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The Shipping Corporation of India Ltd., Bombay and anr. Vs. the Union of India and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal Nos. 725 of 1972 and 35 of 1973
Judge
Reported inAIR1976AP261
ActsMajor Port Trusts Act, 1963 - Sections 42(2), 43 and 120; Indian Contract Act - Sections 151, 152 and 161
AppellantThe Shipping Corporation of India Ltd., Bombay and anr.
RespondentThe Union of India and anr.
Appellant AdvocateR. Kondaiah and ;K.R. Krishna Gopal, Advs.
Respondent AdvocateK. Subrahmanya Reddy, Central Government Standing Counsel and ;K. Srinivasa Murty, Adv.
Excerpt:
commercial - recovery - sections 42 (2), 43 and 120 of major port trusts act, 1963 and sections 151, 152 and 161 of indian contract act, 1872 - suit for recovery due to loss suffered by respondent - respondent claimed due to non-delivery of some bags and some bags were in bad condition - recovery ordered - appeal moved against order - appellant pleaded that they delivered bags to port and trust and received receipt under section 42 (2) of act of 1963 - second defendant contended that under sections 42 and 43 of act of 1963 port trust is not responsible for any loss unless notice contemplated by section 43 (2) is served within prescribed period - held, appellants were not liable in event of proper delivery and also for non-compliance of provisions of section 120 of act of 1963. - - 25.....jeevan reddy, j.1. these two appeals filed by defendants 1 and 2 and the defendant no. 3 respectively against the judgment and decree in o.s. no. 25 of 1971 on the file of the learned district judge, visakapatnam, involve the interpretation of sections 42 and 43 of the major port trusts act, 1963, hereinafter referred to as the 'act' as well as the construction of section 120 of the said act.2. the union of india field the above suit for recovery of a sum of rs. 74,216-65 ps together with interest thereon at 6 per cent per annum form the date of the suit till the date of realization against (1) the shipping corporation of india limited, bombay, represented by their agents; (2) messrs. a.v. banorirao garuda pattabhiramayya and company, visakapatnam and (3) the board of trustees for the.....
Judgment:

Jeevan Reddy, J.

1. These two appeals filed by defendants 1 and 2 and the defendant No. 3 respectively against the judgment and decree in O.S. No. 25 of 1971 on the file of the learned District Judge, Visakapatnam, involve the interpretation of Sections 42 and 43 of the Major Port Trusts Act, 1963, hereinafter referred to as the 'Act' as well as the construction of Section 120 of the said Act.

2. The Union of India field the above suit for recovery of a sum of Rs. 74,216-65 Ps together with interest thereon at 6 per cent per annum form the date of the suit till the date of realization against (1) the Shipping Corporation of India Limited, Bombay, represented by their agents; (2) Messrs. A.V. Banorirao Garuda Pattabhiramayya and Company, Visakapatnam and (3) The Board of Trustees for the Port of Visakhapatnam by its Chairman. According to the plaintiff a consignment of 81,632 bags of Ammonium Phosphate with 817 spare bags was received on Board 'S.S. Viswakirti' owned by the first defendant at the Post of Pascagoula, Mississippi, U.S.A., on 28-8-1966 and under a Bill of Lading of the same date thereunder the first defendant agreed to deliver the said goods to the consignee namely the Regional Director (Food) or his assignees at Visakhapatnam in good and proper condition. The second defendant is the shipping agent of the first defendant. On 26-10-1966, the said ship arrived at the Post of Visakhapatnam and commenced its discharge of the cargo on 8-11-1966 and completed the same on 22-11-1966. But when the consignee went to take delivery to the Port, it was found that 2133 bags along with their contents were totally missing and 718 bags were found to be in a slack, torn and bad condition. The third defendant issued a 'A' certificate dated 16-5-1967 certifying that 2133 bags with their contents were not at all landed at the Port. It was also stated that some of the empty spare bags were also not delivered. The total loss incurred by the plaintiff on this account was demanded by a letter dated 18-3-1967 addressed to the second defendant to which it was replied that the said bags were discharged by the said ship into a steel Barge owned by the third defendant on 9-11-1966 and that the said Barge while proceeding to the Port met with an accident and sank along with all its contents. It was claimed by the second defendant that inasmuch as it has delivered the cargo to the third defendant its responsibility came to an end and it was also pointed out that at is instance the third defendant has subsequently cancelled the 'A' certificate issued by them, and confirming that the said steel Barge had sun at Q-4 Berth. The second defendant asked the plaintiff t look to the Port Trust for any loss or damage incurred by it and disclaimed any responsibility in that behalf. The plaintiff however contended that the second defendant cannot escape the liability inasmuch as the delivery of the bags to the third defendant is no delivery to the consignee as undertaken by the defendants 1 and 2 under the Bill of Lading and that the third defendant cannot be called an agent or representative of the plaintiff. It was therefore contended that the defendants 1 and 2 continued to be liable for the loss or damage and therefore, a decree was sought against them. It was alternatively prayed that if it is found that the defendants 1 and 2 are not liable for the said loss a decree may be passed against the third defendant.

