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Petitioner: MESSRS. ABDUR RAHMAN ABDUL GANI VS Respondent: MESSRS. MACKINNON MACKENZIE & CO. OF CHITTAGONG, AND ANOTHER
P L D 1958 Dacca 460
P L D 1958 Dacca 460
Before Amin Ahmed. C.J. and Rahman, J
MESSRS. ABDUR RAHMAN ABDUL GANI‑Appellant
versus
MESSRS. MACKINNON MACKENZIE & Co. of CHITTAGONG, and another‑Respondents
Second Appeal No. 512 of 1953, decided on 24th January 1956.
(a) Bill of lading‑Nature and scope of‑Liability of common carriers after contract of affreightment ends.
The bill of lading constitutes a contract between the shipowner and the shipper or the indorsee of the bill but it purports as a rule, only to embody the terms of the contract on which the goods are carried and not of the terms of any other contract for any other purpose.
Where in a case against shipowners for compensation of damage caused to goods after the goods had been landed the shipowners contended that their liability completely ceased as soon as the goods were free of the vessels tackle as the bill of lading contained the following clause.
"In all cases and under all circumstances the company's liability shall absolutely cease when the goods are free of the vessel's tackle and thereupon the goods shall be at the risk, for all purposes and in every respect, of the shipper or consignee."
Held, that such a clause in a bill of lading would not exclude the liability arising from wilful negligence or wanton misfeasance of the shipowner.
The shipowners were exempt from the liabilities which attached to them as carriers only and after the goods were landed the shipowners were holding the goods as bailees and were liable to use reasonable care.
At Common Law, after the contract of affreightment ends, the common carriers incurs a new liability as an involuntary warehousemen or a bailee if the goods still continue to remain in his custody even by reason . of some fault of the consignee and he is bound to take such care of the goods as a prudent man would take of his own goods of the same kind, bulk or value in similar, circumstances.
Chartered Bank of India Australia and China v. The British India Steam Navigation Co., Ltd. 13 C W N 733 ; Mitchell and others v. The Lancashire and Yorkshire Railway Company 1875 L R 10 Q B 256 (260) : Chapan v. The Great Western Railway Company 1880 L R 5 Q B Divn. 278 (281 and 282) fol.
Halsbury's Laws of England, 2nd Edition, page 549 and Carver's Treatise on the law relating to the Carriage of Goods by Sea, 6th Edition page 609; ref.
(b) Carriage of Goods by Sea Act (XXYI of 1925) Art. III---?Liability of shipowners arising under the principles of English Common Law‑Article 115, Limitation Act (IX of 1908) appli?cable.
Where the liability of the ship-owner does not arise under the bill of lading but, apart from it, by implication, under the principles of the English Common Law, the special limitation of one year provided by Article III of the Rules relating to bills of lading, set out in the Schedule to the Carriage of Goods by Sea Act (XXVI of 1925) does not apply but Article 115 of the First Schedule to the Limitation Act, applies.
(c) Carriers‑By Sea‑Governed by Common Law of England. Carriers by sea are governed by the Common Law of England. Carriers by sea who offer to carry the goods of all commerce in a general ship or who run a line of ships from port to port habitually carrying all goods brought to them, are under the Common Law common carriers. and thus incur the same liability in respect of loss or damage to the goods carried by them subject to any express exceptions relieving them from such liability.
(d) Bill of Lading and Charter party agreement‑No difference between, as regards ship-owner's liability ?Ship-owner's liability at Common Law much higher than that of bailee. As regards ship-owner's liability the position is not different where, instead of a charter party agreement, there is only a bill of lading.
The liability of shipowner at Common Law is much higher than that of a bailee, for, he is in the position of an insurer of the goods but that he may by express stipulations in the contract also limit that liability.
Halsbury's Laws of England 2nd Edition, Vol. 30, page 315 & 504, ref.
Dwarkanath Raimohan Chowdhury and another v. The Rivers Steam Navigation Company, Limited 27 C L J 615 ; Irrawaddy Flotilla Company, Limited v. Bugwandass 18 I A 121 ; Kariadan Kumber v. Tne British India Steam Navigation Co. Ltd. I L R 38 Mad. 9.41 Sheik Mahammed Raiuther v. The British India Steam Navigation Co. Ltd. I L R 32 Mad, 95 and Haji Shakoor Gany Firm v. Firm of Volkart Brothers and another A I R 1931 Sind 124 ref.
