Madras High Court
Container Corporation Of India Ltd vs Priya Dyes & Chemicals on 23 July, 2012
Equivalent citations: AIR 2013 MADRAS 85, (2012) 6 MAD LJ 75 (2012) 4 MAD LW 163, (2012) 4 MAD LW 163
Bench: C.Nagappan, R.Karuppiah
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23-7-2012 CORAM THE HONOURABLE MR.JUSTICE C.NAGAPPAN AND THE HONOURABLE MR.JUSTICE R.KARUPPIAH APPEAL SUIT Nos.948 of 2005 and 104 of 2012 and M.P.No.1 of 2012 in A.S.No.104 of 2012 Container Corporation of India Ltd., by its General Manager Container Freight Station at Ennore High Road Sathankadu Village Thiruvottiyur Chennai 19. .. Appellant in AS 948/2005 and 6th Respondent in AS 104/2012 vs 1.Priya Dyes & Chemicals reptd. By its Authorised Signatory having its Principal Office at No.C-23/TTC Industrial Estate Opp. Mico Pawne Village, Thane, Belapur Road, Turbhe New Bombay and having its Branch Office at 5J, Century Plaza 560-562, Mount Road Teynampet, Chennai 18. 2.M/s.New India Assurance Company Limited D.O.112000, at Asian Building 3rd Floor, R.Kamani Road Ballard Estate Mumbai 400 001 (D4 was transposed as second plaintiff as per order made in I.A.No.560/98 on 25.7.02 by the trial Court and amendment carried out as per order dated 5.12.02 made in I.A.No.17937/02) 3.Maersk Lines rep. By their agents Maersk India Ltd., having its office at "Twins Chambers" 1st Floor, 824/6/4, Poonamallee High Road Chennai 10. 4.Maersk India Ltd., by its Regional Documentation Manager having its registered Office at No.62/63, Free Press House Free Press Journal Marg, Nariman Point Mumbai 400 021 and having Office at Twins Chambers I Floor 824/6/3 Poonamalle High Road Chennai 10. 5.M/s.Teac Corporation having its office at 3-7-3, Nackacho Mushashino Tokyo, 180, Japan. .. Respondents 1 to 5 in both appeals 6.Madras Port Trust represented by its Chairman having their office at Rajaji Salai, Chennai 600 001. .. Appellant in AS 104/2012 and 6th respondent in AS 948/2005 Appeal suits preferred under Section 96 read with Order 41 Rule 1 of Code of Civil Procedure against the judgment and decree dated 11.1.2005 made in O.S.No.836 of 1998 on the file of the Additional District and Sessions Judge, Fast Track Court No.IV, Chennai. For Appellant in AS 948/2005 and 6th Respondent in AS 104/2012 : Mr.B.T.Seshadri For Appellant in AS 104/2012 and 6th Respondent in AS 948/2005 : Mr.J.Sathya Narayana Prasad For other Respondents in both appeals : M/s.Elveera Ravindran for RR1 & 2 RR3 & 4 given up R5 set ex-parte in trial Court COMMON JUDGMENT
(Judgment of the Court was delivered by C.NAGAPPAN, J.) The appeal in A.S.No.948/2005 is directed against the judgment and decree dated 11.1.2005, passed by the Additional District and Sessions Judge, Fast Track Court No.IV, Chennai, in O.S.No.836 of 1998 on his file. The sixth defendant is the appellant.
2.The appeal in A.S.No.104/2012 is preferred by the fourth defendant in the said case against the very same judgment and decree.
3.Since both the appeals arose against the same judgment and decree, they are heard together and a common judgment is rendered.
4.The first respondent herein filed the suit seeking for a judgment and decree directing the defendants to pay a sum of Rs.7,21,607/- together with future interest at 18% per annum thereon from the date of plaint till realisation and for costs.
5.The case of the first respondent/first plaintiff is briefly stated thus:
On or about 10.1.1997, the third defendant/consignor/ shipper entrusted to the first defendant a consignment of 1 x 20 container No.XTRO containing 250 cartons (5000 pieces Floppy Disk Drive 1.44 MB) weighing 2350.000 Kgs as per purchase order No.PDB.3160/96 dated 19.12.1996, of the first plaintiff to be shipped from Singapore to Madras and the first defendant accepted the said cargo for transportation by sea and issued a bill of lading bearing No.SINN 37450 dated 10.1.1997, to carry it in ship TIGER BRIDGE.
