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Thakur Shipping Co. Ltd., Bombay and anr. Vs. Food Corporation of India - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberAppeal No. 609 of 1976
Judge
Reported inAIR1983Mad105
ActsA.G. of Ceylon v. Scindia Steam Navigation Co., (1961) 3 WLR 936 (PC); ;New Chinese Antimony Co. Ltd v. Ocean Steamship Co, Ltd. (1917) 2 KB 664, 86 LJKB 1417, LT 297; ; In Re: Anglo Russian Merchant Trades and John Batt & Co. London, LT 805 (CA); ;Companies Naviers Vasconzada v. Churchil and Sim, (1906) 1 KB 237, 75 LJKB 94, 94 LT 59; ;Smith & Co. v. Bedouin Steam Navigation Co., (1896) AC 70, 65 LJPC 8, 12 TLR 65(HL); ;Restitution Steamship Co. Ltd. v. Sir John Pirie and Co., (1889) 5 TLR 641, 61 LT 330; The Peter der Grosse, (1876) 1 P 414, 34 LT 749 (CA); ;Lebeau v. General Steam Navigation Co., (1872) LR 8 CP 88, 42 LJCP 1, 27 LT 447; Jessel v. Bath, (1867) LR 2 Ex 267, 36 LJ Ex 149, 15 WR 1041
AppellantThakur Shipping Co. Ltd., Bombay and anr.
RespondentFood Corporation of India
Appellant AdvocateS. Sampath Kumar, Adv.
Respondent AdvocateM.S. Menon, Adv.
Cases ReferredJayanti Shipping Co. v. Food Corporation of India
Excerpt:
contract act (ix of 1872) section 230--disclosed principal--agent not personally liable--clauses--in charter--party--effect of--ship owners liability;the plaintiff filed a suit against a shipping company and the operating manager of the ship for the recovery of certain amount together with interest towards short delivery of the consignment transported by the plaintiff by the vessel belonging to the first defendant and operated by the second defendant as its operating manager. according to the plaintiff the shortage in the quantity of consignment that was delivered has occurred due to the negligence of the appellants, their agents and servants as they had failed to exercise due care and diligence in respect of the consignment by failing to make parts of the ship fit and safe for reception.....1. defendants 1 and 2 in o. s. no. 103 of 1970 on the file of the court of the subordinate judge of tuticorin are the appellants. the suit was an action by the respondent-plaintiff for recovery of a sum of rupees 1,67,724.72, together with interest towards short delivery of rice consignment transported by the respondent from bangkok to tuticorin by vessel s. s. varunadevi belonging to the first appellant and operated by the second appellants as operating manager. the learned subordinate judge sustained the respondent's case and after deducting rs. 1,40,000 together with interest from the date of suit till the date of realisation. it is against that judgment and decree, defendants 1 and 2 have preferred this appeal.2. the respondent's case is as follows - the first appellant company is a.....
Judgment:
1. Defendants 1 and 2 in O. S. No. 103 of 1970 on the file of the court of the Subordinate Judge of Tuticorin are the appellants. The suit was an action by the respondent-plaintiff for recovery of a sum of Rupees 1,67,724.72, together with interest towards short delivery of rice consignment transported by the respondent from Bangkok to Tuticorin by vessel S. S. Varunadevi belonging to the first appellant and operated by the second appellants as operating manager. The learned Subordinate Judge sustained the respondent's case and after deducting Rs. 1,40,000 together with interest from the date of suit till the date of realisation. It is against that judgment and decree, defendants 1 and 2 have preferred this appeal.

2. The respondent's case is as follows - The first appellant company is a ship owner and carrier of goods and owned the ship S. S. Varunadevi. The second appellant company is the operating manager of the above said steamer. The third defendant (against whom the suit has been dismissed) is the steamer agent of appellants 1 and 2 at Tuticorin. As operating manager of the ship, s. S. Varunadevi, the second appellant received on board the ship at the Bangkok Port, Thailand, 96000 bags of Thailand boiled rice ( 15% broken ) packed in new single gunny bags, weighing 9681.000.388 metric tonnes gross and 9575.4.388 metric tonnes net, each bag thus weighing 100.844 kilograms gross and 99.744 kilograms net, with a tare weight of 1.100 kilograms per bag. The bags were all of uniform size and weight and the consignment was received on board the ship in good order and condition. The second appellant issued 34 clean onboard bills of lading at Bangkok acknowledging therein the receipt of the goods and also agreed to deliver the goods at Tuticorin , the port of discharge, in like good order and condition to the order of the respondent. The ship arrived at the Port of Tuticorin on 31.8.1969 and commenced discharge of the cargo on 1.9.1969 and completed the discharge operations on 13.9.1969. When the cargo was being discharged from the batches, the respondent's clearing agents, Messrs A.M. Ahamed and Co., Tuticorin, found several slack bags in all the hatches and wanted appropriate mention being made of the slack condition of the bags unloaded in the relevant boat notes. The officers of the vessel at first refused to make the necessary endorsement and thereupon, the respondent's clearing agents wrote a letter on 4-9-1969 to Messrs. A and F Harvey Ltd. Tuticorin. the Lloyd's agents, under advice to the master of the vessel and steamer agents, requesting them to arrange for a survey of the slack bags on board the vessel. The Master of vessel then relented and agreed to make mention in the boat notes the number of the bags which in his opinion, appeared to be slack, but subject to a further endorsement being made that 'the ship was not responsible for the slack bags'. The respondent's clearing agents protested to the Master of the vessel about the endorsement regarding the ship's non liability. After completion of discharge of the bags on 13-9-1960, the clearing agents, by their letter dated 16-9-1969, to the third defendant, who was the steamer agent of appellants, preferred a provisional claim for slack bags and also informed the third defendant that the exact number of slack bags would be intimated after segregation of the slack bags from the sound bags. The third defendant sent a reply on the same day repudiating the liability of the appellants for any shortage noticed by the respondent in the quantity of the consignment. A portion of the consignment delivered by the ship had to be subsequently sent by the respondent to Madurai and Ramanathapuram districts but the representatives of the Collectors of those districts, seeing the condition of the bags, insisted upon delivery being effected only after weighment was made. A total number of 28306 bags were issued to the State Government authorities after weighment was made on lorry weigh bridges. The weighment revealed a shortage of 79,940.584 metric tonnes as against the bill of lading weight for those bags 3000 slack bags, 138 bags of ship sweepings and 102 bags of shore sweepings were kept segregated and were surveyed by the third defendant between dates 27-10-1969 and 7-11-1969. The survey revealed a net shortage of 87,686.040 metric tonnes even after adjustment of ship and shore sweepings. The clearing agents of the respondent preferred four claims against the third defendant as the steamer agent of the first appellant. The first claim under bill No. 1 was for Rs. 82,247.58 towards loss resulting from the slackness of 3000 bags after adjusting the weight of quantity recovered from ship and shore sweepings. The claim under bill No. 2 was for Rs.74,411.39, towards shortage in contents in 28,336 bags delivered to the State Government authorities. The claim under bill No. 3 was for Rs. 2338.64, towards cost of the 25 bags that were lost overboard when being transferred from the ship to the lighters. The last claim under bill No. 4 was for Rs. 503 paid towards survey fees. The third defendant did not settle the claim under any of the bills in spite of repeated demands by the respondent and, instead, repudiated the claim stating that over side delivery had been given and as such the ship owner and the operating agent were not responsible for any shortage. The stand taken by the third defendant is not a tenable one because, as per clause 30 of the Charter party agreement between the parties, the bills of lading issued by the second appellant are conclusive evidence against the owners regarding the number of bags shipped and the liability of the owners to deliver the same quantity at the port of delivery. The shortage in the quantity of consignment that was delivered has occurred due to the negligence of the appellants, their agents and servants as they had failed to exercise due care and diligence in respect of the consignment by failing to make parts of the ship fit and safe for reception, carriage and preservation of the consignment. On such averments, the respondents came forward with the suit for recovery of a sum of Rs. 1,57,724-73,. This amount represents the claims made under bill Nos. 1,2 and 4 (the claim under bill No.2 being revised to Rs. 74,974-15, form the original figure of Rs. 74,411-39) the claim under bill No. 3 viz, towards loss of 25 bags which fell into the sea when being transferred from the ship to the lighters, being given up.

