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Petitioner: MESSRS KARIM COMMERCIAL Co. LTD. VS Respondent: THE UNITED ORIENTAL STEAMSHIP Co. JUDGMENT
Court Name: Sindh High Court Judge(s): Durab Patel Title:MESSRS KARIM COMMERCIAL Co. LTD. vs THE UNITED ORIENTAL STEAMSHIP Co.
JUDGMENT
Reported As: PLD 1970 Karachi 427 Result: Suit decreed Judgment JUDGMENT According to the plaint, by a Bill of Lading dated 8th May 1962 the first plaintiff had shipped 25 bales of cotton yarn from Karachi to Chittagong by the s.s. Iqbal Bakhsh owned by the first defendant. The s. s. Iqbal Bakhsh reached Chittagong on 13th July 1962 and discharged its cargo soon thereafter but it failed to land the 25 bales shipped by the first plaintiff. I shall for convenience refer to these bales as the said bales. The said tales were insured against loss with the second plaintiff, therefore both the plaintiffs approached the Chittagong Port Trust for the delivery of the said bales. I may observe here that by an order of this Court dated 23rd September 1966 the Chittagong Port Trust was impleaded as the third defendant in this suit and I shall, for convenience, refer to it as the third defendant. The third defendant informed the plaintiffs that the s.s. Iqbal Baksh had not landed the said bales and it issued a short landing certificate dated 22nd September 1963 which stated that it had not received the said bales. The second plaintiff then paid the first plaintiff a sum of Rs. 37,593.18, being the value of the said bales, and was subrogated to its rights. It then took up the question of the loss of the said bales with the first defendant and its local agent in Chittagong, the second defendant, but soon thereafter the plaintiffs were informed that the said bales were lying in the B shed of the third defendant in a damaged condition. Accordingly, they asked the 2nd and 3rd defendants to arrange for the delivery of the said bales to their clearing agents M/s. Pak Manufacturers & Industries Ltd. But despite reminders and correspondence with the first two defen- -dants, the said bales were not delivered to their clearing agents. They then gave a notice to the first two defendants demanding payment of the sum of Rs. 37,593.18 as compensation for their failure to deliver the said bales, and meanwhile they also sold the said bales to M/s. Muhammad
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Abdul Aziz & Sons of Karachi and instructed the first two defendants to deliver the said bales to the said Abdul Aziz & Sons. However, as delivery was not given, Messrs Muhammad Abdul Aziz & Sons cancelled the sale and received back from the plaintiff the amount paid by it for the purchase of the said bales. The plaintiffs then served fresh notices on the first two defendants demanding payment of the said amount of Rs. 37,593.18 on account of their failure to deliver the said bales in pursuance of the terms and conditions of its bill of lading. But contrary to this allegation that the first two defendants had not delivered the said bales, the plaintiffs have also stated in para. 10 of the plaint as follows:----- "That the plaintiffs reliably understand that a huge sum of money is due from the defendant No. 2 to the Chittagong Port Trust the defendant No. 3 which the defendant No. 2 are not able to pay, and unless the entire outstanding are cleared the defendant No. 2 will not be allowed by the Trust to remove the said consignment as well as many other consignment lying at the Port of Chittagong from the Port premises." Finally, as no payment was received from the first two defendants the plaintiffs filed this suit against them for the recovery of the said amount of Rs. 37,593.18 with costs and interest from the date of the suit till the realization of the decretal amount. 2. In a lengthy written statement, the first defendant denied liability for the alleged loss of said bales. It submitted inter alia that on the way from Karachi to Chittagong there was a fire on the s. s. Iqbal Bakhsh and that as the fire had been put out by water, the water had damaged the said bales and obliterated the marks on them. It also submitted that the s. s. Iqbal Bakhsh had arrived in Chittagong on 29th June 1962 and had delivered the said bales to the third defendant, therefore it submitted that the short-landing certificate of the third defendant was not correct and was not binding on it. It thus submitted that although the marks on the said bales had been obliterated, the said bales had been landed by the s. s. Iqbal Bakhsh, and were available for delivery to the plaintiffs in damaged condition in the B shed of the 3rd defendant, and that its agent, the second defendant, had arranged for the delivery of the said bales to the plaintiffs' clearing agent. It further submitted that as it had delivered the said bales to the third defendant, it was discharged from all liability under its bill of lading, and contended that if the plaintiffs had suffered any loss it had been caused by the third defendant for which it was not liable. It also submitted that the suit was barred by Article III, clause 6 of the Carriage of Goods by Sea Act, 1925 (hereafter called the said Act) and that the suit was barred by limitation. The second defendant filed a separate written statement in which it adopted the pleas of the first defendant in its written statement. It also pleaded that the suit was not maintainable against it as it was only the first defendant's agent, and I may observe here that learned counsel for the plaintiff did not press his claim against this defendant. 