6.It is further stated by the first plaintiff that the cargo appears to have arrived at Madras Port on or about 17.1.1997 and moved to Container Corporation of India Ltd., Tiruvottiyur, (hereinafter referred to as CONCOR), on 28.1.1997, and the original seal of the container was said to be intact when the container had reached the Container Freight Station of CONCOR, the fifth defendant, which is about 5 kilometers away from Chennai Port Trust. According to the first plaintiff, the container was inspected by the Customs on 11.2.1997, after breaking open the original seal and a random checking was done to four packages out of 250 and after the Customs inspection, a fresh seal by CONCOR, the fifth defendant, was put on the same day.
7.It is also stated by the first plaintiff that the Clearing Agent, namely M/s.Sabari Enterprises, of the first plaintiff requested WETCALFK & HODGKINSON (PVT) Ltd., who are the authorised Surveyors of CONCOR on 12.2.1997, to carry out pre despatch survey of the suit consignment of Floppy Disk Drive packed in cardboard carton, at the CONCOR, Chennai and the above named Surveyor along with the representative of the said Clearing Agent inspected the container externally and observed to be sound and in the presence of the said Surveyor, the seal of the container was broken and the doors were opened and the contents were destuffed from the container and they found that there was a total shortage of 50 cartons.
8.It is further stated in the amended plaint, that at the request of the second plaintiff, M/s.Surveyors & General Surveillance also participated in the said survey on 12.2.1997, at CONCOR and they found 200 cartons were in the container occupying about 45 to 50% of the space in the container, and there was a shortage of 50 cartons containing 1000 pieces of Floppy Disk Drive and the Surveyors submitted their report dated 18.2.1997. According to the first plaintiff, the value of the short delivered Floppy Disk Drive 1000 pieces came to Rs.7,20,432.50 and adding survey fee, the total comes to Rs.7,21,607/- and the shortages and the resulting loss to the plaintiffs were directly due to the gross negligence and/or misconduct of the defendants, their agents, their employees and servants and therefore, they are liable to compensate the first plaintiff for the said loss.
9.It is also stated by the first plaintiff that they preferred a claim on all the defendants by its letters dated 11.2.1997, 5.3.1997 and 6.3.1997, to settle the claim. According to the first plaintiff, the suit consignment was insured with the second plaintiff for a sum of Rs.36,02,363/- on 24.4.1997, and the first plaintiff made a claim by enclosing the documents and initially, the second plaintiff refused to admit the claim of the first plaintiff on the ground that there was no Shortage Certificate issued by the concerned authorities. According to the first plaintiff, the defendants are jointly and severally liable for a sum of Rs.7,21,607/- to the first plaintiff and hence the suit.
10.During the pendency of the suit, the original fourth defendant, namely Insurance Company, honoured the claim of the first plaintiff and it was transposed as second plaintiff as per order of the trial Court dated 25.7.2002, made in I.A.No.560/98, and impleaded as such and consequently, the original defendants 5 and 6 became defendants 4 and 5.
11.The defendants 1 and 2 are carriers and they have stated in their written statement, that notice as contemplated under Article III Clause 6 of the Indian Carriage of Goods by Sea Act, 1925, which Clause is contained in 7(4) of the Bill of Lading itself, was admittedly not served on them within 3 day period contemplated therein and as such, the presumption is that the goods described in the bill of lading, were delivered. Without prejudice to the above contention, they have further stated in the written statement, that the bill of lading issued was a "CY/CY Shippers Load, Stow and Count" and "said to contain" bill of lading and as such, defendants 1 and 2 cannot be held responsible either directly or indirectly for any alleged shortage/damage to the contents of the container and this was brought to the notice of the first plaintiff as early as 25.2.1997 itself.
12.It is further stated in their written statement, that the container reached the Container Freight Station of the original sixth defendant on 28.1.1997, with the original seal intact and it was inspected by the Customs on the same day and a fresh seal was affixed and the alleged survey was conducted in the presence of defendants 1 and 2 and their representatives and as such, the survey report would in no way bind them and they do not admit the alleged shortage nor the value of goods allegedly short delivered and they are not liable for the suit claim.