3. The suit was resisted by all the three defendants. The first appellant (first defendant) filed a written statement which has been adopted by the other two defendants in their respective written statements, where they have raised a further defence that in any event, they are not personally liable for the suit claim as they were mere agents of the first appellant. The first defence raised by the first appellant in its written statement is that as per clause 42 of the charter party, all disputes must be settled by arbitration and hence the civil court has no jurisdiction to entertain the suit and try it. The second defence is that clause 2 of the charter party provides that the owner of the ship will be responsible for loss of, or damages to, the goods only if the loss or damage has been caused by the improper or negligent stowage of the goods (unless the stowage performed by shipper or their stevedores or servants) or by personal want of diligence on the part of the owners or their managers to make the vessel in all respects seaworthy and the secure that they are properly manned, equipped and supplied by the personal act or default of the owners or their managers. The clause further provides that the owners are not responsible for any loss or damage or delay arising from any other cause whatsoever, even from the negligent acts or default of the captain or crew or some other persons employed by the owners on board or ashore for whose acts they would, but for the clause, be responsible or from unsea worthiness of the vessel on loading or commencement of the voyage or at any time whatsoever. In the instant case the stowage was performed by the shippers, their stevedores, and servants and hence the appellants are not liable for the alleged shortage in the quantity of the consignment delivered at Tuticorin. There has been no breach whatever by the appellants of any of the provisions of clause 2 of the charter party. In any event, the second defendant (second appellant) and the third defendant are not liable for the plaint claim because the second appellant is only the operating manager of the first appellant and the third appellant is only the steamer agent of the first appellant and hence the second appellant and the third defendant are only agents of the first appellant. Clause 18 of the charter party provides that the loading and stowing of the vessel as well as discharge of the cargo will be free of risk and expenses to the defendants and consequently, the defendants are under no liability to deliver the cargo. On the other hand, it is the duty and responsibility of the respondent plaintiff to take delivery of the cargo in the vessel's holds and discharge the same and all these operations were done by or on behalf of the respondent plaintiff. The entries contained in the bills of lading were not conclusive and binding, because it has been clearly mentioned in the bills of lading that the mentioned in the bills of lading that the bags are `said to weigh' as per weighment particulars given by the respondent. The bags were not of uniform weight and size and this fact is revealed by the entries contained in the bills of lading. As per clause 5 of the bill of lading, the weight, contents and value when shipped were unknown to the appellants. As the respondent's clearing agents alleged that slack bags were noticed in all the hatches, the appellants agreed to a survey being made by Lloyd's agents. The report issued by the surveyors reveals that there was no sign of any of the bags being torn or tampered with and that the bags were found in the same condition in which they were loaded at the port of loading. Since the loading at Bangkok was done by or on behalf of the respondent, any slackness found in the bags was not bound to be explained by the appellants. During the voyage the vessel experienced rough weather and on account of the resultant rolling and pitching of the vessel there might have been spillage from the bags which could not be collected even in the form of sweepings and for such spillage, the appellants cannot be made liable. Even with reference to the number of the slack bags, the respondent's case is not a tenable one. At the time of survey only 2910 bags were found to be slack. But the respondent has claimed that 28336 bags were slack when delivery was effected to the representatives of the Collectors of Madurai and Ramnad. The appellants are not concerned with the weighments made by the respondent at the time of delivery by it to other parties. The slackage, if true, must have happened due to the negligent handling of the bags, by the respondent and its servants, agents and men after they took charge of the goods from the holds of the vessel. The shortage, if any, may have been due to short shipment or due to negligence and pilferage by the respondent's own men and agents. The appellants and their agents did, at no point of time, handle the cargo as the loading, stowage and discharge was all done by or on behalf of the respondent. The respondent is not entitled to claim survey fees. As per clause 30 of the Charter party, the appellants will be liable to account only for the number of bags which were shipped and, viewed in that light, the appellants had performed their obligations in delivering the identical number of bags viz. 96000 bags. Since there is no breach of clause 2 of the Charter party, the appellants are not liable for the plaint claim in any manner. The respondent is not entitled to claim insurance charges as it has not taken out any insurance. The appellants do not admit the shortage of rice that is said to have occurred. Even if there is any shortage, it may have been due to drag which may be as high as 7-1/2 per cent during a normal voyage. On the basis of such defences, the appellants and the third defendant prayed for the dismissal of the suit filed by the respondent.

4. The learned Subordinate Judge set for consideration in the trial of the suit 16 issues as set out below-

1. Whether this court has no jurisdiction to try this suit?

2. Whether the defendants are not liable as per clause 2 of Charter party?

3. Whether there is any valid claim as no breach of clause 2 of the Chater party is alleged in the plaint?

4. Whether the second defendant, who is only the operating manager of the first defendant, cane be held liable?

5. Whether the 3rd defendant who is only an agent can be held liable for the suit claim?

6. Whether under clause 18 of the Chater party the loading and unloading are done by the shippers and there is no liability for damages against the defendants?

7. What are the weights of bags shipped, the bills of lading containing the words `said to weigh', and `weight contents and value not known'?

8. Whether there was any slackness in the bags and if so, how much?

9. Whether rice will lose weight in transit?

10. Whether the plaintiff is entitled to claim any loss as the survey report dated 6-10-1969 shows that there was no sign of tampering with bags and the bags were found to be in the condition as on loading?

11. Whether the plaintiff can claim any loss over and above what is found on overside delivery?

12. Whether there was rough weather and the spillage and consequent loss of weight is due to the same?

13. To what amount if any is the plaintiff entitled?

14. Whether the plaintiff can claim survey charges?

15. Whether the plaintiff can claim insurance charges? and

16. To what relief is the plaintiff entitled?

5. On behalf of the plaintiff-respondent. Pws 1 to 11 were examined and Exs. A. 1 to A. 613 were marked as documents. For the appellants and the third defendant DWs 1 and 2 were examined and Exs. B-1 to B-123 were marked as documentary evidence. The learned Subordinate Judge, rendered findings in favour of the respondents on issues Nos. 1, 4. 2. 3, 6, 7, 8, 10, 11, 12 and 14. Under issue No. 5 he held that the 3rd defendant was only the steamer agent of the appellants and is therefore not liable for the plaint claim. Under Issue No. 9, he held that the loss on account of drag will be normally 2-1/4 per cent and not 7-1/2 per cent as claimed by the appellants. Under issues Nos. 13 and 16, the learned Subordinate Judge, after making certain allowances for spillage, wastage etc., awarded the respondent the sum of Rs. 1,49,000 against the appellants, the said sum to carry interest from the date of suit till the date of payment. It is the correctness of the judgment and decree of the Subordinate Judge, that is questioned by the appellants in this appeal.

