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Petitioner: THE TRUSTEES OF PORT OF KARACHI VS Respondent: NORWHICH UNION FIRE INSURANCE JUDGMENT
Court Name: Sindh High Court Judge(s): Syed Haider Ali Pirzada Title:THE TRUSTEES OF PORT OF KARACHI vs NORWHICH UNION FIRE INSURANCE
JUDGMENT
Reported As: 1992 CLC 2412 Result: Appeal allowed Judgment JUDGMENT ' This First Appeal is directed against the judgment and decree dated 25-3-1979 passed by the VIth Senior Civil Judge, Karachi, whereby he decreed the suit filed by the respondents. ' The facts leading to the filing of the above appeal are that M/s. Gloria Industries imported a consignment of 16 iron drums containing dyes from Bremen. The said consignment was trusted to M/s. Hensa Lines/or carriage to Karachi. The consignment was shipped on board their vessel s.s. "TRAUTENFELS". The said consignment was insured with the respondent company under their Insurance Certificate No, PB 76/0070/C, issued under open policy No, PB75/0603. The vessel "TRAUTENFELS" arrived at Karachi port on or about 1-4-1976 and the consignment was discharged under Index No, 41 dated 12-5-1976. The case of the respondent as set out in the plaint was that the consignment relieved the relevant shipping documents from their bankers and endorsed the original B/L in favour of their Clearing Agents M/s. M.Subhan and Sons, who lodged the same with the agents of the carriers at Karachi and obtained delivery order from them. It is the further case of the respondents that the said agents filed customs/bill of entry and duty in the sum of Rs,17,439 which was paid in respect of the said consignment. Out of the consignments of 16 drums, 9 drums were not delivered to the clearing agents of the consignees. The clearing agents wrote to the agents of the carriers about the missing drums. The agents of the carriers by their letter dated 22- 6-1976 informed clearing agents that as per provisional outturn report, there was no shortage recorded against Index No, 41. The agents advised the clearing agents to contact the appellants for the exact location of the missing 9 drums. The slearing agents wrote a letter dated 5-7-1976 to the Deputy Traffic Manager of the appellants. The Assistant Traffic Manager of the appellants by his
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letter dated 26-7-1976 informed the consignees that 7 drums were delivered to them, one drum was detained by the Customs Authorities and the remaining 8 drums had been stolen from K.P.T. For which Form 'B' had already been sent to Docks Police for investigation. The consignees served a legal notice dated 24-8-1976 upon the appellants calling upon them to make good the loss of consignment. ' The consignees approached the respondent who settled and paid the consignees under letter of subrogation. The respondents filed Suit No,2138/1976 against the appellants for recovery of Rs, 41,600. ' The appellants resisted the suit. The appellants' case as set out in written statement was that the vessel "TRAUTENFELS" arrived at Karachi Port on 31-3-1976 and discharged the consignment fof 16 drums against its Index No, 41 and Shed No,1. It was their case that the consignment was lying fully guarded and protected up to 2-6-1976 whereafter according to administrative requirements, it had to be shifted to and stored in warehouse/umbrella shed on 3-6-1976. It was their further case that in spite of having taken all due care and caution to protect the consignment from any loss, damage or pilferage, 8 drums were found missing and stolen from the shed on 14-6-1976. Truck Driver Hashim s/o Ismail was caught outside the port premises carrying in Truck No,KAU 6745, only two drums which were recovered from him and one lying in the police custody. One of the drums examined by the Customs Authorities has been detained by the police which is lying in the shed. The appellants admitted para. 11 of the plaint to the extent that the, appellants being statutory bailee, are under an obligation to take as much care and caution for the safety and protection of the goods bailed to them, as a man of ordinary prudence would, under similar circumstances, take of his own goods and that they charge their services as per rules laid down in that behalf. ' The appellants pleaded that in view of that fact, it is evident that the appellants have discharged their responsibilities and there is no fault, failure or negligence on their part as bailee, hence they are not liable for the alleged loss and the suit is liable to be dismissed. ' On the pleadings of the parties, the trial Court framed the following issues:-- "(1) Whether out of the consignment of 16 drums, 9 drums were not delivered to the consignee by the defendants after having received the same from the ship? (2) Whether 8 drums were stolen from the custody of the defendants? If so, are the defendants liable for it? (3) Whether one drum alleged by the defendants to be lying in Customs shed or police custody, was not found by the clearing agents of the consignee? If so, arc the