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Firm of S.P.A. and A.R. Chockalingam Chettiar Vs. National Steamship Co., Bombay - Court Judgment

LegalCrystal Citation
SubjectCivil;Limitation
CourtKerala High Court
Decided On
Case NumberA.S. No. 338 of 1955 (E)
Judge
Reported inAIR1958Ker47
ActsLimitation Act, 1908 - Schedule - Articles 31 and 48; Sea Customs Act, 1878 - Sections 29; Evidence Act, 1872 - Sections 29 and 115
AppellantFirm of S.P.A. and A.R. Chockalingam Chettiar
RespondentNational Steamship Co., Bombay
Appellant Advocate A.S. Krishna Iyer, Adv.
Respondent Advocate K. Rama Iyer and; S. Ananthasubramonia Iyer, Advs.
DispositionAppeal allowed
Cases ReferredSee Mylappa Chettiar v. B.I.S.N. Co. Ltd.
Excerpt:
.....of various goods under contract of sea carriage - defendant failed to deliver specific lots of goods - plaintiffs demanded settlement on basis of their invoice prices - defendant called for revised claims at government control rates - defendant liable to plaintiffs for damages for conversion - plaintiffs claimed settlement at early stage on foot of invoice value - defendant did not cast any doubt on invoices - held, defendant answerable to plaintiff to full extent of invoice prices. - - according to the plaintiffs, there was failure on the part of the defendant to deliver 4 specific lots of goods covered by four separate bills of lading, even though the goods had arrived and been stored in the defendant's go-down, along with the rest. , and is the suit bad for misjoinder of..........and last question is the amount of damages awardable to the plaintiffs for the conversion of the goods. the value recoverable in an action for conversion is, in general, the value of the property at the date of the conversion and not its value at an earlier or later date. in this case there is no dispute that the value fluctuated between the date of despatch from bombay and the date of arrival at the port of destination. the only question is, was the bombay value of the goods reflected by the invoices ex. vi series or was it the lower value declared by the plaintiffs in the bill of entry, ex. iii series. now section 29 of the sea customs act viii of 1878 says: 'on the importation into, or exportation from, any customs-port of any goods, whether liable to duty or not, the owner of such.....
Judgment:

Varadaraja Iyengak, J.

1. This appeal is by the plaintiffs in a suit for damages for conversion which has been decreed in part by the Court below.

2. The plaintiffs represent a firm of merchants carrying on business at Mattancherry in Cochin. They were the consignees of various goods under separate contracts of sea carriage between Bombay and Cochin, through-M/s, The New Dholera Steamship Ltd., Bombay, and the Malabar Steamship Co., Ltd., Bombay. These two carriers have their common agent in the sole defendant in the case, viz., M/s. The National Steamship Co., Bombay, with registered office at Mattancherry, and represented by Ratansee Panchan, residing at Mattancherry.

According to the plaintiffs, there was failure on the part of the defendant to deliver 4 specific lots of goods covered by four separate Bills of lading, even though the goods had arrived and been stored in the defendant's go-down, along with the rest. Two of these lots which consisted of copper circles and brass circles arrived in single voyage on 10-8-1947 by S.S. Jayabrahma, engaged by the Dholera Steamship Co.

The other two lots arrived on 29-6-1947 and 16-7-1947 by S.S. Janaki, of the Malabar Steamship Co., in two voyages, and consisted of separate bundles of tin blocks. On the plaintiffs' complaint of short delivery, the defendant undertook to make necessary enquiries and do the needful. Subsequently when the plaintiffs demanded settlement on basis of their invoice prices, the defendant called for revised claims at Government control rates. This was on 20-11-1947. To this requisition, the plaintiffs replied to say that there was no control in connection with the goods and the invoices alone governed the: extent of their loss.

Nothing further happened and to all the plaintiffs' later reminders, the defendant remained only silent. This suit was accordingly laid on 4-4-1124 corresponding to 20-11-1948 for recovery from the defendant of the value of the goods not delivered along with proportionate freight charges and interest aggregating to Rs. 3,356-2-4. The plaint averred that the defendant, either is still retaining the goods or has wrongfully converted them to his own benefit. The plaintiffs claimed that their cause of action for the suit arose in August 1947, on 20-11-1947 and on or after 1-1-1948.

