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Collis Line Private Ltd. Vs. New India Assurance Co. Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKerala High Court
Decided On
Case NumberA.S. No. 168 of 1976
Judge
Reported inAIR1982Ker127
ActsCarriage of Goods by Sea Act, 1925 - Schedule - Article IV; Carriage of Goods by Sea Rules - Rule 2
AppellantCollis Line Private Ltd.
RespondentNew India Assurance Co. Ltd. and anr.
Appellant Advocate M. Pathross Mathai and; Joseph Vellappally, Advs.
Respondent Advocate J. Ranganatha Kamath,; V.K. Parekh and; G. Krishnan,
DispositionAppeal partly allowed
Excerpt:
.....or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage; if the carrier finds that the goods at the time of shipment were not in apparent good order and condition he is entitled to qualify his statement by a marginal clause to that effect. 13. we are not satisfied that in respect of the 92 bags the carrier has succeeded in establishing that the loss arose from any of the exceptions contained in article iv. it is also possible that the warehouse was not sufficiently well protected against rain. 17. in the circumstances we are satisfied that in respect of the 828 bags the plaintiffs have failed to establish that the shipowner has incurred any..........the respondents who are plaintiffs 1 and 2 are respectively the insurer and the consignor of cargo shipped on board the vessel s. s. anton belonging to the defendant. the cargo consisted of 12934 -bags of chemicals. it was shipped at okha under bill of lading no. 1 d/- 5th july 1971 (ext. a1 which is the same as ext. b40). it was consigned to 'self' and it was agreed to be delivered to the consignee at cochin. freight was pre-paid before shipment on the basis of weight of the cargo as declared by the shipper. the cargo was not however weighed by or in the presence of the carrier prior to or at the time of shipment. the entire cargo on board the ship during the voyage from okha to cochin consisted of what is covered by ext. al bill of lading. the ship arrived at the port of cochin.....
Judgment:

Kochu Thommen J.

1. This appeal arises from the judgment and decree of the learned Subordinate Judge of Cochin in O. S. No. 79 of 1972. The appellant is the defendant in a suit for the value of goods short delivered and damaged. The respondents who are plaintiffs 1 and 2 are respectively the insurer and the consignor of cargo shipped on board the vessel S. S. Anton belonging to the defendant. The cargo consisted of 12934 -bags of chemicals. It was shipped at Okha under bill of lading No. 1 D/- 5th July 1971 (Ext. A1 which is the same as Ext. B40). It was consigned to 'Self' and it was agreed to be delivered to the consignee at Cochin. Freight was pre-paid before shipment on the basis of weight of the cargo as declared by the shipper. The cargo was not however weighed by or in the presence of the carrier prior to or at the time of shipment. The entire cargo on board the ship during the voyage from Okha to Cochin consisted of what is covered by Ext. Al bill of lading. The ship arrived at the Port of Cochin on 13-7-1971 and completed discharge of the cargo on 17-7-1971. The cargo was discharged mid-stream into lighters hired for the purpose by the consignee, viz., the 2nd plaintiff (2nd respondent). Boat-notes were issued for the goods delivered. Discharge of the bags was made by means of the ship's derricks. During the discharge, 92 bags fell over-board because the sling struck against the gunwale of the ship. Ext. A10 contains the certificates issued in respect of the 92 bags lost overboard. The certificate in respect of 25 bags removed from No. 1 Hatch for delivery into Boat No. 2 on 14-7-1971 reads:

'Certified that whilst discharging cargo from No. 1 Hatch into Boat No. 2 on 14-7-1971 at 11.15 A. M. A Tata Product marked Bags Soda Bicarb fell out of the sling and were lost overboard the following cause:

While discharging Bags Soda Bicarb from H. No. 1 into Boat 2. a sling containing (25) twentyfive bags struck against the gunwale of ship and the sling got slackened and (19) nineteen bags fell out of the sling into the water and were lost. The ship's shackles and gears were in good condition. ....'

Similar certificates were issued in respect of the remaining bags which were lost overboard. The rest of the cargo was duly delivered into the lighters. Those bags were thus taken delivery of by the lightermen on behalf of the consignee as per Exts. Bl to B28 Boat-notes on their respective dates during the period between 13 and 17 Aug. 1971. Some of the Boat-notes contained the remarks: 'Bags slightly wet' and 'Bags torn and repaired.' Prior to the discharge of the cargo no hatch survey was either sought or done. The bags were taken by the lighters to the jetty and were removed as head-loads to the consignee's warehouse which is about 250 ft. away from the jetty. The 1st plaintiff, the insurer, at the instance of the consignee (the 2nd plaintiff -- the assured), conducted a survey of the bags on 11-8-1971 which was about 23 days after the removal of the goods to the consignee's premises. The survey report (Ext. A5) dt. 30-8-1971 shows that about 828 bags were torn as a result of which part of the contents had been either lost or damaged. The insurer after making certain deductions on the basis of the allowances granted, paid to the consignee the value of the goods lost or damaged as per the terms of the policy of insurance. The 1st plaintiff is thus subrogated to the rights of the 2nd plaintiff.