defendants liabe for it? (4) Whether the defendants as bailee took care and precaution of the consignment entrusted to, them from the ship? (5) To what amount of compensation the consignee and the plaintiff as subrogatees arc entitled from the defendants? (6) What should the decree be?" ' The respondents in support of their case examined PW Muhammad Sulcman as Exh. 5, PW No,3 Saleh Muhammad as Exh. 19 and closed their side. The appellants in support of their case examined D.W.1 Hasan Abbas as Exh. 35 and DW No,2 Malik Muhammad Yunus as Exh. 37 and closed their side. ' The learned Trial Judge discussed issues 1 to 4 as they are interconnected with each other. He decided issue No, 1 in the affirmative. Finding on issue No,2 was that 8 drums were stolen from the custody of the appellants and they were liable for it. He came to the conclusion that the appellants have not produced any documents to show that the customs had actually detained one drum, as such the appellants are liable. He decided issue No, 4 in the negative. He held that as the respondents had paid Rs,41,000 to the consignees, as such the respondent being subrogatees are
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entitled to claim Rs,41,600 paid by them to the consignees. He decreed the suit for Rs,41,600 with costs. ' I shall refer to the pleadings in their proper context to the extent they bear on the controversy before me. A reference to the plaint (para. 1) shows that the consignees imported a consignment of 16 drums containing dyes from Bremen. The respondents pleaded in para. 2 of the plaint that the vessel arrived at Karachi Port on or about 1-4-1976. The said consignment was discharged under Index No, 41 dated 12-5-1976. In para. 4 the respondents pleaded that on arrival of the vessel, the said consignment, as per practice at Karachi Port, was discharged and delivered in the care and custody of the appellants who thereafter on the strength of delivery order issued by the agent of the vessel and in compliance of customs and Port Trust formalities were required to give the delivery of the entire consignment to the consignees. Then in para. 5 the respondent pleaded that out of the consignment of 16 drums, 9 drums were not delivered to the clearing agents of the consignees and the remaining 7 drums were delivered to them after proper verification of the contents by the Customs Department under the appraising proceedings. Then in para. 9 the respondents pleaded that the Assistant Traffic Manager stated that the remaining 8 drums had been stolen from KPT for which Form 'B' had already been sent to Docks Police for investigation. Then in para. 11 of the plaint, the plaintiff pleaded that as bailee of the consignment entrusted to their care and custody under the statutory provisions of KPT Act, the appellants were under an obligation to take utmost care and protection, of the consignment alleged to have been taken by Docks Police. ' The trial Court took the view that the appellants are bailee and their duties and liabilities will be governed by sections 151 and 152 of the Contract Act. The trial Court came to the conclusion that the appellants have miserably failed to prove that they had discharged their duties as bailee enjoined upon them under section 151 of the Contract Act. If there was 'any loss of the consignment of 9 drums within the charge of the appellants, their responsibility was that of a bailee under the three specific sections i,e sections 151, 152 and 162 of the Contract Act. ' It has to be appreciated that the subject-matter of contractual bailment has been dealt with in Chapter IX of the Contract Act. Section 148 defines bailment to mean delivery of goods upon a contract. As it was no body's case that there was any such contract between the consignees and the appellants in this case. Section 151 provides that in all cases of bailment the bailee is hound to take as much care of the goods bailed to him as a man of ordinary prudence would under similar circumstances, take of his own goods. Section 152 provides that bailee, in the absence of any special contract, is not responsible for the loss, destruction or deterioration of the thing bailed, if he has taken the amount of care described in section 151. Section 161 provides bailer's responsibility when goods were not duly returned. ' In the Karachi Steam Navigation Co. Ltd. v. Ibrahim Gani (PLD 1987 (W.P.) Karachi 315) it was held that "section 47 of the Karachi Port Trust Act lays down that the goods discharged and kept in the warehouses of the Karachi Port Trust will be kept at the risk and responsibility of the owner of the goods. It is therefore clear that the Karachi Port Trust is the agent of the owner of the goods and delivery of the goods by the steamship company under the statutory provisions of this enactment is the delivery of the goods to the consignee". ' In Abdul Jalil Chaudhry v. The Muhammadi Steamship Company Ltd. And another (PLD 1961 S.C. 340) the Hon'ble Supreme Court, after referring the above case, laid down the following proposition:-- "We have to observe, however, that there is in this case a reference to the Karachi Port Trust Act and it is stated that the Karachi Port Trust is a statutory bailee and that delivery to such statutory bailee amounts to delivery of the goods to the consignee. Reference in support of the proposition