3. Defendants 1 and 2 pleaded in their written statement that once they delivered the bags to the Port Trust and receive a receipt under sub-section (2) of Section 42 of the Act, they are not responsible for any loss or damage incurred thereafter. They pleaded that by virtue of the provisions of Section 42 of the said Act, they are statutorily discharged of any liability either towards the third defendant or toward the plaintiff and that therefore no decree can be passed as against them. They also referred to the cancellation of the 'A' certificate (dated 16-5-1967) by a subsequent letter of the third defendant dated 31-8-1967 in which it was stated that the short landing certificate i.e., 'A' certificate, was issued erroneously and that the third defendant had received the total consignment from the said ship, but loss 2133 bags in the said accident. They also denied the non-delivery of 367 spare empty bags and also that they were responsible for any damage to some of other bags.

4. The third defendant in its written statement pleaded that under Section 42 and 43 of the Act, the Port Trust is not responsible for any damages or loss unless a notice contemplated by sub-section (2) of Section 43 was given within the prescribed period and inasmuch as no such notice was given, no liability whatsoever attaches to it. They admitted that the 'A' certificate was issued under a mistake and that subsequently it was cancelled on verification of the true facts. It was further contended that the Port Trust receive the cargo as bailee on behalf of the carrier i.e. the first defendant and it was denied that it acted in any negligent manner. It denied its liability to preserve the cargo or to deliver the same to the plaintiff. It was stated that the barge sank on account of an accident and not on account of any negligence on its part. It disclaimed any concern or connection with the Bill of Lading or any liability towards the consignee. Inasmuch as there was no privity of contract between the third defendant and the plaintiff, it was alleged that the plaintiff has no cause of action against the third defendant and it was also submitted that the plaintiff never preferred any claim against it prior to the filing of the suit. It was also stated that no statutory notice as required by Section 120 of the Act was issued by the plaintiff which makes the suit itself incompetent.

5. Twelve issues were framed by the trial Court out of which 1 to 3, 5, l6 and 9 were omitted on a memo dated 7-2-1972 filed by the plaintiff's advocate stating that they are not necessary for the determination of the disputes between the parties. Thereafter, the remaining issues were renumbered. The trial Court found that the suit is not barred either on account of the absence of notice contemplated by Section 43(2) of the Act or for non-issuance of the notice required by Section 120 of the Act. It was also found that the suit is also within the limitation prescribed by Article III, Clause (6) of the Schedule to the Indian Carriage of Goods by Sea Act, 1925. It was further found relying upon the Union of India v. M/s. Ralli Bros Ltd., (1968) 2 Mad LJ 199, that merely because defendants 1 and 2 have delivered the cargo to the third defendant, their responsibility as a carrier has not ceased and that according to the terms of the Bill of Lading, they continued to be liable for a proper and full delivery of the consignee in accordance with the said Bill and since admittedly there was a failure to do so on their part, defendants 1 and 2 were liable therefor. It was also found that the third defendant was not acting as the agent of the plaintiff, but they were acting as the agent of the carrier when the cargo was discharged form the ship into the steel barge owned by the third defendant. On these findings, the suit was decreed with cost as prayed for. Against the said judgment and decree, defendants 1 and 2 have filed A.S. No. 725/72 while the third defendant has filed A.S. No. 35/73 both of which are heard together and can be disposed of by a common judgment.