2. Claim bills were submitted by the consignee to the carrier in respect of the 92 bags lost overboard as well as the 828 bags found to be damaged as per Ext. A5 survey report. The claim bill for the 92 bags lost overboard is for Rs. 4197.83. The claims in respect of the 828 damaged bags amounted to Rs. 24,261.43 together with interest. As the carrier did not pay the bills as demanded the suit was instituted by the plaintiffs for a total sum of Rs. 31305.1G inclusive of interest.

3. The learned Judge found that no notice had been issued by the plaintiffs in accordance with the provisions of Article III Rule 6 of the Schedule to the Indian Carriage of Goods By Sea Act, 1925. It was also found that holds in the ship were fit and safe for the reception, carriage and preservation of the cargo, The Judge however found that the carrier was liable to compensate the plaintiffs for the loss of the 92 bags covered by the lost Overboard Certificates as well as for the loss of weight in the 828 damaged bags as ascertained by the survey report (Ext. A5). The suit was accordingly decreed for a sum of Rs. 28459.26 in favour of the 1st plaintiff, the insurer. The insurer was also awarded its proportionate costs. The present appeal is brought by the defendant against this judgment and decree,

4. The bill of lading which is governed by the Indian Carriage of Goods by Sea Act. 1925, is an acknowledgment of the receipt of the goods mentioned therein. It evidences the terms of the contract of afreightment made between the shipowner and the shipper. Bill of lading which is a symbol of the goods covered by it is regarded by the custom of merchants as a document of title. 'Carriage of goods' covers the period from the time when the goods are loaded on to the time when they are discharged from the ship. The carrier is responsible for the safe carriage and discharge of the goods which he has agreed to carry. Article III. Rule 2, provides that, subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried. Discharge of the cargo is part of the 'carriage of goods' as defined under Article I and the responsibilities and liabilities of the carrier continue till discharge. The carrier is entitled to such rights and immunities as are enumerated under Article IV and none other. (See Article III, Rule 8). Subject to such rights and immunities, the carrier is fully responsible for the safe carriage of the goods entrusted with him and for delivery of the same to the consignee in the same order and condition in which he received them. Article III, Rule 3, further provides:

'After receiving the goods into his charge, the carrier or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things--

(a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage;

(b) Either the number of packages or pieces, or the quantity, or weight, as the case may be as furnished in writing by the shipper:

(c) The apparent order and condition of the goods:

Provided that no carrier, master or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking.' The carrier must show in the bill of lading not only the lading marks, but also either the number of packages or pieces, or the quantity or weight. This means that if the number is shown he is not bound to account for the weight provided he has so indicated in the bill of lading. Words such as 'Weight and quantity unknown' are common in bills of lading. Their effect is that the bill of lading is not even prima facie evidence of the weight or quantity shipped. See Serutton on Charterparties, 18th Edn., 1974, p. 426: Carver: Carriage by Sea, Vol. 1, 12th Edn., para 270.

5. The carrier is not bound to state in the bill of lading any mark, number, quantity or weight, the correctness of which he has reasonable ground to suspect, or which he has had no reasonable means to check. The bill of lading evidences only the apparent order and condition of the goods. If the carrier finds that the goods at the time of shipment were not in apparent good order and condition he is entitled to qualify his statement by a marginal clause to that effect. The expression 'apparent order and condition' refers only to the external condition of the goods at the tune of shipment. It is not an admission on the part of the carrier as to the internal condition or quality of the goods.

6. Article III, Rule 6, provides that it is the responsibility of the consignee to notify the carrier of the loss or damage to the goods before or at the time of removal of the goo/Is, or, if the loss or damage is not apparent, within three days of their removal. This clause has been interpreted to mean that in cases where delivery is not directly made to the consignee his responsibility to notify the carrier of loss or damage arises only upon receipt of the goods by him. However the rule emphasises the need for notice being issued to the carrier as soon as the goods have actually come into the possession of the consignee. [See Scrutton, op. cit. page 428.]

7. Shri Pathrose Mathai, counsel for the appellant-defendant submits that the learned Judge incorrectly found that the carrier was liable for the goods lost. He says that, in respect of the 92 bags, certificates had ,been issued to show that they were lost overboard. This means that the loss occurred during discharge of the cargo from the ship into he lighters. Referring to the provisions of Article IV, Rule 2 (a) and (c), counsel submits that neither the carrier nor the ship is responsible for such loss. The rights and immunities of the carrier are specifically stated under Article IV, the relevant portion of which reads:

'2. Neither the carrier nor the ship shall be responsible for the loss or damage arising or resulting from--

(a) act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship:

(b) .....