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that the Trust holds on behalf of the consignee has only been made to section 47 of the Act wherein it is provided that in the warehouse of the Karachi Port Trust goods are kept at the risk of the owner. The provision is not by itself sufficient to make the Port Trust the agent of the consignee. We have not found it necessary to go into the various provisions of the Karachi Port Trust Act to see how far the Port Authorities can be said to hold the goods on behalf of the consignee, for it is sufficient to point out that at least in the present case the Port Authorities who could not have delivered the goods without a delivery order from respondent Not were not agents of the consignee." ' In East and We Steamship Company v. Hussain Brothers and others (PLD 1968 SC 15), Mr.S.A Rahman, J. Held as follows:--- "I agree but would add, that even if the contract of carriage by sea could be said to have ended with the discharge of goods from the ship into a lighter engaged by the shipowners, the latter would not be absolved from liability as bailees of the goods till they were handed over to the consignee or their agents or assignees." ' In Farook Omar v. National Security Insurance Company Ltd., Karachi and another PLD 1974 Karachi 321 a learned Single Judge held that Karachi Port Trust are statutory bailees and delivery to the Karachi Port Trust is on behalf of the consignee. In this case no reference was made to PLD 1961 SC 340 and PLD 1968 SC 15. ' In the case reported in PLD 1983 Karachi 242, it was held that KPT may in certain circumstance be treated as agent of the consignees but certainly it only a statutory agent for limited and restricted purposes. ' The dictum laid down in PLD 1961 SC 340 was followed in the case of Messrs Tar Muhammad Janoo & Co. v. Messrs Maldivian National Corporation (Ceylon) Ltd. And another PLD 1969 Karachi 498. The principle laid down by (he Hon'ble Supreme Court in the above cases is applicable to the facts of the instant case. So even though there was no contractual baiImen, either according to the pleadings of the parties or on the wordings of section 47, the responsibility of the appellants was of the nature aforesaid, as the bailee of the consignee by virtue of that section. It may be mentioned that I have gone Through the pleadings and there is justification for the view that the respondents based their claim on the breach of a mere statutory duty of the appellants under section 47. It is well settled that the essence of bailment is possession. It is equally well settled that bailment may arise, as in this case, even when the owner of the goods has not consented to their possession by the bailee at all. (Palmer on Bailment, 1979 Edition, page 2). ' In Morris v. C.W. Martin & Sons Ltd. (1965) 2 AER 725 = (1966) 1 QB 716 a mink stole sent by the plaintiff to a furrier to be cleaned was with the consent of the plaintiff, sent on to the defendants as cleaning specialists for them to clean it under a contract between them and the furrier. The mink stole was stolen by a servant of the defendants whose duty it was to clean it. It was held that the defendant had a non-contractual liability to the plaintiff. Lord Denning, Mr. R. After citing the passage set from Pollock and Wright, said: "By which I take it that if the sub-bailmenlis for reward, the sub-bailee owes to the owner all the duties of a bailee for reward; and the owner can sue the sub-bailee direct for loss of or damage to the goods; and the sub-bailee (unless she is protected by any exempting condition) is liable unless he can prove that the loss or damage occurred without his fault or that of his servants. So the plaintiff can sue the defendants direct for the loss of the goods by the misppropriation by their servant, and the cleaners are liable unless they are proteced by the exempting conditions." ' At page 734 Diplock, L.J. Said: "Duties at common law are owed by one person to another only if there exists a relationship between them which the common law recognises as giving rise to such duty. Ong of such