3. Issues were framed by the Court in due course on these pleadings, and both the parties examined witnesses on Commission in Chittagong and the evidence thus recorded was duly brought on the record of the suit. In order to appreciate how the 3rd defendant was impleaded, I have to explain here that the plaintiffs had examined Mr. M. S. Meah, Asstt. Supdt, of Chittagong Port about the short-landing certificate on which their claim in the suit was based. In reference to this evidence, Nana, J. In his order dated 23rd September 1966 has observed as follows :- ---I have been through this evidence with the assistance of the learned counsel on either side, and without expressing an opinion one way or the other, it does appear prima facie, that in the context of the dispute between the parties, this evidence is of little assistance, coming as it does from the representative of the Port Trust Authorities, specially when counsel on either side admit that the evidence of this officer was recorded in his own office. Strangely, at convenient times this witness appears to state that he wants from the records available to him and at other times that the record is not available to him in his office, therefore he could not reply.---
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It is clear from these observations that as Nana, J. Was not impressed by the evidence of Mr. M. S. Meah, he directed that the Chittagong Port Trust should be impleaded as a defendant in the suit. The Chittagong Port Trust has therefore been impleaded as the third defendant in the suit and has filed its written statement. In its written statement, it has denied liability for the loss of the said bales and has stated that they were never received by it from s. s. Iqbal Baksh. It has further stated that the cargo of s.s. Iqbal Baksh had been removed by the second defendant in its capacity as the first defendant's agent to the rented space at B shed in Chittagong Port. As to paragraph 10 of the plaint, in which the plaintiffs have made a specific allegation that the third defendant had deliberately refused to deliver the said bales because of its (3rd defendant) claim against the second defendant, it has merely stated that the contents of paragraph 10 of the plaint "are not relevant to the present suit and need not reply." It has further pleaded that the suit was time- barred under section 109 of the Port of Chittagong Act, 1914 and that it was not maintainable because notice under the said section had not been served on it. It has also taken other technical pleas which were later dropped. 4. Additional issues, were framed after the written statement of the 3rd defendant was filed, and although the 3rd defendant did not examine any witness it was permitted, on its request, to cross- examine the clearing agent of the plaintiffs in Chittagong. 5. Before presenting their arguments, all the learned counsel submitted that many of the issues were unnecessary, therefore I have resettled the issues which are as follows (1) Whether the suit is barred by limitation? (2) Whether the defendants discharged the bales in question in the custody of Chittagong Port Trust under nil marks and if so what is its effect? (3) Whether the contents of the alleged certificate issued by the Chittagong Port Trust are correct and binding on the defendants? (4) Whether the plaintiffs have any cause of action against the defendants? (5) Whether the suit is barred for want of notice under section 109(1) of the Port of Chittagong Act, 1914 against defendant No. 3 ? (6) Is not the suit against defendant No. 3 barred by limitation under section 109(2) of the Port of Chittagong Act, 1914? (7) To what relief, if any, are the plaintiff entitled to? I shall now consider these issues 6. Issue No. 1.