Sisir Kumar Sen for Appellant.
A. Hossain with Mirza Md. Gholam Hafez for Respondent.
JUDGMENT
RAHMAN, J.‑This appeal is against the decision of the Additional District Judge, Chittagong, reversing the decision of the Subordinate Judge. Third Court, Chittagong, in Money Suit No. 21 of 1950.
2. The suit out of which this appeal arises was instituted by the appellant for the recovery of a sum of Rs. 3,680 by way of compensation for loss sustained and for certain survey and agency fees incurred by the appellant as a result of damage caused to a consignment of old newspapers imported by the appellant. The appellant's case was that 200 bales of old American newspapers purchased by him at the price of Rs. 54 per bale C. I. F. Chittagong were shipped from Hongkong per S. S. Wosang and were to be delivered at Chittagong but, in exercise of the option expressly reserved by the owners of the said ship under the terms of the bill of lading (Ext. A‑2), the said cargo was transhipped at Calcutta by respondent No. 2, the agents of the ship-owners, to S. S. Ram Raja, belonging to respondent No. 1, under another bill of lading (Ext. A‑1) issued by the said respondent No. 1 for on carriage to Chittagong. Thereafter, the appellant alleged, the said cargo was landed at the wharf of respondent No. l at Chittagong on the 18th March, 1949, and, on the 21st March, 1949, when the appellant's representative went to take delivery, he found that the cargo had been kept in an open space on the wharf without any tarpaulin covering or any other protection and had as a result thereof been damaged by rain water on the previous night. The appellant, therefore, applied for a survey of the cargo and had the same surveyed by Lloyds' agents at Chittagong on the 24th March, 1949. in the presence of the staff of respondent No. 1 at its wharf. According to the survey report, the damage was caused by rain water from the rainfall on the night of the 20th March, 1949, impregnating the folds of the papers and was estimated at 33J per cent, of the market value. Calculated on the basis of the invoice price, this amounted to Rs, 3.600 and the agency and survey fees amounted to Rs. 80. The appellant duly claimed the above amount from both the respondents but both repudiated liability. The appellant maintained that, after the landing of cargo, respondent No. 1 was, at any rate, ill the position of a bailee of the said cargo and was bound, as such, to take reasonable care of the same until it was delivered to the appellant and that respondent No. 1, having failed to take such care was liable to make good the loss resulting from such neglect of duty and misfeasance, but prayed for a decree either against the respondents jointly or against whichever of them was found to be liable.
3. Both the respondents contested the suit by filing separate written statements. Respondent No. 1, inter alia, contended that its liability was strictly limited under the Carriage of Goods by Sea Act 1925 and the terms and conditions contained in the bill of lading (Ext. A1) whereunder its liability completely ceased as soon as the goods were free of .the ship's tackle and after that the goods were for all purposes and in every respect at the risk of the consignee. This respondent further alleged that since it gave due notice on the 15th March, 1949, to respondent No. 2 at Chi6tagong that the S. S. Ram Raja was expected to arrive in Port on the 17th March, 1949, arrangements should have been made to take delivery as soon as the ship was ready to unload on the . 17th March, 1949. but as no one took delivery on that date, it discharged the cargo on the next day and thereafter its liability ceased. This respondent further maintained that it took sufficient care for the protection of the said goods whilst they remained in its custody and that, if there was any liability at all, it was of respondent No. 2 who was, as the‑local agent of the insurers of the goods, in duty bound to take delivery of the goods as soon as they left the ship's tackle.
4. Respondent No. 2, on the other hand, asserted that since it made over the goods in good condition and under a clean bill of lading (Ext. Al) to respondent No. 1, its liability, if any, ceased on the discharge of the cargo on the 18th March, 1949, and that thereafter the responsibility for the safe custody of the goods was of the said respondent .No. 1 whilst they remained in its custody.