6. It is contended by Sri K. Ramgopal, the learned counsel for the appellants in A.S. No. 725 of 1972, that the moment the cargo was transferred to the steel barge owned by the third defendant and a receipt contemplated by sub-section (2) of Section 42 was issued by the Post Trust to the Master of ship, the shipper is statutorily discharged of any further liability for the loss or damage incurred thereafter by the third defendant. It is stated that where the goods are carried by sea and on account of the provisions of the said Act it is not possible for the shipper to deliver the goods directly to the consignee at the side of the ship, the shipper can deliver the goods only to the Port Trust and the consignee has to take delivery from the Port Trust only. Inasmuch as in this case a receipt dated 11-11-1966 under Section 42(2) of the Act was issued (Marked in the suit as Ex. B-3) acknowledging the receipt of the total number of the said bags which are not said to be lost, it is the third defendant who is liable for the said loss and not defendants 1 and 2. He relied upon a unreported Bench decision of this Court dated 12-2-1975 in A.S. No. 489 of 1971 (Andh Pra) in support of this contention. He also referred to Madras Port Trust v. Annamalai, : AIR1968Mad42 ; Swastic Agency v. Madras Port Trust, : AIR1966Mad130 ; G.E. Shipping Co, v. S.M.S. Saheb and Co.., : AIR1959Mad367 and further contended that the decision of the Supreme Court in Trustees of the Port of Madras by its Chairman v. K.P.V. Sheik Mohammed Rowther & Co., (1963) Supp (2) SCR 915 does not in any manner militate against his contention.

7. Mr. M.R. Rama Sarma, the learned counsel appearing for the appellant in A.S. No. 35 of 1973 contended that so far as the third defendant is concerned, the suit itself is barred by virtue of the provisions of Section 120 on account of the notice contemplated by Section 120 of the Act not having been admittedly issued before the institution of the suit. It was also contended that inasmuch as the notice required by Section 43(2) of the Act was also admittedly not issued it also bars the suit. It was further contended that the plaintiff for its own reason has given up the issues relating to the negligence on the part of the third defendant and inasmuch as there is no finding of negligence on its part, no decree can be passed against it. It is also contended that there is absolutely no privity of contract or any other obligation between the third defendant and the plaintiff and that the plaintiff has to look to defendants 1 and 2 alone for the loss if any suffered by it.

8. On the other hand, it is contended by Sri Subrahmanya Reddy, the learned standing counsel for the Central Government that under the Bill of Lading marked as Ex. A-1 in the suit, defendants 1 and 2 are under an obligation to deliver the goods to the consignee i.e. the plaintiff and admittedly no such delivery has taken place in respect of 2133 bags. He submitted that the Port Trust is not the agent of the consignee but it is only bailee or sub-bailee or the carrier, which itself is a bailee of the consignor. He says that the receipt issued under sub-section (2) of Section 42 of the Act is a matter between the shipper and the Port Trust and that the consignee does not come into the picture at all. He further submitted that for any loss or damage incurred while the goods are in the custody of the Port Trust, the ultimate responsibility is upon the carrier only and that he has nothing to do with the third defendant. According to him, the responsibility of the shipper ends only when the goods are delivered in accordance with the Bill of Laden to the consignee may be from the custody of the Port Trust. He further submitted that the notice contemplated by sub-section (2) of Section 42 has to be given by the carrier and not by the consignee and that non-giving of the said notice can in no manner stand in the way of the consignee instituting the suit. With respect to Section 120 of the Act, he submitted that there are two clauses in the said section and that his suit is maintainable if he satisfies any one of the clauses and that he need not satisfy both the clauses before the institution of the suit. He therefore, contended that he is entitled to a decree primarily against defendants 1 and 2 and also against the third defendant as the sub-bailee of defendants 1 and 2 in the alternative.

9. From the above contentions, it would be clear that three questions arise for decision in these appeals namely, (1) Whether the issuance of a receipt under sub-section (2) of Section 42 of the Act discharges the carrier from any liability for the loss or damage to the goods (occurring thereafter) towards the consignee and whether the Port Trust becomes liable for the said goods from the date of the said receipt to the consignee; (2) What is the object of the notice provided for by sub-section (2) of Section 43 and what is the effect of not giving such a notice on the present suit? and (3) Whether the two clauses in Sec. 120 of the Act should be read conjunctively or alternatively.

10. For answering the first question, it is necessary to examine certain provisions of the Act which are relevant in this behalf namely Sections 42 and 43, which may be set out in full---

Section 42 Performance of services by Board or other person---

(1) A Board shall have power to undertake the following services :

(a) landing, shipping or transshipping passengers and goods between vessels in the port and the wharves, piers, quays or docks belonging to or in the possession of the Board ;

(b) receiving, removing, shifting, transporting, storing or delivering goods brought within the Board's premises;

(c) carrying passengers by rail or by other means within the limits of the port or ports approaches, subject to such restrictions and conditions as the Central Government may think fit to impose : and

(d) receiving and delivering, transporting and booking and despatching goods originating in the vessels in the port and intended for carriage by the neighbouring railways, or vice versa as a railway administration under the Indian Railways Act, 1890.

