
appeal the learned judges of the High Court who heard the appeal did not give
any separate reasons but stated that the appeal was being dismissed on the same
ground as given in their judgment in Appeal No. 66 of 1954.
This is the judgment from which Civil Appeal
No. 92 of 1958 of this Court has been preferred.
From what has been said above it is clear as
we have already indicated that the main questions in this appeal are as regards
the interpretation of the 3rd Clause of paragraph 6 of Art. III in the Schedule
to the Act. The first and the most important of these questions is as regards
the meaning of the word " loss " as used in the said clause. Does it
mean only such loss as occurs when one says " the goods have been
lost" or does it include also such loss as is sustained by the owners of
the goods-whether the shipper or the consignee-when the carrier fails to
deliver the whole or part of the cargo shipped ? The second question that
arises for consideration is whether this clause only prescribes a rule of
limitation or also provides for the extinction of the right to compensation
after a certain period of time. The next question is as regards the as
certainment of the date on which the goods not delivered " should have
been delivered " for the purposes of' this clause. Apart from these
questions as regards the interpretation of the 3rd clause of paragraph 6 of
Art. 111, it will be necessary to consider also whether the requirement in the
bill of lading as regards the time within which the notice of claim must be
made in order that the carrier may be responsible is void as being against the
8th paragraph of Art. III.
As has been mentioned in the preamable to the
Act it was passed to give effect to the recommendation of the International
Conference of Maritime Law at Brussels in October, 1922. The circumstances
which led to the holding of the conference and were responsible for the
recommendations have been stated by Scrutton on Charter Parties, 15th Edition,
at p. 439, in these words:- 828 In recent years, as the terms of bills of
lading became more diverse, the need for standardisation became more and more
insistent and an increasing demand was made on the part of importers and
exporters for the imposition by legislation, on the lines of the American
Harter Act or the Australian Sea Carriage of Goods Act, 1904, or the Canadian
Water Carriage of Goods Act, 1910, of certain minimum liabilities on
sea-carriers who issued bills of lading." x x x The movement in favour of
legislation finally resulted in the decision of the delegates at the Diplomatic
Conference on Maritime Law held at Brussels in October, 1922, to recommend to
their respective Governments the adoption of the Hague Rules with slight modifications
as a basis of legislation." It is this recommendation which has been
referred to in the preamble to the Indian Act. It is important to mention that
apart from our own country, U. K., Australia, Canada, Ceylon, Newfoundland, New
Zealand as well as Belgium, France and U. S. A. have given statutory effect
wholly or partially to the Hague Rules. This international character of the
provisions of law as incorporated in the articles to the schedule to the Act
makes it incumbent upon us to pay more than usual attention to the normal
grammatical sense of the words and to guard ourselves against being influenced
by similar words in other acts of our Legislature.
it is helpful to remember in this connection
the caution uttered by Lord Atkin in State Line Ltd. v. Foscold (1) about the
importance of giving words in these rules their plain meaning, and not to
colour one's interpretation by considering whether a meaning otherwise plain
should be avoided if it alters the previous law. After stating that this caution
would be well founded if the Act merely purported to codify the law, he went on
to observe:- " But if this is the canon of construction in regard to a
codifying Act, still more does it apply to an Act like the present which is not
intended (1) [1932] A.C. 328.
829 to codify the English law, but is the
result (as expressed in the Act) of an international conference intended to
unify certain rules relating to bills of lading. It will be remembered that the
Act only applies to contracts of carriage of goods outwards from ports of the
United Kingdom;
and the rules will often have to be
interpreted in the courts of the foreign consignees. For the purpose of
uniformity it is therefore important that the courts should apply themselves to
the consideration only of the words used without any predilection for the
former law...".
The House of Lords was in that case
interpreting certain provisions of the English Carriage of Goods by Sea Act,
1924. Our own Act applies to contracts of carriage of goods outwards from the
ports of India. Section 2 states that the rules set out in the Schedule shall
have effect in relation to and in connection with the carriage of goods by sea
in ships carrying goods from any port in India to any other port whether in or
outside India. Though in the appeals before us we are concerned with only
contracts of carriage of goods from one Indian port to another Indian port, it
is necessary to remember that these rules will often have to be interpreted in
the courts of the foreign consignees. That is an additional reason why we
should be careful not to attach to the words used in the rules set out in the
Schedule to the Act anything more or less than their normal meaning consistent
with the context in which they appear and consistent with the scheme of the
legislation.
