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Lakhinarayan Ramniwas Vs. Lloyd Triestino Societa Per Azinni Di Navigaziene Sede in Triesta and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 59 of 1959
Judge
Reported inAIR1960Cal155
ActsIndian Contract Act, 1872 - Section 28; ;Code of Civil Procedure (CPC) , 1908 - Section 10 - Order 39, Rule 1; ;Specific Relief Act, 1877 - Section 21
AppellantLakhinarayan Ramniwas
RespondentLloyd Triestino Societa Per Azinni Di Navigaziene Sede in Triesta and ors.
Appellant AdvocateSubimal C. Roy, ;A.K. Mukherjee, ;N. Roy and ;N. Mazumdar, Advs.
Respondent AdvocateR.C. Deb, ;Subrata Roy Chowdhury and ;Tapas K. Banerjee, Advs.
DispositionAppeal dismissed
Excerpt:
- .....societa per azinni di navigazibne sede in triesta. the goods were to be conveyed from italy to the port of calcutta. the steamship s. s. alga duly arrived at the port of calcutta on the 22nd may, 1956. the plaintiff alleges that 22 bundles of the goods were short-landed. in support of its contention it relies on a short-landing certificate issued by the commissioners for the port of calcutta. on or about the 8th of june, 1957, the plaintiff-appellant as the holder of the three bills of lading instituted a suit against the steamship company, the respondent no. 1, as also its agents messrs. turner morrison and co., private ltd., the respondent no. 2 in this appeal, claiming a sum of rs. 15,154/06 np. from both the respondents. the commissioners for the port of calcutta have also been.....
Judgment:

Bachawat, J.

1. This is an appeal from an order of G. K. Mitter J., directing stay of a suit instituted by the appellant against the respondents. The respondents (appellant?) are Indian merchants. They placed an order for 968, 870 and 423 bundles of Mild Steel Round bars with certain Italian shippers. The Italian shippers shipped those goods under three bills of lading dated 6-3-1956, 10-3-1956 and 27-3-1956. The goods were shipped per S. S. Alga, a steamship belonging to the respondents, Messrs. Llyod Triestino Societa per Azinni Di Navigazibne Sede in Triesta. The goods were to be conveyed from Italy to the port of Calcutta. The steamship S. S. Alga duly arrived at the port of Calcutta on the 22nd May, 1956. The plaintiff alleges that 22 bundles of the goods were short-landed. In support of its contention it relies on a short-landing certificate issued by the Commissioners for the port of Calcutta. On or about the 8th of June, 1957, the plaintiff-appellant as the holder of the three bills of lading instituted a suit against the steamship company, the respondent No. 1, as also its agents Messrs. Turner Morrison and Co., Private Ltd., the respondent No. 2 in this appeal, claiming a sum of Rs. 15,154/06 nP. from both the respondents. The Commissioners for the port of Calcutta have also been impleaded as defendants to the suit. Each of the bills of lading contains the following clause:

'All requests for compensation in respect of damage, shortage, deterioration, loss of goods loaded shall be submitted for friendly settlement to the agencies of the shipping company at the place of discharge, failing a friendly agreement, both the shipper and the receiver as well as any other party interested in the cargo, if intending to take legal steps against the company, for the above-mentioned causes and in general for whatsoever other causes may summon them before Judicial Authorities of Trieste or Genoa hereby expressly renouncing the competence of any other Judicial Authorities. No exception must be made to this exclusive competence even if the company is sued party (defendant) by reason of connection or contingency of the law suits.'

2. OR the strength of this clause the defendants respondents applied to the Original Side of this Court for an order staying all further proceedings in the suit. G. K. Mitter J., made the order prayed for. The plaintiff has preferred an appeal from that order.

3. The plaintiff claiming as the endorsee of the hills of lading is entitled to enforce and is bound by the terms and conditions of the bills of lading including Clause 31, which I have set out above.

4. It is admitted in the pleadings and it was admitted before us that the contract contained in the bills of lading is governed by the Italian law. The concession was rightly made. Clause 32 of each of the bills of lading provides that 'for anything which has not been provided for or foreseen in the present contract of carriage the provisions of Italian Code of Navigation shall apply.' The contract of afreightment was entered into between an Italian shipping company and an Italian firm in Italy. The goods were shipped on a steamer flying the Italian flag. In these circumstances there can be no doubt that the Italian law is the proper law of the contract contained in the several bills of lading.