-Article III clause 6 of the said act, in so far as it is relevant, states as follows "In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered." According to the evidence of Mr. M. S. Meah, the Assistant Superintendent of the 3rd defendant, who was examined by the plaintiffs, the s.s. Iqbal Bakhsh completed the discharge of cargo at Chittagong Port on 23-7-1962 and sailed away on 24.7-1962. Mr. Hassan therefore submitted that the suit should have been filed within one year of 24-7-1962, and as the suit was filed in January 1964 it was patently time-barred. I am not able to accept this argument. The provisions of clause III of Article 6 of the said Act have been construed by the Supreme Court in Abdul Jalil v. The Muhammadi Steamship Co. (PLD 1961 SC 340). Their Lordships have held in the said judgment that although the statutory period of limitation under the said clause is one year from the date of discharge that period can always be extended by an agreement between the carrier and the consignee. Their Lordships have further held that the practice of Chittagong Port is for the carrier to discharge the cargo from the ship and deliver it to the Port Authorities and for the Port Authorities to deliver it to consignees. But as they (the Port Authorities) cannot deliver cargo to consignees unless they produce the carrier's delivery order, their Lordships have held that the starting point of limitation in Chittagong Port is the date of the delivery order and not the date of the discharge of
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cargo from the ship. In view of this judgment, the starting point of limitation in the instant case will A be the date of the delivery order. The delivery order Exh. CTG 6 was produced by P. W. Malik Muhammad Usman, the Jetty Sarkar of the plaintiffs' clearing agent, and is dated 3rd July 1962. This means that the suit should have been filed within one year from 3rd July 1962 and as it was filed more than a year later, in January 1964, it is patently time-barred. 7. Mr. Lari then submitted that by its letter Exh. CTG 8 the defendant had extended the time for the performance of the contract in February 1963 and that as the suit was filed in January 1964 it was within limitation. I have to observe here that the letter is a copy of the second defendant's letter and is dated 15th February 1962 but this is obviously a clerical- error for 15th February 1963. In this letter the second defendant has merely informed the plaintiffs' clearing agent that the said bales lying in the shed. Mr. Hassan therefore submitted that this letter did not spell out any agreement for the extension of time and that in any case such an agreement could not be spelt out from an isolated letter when the plaintiff and the defendant had been in correspondence for a long period of time. He also submitted that the question whether time had been extended by the first two defendants was a question of fact, and as the plaintiffs had not pleaded an agreement for the extension of time either in the original plaint or in the amended plaint they could not be allowed to advance this plea at this stage. Learned counsel's argument that the plaintiffs have not pleaded an agree--ment with the defendants for the extension of time for the delivery of the said bales is correct. It is obvious that if such an agreement had been pleaded the defendants might have been able to produce evidence to show that they had not entered into such an agree--ment. The argument of Mr. Lari therefore involves a question of fact, and as it has not been pleaded it cannot be allowed to be h raised at this stage. 8. Mr. Lari then submitted that the letter of 15th February 1963 amounted to an acknowledgment of liability before the expiry of the statutory period of limitation, therefore it had extended time and as the suit was filed within one year of the said letter it was within time. Despite the mandatory provisions of Order VII, rule 6, C. P. C. The plaintiffs have not pleaded an extension of time in the plaint, therefore this argument is barred by the pleadings. Additionally, having exa--mined this letter, I find it impossible to construe it as an admission of liability. The suit is for damages for the alleged short land--ing of the said bales, and an acknowledgement of liability would mean that the defendants had admitted the loss of the said cargo and admitted liability for compensating the plaintiffs, for that loss. Not only doe3 the letter not contain any promise to compensate the plaintiffs, but, on the contrary, it states that the said bales were lying in the custody of the 3rd defendant. This statement is a repudiation of the plaintiffs' claim and cannot possibly be treated as an admission of liability. There is no merit in Mr. Lari's argument. As the suit has been filed much more than a year after the date of the delivery order Exh. C. T. G. 6 the suit is patently barred by time. 9. Issue No. 2.-As the plaintiffs' case under this issue is based on the short landing certificate issued by the third defendant, they had examined Mr. M. S. Meah, Assistant Superintendent of the third defendant, to prove this short landing certificate. As they had not forwarded the short landing certificate with their docu--ments for the examination of this witness he had produced from his records a copy of the short landing certificate. Apparently this copy was exhibited as C. T. G. 14 subject to objection. However it was not returned by the Commissioner with the commission papers, and it was only at the stage of arguments before me that it was discovered that even the copy of the short landing certificate produced by the witness had not been forwarded to this Court. The result is that the very document on which the plaintiff's case is based is missing. There remains however the statement of Mr. M. S. Meah that the s. s. Iqbal Bakhsh had short landed the said bales. But on the other hand D. W. D. Hyder, who was examined on behalf of the second defendant, had denied the short landing and stated that the said bales were lying in the B shed of the third