6. Mr. Sampath Kumar, learned counsel for the appellants, assailed the judgment and decree of the trial court on various grounds and argued that on the terms of the Charterparty and in the light of the evidence that has been adduced in the case, the trial court should have held that the appellants were not liable to pay damages to the respondent for shortage of weight if any in the rice bags that were delivered at Tuticorin. The learned counsel argued that the vessel had been engaged on voyage charter and it had carried only the consignment of the respondent and none other, and the loading on board the vessel at Bangkok and the unloading of the vessel at Tuticorin had been undertaken and done by the respondent itself through its men and agents and as such the appellants were not responsible for any loss in the weight of goods. The counsel stated that the liability of the appellant would arise only if there had been any negligence in the shortage of the rice bags in the hatches etc., but no such negligence was noticed by the surveyor when he inspected the several hatches in the ship and the manner of storage of the bags. In support of this argument, the relevant clauses in the charterparty were pressed into service. In so far as the second appellant is concerned, the counsel urged that it was only the agent (operating manager) of the first appellant and in the absence of any contract to that effect, the second appellant is protected by S. 230 of the Indian Contract Act, and is not personally liable for any breach of contract alleged to have been committed by the first appellant. The further submission made was that the bills of lading issued by the appellants would not preclude them from disowning liability for any shortage of weight in the rice bags that were delivered, because the bills were not prima facie evidence of the weight of the bags that were shipped and, in any event, the appellants had made necessary endorsements in the bills of lading to show that they had acknowledged only the receipt of the number of bags mentioned in the bills on board the vessel, but they had not accepted the correctness of the weight particulars given by the shippers or their agents. Another argument advanced was that the liability of the appellants extended only to the delivering of the number of bags covered by the bills of lading on board the vessel when it reached Tuticorin port and thereafter, any loss sustained by the respondent in the number of bags or the quantity of their contents will not attract any liability for the appellants to pay compensation. The final submission was that the slackness and the resultant shortage of weight in 28,336 bags delivered to the Collectors of Madurai and Ramanathapuram districts was noticed several days after the bags had been taken delivery of from the ship and consequently, the shortage should be ascribed to bad and negligent handling of the rice bags by the men of the respondent or due to pilferage when the bags were in their custody, and in such a situation , the appellants cannot be held liable for the shortage of rice found in those bags.

7. Refuting the arguments of Mr. Sampath Kumar, Mr. N. S. Menon, learned counsel for the respondent, argued that the appellants cannot disown their liability under law for the shortage in the weight contents of the bags when they were delivered at Tuticorin. The counsel stated that before the rice bags were loaded on board the vessel they had been test-checked with reference to the quality and weight by an independent agency vis., the Board of Trade of Thailand, the certificate obtained regarding the quality and weight and hence it would be taken that all the bags were of proper weight and quality when they were loaded on board the vessel. The fact that the vessel was engaged on a charterparty and the terms of contract were set out in the charterparty, will not absolve the appellants of their liability to deliver the exact quantity of rice that was loaded, could be seen from the fact that the appellants seen had issued clean bills of lading which among other things, contained clear recitals about the number of bags that were loaded and the quantity of rice contained in those bags. There had been no reference, in the bills of lading, to slackness of bags or shortage of weight contents and hence the appellants were estopped from setting up a different plea now. Even though the ship was engaged on charterparty, the appellants are statuorily liable for proper stowage, storage and handling of the goods and the mere fact that loading and unloading were done by the respondent's men will not absolve the appellants of their obligations under law. The slackness of bags and loss of weight were noticed at the time of the unloading operations and since they had occurred when the goods were in transit, the appellants are alone liable to answer for the shortage. As regards the second appellant's liability, the company was acting as the operating manager of the first appellant, the ship owner, and hence the second appellant is as much liable as the first appellant for answering the suit claim. The appellants are not entitled to dispute the figures of the shortage in the weight, because the respondent had complained even at the time the rice bags were removed from the ship to the lighters, that several bags were slack and short weighed and subsequently, the slack bags had been segregated and weighed by independent agencies after notice had been given to the third defendant and therefore, it is too late in the day for the appellants to set up a plea that they are not bound by the weighment particulars given by the respondent.

8. Having regard to the principal contentions in the appeal, the following points arise for determination in the appeal. Before setting out the points we may incidentally mention that though an objection had been raised by the appellants before the trial court that the respondent must have initiated arbitration proceedings and had no right to file a suit and that the civil court had no jurisdiction to entertain the suit the technical objection was no reiterated by the appellants in the appeal. Hence, the points for determination are only as under :-

1. Whether the rights and liabilities of the parties are governed by the terms of the charterparty Ex. A. 1, and if so, whether the appellants are absolved from liability from paying damages to the respondent for slackness and loss of weight of the rice bags?

2. Whether the appellants are estopped by reason of the issue of the bills of lading, from contending that the weight contents of the rice bags were not known to them and hence, even if shortage of weight had occurred, they were not bound to make good the shortage?

3. Whether the respondent is entitled to claim damages for shortage of weights noticed in the 28,336 bags when they were delivered to the Collectors of Madurai and Ramanathapuram districts, when the surveyor had certified that only 3,000 bags had suffered slackage?

4. Whether the appellants are liable to pay damages to the respondent for shortage of weight in the rice bags and if so in what sum?

5. Whether the appellants are liable to pay survey charges? and

6. If the respondent's claim for damages is sustained, whether the second appellants is also personally liable?

9. Point 6 : We will first take up this question for consideration, because it does not present any problem. The second appellant was undoubtedly the operating manager of the vessel belonging to the first appellant. In the plaint it is averred that the second appellant was the operating manager of the steamer S. S. Varunadevi, owned by the first appellant during the relevant period and that in its capacity as operating manager, the second appellant had issued clean on-board bills of lading in respect of the consignments received on board the vessel and expressly mentioned in the bills of lading that the consignment was received in good order and condition and the said goods were to be delivered in like good order and condition at the port of discharge. It is on this basis the second appellant is also sought to be made personally liable. However, in paragraph 3 of the plaint, the respondent has also stated that the first appellant is the ship owner and carrier of goods and , as such, owned the ship S. S. Varunadevi, and is sufficiently interested in the vessel to be under liability to deliver the cargo under the bills of lading mentioned in the plaint. In the very nature of thins, the pleadings are inconsistent, because, if the first appellant is under a legal liability to deliver the cargo under bills of lading issued by the master of the ship, then it follows that the second appellant will not be independently liable i.e., independent of the liability of the first appellant to deliver the cargo covered by the self-same bills of lading issued by the master of the vessel. The Subordinate Judge has taken the view that the charterparty under Ex. A. 1 had been entered into by the second appellant in its own right and it was the second appellant who had issued Exs. A. 491 to A. 524, bills of lading for the cargo loaded in the vessel at Bangkok and hence the second appellant is liable for the short delivery arising in the cargo transported on board the vessel. In our opinion, the finding of the learned Subordinate Judge suffers from mistake of caft as well as law. Ex. A. 1 charterparty, has been signed by the Master of the ship in the following manner :

"For Thakur shipping Co. Ltd. Per Pent-Ocean Steamships (P) Ltd. Sd. Capt. S. K. Mishra, Operating Manager." From this it may be seen that the charterparty had been signed by the Master on behalf of both the appellants. In such a situation, the second appellant can only be the agent of the first appellant. If the second appellant is to be considered an independent contracting part, then the respondents cannot make the first appellant also liable and claim damages from it for the shortage of weight in the rice bags. Though the bills of lading have been issued only by the second appellant, it cannot be taken to mean that the second appellant has issued them in its individual capacity and not as agent of the first appellant. In fact, the stand taken by the first appellant itself in its written statement will clearly reveal the contractual status of the second appellant vis-a-vis the first appellant. The relevant passage occurs in paragraph 14 of the first appellant's written statement and it reads as follows-

"Without prejudice to the said contentions, these defendants say that neither their operating manager nor their agent had any authority to make any admission about liability or the weight shipped."