(c) perils, dangers and accidents of the sea or other navigable waters: ....'

8. The construction of these provisions is no longer in doubt. Courts have held that the immunity mentioned under Article IV, Rule 2 (a), is confined to navigation or management of the vessel and is not applicable to the primary responsibility of the carrier to perform the contract of carriage which includes delivery of the cargo. Neglect of duty owed to the cargo-owners is not a neglect or default in the navigation or management of the vessel. Negligence in the management of the hatches or operation of the derricks or cranes or other apparatus of the ship meant for the carriage or protection of the cargo is not negligence in the management of the ship within meaning of the exception under Article IV, Rule 2 (a). The exception or immunity is applicable only to the care of the ship as distinct from the care of the cargo. Negligent discharge of the cargo is not negligent management of the ship. This immunity has no application where the carrier was himself at fault. He is protected only if the loss or damage arose without his actual fault or privity but on account of the negligence of his agents or servants in the navigation or management of the ship.* In the instant case there is no evidence whatever to suggest that the loss arose from negligence in the navigation or in the management of the ship.

9. Regarding the immunity under Article IV Rule 2 (c) the words 'perils, dangers and accidents of the sea or other navigable waters' mean perils or dangers or accidents peculiar to sea or navigable waters which could not have been reasonably foreseen and guarded against by ordinary skill and prudence by the carrier or his agents or servants. To come within the exception it must be a peril or danger of a character to which a marine adventure is inevitably subject. It is not merely a peril on the sea or other navigable waters, but it is a peril of the sea or other navigable waters which means that it should be a peril peculiar to such waters and to which waterborne vessels are exposed. These are therefore casualties arising from the violent action of the elements as distinguished from their silent, natural, gradual action. Any damage arising from such peril during the course of the carriage which begins at the loading point and ends at the discharging point will protect the shipowner. (The Stranna, 1938 Probate 69). As stated by Story on Bailments, 9th Edn.. 1878, para 512 (a):

'The phrase 'perils of the sea,' whether understood in its most limited sense, as importing a loss by natural accidents peculiar to that element, or whether understood in its more extended sense, as including inevitable accidents occurring upon that element, must still, in either case, be understood to include such losses only to the goods on board as are of an extraordinary nature or arise from some irresistible force, or from inevitable accident, or from some overwhelming power, which cannot be guarded against by the ordinary exertion of human skill and prudence.'

10. The primary burden of proving that the loss or damage occurred on account of an excepted cause falls squarely upon the carrier who seeks to exempt himself from liability. Once he has discharged that burden the onus would then shift to the cargo-owner to show that the carrier is not entitled to the benefit of the exception. The exceptions mentioned under Article IV will not be available to the shipowner if the cargo owner proves that the loss or damage has been caused by the negligence of the shipowner or that of his agent or servants except insofar as the shipowner is protected under Article IV Rule 2 (a) and (b). [Art. IV Rule 2 (b) reads: '(b) Fire, unless caused by the actual fault or privity of the carrier;']

11. In the present case the only evidence regarding the loss of 92 bags during discharge is what is stated in the Lost Over Board certificates. No witness was examined on behalf of the carrier to speak as regards the circumstances in which the sling happened to hit against the side of the ship. Whether the accident was caused by peril such as storm, cyclone Or tempest, we do not know. If the sling dashed against the side of the ship by the force of wind or the rolling of the vessel, it is a matter to be pleaded and established by the carrier. If the ship took a sudden list, as in The Stranna (1938 Probate 69), there is no evidence whatsoever. In the circumstances the carrier has not established that the loss arose from any peril, danger or accident of the sea or navigable waters.

12. Discharge of cargo is an important part of the carriage of goods. If cargo has been discharged negligently by the carrier's agents or servants, the consequence flowing from such negligence falls upon the carrier and he is liable to compensate the owner of the cargo for his loss.

13. We are not satisfied that in respect of the 92 bags the carrier has succeeded in establishing that the loss arose from any of the exceptions contained in Article IV. In respect of those bags the learned Judge has rightly held that the shipowner is liable.