5. Apart from the question as to whether respondent No, 1 took sufficient care or not of the good after they were discharged at Chittagong from S. S. Ram Raja and were kept on the wharf, there is no serious dispute, in this case, with regard to the other facts relating to the shipment transhipment at Calcutta, arrival of S. S. Ram Raja at Chittagong, the landing of the goods on the wharf on the 18th March, 1949, the rain on the night of the 20th March, 1949 the damage by rain water to the goods, and the extent of such damage. The main question in dispute thus was as to which, if any, of the respondents was liable, if at all, to make good the loss.
6. The trial Court held that the appellant had on its own case no cause of action against respondent No. 2, that the liability of respondent No. 1 as a carrier ceased as soon as it landed the goods in good condition on the 18th March, 1949, but that thereafter the said respondent No. 1 became merely a ware?house‑keeper and its liability was that of a bailee whilst the goods remained in its custody and that it was bound to take such care of the goods as bailees were required to take under section 151 of the Contract Act. It then went on to hold that on the evidence adduced respondent No. 1 had failed to take such reasonable care of the goods as a prudent man would have taken of his own goods of a similar kind and hence must be held to be liable to make good the said loss. It also held that the suit was governed either by Article 36 or Article 115 of the First Schedule to the Limitation Act and was, as such, not barred by limitation. In this view of the matter, the trial Court decreed the suit with costs against respondent No 1 but dismissed it as against respon?dent No. 2 without any costs.
7. The lower appellate Court, however, took the view that the case as made out in the plaint was one of a liability arising in tort against the respondents jointly and severally, qua Shipping Companies and not qua wharf owners, that the case of bailment was nowhere indicated in the plaint and that, as such, the appellant ought not be allowed to succeed on a case which it did not set up in its pleadings. So far as the case against respondents as ship owners was concerned, the lower Appellate Court came to the conclusion that they were carriers by sea whose liability was governed neither by the Contract Act nor the Carriers Act of 1865 but by the principles of English Common Law relating to common carriers and, as such, since the bills of lading in the present case specifically excluded the liability of the carriers after the goods left the ship's tackle in good condition the appellant had no case at all against the respondents, for, admittedly, the goods were not damaged until the night of the 20th March, 1949, which was long after the goods were landed in good condition. It also held that since the case was against the ship-owners, the special limitation of one year provided under the Carriage of Goods by Sea Act, 1925, applied and the suit was barred by limita?tion. On the question of negligence also, it held that the appellant had failed to discharge its onus because the loss would not have occurred if the appellants had taken delivery as soon as the goods left the ship's tackle, as it was under its contract bound to do, and accordingly dismissed the suit but awarded costs only to respondent No. 2. No costs were awarded to respondent No. 1 as the lower Appellate Court agreed with the trial Court that the story which it had set up of taking reasonable and sufficient care of the goods was not worthy of credence.
8. It is against this decision that the plaintiff has come on appeal before us and respondent No. 2 alone appears to contest the appeal.
9. The first ground urged on behalf of the appellant is that the view taken by the lower Appellate Court that no case of bailment was made out in the plaint was based upon a manifest misreading of the plaint, for in paragraph 7 thereof, the plaintiff had clearly alleged.
" That defendant No. 1 in their capacity as of the bailees were bound to take reasonable care of the plaintiff's goods till they were delivered to the plaintiff and had no reason to keep the goods in open space without any protection."
It is contended that this was a sufficiently specific pleading of a case of bailment and the Court below was wholly unjustified in its criticism of the plaintiff's case which appears to a very large extent to have also influenced its decision on the other questions in issue in the suit. It appears to us that this complaint of the appellant is more than justified, for, the paragraph quoted above raised the question with abundant clarity and it is difficult to appreciate how the Court below failed to notice it unless, of course, it did not take the trouble of reading the plaint. It is also, in our view, apparent from the judgment of the Court below that this misconception of the scope and nature of the plaintiff's case did in no small measure affect the decision of the Court on the other questions as well.