13.The original fifth defendant, namely Madras Port Trust, in its written statement, has stated that one FCL container containing 250 cartons landed per vessel T.Bridge on 17.1.1997, and it consists of Floppy Disk Drive and the party filed the import application dated 22.1.1997, and effected clearance of the manifested container on 27.1.1997. It is further stated in the written statement, that the said container being FCL, it is evident that the Port Trust has not taken charge of 'said to contain' cargo in the FCL container, since it is only meant to 'door to door' delivery and in the present case, the container has been cleared out of the Port premises without destuffing, with seal intact to the Container Freight Station, CONCOR, and the Customs inspection itself has been done at CONCOR premises on 11.2.1997, after breaking open the original seal and the CONCOR CFS is a private one and does not come under the ambit and control of the Port Trust and therefore, the Port Trust cannot be held liable for any alleged loss of the cargo and any survey without the representative of the Port Trust, cannot bind the Port Trust and it did not also issue the Shortage Certificate of any sort.
14.The original sixth defendant, namely CONCOR, in its written statement, has stated that the plaintiff (first plaintiff) had imported certain materials in a container and after its landing, the steamer agent of the plaintiff (first plaintiff) moved the container with the Customs seal to the yard of CONCOR and at the time of despatch from the Port, the number of one time lock is recorded by the Preventive Officers of the Customs along with the time of despatch in the document called PNR application, and the said container arrived in the premises of CONCOR within three hours from the time of despatch from the Port Trust with the same one time lock intact and the same was recorded by the Surveyors of the original sixth defendant and also the Preventive Officers of the Customs.
15.It is further stated by the original sixth defendant that the plaintiff's (first plaintiff) representative, namely Customs House Agent/Clearing and Forwarding Agent, approached it on 11.2.1997, for Customs examination and accordingly, the container was handed over to the Customs House Agent with the Customs seal intact on 11.2.1997, and the container was opened in the premises of CONCOR on 11.2.1997, in the presence of the plaintiff's (first plaintiff) Clearing and Forwarding Agent and Customs Authorities and Surveyor and after the inspection was over, the Clearing Agent sealed the container with his own hand, with the one time lock of the original sixth defendant on the very same day and after the procedure was over, the Clearing Agent requested the sixth defendant for the delivery of the cargo on 12.2.1997.
16.It is also stated in the written statement, that on 12.2.1997, the representative of the plaintiff (first plaintiff) took charge of the container when the seal was intact and the contents were removed from the container and thus it would clearly show that there is no default whatsoever on the part of CONCOR. According to the sixth defendant, if there was any tampering with the seal, which was originally put on 11.2.1997, the Clearing Agent of the plaintiff would not have broken open the seal and removed the contents from the container and since the seal was intact in the present case, the contents of the container were destuffed and delivery was taken by the plaintiff (first plaintiff).
17.It is further stated by the sixth defendant that on the basis of the representation made by the plaintiff's (first plaintiff) agent that the description of the goods mentioned in the bill of lading, is said to contain in the container, the sixth defendant did not open the seal for the purpose of verifying the contents of the container and hence no liability could be foisted on the sixth defendant. According to the sixth defendant, its responsibility starts from the time when the container said to contain the described goods, is received by the sixth defendant and ends the moment the container is handed over to the plaintiff's (first plaintiff) agent with the seal intact and hence it cannot be held responsible for any alleged loss.
18.It is also stated by the sixth defendant that it is not aware that the third defendant entrusted to the first defendant a consignment of 1x20 container containing 250 cartons (5000 pieces of Floppy Disk Drive) as per purchase order to be shipped from Singapore to Madras and the plaintiff (first plaintiff) has to substantiate the same. It is further stated in its written statement, that the Customs Authority on 11.2.1997, after breaking open the original seal, conducted a random check to four packages and the entire 250 packages have not been inspected by the Customs Authorities and therefore, the sixth defendant is not responsible for any shortage whatsoever.
19.The original sixth defendant became fifth defendant after the amendment of the plaint and filed additional written statement, in which it has stated that no details have been furnished as to how the second plaintiff could claim any relief from the sixth defendant and hence the relief sought for, is unsustainable in law.
