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Petitioner: JALALUDDIN AHMED VS Respondent: AMERICAN INSURANCE COMPANY
P L D 1967 Dacca 792
P L D 1967 Dacca 792
Before M. R. Khan and Maksumul Hakim, JJ
JALALUDDIN AHMED‑Appellant
Versus
AMERICAN INSURANCE COMPANY Respondent
Appeal from Appellate Decree No. 1292 of 1962, decided on 3rd February 1967.
Carriage of goods by sea‑Contract of affreightment‑Parties to contract could extend time for delivery of goods by agreement only‑Insurance of goods imported‑Policy assuring insurance Company's liability for any loss or damage to goods subject to "bailee clause" incorporated in policy whereby owner of goods was required to lay claim upon carrier for loss or damage within period of limitation‑Insurance Company, held, not liable to compensate if owner of goods had failed to take appropriate steps against carrier within period of limitation (within one year from departure of ship from port).
Abdul Jalil Choudhury v. The Muhammadi Steamship Company P L D 1961 S C 340 ref.
Dr. Kamal Hossain for Appellant.
Dr. F. K. M. Munim for Respondent.
JUDGMENT
M. R. KHAN, J.‑This second appeal by the plaintiff is from the decision of the Additional District Judge, Chittagong in Money Appeal No. 73 of 1961 affirming that of the Subordinate Judge, 3rd Court, Chittagong, in Money Suit No. 5 of 1960.
The plaintiff is the sole proprietor of Messrs Jamal Ahmed & Co., and carries on business at Chittagong in the firm name. He imported 29 packages of M, S. Angles from Brussels, The goods were shipped from the port of Antewarp per s, s 'Kennedy' of the Clan Line Steamers Ltd. The goods were invested with the American Insurance Company which was the sole defendant in the suit. Messrs James Finley & Co., were the agents of the carrier, and Messrs Bird & Co. (Pakistan) Ltd., were the clearing agents of the plaintiff. The ship arrived at the Chittagong port on 28‑4‑1957 and, after discharging the cargo, left the port on 11‑5‑197. After taking delivery of the said goods by the plaintiff's agents, it was found that four packages of M. S. Angles out of 29 packages were short landed. Thereupon, the plaintiff made a claim upon the American Insurance Company (hereinafter called the Insurance Company) for the price of four packages of M. S. Angles which were short landed. But the Insurance Company denied the liability. Then on 30‑1‑1960, the plaintiff brought the suit for recovery of Rs. 4,301‑8‑0 as the value of the goods short landed.
The defendant Insurance Company contested the suit contending that the plaintiff did not exercise due diligence in taking steps against the carrier and the bailee to recover the price of the lost bundles and that the plaintiff's right to recover the price of the same from the carrier having become already barred by limitation, the Insurance Company had no liability under the policy of insurance. The Insurance Company further pleaded that the suit was not maintainable under section 69 of the Partnership Act.
The trial Court held that the plaintiff made a claim upon the Insurance Company at a time when any suit by
him against the carrier would have been barred by limitation and, for that reason the Insurance Company, under the contract of insurance, was not held liable to compensate the plaintiff. As regards the maintain ability of the suit, the trial Court held that since the firm Jamal Ahmed & Co. is not a partnership section 69 of the Partnership Act was not a bar to the suit. Although the Insurance Company denied to compensate the loss, it agreed to pay the difference between the C. I. F. value and insured value of the goods which came to Rs. 260‑12‑0. Accordingly, the trial Court decreed the suit in 'part of Rs. 260‑12‑0 with proportionate costs.
The plaintiff preferred an appeal. The learned Additional District Judge, Chittagong, agreeing with the view taken by the trial Court, dismissed the appeal.
The policy of insurance issued by the defendant covering the plaintiff's goods shipped as per s s `Kennedy' is Exh. 11. This policy assured that the Insurance Company would be liable for the loss of, or damage to, the plaintiff's goods or any part thereof. But this assurance was subject to certain warranties, one of them being the `bailee clause' incorporated in the policy of insurance. The relevant part of the `bailee clause' is as follows:
"Notwithstanding the warranties contained in this clause it is agreed that in the event of loss or damage to the goods by a peril or perils insured against by this policy for which the carrier or bailee denies or fail to meet his liability the under writers shall advance to the assured as a loan without interest a sum equal to the amount they would have been liable to pay under this policy but for the above warranties, there repayment, thereof to be conditional upon and only to the extent of any recovery which the assured may receive from the carrier or bailee.