Art. III of the Schedule with which we are especially
concerned in the present case purports to mention the responsibilities and
liabilities of the carriers. The first paragraph lays down the responsibilities
and liabilities of the carrier in the matter of making ships seaworthy,
properly manning, equipping and supplying the ship and making the holds and the
different parts of the ship where goods are carried fit and safe for their
reception, carriage and preservation. The second paragraph places on the
carrier the duty of properly and carefully loading, handling, stowing,
carrying, keeping, caring for and discharging the goods, subject to Art. IV.
The 3rd paragraph provides for the issue of a bill of lading 830 to the shipper
of the goods showing among other things the identifying marks, the number of
packages or pieces or the quantity or weight as also the apparent order and
condition of the goods. Paragraph 4 provides that the bill of lading shall be
the prima facie evidence of the receipt by the carrier of the goods as
described in accordance with paragraph 3. The fifth paragraph provides that the
shipper shall be deemed to have guaranteed to the carrier the accuracy as
regards the details of marks, number, 'quantity and weight as furnished by him.
It provides further that the shipper shall indemnify the carrier against all
loss, damages and expenses arising or resulting from such inaccuracies. Then
comes paragraph 6, the whole of which it is proper to set out :- Unless notice
of loss or damage and the general nature of such loss or damage be given in
writing to the carrier or his agent at the port of discharge before or at the
time of the removal of the goods into the custody of the person entitled to
delivery thereof under the contract of carriage, or if the loss or damage be
not apparent, within three days, such removal shall be prima facie evidence of
the delivery by the carrier of the goods as described in the bill of lading.
" " The notice in writing need not be given if the state of the goods
has at the time of their receipt been the subject of joint survey or
inspection. " " In any event the carrier and the ship shall be
discharged from all liability in respect of loss or damage unless suit is
brought within one year after the delivery of the goods or the date when the
goods should have been delivered. " " In the case of any actual or
apprehended loss or damage.
the carrier and the receiver shall give all
reason-able facilities to each other for inspecting and tallying the goods.
The seventh paragraph contains provisions as
regards issue of a shipped bill of lading.
The eighth paragraph is in these words:-
" 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 831 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." It
has to be noticed that before providing in the 6th paragraph an immunity to the
carrier from " all liability in respect of loss or damage " in
certain circumstances the Legislature had in the earlier paragraphs laid on the
carrier the duty of making the ships seaworthy, properly manning, equipping and
supplying the ship, and making the holds and all other parts of the ship fit
and safe for the reception, carriage and preservation of the goods; properly
and carefully loading, handling, stowing, carrying, keeping and caring for and
discharging the goods carried and provided that ordinarily the bill of lading
should show the quantity or weight of the goods or the number of packages or
pieces. " Loss or damage " which paragraph 6 speaks of should
therefore reasonably be taken to have reference to such loss or damage which
may result from the carrier not performing some or all of the duties which had
been mentioned earlier. One of those duties is to discharge the goods carried
in accordance with the quantity or weight or the number of packages or pieces
as mentioned in the bill of lading. The shipper and the consignee of goods are
more concerned with the duty of the carrier to discharge the goods in proper
order and condition and in full than anything else. Indeed the other duties
cast on the carriers so far as the owners of the goods are concerned, are
really incidental to this duty of discharging the goods in full and in good
order and condition. When in the context of the previous paragraphs of Art. III
the 6th paragraph seeks to provide an immunity to the carrier "from all
liability in respect of loss or damage " after a certain time, it is
reasonable to think that it is loss or damage to the owner of the goods, be he
shipper or the consignee, which is also meant, in addition to the " loss
of the goods ". When 832 the goods themselves are lost, e.g., by being
jettisoned, or by being destroyed by fire or by theft, there will be failure to
discharge the goods in full and loss to the owner of the goods will occur. Even
where the goods are not lost the carrier may fail to discharge the goods in
full or not in proper order and there also loss will occur to the owner of the
goods. In such a case, even though there may not have been " loss of the
goods " the goods are lost to the owner. The word " loss " as
used in paragraph 6 is in our opinion intended to mean and include every kind
of loss to the owner of the goods-whether it is the whole of the consignment
which is not delivered or part of the consignment which is not delivered and
whether such non- delivery of the whole or part is due to the goods being
totally lost or merely lost to the owner by such fact of non delivery there is
in our opinion "loss" within the meaning of the word as used in
paragraph 6.