10. In other portions of the written statement also, the first appellant had proceeded on the basis that it was not only the owner of the vessel, but it was also the party with which the charterparty had been entered into and hence it (the first appellant) was entitled to rely upon the terms of Ex. A. 1 and refute its liability to answer the plaint claim. Having regard to the categorical stand taken by the first appellant in its written statement there is no scope at all for respondent to contend or the Subordinate Judge to hold, that the second appellant is also an independent contracting party and is personally liable to answer the suit claim. The relevant section in the Indian Contract Act which will govern the situation is S. 230. The section reads as follows-

"S. 230 : Agent cannot personally enforce, nor be bound by, contract on behalf of principal:- In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.

Presumption of contracts to contrary:- Such a contract shall be presumed to exist in the following cases-

(1) Where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad;

(2) Where the agent does not disclose the name of his principal;

(3) Where the principal, though disclosed cannot be sued."

It is not the case of the respondent that there was a contract between it and the second appellant contrary to the terms of S. 230 or that the contract would fall under any of the presumptive clauses mentioned in the later portion of the section. On the other hand, as already stated, this is a case where the charterparty, Ex. A-1, has been signed by the Master of the vessel on behalf of the operating manager, viz., the second appellant, as well as the owner of the vessel, viz., the first appellant. We may also usefully refer to the following passage occurring in Carver's Carriage by Sea. 12th Edn. Volume I, at page 340-

"If a doubt arises as to whether the contract was made by the agent personally or merely as a representative, it must be settled by reference to the document, considering it as a whole and having regard to its object and to the relation of the parties. The question in each case is as to the intention of the

parties..........If the charterparty is signed by the agent in his own name without qualification, the presumption generally is that he meant to contract personally...............But the fact that the agent's signature is unqualified, does not conclusively show that he contracts personally; the whole document must be considered."

In the instant case, the mere fact that besides the name of the first appellant the second appellant's name also is mentioned in Ex. A 1 and that the bills of lading had been issued on behalf of the second appellant, will not constitute adequate material to hold that the second appellant had meant to contract personally. The position becomes still more clear when the first appellant does not deny having entered into the charterparty and being bound by the concomitant obligations arising therefrom. It has taken the further stand that the second appellant had, at all material times, acted only as its agent. Hence the finding on this point has to be in favour of the appellants. Consequently, we hold that the finding rendered by the Subordinate Judge, on the relevant issue, viz, issue No. 6 is not correct.

11. Points 1 and 2 : These two points may be conveniently taken up for discussion together, because the stand of the respondent is that even if the terms of Ex. A-1 protect the rights of the appellants, the bills of lading issued by the master of the vessel will estop them from refuting their liability to pay damages for shortage of weight in the rice bags. The facts which are not in controversy are as follows. Pursuant to an agreement entered into by the Government of India on behalf of the respondent, with the Government of Thailand for import of rice from Thailand to India, the Government of Thailand placed orders with rice millers in Thailand for supply of rice and the millers supplied 96,000 bags and its was these bags which were transported to the ship S. S. Varunadevi,. Ten per cent of the shipment weighed before loading at the mill or go down in Bangkok and on the basis of the average weight per bag ascertained, the Board of Trade of Thailand certified the weight of the entire shipment under Ex. A-447 to A-490. Upon receipt of the cargo on board the ship, the Master of the vessel issued Mats's receipts, Exs. B-4 to B-39. On the basis of the Mate's receipts, the second appellant issued the bills of lading, Exs. A. 491 to A. 524. The 96000 bags were stacked in the five hatches of the ship. The ship arrived at Tuticorin on 31-8-1969. As Tuticorin is a minor port, the ship was anchored at a distance of about seven miles from the shore. The respondent's clearing agent. Messrs A.M.Ahamed and Co, obtained overside delivery order from the 3rd defendant, the steamer agents, and took delivery at mid sea through boats or lighters. The hatches were opened in the presence of the representatives of both parties and the rice bags were taken out and put on the sling at the rate of 10 to 15 bags each time and lowered into the boats. After each boat was loaded, the tally supervisors and tally clerks prepared boat notes for each boat . Exs . A. 2 to A. 85 are the boat notes that had been prepared for the consignment. Some bags were found to be slack on 1-9-1969. and 2-9-1969. The clearing agents wanted that fact to be noted in the boat notes, but the Master of vessel and tally supervisor of the steamer agents viz, the 3rd defendant, would not agree to that. Thereupon, the clearing agents wrote a letter Ex. A. 443 on 3-9-1969 stating that unless the slack bags and torn bags were noted in the boat noes, they would remove from the ship only the sound bags and leave the rest of the bags in the ship itself. This letter evoked a change in the attitude of the Master of he ship and the tally supervisor. But. nevertheless, they made a further entry in the boat notes that the ship was not responsible for the slack and torn bags. This was objected to by the clearing agents and they wrote a letter Ex. A. 525 to the Lloyd's agents to conduct a hatch survey of the bags and give a report. The Lloyd's agents appointed the Port Officer of Tuticorin as the surveyor and the said officer inspected the hatches of the ship and the rice bags contained therein and gave a survey report. Ex. A. 526. After discharge of the 96000 bags from the ship, a statement of facts. Ex. A-591 was prepared and it was signed by the Master of the ship and the representatives of the steamer agents and the clearing agents. During the course of discharge of the rice bags and storing them on the shore, 138 bags of ship sweepings were collected. After the consignment was brought to the shore, 3000 slack bags were segregated and those bags were subjected to survey and a survey report, Ex. A. 595 was obtained. In the meantime, the rice bags allotted to the Collectors of Madurai and Ramnad districts, had to be handed over to the representatives of the respective Collectors. On the insistence of those representatives for the rice bags being weighed before delivery was effected, the rice bags were loaded into lorries and weighed at the lorry weigh bridge and the weight particulars were determined. Notice was given to the 3rd defendant to be present at the time of weighment of the bags at the lorry weigh-bridge but the 3rd defendant refused to attend the weighment and took the stand that the liability of its principals ceased as soon as overside delivery was effected. The weighment certificates obtained from the weigh-bridge authorities are Exs. A. 86 to A. 423. The shortage that was noticed in the 28336 bags came to 79,940.583 metric tonnes.

12. The question for consideration is whether the shortage in the rice bags is to be made good by the appellants. The appellants stand is that they are not liable because their liability is restricted under clause 2 of the charterparty. Ex. A. 1. The relevant clauses in Ex. A. 1 are as follows-

Clause 1 : "..............Loading at Kozhichang will be at owner's risk and extra lighterage will be on owner's account....... Clause 2 : `Owners are to be responsible for loss of, or damage, to the goods or for delay in delivery of the goods only in case loss, damage or delay has been caused by the improper or negligent stowage of the goods (unless stowage performed by shippers or their stevedores or servants) or by personal want of due diligence on the owner's or their Manager to make the vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied or by the personal act or default of the owners, are responsible for no loss or damages or delay arising from any other cause whatsoever, even from he neglect or default of the Captain or crew or some other person employed by the owners on board or a shore for whose acts they would, but for this clause, be responsible, or from unseaworthiness of the vessel on loading or commencement of the voyage or at any time whatsoever, "Damage caused by contact with or leakage, small or evaporation from other goods or by the inflammable or explosive nature or insufficient package other goods not to be considered as caused by improper or negligent stowage even if in fact so caused."

Clause 5 : ........ Charterers to produce and pay the necessary men on shore or on board the lighter to do the work there.

Clause 18 : The vessel to be loaded, stowed and discharged free of risk and expense to the owners of the vessel.

Clause 29 - Owners to appoint their own agents at port of loading and at discharging port."

Clause 30 - Bills of lading to be conclusive evidence against owners as to the number of bags shipped and vessel to be responsible for the number of the bags and contents short delivered of signed bill of lading quantity, sweepings, if any, to be adjusted against short delivery".