20.The trial Court framed two issues and two more additional issues and P.W.1 S.K.Egnya Varahan was examined and Exs.A1 to A46 came to be marked on the side of the plaintiffs. The fifth defendant, CONCOR, examined D.W.1 V.Balaji and the fourth defendant, Madras Port Trust, examined D.W.2 Thuraisamy on their side and Ex.B1 authorisation letter, was marked through D.W.1. The trial Court, on a consideration of oral and documentary evidence, held that the plaintiffs have substantiated the case pleaded by them, and all the defendants are liable for the suit claim and consequently, decreed the suit as prayed for with costs. Challenging the said judgment and decree, the fifth defendant, CONCOR, filed the appeal in A.S.No.948/2005 and the fourth defendant, Madras Port Trust, preferred the appeal in A.S.No.104/2012. For the sake of convenience, in this judgment, the parties are referred to as arrayed in the Original Suit after amendment.
21.The points that arose for consideration in these appeals, are:
(1) Whether the endorsement "said to contain" found in Ex.A4 bill of lading, as declared by the shipper/consignor, namely the third defendant, means that there was no admission or acceptance of the total number of cartons by the carriers, namely defendants 1 and 2,?
(2) Whether the fourth defendant, Madras Port Trust, is answerable for the suit claim?
(3) Whether the fifth defendant, CONCOR, is liable to the suit claim?
22.Learned Counsel appearing for the appellant in A.S.No.948/2005, namely fifth defendant CONCOR, contends that the endorsement "SHIPPERS LOAD, STOW AND COUNT FREIGHT PREPAID CY/CY X20' CNTR SAID TO CONTAIN 250 CARTONS 5000 PCS FLOPPY DISK DRIVE" found in Ex.A4 bill of lading, is to protect the carrier from any claims that the shipper might levy on them at a later stage and the very endorsement "SAID TO CONTAIN" could only mean that there was no admission or acceptance of the total number of cartons as declared by the consignor, and the carrier could not have been held responsible for the shortage when there is no acceptable proof that 250 cartons were put on board in the container by the consignor at the time of shipment.
23.It is his further contention that the endorsement was indicative of disclaimer of responsibility and liability with regard to the total number of cartons and the Shipping Company did not want to acknowledge the correctness of the total number of cartons as shown in the bill of lading, and the carriers have contracted out of their liability and the plaintiffs having not discharged their burden of proof that 250 cartons were loaded in the container, neither the carriers, namely defendants 1 and 2, nor the bailees, namely defendants 4 and 5, can be held liable for the suit claim.
24.In support of the above contention, learned Counsel relied on the following decisions of this Court:
(i) M/S.THAKUR SHIPPING CO. LTD., BOMBAY AND ANOTHER V. FOOD CORPORATION OF INDIA (AIR 1983 MADRAS 105) and
(ii) NIPPON YEESEN KAISHA LTD. V. UNION OF INDIA AND ANOTHER (AIR 1987 MADRAS 12).
25.Learned Counsel appearing for the fifth defendant, CONCOR, further contends that CONCOR is only a Ware House Keeper and there is no specific allegation in the plaint, that the alleged loss of goods had occurred while the container was in the custody of CONCOR and on the other hand, the first plaintiff itself has admitted that the original seal put on the container at the point of despatch, was found intact when the container arrived at the premises of CONCOR and thereafter, it was broken open by the Customs in the presence of the Clearing Agent of the first plaintiff and it was resealed again in the presence of Customs and the said agent, and therefore, the fifth defendant is not responsible for the alleged loss and the finding of the trial Court is perverse and liable to be set aside.
26.Learned Counsel appearing for the appellant in A.S.No.104/2012, namely fourth defendant Madras Port Trust, submits that the subject container was a Full Container Load and as per the bill of lading, it was "said to contain" cargo in it and it was meant to "door to door" delivery and the original seal of the container was intact when it was sent to the Container Free Station, CONCOR, namely the fifth defendant, and the CONCOR does not come under the ambit and control of Madras Port Trust and therefore, the fourth defendant cannot be held liable for any alleged loss of the cargo. In other aspects, he adopted the contentions of the learned Counsel appearing for the fifth defendant.