(2) A Board may, if so requested by the owner, take charge of the goods for the purpose of performing the service or services and shall give a receipt in such form as the Board may specify.

(3) Notwithstanding anything contained in this section, the Board may with the previous sanction of the Central Government, authorise any person to perform any of the services mentioned in sub-section (1) of such terms and conditions as may be agreed upon.

(4) No person authorised under sub-section (3) shall charge or recover for such service any sum in excess of the amount leviable according to the scale framed under Section 48 or Section 49 or Section 50.

(5) Any such person shall, if so required by the owner, perform in respect of goods any of the services and for that purpose take charge of the goods and give a receipt in such form as the Board may specify.

(6) The responsibility of any such person for the loss, destruction or deterioration of goods of which he has taken charge shall, subject to the other provisions of this Act, be that of a bailee under Sections 151, 152 and 161 of the Indian Contract Act, 1872.

(7) 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 master or owner of the vessel from which the goods have been landed or transshipped.

Section 43 : Responsibility of Board for loss etc., of goods---

(1) Subject to the provisions of this Act, the responsibility of any Board for the loss, destruction or deterioration of goods of which it has taken charge shall,

(i) in the case of goods received for carriage by railway, be governed by the provisions of the Indian Railways Act, 1890; and

(ii) in other cases, be that of a bailer under Sections 151, 152 and 161 of the Indian Contract Act, 1872 omitting the words 'in the absence of any special contract' in Section 152 of the Act ;

Provided that no responsibility under this section shall attach to the Board until a receipt mentioned in sub-section (2) of Section 42 is given by the Board.

(2) A Board shall not be in any way responsible for the loss, destruction or deterioration of, or damage to, goods of which it has taken charge, unless notice of such loss or damage has been given within such period as may be prescribed by regulations made in this behalf from the date of receipt given for the goods under sub-section (2) of Section 42.'

It may be noted that Sections 42 and 43 correspond to Sections 39 and 40 of the Madras Port Trusts Act. It would also be relevant to set out the definition of the expression 'owner' defined by clause (o) of Section 2 of the Act :--

''Owner' (i) in relation to gods, includes any consignor, consignee, shipper or agent for the sale, custody, loading of unloading of such goods; and (ii) in relation to any vessel or any aircraft making use of any port, includes any part-owner character consignee, or mortgagee in possession thereof.'

11. For the sake of convenience, we may also set out Sections 151, 152 and 161 of the Indian Contract Act after omitting the words as required by this Act :---

'Section 151 : In all cases of bailment the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value as the bailee.

Section 152 : The bailee................. is not responsible for the loss, destruction or deterioration of the thing bailed, if he has taken the amount of care of it described in Section 151.

Section 161 : If, by the default of the bailee, the goods are not returned, delivered or tendered at the proper time he is responsible to the bailer for any loss, destruction or deterioration of goods from that time.'