Placing reliance on the clauses which state that the loading , unloading and stowage will have to be done at owner's (charterer's) risk and expenses and free of risk and expense to the owners of the vessel and that the owners of the vessel would be responsible for loss of, or damage to, the goods only if loss or damage has been caused by improper or negligent stowage of the goods, or by personal want of diligence on the part of the ship owner or their manager to make the vessel seaworthy and ensure its proper operation, the appellants would say that they cannot be held liable for slackage of the bags on for any loss of weight in the consignment of rice. The respondent would however, say that even though the loading and unloading had been done by men employed by it, yet the actual operations on board the ship had been done as per instructions given by the officers of the ship and in particular, the stowage operations were entirely looked after by the said officers and, in such circumstances, the appellants cannot disown their liability for the loss that had been occasioned to the respondent when the cargo was in transit. The further contention of the respondent is that in any event, clause 2 of Ex. A-1 will be subject to the overriding terms of cl. 30 which says that bills of lading would be conclusive evidence against the ship owners as to the number of bags shipped and the vessel would be responsible for the number of bags and contents short delivered in terms of the quantity noted in the bills of lading.

13. In the first place, we will examine the question whether the liability of the first appellant under the charterparty will be the same as a common carrier. For an answer to the question, we may usefully refer to the following passage occurring in Pyne and Ivamy's Carriage of Goods by sea 9th Edn., at pages 124 to 126 :-

"The Exclusion of liability :

A. At common law : The view usually accepted. It seems that, in spite of the disapproval of one eminent Judge, the correct view of the law is-

(a) that the liability of a ship owner at common law varies according as he is a common carrier or not :

(2) that a ship owner is deemed to be a common carrier only in respect of such ships (and its submitted, where a portion of a ship is chartered, in respect of such other portion of that ship) as are employed as general ships : and

(3) that the liability at common law, of a ship owner is a s follows:-

(A) If he is a common carrier he is absolutely responsible to the owner of the goods carried for any loss or damage to them unless caused by -

(i) an act of God or

(ii) an act of the Queen's enemies or

(iii) inherent vice in the goods themselves or

(iv) the negligence of the owners of the goods or

(v) a general average specified

The severity of this rule of the common Law is said to have had its origin in the danger of theft by the carrier's servants or collision between them and thieves. To prevent this the responsibility of an insurer for the safe delivery of the goods was imposed on the carrier in addition to his liability as a ballet for reward.

(B) If he is not a common carrier his liability is only that of a bailee for reward; i.e., he need only exercise due care and diligence.

It will thus be seen that the liability of ship owner to a charterer of his ship is not the same as his liability to shipper when the vessel is not under charter. For, in the former case the ship is not a general ship in the latter she is.

The alternative vies; As has been indicated however, the view of the law stated above is by no means universally preferred by any, is to the effect that, at Common Law, the ship owner is always under a liability to deliver the goods received by him in the same condition as they were in when shipped, unless he has been prevented from so doing by one of the five caused mentioned above, in other words, that apart from special contract or statute every ship owner is under a liability akin to that of a common carrier, irrespective of whether the goods were shipped by a charterer or on a general ship.

The absence of a binding decision of the pint is, no doubt due, at least in part, to the fact that, in practice, goods are invariably shipped in pursuance of a contract the terms of which are set out in a bill of lading or in some other document. In such circumstances, the position at Common Law is of no more that academic interest.

It has, however, been pointed out that in principle, there is no good reason for imposing upon the ship owner, whose ship carries the goods of one person, only a less strict liability with regard to those goods than he would have incurred had they been shipped by several persons; the reasoning applicable in the one case seems equally applicable in the other.:

From the above passage it may be seen that in law a ship owner, whose ship is chartered, will not stand in the same position as a common carrier t the owner for any loss or damage caused to his goods when they were carried on the vessel. On the other hand, the liability of the owner of the chartered vessel will be only that of a bailee for reward and if he had exercised due care and diligence. he cannot be held liable for any loss or damages sustained by the owner of the goods. The passage extracted above does refer to an alternative view. But, the question of treating the owner of a chartered vessel on a par with a common carrier will arise only in the absence of a special contract between the parties. In the instant case Ex. A-1 constitutes a special contract between the parties and hence there is no question of the first appellant's liability being co-extensive with that of a common carrier.

14. Once this position is reached, we will first examine the appellant's contention that their liability to account for the rice bags ceased the moment they effected overside delivery of the 96000 bags of rice carried in the ship. Mr. sampath Kumar invited our attention to Food Corporation of India v. Prosperity Steamship Co., (1977) 1 Mad LJ 278, where a similar question was considered and answered. In that case also, the Food Corporation of India (the plaintiff in that suit) entered into a charter party with the steamship company for transport of 91600 bags of rice from Bangkok to Tuticorin. On arrival of the ship at Tuticorin, the rice bags were unloaded. A portion of the consignment was found damaged and there was shortage of rice. The plaintiff therein filed a suit for damages for the shortage that had occurred. A Division Bench of this court, agreeing with the trial court, rejected the claim of the Food Corporation of India and held that since the defendants, viz., the ship owners had neither loaded nor unloaded the goods, the plaintiff's agents having assumed the responsibility of transporting the goods by undertaking the operation of stevedoring, and each boat note carried the words `ship not responsible' and no protest had been made by the plaintiff, the defendants could not be held responsible for the shortage. The ratio in that above said case will apply on all fours to the instant case also. because here also, the respondent-Corporation had undertaken to loan and discharge the ship at its risk. Notwithstanding this position, Mr. Menon for the respondent, argued that the ratio in the above said case would not apply because of difference in facts. It was argued that in the reported case the endorsement made by the Master of the vessel on each boat note that the ship was not responsible had been accepted without demur by the agent of the Food Corporation of India, but in the present case, the clearing agent had protested to the Master of the vessel about making such unwarranted endorsement in the boat notes. We fail to see how this circumstance will alter the situation and place the respondents on a better footing. The question of liability of the ship owner has to be determined with reference to the terms of the charterparty and not with reference to the terms of any endorsement made on the boat notes and whether the clearing agents accepted the endorsement made on the boat notes and whether the clearing agents accepted the endorsement on the boat notes without demur or under protest. Mr. Menon then argued that in any case, the ship owner is governed by the provisions of the Indian Carriage of Goods by Sea Act, and under Art. 3, clause (2) they are statutorily liable for proper loading, handling stowing etc. of the goods and such being the case, the first appellant cannot escape its liability merely on the ground that the loading and unloading were done by the men engaged by the respondent. Clause 2 of Art. 3 of the above said Act reads as follows-

"Subject to the provisions of Art. 4, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried."

The argument of Mr. Menon contains a twofold fallacy. In the first place his argument overlooks the fact that Art. 6 of the said Act gives liberty to a carrier and a shipper to fix the terms of contract for carriage of goods by sea at variance with the statutory provisions, provided the stipulations are not contrary to public policy. The second fallacy is that Mr. Menon assumes that there had been want of diligence, or negligence, on the part of the Master of the vessel or his officers in the carrying or stowing of the rice bags in the holds of the ship. The respondent's clearing agent initiated steps for Lloyd's agents inspecting the ship and giving a survey report. Accordingly, the port officer was appointed surveyor and he inspected the vessel on 6-10-1969 and gave his report Ex. A. 608. The surveyor inspected all the five hatches in the ship and made a test check of the weight of sound bags and slack bags in each hatch. At the end of the report, he has given his general observation as follows-

"None of the bags weighed above, showed any signs of being torn or tampered with, and as such, I am of opinion that the bags were loaded in this condition at the port of loading."