It is worth noting in this connection that
while paragraph 5 makes it clear that loss there means loss to the carrier and
paragraph 6 speaks of loss or damage to or in connection with the goods, the
Legislature has in the 6th paragraph of this Article left the words "loss
or damage" unqualified.
The object of the rule however being to give
immunity to the carriers and the shippers from claims of compensation made by
the owners of the goods in respect of loss sustained by them, it will be
unreasonable to read the word " loss " in that paragraph as
restricted to only loss of the goods ".
When the object of this particular paragraph
and the setting of this paragraph in the Article after the previous paragraphs
are considered there remains no doubt whatsoever that the learned judges of the
Bombay High Court were right in their conclusion that the loss or damage in
this paragraph is a wide expression used by the Legislature to include any loss
or damage caused to shipper or consignee in respect of which he makes a
grievance and in respect ,of which he claims compensation from the shipping
company.
The argument that loss due to failure to
deliver the goods is not covered by this clause is merely to be mentioned to
deserve rejection. The very use of the 833 words " the date on which the
goods should have been delivered" clearly contemplates a case where the
goods have not been delivered. The clause gives the owner of the goods one
year's time to bring the suit the year to be calculated from the date of the
delivery of the goods where the goods have been delivered and from the date
when the goods should have been delivered where all or some of the goods have
not been delivered. The fact that the first clause of the 6th paragraph speaks
of removal of the goods may be an argument for thinking as the Bombay High
Court thought that clause has no application when goods are not delivered. It
may be mentioned that some authorities (See Carver's Carriage of Goods by Sea,
10th Edition, p. 191) have suggested that the first clause of this paragraph
appears to have little meaning. That is a matter which need not engage our
attention. It is sufficient to mention that the fact that the rule of evidence
provided in the first clause of the paragraph may have no application to cases
of non-delivery is wholly irrelevant in deciding whether the third clause
applies to cases of non-delivery. As we have already said the date when the
goods should have been delivered necessarily contemplates a case where loss has
arisen because goods have not been delivered.
Reliance was sought to be placed on behalf of
the appellants in the two Bombay appeals on Spens v. The Union Marine Insurance
Co. Ltd. (1). What had happened in that case was that cotton belonging to
different owners was shipped in bales specifically marked, including 43 bales
belonging to the plaintiffs. In the course of the voyage the ship was wrecked;
all the cotton was more or less damaged, some of it was lost, some was so
damaged that it had to be sold before reaching the port and marks on a very
large number of the bales were so obliterated by sea water that none of the
cotton that was lost or sold and only a portion of what was carried to the port
could be identified as belonging to any particular consignment. The plaintiffs
had insured the goods with the defendant company against the usual risks.
The question (1) (1868) L.R. 3 C.P. 427.
834 arose whether there was a total loss of a
part of each owner's cotton or whether there was a total loss of the
plaintiffs' consignment. The court held that it could not be said that there
was an actual total loss of the plaintiffs' consignment nor a constructive
total loss of these, that the principle of proportion applied in cases of
general average or jettison where it is not known whose goods are sacrificed
should be properly applied to cases of this nature where because of the bales
of different shippers being undistinguishable by reason of the action of the
sea and without the fault of the respective owners it becomes impossible to
ascertain to whom the goods actually lost belonged.