12. Sections 42 and 43 occur in Chapter V relating to Works and Services to be provided at Ports. Sub-section (2) of Section 42 provides that the Board may, if so requested by the owner, take charge of the goods for the purpose of performing the service or services and shall give a receipt in such form as the Board may specify. The service or services which the Board performs are referred to in sub-section (10 which include receiving removing, shifting, transporting storing or delivering goods brought within the Board's premises. The delivery of goods contemplated in clause (b) of sub-section (1) is delivery to the consignee or his agent. It is thus clear that statutorily the Board is constituted as a intermediary who receives the goods from the shipper and delivers them to the consignee on presentation of the appropriate documents. Sub-sections (3) to (3) deal with the performance of the said services by a person authorised by the Board with the previous sanction of the Central Government and are not relevant for our purposes. Sub-section (7) is crucial for our purposes and it states that after that goods have been taken charge of and a receipt given for them under this section (obviously under sub-section (2) ) no liability for any loss or damage occurring thereafter shall attach to any person to whom a receipt has been given or to the master or owner of the vessel from which the goods have been landed or transshipped. The question is whether this sub-section merely states the obvious i.e. whether it merely reiterates that once the goods are taken charge of by the Board, the shipper is no longer responsible as between himself and the Board for any loss or damage occurring to the goods thereafter i.e. in other words the statutory discharge of liability is confined to the inter se rights and obligations between the shipper and the Board or whether he said sub-section has any positive content namely whether it puts an end to all the obligations of the shipper towards the consignee once the goods are delivered into the possession of the Board, making the Board responsible thereafter for the safe custody and proper delivery to the consignee. Reference may also be had to the provisions of sub-sections (1) and (2) of Section 43. Sub-section (1) states that the responsibility of the Board for the loss, destruction or deterioration of the goods taken charge by it and in respect of which a receipt under sub-section (2) of Section 42 has been issued by it shall be that of a bailee under Section 151, 152 and 161 of the Indian Contract At. The said provisions of the Contract Act oblige the Board to take such care of the said goods as a man of ordinary prudence would take of his own goods in similar circumstances, while exonerating it from any loss or destruction occurring to the goods in spite of such care taken by it. It is further provided (by Section 161 of the Indian Contract Act) that if on account of the default of the bailee, the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailer for any loss, destruction or deterioration of the goods from that time. Sub-section (2) of Section 43 requires a notice to be given within the period prescribed by the Regulations (in the case of Visakhapatnam Port the period prescribed by the Regulation is five days) if the Board is sought to be made responsible for the loss, destruction or deterioration of the goods taken charge by it and in respect whereof it has issued a receipt under sub-section (2) of Section 42. In other words, the effect of Section 43 (1) is to make the Board 'Bailee's Bailee' i.e. the shipper/carrier's bailee. Perhaps, for this reason the Supreme Court has referred to the Board as the 'sub-bailee'. (See the observations at page 944 of the decision reported in (1963) Supp 2 SCR 915). In this context, to show we were referred to certain passages from Mulla's Commentary that the liability of a common carrier is similar to the insurer of goods, that is to say :

'They were responsible for every injury to the goods occasioned by any means whatever, except only the act of God and the King's enemies. Therefore, the mere proof of delivery of goods and injury thereto unless cause d by the act of God or the King's enemies, was sufficient to entitle the plaintiff to compensation without proof of negligence on the part of the defendant. These principles of the English common law applied in India, but they were subsequently modified by legislation as respects common carriers and the Carriers Act, 1865 now enables a bailee of this case to limit his liability by special contract in the case of certain goods, but not so as to get rid of liability for negligence'. (See Pollock and Mulal on Indian Contract and Specific Relief Acts at page 660).

It is also held that :

'In cases governed by the provisions of Sections 151 and 152, the loss or damage of goods entrusted to a bailee is prima facie evidence of negligence and the burden of proof, therefore to disprove negligence lies on the bailee.' (See at page 665 of the same Book).

13. Now what Mr. Ramgopal contends is that sub-section (7) of Section 42 has a positive content as construed by a Bench of this Court and that it gives a complete statutory discharge to the shipper/carrier once the goods are delivered to the Board and a receipt is obtained under Section 42 (2) of the Act. The learned counsel points out that if Section 42 (7) is construed as to mean that only the liability of the shipper to the Board is discharged, there was absolutely no need to have such a provision. It is obvious if A delivers goods to B. A's liability so far as B is concerned is discharged. He therefore contends that the obvious purpose behind enacting Section 42 (7) was to see that the liability of the shipper in every respect including his liability to the consignee is statutorily discharged, the moment the goods are put in charge of the Board and a receipt is obtained by the shipper. On the basis of certain observations in the decisions reported in Swastik Agency v. Madras Port Trust : AIR1966Mad130 (supra) and G.K. Shipping Co., v. S.M.S. Saheb & Co. : AIR1959Mad367 (supra) the learned counsel contends that delivery to the Board is delivery to the consignee itself and argue further that at any rate the Board becomes the agent of the consignor and the liability of the shipper/carrier definitely comes to an end with the delivery to the Board. Mr. Subrahmanya Reddy, the learned Standing counsel for the Central Government however contends that sub-sections (1), (2) and (7) of Section 42 must be read along with sub-section (2) of Section 43 and in the light of the observations of the Supreme Court in the case referred to above. According to him, the Board is a sub-bailee and the bailee is not absolved of its responsibility for proper delivery of the goods consigned to it on account of the delivery of the same to its bailee particularly when there is no privity of contract or any other relationship between the consignor and the Board. He further contends that under sub-section (2) of Section 43, the notice must be given only by the shipper/carrier and if so, reading all the provisions together, the discharge of liability provided for by sub-section (7) of Section 42 should also be read as conferred to and as limited to the inter se rights and liabilities between the shipper/carrier and the Board and not as absolving the shipper/carrier of his liabilities to the consignee undertaken by him under the Bill of Laden. According to the learned counsel there are no express or clear words in the statute so absolving the carrier of his liability (under the Bill of Laden) to deliver the goods to the consignee. So far as the Board is concerned, as already noted, the contention is that since no negligence has been proved on its part so liability has been proved on its part, no liability attaches to it and that the plaintiff has no cause of action to institute suit against it.