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defendant. As the burden of proof under this issue is on the plaintiffs, the mere oral testimony of Mr. M. S. Meah is not sufficient to prove the short landing of the said bales. 10. I have also to observe that the evidence of Mr. M. S. Meah is contradicted by two other witnesses examined by the plaintiffs. I have said that the plaintiffs had sold the said bales to Messrs Muhammad Abdul Aziz & Sons and P. W. A. Rauf, a partner of this firm, was examined on commission by the plaintiffs. He said in his evidence that he had purchased the said bales from the second plaintiff for Rs. 12,500 and that despite his efforts as he did not get delivery of the said bales he cancelled the sale and refunded the sale consideration to the second plaintiff. He also said "we could not get delivery of these 25 bales of cotton yarn from the Port and the steamer agents because the Jetty Authorities demanded Rs. 70,000 to Rs. 75,000 as demurrage charged on these goods and other goods lying in the same shed." He further said in his cross-examination "I have personally seen 25 bales of cotton yarn lying in B shed in the Port Trust." The evidence of this witness, which I have quoted, amounts to an admission in favour of the first defendant, that it had landed the said bales, therefore it is entitled to rely on this admission and it fully supports its contention that it had delivered the said bales, although under nil marks, to the 3rd defendant. 11. The plaintiffs also examined Malik Muhammad Usman, the Jetty Sarkar of their clearing agent, and his evidence also" supports the case of the first two defendants. This witness proved the delivery order issued by the defendants for the said bales and said that the jetty authorities had first told him that the said bales were unmanifested and had not been discharged. He further said : "The goods were lying in B shed under nil marks and ob--literated marks" and that the second defendant informed him that "We should arrange to take delivery of the same from the jetty. We filed wrong and nil mark application and when we went to take delivery of the same the shed officer demanded Rs. 65,000 which were due from the defendant towards the demurrage and the other goods lying in the rented place." He further said in his cross-examination with reference to the said bales "my firm paid dues or other charges. I saw the bales lying in B shed in jetty area lying under wrong or nil marks." Thus according to P. W. Muhammad Usman also, he had personally seen the said bales in the B shed and the third defendant had refused delivery not on account of non- payment of dues and charges on the said bales but on account of some unspecified claim of the third defendant against the second defendant. The evidence of this witness and of P. W. A. Rauf, bearing in mind the fact that both these witnesses were the plaintiffs' witness, is sufficient to establish that the s.s. Iqbal Bakhsh had delivered the said bales to the third defendant. 12. I am aware that P. W. A. Rauf has made allegations against the second defendant in his evidence and said that some persons from the second defendant had an interest in disposing of the said bales, therefore they had obstructed delivery to him. But this plea amounts to an allegation of fraud and is not fit to be con--sidered as it was not taken in the plain, nor is there any documentary evidence in support of it. Further P. W. A. Rauf's allegations were not based on personal knowledge. He admitted in his evidence. "I approached Mr. Akhtar and Syed also for effect--ing delivery but they avoided and declined . . . . . Mr. S. M. Mehdi who has since resigned informed me that Akhtar and Syed were themselves interested to buy the same and disposed of it at a good premium". As the plaintiff did not examine Mr. S. M. Mehdi, this statement of P. W. A. Rauf is hearsay evidence and is not admissible at all, much less against the first two defendants. But his admission that he had seen the said bales supports their case. 13, Finally Mr. Lari criticized the first two defendants for not producing the truck notes and the outturn report of s. s. Iqbal Bakhsh and argued that an adverse inference should be drawn against them for not producing these documents. But these defendants are entitled to rely on the admissions of the plaintiffs' witnesses. As these witnesses have supported the case of the first two defendants and said that they had seen the said bales in the B shed of the third defendant it was