This case it has to be noticed had to
consider in view of the special terms of an insurance policy, whether there was
a total or partial loss for the purposes of claims under the policy and the
argument that there was a total loss within the meaning of the policy because
it was impossible for the ship-owner to deliver the plaintiffs' own bales of
cotton to them was rejected. This case is of no assistance in the
interpretation of the word " loss " in the Articles of the Schedule.
In cases of such mixture of cargo of
different owners it was pointed out by Lord Moulton in Sandeman & Sons v.
Tyzack and Branfoot Steamship Co. Ltd. (1) which was cited by the learned
Solicitor-General himself :
" It may well be that they could assert
the position of joint owners in the mixed cargo, and as such take action
against any person who sought to get possession of it or convert it to his own
use. But it does not follow that the ship-owners would have performed their
contract of carriage.
Their duty is to deliver the goods entrusted
to them for carriage, and they do not perform that duty if all that the
consignee obtains is a right to claim as tenant in common a mixture of those
goods with the goods of other people. No doubt, if such a right is of some
value, and the consignee avails himself of it, the ship owners are entitled to
credit for whatever value the goods possessed if they were delivered (1) [1913]
A.C. 680, 697.
835 mixed up with some extraneous substance
which lessened their value or compelled the consignee to go to expense in
separating it out." There is nothing however to justify the conclusion
that the consignee is bound to avail himself of the right to claim as tenant in
common. The breach of contract remains and the claim for compensation for such
breach is in no way affected. Neither authority nor principle therefore
supports the contention of the learned Solicitor-General that where the goods
are in existence but cannot be delivered because they have been mixed up with
the cargo of other owners there has been no " loss " within the
meaning of the third clause of the 6th paragraph of Art. III.
On the first question, therefore, we have
come to the conclusion that the word "loss" in the third clause of
the 6th paragraph of Art. III to the Act means and includes any loss caused to
a shipper or a consignee by reason of the inability of the ship or the carrier
to deliver part or whole of the goods, to whatever reason such failure may be
due.
On the next question whether this clause
prescribes only a rule of limitation or provides for the extinction of a right
to compensation, it will be observed that the Bombay High- Court has not
discussed it at all, apparently because on the facts of the case before it
would have mattered little whether the provision was one of limitation or of
extinction of right. The question is however of some importance in the facts of
the Madras Case. For if the provision is one of limitation there would be some
scope for argument in the facts of that case that the period was extended by
acknowledgments of liability within the meaning of Art. 19 of the Limitation
Act. The question we have to decide is whether. in saying that the ship or the
carrier will be " discharged from liability ", only the remedy of the
shipper or the consignee was being barred or the right was also being
terminated. It is useful to remember in this connection the international character
of these rules, as has been already emphasised above. Rules of limitation are
likely to vary from country to country. Provisions for extension of periods
prescribes for limitation would similarly vary,.
836 We should be slow therefore to put on the
word " discharged from liability " an interpretation which would
produce results varying in different countries and thus keeping the position
uncertain for both the shipper and the ship owner.
Quite apart from this consideration, however,
we think that the ordinary grammatical sense of "discharged from
liability" does not connote " freed from the remedy as regards
liability " but are more apt to mean a total extinction of the liability
following upon an extinction of the right. We find it difficult to draw any
reasonable distinction between the words "absolved from liability"
and " discharged from liability " and think that these words "
discharged from liability " were intended to mean and do mean that the
liability has totally disappeared and not only that the remedy as regards the
liability has disappeared.
We are unable to agree with the learned Judge
of the Madras High Court that these words merely mean that " that even
though the right may inhere in the person who is entitled to the benefits,
still the liability in the opposite party is discharged by the impossibility of
enforcement." The distinction between the extinction of a right and the
extinction of a remedy for the enforcement of that right, though fine, is of
great importance. The Legislature could not but have been conscious of this
distinction when using the words " discharged from all liability " in
an article purporting to prescribe rights and immunities of the ship owners.
The words are apt to express an intention of total extinction of the liability
and should, specially in view of the international character of the
legislation, be construed in that sense. It is hardly necessary to add that
once the liability is extinguished under this clause, there is no scope of any
acknowledgment of liability thereafter.
This brings us to the question as to how the
date " when the goods should have been delivered " should be
calculated.