3. The defendant contested the suit on various grounds covered mainly by the issues 1, 5, 6 and 8 as follows:

(1) Whether the suit against the defendant company is not maintainable? Is the cause of action, if any, only against the Malabar Steamship Co. Ltd., and the New Dholera Steamship Ltd., and is the suit bad for misjoinder of causes of action?

(5) Whether the defendant is not liable for any loss in excess of the value declared by the shipper in the Bills of entry?

(6) Whether the defendant has caused conversion of the whole or part of the goods in dispute; whether the belief of the 1st plaintiff as to conversion is justifiable?

(8) Whether the suit is barred by limitation?

4. On the technical plea covered by issue 1, the Court below found that it would have been better if two separate suits had been filed against the defendant as representing the two different Steamship companies. But it did not matter because the claims against the different companies were separately shown in the plaint and the companies did not suffer on account of the joinder in this single suit of the different causes of action against them.

On the merits, the Court below found that there was no question of short landing as pleaded by the defendant but it was only a case of short-delivery by the defendant of the goods and the defendant was accordingly liable to the plaintiffs in damages for conversion. These damages did not however extend to the prices as shown in the invoices but should be limited to the lower values as were declared by the shipper in the Bill of entry.

The lower Court held further that the failure to institute the suit within one year of the date when the goods should have been de-livered did not involve a bar of limitation under Article 31 of the Limitation Act. For, according to its finding as to conversion, the suit was governed by the 3 years' rule under Article 48 and so considered the suit was within time.

In the result, the plaintiff was granted decree for recovery of Rs. 618-14-0 only, the plaint claim being disallowed as regards the rest. Hence this appeal by the plaintiff to the extent of Rs. 2,737-4-4 disallowed. The defendant has taken cross-appeal as regards the amount allowed.

5. The whole controversy between the parties being thus re-opened before this Court, the first question that arises for consideration is how far the suit is bad for misjoinder of causes of action. Learned counsel for the defendant submits, in this connection that the plaintiffs cannot combine their causes of action based on their separate contracts of carriage with the two steamship companies, in single suit filed against them both.

They cannot do so as against the defendant either and this, notwithstanding the explanation attempted in the plaint and accepted by the Court below 'that the defendant was exercising the rights and answering the obligations of the two companies qua carriers'. For, the defendant's liability if at all, as agent of the one company remained always distinct from that as regards the other. And there was also no question of the personal liability of the defendant under the contracts even as agent.

The argument is not without force but it is unacceptable in this case seeing that the suit here is framed as one in tort against the defendant personally and not for relief ex-contractu at all. And the plaintiffs' counsel also states that his client is prepared to win or lose on this footing. The common agency was stressed in the plaint, because it gave the defendant the opportunity to commit the tort.

6. This takes us on to the next important question whether the goods were converted by the defendant to his use. On this, learned counsel for the defendant strenuously urged that this case of conversion was an afterthought invented by the plantiffs with a view to this litigation and was never in their view during the whole course of their correspondence with the defendant before suit.

According to learned counsel, there could be no conversion in law unless the defendant interfered with the plaintiffs' possessory right and no such interference could possibly arise in this case because the plaintiffs had admittedly no possession of the goods at any time and he referred to certain reported cases in this connection. Learned counsel also assailed the finding of the Court below that the goods had been really landed in the defendant's go-down and the non-delivery was therefore wrongful.

Now the tort of 'conversion' consists in an act of wilful interference, without lawful justification, with a chattel in a manner inconsistent with another's right, whereby that other is deprived of the use and possession of it.

There are three distinct methods in which one may be guilty of a conversion:

(1) by wrongly taking it, (2) by wrongly detaining it, and (3) by wrongly disposing of it. In the 'first case the wrong-doer acquires a possession which is wrongful ab initio. In the second he acquires possession rightfully but retains it wrongfully. In the third case he neither takes it wrongfully nor detains it, but so acts that it is lost to the true owner.' (See p. 316, Salmond's Law of Torts, 11th Edn. (1953).