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recognised *relationships is created by the voluntary taking into custody of goods which are the property of another. By voluntarily accepting from Mr. Beder the custody of a fur which they knew to the property of a customer of his, they brought into existence between the plaintiff and themselves the relationship of bailer and bailee by sub-bailment. The legal relationship of bailer and bailee of a chattel can exist independently on any contract, ' At page 738 Salmon, L.J. Said:--- ' When the defendants received the plaintiff's mink stole from the furrier, Mr. Beder, for cleaning, they knew that this stole did not belong to him but to one of his customers. They did not know the customer's name. Nevertheless by taking the fur into their possession in these circumstances they became bailees to the plaintiff for reward...." ' The same principle has been applied in Global Dress Co. Ltd. v. W.H. Boase & Co. (1986) 2 Lloyd's Report 72, Learoyd Brothers & Co. And Huddersfield Fine Worsteds v. Pope and Sons (Dock Carrier) Ltd., (1966) 2 Lloyd's Report 142. ' In Gillchrist Watt & Sanderson Pvt. Ltd. v. York Products Pvt. Ltd. (1970) 3 All ER 825, the facts were that the shipowners carried two cases of clocks belonging to the plaintiff in their vessel from Humburg to Sydney, where the defendants carried on the busines of stevedores and ship agent. The bill of lading provided, inter alia: "When the goods are discharged from the vessel, they shall be at their own risk and expense; such discharge shall constitute complete delivery and performance under this contract and the shipowners shall be freed from any further responsibility". The defendants unloaded the two cases from the vessel at a wharf belonging to the Maritime Services Board, but of which the defendants had the use and control. When the plaintiffs sought to take delivery of the two cases, one of them was missing and was not recovered. The plaintiffs sued the defendants on the ground, inter alia, that: There were delivered to the defendant in Sydney certain goods of the plaintiff to be safely kept and taken care of by the defendant for the plaintiff and the defendant received and had the said goods in its care and keeping for the purpose and upon the terms aforesaid yet the defendant kept the said goods in a negligent manner and took no care of the same WHEREBY the said goods were wholly lost to the plaintiff." A finding by the trial Judge that the loss would not have occurred if the defendants had exercised reasonable care was not contested. ' The question at issue before their Lordships of the Privy Council was whether the defendants as bailees owed a duty of care to the plaintiffs. If there was such a duty, the defendants committed a breach of it and thereby caused the loss. The trial Coto found that the loss would not have occurred if the defendants had exercised reasonable care, and this finding has not been contested. The trial Judge held that there was a bailment, although there was no express agreement of bailment. He made a finding that the defendants notified the plaintiffs that the goods had arrived. Then his view was that the defendant's duties as agents for the shipowners were completed, when they notified the plaintiffs that they had the plaintifs goods on the wharf and thereafter they held the goods with the plaintiffs consent and retained possession and control of the goods and thereby a bailment was created. This finding was contested by the defendants before the Privy Council. Their Lordships of the Privy Council held as follows:--- "Both on principle, and an old as well as recent authority it is clear that, although there was no contact or attornment between the plaintiffs and the defendants, the defendants by voluntarily taking possession of the plaintiff's goods, in the circumstances assumed an obligation to take due care of them and are liable to the plaintiffs for their failure to do so (as found by the trial Judge). The obligation is at any rate the same as that .Of a bailee, whether or not it can with strict accuracy be described as being the obligation of a bailee. In a case such as this, the obligation is created by the delivery and assumption of possession under a sub-bailment. In the English Courts the word `bailment' has acquired a meaning wide enough to include this case. It may not have acquired
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such a wide meaning in the Australian Courts. It is to be observed, however, that there is no express reference to bailment in count of the particulars of claim on which the plaintiff succeeded. On a reasonable construction of that count this case falls within it.' ' It follows therefore that as the claim in the instant case was not based upon a mere breach of statutory duty under section 47 of the Act and was based on the Board's liability as bailee, it was no other than by way of an action in tort. It may be that, as in the instant case, certain obligations were fastened on the Board under section 47 of the Act which were not in truth contractual inasmuch as they did not rest on agreement. Such a relationship may be called as one arising out of an implied contract. A duty to take charge of the Landed Goods was cast on the Board under section 47. By the very nature of that relationship, which admittedly did not arise out of an agreement between the parties, it was not essentially a delictal obligation. It was civil wrong for which the remedy was an action for damages and not by way of an action for breach of contract, as it is nobody's case that there was any such relationship between the parties. ' Halsbury has