References were made at the Bar to some of
the numerous decisions in the different courts in India as regards the interpretation
of somewhat similar words in Art. 31 of the Limitation Act in respect of suits
for recovery of compensation for 837 non-delivery. Indeed the learned Judge in
the Madras High Court himself has based his conclusion on this question on the
view of law he had earlier expressed as regards Art. 31 of the Limitation Act
that the starting point of limitation there is the final repudiation of the
liability by the company. With great respect to the learned Judge, we are of
opinion that the cases as regards the ascertainment of the date when the goods
" ought to be delivered " as used in Art. 31 of the Limitation Act
are of no assistance for our present purpose. Most, if not all of the cases
which have considered the question of the ascertainment of the date when the
goods " ought to be delivered " for the purpose of Art. 31 deal with
cases of transport by Railways where no date has been or can be specified in
the contract for carriage. We cannot however ignore the fact that the
conditions of carriage of goods by ship are essentially different from
contracts of carriage of goods by Railways in one respect, viz., that whereas
in contracts of carriage of goods by Railways there is ordinarily no knowledge
as to by which particular train the goods will be despatched nor is there any
undertaking by the Railways as regards such trains, there is ordinarily in
contracts of carriage of goods by sea distinct arrangement that the goods will
be shipped by a particular vessel. Whether the bill of lading in the older form
beginning with the words " shipped on board the........ or in the form
more recently employed by some shipping companies, beginning with the words
" Received for shipment by......... (See Scrutton on Charter Parties, 15th
Edition, p. 10) the name of the vessel is ordinarily indicated in the bill of
lading itself. The duty of the carrier under the contract of carriage is to
carry the goods by a particular ship and then to deliver the same on the
arrival of the ship at the port. The manner in which the delivery will take
place will depend on the particular terms of the bill of lading and on the
custom of the port of destination. But whether the delivery has to be made to
the consignee at the ship's side or is made on the quay side there can be
little doubt that the carrier's duty is to start the delivery of goods as soon
as the ship arrives at the 109 838 port of destination and to complete the
delivery before the ship leaves the port. In a particular case the carrier may
not do his duty. That cannot however alter the fact of the existence of his
duty to complete the delivery between the arrival of the ship at the port and
the departure of the ship from the port. If as regards any particular goods
this duty remains unperformed at the time when the ship leaves the port there
can be no escape from the conclusion that the point of time when the ship
leaves the port is the latest point of time by which the goods should have been
delivered.
On the records of both the Bombay appeals we
find the bills of lading for these carriages of contract. Paragraph 10 of the
bill of lading in Civil Appeal No. 92 of 1948 contains the terms as regards the
discharge of cargo in these words:- " 10. Discharge of goods: The goods
may be discharged as soon as the ship is ready to unload and as fast as she is
able, continuously day and night. Sundays and holidays included, and if the
consignee fails to take delivery of his goods immediately the ship is ready to
discharge then the company shall be at liberty to land the said goods on to the
wharf or quay or into warehouse, or discharge into hulk, lazaretto or craft or
any other suitable place without notice and the goods may be
stored..................... The company shall have the option of making
delivery of goods either over the ship's side or from lighter or store ship of
hulk or custom house or warehouse or dock or wharf or quay at consignee's risk.
In all cases the company's liability is to cease as soon as the goods are
lifted from and leave the ship's desk".
In the Civil Appeal No. 91 of 1958 the terms
of delivery are in paragraph 15 and is in these words:
" 15. The company is to have the option
of delivering these goods or any part thereof, into receiving ship or board or
craft or landing them at the risk and expense of the shipper or consignee as
per scale of charges to be seen at the Agents Offices........" In these
appeals we are not concerned with the facts of these terms of delivery of
contract except that they 839 show that it is clearly understood between the
parties to the contract that delivery is to commence as soon as possible after
the arrival of ship at port and completed before the ship leaves the port.
Indeed even if there were not definite terms in the bill of lading as regards
the delivery it would follow necessarily from the very nature of the carriage
of goods by ship that the delivery of the cargo carried by the ship should be
made between the date of the arrival at the port and its departure from the
port. For our present purpose it is unnecessary to consider whether delivery to
the dock authority in any of there cases was or would have been equivalent to
the delivery to the consignee.