27.Per contra, learned Counsel appearing for the respondents 1 and 2 in both the appeals, namely plaintiffs, submits that the Customs Authorities broke open the lock in the premises of CONCOR and examined the cartons, assessed proper duty and permitted clearance of the said goods and at that time, they have not reported shortage of cartons and only thereafter, when the contents were destuffed, there was a shortage of 50 cartons and it has to be presumed that shortage has occurred only when the goods were in the premises of CONCOR and in any event, the carriers, namely defendants 1 and 2, and the bailees, namely the defendants 4 and 5, are liable for the suit claim. In support of his submission, learned Counsel relied on the decision of the Supreme Court in ESCORTS LIMITED V. UNION OF INDIA AND OTHERS (1994 SUPP (3) SCC 86).
28.We considered the rival contentions and perused the material records.
29.POINT Nos.1 to 3: The first plaintiff imported Floppy Disk Drive in a container sent by the third defendant/consignor from Singapore to Madras and the said cargo was transported by sea in the ship TIGER BRIDGE owned by the first defendant, and it arrived at Madras Port on 17.1.1997. Ex.A2 is the xerox copy of the invoice dated 27.12.1996, issued by the third defendant/consignor, in which a quantity of 5000 pieces of Floppy Disk Drive were sold to the first plaintiff to the value of US$ 92,250. Ex.A4 is the xerox copy of the bill of lading dated 10.1.1997, issued by the first defendant Shipping Company and in the column "description of goods", the following endorsement is found:
"SHIPPERS LOAD, STOW AND COUNT FREIGHT PREPAID CY/CY X20' CNTR SAID TO CONTAIN 250 CARTONS 5000 PCS FLOPPY DISK DRIVE"
Ex.A5 is the xerox copy of the Certificate of Origin, issued by Republic of Singapore, containing the particulars of consignor and consignee and the Country of Origin of Goods as well as Final Destination.
30.The first submission of the learned Counsel for the fifth defendant is that the endorsement "SAID TO CONTAIN" found on Ex.A4 bill of lading, did not give any assurance that the total number of cartons had been checked and found to be correct and in such a contingency, it is for the first plaintiff to prove that the actual quantity was shipped at the other end and such a proof is glaringly lacking in the present case. Neither the consignor, nor the consignee has been examined by the plaintiffs in the present case, to prove the total number of cartons shipped. P.W.1 is the employee of the second plaintiff Insurance Company and he has testified on the basis of records. He has no personal knowledge and his testimony does not in any way help the plaintiffs to prove the actual quantity shipped by the consignor. A Division Bench of this Court in the decision in M/s.Thakur Shipping Co. Ltd. case, referred to above, dealing with the endorsement as "said to weigh" in a bill of lading, observed as follows:
"34.....In other words, it would mean that the particulars of weight entered in the bills of lading were in accordance with the figures given by the shipper; but so far as the master is concerned, he did not give any assurance that those particulars had been checked and found to be correct. Once such a conclusion is reached, then it follows that it is for the respondent to prove that the rice bags that were loaded at Bangkok were of the same weight as had been entered in the bills of lading. Only after such proof is adduced, the owner of the vessel can be called upon to account for the shortage. Since such proof has not been adduced by the respondent in this case, we have to hold that the appellants cannot be called upon to account for the shortage in the weight contents of the bags..."
31.Subsequently, a learned Single Judge of this Court followed the above ratio in the decision in Nippon Yeesen Kaisha Ltd. case, cited above, and held thus:
"8....I have already found that with regard to the actual weight of the urea shipped at Tokyo, there is dearth of evidence on the side of the plaintiffs. If that is so, it is not possible to pin down the liability on the carriers in view of the endorsement found in the bill of lading. The endorsement 'said to weigh' found in the bill of lading Ex.A.1 could only mean that there was no admission or acceptance of the weight, by the carriers, as declared by the shippers or consignors. Such an endorsement could not be taken note of as conclusive proof of weight of the goods shipped. If there is a complaint of short delivery, weight-wise, the burden rests squarely on the plaintiff to place acceptable and convincing evidence of the actual weight of the goods shipped. The plaintiffs have not discharged their burden of proof....."