It is further agreed that the assured shall with all diligence bring and prosecute under the direct control of the under writers such suit or other proceedings to enforce the liability of the carrier or bailee as the. underwriters shall require and the underwriters agree to pay such proportion of the cysts and expenses of any such suit or proceedings as attached to the amount advanced under the policy."
The Insurance policy further provides.
"It is a condition of this insurance that the assured shall act with reasonable despatch in all circumstances within their control."
According to the 'bailee clause', the plaintiff was required to lay a claim upon the carrier for loss of, or damage to, goods within the period of limitation. On the carrier's denial or failure to meet the claim, the Insurance Company was under an obligation to advance to the assured as a loan a sum equal to the amount the Insurance Company would have been liable to pay under the policy. Further, the Insurance Company, after advancing such loan, could require the plaintiff to bring a suit against the carrier or the bailee for recovery of compensation for the goods lost or damaged. The period of limitation for recovery of compensation from the carrier for loss of, or damage to goods under the contract of affreightment is as under:
"In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless the suit is brought within one year after delivery of the goods of the date when the goods should have been delivered."
After discharging the cargo, the ship left Chittagong port on 11‑5‑57. The plaintiff did not lay any claim upon the carrier within one year from the said date. It was only on 19‑8‑58, vide Exhs. 1(S) and A(5) that the plaintiff for the first time laid claim upon Messrs James Finley & Co., Ltd., agents of the carrier, which was far beyond the period of one year from the date of departure of the ship. In reply to this claim, the carrier's agents denied the liability on 4‑9‑1958 on the ground that the claim had already become time‑barred, vide Exh. 1(1') which is the same as Exh. A(4). It thus appears that the plaintiff or his agents, namely, Bird & Co. (Pakistan) Ltd., did not act with reasonable despatch in accordance with the condition contained in the policy of insurance.
The first letter addressed by the plaintiff to the Insurance Company is Exh. 1(U), dated 7‑4‑58. It was urged before the lower appellate Court and also in this Court that the letter Exh. I(U) which was sent to the Insurance Company by toe plaintiff within a period of the year from the date of departure f the ship was a claim on the Insurance Company and as such the Insurance Company should have advanced a loan and taken steps for bringing a suit against the carrier for recovery of compensation for the lost bundles of M. S. Angles. This contention was rejected by the lower appellate Court. The plaintiff's letter to the Insurance Company Exh. 1 (U) read thus:
"Dear Sirs,
Enclosed please find letters which we have received from Messrs Bird & Co., (Pak.) Ltd. which are self- explanatory.
The total of these losses add up to good amount. We shall refer to this topic again and in the meantime we would request you to make a note of the situation."
In this letter, the plaintiff requested the Insurance Company only to take note of the situation, but did not, in fact, lay any claim upon it. In continuation of the said letter of 7‑4‑1958, the plaintiff wrote another letter to the Insurance Company on 10‑6‑1958 Exh. 1(W) which is as follows:
"Dear Sir,
Please refer to your letter No. JA/I. D. S/6280, dated 7‑4‑58.
Our clearing Agents Messrs Bird & Co. have not been able to deliver us above goods, in spite of our frequent reminders. We would request you to kindly pay our claim (bill enclosed in triplicate) for non‑delivery of entire four bundles of M. S. Angles and two lifts of B. P. sheets."