14. We now come to the loss which is alleged to have occurred on account of the damage to 828 bags. It is true that the Boat-notes contained remarks such as 'Slightly wet' and 'Torn and repaired.' As stated earlier the entire cargo of the ship consisted of what was carried under Ext. Al bill of lading. Whatever cargo was carried by the ship, including the sweepings, had been delivered to the consignee with the sole exception of the 92 bags. It is not clear from the evidence whether any representative of the consignee, other than the lightermen who were acting on the consignee's behalf, was present at the time of discharge. The consignee did not demand a hatch-survey before the discharge commenced. If such survey had been asked for, it would in the normal course have been conducted and any damage to cargo would have been recorded. The evidence of P. W. 2 shows that rain at the time of discharge could not be ruled out. The cargo was discharged in the month of July when monsoon was probably in full force, P. W. 2 also does not rule out the possibility of sea-water in the lighters. It is quite possible that the bags became slightly wet on account of the rain water during discharge. It is equally possible that on account of water in the lighters the bags got slightly wet when they were placed in the lighters. This probably accounts for the remark in the Boat-notes 'slightly wet.' The plaintiffs have not examined any witness who had seen the discharge of the cargo and who could have spoken to what happened. If the lighter-men had been examined they could have stated at what point of time the Boat-notes were prepared. They could also have stated whether the bags were noticed to be wet while they came down by the slings and before they were placed in the lighters in the circumstances it is not possible to say whether the remark 'Slightly wet' in the Boat-notes is traceable to rain water which might have fallen on the bags during discharge or to rain water or sea water in the lighters. Whatever that be, the damage, if any, could be ascertained only by a proper and prompt survey of the goods. If such survey was conducted immediately after the bags were taken into the warehouse of the consignee it could have been ascertained whether the contents of the bags had been damaged on account of the water which made them wet. As we stated earlier the shipowner is liable only to deliver the goods in the apparent order and condition in which he received them and he is not responsible for their internal condition and quality. The only apparent change in the condition of the goods since he received them was that the bags had become wet. If the bags became wet subsequenty to the discharge of the cargo, the shipowner would not have any liability. If on the other hand, they became wet during discharge, it was incumbent upon the recipient of the cargo to prove by an immediate survey that because of their contact with water the contents of the bags became damaged. It is significant that the Boat-notes only indicated that the bags were slightly wet. Whether that was the cause of the alleged damage is a matter which could have been ascertained by a prompt survey.

15. P.W. 2 says that the lighters were taken to the jetty from where the bags were carried as head-loads to the consignee's warehouse just about 250 feet away. It is quite possible that all this happened during rain and that the bags got further wet. It is also possible that the bags were stacked in the godown in such a way that damage occurred on account of the pressure of weight of the bags. It is also possible that the warehouse was not sufficiently well protected against rain. The survey conducted 23 days after the receipt of the goods could not disclose the state of the cargo at the time of delivery from the ship. The burden was upon the consignee to show that there was no negligence on their part subsequent to the delivery of the goods. It was the consignee's burden to show that during the removal of the cargo after they were received into the lighters or during their storage in the warehouse no damage did or could occur.

16. The claim bills show that they were prepared on the basis of the shortage in weight, as shown in the bill of lading. It is admitted by P. W. 2 that the bags were not weighed at the time of loading. Although the freight was calculated on the basis of weight as declared by the shipper, the shipowner exempted himself from the weight so declared by the shipper by specific provisions to that effect, Clause 4 of the bill of lading says:

'Weight, contents and value when shipped unknown.' In the circumstances the shipowner has no liability to account for the exact weight as stated in the bill of lading. The fact that freight was calculated on the basis of the weight declared by the shipper does not mean that for any other purpose the shipowner had accepted the weight. Even assuming that the bags had burst during carriage, the liability of the shipowner was only to account for the goods which came out of the bags. The consignee has no case that any part of the sweepings had not been bagged and delivered to it. By a specific provision in the bill of lading which reads 'Ship not responsible for mouth getting burst and loss of contents,' the shipowner had exempted himself from such liability. His liability for the contents would arise only if what came out of the bags had not been accounted for to the consignee or if the contents were damaged while in his custody and owing to his negligence.

17. In the circumstances we are satisfied that in respect of the 828 bags the plaintiffs have failed to establish that the shipowner has incurred any liability whatsoever to compensate them for the alleged loss. Accordingly we are of the view that the learned Judge wrongly held that the shipowner was liable in respect of the claim relating to those bags. We allow this appeal in respect of the 828 bags and dismiss the appeal in respect of the 92 bags lost overboard. The decree of the lower court is therefore modified and limited to a sum of Rs. 4197.83 together with interest thereon at 6% per annum from the date of suit and the proportionate costs of the 1st plaintiff in the court below. The parties will bear their respective costs in the present appeal.

18. The respondents' counsel (Shri Kamath) asks for leave to appeal to the Supreme Court. We are not satisfied that any substantial question of law of general importance which, in our opinion, requires a decision by the Supreme Court arises in this case. Leave is refused.


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