32.We are in entire agreement with the views expressed in the decisions referred above. In the present case also, the endorsement "SHIPPERS LOAD, STOW AND COUNT FREIGHT PREPAID CY/CY X20' CNTR SAID TO CONTAIN" found on Ex.A4 bill of lading, only means that there was no admission or acceptance of total number of cartons by the carriers, namely defendants 1 and 2, as declared by the consignor, the third defendant. We are of the considered view that the Clauses in the endorsement, referred above, have been put on the bill of lading to protect the carrier if there is a complaint of short delivery or non-delivery. The plaintiffs have also not discharged their burden in establishing that 250 cartons were actually shipped in the container and in such circumstances, the carriers, namely defendants 1 and 2, and the bailees, namely defendants 4 and 5, cannot be held liable for the short delivery.
33.Insofar as the other contentions raised by the learned Counsel for the defendants 4 and 5, are concerned, even as per the plaint averments, the original seal of the container was intact when the container arrived at Madras Port and thereafter, reached the Container Freight Station, CONCOR and the said container was inspected by the Customs on 11.2.1997, after breaking open the original seal in the presence of Clearing Agent of the first plaintiff and a random check was conducted by the Customs by picking out four packages and after the Customs inspection, a fresh seal by CONCOR, the fourth defendant, was put in the presence of Customs Officials as well as the Clearing Agent of the first plaintiff. The further plaint averments are that on 12.2.1997, the representative of the Clearing Agent of the first plaintiff inspected the container externally and found it to be sound and in his presence, the seal of the container was broken and doors were opened and the contents were destuffed and a shortage of 50 cartons was found. From the above, it is clear that the original seal of the container was found to be intact and during Customs inspection, it was broken open and and sealed again in the presence of the Clearing Agent of the first plaintiff and on the next day, after the representative of the Clearing Agent ensuring the seal to be intact, the container was opened and the goods were destuffed. There is absolutely no allegation against the fifth defendant CONCOR that there was any tampering with the seal of the container when it was in its custody. The witness examined on the side of the plaintiffs, namely P.W.1, also did not allege any tampering with the seal of the container at any point of time. Though Ex.A15 Survey Report, dated 22.2.1997, mentions shortage of 50 cartons, the fifth defendant, CONCOR, cannot be held responsible either directly or indirectly, since there was no tampering with the container while it was in its custody. The witness examined on behalf of the fifth defendant, namely D.W.1, also reports that the original seal was intact and it was broken open in the presence of Customs and the Clearing Agent of the first plaintiff and a fresh seal was affixed in their presence. Admittedly, it was a Full Container Load and also meant to "door to door" delivery and the defendants 4 and 5 have acted as bailees.
34.The contention of the learned Counsel for the respondents 1 and 2 that the Customs Authorities verified the entire consignment of 250 cartons during their checking, assessed proper duty and passed order releasing the goods, cannot be accepted for the reason that the role of Customs is to levy duty on the consignment as declared in the invoice. Moreover, even as per the plaint averments, the Customs on 11.2.1997, after breaking open the original seal, conducted a random check with regard to four packages out of 250 and thereafter, a fresh seal was put by CONCOR in their presence. In this context, it is also relevant to point out that the plaintiffs have not examined the Clearing Agent of the first plaintiff, who is said to be present at the time of breaking open of the seal of the container. The trial Court has failed to consider the pleadings and evidence let in, in proper perspective and its finding that the appellants/defendants 4 and 5 are liable for the suit claim is perverse and liable to be set aside. The points are determined accordingly.
35.In the result, both the appeals are allowed with costs and the judgment and decree of the trial Court dated 11.1.2005, passed in O.S.No.836/98, as against both the appellants/defendants 4 and 5, are set aside and the suit in respect of them, shall stand dismissed. Consequently, connected MP is closed.
(C.N.,J.) (R.K.,J.) 23-7-2012 Index: yes Internet: yes nsv To:
The Additional District and Sessions Judge Fast Track Court No.IV Chennai C.NAGAPPAN, J.
AND R.KARUPPIAH, J.
nsv A.S.Nos.948 of 2005 and 104 of 2012 Dt: 23-7-2012