14. Now let us consider the meaning and effect of the provisions of Sections 42 and 43, uninhibited by the decisions. Sub-section (1) of Section 42 and particularly clause (b) thereof makes it clear that the Act has empowered the Board to undertake the services of receiving, removing, shifting and transporting the goods from the ships to its warehouses and stores and for storing the same in its premises and also delivering the same to the person entitled thereto, which would be the consignee or his agent. Sub-section (2) of Section 42 provides for giving a receipt for the goods received, removed, shifted or transported from the ship by the Post Authorities and under sub-section (7) the person receiving the said receipt is absolved from any further liability for the loss or damage occurring to the goods thereafter. In other words, from the moment the receipt is given, it is the Board that becomes responsible for the loss, destruction or deterioration of the goods and its liability is described to be that of a bailee under Sections 151, 152 and 161 of the Indian Contract Act vide sub-section (1) of Section 43. In this context, we are of the opinion that the notice contemplated by sub-section (2) of Section 43 should be given a limited meaning in the sense that the notice contemplated therein has to be given to the Board by the shipper/carrier to whom the receipt has been issued and the object of the said sub-section is to decide and dispose of any objections with respect to the correctness of the receipt issued promptly and immediately after the goods are received by the Port Authorities. We are not prepared to construe the said sub-section as absolving the Board of its liability for loss or destruction altogether vis--vis the consignee on account of the shipper. carrier not having given the notice required by the said provision . obviously, the said receipt is issued soon after the goods are shifted from the ship and the receipt is issued to the master of the ship and he alone will be in a position to raise any objections with respect to the correctness of the said receipt. Situations may perhaps arise where the Board itself may seek to rectify or modify the contents of the receipts soon after the receipt of goods. The consignee cannot be aware of the date of the shifting of the goods or the date of issue of the receipt to the master of the ship. The Regulations fix a period of five days for giving the notice contemplated by the said sub-section. It may not be possible for the consignee, who may be in any part of India, even to know that such a receipt has been given and therefore, we are of the opinion that the said notice has to be given only by the person who receives the said receipt and not by the consignee and that the non-giving of such notice does not absolve the Board of its liability for any loss or destruction vis--vis the consignee. It is no doubt true that sub-section (2) Section 43 refers to the receipt given under sub-section (2) of Section 42 and therefore, the argument of the learned counsel for the Board appears to be prima facie plausible that if the notice is not given within five days, the Board is not responsible for any loss whatsoever occurring for whatever reason but on the closer consideration of the matter, we reject the said contention. To illustrate the fallacy of the said argument, it is sufficient to give one example. Take a case where the goods may e landed form the ship on a particular day and the receipt may be given which may be proper and no objection therefor may have been raised in that behalf. After five days and before the consignee receives the goods from the Port Authorities, there may be fire or any other accident resulting in loss or destruction of the said goods. Could it be contended that in such a case the Port Authorities would not be responsible because notice of damages has not been given within five days of the issue of the receipt under sub-section (2) of Section 42? Similar instances can be multiplied to show the fallacy of the said argument. On this reasoning of ours therefore, it is the Board that is responsible for the loss occasioned to the plaintiff and not the shipper/carrier. This conclusion of ours is consistent with the opinion expressed by a Division Bench of this Court referred to above.