5. On behalf of the appellant it was argued that the several contracts contained in the bills of lading are hit by the provisions of Section 28 of the Indian Contract Act. In my opinion there is no substance in this point. The essential validity of the contracts will have to be judged and determined by the proper law of the contracts namely the Italian law. There is neither any allegation nor any proof that the Italian law in any way renders Clause 31 invalid. Section 28 of the Indian Contract Act cannot and does not render invalid a contract entered into in Italy between two Italian subjects for the carriage of goods from Italy to India on board a steamer flying the Italian Flag.

6. Though Clause 31 contained in those several contracts are valid, they cannot be pleaded as a bar to the jurisdiction of an Indian Court which otherwise has jurisdiction to try a suit instituted before it. The suit was instituted on the Original Side of this Court upon the allegation, inter alia, that a part of the cause of action arose in Calcutta. Leave under Clause 12 of the Letters Patent to institute the suit was duly obtained and the Court had undoubted jurisdiction to try the suit. The jurisdiction of the Court to try such a suit is vested in it by the Letters Patent and by the Constitution. Parties cannot by a private agreement, whether such agreement has been entered into in India or outside India, take away a jurisdiction which is vested in this Court to try the suit just as the parties could not by such agreement confer upon it jurisdiction to try a case which it had otherwise no jurisdiction to try. Clause 31 of the contract remains valid as a contractual stipulation, but it cannot be pleaded as a bar to the jurisdiction of the Court. When the attention of the Court in which the suit is instituted is drawn to a contractual stipulation of this kind, the Court may in the exercise of its discretion stay its hands & refuse to try the suit until the competent judicial authority to whose decision the parties have agreed to submit their disputes has pronounced its decision. The Court acts upon the principle that in general the Court will compel the parties to abide by their contracts. Instead of driving the defendant to a separate suit to enforce the covenant, the Court may for the purpose of preventing multiplicity of litigation enforce the contract summarily on an application made to it in the suit instituted before it. The prima facie leaning of the Court is that the contract should be enforced and the parties should be kept to their bargain. Subject to this prima facie leaning, the discretion of the Court is guided by considerations of justice. The balance of convenience, the nature of the claim and of the defence, the history of the case, the proper law which governs the contract, the connection of the dispute with the several countries and the facilities for obtaining even-handed justice from the foreign Tribunal are all material and relevant considerations. If on a consideration of all the circumstances of the case the Court comes to the conclusion that it will be unjust or unfair to stay the suit, the Court may refuse to grant the stay asked for.

7. On review of all the circumstances whichwere placed before him, G. K. Mitter J., in theexercise of his discretionary power has granted astay of the suit. There have been lengthy arguments before us and we have been taken throughthe entire record. I have come to the conclusion.that G. K. Mitter J., has come to a correct decision.

8. Several issues of fact and law arise in this case. The first and the main question is what quantities of goods were shipped in Italy on board S. S. Alga. On this point the entire evidence is available in Italy. It has been suggested that such evidence may consist of oral and documentary evidence from the office of the Italian shippers, the oral and documentary evidence of the steamship company in Italy and the oral and documentary evidence from the office of the relevant port authorities in Italy. The quantities said to have been shipped are mentioned in the several bills of lading, but Clause 3 of bill of lading, the declarations as to the quantity, weight, volume, contents and value of the goods are considered as given unilaterally by the shipper and do not constitute any proof against the Captain or any acknowledgment by him, the obligations of the Master and of the Owners being limited to the redelivery of the goods loaded in the same apparent condition of packing in which they were received, excepting cases of force majeure and the other causes provided for in this Bill of Lading. On a perusal of the bills of lading we are not certain whether all the 968, 870 and 423 bundles were shipped in separate packages. It was not even contended before G. K. Mitter J., that the several bundles were shipped in distinct and separate packages and that the defence of the shipping company was a dishonest one. On the present materials it seems to us that a considerable volume of evidence with regard to the quantities shipped may have to be made available from Italy.

9. On the question whether the shortage occurred in course of the voyage, the evidence of the responsible officers who were on board the vessel will be necessary. Such evidence will also be available in Italy.