And dealing with 'conversion by detention, at p. 329, the learned author says:

'The usual method of proving that a detention is adverse within the meaning of this rule is to show that the plaintiff demanded the delivery of the chattel, and that the defendant refused or neglected to comply with the demand. Demand and refusal, however, is not the sole method in which an adverse detention may be proved. If wrongful detention can be established without proving a demand, there is a good cause of action.'

It follows that the argument of learned counsel that plaintiffs' anterior possession is an essential element of converson, is without substance. it is enough if the defendant came by possession of the plaintiffs' goods by trespass against plaintiff's or even otherwise and then detained it against the plaintiffs' will. If the failure to deliver was not justified, the defendant is not allowed to say that he had not converted the goods. Learned counsel referred to Martab Ali v. Union of India, AIR 1954 Bom 297 (A). But all that the case held was that:

'In order to determine whether there was conversion of goods, the test to be applied is not merely to see whether there was failure to return the goods. It must also appear that there was an intention to keep the goods in defiance of the plaintiff. In other words, detention is not conversion unless there is an adverse claim. A carrier who on demand being made states that he would not return the goods because they were looted while in his possession cannot ipso facto be said to have been guilty of conversion'.

The next case of Maneklal Mansukhbhai v. Jwaladatt Pilani, AIR 1947 Bom 135 (B), relied on by learned counsel does not really help him. For it was observed there:

'There can be conversion of an article only when the person against whom the suit is brought has been in possession of that article and has refused to hand it over to the person filing the suit on a demand being made for the same.'

and the learned Judges went on to hold that the defendant therein having never come into the possession of the twenty Tata deferred shares concerned, on behalf of the plaintiff, no question of conversion ever arose. The question in this case also is really did the defendant himself get delivery of the goods from the steamship carriers or was it a case of short-landing as he pleaded.

7. Now in arriving at its conclusion as to short delivery as opposed to short landing the Court below placed considerable reliance on Exs. D, E and F, Boat notes kept in the Customs Office in respect of the goods landed in the voyages under reference and also the failure of the defendant to raise any question of short landing during the correspondence before suit between the parties. Indeed the investigation he was undertaking by his earliest letter Ex. A dated 13-9-1947 was to find out the whereabouts of 'the short delivered' goods.

Exhibits D, E and F uniformly showed that all the goods of the defendant's Steamship companies were duly landed, and there was nothing to be accounted for. These records are maintained for the Customs Inspector to note whether the goods, arriving by ship have been landed correctly as per the Import Manifest for, any short landing of cargo would have to be immediately reported so as to have appropriate amendments made in the Manifest.

If goods are properly landed, the Master's certificate and acknowledgment that all the goods were delivered in full is also obtained. Exhibits D, E and F were produced before Court by the Customs Office at the instance of the plaintiffs because the defendant failed to file the boat notes, the duplicates of which were admitted by his Store Keeper P.W. 2 to be available in the defendant's office. These boat notes would have revealed whether and if so what goods were not landed from the ship's side into the boats.

Learned counsel for the defendant placed great reliance upon the Register maintained by the defendant in connection with the import of the goods but that Register did not refer to any 'short landing' as such. There was also some oral evidence before the Court that the short delivered goods were seen at the defendant's godown. The finding of the Court be-low against the defendant's case of short landing cannot be said therefore to be unjustified. If so, the failure to deliver the goods after demand therefor, certainly amounted to conversion.

8. We now pass on to the question of limitation. On this matter, learned counsel for the defendant says that the finding as to conversion as against the defendant will not enable the application of Article 48 of the Limitation Act. Article 31 will still apply because the defendant, as agent of the carrier companies must himself be deemed to be a carrier within the meaning of Article 31 and if so, the non-delivery however caused, whether on account of conversion or otherwise did not matter.

The argument then went on to assert, that the goods should have been delivered within reasonable time of the arrival of the Steamships, say by September 1947 at the most and the suit filed in November 1948 more than a year later, must be held to be barred whether by virtue of para. 6 of Article III of the Schedule to the Carriage of Goods by Sea Act or under Article 31 of the Limitation Act.

Now it may be conceded that a suit against a carrier for compensation for non-delivery of goods is governed by Article 31 whether the suit is based on contract or tort and Article 48 would not apply even if an allegation of conversion of goods is made. But the question still is whether the position of the defendant could be assimilated to that of a carrier.