That would depend upon the custom of the port
of discharge or on statutory provisions or express stipulations in the bill of
lading. But whether the delivery is to be made to the consignee or to anybody
else on his behalf the duty of the ship's master is to start the delivery as
soon as possible after the ship's arrival at the port and to complete it before
the date of departure from the port.
Before the ship has actually left, the port
it is not possible to say that the time when delivery should be made has
expired. Once however the vessel has left the port it cannot but be common
ground between the carrier and the consignee that the time when delivery should
have been made is over. It is this point of time, viz., the time when the ship
leaves the port, which in our opinion should be taken as the time when the
delivery should have been made. The fact that after this point of time correspondence
started between the carrier and the consignee as regards the failure to deliver
and at a later point of time the carrier communicates his inability to deliver
cannot affect this question. Nor can the ultimate repudiation of any claim that
may be made by the shipper or the consignee affect the ascertainment of the
date when the goods should have been delivered. The arrival at port of the
vessel by which the goods have been contracted to be carried being known and
the departure being equally an ascertainable thing and the duty of the carrier
being necessarily to complete the delivery before leaving the port, the date
'by which the delivery should have been made is 840 already a fixed point of
time and later correspondence, claims or repudiation thereof can in no way
change it.
We have therefore come to the conclusion that
whatever be the proper mode of ascertaining the date when delivery " ought
to be made" under Art. 31 of the Limitation Act- whether that be the
reasonable time for delivery in the circumstances of the case or the date when
after correspondence the carrier intimates its inability to deliver or the date
of the final repudiation of the claim on a claim for compensation having been
made or in the case of part delivery the date when the bulk of the consignment
was delivered the date when the goods should have been delivered for the
purpose of the third clause of the 6th paragraph of Art. III of the Act is the
date when the ship by which the goods were contracted to be carried has left
the port at which delivery was to be made.
Applying the above clause to the facts of the
cases before us it is obvious that these suits for compensation were not
maintainable. It is hardly necessary therefore to consider the additional
defence raised in all the three suits by the shipping companies, viz., that the
claim for compensation not having been made within thirty days from the date of
arrival of the vessel in accordance with the terms of the bill of lading no
compensation is payable. The learned Judges of the Bombay High Court did not
think it necessary to consider this additional defence as they accepted ,the
defence based on the third clause of the 6th paragraph of Art. III which has
been discussed above. The learned Judge in the Madras High Court had however to
consider this additional defence in view of his conclusions against the
shipping company on the other defence. He held that the stipulation in the bill
of lading that if no claim for compensation is made within thirty days from the
date of arrival of the ship the shipping company will not be liable for
compensation is void as it offends against para. 8 of Art. 111. The relevant
portion of this paragraph is in these words:-
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 841 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." It cannot be seriously disputed that the
stipulation under consideration does directly offend against the provisions of
the 8th paragraph. For it seeks at least to " lessen ", otherwise
than provided in the rules in the Schedule the liability of the ship or carrier
for loss or damage to goods or in connection with goods caused by the failure
to deliver. This stipulation requiring claim for compensation being made within
one month from the date of arrival of the ship is therefore null and void.
Though the additional defence raised by the
shipping companies must therefore fail, the main defence, as we have already
found, succeeds. None of the suits were brought within a year from the date
when the ship carrying the goods left the port of discharge. We therefore
dismiss with costs the Civil Appeals Nos. 91 and 92 of 1958 and confirm the
order of dismissal made by the Bombay High Court. One set of hearing costs will
have to be paid.
Civil Appeal No. 88 of 1956 is infructuous
because of the fact, as already indicated, that after the order of remand now
appealed from was made by the Madras High Court the suit was heard in the Small
Causes Court and a decree was passed and that decree has become final. We
therefore dismiss Civil Appeal No. 88 of 1956, as already ordered by this Court
when giving leave to appeal; the appellant will pay the costs of the appeal to
the respondent.
Appeals dismissed.
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