10. This brings us to the next ground urged on behalf of the appellant, namely, that having taken the view that no case of bailment had been set up in the plaint, the Court below confined itself to considering the liability of the respondents as ship-owners and totally failed to consider the question as to whether in law after the liability of the ship or shipowner as carrier ceased, any liability as bailee could, in the facts alleged in the plaint and found by the trial Court, at all arise. The learned Advocate for the appellant contends that even after the contract of carriage came to an end the common carrier became a bailee of the goods carried, if he continued to retain them in his custody, and was bound, as such, to take reasonable care of them or at least such care as a prudent man would in similar circumstances take of his own goods of the same character as provided in section 151 of the Contract Act. In support of this contention, the learned Advocate relied upon the decision of the Judicial Committee in the case of Dwarkanath Raimohan Chowdhury and another v. The Rivers Steam Navigation Company, Limited (27 C L J 615 AIR1917(PC)173).
11. In that case, jute was consigned in a flat from a place called Bera to Ruthtolla Ghat at Calcutta but, when the flat reached the discharging Ghat, the consignees were not ready to take delivery, Subsequently the flat went further down the river and ultimately moored near Nimtolla Ghat by the side of another flat. After she had been in this position for 2 or 3 days, a fire broke out in the adjoining flat and spread to the flat in question and destroyed a greater part of the jute consigned. In these circumstances, their Lordships observed that
" As the contract of carriage had been terminated by the arrival of the flat at the wharf at which delivery should have been taken, and by the neglect of the plaintiffs to take delivery in due course, the liability of the defendant Company under the bills of lading had ceased, and its responsibility thereafter was that of an ordinary bailee. The limits of this responsibility are defined in the following sections of the Indian Contract Act of 1872 ",
and then quoted sections 151 and 152 of the said Act. But for the fact that in that case the carriers were inland navigation carriers and not carriers by sea, as in the present case, that decision would have been an express authority in favour of the appellant. In view, however, of the dicta of their Lordships of the Judicial Committee themselves in the earlier case of Irrawady v Flotilla Company Limited v. Bugwandass (181 A121) that the
Contract Act, 1872, "was not intended to deal, with the law relat?ing to common carriers, and notwithstanding the generality of some expressions in the Chapter on bailments, they, think that common carriers are not within the Act" ; it is not open to us to say that the provisions of the said sections apply also to such carrier, particularly since the question whether the said sections 151 and 152 of the Contract Act applied or not to carriers by sea was the main question for consideration before their Lordships. ,
12. It is, therefore, now necessary for us to consider as to whether the position of such carriers is materially different under the Common Law of England by which they are undoubtedly governed. Carriers by sea who offer to carry the goods of all commerce in a general ship or who run a line of ships from port to port habitually carrying all goods brought to them, are under the Common Law common carriers and thus incur the same liability in respect of loss or damage to the goods carried by them subject to any express exceptions relieving them from such liability. What that liability extends, to is stated in Halsbury's Laws of England, 2nd Edition, Vol. 30, page 315, thus :‑
" Under a contract of charter party (not by way of demise) containing no stipulation relieving the ship owner from liablility for loss of or damage to the cargo, the ship owner would certainly be liable to the charterer, for any loss or damage due to the negligence of himself or his agents. The weight of authority seems to be in favour of the view that under such a charter party his responsibility would be greater than this and that he would be liable not merely as a bailee for negligence but as an insurer for all logs or damage (whether or not it was due to his negligence of that of his agents) which occurred while the goods were in his custody as carrier, and which was not due to the act of God or the King's enemies or to an inherent defect in the goods themselves or to the default of their owner."
The position is not different where, instead of a charter party) agreement, there is only a bill of lading, as will appear from the following quotation from the same volume of Halsbury's Law or England at page 504 :‑
" If goods are shipped in a general ship without any express contract being made or under a contract to which the Carriage of Goods by Sea Act, 1924, does not apply, and which does not contain any stipulations relieving the ship owner he under?takes to carry at his own absolute risk, the act of God or of the King's enemies or the inherent defect of the goods themselves or the shipper's default alone excepted. He thus incurs the same liability as a common carrier in respect of loss or damage to the goods."
13. It is clear from the above that the liability of a ship?owner at Common Law is much higher than that of a bailee, for, he is in the position of an insurer of the goods but that he may by express stipulations in the contract also limit that liability. Indeed it is not uncommon for ship-owners to do so and charter parties or bills of lading usually contain many express exemptions similar to those contained in the bill of lading issued by respondent No. 1. The clause in his bill of lading, upon which the Court below has placed great reliance in coming .to the conclusion that all liability of the said respondent was excluded, is in these terms :‑
" In all cases and under all circumstances the Company's liability shall absolutely cease when the goods are free of the vessel's tackle and thereupon the goods shall be at the risk for all purposes and in every‑respect of the shipper or consignee."