put it in fourth edition, volume 45, page 558 at para. 1201, while dealing with the nature of liability the position is as follows:--- "Those civil rights of action which are available for the recovery of unliquidated damages by persons who have sustained injury or loss from acts, statements or omissions of others in breach of duty or contravention of right imposed or conferred by law rather than by agreement are rights of action in tort." ' Reference may also be made to Street on Torts, Sixth Edition at page 3, that an action for breach of a statutory duty is an action in tort. As has been pointed out on page 6 of Street on Torts (7th Edition), there is no fixed catalogue of circumstances which alone and for all time mark the limit of what are torts. The Law of Torts is concerned with those situations where the conduct of one party causes or threatens harm to the interests of other parties. ' As in instant case, such goods shall be retained either in the warehouse or sheds of the Board under section 47 of the Act. Section 49 provides that whenever goods, which have been landed, have, without any default on the part of the Board, been left for five clear days on or in any wharf or shed belonging to the Board, the Board may cause such goods to be removed either to any warehouse, belonging, or, to a public warehouse; and the removal to and detention in any such warehouse shall be at the risk and expense of the owner of the said goods, the Legislature took care to lay down and define the nature and the extent of that liability which was set out in terms to be that of the bailee. ' It would thus appear that it was the case of the respondents in their pleadings that their claim was founded merely upon the breach of the statutory duty under the provisions of the Act. ' So when the action was rested on section 47, it was necessary for the trial Court to refer sections 87 and 88 of the KPT Act. The two sections read as follows:--- "87. No suit shall be commenced against any person for anything done or purporting to have been done; in pursuance of this Act, without giving to such person one month's previous notice in writing of the intended suit and of the cause thereof, nor after six months from the accrual of the cause of such suit. ' And, in the case of a suit for damages, if tender of sufficient amends shall have been made before the suit was brought, the plaintiff shall not recover more than the amount so tendered and shall pay all costs incurred by the defendant after such tender. 88. The Board shall not be responsible for any misfeasance, malfeasance or non-feasence of any officer or servant appointed under this Act." ' In Messrs Karim Commercial Co. Ltd. v. The United Oriental Steamship Co. And 2 others PLD 1970 Karachi 427, the plaintiffs had shipped 25 bales of cotton yarn from Karachi to Chittagong by the
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s.s. Iqbal Bakhsh owned by the first defendant. The ship reached Chittagong on 13-7-1962 and discharged its cargo soon thereafter but it failed to land the 25 bales shipped by the first plaintiff. The said bales were insured against loss with the second plaintiff. The plaintiffs served 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 hales. As no payment was received from the first two defendants, the plaintiffs filed suit against them for the recovery of Rs,37,593.18. The plaintiffs also impleaded the Chittagong Port Trust. The Chittagong Port Trust and the first two defendants resisted the suit. Appropriate issues were framed. The relevant issues for the purposes of this case are issues Nos. 5 and 6. Section 109 of Chittagong Port Act is para materia to section 87 of the KPT Act. Mr. Dorab Patel, J., held as follows:--- "The protection of this section both with regard to notice and limitation is available not only to action taken under the said Act but to action purported to have been taken under it. The protection is similar to that of section 80 of the Civil Procedure Code and is clearly intended to cover negligence or misfeasance in the discharge of the third defendant's duties under the said Act. But how far does the protection extend? Would it cover action taken in dclibarate disregard of the provisions of the said Act? Let me consider a couple of examples. It is the third defendant's duty under the said Act to receive cargo from steamers and deliver it to consignees. If, for instance, in receiving Cargo from a steamer it negligently drops it into the sea, or, if in distributing the cargo received by it from a steamer it negligently misdelivers it, it will be entitled to rely upon this section in any suit instituted against it. But if it receives cargo from a steamer and deliberately throws it into the sea, can such a wanton act of destruction possibly fall within the ambit of this section? As the point is not covered by authority Mr. Asif Zaidi argued on behalf of the third defendant that the section was available as a defence to the third defendant in…
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