There are cases in the books no doubt, where the inference has been drawn that the conveyance and the landing are effected by two agencies, one carrying the goods up to the port and the other from the ship's tackle to the godown on the shore, and the principle has ' been enforced that when there is an agreement between the two agencies the effect of which is to constitute one of them as the agent of the other and the traffic has been carried on for the joint benefit of both the agencies, either of them may be sued at the option of the consignor and Article 31 would apply equally to them. See Mylappa Chettiar v. B.I.S.N. Co. Ltd., AIR 1918 Mad 341 (C). But para. 2 of the defendant's written statement

'The National Steamship Company represented by this defendant in Mattancherry is only the agent of the Malabar Steamship Co. Ltd., and the New Dholera Steamship Ltd., Bombay. These latter companies are the carriers both in law and in fact and not defendant company. The plaintiff's cause of action it any is against the carrier company concerned with the particular consignment of goods, about which the plaintiff complains of short delivery.'

precludes any consideration of the defendant in this case, as engaged in a continuous contract of carriage. It follows therefore that Article 48 of the Limitation Act alone applies to the defendant's case and the Court below was perfectly right in saying that the suit was within time. The above conclusion has rendered unnecessary the consideration by us of the further questions raised by learned counsel for the defendant as to the discharge under para. 3 of Article 6 of the Carriage of Goods by Sea Act or limitation under Article 31 of the Limitation Act.

9. The next and last question is the amount of damages awardable to the plaintiffs for the conversion of the goods. The value recoverable in an action for conversion is, in general, the value of the property at the date of the conversion and not its value at an earlier or later date. In this case there is no dispute that the value fluctuated between the date of despatch from Bombay and the date of arrival at the Port of destination.

The only question is, was the Bombay value of the goods reflected by the invoices Ex. VI series or was it the lower value declared by the plaintiffs in the Bill of Entry, Ex. III series. Now Section 29 of the Sea Customs Act VIII of 1878 says:

'On the importation into, or exportation from, any customs-port of any goods, whether liable to duty or not, the owner of such goods shall, in his bill of entry, or shipping bill, as the case may be, state the real value, quantity and description of such goods to the best of his knowledge and belief and shall subscribe declaration o the truth of such statement at the foot of such bill.'

But these declarations cannot be said to be conclusive even for the purpose of Sea Customs Act. For, it contemplates three alternative procedures, whose details we are not now concerned with, which a Customs Officer may adopt if he finds the declared value to be incorrect. In any event, it cannot be final or conclusive as between the victim of a wrong of conversion and the wrong-doer.

The 2nd plaintiff as P.W. 4 explained that the price of the articles given in the bill of entry was only for purpose of assessing Customs duty and it did not disclose the actual value and that the correct price was shown in the invoices. The Court below thought that the invoices had not been properly proved and further that the 1st plaintiff had himself admitted that the price given in the Bills of entry was the correct one. In this however it was mistaken.

It will be remembered that when the plaintiffs claimed settlement at early stage on foot of the invoice prices, the defendant requisitioned only the Government control rates and did not cast any doubt on the invoices or suggest alternative values. Even in the written statement, except that he denied the plaintiffs' rates and put the plaintiffs to proof, the defendant did not have any positive case as to the value,

It is wrong to say as the lower Court did that the figures in the Bill of entry constitute an estoppel against the plaintiffs for, there is no question of the defendant's altering his position on the faith of the representations contained in the Bill of entry. There is no reason on the whole, why the values as per the invoices should not be accepted. It is not contended that the plaint calculation is any way-incorrect, from the point of view of those invoices.

It follows, therefore, that the defendant is-answerable to the plaintiff to the full extent of the invoice prices, viz., of Rs. 3.136-2-7, viz., the whole of the principal constituting the plaint claim except to the extent of Rs. 29-12-6 being the excess landing charges due under-different account and also given up by plaintiff during the suit. This amount will carry interest at 6 per cent, from 7-11-1947.

10. In the result we allow the appeal and dismiss the cross-appeal. The decree of the Court below will accordingly stand modifies so as to enable the 1st plaintiff to recover Rs. 3,136-2-7 and interest thereon at 6 per cent, from 7-11-1947 against the defendant-company with proportionate costs throughout. The defendant-company will suffer his costs of both the Courts.


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