10. The next point on the main issue which arises in the case is what was the quantity of goods which were landed in the port of Calcutta. The short-landing certificate which is relied upon by the appellant is disputed by the respondents. On the question as to what quantities of goods were landed in the port of Calcutta the records of the Port Commissioners of Calcutta will be relevant. Further, the oral evidence of the appellant firm's officers who actually obtained delivery from the Commissioners of the port of Calcutta would also be relevant as to what quantity of goods was actually received by the appellant. All these evidences will have to be taken from India, if this case is tried in Italy. On the other hand, the papers or documents usually kept on board the vessel will also be relevant and may throw some light on the question as to what quantity of goods was discharged by the steamship company at the port of Calcutta. This part of the evidence will be avail-able in Italy.

11. On discharge of the goods from the ship, the goods were handed over to the Commissioners of the Port of Calcutta. It is the case of the respondents that by and under the provisions of law, regulations, custom and usage of the Port of Calcutta, the delivery of the goods to the consignees is the responsibility of thy Commissioners of the Port of Calcutta. In substance, the respondents contend that the steamship company duly delivered to the. Commissioners of the Port of Calcutta whatever quantity of goods was originally shipped and that the company is not responsible for the subsequent shortage, if any. The evidence with regard to the relevant Indian law, custom, regulation and usage will have to be taken from India it the case is tried in Italy.

12. The next dispute in this case is as to the value of the goods. On this point Mr. Deb drew our attention to Clause 28 of the bill of lading which provides that in the event of damage or loss for which the company is answerable they shall only be liable to the payment of the real and intrinsic value of the goods as proved by proper invoices of origin or as ascertained by a statement of a judicial expert, with a maximum, in case of undeclared value of Italian lire 5000 per package excluding any compensation in respect of damage for lost profits or for increase of value or expenses. Mr. Deb pointed out that in none of the bills of lading the value had been declared by the shippers. Having regard to Clause 28 of the bills of lading, prima facie it would seem that the value would have to be determined with reference to proper invoices of origin and the evidence as to the relevant value will be available in Italy.

13. On the materials on the record it is impossible to hold that the balance of convenience is overwhelmingly in favour of the trial of the suit in Calcutta as against trial of the suit before the relevant judicial authority in Italy. Undoubtedly the appellant will suffer some inconvenience if the litigation goes on in Italy instead of its going on in the Calcutta forum. Mere inconvenience to the appellant alone, however, is no ground for refusing the stay.

14. The suit was instituted on the 8th of June, 1957, and the written statement was filed on the 1st of August, 1957. In the written statement reliance was placed upon Clause 31 of the bill of lading and it was contended that the Court had no jurisdiction to try the suit. In February 1958, when discovery was applied for, the respondents stated that they were going to apply for the stay of the suit. The notice of motion asking for the stay of the suit was made on the 10th of May, 1958. An application for the stay of the suit on the ground that the parties had agreed to submit their decisions to foreign Tribunal should be made without delay. In this case there has been some delay in making the application. Considering all the circumstances, G. K. Mitter J,, came to the conclusion, I think rightly, that the delay was rot fatal to the application. It has not been made out that the appellant has suffered any substantial prejudice by the delay.

15. It is common case that the contracts are governed by the Italian law. The subject-matter of the dispute seems to be more closely connected with Italy than with this country. It is not shown that the appellant will not obtain justice from the Italian Tribunal.

16. While the steamship company is represented in India by its agents, Messrs. Turner Morrison and Co., Private Ltd., the interest of the appellant firm in Italy may be looked after by their Italian shippers. We are informed by the learned counsel on behalf of both the parties that during the pendency of this appeal the appellant has instituted suitable proceedings before the appropriate Judicial Authority in Italy.

17. It is not made out to our satisfaction that it will be unjust or unfair to stay the suit. We have come to the conclusion that in the circumstances of the case, Clause 31 of the Bill of Lading should be enforced and the suit ought to be stayed.

18. Mr. Roy drew our attention to the decision of the English Court of Appeal in The Fehmarn, (1958) 1 All ER 333, where the Court of Appeal in the circumstances of that case affirmed an order made by Willmer J., refusing to stay a suit which had been instituted in broach of a covenant by which the parties agreed that all claims and disputes arising under and in connection with the bill of lading shall be judged in the U. S. S. R. In the circumstances of that case it was not just or proper to stay the suit. Each case must be judged on its own facts. We have to consider for ourselves the entire facts and circumstances of this particular case. On a review of the facts and circumstances of this case, we have come to the conclusion that the order appealed from ought to be affirmed. I, therefore, propose that the following order be passed.

19. The appeal be and is hereby dismissed.

20. Considering all the facts and circumstances of the case we direct that each party will pay and bear its own costs of the appeal,

Lahiri, C.J.

21. I agree.


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