This report clearly reveals that the bags stowed in all the five hatches had neither been tampered with nor had become torn. The surveyor has not stated that the bags had been improperly stowed. Hence there is no scope whatever for the respondent to contend that there had been improper stowing or carrying of the rice bags on account of any negligence of the Master of the vessel and hence cl. (2) of the charterparty cannot provide a shield for the ship owner's liability. Mr. Menon then argued that whatever be the field of coverage of clause (2) of Ex. A. 1 that very clause will be subject to the terms of cl. 30 which says that bills of lading will be conclusive evidence against owners as to the number of bags shipped and the vessel will be held responsible for the number of bags and contents short delivered vis-a-vis the quantity noted in the bills of lading, subject, of course, to the adjustment of sweepings against short delivery. For dealing with this argument, it is necessary to refer to the terms of the bills of lading. Since all of them are identical except with reference to the number of bags and their weight contents we will refer to the terms contained in Ex. A. 491. It is stated that all the terms, provisions and conditions of the Indian Carriage of Goods by Sea Act 1925, and the schedule thereto will apply to the contract in the bill of lading and if. anything contained in the bill of lading were inconsistent with the provisions of the said Act. the provisions in the bill of lading will stand canceled to the extent of the inconsistency. The liability of the carrier prior to the loading and subsequent to discharge from the ship has been made subject to the conditions and exceptions contained in the bill of lading. The clauses inserted by way of exception need not detain us. because they are not relevant for consideration. In the `particular' column, the loading marks, the number of packages or pieces, the description of the cargo and the gross weight in kilograms are mentioned. There is an endorsement that the goods have been brought `in apparent good order and condition' on board the ship. However, there is also an endorsement by the Master of the ship against the column relating to weight, containing the words `said to weigh'. Besides the above said endorsement, the bill of lading contains a printed clause, viz., clause No. 5, which specifically says that weight, contents and value when shipped unknown........."

15. On behalf of the respondents, it was vehemently argued that cl. 30 of Ex. A. 1 charterparty and the bills of lading have overriding effect over cl. 2 thereof and since the Master of the vessel has undertaken on behalf of the owner of the ship that the ship owner will be responsible for the number of bags short delivered, the first appellant would undoubtedly be liable to account for the total number of bags as well as the quantity of weight of rice noted in the bills of lading and inasmuch as there has been shortage of weight, the first appellant is bound to compensate the respondent for the loss suffered by it. To fortify this argument, the respondent's counsel also referred to S. 3 of the Indian Bills of Lading Act and R. 3 of Art. III in the Schedule to the Carriage of Goods by Sea Act. Section 3 of the Indian Bills of Lading Act lays down that every bill of lading in the hands of a consignee or endorse for valuable consideration and without notice, representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the Master or other person signing the same notwithstanding that such goods or some part thereof may not have been so shipped. Rule 3 of Art. 3 of the Indian Carriage of Goods by Sea Act enjoins the Master or agent of the carrier in issue to the shipper. on demand by him, a bill of lading, after the goods are received on board the vessel. The subsidiary clauses indicate what are the particulars that should be noted in the bill of lading. In clause 3 it will be relevant to refer to sub-clause (b), and the proviso thereto and hence, we are extracting them-

(a).................................................................. .................................................................... ..............................................................

(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).................................................................. ........................................................ .................................................................... ......

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 grounds for suspecting not accurately to represent the goods actually received or which he has had no reasonable means of checking."

16. The learned Subordinate Judge has proceeded on the basis that a close read of cl. 18 of Ex. A. 1 will show that the stowage has been done by the shippers, that what was intended by the parties was that loading and stowage will be free of risk to the owners of the vessel only so far as payment to the workers and liability for accidental risk of workers during stowage is concerned and it will not mean that the ship owner will not be liable for loss or damage to the goods or for short delivery. He has then held that it has been alleged in the plaint that the ship owners and his agent had improperly and negligently performed the stowage of the cargo in the holds of the ship and this averment has not been controverted by the defendants-appellants by examining any of the officers or crew members and proving that there had been no negligence on their part. Even here, we may point out the mistake committed by the Subordinate Judge. He has taken the plaint averments to be evidence on the side of the plaintiff respondent and failed to see that the appellants had specifically denied the plaint averments and stated that the stowage was performed by the respondents and its steamer agents and servants. In the face of this denial, it was incumbent on the respondents to let in evidence to show that stowage was done by the Officers and men on board the vessel and not by its agents. In spite of their not having let in such evidence, the Subordinate Judge has wrongly assumed that the respondent has proved its case. The further view taken by the Subordinate Judge is that even if cls. 2 and 18 in Ex. A. 1. are to be taken at their face value, those clauses cannot be valid in law, because they run counter to the terms and conditions of the Indian Carriage of Goods by Sea Act 1925 and the Schedule thereto, and consequently by reason of clause 31 in Ex. A. 1. those inconsistent or repugnant provisions will stand nullified and voided. He has also taken the view that as per S. 3 of the Indian Bill of Lading Act, 1856 the entries contained therein shall be conclusive evidence of the quantity of shipment that is noted therein and hence the appellants cannot wriggle out of their obligations to account for the goods loaded on board the vessel. The proviso to R. 3 of Art. III has been held inapplicable to the facts of the case, since according to the Subordinate Judge, if facilities for weighment were not available at the port of Kohzichang, the master of the vessel could have confined himself to entering only the number of rice bags that were put on board the vessel and he need not have mentioned the weight of the contents of the bags. The reasoning of the learned Subordinate Judge was hailed by Mr. Menon as a correct one and therefore he argued that the appellants cannot refute their liability to compensate the respondent for the loss of weight in the rice bags.

17. Before deciding the question as to how far the entries contained in the bill of lading will conclusively bind the owner of the vessel, we may refer to the case law on the subject. In Smith & Co. v. Bedouin Steam Navigation Co., (1896) AC 70, Lord Halsbury construed the effect of the entries contained in a bill of lading and held that it will amount to a receipt for goods given by the person, who was authorised to give the receipt for the goods for the express purpose of making evidence against the person, who received them and such being the case, the value or force or effect of the documents cannot be given up, though the party issuing the receipts can say that there was some mistake made in the receipt and adducing evidence to show that the goods were not received on board. In the view of Lord Halsbury, it was a question of fact and if there was no evidence to displace the evidence of the document. viz., the bill of lading, the particulars contained in the bill of lading should receive acceptance from courts.

18. The matter came to be considered more fully in New Chinese Antimony Co. Ltd. v. Ocean Steamship Co. Ltd., (1917) 2 KB 664. The facts were that the master of a steamship Tisntsin had to receive on board a quantity of antimony oxide ore shipped at the port of Hankow for conveyance to the port of London. The bill of lading signed by the master referred inter alia to the consignment of antimony oxide ore weighing 937 tons. In the margin of the bill of lading, the following typewritten clause was made, "No mark". A quantity said to be nine hundred and thirty seven tons". In the body of the bill of lading, there was printed in ordinary type the clause "weight, measurements, contents and value (except for the purpose of estimating freight) unknown". On arrival of the ship at London, the ore was transhipped into the coasting vessels and taken to New Castle and on delivery there, it weighed 861 tons. The plaintiffs sued the owner of the vessel to recover the value of 76 tons, being the difference between the 937 tons that was loaded on board the ship as per the entries made in the bill of lading and 861 tons the weight at its final port of destination. Sankey, J. who tried the case, held that 53 tons of deficiency was due to the wastage of the ore due to ordinary causes in the process of handling and transhipment and gave judgment for the plaintiffs for 529 pounds, that being the value of the remaining 23 tons which he held the defendants were not excused from delivery under the bill of lading.