15. Mr. Subrahmanya Reddy, however, contends that the observations of the Supreme Court in Trustees of the Port of Madras by its Chairman v. K.P.V. Sheik Mohamed Rowther & Co., (1963 Supp (2) SCR 915) (supra) run counter to the reasoning of the said Bench decision and consequently to our view also. We have examined the said decision of the Supreme Court and we are of the opinion that the observations made in the said judgment have to be understood in the context and in the light of the questions and issues arising for decision in the said case. The matter arose in a writ petition filed by certain steamer agents questioning the introduction of scale 'E' in Chapter V of the Madras Port Trust Act, 1905 whereunder charges to be paid by Masters owners or agents of vessels in respect of Port Trust labour requisitioned and supplied but fully or properly utilized, were prescribed. The said charges were to be on account of the labour of the Port Trust rendered idle on account of some lapse on the part of the ship owners or on account of extra payment to labour for the simultaneous working of ore than one hook at the vessel's hatch. It was contended by the writ petitioners i.e. the steamer agents, therein, that they cannot be made liable for the said charges which should be borne by the consignee on the ground that the said charges do not pertain to the operations falling under the head of discharge of cargo from the vessel. It was their argument that the Port Authorities while receiving the goods at the quay or in the barge at moorings do so on behalf of the consignee and not on behalf of the shipper/carrier. On an examination of the provisions of the said Act, (the material provisions whereof are identical with the provisions of the present Act) it was held by their Lordships of the Supreme Court that performance of the services of the Board is at the request of the 'owner', which is a general term including consignor, consignee, shipper or agent and that since the steamer agent normally requires the Board to undertake the said services in respect of the cargo to be unloaded (and since he alone is expected to have full knowledge about the time of arrival of the ship, suitability of the berth therefor and the quantity in each of the consignment and other matters), it was held that the Board undertakes the said services on his behalf. It was further held that the ship owner is the bailee of the shipper, the consignor and that he is responsible for the delivery of the goods to the consignee or a transferee according to the terms of the Bill of Lading. Delivery to the Board was held not to be a delivery to the consignee since there is no provision in the Act which constitutes the Board an agent of the consignee for the purpose of taking delivery of the goods. It was further held that the Board's responsibility for the goods after it takes charge of the same is that of a bailee of the ship owner and not that of a bailee of the consignee. The Supreme Court did not agree with the submission that since the consignee has to get his goods from the Board and not directly from the Master of the ship, the Board acts as an agent of the consignee, since no provision to that effect was brought to the notice of their Lordships. It was further observed that the place of delivery in such case is shifted from the side of the ship to the warehouse where the Board stores the goods. Further, since the Board has a lien on the goods for the payment of the dues of the Board or the freight, it was held that the Board did not hold the goods as an agent of the consignee but that of the owner of the ship. The said observations were made in the context of the liability or otherwise of the shipowner to pay the charges in accordance with the scales prescribed by the Board. It was not a case where the liability for the loss of the goods while in the custody of the Board, arose for decision. We are of the opinion that the judgment of the Supreme Court is in no way inconsistent with the view taken by us. While it is true tat the Board is not the agent of the consignee as observed by their Lordships, yet it undertakes to deliver the gods to the consignee or his agent by virtue of the provisions of claue (b) of sub-section (1) of Section 42 of the Act and therefore, by law, the Board is introduced as a statutory medium between the shipper/carrier and the consignee. By virtue of the provisions of the said Act, the consignee cannot receive the goods directly from the ship. The ship owner has to deliver the goods necessarily to the Board and the consignee has to receive the goods from the Board. In such circumstances, if the goods are lost or damaged while in the custody of the Board during the said interval, it is the Board's responsibility and cannot certainly be the responsibility of the ship owner. While it is true that the Board is in the nature of a bailee of the ship owner, yet it is not a bailee appointed by the ship owner voluntarily. The ship owner has no choice in the matter. It is for this reason that sub-section (7) of Section 42 provides for a statutory discharge to the ship owner the moment he delivers the goods into the possession of the Board and obtain a receipt therefor under sub-section (2) of Section 42. The responsibility of the Board is of course of the nature mentioned in sub-section (1) of Section 43, which is again statutorily prescribed and is not a matter to be determined by an agreement between the ship owner and the Board nor by the Common Law applicable in that behalf. This is also the understanding of the Madras High Court of the Supreme Court decision vide Madras Port Trust v. Annamalai, : AIR1968Mad42 (supra), which has been approved by Chinnappa Reddy, and Madhusudan Rao, JJ., in the Bench decision referred to above. It was observed by the Madras High Court :