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not necessary for these defendants to produce further evidence. I therefore decide this issue in favour of the first defendant and hold that the said bales were discharged by the s. s. Iqbal Bakhsh. 14. Mr. Lari also argued that if his evidence established that the first defendant had delivered the said bales to the 3rd defen--dant it implied that this defendant had lost the said bales, therefore if the plaintiffs were not entitled to a decree against the first defendant, they were entitled to a decree against the 3rd defendant. Once again the burden of proof that the 3rd defendant had failed to deliver the said bales to the plaintiffs after having received them from the first defendant falls on the plaintiffs. But the evidence of their witnesses P. Ws. Muhammad Usman and A. Rauf and the evidence of D. W. Chaudhry establishes a pima facie case against the 3rd defendant, there-- fore I shall examine whether the 3rd defendant has given any evidence in rebuttal. 15. I have to point out here that in his order of 23-9-1966 directing the 3rd defendant to be joined as a party my learned brother Nana, J. Had commented on the unsatisfactory evidence of Mr. M. S. Meah, Assistant Suptd. Of 3rd defendant, and this defendant had been given opportunity to produce evidence on commission after it was impleaded. Instead of examining any of its own officers or cross-examining D. W. Choudhry, the first defendant's witness it merely cross-examined the plaintiffs' clearing agent. But as P. W. Muhammad Usman, who had been examined by the plaintiff and given evidence against the 3rd defendant, had left the service of his employers the 3rd defen--dant cross-examined instead a witness by the name of Muhammad Amin. This witness was not cross-examined about the said bales but only about the general procedure of Chittagong Port. The object of this cross-examination apparently was to prove that the 3rd defendant had no control over cargo stored in the C shed of the Chittagong Port. As this evidence by itself is irrelevant I have to examine whether the evidence of Mr. M. S. Meah helps the case of the 3rd defendant. 16. Mr. M. S. Meah said in his evidence that although the s. s. Iqbal Bakhsh was to discharge 530 bales of cotton yarn, it had only discharged 327 bales by marks, 178 bales by wrong or nil marks and that it had short landed 25 bales. He further said that no nil mark application had been filed by the plaintiff, but P. W. Muhammad Usman has stated that he had filed nil mark application and produced a copy of this application (Exh. Ctg 11) therefore the question whether such an application was filed or not is not very clear. But the position would have been clarified beyond any doubt if the 3rd defendant had produced its records. Mr. M. S. Meah has further stated that the nil and wrong mark cargo had been delivered by the 3rd defendant to the second defendant and stored by that defendant in the C shed and according to Mr. Zaidi, learned counsel for the 3rd defendant, the 3rd defendant was not liable for cargo stored in C shed. That view is also supported by the evidence of P. W. Muhammad Amin who was cross-examined by the 3rd defendant. However assuming for the sake of argument that the cargo stored in the C shed of the 3rd defendant was under the control of the first two defendants this can exonerate the 3rd defendant from liability only if it can show that it had delivered to the second defendant the said bales or bales of cotton yarn under nil marks, which had been shifted by the second defendant to the C shed. Mr. M. S. Meah has no doubt said that the nil mark cargo of the s. s. Iqbal Bakhsh was shifted to the C shed, but although he was cross--examined on the correctness of this allegation he did not produce the receipts of the first two defendants in support of his statement although all the relevant records were in the 3rd defendant's possession At that time the 3rd defendant was not a party to the suit, therefore his failure to produce the records in his custody did not prejudice the interest of the 3rd defendant but it prejudiced the case of the plaintiffs against the first defendant. However after the 3rd defendant had been impleaded, it became entitled to produce evidence and examine its officers to prove either that it had never received the said bales from the first defendant or that after receiving these bales it had delivered them back to the first or 2nd defendants who had stored them in the C shed. As it was impleaded after evidence had- been recorded it is clear that its failure to produce evidence, including documentary evidence, in support
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of its contentions cannot but lead to an adverse inference against its contentions. The other consequence of its total failure to produce evidence is that there is absolutely no evidence to rebut the evidence of D. W. Choudhry and P. Ws. Muhammad Usman and A. Rauf. All these witnesses have emphatically said that they had seen the said bales in the B shed of the 3rd defendant. As there is no evidence in rebuttal,…
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