19. The defendants appealed and the matter came to be considered by the Appellate Court. The Appellate Court reversed the judgment of Sankey, J. and held as follows -

"Where in a bill of lading which is prepared by the shippers for acceptance by the defendant's agent, the agent accepts in the margin a quantity `said to be 937 tons' and in the body of the bill of lading there is a clause `weight & c unknown' there is no prima facie evidence that 937 tons have been shipped. Sankey, J. in my judgment omitted to give proper effect to the words `weight & Co. unknown'. He based his judgment on the decision in Smith & Co. v. Bedouin Steam Navigation Co., (1896) AC 70 but he omitted to notice that in that case a definite quantity was given in the bill of lading and that there were no qualifying words such ass - `said to be' or `weight unknown'. I think that the true effect of this bill of lading is that the words `weight unknown' have the effect of a statement by the shipowners' agent that he has received a quantity of ore which the shippers' representative says weighs 937 tons but which he does not accept ass being of that weight, the weight being unknown to him, and that he does not accept the weight or 937 tons except for the purpose of calculating freight and for that purpose only." In another portion of the judgment, Viscount Reading, C. J. has held as follows -

"Where in a bill of lading, which is prepared by the shippers for acceptance by the defendant's agent, the agent accepts in the margin a quantity `said to be 937 tons' and in the body of the bill of lading there is a clause `weight & c, unknown', there is no prima facie evidence that 937 tons have been shipped. Sankey, J. in my judgment omitted to give proper effect to the words `weight & c. unknown'."

20. For reaching such a conclusion, Viscount Reading, C. J. relied upon two earlier decisions viz., Jessel v. Bath, (1867) LR 2 Ex 267. 273, 274 and Lebeau v. General Steam Navigation Co., (1872) LR 8 CP 88, 96.

21. Pickford. L. J. in his separate judgment, stated ass follows-

"It has been argued that that view (the view taken in Smith & Co. v. Bedouin Steam Navigation Co., (1896) AC 70 was right and that the word `weight & c unknown' have practically no effect. But I do not think that that is the right view. The bill of lading begins with the statement `shipped'. Below that appear the words `weight &c; unknown'; it is true that they are in print, but they cannot be disregarded. And in this case they are not the only thing to be considered for in the margin is attached a document which says `a quantity said to be 937 tons'. To attach the same weight to that as the a clean bill of lading is wrong."

22. Scrutton, L. J. has also agreed with the view of the other learned Judges. But it is not necessary to refer the portions of the judgment of Scrutton. L. J.

23. In A. G. of Ceylon v. Scindia Steam Navigation Co., (1961) 3 All ER

684. the correctness of the ratio in New Chinese Antimony Co. Ltd. v. Ocean S. S. C. Ltd., (1917) 2 KB 664 has been affirmed, though on facts the judgment went against the shipowners, viz., Scindia Steam Navigation Co. Ltd. (hereinafter called Scindia Co. Ltd.) In this case, 100,652 bags of rice were carried from Rangoon to Colombo by vessel S. S. Jalaveera belonging to Scindia Co. Ltd. At Colombo, delivery was effected of only 110417 bags and there was a shortage of 225 bags. Three bills of lading were issued by the master of the vessel, in respect of 100652 bags shipped; but each bill was subject to a condition `number and contents (1) weight, contents and value when shipped unknown'. A stamped endorsement on each bill provided that the ship was not responsible inter alia for bursting of bags and loss of contents. Having loaded the cargo at the port, the vessel proceeded direct to Colombo, without calling at any intermediate port. Her only cargo was the bags shipped at Rangoon. When Scindia and Co. Ltd. was proceeded against for recovery of the cost of the 235 missing bags of rice, they took umbrage, under the endorsement contained in the bills of lading that the weight, contents and the value were unknown and that the ship was not responsible for bursting of bags and loss of contents. The defence was not accepted and it was held that unless the shipowners showed that only a some lesser number of bags than that acknowledged in the bills of lading was shipped, the ship owners would be under no obligation to deliver the full number of bags. Having said so, their Lordships of the Privy Council affirmed the ratio in (1917) 2 KB 664 as follows-

"Though by relying on the bills of lading the appellant presented prima facie evidence that 100652 bags (marked and numbered as in the margin of the bills) were shipped. the bills of lading were not even prima facie evidence of the weight or contents or value of such bags. This was the result of the incorporation in the bills of lading of the provisions previously referred to (New Chinese Antimony Co. Ltd. v. Ocean S. S. Co. Ltd., (1917) 2 KB 664)."

24. Thus, it may be seen that in this case, the Privy Council held that the ship owners would be bound by the number of the bags that were acknowledged in the bills of lading, but so far as weight, contents and values are concerned the particulars given by the shippers and noted in the bills of lading would not bind the shipowners, because of the endorsement that the weight, contents and value when shipped were not known.

25. We will now refer to some of the decisions rendered by the Indian High Courts. In Subramania Chetti v. British Indian Steam Navigation Co. Ltd., (1923) 17 Mad LW 363 : (AIR 1923 Mad 523 (1)) it was held, following In re Anglo Rusian Merchant Trades and John Batt & Co., London (1917) 2 KB 679, that where the bill of lading stated that `weight, contents and value when shipped unknown' the onus of proving the shortage in the goods is on the person loading the same.

26. In Hajee K. Assanar v. Malabar Steamship Co.,

several English and Indian decisions were noticed and thereafter it was held that where a bill of lading is subject to the notation `weight declared by the shipper but not checked' it is indication of disclaimer of responsibility and liability and hence, the carrier would not be held liable for shortage, when there was no acceptable proof that the actual weight was as noted in the bill of lading at the time of shipment.

27. In P. Kishanlal v. O. S. Kaisha (1966) 70 Cal WN 307, the bill of lading issued by the master of the vessel clearly mentioned that the description of the goods and the particulars of the packages mentioned in the bill were as furnished by the shipper and they will not operate as conclusive endorsement against the shipowners and that the weight and measurement particulars are stated on the bill of lading and will not be conclusive against the shipowners and will therefore not preclude the shipowner from denying his liability to account for the shortage of weight noticed in the bags at the port of delivery.

28. Yet another decision cited is Shipping Corporation of India v. Union of India, AIR 1976 Goa 49. where it was held that a clause in a bill of lading that the `measurement' weight and quantity not known' meant that the particulars contained in the document were those furnished by the shipper and the carrier did not accept the particulars as correct and the burden of proving such particulars was on the shipper.

29. The respondent's learned counsel cited three decisions and urged that the ration laid down in those cases should be followed. The first is in Union Carbide v. Jayanti Shipping (1970) 74 Cal WN 5, where a contrary view has been taken. The decision rendered in that case must be confined to the facts of that case because, therein there was an admission by the shipowner in the written statement that the goods (polyethylene bags) and the weight mentioned in the bill of lading were correctly loaded on board the ship. It must also be mentioned that as against a consignment of 499 paper bags of polyethylene that were loaded on board the ship and acknowledged in the bill of lading, the shipowner effected delivery of only 447 paper bags and hence there was a shortage of 52 bags of polyethylene. It was not therefore a case of shortage of weight alone in the contents of the bags, but shortage of actual bags itself. Hence this decision cannot be taken as affording any guidance.

30. The second decision cited is in Ellerman and Bucknall Ltd. v. Misrimal . In this decision, the respondent placed

reliance on a passage occurring at page 101 (of Supp SCR) : (at p. 1898 of AIR), which is as follows-

"The words `like quality and measure unknown", found in Companies Naviers Vasconzada v. Churchil and Sim LR (1906) 1 KB 237 `weight, contents and value unknown' in the Peter der grosse (1876) 1 P 414; `weight, quality, condition and measure unknown' in the Tromp, (1921) P 337, were held to be not qualifying words. In the Restitution Steamship Co. Ltd. v. Sir John Pirie and Co., (1889) 5 TLR 641, it was held `if you insert in the margin of a bill of lading weights, quantities, or anything that is not contained in the bill of lading itself, that is not a clean bill of lading.' If such words found a place in the body of a bill of lading, they would not have the effect of making the bill an unclean one' we do not see how their mention in the margin would make a difference. But we need not express our final opinion thereon, as in the present case the words are found in the body of the bill itself."