'We do not see how those observations of the Supreme Court can help the Port Trust in the context of the present case. It was not argued before us that even if the consignment had been correctly landed form the ship, the consignee had no cause of action against the Port Trust for failure to deliver the proper goods. The Port Trust is a bailee must be deemed to have undertaken to deliver the goods according to the directions of the ship-owner from whom the goods had been taken charge of and statutorily the ship-owner got an absolute discharge on taking the receipt provided for under Section 39, sub-section (3) of the Act. It would not, therefore, be open to the Port Trust to contend that the consignee had no cause of action against them for non-delivery of goods which they had taken charge of. Far from the view of the Supreme Court that the Port Trust is not an agent of the consignee when the goods are delivered by the ship-owner helping the Port Trust, in our view, in case like the present it only emphasises the liability of the Port Trust.'

and again :

'Under Section 39 (3) of (Section 39 (3) of the Madras Port Trust Act corresponds to Section 42 (7) of the Major Port Trusts Act) once a receipt is given that a particular consignment had been taken charge, a complete discharge is given to the ship-owner. Section 39 refers to taking charge of gods.'

The passage extracted by us above have also been referred to with approval by the Bench of this Court and we are in full agreement with the same.

16. With respect to the meaning and scope of sub-section (2) of Section 43 of the Act, we have dealt with the same in the course of our discussion on the first question. We reiterate that the notice contemplated by the said provision has to be given only by the Master of the ship or the person, whoever it may be, that receives the receipt issued under Section 42 (2) of the Act. The said notice pertains only to the correctness or otherwise of the receipt. The receipt is not contemplated to be issued by the consignee nor is the Board absolved of its liability for the loss of the goods vis--vis the consignee only because the ship owner has filed to give the notice under the said sub-section. As we have already indicted above, the goods may be lost or damaged after the prescribed period of five days from the date of the said receipt and therefore the issuance of the said receipt has nothing to do with the responsibility of the Board for the loss or damage to the goods while the goods are in the custody awaiting delivery to the consignee.

17. Now coming to the third question namely the construction to be placed upon Section 120 of the Act which reads as follows :--

'No suit or other proceedings shall be commenced against a Board or any member or employee thereof for anything done, or purporting to have been done, in pursuance of this Act until the expiration of one month after notice in writing has been given to the Board or him stating the cause of action, or after six months after the accrual of the cause of action.'

18. We are of the opinion that the two requirements in the said section have to be read conjunctively and not alternatively. In other words, not only the suit has to filed within six months after the accrual of the cause of action, but that it has to be preceded by one month's notice given in the prescribed manner. No doubt, the word 'or' is employed between the two clauses in the said section, but we are of the opinion that reading the said clauses alternatively would defeat the very object and intention of the said provision and would lead to absurdity. The contention of the learned standing counsel for the Central Government is that if the suit is instituted within six months, no notice is required only when the suit is instituted after a period of six months from the date of accrual of the cause of action, but in such a case there is no time limit for the institution of the suit. The suit can be instituted even after say, five years. We cannot accede to such a contention. In fact, the learned counsel for the Board drew our attention to a decision of learned single Judge of this Court reported in Hyderabad Municipality v. T.V. Sarma, : AIR1972AP96 on an identical provision occurring in Section 685 of the Hyderabad Municipal Corporation Act. It was held by the learned single Judge relying upon a decision of the Calcutta High Court in Sadhiram Atoi v. Kunja Behari Banerjee, AIR 1936 Cal 715 that the word 'or' has to be read as 'and' in the context. It is well settled that the word 'or' can be read as 'and' and vice versa, if it is necessary to give effect to the intention of the Legislature and to avoid any absurdly. We, therefore, cannot agree with the submission of the learned counsel for the Union of India. The language of Section 120 of the Act is in the same terms as Section 80 of the Code of Civil Procedure which has been construed by the Supreme Court as mandatory. Now in this case, it is admitted that notice as required by Section 120 of the Act was not issued by the plaintiff to the Board before the institution o the suit. In this view, it is not necessary for us to further go into the question whether it was necessary for the plaintiff to prove negligence on the part of the Board and whether the plaintiff is entitled to a decree in the absence of such a finding.

19. The result in our discussion, unfortunate it may be, is that both the appeals have to be allowed and the suit dismissed. Defendants 1 and 2 are not liable because they have properly delivered the goods to the Board and obtained a receipt under Section 42 (2) of the Act making the Board liable for the said loss. And the suit as against the Board has to be dismissed for non-compliance with the provisions of Section 120 of the Act. In the circumstances of the case, there will no order as to costs.

20. Appeals allowed.


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