It is thus clear that the claim upon the Insurance Company was made for the first time on 10‑6‑1958 and not earlier. By that date, the period of one year bad already expired. After laying a claim upon the Insurance Company on 10‑6‑1958 the plaintiff addressed a letter to his own clearing agents on 15‑7‑1958, a copy of which was Endorsed by him to the insurance Company which was marked Exh. A(9). The plaintiff's attitude in regard to the lost four bundles as expressed in the said letter Exh. A(9) is significant. The relevant part of that letter runs thus:
"The undersigned has been reminding you about these materials and requesting you for immediate action every time be has visited you, which is no less than 30 times during last one year. In spite of all these we were informed on telephone sometime back (after expiry of one year) to institute a case against the parties. Obviously it was already time‑barred and there was no sense in instituting cases. There is no escape from the conclusion that it is a case of neglect on your part "
After the plaintiff bad already taken such attitude in respect of the maintainability of his claim, he thought of sending the short landing certificate Exh. 9 to the Insurance Company and he did actually send it to that company only on I1‑8‑1958, vide Exh. A (7). By then, further time elapsed after the expiry of one Sear from the date of departure of the ship. After some correspondence between the plaintiff and the Insurance Company a reply came from the Insurance Company on 28‑3‑1958 denying its liability for the time‑barred claim. The denial was made by the Insurance Company in its letter to the plaintiff of the said date marked Exh. 1 (i) which is in the following terms;
"Please refer to your claim preferred under the above policy. As our rights of recovery from the steamer Agents have not been protected we regret v6 e are unable to settle your claim in full. You are therefore requested to submit a revised claim bill for the difference between the C. I. F. and Insured value."
It is thus abundantly clear from the foregoing discussion that whatever claim was made either upon the carrier or the Insurance Company was made after the expiry of the period of one year from the date of departure of the ship and that the plaintiff himself was clearly of the view that the claim had become time barred.
Mr. Kamal Hossain, learned counsel for the plaintiff‑appel lant submits that although the claim was made beyond the period of one year, a suit by the plaintiff against the carrier could not have been barred by limitation because of the endorsement made by the carrier's agents on the bill of lading, it appears that Messrs James Finley & Co., Ltd., as agents of the carrier made an endorsement on 20‑6‑1958 on the body of the short landing certificate Exh. 9 that "4 bundles short landed by mark." Apparently, this endorsement was made as a counter blast against the grant of short landing certificate. But it does not, in our opinion, mean an assurance by the carrier or its agents to the plaintiff that the goods short landed would be delivered to the plaintiff in future. The learned counsel then refers to the Insurance Company's letter, dated 18‑8‑1958 to the plaintiff Exh. A(6). That letter was sent in reply to the plaintiff's letter, dated I1‑8‑1958 Exh. A (7) together with which the short landing certificate was sent to the insurance Company. In its reply Exh. A(6), the Insurance Company simply stated that when the four bundles, according to the endorsement on the short landing certificate "Short landed by mark", it was up to the plaintiff to take delivery thereof from the carrier's agents. The carrier or its agents were in no way concerned with the letter Exh. A(6) which was one by the Insurance Company to the plaintiff. Any thing said in that letter can never be taken as an assurance from the carrier or its agents that the lost bundles would be delivered to the plaintiff. In spite of the period of limitation under the contract of affreightment, the parties to the contract of affreight ment could extend the time of delivery of goods by agreement as has been held in the case of Abdul Jalil Choudhury v. The Muhammadi Steampship Company (PLD1961SC340). The facts revealed in this case do not show if the carrier or its agents ever extended any hope to the plaintiff or his agents that the lost bundles would be delivered to them in future. In the absence of any such assurance on the part of the carrier or its agents, the suit by the plaintiff against the carrier for compensation for loss or goods if any in the circumstances of the case, would have been barred by the time the plaintiff laid claim upon the Insurance Company. The plaintiff did not act diligently and with reasonable despatch as was required in accordance with the condition of the contract of insurance, The plaintiff having failed to take appropriate steps well in time as required under the `bailee clause' in the insurance policy cannot enforce his claim against the Insurance Company whose right to recover any compensation from the carrier by a suit in the plaintiff's name became time‑barred and was not, therefore, protected. Hence, the view taken by the Courts below, in the facts and circumstances of the case is correct.
In the result, we dismiss the appeal but leave the parties to bear their own costs.
MAKSUM‑UL‑HAKIM, J.‑I agree.
K. B. A.
Appeal dismissed.