31. On a reading of the judgment, we find that the observation of the Supreme Court has been made with reference to the peculiar facts of that case, which were as follows: Certain chemicals were purchased by the plaintiff company, a firm in New Yourk. One of the conditions of the indents was that the materials have to be sent in a new fibre drums. The seller delivered the ship owners certain consignments in reused fibre drums. The bills of lading issued by the ship owners described the drums simply as `drums'. After taking a letter of indemnity to cover against any loss, the ship owners issued clean bills of lading the seller negotiated the bills of lading and obtained payment under the letters of credit opened by the purchaser. Thereafter, the bills of lading were forwarded to a bank in Madras and the buyer paid the bank a sum of Rupees 33012-5-9 against the said letter of credit. When the shipment arrived, it was discovered that the drums contained only coal dust and factory shavings. The buyer proceeded against the seller in the American courts and realised a portion of his loss. For the balance he proceeded against the ship owners and the question was, whether the ship owners were justified in issuing clean bills of lading in spite of knowing that what had been loaded on the ship was only used fibre drums. The Supreme Court held that the ship owners knew from the Mate's receipt the condition regarding the packing of the materials in new fibre drums; but in spite of it, they had not only taken on board reused fibre drums, but also issued clean bills of lading making it appear that only new drums were made use of and the action of the shipowner revealed collusion between him and the seller so as to enable the latter to operate on the credit with the bank. Therefore, it was held that it was a case of deceit and hence the ship owner cannot escape from his liability to pay the loss claimed by the buyer. We do not therefore think the Supreme Court has expressed a contra opinion to the ratio laid down in the several cases cited by the learned counsel for the appellants.

32. Yet another case cited by the respondent's counsel is Jayanti Shipping Co. v. Food Corporation of India, . We find that the court rendered judgment against the carrier albeit under a charterparty in that case for short delivery of goods (563 bags of rice) on account of the fact that as against 1,03,500 bags of rice mentioned in the bills of lading only 1,01,048 bags were delivered in good condition. 1889 bags of rice were discharged in torn, cut and slack condition. It was further found that the cargo of rice in hatches Nos. 1 and 5 in the ship were contaminated by sulphur particles. No such circumstances existed in the present case. Hence, on facts this case is clearly distinguishable.

33. Thus, a review of the reported cases and the ratio laid down therein clearly goes to show that the statement in the bills of lading regarding the number of bags, tins or containers that are shipped would constitute sufficient evidence against the shipowner about the exact number of bags, tins or containers being shipped. But in so far as the weight, contents and value are concerned, if there is an endorsement that they are not known or if there is a qualifying remark indicating that the master of the vessel has entered those particulars in the bills of lading in accordance with the figures given to him by the shipper or consignor, then the statements in the bills of lading regarding those particulars would not be binding on the shipowner and it will be for the shipper or consignor to prove that the consignments loaded on board the ship were of the same weight and the contents were of the same nature and the value was of the same figure as those noted in the bills of lading. The hypothesis on which such a dictum has been laid is not far off to see. In so far as the number of bags, tins or containers is concerned, they cane be easily verified by a visual check and the checking process will not involve any complicated procedure. On the other hand, checking the weight or nature or the value of the contents in the consignment that is shipped will involve specialised tests and will also prove to be a time consuming exercise, which the ships cannot afford to do for various reasons, such as, the cost factor, the adherence to departure, and arrival, schedules, the lack of capabilities for conducting such checks etc. Therefore, it is that if a bill of lading contained a disclaimer clause, it will not have effect in so far as the number of bags, tins etc. are consigned, ass no mistake can be made by the master of a vessel about those particulars. But in so far as the weight, contents and quality are concerned, the disclaimer clause will certainly operate and in such a situation, it will be for the shipper or consignor to prove by adequate evidence that the particulars regarding weight contents etc. entered in the bill of lading represent the correct weight and the exact quantity of the goods which are loaded on board the ship.

34. If we now examine the facts of the case, it will be seen that as against the quantity of 96000 bags of rice loaded on board the ship at Bangkok, the same quantity had been delivered at Tuticorin. Hence there was no shortage in the number of bags that were delivered to the number of bags that were delivered to the respondent. As regards the condition of the hatches we may refer to Ex. B. 3, the hatch survey report issued by the Port officer and surveyor. This certificate had been issued on 1-9-1969 and 13-9-1969. In Ex. B. 3 it is stated as follows:-

"The vessel has 5 hatches and they were battened down properly and covered with three tarpaulins. On opening the hatches, all the visible cargo of rice in bags was found in good condition there being no sign of any stain or weightage to the bags of rice."

The condition of the bag was also certified by the surveyor under Ex. A. 608 and we have referred supra to the report. In addition, there is also the admission of PW 10, the shipping manager of the respondent's clearing agent that the bags were discharged from the ship in the same condition in which they were loaded in the port of loading. In such circumstances the qualifying words `said to weigh' incorporated by the master of the vessel in the bills of lading besides the words of disclaimer in clause No. 5 would undoubtedly mean that the master bound himself under the bills of lading only for the number of bags that were loaded, but he did not guarantee the weight particulars entered in the bills of lading. In other words, it would mean that the particulars of weight entered in the bills of lading were in accordance with the figures given by the shipper; but so far as the master is concerned, he did not give any assurance that those particulars had been checked and found to be correct. Once such a conclusion is reached, then it follows that it is for the respondent to prove that the rice bags that were loaded at Bangkok were of the same weight as had been entered in the bills of lading. Only after such proof is adduced, the owner of the vessel can be called upon to account for the shortage. Since such proof has not been adduced by the respondent in this case, we have to hold that the appellants cannot be called upon to account for the shortage in the weight contents of the bags. Hence, our finding on points 1 and 2 is in favour of the appellants.

35. Point No. 3 : Taking up question No. 3, it is seen that the delivery of bags to the Civil Supplies authorities has been effected long after the goods had been unloaded from the ship. The discharge operations were over on 13-9-1969. The delivery of rice bags to the representatives of the Collectors of Madurai and Ramanathapuram was however effected long after the rice bags were discharged from the ship and therefore, any loss in weight in the rice bags, could have taken place during the time the bags were kept on the shore either due to negligent handling or pilferage, etc. Hence even assuming that the appellants are liable in law to compensate the respondent for shortage of weight in the rice bags, the shortage should be determined with reference to the state of things when the goods were discharged and not with reference to the state of things discovered long after. It will not be out of place to mention here that even according to the respondent there were only 3,000 bags which were slack when the 96,000 bags were unloaded from the ship, vide Exs. A-592 and 595. Such being the case, it is not understandable how the respondent can claim for the shortage in weight noticed in the rice bags delivered to the Civil Supplies authorities long after the discharge of the rice from the ship. Hence, this point is also answered in favour of the appellants and against the respondent.

36. Point No. 4. In view of the finding rendered on points 1 to 3. it follows that the appellants are not liable to pay damages to the respondent for shortage of weight in the rice bags.

37. Point No. 5 : We are left only with point No. 5. which relates to the liability of the appellants to pay the survey charges. In the letter Ex. A-525, all that is stated is that several bags were found slack and hence a survey of the bags cleared as well as uncleared should be done. It is, therefore, clear that the survey had been asked for only to safeguard the interest of the respondent and not on account of any default or non-co-operation by the master and crew of the vessel. Therefore the respondent cannot fasten the liability of survey charges on the appellants. This point will stand answered accordingly.

38. In the result, for the reasons aforesaid the appeal deserves to succeed. Accordingly, the appeal will stand allowed and the judgment and decree of the trial court will stand set aside and the suit will stand dismissed. We however direct the parties to bear their respective costs throughout.

39. Appeal allowed.


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