14. These words are no doubt of very wide and genera import and the question naturally arises as to whether they operate to exclude any and every kind of liability howsoever arising or whether they merely operate to exclude the liability which the shipowner undertakes under the bill of lading, namely, that, of a carrier at Common Law. The hill of lading constitutes a contract between shipowner and the shipper or the endorsee of the bill but it purports, as a rule, only to embody the terms of the contract on which the goods are carried and not of the t terms of any other contract for any other purpose. To hold otherwise would be manifestly unjust and unreasonable, for, then one would have to go to the extent of holding that the clause quoted above would effectively exclude even the liability arising, say, from the wilful negligence or wanton misfeasance of the shipowner. This surely could not have been the intention behind the said clause and, in our opinion, the Court below was clearly wrong in giving such a wide meaning to the same. The authori?ties, except one, relied upon by the learned Additional District Judge also do not support such a wide construction.
15. In the case of the Chartered Bank of India, Austarlia and China v. The British India Steam Navigation Co. Ltd. (13 C W N 733), the facts were that the goods were delivered over side into the lighters of a landing agent who stored them in the jetty shed from where the goods were fraudulently delivered by a servant of the landing agent to a person who was not the endorsee of the bill of lading and who did not even produce the same. The indorsee then sued the shipowners for damages for non‑delivery of the goods and the shipowners claimed to be saved from liability under a clause identical with the clause quoted earlier. The Supreme Court of Penang held that the said clause exempted the shipowners from liability and the Privy Council upheld the said decision; but, upon a careful reading of the reports, it appears that their Lordships of the Judicial Committee merely agreed with the view taken by the learned Chief Justice of the Supreme Court which, as stated at Page 736 of the reports, was that the ship?owners were exempt from the liabilities which attached to them as carriers only; for, the learned Chief Justice appears to have taken the view that after delivery to the landing agent the ship?owners were holding the goods only as bailees and were liable only to use reasonable care. Since, in the facts of that case, there was no want of reasonable care on the part of the shipowners, they could not be held liable.
16. In the case of Kariadan Kumber v. The British India Steam Navigation Co. Ltd. (I L R 38 Mad. 941: A I R 1915 Mad. 833 ), cited by the lower Appellate Court, Sadasiva Ayyar and Tyabji, JJ., did, however; take the extreme wide view that such a clause was operative even to absolve the shipowner from the negligence of its servants. This view was directly opposed to an earlier Full Bench decision of the same High Court in the case of Sheik Mahammed Ravuther v. The British India Steam Navigation Co. Ltd. (I L R 32 Mad. 95) and purported to be based upon the decision of the Privy Council in the case of the Chartered Bank of India, Australia and China v. The British India Steam Navigation Co. Ltd., referred to above. With great respect to the learned Judges of the Madras High Court, we are unable, for the reasons already indicated, to agree that their Lordships of the Judicial Committee intended to give such a wide import to the said clause.
17. Again the case of Irrawaddy Flotilla Co. Ltd. v. Bugwandass has no bearing on the facts of the present case, for, there the goods were destroyed by fire on board the vessel and the only question was whether the shipowners could avoid their higher liability at Common Law by invoking sections 151 and 152 of the Contract Act.
18. The decision in the case of Haji Shakoor Gany Firm v. Firm of Volkart Brothers and another (A I R 1931 Sind 124) does not also appear to us to have any bearing on the question before us, for, it does not appear from the reports that the construction to be put on any such or similar clause fell to be considered in that case.
19. On the other hand, there appears to us to be abundant authority in support of the proposition of law convessed by the learned Advocate for the appellant. In Halsbury's Laws of England, 2nd Edition, page 549, the law is thus enunciated
" Apart from contract or special custom, the shipowner's liability does not at Common Law cease on the landing of the cargo ; though he is no longer liable as a carrier, he incurs a new liability as a warehouseman,"…
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